[00:01:01] Speaker 05:
Ms.

[00:01:01] Speaker 05:
Wilbert?

[00:01:03] Speaker 05:
Yes.

[00:01:03] Speaker 05:
You're reserving four?

[00:01:05] Speaker 00:
Correct.

[00:01:06] Speaker 05:
Go ahead.

[00:01:07] Speaker 00:
May it please the court, Johanna Wilbert, appearing on behalf of Appellants Lavaquin and the University of Bern.

[00:01:14] Speaker 00:
It defies this court's precedent that a single sentence in a single letter could land two foreign defendants in US court.

[00:01:22] Speaker 00:
No authority supports such an expansive view of jurisdiction.

[00:01:27] Speaker 03:
What did you put that stuff in the letter for in the first place?

[00:01:30] Speaker 03:
I mean, this was all about German patents being infringed.

[00:01:34] Speaker 03:
And once you put that in, I can perfectly see why the company might think this is a threat to enforce our American patents against you too.

[00:01:44] Speaker 02:
I mean, it seems like it's your fault for putting that sentence about the American patents in here that you've gotten hauled into a declaratory judgment action.

[00:01:53] Speaker 00:
Under the court's precedent in Red Wing and its progeny, a single reference in a single letter is not enough.

[00:02:00] Speaker 01:
What about the Jack Henry case?

[00:02:01] Speaker 01:
Are you familiar with that case?

[00:02:03] Speaker 00:
No, I'm not, Your Honor.

[00:02:04] Speaker 01:
OK, that's a case that was decided in 2018.

[00:02:08] Speaker 01:
And it specifically addresses Red Wing.

[00:02:12] Speaker 01:
And it says Red Wing is not a bright line rule and that Supreme Court precedent requires assessment of the Burger King factors in each case.

[00:02:23] Speaker 00:
Yes.

[00:02:23] Speaker 00:
And I think a way to address that is to look at the totality of the contacts and the burden on the parties.

[00:02:29] Speaker 01:
But your reliance on Red Wing is creating a bright line rule.

[00:02:32] Speaker 01:
It doesn't exist.

[00:02:35] Speaker 01:
So how does that not undermine your entire bases here before us?

[00:02:39] Speaker 00:
Sure.

[00:02:40] Speaker 00:
I don't think Red Line has to take a single hard line rule.

[00:02:44] Speaker 00:
But it is an example.

[00:02:46] Speaker 00:
And I think consistent with that, if you look at the contacts that the parties have with the United States,

[00:02:52] Speaker 00:
you would see why one reference is not the other activities in this court's three-part jurisdictional analysis.

[00:02:58] Speaker 01:
Well, what is your analysis of the Burger King factors?

[00:03:01] Speaker 01:
Obviously, the first Burger King factor favors your argument.

[00:03:05] Speaker 01:
But what about the others?

[00:03:07] Speaker 00:
Sure.

[00:03:10] Speaker 00:
So even in looking at a forum's interest in adjudicating the dispute, it would be important, as this court has looked at, to see the contacts that the parties have with the forum.

[00:03:22] Speaker 00:
And the issue here is that the German defendant, Labecklin, only has contacts with the US licensees that it has.

[00:03:32] Speaker 00:
So it was a mistake.

[00:03:32] Speaker 01:
What about the forum's interest in adjudicating this US patent dispute?

[00:03:35] Speaker 01:
This is the only place, only in the United States could a US patent dispute be adjudicated.

[00:03:45] Speaker 00:
I believe in this case, the burden on the defendants, the first prong, is significant and outweighs the other factors.

[00:03:51] Speaker 01:
OK, are there other factors that weigh it all in favor of the defendant?

[00:03:58] Speaker 00:
Our position is that it's the significant burden on the two foreign defendants that would control the Burger King analysis.

[00:04:05] Speaker 00:
And that folds into the three-part analysis if you look at prong three that this court has applied.

[00:04:10] Speaker 03:
I mean, you loosely talk about the burden, but what do you mean in terms of burden just being required to appear in an American court?

[00:04:19] Speaker 00:
and the language barrier, and the fact that there are two different countries.

[00:04:22] Speaker 03:
But you have an American patent.

[00:04:24] Speaker 03:
If you were ever going to enforce that American patent as you, you know, I don't want to over-read your letter.

[00:04:30] Speaker 03:
You at least mentioned it in your letter.

[00:04:32] Speaker 03:
If you were ever going to follow through and enforce it, then you would have to go through all of those steps.

[00:04:37] Speaker 03:
So I don't see how those are necessarily all that much of a burden in the context of a declaratory judgment on that same patent.

[00:04:45] Speaker 00:
I would argue it's the difference between a declaratory judgment

[00:04:47] Speaker 00:
and an action by the party seeking to enforce.

[00:04:50] Speaker 03:
So the difference here is that this is a one sentence in a six page letter, and- Right, but I mean, maybe I wasn't clear, but the burdens you're talking about in terms of language and presumably foreign travel and all kind of stuff like that, those don't-

[00:05:08] Speaker 03:
You would have to give those up if you were trying to enforce that patent here.

[00:05:12] Speaker 03:
You would have those same burdens, but they wouldn't have any relevance to the case.

[00:05:19] Speaker 00:
Looking at due process and how this court has analyzed what is fair and substantial context, it requires the court to actually look at context with the forum residents.

[00:05:32] Speaker 00:
And what happened in the case below, and this is around 310 in the appendix,

[00:05:37] Speaker 00:
is that the court relied on Labaclun's relationship with the University of Bern, that license agreement.

[00:05:44] Speaker 00:
And that was an error, because that license agreement is not with any of the forum parties.

[00:05:50] Speaker 00:
So Switzerland.

[00:05:51] Speaker 05:
In the reply brief at 1, appellants say that Labaclun is not required to commercialize in the US, but instead to, quote, sell a licensed product in North America within 12 months, which includes numerous countries and territories.

[00:06:08] Speaker 05:
Did Laviklin affect a sale?

[00:06:11] Speaker 05:
It's my understanding that Laviklin doesn't deny on the record that it made sales in the United States.

[00:06:17] Speaker 00:
No, Laviklin has not affected sales, and the appropriate places... So is the lower court's finding at 309 wrong?

[00:06:25] Speaker 00:
Yes.

[00:06:25] Speaker 00:
If you look at the evidentiary hearing, the testimony is that the business Laviklin does within the United States is through its sublicense agreements, and that can be found on page 350 of the evidentiary hearing.

[00:06:38] Speaker 01:
So it has licensed the patent.

[00:06:42] Speaker 00:
Labaclun has entered into two sublicenses that are non-exclusive and do not contain enforcement rights.

[00:06:47] Speaker 01:
And there has been no recoupment of any royalties whatsoever under those sublicenses?

[00:06:52] Speaker 00:
There has been approximately $2,000 recouped, but there has not been a direct sale by Labaclun into the United States.

[00:06:59] Speaker 00:
And as this court said in Red Wing.

[00:07:01] Speaker 01:
But they have engaged in commercial activity in the United States involving some monetary recoupment.

[00:07:08] Speaker 00:
through the two licensees.

[00:07:10] Speaker 00:
And that limited use is described at page 350.

[00:07:13] Speaker 03:
Why isn't that enough to make the university the owner of the patents subject to jurisdiction here?

[00:07:21] Speaker 00:
In Avicent, this court said it's important to look at other contacts with the forum that relate to enforcement in the circumstance where there's only a letter with a single reference.

[00:07:32] Speaker 00:
And that goes to the fairness prong

[00:07:35] Speaker 00:
of if there's only a one-letter reference, you should look at other enforcement activities, such as has there been another litigation?

[00:07:42] Speaker 00:
Has the party traveled here?

[00:07:44] Speaker 00:
Is it a patent trial where it's purporting to say that my business is enforcing?

[00:07:48] Speaker 00:
Those factors don't apply here.

[00:07:50] Speaker 00:
Lavaclun has not traveled to the United States for purposes of enforcement.

[00:07:54] Speaker 00:
It has not engaged in any other enforcement activity throughout the United States.

[00:07:57] Speaker 00:
And its business.

[00:07:58] Speaker 03:
Let me just hypothetically, because I don't know where I can go on this, but let's just assume that the letter you sent

[00:08:05] Speaker 03:
You know, that was primarily about the German patents.

[00:08:09] Speaker 03:
It's sufficient to, you know, it would meet a declaratory judgment standard and it's sufficient to be a threat of enforcement activity.

[00:08:19] Speaker 03:
Is there a difference as how that we would have jurisdiction over the university versus Labackland in that context?

[00:08:26] Speaker 03:
Getting away, I know you want to rely on the single sentence.

[00:08:29] Speaker 03:
But let's assume that that single sentence is enough for purposes of threatening a civil action.

[00:08:36] Speaker 00:
Absolutely.

[00:08:36] Speaker 00:
You bring up an excellent point that jurisdiction over the university is a different analysis.

[00:08:41] Speaker 00:
And that analysis focuses on the sovereign immunity.

[00:08:43] Speaker 00:
The University of Bern is an instrumentality of Switzerland.

[00:08:47] Speaker 00:
And the court made two errors.

[00:08:49] Speaker 00:
when evaluating sovereign immunity.

[00:08:51] Speaker 00:
It first erred when it stated that the university had waived sovereign immunity by proxy.

[00:08:57] Speaker 00:
And the second error is in holding that the university's consent to the letter had a direct effect in the United States.

[00:09:04] Speaker 03:
With respect to- The university is engaging in commercial activity here, right, through lava clean licensing the university's patents?

[00:09:12] Speaker 00:
It's three steps attenuated.

[00:09:14] Speaker 00:
So the university does not have any.

[00:09:17] Speaker 03:
But they have.

[00:09:17] Speaker 03:
But the university retains all the authority here, right?

[00:09:21] Speaker 00:
No, it does not retain all authority.

[00:09:23] Speaker 00:
There's actually a particular.

[00:09:25] Speaker 03:
Can Labaclun Institute a enforcement action?

[00:09:29] Speaker 03:
Can they file an infringement suit without the university's consent?

[00:09:32] Speaker 01:
No, they cannot.

[00:09:33] Speaker 01:
And they can't even send a letter without the university's consent, right?

[00:09:37] Speaker 01:
Correct.

[00:09:38] Speaker 05:
It appears that under Labaclun's view,

[00:09:40] Speaker 05:
It should be free to commercialize the 114 patent in the United States, including negotiating for licenses with entities like PPG by sending, for example, strongly worded cease and desist letters, demanding as much, without being subject to suit in any state.

[00:10:01] Speaker 05:
How does that seem reasonable or fair under our precedent?

[00:10:04] Speaker 00:
I don't think the facts are consistent with your analogy, and that's why I don't think it would be consistent with this precedent.

[00:10:10] Speaker 00:
the letter is not as focused on the US enforcement as your scenario described.

[00:10:17] Speaker 03:
Yeah, but can you just take that as the hypothetical?

[00:10:19] Speaker 03:
Let's not talk quibble about the facts, because this is a difficult jurisdiction.

[00:10:24] Speaker 03:
Let's just assume the letter is, for our purposes, sufficient to threaten litigation in the United States, that your client's letter threatens competitors with enforcement of the American patent.

[00:10:37] Speaker 03:
Do the jurisdictional analysis then?

[00:10:40] Speaker 03:
Doesn't the Burger King factors away in finding of jurisdiction over Lavaquan?

[00:10:45] Speaker 00:
I would argue no.

[00:10:46] Speaker 00:
Because of this court's precedent in New World, Avacent, in those cases, the court looked very closely at the license agreements that were in place.

[00:10:56] Speaker 01:
I want to ask you something else, just to make sure I understand.

[00:10:59] Speaker 01:
I understand that the court below held that there was declaratory judgment jurisdiction.

[00:11:04] Speaker 01:
that there wasn't sufficient threat for there to be a jurisdiction here, and that you have not raised that issue on appeal.

[00:11:11] Speaker 01:
Do I understand that correctly?

[00:11:12] Speaker 00:
Yes, you have.

[00:11:13] Speaker 00:
So we're focusing on the other contacts that we understand are required.

[00:11:18] Speaker 00:
And this court has looked at other contacts with the forum residents, so other contacts with the US residents.

[00:11:24] Speaker 00:
And in New World and in other cases, they've analyzed, do those license agreements contemplate

[00:11:30] Speaker 00:
or create an enforcement obligation in the US.

[00:11:33] Speaker 05:
Is it Laviklin's position that it's not commercializing in the United States?

[00:11:38] Speaker 00:
It's Laviklin's position that it is not directly commercializing in the United States, and that doing business.

[00:11:43] Speaker 05:
That wasn't my question.

[00:11:45] Speaker 03:
Well, just commercializing in the United States, then, if you're licensing these patents.

[00:11:51] Speaker 03:
And where's the money going?

[00:11:52] Speaker 03:
It's either you or it's the university.

[00:11:54] Speaker 00:
I understand the testimony is that one of the license agreements was with the University of California.

[00:11:59] Speaker 00:
My understanding is they are not commercializing, and that the other license agreement has only resulted in $2,000 worth of royalties.

[00:12:07] Speaker 01:
Do we usually look at the amount of royalties to determine whether somebody has been commercializing in the United States?

[00:12:14] Speaker 00:
No, but you do look at the context of if there's an enforcement obligation.

[00:12:18] Speaker 00:
So here, this is a pass-through royalty-generating license.

[00:12:22] Speaker 00:
And in circumstances like Avicent, that has been held not to be enough.

[00:12:26] Speaker 00:
And I would like to point quickly to the sovereign immunity.

[00:12:31] Speaker 01:
I want to ask you a question about state sovereign immunity.

[00:12:34] Speaker 01:
I know that you're relying on principal agency relationship to assert that the cease and desist letter can't be imputed to the university.

[00:12:42] Speaker 01:
But there's other agency relationships that could apply, for example, joint enterprise, right?

[00:12:49] Speaker 00:
That was not analyzed, and that's an error below.

[00:12:51] Speaker 00:
Was it raised?

[00:12:55] Speaker 00:
Parties did not analyze.

[00:12:57] Speaker 01:
Then why would it be an error?

[00:12:59] Speaker 00:
Because to find that sovereign immunity has been waived, there must be an exception on the grounds of what it's waived under.

[00:13:05] Speaker 00:
So for the court to say that there has been a waiver, there must be some analysis explaining why there's been a waiver.

[00:13:11] Speaker 01:
That's fine.

[00:13:12] Speaker 01:
So you rely on appeal.

[00:13:13] Speaker 01:
You're arguing that there's no principal-agent relationship, right?

[00:13:16] Speaker 00:
Correct.

[00:13:17] Speaker 01:
That wasn't analyzed below either, right?

[00:13:19] Speaker 00:
The phrase by proxy, we are interpreting that as some type of analysis.

[00:13:26] Speaker 00:
Was it argued below?

[00:13:28] Speaker 00:
Yes, it was argued below.

[00:13:29] Speaker 01:
The principal agent was argued below.

[00:13:31] Speaker 01:
Was it discussed in the court's opinion below?

[00:13:34] Speaker 01:
I want to understand.

[00:13:36] Speaker 00:
So what was argued below is that the university does not have action that would have qualified under the commercial exception.

[00:13:44] Speaker 00:
And in response to that, the court said that there was waiver by proxy is the phrase that was used.

[00:13:50] Speaker 01:
And so on appeal for the first time, you're arguing the principal agent relationship based on the language in the district court's opinion, right?

[00:13:59] Speaker 00:
No.

[00:13:59] Speaker 00:
We argued below that there was not waiver because the consent to the letter was not a direct action and that the parties are separate.

[00:14:08] Speaker 00:
We've always argued that they are at arm's length to separate companies, the German company and the university.

[00:14:13] Speaker 01:
So my question to you originally was, you are arguing on appeal that there is no principal-agent relationship.

[00:14:22] Speaker 01:
But wouldn't another by proxy relationship be joint enterprise?

[00:14:28] Speaker 00:
We do not believe so.

[00:14:30] Speaker 01:
And why not?

[00:14:31] Speaker 00:
Because here there is not a joint enterprise being formed.

[00:14:35] Speaker 00:
The German company has a separate business from the university.

[00:14:39] Speaker 00:
The university is a nonprofit university.

[00:14:42] Speaker 00:
The German company is a veterinary laboratory.

[00:14:45] Speaker 00:
And they do not have a joint enterprise with respect to how they're behaving.

[00:14:51] Speaker 01:
There is an agreement between them, right?

[00:14:53] Speaker 00:
There is a license agreement between them.

[00:14:54] Speaker 01:
And is there a common purpose to be carried out by them in the context of that agreement that is commercializing in North America?

[00:15:02] Speaker 00:
We believe they have different interests, because the university has retained research rights.

[00:15:09] Speaker 00:
The licensee has its own business interests.

[00:15:11] Speaker 00:
So we do not believe they are completely aligned.

[00:15:14] Speaker 05:
Does money flow to the university?

[00:15:16] Speaker 00:
Yes, money does flow to the university.

[00:15:17] Speaker 01:
Do they have an equal right and a voice of the direction of who they're going to send a letter to, a cease and desist letter to?

[00:15:28] Speaker 00:
They both have a voice of who they send the letter to.

[00:15:31] Speaker 00:
But as Dr. Mueller's declaration shows at page 94, lava clean does not actually have an obligation to commercialize in the United States.

[00:15:40] Speaker 00:
And she is the one directing the action here.

[00:15:42] Speaker 00:
So it is not, in this circumstance, in this factual scenario, an equal voice.

[00:15:51] Speaker 00:
I reserve any remaining time.

[00:15:53] Speaker 00:
Thank you.

[00:15:53] Speaker 05:
I'll let you have two minutes.

[00:16:09] Speaker 04:
May it please the court, Mark Walters on behalf of Genetic Veterinary Sciences, Inc., doing business as pop print genetics or PPG.

[00:16:18] Speaker 04:
On page four of the gray brief, Laboclun cites the Supreme Court case Colco and states that the prong and Burger King of the notion of fair play and substantial justice, that that's not susceptible to mechanical application.

[00:16:33] Speaker 04:
But then they go on to do a very mechanical application of this court's precedents, including Silent Drive, Avocent, Red Wing Shoe, and Breckenridge.

[00:16:44] Speaker 04:
And I can summarize it as follows.

[00:16:47] Speaker 04:
They require in the other activities in order for the jurisdiction to be fair and reasonable, according to my friend, there must be some sort of exclusive license or absolute right to enforce the patent in the forum.

[00:17:03] Speaker 04:
But it's not so mechanical, and the Supreme Court cautions against that kind of mechanical approach.

[00:17:09] Speaker 04:
According to the law,

[00:17:11] Speaker 04:
the minimum contacts are satisfied by the cease and desist letter.

[00:17:17] Speaker 04:
And what that does is it creates a presumption that the jurisdiction is reasonable under that prong in Burger King.

[00:17:27] Speaker 04:
And so where the minimum contacts are satisfied like they are in this case, the question has to be asked, is the defendant engaging activities with respect to the forum

[00:17:38] Speaker 04:
Such that they are shielded by the benefits and protections of that foreign states law And I think in this case they clearly are they're undertaking to commercialize the patent in the United States They have two licensees here I don't think the substantial the magnitude of the revenue matters or as relevant the fact that they are engaging in a commercial enterprise and

[00:18:01] Speaker 04:
from Germany to collect revenue and cooperate in enforcement here in the United States.

[00:18:08] Speaker 05:
If their licensees violated the license agreement, enforcement would lie in the United States.

[00:18:15] Speaker 05:
Isn't that correct?

[00:18:15] Speaker 04:
That is absolutely correct, Your Honor.

[00:18:17] Speaker 04:
And the idea in the gray brief, they mentioned the fact that the license agreement talks about North America.

[00:18:23] Speaker 04:
But the only way to really commercialize a US patent, of course, is in the United States.

[00:18:27] Speaker 04:
There are obligations for enforcement.

[00:18:29] Speaker 05:
And I think- Well, they also reference the numerous countries in North America.

[00:18:33] Speaker 05:
I assume that numerous means three.

[00:18:36] Speaker 04:
Correct, Your Honor.

[00:18:37] Speaker 04:
And I mean, the United States is the key market.

[00:18:41] Speaker 04:
There was some suggestion in the gray brief about whether there was a viable market and if there's some question about that.

[00:18:47] Speaker 04:
I mean, it really comes down to looking at that license agreement and asking whether Lab Oakland is obligated by the terms of that agreement

[00:18:58] Speaker 04:
to engage in commercial activity in the United States in a way that would fall within the scope of the claims of the licensed patent.

[00:19:06] Speaker 04:
And clearly, they are.

[00:19:07] Speaker 01:
I think the argument was that because it refers to North America, it doesn't necessarily mean that they were tasked with operating in the United States, right?

[00:19:14] Speaker 01:
That's what they're arguing, as I understand it.

[00:19:18] Speaker 01:
Because North America includes other locations.

[00:19:21] Speaker 04:
That's right, Your Honor.

[00:19:21] Speaker 04:
But again, the only way to commercialize a United States patent

[00:19:27] Speaker 04:
is to engage in commercial activity in the United States.

[00:19:30] Speaker 04:
The United States patent doesn't have any application outside of the United States.

[00:19:34] Speaker 04:
So Your Honor.

[00:19:35] Speaker 01:
Are there other patents in North America other than the United States patent?

[00:19:42] Speaker 04:
Does this license agreement cover other patents?

[00:19:44] Speaker 01:
Yeah, does it cover anything in Canada or Mexico?

[00:19:46] Speaker 04:
I believe it does, Your Honor.

[00:19:47] Speaker 04:
It was sort of licensing a portfolio that would have that.

[00:19:51] Speaker 04:
And that's why I think the language was chosen the way it was.

[00:19:55] Speaker 04:
I think what's really going to be helpful for the court is to look at this case.

[00:19:59] Speaker 04:
I want to address the Burger King factors really quick, Your Honor.

[00:20:02] Speaker 04:
I think the first three really fall very heavily in our favor.

[00:20:07] Speaker 01:
Judge Hughes brought it up with respect to the- Do you think the burden on defendant, which is the first factor, falls in your favor?

[00:20:13] Speaker 04:
I absolutely do, Your Honor.

[00:20:14] Speaker 04:
And Judge Hughes, I kind of gather he might think that way too.

[00:20:18] Speaker 04:
I wouldn't gather anything from our questions here.

[00:20:21] Speaker 04:
Well, Your Honor, I apologize for that.

[00:20:23] Speaker 04:
But what I gather from it then is that the defendant's burden in this case

[00:20:31] Speaker 04:
is the same.

[00:20:32] Speaker 04:
They are a foreign licensure.

[00:20:35] Speaker 01:
But they didn't choose to file the suit, right?

[00:20:38] Speaker 03:
Correct.

[00:20:38] Speaker 03:
But it seems a little odd to me that a brief reference to a United States patent in a letter that was really about infringing German patents is enough.

[00:20:51] Speaker 03:
I mean, honestly, this whole litigation frustrates me because it seems like you're both wasting our court's resources, them by putting the sentence in, and then you by overreacting and filing a declaratory judgment action based upon this one reference to an American patent when they were complaining about German patents.

[00:21:11] Speaker 03:
I mean, did you really need to do this, or could you have waited until you actually got sued over the American patents?

[00:21:17] Speaker 03:
Maybe you never would have.

[00:21:19] Speaker 03:
And then we would never have had to have been here in the first place.

[00:21:24] Speaker 04:
That issue, of course, as the court points out, was not raised on appeal.

[00:21:28] Speaker 03:
I know.

[00:21:28] Speaker 03:
But it's really frustrating that you overreact to one sentence in a cease and desist letter about a German patent or a group of German patents and rush off and file a declaratory judgment action, which takes up the party's resources, the district court's resources, and our court's resources over something that may never have happened in the first place.

[00:21:49] Speaker 04:
Well, Your Honor.

[00:21:51] Speaker 04:
My client makes decisions on what business to go into.

[00:21:57] Speaker 04:
And when their business is threatened by this one sentence or 24 sentences, that is something that they have to deal with.

[00:22:05] Speaker 04:
And they're faced with a decision to make.

[00:22:08] Speaker 04:
Do I put more investment into this business and risk some liability?

[00:22:15] Speaker 04:
Or do I get a determination from a court?

[00:22:17] Speaker 04:
They couldn't go to anywhere else.

[00:22:19] Speaker 01:
Did you raise a single issue below?

[00:22:20] Speaker 01:
Pardon me.

[00:22:21] Speaker 03:
Did you raise a single issue below just 101 validity we did and we tried to make this as Streamlined as possible we admitted to infringement honor sentence hadn't been in this letter about German enforcement You couldn't have filed the declaratory judgment.

[00:22:33] Speaker 03:
I'm not sure that's correct your honor It there are multiple factors that would I think give a letter into the United States saying we own this German patent Europe infringing it

[00:22:46] Speaker 03:
you need to stop sending product into Germany would allow you to go after an unmentioned, unraised American patent?

[00:22:53] Speaker 04:
If we assume that that's the only thing that might implicate my client's business, then I think maybe there are probably

[00:23:02] Speaker 04:
case or controversy.

[00:23:03] Speaker 04:
But that, of course, is not the case.

[00:23:05] Speaker 04:
And the analysis goes beyond that.

[00:23:06] Speaker 03:
Right.

[00:23:07] Speaker 03:
There's a sentence discussing the American patent.

[00:23:10] Speaker 03:
And I get it.

[00:23:11] Speaker 03:
You can infer from the letter that they're threatening enforcement of this American patent because they're threatening enforcement of the German patent.

[00:23:19] Speaker 03:
I get it.

[00:23:19] Speaker 03:
But it seems to me a little bit of an overreaction.

[00:23:22] Speaker 05:
Was there further communication?

[00:23:25] Speaker 04:
There was in an attempt to resolve.

[00:23:27] Speaker 04:
But it just couldn't get resolved, Your Honor.

[00:23:29] Speaker 04:
Where is that?

[00:23:31] Speaker 05:
Is that in the record?

[00:23:32] Speaker 03:
I don't believe so.

[00:23:34] Speaker 03:
Yeah.

[00:23:34] Speaker 03:
Well, I thought it was in the record that once you got this letter, you threatened not only to file a declaratory judgment action if they didn't stop this, but they had to pay you $30,000.

[00:23:44] Speaker 04:
Well, I think that particular letter, which is not relevant to any issue on appeal, had to do with fees expended in determining under the German patent.

[00:23:53] Speaker 04:
We had to hire German counsel at that point.

[00:23:56] Speaker 04:
to figure out whether the law is the same in Germany.

[00:23:58] Speaker 03:
So in responding to a legitimate complaint of infringement of a German patent, you threatened fees, and if they don't pay your fees to do that, you're going to invalidate their American patent.

[00:24:13] Speaker 04:
I don't believe it was quite like that, Your Honor.

[00:24:15] Speaker 04:
I mean, I believe that the issue is you, in this letter, raised this issue of the US patent.

[00:24:21] Speaker 04:
We need to figure out a way to resolve both issues now.

[00:24:26] Speaker 04:
So Your Honor, I want to turn, if I may, to... So you're going to talk about the burden on the defendant?

