[00:00:02] Speaker 03:
Council for the appellant ready to proceed?

[00:00:06] Speaker 03:
Do we have a motion?

[00:00:15] Speaker 04:
Admissions?

[00:00:16] Speaker 04:
Do we have any admissions?

[00:00:19] Speaker 04:
I have some admissions.

[00:00:25] Speaker 04:
Okay.

[00:00:26] Speaker 04:
I wasn't told that.

[00:00:29] Speaker 04:
I'm going to move the admission of

[00:00:32] Speaker 04:
three of my current law clerks who probably should stand.

[00:00:37] Speaker 04:
It's a pleasure and a privilege to move all of your admissions of whom are about to leave me for very bright and promising careers.

[00:00:51] Speaker 04:
They've all been wonderful thinkers and researchers and conversation partners, writers and chambers companions.

[00:01:02] Speaker 04:
For each, my personal experience, I will attest to their qualifications to be members of the bar of this court, which is very much the richer for their presence.

[00:01:12] Speaker 04:
And now I will do each of the three in turn.

[00:01:15] Speaker 04:
That's OK.

[00:01:15] Speaker 04:
That's fine.

[00:01:17] Speaker 04:
First, I move the admission of Amy Feinberg, who is a member of the bar and is in good standing with the highest court of Colorado.

[00:01:24] Speaker 04:
And I remove the admission of Samuel Benjamin Goldstein, who is a member of the bar and is in good standing with the highest court of California.

[00:01:34] Speaker 04:
And I move the admission of Claire Williams, who is a member of the bar and is in good standing with the highest court of Minnesota.

[00:01:41] Speaker 04:
I have knowledge of all of their credentials, and I'm satisfied that each one possesses the necessary qualifications.

[00:01:50] Speaker 03:
Ms.

[00:01:50] Speaker 03:
Cleminger, do you want to take any of the witnesses on board here?

[00:01:55] Speaker 05:
Well, I'll just make a comment for the benefit of the audience.

[00:01:59] Speaker 05:
In this court, as you would know, all the judges have law clerks.

[00:02:04] Speaker 05:
And during the course of doing our work, the clerks, because we're all one roof and one building, the clerks from one chamber to another chamber frequently interact with each other and exchange ideas and thoughts.

[00:02:19] Speaker 05:
And I just want to say that

[00:02:21] Speaker 05:
I'm aware of the skills of these three applicants to the bar, and they have been materially helpful to the work of the court in the time they've been here.

[00:02:33] Speaker 05:
And so I'm pleased to vote in favor of their admission to the bar, and I look forward to them coming back.

[00:02:40] Speaker 05:
And I promise you that you will be treated just as harshly as we treat everyone else.

[00:02:47] Speaker 03:
And I join in

[00:02:50] Speaker 03:
in agreeing to that motion, so it is granted.

[00:03:17] Speaker 03:
OK.

[00:03:17] Speaker 03:
Is the appellant ready to proceed?

[00:03:19] Speaker 01:
Yes, Your Honor.

[00:03:25] Speaker 01:
May it please the court?

[00:03:26] Speaker 01:
Deion Maynard on behalf of Balsam.

[00:03:29] Speaker 01:
I'd like to try to reserve three minutes for rebuttal while also addressing jurisdiction, claim construction, and the disputes of fact that exist even under the district court's claim construction.

[00:03:39] Speaker 01:
I'd like to start with jurisdiction, because this case should have been dismissed at the outset for lack of Article III jurisdiction.

[00:03:46] Speaker 04:
At the time that UCP brought this declaratory judgment suit, it had no US customers, it had no US sales, was making no meaningful progress towards US sales, and Balsam had shown... But why isn't it enough that Balsam obviously thinks that UCP's products infringe, sued on them, though didn't sue them, until, I don't know, a couple of days before, maybe even the day before or something?

[00:04:10] Speaker 04:
The front gate litigation was settled.

[00:04:12] Speaker 04:
They were actually selling the products into the United States.

[00:04:16] Speaker 04:
Why is that not exactly the common sense situation that Men Immune says is one for which the court should be available to figure out whether, if they start doing it again tomorrow, what they were doing yesterday, they're at risk?

[00:04:31] Speaker 01:
Well, because they've made no meaningful efforts to start doing tomorrow what they were doing yesterday, Your Honor, and this course held customer suits alone are not enough.

[00:04:39] Speaker 01:
That was the case in Allied.

[00:04:40] Speaker 01:
The customer had been sued, but no actions had been taken toward the supplier.

[00:04:44] Speaker 01:
Is Allied the one about the Mexican patent?

[00:04:45] Speaker 01:
It is, Your Honor.

[00:04:46] Speaker 01:
Well, that's different.

[00:04:47] Speaker 01:
Let's assume that's different.

