[00:00:22] Speaker 01:
Mr. Gannon, when you're ready.

[00:00:34] Speaker 02:
And help me, which claim are we talking about for this case?

[00:00:38] Speaker 02:
Which patent?

[00:00:39] Speaker 03:
So this is, it's really all of the, this argument relates to all the patents.

[00:00:44] Speaker 03:
Okay.

[00:00:45] Speaker 03:
It's the constitutional law issue.

[00:00:46] Speaker 02:
Oh, you want to raise the constitutional issue?

[00:00:48] Speaker 02:
Yes.

[00:00:48] Speaker 02:
Okay, that's fine.

[00:00:50] Speaker 02:
Yeah, so.

[00:00:51] Speaker 02:
Ms.

[00:00:51] Speaker 02:
Allen, you get to talk.

[00:00:57] Speaker 02:
Can I ask you, since you're going to raise it, let me ask you.

[00:01:02] Speaker 02:
You've suggested that there's a takings problem and a due process problem.

[00:01:07] Speaker 02:
Can you explain what your takings theory is to the extent that you can assert it in the context of a CPM review?

[00:01:18] Speaker 03:
I think that the takings clause, it's just a simply you're taking a property.

[00:01:23] Speaker 03:
That's as simple as that.

[00:01:24] Speaker 02:
Well, sure, but this is the problem with your constitutional arguments even in your expanded, more detailed discussion in your briefs.

[00:01:33] Speaker 02:
You don't actually play that out.

[00:01:36] Speaker 02:
It's not that a taking is unconstitutional.

[00:01:39] Speaker 02:
The Takings Clause actually permits Congress or the United States to take property with just compensation.

[00:01:46] Speaker 02:
So how would your theory of a Takings Clause violation apply here in the context of the CBM review at all?

[00:01:55] Speaker 03:
Well, because the same exact thing is happening, Your Honor.

[00:01:58] Speaker 03:
You've got.

[00:01:59] Speaker 02:
No, no, but explain it to me.

[00:02:01] Speaker 02:
There's a test for Takings Clause.

[00:02:04] Speaker 02:
two different kinds of takings, or maybe even more, and you get a certain type of relief.

[00:02:10] Speaker 02:
What relief do you think you can get from the PTAB for a takings violation?

[00:02:16] Speaker 02:
Well, that's the problem.

[00:02:16] Speaker 02:
We can't get any relief from the PTAB.

[00:02:18] Speaker 02:
Well, then why are you asserting a takings clause here?

[00:02:20] Speaker 02:
Do you know where the takings clause relief should go?

[00:02:24] Speaker 03:
I'm sorry.

[00:02:28] Speaker 03:
I don't understand that.

[00:02:29] Speaker 02:
Well, I don't understand what you're talking about, because a takings clause against the United States means that you're arguing the United States is taking your property without just compensation, and you're asking for that compensation.

[00:02:42] Speaker 02:
You can't do that in a PTAB case, right?

[00:02:45] Speaker 02:
You can't ask the PTAB to order the government to pay you money.

[00:02:49] Speaker 02:
That's right.

[00:02:49] Speaker 02:
You go to the Court of Federal Claims for that.

[00:02:54] Speaker 03:
Well, Your Honor.

[00:02:55] Speaker 02:
Well, I mean, can you give me one single case with a legal theory that has shown a takings clause is a defense to an agency action, rather than the theory I just described, which is where almost every other takings clause case against the United States goes?

[00:03:10] Speaker 03:
I can't give you a case off the top of my head.

[00:03:12] Speaker 02:
I mean, your repeated reference of this takings clause theory in multiple briefs without any explanation, without any citation to legal authority that would allow it to be applied in a PTEP case comes very, very close to being frivolous as briefed and frivolous as argued.

[00:03:27] Speaker 02:
I'm just going to warn you.

[00:03:28] Speaker 02:
I don't think I want you to need to be asserting that very many more times here.

[00:03:34] Speaker 02:
Now, your due process claim may have some more legitimate arguments, although again,

[00:03:39] Speaker 02:
I don't know what your theory is because you don't cite any kind of test.

[00:03:42] Speaker 02:
You don't explain how that test is applied to this legislation at issue or the like.

[00:03:47] Speaker 02:
So you have some time here.

[00:03:50] Speaker 02:
Why don't you try to explain it to me?

[00:03:51] Speaker 03:
Well, Your Honor, with respect to due process, again, our patents, TT's patents, we already had a trial on these patents before the AIA was even enacted.

[00:04:02] Speaker 03:
The AIA was enacted.

[00:04:05] Speaker 03:
It was applied retroactively to our patents.

[00:04:09] Speaker 03:
for the first time ever the government could assert or the opposing council could assert a 101 argument with the lower standard of proof that changed the quid pro quo of the system and That is violating that the takings and due process clauses.

[00:04:29] Speaker 02:
We believe Well, we've already established that you can asserted takings clause and

[00:04:34] Speaker 02:
or at least to my satisfaction that it's not a defense to an agency action, how does Congress's retro application and creation of the CBM review and retroactive application to your process or patents violate due process?

[00:04:51] Speaker 03:
Well, because for the first time now in a patent office proceeding, for example, the other side can argue that the patents are abstract, for example, under a lower standard.

[00:05:02] Speaker 02:
Why is that a violation of due process?

[00:05:04] Speaker 03:
because we never had notice of that.

[00:05:09] Speaker 02:
Again, what is the test for a due process violation involving retroactive application of law?

[00:05:16] Speaker 02:
It's not always unconstitutional, right?

[00:05:18] Speaker 02:
It's not per se unconstitutional for Congress to enact a law with retroactive effects.

[00:05:24] Speaker 02:
There's a test for it.

[00:05:26] Speaker 02:
Do you know what the test is?

[00:05:27] Speaker 03:
I believe I do know the test.

[00:05:29] Speaker 02:
I mean, it's not in your briefs.

[00:05:31] Speaker 02:
Can you articulate it for me and tell me how it applies in this case?

[00:05:35] Speaker 03:
Well, in the PTAB proceeding, again, it's a completely different proceeding than this report.

[00:05:40] Speaker 02:
Can you start with what the test is?

[00:05:43] Speaker 02:
What's the test?

[00:05:44] Speaker 02:
I mean, again, you agree that Congress has been permitted over the years to enact legislation that has retroactive application without violating the due process clause, right?

[00:05:56] Speaker 02:
Right.

[00:05:56] Speaker 02:
Not every retroactive application is unconstitutional.

[00:06:00] Speaker 02:
What's the test to determine whether it falls into that constitutional line or unconstitutional line?

[00:06:07] Speaker 03:
Well, Your Honor, I can't cite a case to you right now.

[00:06:11] Speaker 02:
Again, I mean, you're

[00:06:14] Speaker 02:
You're really pushing the boundaries by repeatedly referencing in very shorthand fashion these arguments without giving us any explanation whatsoever to how they apply here.

[00:06:27] Speaker 02:
You're getting them rejected out of hand in the last two trading technology cases for not effectively preserving them.

[00:06:37] Speaker 02:
It becomes a problem at a certain point when you just throw something out there and you suggest that we have to decide this issue without giving us any explanation of what your argument is.

[00:06:46] Speaker 03:
Well, Your Honor, with all the respect on the earlier cases, the court just found that the only problem they had was that we waived the argument, even though in those earlier cases we did have argument in our blue brief.

[00:07:00] Speaker 03:
the federal circuit allowed the government to file an additional brief, and then the federal circuit allowed us to file a 30 or 40-page brief in response.

[00:07:10] Speaker 02:
Sure, but you don't preserve arguments by putting a one- or two-paragraph placeholder in and saying, oh, we have this possible argument, and then forcing the government or the other side to respond ultimately, and then you getting

[00:07:24] Speaker 02:
a 30-page reply brief.

[00:07:25] Speaker 02:
And you may have put four paragraphs in this time instead of two, but you still haven't been able to articulate a sufficiently detailed legal theory, and you haven't done it today at argument.

[00:07:38] Speaker 02:
Well, Your Honor, if you would like us to submit... No, I would like you to quit putting in

[00:07:43] Speaker 02:
two paragraph placeholders or four paragraph placeholders, and then when we ask you to distinguish prior cases, claiming in a supplemental letter that those are detailed discussions.

[00:07:54] Speaker 02:
I mean, you wrote that letter, right, that said you had a detailed discussion of constitutional law in your brief.

[00:08:00] Speaker 02:
If you ask a first year associate to give you a detailed memo on this issue, do you think four paragraphs would cut it?

[00:08:08] Speaker 03:
I think it depends.

[00:08:09] Speaker 03:
It depends on what the issues are.

[00:08:13] Speaker 02:
Well, don't you think it would at least require a description of the test and how it applied to the case at hand?

[00:08:20] Speaker 02:
Can you point to me in your brief, in any of your blueberries here, where you actually describe the test and how it applied to the cases at hand?

[00:08:29] Speaker 03:
Well, as I said, Your Honor, we'd be happy to provide that to the court.

[00:08:32] Speaker 02:
No, thanks.

[00:08:35] Speaker 02:
Do you want to talk about the merits?

[00:08:36] Speaker 02:
Where have we basically discussed all those same issues with regards to?

[00:08:39] Speaker 02:
Unless you have any questions on the merits.

[00:08:42] Speaker 02:
Thanks.

[00:08:43] Speaker 02:
Miss Nelson, since he's not talking about the merits, unless you really want to talk, I think we're good.

[00:08:48] Speaker 02:
Miss Allen, do you want to briefly address the constitutional issues?

[00:08:57] Speaker 02:
Can you first address the takings clause?

[00:09:00] Speaker 02:
Are you aware of any kind of case where the takings clause is used as a defense to an agency action?

[00:09:07] Speaker 00:
Your Honor, we didn't make that argument because in Horne versus Department of Agriculture, the Supreme Court allowed under that statutory scheme for a takings argument to be used as a defense to an agency action.

[00:09:19] Speaker 02:
But how would that play out then?

[00:09:23] Speaker 02:
Would it make the agency action unlawful, or would it just mean that they could seek compensation for it?

[00:09:29] Speaker 00:
Ultimately, it would just mean that they could seek compensation.

[00:09:32] Speaker 00:
But because the Supreme Court allowed it in that case, we didn't run that argument here.

[00:09:37] Speaker 02:
Did that case go through district court at some point, or was it pure review from an agency action?

[00:09:44] Speaker 02:
I'm just curious.

[00:09:45] Speaker 02:
I'm not ruling it out.

[00:09:47] Speaker 02:
But your friend on the other side can't come up with any argument why it can be asserted in a PTAB case.

[00:09:52] Speaker 02:
Can you think of how it would be asserted in a PTAB case?

[00:09:55] Speaker 00:
Oh, I certainly don't want to be making that argument for him.

[00:09:57] Speaker 00:
And we haven't briefed Horne.

[00:09:59] Speaker 00:
But just to my mind, that's the closest case.

[00:10:04] Speaker 00:
And I apologize that I don't have the exact facts.

[00:10:06] Speaker 02:
And what happened in Horne, then?

[00:10:07] Speaker 02:
Did they find the agency action unconstitutional?

[00:10:10] Speaker 00:
I'm not sure what the merits determination was, Your Honor.

[00:10:14] Speaker 00:
a question about taking raisins as a defense in the agency proceeding under the particular statute that was at issue there.

[00:10:22] Speaker 00:
The takings argument was allowed to be raised.

[00:10:25] Speaker 00:
Here, as we've discussed in our forfeiture argument, I think if they had raised this argument before the agency, the agency has discretion to decline to institute CBM review.

[00:10:37] Speaker 00:
So if the agency had agreed with them, it could have declined to institute the review.

[00:10:42] Speaker 00:
But again, we think the takings argument also fails on the merits.

[00:10:45] Speaker 00:
And just to briefly address the due process issue, the question is whether Congress had a rational basis.

[00:10:49] Speaker 00:
And we think that the rational basis this court found in Patlex applies fully here.

[00:10:53] Speaker 00:
And that decision controls this case.

[00:10:56] Speaker 01:
OK.

[00:10:58] Speaker 00:
Thanks.

[00:11:01] Speaker 02:
Mr. Ganna, do you have anything on rebuttal?

[00:11:04] Speaker 02:
No, Your Honor.

[00:11:04] Speaker 02:
Thanks.

[00:11:05] Speaker 02:
The case will be submitted.

[00:11:07] Speaker 02:
We're in recess.