[00:24:30] Speaker 01:
Correct.

[00:24:30] Speaker 01:
So besides the language barrier...

[00:24:33] Speaker 01:
which was mentioned by opposing counsel.

[00:24:37] Speaker 01:
How do you deal with that?

[00:24:38] Speaker 01:
Language barrier being hauled into a foreign court?

[00:24:40] Speaker 01:
The Supreme Court in Asahi talked about how that puts a significant burden on a foreign defendant.

[00:24:46] Speaker 04:
Your Honor, I think that there's a case from this court that's instructive on the burden on the defendant.

[00:24:51] Speaker 04:
That's the Z-Links case.

[00:24:53] Speaker 04:
It is, I believe, a 2018

[00:24:56] Speaker 04:
I don't know if I'm saying the name correctly.

[00:24:58] Speaker 04:
It's XILINX848F1346.

[00:25:03] Speaker 04:
It discusses this particular factor.

[00:25:07] Speaker 04:
And in that case, there was a German patentee.

[00:25:12] Speaker 04:
And there were notice letters sent.

[00:25:14] Speaker 04:
And the analysis was that those notice letters satisfied the minimum contacts prong and made it presumptively reasonable that the German company would be subject to suit here.

[00:25:26] Speaker 04:
And the analysis of the Burger King factors in that case concluded that the burden on the defendant would be minor.

[00:25:35] Speaker 04:
And because they have to come to the United States in any event to enforce the patent.

[00:25:42] Speaker 04:
So that does weigh pretty heavily in our favor, I think, in this case.

[00:25:50] Speaker 04:
And if you look at the other.

[00:25:52] Speaker 04:
Factors we list them on page 17 of the red brief The burden or the form states interest in adjudicating the dispute and the plaintiff's interest in obtaining convenient and effective relief We would have no ability to obtain relief in this particular case If they are correct in their argument and similar

[00:26:14] Speaker 04:
the implications of a decision from this court that would rule that in this particular case, Lab Oakland's not subject to jurisdiction, would have implications beyond this case.

[00:26:23] Speaker 04:
And so whether you agree with the facts of the case or you're not happy with how it arose, it has implications beyond this particular case and these parties.

[00:26:34] Speaker 04:
Now, I want to move with the remaining parts of my time to

[00:26:39] Speaker 04:
the issue of sovereign immunity.

[00:26:42] Speaker 04:
There are basically three ways to waive sovereign immunity under section 1605A2.

[00:26:48] Speaker 04:
The first is where your cause of action is based on a commercial activity carried out by the foreign state in the United States.

[00:26:55] Speaker 04:
The second way is where your cause of action is based on an act performed in the United States in connection with a commercial activity of the foreign state elsewhere.

[00:27:06] Speaker 04:
And the third way is where there's an act outside the United States

[00:27:10] Speaker 04:
in connection with the commercial activity of the foreign state elsewhere.

[00:27:13] Speaker 04:
And that act has a direct effect in the United States.

[00:27:17] Speaker 04:
The district court cited the Intel case and reasoned that the university threatened litigation against PPG by proxy through Lab Oakland.

[00:27:31] Speaker 04:
And it wasn't clear from the district court's analysis if they were relying on clause one or two.

[00:27:37] Speaker 04:
But I think if you look at the Intel decision in that case, which involved this Australian resource organization, in that case, that resource organization's attempts to secure patent licenses in order to generate royalty income

[00:27:56] Speaker 04:
was not an activity peculiar to the foreign state, but it was instead a commercial activity that a private entity would engage in.

[00:28:03] Speaker 04:
I think the same analysis applies here, the fact that the university obtained a United States patent and then entered into an agreement with Lab Oakland for the express purpose of commercializing that technology in the United States.

[00:28:18] Speaker 04:
That particular activity is considered a commercial activity within the Intel precedent.

[00:28:24] Speaker 01:
What about the bi-proxy language?

[00:28:26] Speaker 01:
How do you understand that?

[00:28:27] Speaker 01:
Does that impute agency law?

[00:28:31] Speaker 04:
Pardon me?

[00:28:32] Speaker 01:
Does that require us to consider agency law, the bi-proxy?

[00:28:37] Speaker 01:
What do you understand the bi-proxy to mean?

[00:28:39] Speaker 04:
I don't know what the District Court meant by bi-proxy.

[00:28:42] Speaker 04:
It wasn't an argument that we made.

[00:28:44] Speaker 04:
I mean, the argument that we made was that the university... Did the university make that argument?

[00:28:49] Speaker 04:
I'm not sure, Your Honor.

[00:28:50] Speaker 04:
I don't recall.

[00:28:51] Speaker 04:
But the argument that we made was that the university is engaging in commercial activity in Germany that has a direct effect here, or by obtaining a patent and then entering into a license with Lab Oakland, who then use the patent here.

[00:29:10] Speaker 04:
Either of those scenarios would, I think, result in an exception or a waiver of the immunity under the Foreign Sovereign Immunities Act.

[00:29:20] Speaker 01:
What's your view on whether there's a joint enterprise between the university and La Blanca?

[00:29:27] Speaker 04:
Right, Your Honor.

[00:29:28] Speaker 04:
I mean, there's clearly an agreement here between them with a common purpose of obtaining royalty income.

[00:29:37] Speaker 04:
They are, under the agreement, both tasked with enforcement

[00:29:41] Speaker 04:
They are under the agreement or lab Oakland is under the agreement tasked with commercialization So I think that they both have an interest in it and I mentioned control either Right that is the university Shares control correct the university does share control which would also feed into the analysis of a joint venture so I think the the sum total of this is this particular situation where you have a

[00:30:12] Speaker 04:
patent holder abroad and a licensee abroad when they engage in activity to commercialize a patent in the United States.

[00:30:20] Speaker 04:
They're subject to jurisdiction here.

[00:30:22] Speaker 04:
We went to the Eastern District of Virginia because that's where we were required to go in order to obtain long-arm jurisdiction.

[00:30:31] Speaker 04:
Where else can we go?

[00:30:33] Speaker 04:
That's the only place we can go if we want to have this issue resolved.

[00:30:37] Speaker 04:
Appreciate the court's time, and if there are no further questions, I'll yield.

[00:30:43] Speaker 04:
Thank you.

[00:30:45] Speaker 05:
Thank you, Ken.

[00:30:47] Speaker 05:
Two minutes.

[00:30:51] Speaker 00:
Thank you.

[00:30:52] Speaker 00:
I'd like to address some of the questions that you raised.

[00:30:55] Speaker 00:
You asked where the agency relationship was argued below.

[00:30:58] Speaker 00:
It was argued below at the evidentiary hearing on Appendix page 358.

[00:31:02] Speaker 00:
And that argument was made by Lavaclin.

[00:31:05] Speaker 00:
And it explained that there is not control here, that there would be establishing an agency relationship.

[00:31:11] Speaker 00:
With respect to the joint enterprise issue, I'd like to direct this court's attention to two cases that provide persuasive authority.

[00:31:20] Speaker 00:
Foremost, McKesson versus Iran.

[00:31:22] Speaker 00:
It's site 905F, second, four.

[00:31:27] Speaker 00:
38, and that is a situation where the parties did have a business.

[00:31:33] Speaker 00:
It was a dairy farm, but the court remanded because they needed to determine whether there was a principal agency relationship.

[00:31:39] Speaker 05:
Was that this court?

[00:31:40] Speaker 00:
No, it's not.

[00:31:41] Speaker 00:
It's persuasive authority out of the DC Circuit.

[00:31:43] Speaker 00:
Also, I could direct you to a Second Circuit case, which would also be persuasive authority, that addresses Orissa.

[00:31:49] Speaker 00:
And it says that even if Orissa would show that there was common control, it was still necessary

[00:31:55] Speaker 00:
for there to actually be a relationship with the parties.

[00:31:58] Speaker 00:
So to waive sovereign immunity, the idea here is that it's a significant matter and that it needs a principal agency relationship.

[00:32:06] Speaker 00:
It cannot be waived by the actions of a wholly separate entity, which Lobaclun is from the university.

[00:32:13] Speaker 01:
Did you give us a site for that second case?

[00:32:16] Speaker 00:
I believe it's in our briefs, but the site is 7F335 Second Circuit.

[00:32:24] Speaker 00:
With respect to the

[00:32:25] Speaker 00:
If there's been any other communications between the parties before the lawsuit was filed the first letter was sent by Lobaclun and then the declaratory judgment complaint was filed on February 22nd 2017 that Complaint that signature page is found on page 55 of the appendix the response letter is also in the appendix and that's found at page 50 and that response letter came after

[00:32:50] Speaker 00:
the declaratory judgment action was filed.

[00:32:52] Speaker 05:
And there was no other communication?

[00:32:54] Speaker 00:
There's no communication between the time of sending the letter and filing the declaratory judgment action.

[00:32:59] Speaker 00:
There has since been communication since the lawsuit started.

[00:33:02] Speaker 05:
Good times, though.

[00:33:03] Speaker 05:
Thank you.

[00:33:07] Speaker ?:
Thank you.

[00:33:08] Speaker ?:
All rise.

[00:33:16] Speaker ?:
The Honorable Court is adjourned.