[00:04:50] Speaker 01:
It is different, Your Honor, but it's the same in one meaningful respect, which is that the Mexican patent there was the same as the U.S.

[00:04:58] Speaker 01:
patent.

[00:04:59] Speaker 04:
The supplier in that case was making... Right, but the willingness to go into one system's courts as opposed to another might in fact be

[00:05:06] Speaker 04:
be quite different.

[00:05:07] Speaker 04:
But here, Balsam was quite willing to go into the US courts to enforce the very patent against the very same products.

[00:05:15] Speaker 01:
Well, but it had chosen to sue Frontgate.

[00:05:17] Speaker 01:
And it had opportunities throughout that suit to add UCP, considered doing so, and affirmatively did not do so.

[00:05:23] Speaker 01:
And it's UCP's burden to show Article III standing.

[00:05:27] Speaker 01:
And here, at the time of the complaint,

[00:05:29] Speaker 01:
They have no meaningful steps to find new customers or to make new sales, and they're only... Well, that was the case materially, different from the Arkema Honeywell case.

[00:05:38] Speaker 05:
Well, that case, Your Honor... In that case, you had a French manufacturer who wanted to manufacture a thing to be put in cars.

[00:05:49] Speaker 05:
Honeywell was doing the same thing in the United States.

[00:05:51] Speaker 05:
Honeywell was issuing contracts with people to make the stuff.

[00:05:55] Speaker 05:
The guy in France had a factory that made it, but he had done nothing.

[00:05:59] Speaker 05:
He had not taken any steps to enter into a contract.

[00:06:03] Speaker 05:
He simply wanted to find out whether or not he would be infringing if he entered the market.

[00:06:09] Speaker 01:
That's not how I read that case, Judge Clemender.

[00:06:11] Speaker 01:
I understand that case.

[00:06:12] Speaker 05:
What facts do you add beyond the ones I just gave you, which are the only ones in the case?

[00:06:17] Speaker 01:
My reading of the case, Your Honor, my memory of the case is that the D.J., the declaratory judgment plaintiff there had already responded to one customer request to supply the product and was poised to respond to others.

[00:06:29] Speaker 05:
That was Honeywell.

[00:06:32] Speaker 05:
The opinion went on to say if we don't grant D.J., we'll put the French guy in the position that he will have to go out and try to make those contracts.

[00:06:43] Speaker 01:
That's not my memory of the case, Your Honor, but the point here is that

[00:06:47] Speaker 01:
There have been no concrete steps at the time that they filed their complaint, and Balsam had showed no interest in suing them.

[00:06:55] Speaker 01:
If the court does find jurisdiction here, however, we would like the court, and we think the court should reach the claim construction issues.

[00:07:02] Speaker 05:
Well, if I'm right that the French company was not engaging in any contracts, then would you concede that the cases are all in all fours?

[00:07:13] Speaker 01:
No, Your Honor, because while that might get

[00:07:16] Speaker 01:
UCP's affirmative actions, Balsam had showed no affirmative interest in suing UCP.

[00:07:22] Speaker 03:
Let me ask you this.

[00:07:24] Speaker 03:
On page four of the gray brief, you say Balsam's reported threat to sue UCP was neither issued by Balsam nor communicated to UCP, and that they refer to a never-filed draft case management statement from the front gate litigation.

[00:07:42] Speaker 03:
Was this a draft?

[00:07:43] Speaker 03:
And if so,

[00:07:44] Speaker 03:
Is there any evidentiary foundation for it?

[00:07:48] Speaker 03:
How can anybody cite to it?

[00:07:50] Speaker 01:
It was a draft.

[00:07:51] Speaker 01:
It was communicated between the parties in the Frontgate case.

[00:07:54] Speaker 01:
Frontgate was represented by the same council as it represents UCP.

[00:07:57] Speaker 01:
It was not what was filed in the Frontgate case.

[00:07:59] Speaker 01:
I believe it made its way into this case because it was attached to either the complaint or the amended complaint here in the Deterritorial Judgment Act case.

[00:08:07] Speaker 01:
But in any event, Your Honor, it was communicated at most to Frontgate, not to UCP.

[00:08:12] Speaker 03:
I would like to shift those.

[00:08:15] Speaker 03:
But its foundation, then, is it could be still a fugitive piece of paper that's attached to a filed document.

[00:08:27] Speaker 03:
I don't see any foundation for it.

[00:08:28] Speaker 01:
That's my guess.

[00:08:30] Speaker 01:
Well, I believe the other side attached it to one of their complaints in this declaratory judgment action.

[00:08:35] Speaker 01:
But I do not believe it shows any action by Balsam to suggest an actual intent

[00:08:41] Speaker 01:
to sue UCP.

[00:08:42] Speaker 01:
In fact, it shows the opposite.

[00:08:44] Speaker 01:
It was not communicated directly to UCP.

[00:08:46] Speaker 01:
And UCP, although at one point, I mean, Balsam did at one point consider suing UCP in the Frontgate litigation, it affirmably chose not to.

[00:08:54] Speaker 04:
Does the record tell us how many UCP trees were sold through Frontgate when Frontgate was selling them, even in ballpark terms?

[00:09:03] Speaker 04:
Is it three or is it 300?

[00:09:07] Speaker 01:
I do not know the answer to that, Your Honor.

[00:09:10] Speaker 05:
So if I may.

[00:09:12] Speaker 05:
Well, what are we supposed to do with paragraph seven of Mr. Wee's declaration, which is made after the DJ was filed, a few months after?

[00:09:23] Speaker 01:
So the declaration that he filed, right?

[00:09:25] Speaker 01:
So one, as you say, it's after the complaint was filed, and after arising facts cannot create jurisdiction.

[00:09:31] Speaker 05:
Well, I didn't understand you in your brief to be saying we should ignore it.

[00:09:35] Speaker 01:
I beg your pardon?

[00:09:36] Speaker 05:
I didn't understand you in your brief.

[00:09:37] Speaker 05:
Maybe you're saying it now to say we would ignore paragraph 7 because it was filed after the complaint was filed.

[00:09:44] Speaker 01:
I think you do ignore after arising facts, Your Honor.

[00:09:48] Speaker 04:
But not just because the declaration was filed after.

[00:09:51] Speaker 04:
I mean, nobody files a declaration.

[00:09:53] Speaker 04:
You don't have to file a declaration with your complaint.

[00:09:55] Speaker 04:
Your point is that the subject of the declaration was not facts at the time of the filing.

[00:10:01] Speaker 01:
Those facts are certainly not alleged to be facts at the time of the original filing in the declaration.

[00:10:07] Speaker 01:
And again, it's their burden to show that at the time they filed their complaint and their complaint at day 120.

[00:10:11] Speaker 05:
When he says he's searching for a warehouse or he's taking steps to make direct sales, we assume that's all after the filing of the complaint?

[00:10:19] Speaker 01:
It's certainly not alleged in the original complaint.

[00:10:21] Speaker 01:
And it does not state in here, Judge Clevenger, that it was the truth and a fact

[00:10:26] Speaker 01:
as of the time of the original complaint.

[00:10:28] Speaker 01:
I think two points about that.

[00:10:29] Speaker 01:
One is you can't have after arising facts for Article III jurisdiction.

[00:10:33] Speaker 01:
The Supreme Court says so.

[00:10:35] Speaker 01:
This court has said so.

[00:10:36] Speaker 04:
But the question is whether what's described there without being too picky about what's inferences from what's not said, that when you have a pre-existing long course of conduct of selling the product, and I don't know, was this a few months later or a few weeks later or something?

[00:10:52] Speaker 04:
He says we're searching for a warehouse.

[00:10:54] Speaker 04:
The inference is,

[00:10:56] Speaker 04:
They want to continue.

[00:10:57] Speaker 04:
They even wanted, at the day that they filed the complaint, to continue the business that they had been conducting.

[00:11:02] Speaker 01:
But at the time they filed the complaint at Toronto, it was a mere hours after the court had dismissed the front gate litigation.

[00:11:09] Speaker 01:
That was their exclusive seller in the United States.

[00:11:12] Speaker 01:
Your argument is they didn't have a game plan.

[00:11:15] Speaker 05:
Your argument is like being stood up at the altar.

[00:11:18] Speaker 05:
All of a sudden, the bride learns she stood up at the altar.

[00:11:20] Speaker 05:
What am I going to do next?

[00:11:21] Speaker 05:
And you're saying, well, where are their plants?

[00:11:23] Speaker 05:
Did they have a backup plan?

[00:11:25] Speaker 05:
Because at any time they could have, previously could have lost the Frontgate relationship.

[00:11:32] Speaker 05:
And so your point I would think would be that they didn't have any backup plans.

[00:11:35] Speaker 05:
They can't point to anything they were planning to do if their stream of commerce got cut off.

[00:11:41] Speaker 01:
That's right, Judge Clevenger.

[00:11:42] Speaker 04:
And I think the inference can't... Even though it looked like, until the dismissal, like maybe Frontgate was actually going to win the litigation and they didn't need a backup plan.

[00:11:52] Speaker 04:
And I gather the

[00:11:53] Speaker 04:
the settlement was not, UCP itself was not privy to the settlement.

[00:12:00] Speaker 01:
That's correct, Your Honor.

[00:12:02] Speaker 01:
So two points though.

[00:12:03] Speaker 01:
What's correct?

[00:12:04] Speaker 01:
It's correct that UCP was not privy to the settlement.

[00:12:06] Speaker 01:
It isn't correct?

[00:12:07] Speaker 01:
The settlement was under seal.

[00:12:08] