[00:00:06] Speaker 03:
We have four cases on the calendar this morning.

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Three patent cases from district courts and vaccine case from the Court of Federal Claims.

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No patent office cases.

[00:00:22] Speaker 03:
Our first case is IBM versus Booking Holdings, et al., 2018-15-74, Mr. UCF.

[00:00:36] Speaker 00:
Good morning, Your Honor.

[00:00:40] Speaker 00:
Kareem Usayef for IBM.

[00:00:43] Speaker 00:
May it please the court.

[00:00:45] Speaker 00:
Your Honor, in the court below, IBM submitted substantial evidence indicating that defendants store content at the user's device.

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Defendants do this using cache control directives.

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Cache control directives are pieces of code that are sent down with web content that say what content to store

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and how to store it.

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The HTTP protocol specification saying how those communications work says that those parameters, quote, must be obeyed.

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An IBM's expert on this matter says that the other components such as the browser or the operating system are mere implementation details that slavishly implement.

[00:01:28] Speaker 01:
Am I right that the only theory that you proposed at the district court was that this was direct infringement

[00:01:36] Speaker 01:
And you relied on CERF, assuming that's how you pronounce it, but S-I-R-F, right?

[00:01:43] Speaker 00:
Your Honor, there were two theories of direct infringement.

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The first was under CERF and the second was under Akamai.

[00:01:49] Speaker 01:
We presented both of those issues, Your Honor.

[00:01:53] Speaker 01:
So in other words, you're saying under Akamai, you're saying direct infringement because there's attribution.

[00:02:00] Speaker 00:
Exactly, Your Honor.

[00:02:03] Speaker 01:
Surf is distinguishable, is it not?

[00:02:05] Speaker 01:
Because there, one entity controlled, it was vertical integration, controlled all aspects, right?

[00:02:13] Speaker 00:
I believe Surf is not distinguishable because you still have the cache control parameters that are actually sent to the user's device.

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And when they're executed, that's what dictates the storing process.

[00:02:26] Speaker 00:
So just like in Surf, at the device, the remote device, there are instructions that say what to do.

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And those are the things that are being executed.

[00:02:34] Speaker 01:
But it's the user who sets the process in motion, right?

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The user doesn't have any control over the storing process.

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They can either toggle a switch to say, I want to be able to have caching or not.

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And the default, by the way, is that caching will be honored in whatever the cache control directives say will be honored.

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The user can either

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can disable that for all content, but they never have any control over any particular item whether that's stored.

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Just because the user can set and disable caching and prevent infringement from occurring, that's not the same as saying that the user has control.

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And in fact, their defendant's own expert says, quote, and this is appendix 3392, there's no scenario where the user would have to take an affirmative action in order for information to be cached on their browser.

[00:03:26] Speaker 04:
Can you clarify this for me?

[00:03:32] Speaker 04:
Putting aside storing for a minute, is there any step of the claims at issue that the user takes?

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That is, in particular, is the user's request for content among the claim elements here?

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Or does everything in the claims take place either after that

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or even before that in whatever structuring advertising might mean.

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So there's no claimed action that the user must take.

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The only claim elements are two structuring claims, structuring advertising, and then there's the storing claim.

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So the only claim element that defendants dispute is the storing claim.

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Everything else is indisputable that defendants do it.

[00:04:24] Speaker 01:
Unless the user visits the website, nothing happens, right?

[00:04:28] Speaker 00:
Yes, that's correct, Your Honor, and that's the case in many accused products.

[00:04:32] Speaker 00:
So if we think about it, any computer software product, the user has to turn on their computer, they have to install it, they have to use it, and in many situations, the user has to take some kind of action first.

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But just like in surf, what surf says is once the GPS receiver is enabled and ready to process the data,

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Only SERF's actions are involved in processing or representing.

[00:04:57] Speaker 01:
Well, that's because SERF was in control of all of the aspects, right?

[00:05:01] Speaker 01:
In here, too, there was no independent user.

[00:05:04] Speaker 00:
In SERF, someone actually had a GPS device on their phone.

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The SERF product was a GPS chip, and it could be installed on mobile devices.

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So there, too, the user had to turn on the devices.

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In fact, SERF says, and this is at 1323 to 24,

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Cerf chips were incorporated into end user consumer GPS devices.

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So it's in.

[00:05:29] Speaker 01:
But Priceline doesn't make the browser.

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That's correct.

[00:05:37] Speaker 01:
Or doesn't even, or doesn't sell the hardware.

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I mean, all of that was different in Cerf, right?

[00:05:43] Speaker 00:
So in Cerf, Cerf made the chip, but they didn't make the end user consumer devices like the cell phone, etc.

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Those were third party devices.

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This is no different than the variety of cases this court takes up where there's software, which is being accused, running on hardware that the defendant did not design.

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And whenever there's a receiving or sending step that is claimed by patent, this court doesn't agonize over who made the networking card or the ethernet cable.

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Whenever there's a displaying claim, this court doesn't agonize over who made the monitor

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or the LCD devices, that's because the key issue here is who's dictating performance, who is making sure that it occurs, making sure that it happens, and who's making the decision that everything else implements and obeys.

[00:06:35] Speaker 04:
And each of these method claims is performed each time there is basically an advertisement sent down to use a shorthand.

[00:06:47] Speaker 04:
Exactly.

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And so that if the user

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before the 43,000 times that happens has done something to set a default or alter a default on the device that precedes the steps in these methods.

[00:07:04] Speaker 00:
Exactly.

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So there's no situation where there's like an individual piece of content that comes down and the user has to say like save as like in a Word document.

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Instead, the user can in certain times disable caching if they wish.

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And then afterwards, there will be no infringement.

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But if they don't choose to do so, there's no user action that takes place when content is coming down.

[00:07:29] Speaker 00:
So it's just like in Z4, where there's an infringing mode of operation, which, by the way, 95% of users is the only way of operation that they're even aware of.

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And then just 1% actually decides to disable.

[00:07:41] Speaker 01:
But you're talking as if these browsers are people.

[00:07:44] Speaker 01:
I mean, the browsers do act to

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allow the storing, right?

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And to store.

[00:07:52] Speaker 01:
In your view, is dictating the same as direction and control under Akamai?

[00:07:58] Speaker 01:
I don't understand where you're getting direct infringement outside of the Akamai landscape.

[00:08:06] Speaker 00:
The way we view a surf is that dictating is something where you control the process and something else might be involved in implementing that process.

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taking the ones and zeros and putting it on the hard drive, that process might need a browser to do it.

[00:08:25] Speaker 00:
But if you dictate it, in other words, if you say you need to do it and there's no control or decision-making process the browser can do to stop that, then that is dictating performance.

[00:08:36] Speaker 01:
On the other hand... So you're saying that we took the word dictating and surf and created a whole new legal principle of direct infringement outside of the Akamai context?

[00:08:45] Speaker 00:
Your Honor, we compare this to SURF simply because there's a remote action that's happening far away from the computer.

[00:08:52] Speaker 00:
But setting aside SURF, I think that it is uncontroverted that in direct infringement cases, in a situation where there's implementation details that happen one layer down, that's not what the court looks to.

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Otherwise, any accused infringer could look to a processor and say, we don't actually do what the software's

[00:09:13] Speaker 00:
You know, our software might do X, Y, Z, but it's in fact the processor that has to move around the 1s and 0s in the hardware that has to actually implement that in the hard drive that has to store things in the monitor that has to display things.

[00:09:26] Speaker 03:
Did you raise the Akamai issue with the district court?

[00:09:30] Speaker 00:
Yes, Your Honor.

[00:09:31] Speaker 00:
We raised the Akamai issue in the district court, and that's at appendix 31, 17 to 18.

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And specifically, we had a whole section of our summary judgment opposition

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titled, there is substantial evidence that the actions that take place at the user's reception system are attributable to defendants under a theory of direct infringement.

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We cited Akamai at appendix 3117 through 18.

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And as soon as travel sentry came out, we filed a notice of supplemental authority telling the court that it was relevant to the summary judgment opinion.

[00:10:05] Speaker 00:
That's at appendix 5085.

[00:10:07] Speaker 01:
You said it's relevant, but what theory then did you propose?

[00:10:11] Speaker 01:
So- If you're dictating, okay, and certainly pre-Akamai, of course, but if you're dictating language is not enough and you need some form of attribution within the bounds of Akamai, what form of attribution did you argue for?

[00:10:27] Speaker 00:
So below what we said is that this fits within the context of the particular facts.

[00:10:33] Speaker 00:
So if we look at Akamai travel century in Eli Lilly, they all refer to the fact that

[00:10:39] Speaker 00:
that we need to consider the specific context in that the specific tests that are set forward in Akamai are not the only tests that are available.

[00:10:49] Speaker 00:
And that's the one that we set forward.

[00:10:51] Speaker 01:
Did you propose a particular test?

[00:10:54] Speaker 01:
We said in Akamai there are a variety of forms of attribution and we were not

[00:11:01] Speaker 01:
closing out any of them necessarily, but you still had to have attribution.

[00:11:07] Speaker 01:
And then we expanded on that in travel century about the kinds of things you look at.

[00:11:11] Speaker 01:
So what did you ask the district court to look at here?

[00:11:15] Speaker 00:
We asked the district courts to look at the fact that the components that are remote, that defendants say are third party components, those are attributable because they must do whatever the cash control directives tell them to do.

[00:11:29] Speaker 00:
And this case is stronger

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than situations like Akamai or Eli Lilly or Travel Century, where it was an independent human user who could decide.

[00:11:39] Speaker 04:
Let me just interrupt you there.

[00:11:40] Speaker 04:
I mean, it seemed to me that your first argument really turns on that, that it is vitally important under 271 to distinguish persons from equipment.

[00:11:48] Speaker 04:
271 asks, who is doing things?

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Most of the discussion in this case is about the defendants are clearly doing things up at their servers, sending stuff down.

[00:12:00] Speaker 04:
And then there's all this talk about what equipment is doing that happens to be owned or in the hands of somebody else, but not what that somebody else is doing.

[00:12:10] Speaker 04:
And I took it that your first point is that for the particular steps of these claims, the user isn't doing anything.

[00:12:17] Speaker 00:
Yes, exactly, Your Honor.

[00:12:19] Speaker 00:
In effect, defendants haven't come forward and talked about

[00:12:23] Speaker 04:
a third party that's... And therefore, this isn't actually an Akamai case.

[00:12:27] Speaker 04:
Because an Akamai case is when two different persons are doing two different things and you're attributing person number two's action to person number one.

[00:12:36] Speaker 04:
Your first theory is there is no person number two for any of these steps.

[00:12:41] Speaker 00:
Yes, that's right, Your Honor.

[00:12:43] Speaker 00:
And to the extent the court decides that there is a third party,

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For example, whoever made the browser, whoever made the operating system or the user, that would be all attributable to defendants under Akamai.

[00:12:55] Speaker 01:
So your attribution theory is direction and control because of the instructions, the caching instructions?

[00:13:02] Speaker 00:
Yes, that's correct, Your Honor.

[00:13:03] Speaker 01:
So you're not talking about conferring a benefit.

[00:13:06] Speaker 00:
Yes, Your Honor, we are, in fact.

[00:13:08] Speaker 01:
But the benefit is to the operating system, not to the user, right?

[00:13:11] Speaker 00:
No, the benefit is definitely to the user, because the user doesn't have to wait around

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for content to be retrieved again if they already have it.

[00:13:21] Speaker 01:
In fact... Because the operating system can act more quickly, you're saying that that's not a benefit to the operating system?

[00:13:29] Speaker 00:
Well, that's a benefit to the user because our expert testified, and this is at appendix 3674, the average user is unlikely to want to disable caching because of the negative impact it affords.

[00:13:43] Speaker 00:
And that means that if you disable caching, you have a negative impact because you have to go back and forth and get that content again.

[00:13:51] Speaker 00:
And that's set forward in the HTTP protocol, which says the reason why you use caching in the first place is that you have the image available locally.

[00:14:02] Speaker 03:
And we know- Counselor, you wanted to save some time for a bottle?

[00:14:05] Speaker 00:
Yes, Your Honor.

[00:14:06] Speaker 03:
I will give you two minutes for a bottle and let's hear from the other side.

[00:14:10] Speaker 03:
Thank you, Your Honor.

[00:14:11] Speaker 03:
Mr. Franklin.

[00:14:18] Speaker 02:
Thank you, Your Honors.

[00:14:18] Speaker 02:
May it please the court, Jonathan Franklin, for the appellees.

[00:14:22] Speaker 02:
The district court correctly held that the defendants did not infringe this patent because they do not perform.

[00:14:29] Speaker 02:
The defendants do not perform the step of storing the data at the local user system.

[00:14:35] Speaker 04:
What other person does?

[00:14:36] Speaker 02:
The storing is done by the web browsers.

[00:14:42] Speaker 02:
That's not a person.

[00:14:44] Speaker 02:
The user controls the web browser and also the... Not once it's set.

[00:14:48] Speaker 04:
It's just sitting there doing whatever the remotely sent instructions are doing.

[00:14:51] Speaker 02:
But the point is that we don't.

[00:14:54] Speaker 02:
We don't control it.

[00:14:55] Speaker 02:
It's always subject to the protocols in the browser and in the operating system.

[00:15:00] Speaker 02:
And those manufacturers, yes, they are people.

[00:15:03] Speaker 02:
There are humans involved in all of these.

[00:15:06] Speaker 02:
The human who makes that operating system can decide not to cache or cache.

[00:15:11] Speaker 04:
But once the user either lets a default caching stay or sets it for caching, all of which is outside any of these particular claim elements, the activities set forth in these particular steps will go forward while the user is asleep.

[00:15:30] Speaker 02:
Well, they're not outside the claims, Your Honor, because the claims require the storing.

[00:15:36] Speaker 02:
And if the user controls whether or not the storing is going to happen,

[00:15:40] Speaker 02:
then the user is in control of that step.

[00:15:42] Speaker 02:
And the user is in control of that step.

[00:15:45] Speaker 02:
We don't control it.

[00:15:46] Speaker 02:
In fact, my opposing counsel has made reference to the cache control headers.

[00:15:51] Speaker 02:
As we said in our brief, we cannot ever dictate the caching of information that either the local systems or their users do not want to cache.

[00:16:01] Speaker 02:
And that's the key here.

[00:16:02] Speaker 01:
The key is who has control.

[00:16:04] Speaker 01:
So the users, even if they disable caching, they still get full access to the operating system.

[00:16:09] Speaker 02:
Absolutely.

[00:16:09] Speaker 02:
And the evidence is undisputed that our services operate in an identical manner, regardless of whether caching is enabled or not enabled.

[00:16:19] Speaker 02:
This is a claim that was drafted.

[00:16:20] Speaker 04:
By the way, there was some discussion in the briefs about a possible difference between mobile devices that use apps.

[00:16:30] Speaker 04:
took it that there was some evidence, at least on the IBM side, that the user cannot disable caching in the mobile devices.

[00:16:39] Speaker 04:
There may be disputed evidence, but is that right?

[00:16:41] Speaker 02:
There's no evidence that I'm aware of in the record that says the users for the mobile apps can flip the switch as they can for the web browsers, but there still is no control by

[00:16:54] Speaker 04:
the defendants over the caching because what happens in these systems... That's where Chief Judge Stark in the reconsideration said, the operating system.

[00:17:03] Speaker 02:
The mobile operating system does all of the caching pursuant to its own protocols.

[00:17:09] Speaker 02:
We don't control those protocols.

[00:17:10] Speaker 02:
What the cache control headers do is they say, if you're caching information, here's how long you should do it.

[00:17:19] Speaker 02:
But the important thing is he refers to the things that the

[00:17:24] Speaker 02:
Headers must be followed.

[00:17:25] Speaker 02:
That is true.

[00:17:26] Speaker 02:
But the header says, for example, public information.

[00:17:31] Speaker 02:
Public information is the broadest category.

[00:17:33] Speaker 02:
That is something that is cacheable.

[00:17:36] Speaker 02:
All that the protocol says is it may be cached.

[00:17:38] Speaker 02:
So if you put in a public header, we put in a public header, it may be cached.

[00:17:43] Speaker 02:
It may be cached if the local system decides it wants to cache it.

[00:17:47] Speaker 02:
That's how this works.

[00:17:48] Speaker 02:
We don't control that process.

[00:17:51] Speaker 04:
I really wish you would keep talking about persons rather than systems.

[00:17:55] Speaker 04:
The system isn't deciding anything.

[00:17:57] Speaker 04:
It tells it to do something at the moment of these steps.

[00:18:01] Speaker 02:
The people that wrote the software that the user is using at their system.

[00:18:05] Speaker 02:
There are humans that wrote the web browsers.

[00:18:08] Speaker 02:
There are humans that wrote the operating system.

[00:18:11] Speaker 02:
Their theory right now is any time a software makes a call on some other system,

[00:18:20] Speaker 02:
And that system may have embedded in it some sort of an infringing method.

[00:18:24] Speaker 02:
That the party that made the call, made the program call on it, is a direct infringer.

[00:18:31] Speaker 02:
That would expand liability tremendously.

[00:18:34] Speaker 02:
I think this is really quite an easy case.

[00:18:36] Speaker 01:
Could the mobile browsers be the direct infringers in this context?

[00:18:39] Speaker 01:
Because the mobile browsers call on the operating system.

[00:18:42] Speaker 02:
Yes.

[00:18:43] Speaker 02:
They're the direct infringers of the

[00:18:45] Speaker 02:
The mobile browsers in this case don't call in the operating system.

[00:18:48] Speaker 02:
They do the caching themselves.

[00:18:52] Speaker 02:
There's no mobile browser that is involved in these apps.

[00:18:56] Speaker 02:
It's an operating system that uses that functionality.

[00:18:59] Speaker 04:
Have you thought about centillion?

[00:19:04] Speaker 04:
Centillion is not a method case.

[00:19:07] Speaker 04:
It's about a system case.

[00:19:08] Speaker 04:
And it's all about using a system

[00:19:11] Speaker 04:
in which different components are actually spread out, some at your home, some at Quest's servers in Denver or something.

[00:19:22] Speaker 04:
And there I thought we said the person who sets the thing in motion, which in my case was going to be the home user, was actually directly infringing by using the system, even though parts of that system were absolutely under the control of Quest.

[00:19:39] Speaker 02:
I apologize.

[00:19:40] Speaker 02:
I don't think I'm familiar with that case or whether it was cited.

[00:19:42] Speaker 02:
But each patent is different.

[00:19:45] Speaker 02:
And a lot of these issues, frankly, can be dealt with by patent drafting.

[00:19:48] Speaker 02:
In this case, they drafted a patent that required storing at the local user's device.

[00:19:54] Speaker 02:
We don't do that.

[00:19:56] Speaker 02:
Other systems and humans do that.

[00:19:57] Speaker 01:
Speaking of patent drafting, do you see a distinction between claim one and claim eight?

[00:20:01] Speaker 01:
I know they didn't argue a distinction.

[00:20:04] Speaker 01:
But is the structuring language doing anything in claim eight?

[00:20:09] Speaker 02:
The structuring language isn't really, it's the storing issue that is we're dealing with.

[00:20:18] Speaker 01:
Okay, but I mean, is there a difference between saying here's the steps of the method and our method is structuring a system so that you could get to a storing capability?

[00:20:31] Speaker 02:
Yeah, but that's not what it says.

[00:20:33] Speaker 02:
It says structuring, advertising, and storing.

[00:20:36] Speaker 04:
So storing is an element of claim eight, as well as... Doesn't it say structuring advertising includes storing?

[00:20:44] Speaker 02:
Structuring advertising so that it may be selectively stored.

[00:20:47] Speaker 02:
Wherein structuring advertising includes supplying and storing.

[00:20:50] Speaker 04:
Wherein structuring advertising includes supplying and storing.

[00:20:55] Speaker 04:
Doesn't that mean the structure, which has to be you, is doing the storing?

[00:20:59] Speaker 02:
Yes, and we're not.

[00:21:00] Speaker 04:
So there is no... So you're not even doing the structuring?

[00:21:03] Speaker 02:
We're not doing the structuring that is described in this claim.

[00:21:07] Speaker 02:
We're not.

[00:21:08] Speaker 02:
Because the structuring includes storing, we're not doing the storing.

[00:21:11] Speaker 02:
Another party is doing the storing.

[00:21:13] Speaker 02:
Who's doing the structuring in that?

[00:21:16] Speaker 02:
In this case, again, nobody because structuring advertising includes two things.

[00:21:23] Speaker 02:
we're not doing the second of those two things.

[00:21:26] Speaker 02:
So nobody is doing, no single party is doing this.

[00:21:29] Speaker 04:
Maybe I'll try to ask it this way.

[00:21:30] Speaker 04:
I guess I took it that the structuring of advertising is definitely something that the publisher who's running the server is doing.

[00:21:38] Speaker 04:
They're making it

[00:21:39] Speaker 04:
so that it fits nicely with the non-advertising content and it arrives at the same time or is there at the same time and that the language here by saying structuring advertising includes storing implies that the structure is the store.

[00:21:59] Speaker 04:
Why does that not imply that?

[00:22:02] Speaker 02:
To be an infringer, yes.

[00:22:04] Speaker 02:
So they've defined what structuring advertising means here.

[00:22:07] Speaker 02:
You have to do two things to be a structure of advertising.

[00:22:10] Speaker 02:
You need to do step one and step two.

[00:22:13] Speaker 02:
We don't do step two.

[00:22:14] Speaker 02:
We're not a structure under this claim.

[00:22:16] Speaker 02:
We don't infringe this claim.

[00:22:18] Speaker 02:
This is, I think, Judge O'Malley, SERF is clearly distinguishable.

[00:22:21] Speaker 02:
This is, that was a case where the sole defendant controlled, not just controlled, but

[00:22:26] Speaker 02:
wrote, made the hardware, wrote the software, installed it at the user system.

[00:22:31] Speaker 02:
And I would add, by the way, that Court and Serf made clear and emphasized that the users had no ability to change what the defendant did, its infringing systems.

[00:22:42] Speaker 02:
Here it's completely different.

[00:22:44] Speaker 02:
We don't control the web browsers and the operating systems and the users who ultimately control both.

[00:22:50] Speaker 02:
We don't control them.

[00:22:52] Speaker 02:
This is an easy case for the following reason.

[00:22:54] Speaker 02:
There's no direct infringement under CERF because there is, in fact, a step, the storing step that we don't do.

[00:23:00] Speaker 02:
There is no attributed, under ACMI, you can attribute infringement, you can have vicarious liability in four different ways.

[00:23:07] Speaker 02:
You can have a contractual relationship, you can have an agency relationship, you can have a joint enterprise, or you can have conditioning of a benefit or participation on the step.

[00:23:18] Speaker 02:
They haven't made any argument under one, two, or three.

[00:23:21] Speaker 02:
And number four, clearly waived in the district court.

[00:23:24] Speaker 02:
And I want to just clarify that if I could.

[00:23:27] Speaker 02:
We said in our summary judgment motion, you aren't making any argument under that prong of Akamai 5 that there's a conditioning of a benefit.

[00:23:36] Speaker 02:
And they weren't.

[00:23:37] Speaker 02:
Not only that, we said your expert, he testified that you conditioned a benefit on this step, the screen displaying step, but not the caching step.

[00:23:46] Speaker 02:
They responded, we don't need to prove that because we can do it a different way.

[00:23:51] Speaker 02:
So it's not just a case where they never made the argument below.

[00:23:55] Speaker 02:
They affirmatively said, we aren't making the argument below.

[00:23:59] Speaker 02:
And then when Travel Sentry came out, we had cited the district court opinion in Travel Sentry, and they said, oh, that's been reversed.

[00:24:06] Speaker 02:
They never made an argument that there was a conditioning of a benefit.

[00:24:10] Speaker 02:
And the reason I think they never made that argument is there is no conditioning of a benefit here.

[00:24:15] Speaker 02:
Our websites operate, as the testimony says,

[00:24:18] Speaker 02:
in identical manner, regardless of whether caching is enabled or caching is not enabled.

[00:24:24] Speaker 02:
We don't care.

[00:24:26] Speaker 02:
And if this was an argument that they wanted to make.

[00:24:30] Speaker 04:
Do you remember the IBM patented issue says, what are the supposed problems being solved here by this?

[00:24:41] Speaker 04:
And here I'm just going to use the term prefetching.

[00:24:44] Speaker 02:
So let me just put it in context.

[00:24:46] Speaker 02:
We're dealing in, this is prodigy.

[00:24:48] Speaker 02:
Your honors may be old enough to remember what that is.

[00:24:51] Speaker 04:
Well, this is extraordinary that this patent is still alive in the 1989.

[00:24:55] Speaker 04:
That's another issue.

[00:24:58] Speaker 02:
But this was a closed system involving

[00:25:01] Speaker 04:
typically and almost exclusively dial-up modems where it could take and so I guess that actually maybe I'll just flip ahead it seems to me you may not be providing a benefit through this because now we have super fast unlimited bandwidth but that doesn't mean

[00:25:21] Speaker 04:
that had you been using the older form where it mattered to have some of the to-be displayed advertising not having to come through on the same wire, that would have been a benefit.

[00:25:34] Speaker 02:
Well, we don't do the prefetching, and that's our alternative argument, because only the caching that's done by the operating systems and the browsers is done when the thing is retrieved in response to a call.

[00:25:43] Speaker 02:
But just to make that point, what I was going to say is if they wanted to make this argument, the conditioning of a benefit argument, which they clearly waived below, said they weren't making

[00:25:51] Speaker 02:
We would have come back with extensive evidence showing, for example, to the extent there's any difference in speed, it's milliseconds.

[00:25:59] Speaker 02:
Milliseconds.

[00:26:01] Speaker 02:
Because no user considers that to be in any way material to their use of our websites.

[00:26:07] Speaker 02:
They're very impatient people.

[00:26:09] Speaker 02:
I don't think they're that.

[00:26:10] Speaker 02:
I mean, maybe, Your Honor, but I don't think.

[00:26:13] Speaker 01:
But you don't refuse access to your material.

[00:26:18] Speaker 01:
Absolutely.

[00:26:18] Speaker 02:
And this is just the MedGraph case in our view.

[00:26:21] Speaker 02:
The MedGraph case said there was an automatic synchronizing step.

[00:26:25] Speaker 02:
By the way, it was automatic.

[00:26:27] Speaker 02:
So it was a system that was doing it.

[00:26:28] Speaker 02:
There was an automatic synchronizing step that the party that didn't have to be done.

[00:26:35] Speaker 02:
And what the court said is, well, the users can take their data into their doctor and have the doctor extract it, or they can print it out and take it in.

[00:26:44] Speaker 02:
Obviously, those are things that

[00:26:47] Speaker 02:
that are less efficient, but the court said there was no conditioning of a benefit.

[00:26:51] Speaker 02:
And my point here is that there are many, many facts that we would have put into evidence, among them also that there's very, very little of what IBM would consider to be advertising data that we ever allowed to be cached by the operating systems of the browsers because, among other things, we get paid for how many ads we send down and also because

[00:27:13] Speaker 02:
the ads need to be current and most often and almost exclusively the ads are just links to websites from the advertiser.

[00:27:21] Speaker 02:
They're not data that can be cached on the local system.

[00:27:25] Speaker 04:
All of these things we would have shown... Your metering of the advertising is from the transmission, not from the display.

[00:27:30] Speaker 02:
That's what I understand, Your Honor.

[00:27:32] Speaker 02:
We would have put a lot more... My only point here, this is going to the waiver point.

[00:27:37] Speaker 02:
We've rarely seen a clearer example of waiver here.

[00:27:40] Speaker 02:
This is something that they never argued.

[00:27:42] Speaker 02:
We told them it wasn't in the case.

[00:27:43] Speaker 02:
We told them their expert never testified about it.

[00:27:46] Speaker 02:
They came back and said, yeah, we don't need to do that because we've got other theories.

[00:27:51] Speaker 02:
And then for the first time on appeal, they bring out this test, which I think your honors are familiar with travel sentry.

[00:27:57] Speaker 02:
That was litigated extensively below.

[00:28:00] Speaker 02:
Mankees is another case where this court said it wouldn't be doing this on appeal for the first time and of course remanded but in that case the law had changed while it was on appeal so the party had that opportunity.

[00:28:12] Speaker 02:
Here the law was established well before.

[00:28:15] Speaker 02:
This is not a direct infringement case.

[00:28:18] Speaker 02:
It is not an attributed infringement case under Akamai because as I said they haven't made any arguments under the first three parts of that test and the fourth part they've clearly waived.

[00:28:29] Speaker 02:
I think this is something that fits quite squarely into the court's precedence.

[00:28:34] Speaker 02:
And for the court to then adopt this view that any time somebody sends instructions to another entity's operating systems or web browsers that then, in their view, cause this to happen.

[00:28:50] Speaker 02:
Now, we don't think that actually happens.

[00:28:53] Speaker 02:
Causing something is not the same as having the kind of control that you need.

[00:29:00] Speaker 02:
And I think that what the court has said in its divide infringement cases is we need to put a lid on this because it would blow away the entire doctrines of induced and contributory infringement.

[00:29:11] Speaker 02:
So we would ask the court affirm the judgment below on these grounds or on the alternative grounds that we've also presented in our brief.

[00:29:19] Speaker 03:
Thank you, Carlson.

[00:29:22] Speaker ?:
Mr.

[00:29:23] Speaker 03:
UCF has some more battle time.

[00:29:25] Speaker 03:
Two minutes.

[00:29:26] Speaker 00:
Your Honor, defendants all but concede the direction or control point on pages 14 to 16 of their appeal brief.

[00:29:35] Speaker 00:
What they say there is they characterize IBM's substantial evidence as showing that they merely control, or they just cause, or they necessarily require storing to occur.

[00:29:48] Speaker 00:
That's how they characterize IBM's evidence.

[00:29:53] Speaker 00:
evidence must be viewed in the light most favorable to IBM.

[00:29:56] Speaker 00:
So at the point in which they say that, that means that to the extent there isn't even is a third person which they haven't identified, that behavior should be attributed to defendants.

[00:30:08] Speaker 00:
And that's why it makes sense to find attribution if the court does not find direct infringement.

[00:30:14] Speaker 04:
Can you address the kind of broad point that Mr. Franklin mentioned that to adopt your primary theory of causing the storing because the user can be asleep when it's happening, even if the user has control of the equipment in a general sense, would vastly expand

[00:30:38] Speaker 04:
infringement liability in both unprecedented and dangerous ways.

[00:30:45] Speaker 00:
Your Honor, it would not expand liability in the way that defendants posit.

[00:30:50] Speaker 00:
And the reason why is you'd still be asking who, in effect, is deciding what is occurring.

[00:30:57] Speaker 00:
So if there was actually evidence that the users have to look at a pop-up box, and then they say, well, I'm choosing to download this.

[00:31:07] Speaker 00:
Please download.

[00:31:08] Speaker 00:
then we'd be in a different situation.

[00:31:11] Speaker 00:
If there was a situation in which the operating system, there's evidence that rather than just blindly obeying whatever happens, actually has to make a decision making process, then maybe we'd be in a different situation.

[00:31:24] Speaker 00:
So that's the backstop to overly expansive infringement.

[00:31:28] Speaker 00:
The question is, who's driving the bus in this scenario?

[00:31:32] Speaker 00:
not who's manufacturing the wheels or some implementation details on the lower end.

[00:31:38] Speaker 00:
And that's really the issue here.

[00:31:40] Speaker 00:
In effect, defendants are confusing.

[00:31:42] Speaker 01:
You know, when you say who's driving the bus, I mean, there have to be circumstances, either for conditioning of a benefit or otherwise.

[00:31:49] Speaker 01:
I mean, in Eli Lilly, we said, OK, those patients have no choice.

[00:31:55] Speaker 01:
They have to do these things in order to get the medical treatment.

[00:32:00] Speaker 01:
This is not a situation in which the downstream servers have no choice, right?

[00:32:07] Speaker 00:
Your Honor, the evidence is that they have no choice.

[00:32:11] Speaker 00:
The HTTP protocol says the directives, quote, must be obeyed.

[00:32:16] Speaker 00:
In comparing it to Eli Lilly, if we think about Eli Lilly, that was about a case where a pharmaceutical company set out particular instructions for how to do treatment.

[00:32:26] Speaker 00:
And then the

[00:32:28] Speaker 00:
expert witness in that case said that physicians, based on that evidence, would then withhold folic acid or withhold treatment unless the patients used folic acid.

[00:32:39] Speaker 00:
So the two steps removed from what the defendant was doing.

[00:32:42] Speaker 00:
First, physicians would act in this way, and then patients would be denied

[00:32:47] Speaker 00:
a benefit if physicians happen to withhold treatment based on them taking folic acid.

[00:32:53] Speaker 01:
But evidence is clear that there's no benefit that's withheld.

[00:32:57] Speaker 01:
Anybody can still access that website, whether they cash or not.

[00:33:00] Speaker 00:
The question, though, Your Honor, is not whether they can access the website, but whether the activity is conditioned.

[00:33:06] Speaker 00:
And the activity here is storing.

[00:33:09] Speaker 00:
The activity is not visiting Priceline's website.

[00:33:11] Speaker 00:
So the key question we have to ask is, is the benefit from storing it?

[00:33:15] Speaker 01:
Well, that's awfully narrow.

[00:33:17] Speaker 01:
assessment of what the reported benefit would be.

[00:33:21] Speaker 01:
I mean, even if you didn't waive this argument.

[00:33:24] Speaker 00:
In Appendix 3533, that's the HTTP protocol, and it says why you store, and you store to increase speed, and that's a benefit to the user.

[00:33:33] Speaker 00:
As to waiver, we actually had a section in our brief about attribution, and furthermore, if we think about defendant's wa... But did you argue the benefit prong?

[00:33:43] Speaker 01:
So... Conditioning a benefit prong, you didn't, though.

[00:33:45] Speaker 00:
because that was already before the court.

[00:33:47] Speaker 00:
The court decided that there was a benefit at appendix 54, 51 to 52, where it talks about the benefits of the invention.

[00:33:54] Speaker 00:
Rather than talking about the benefits of the invention over again, we pointed to the other factual scenarios that might give rise to liability.

[00:34:03] Speaker 03:
Council, as you can see, you've exceeded your time.

[00:34:08] Speaker 03:
We'll conclude the argument.

[00:34:10] Speaker 03:
The case is submitted.

[00:34:11] Speaker 00:
Thank you, Your Honor.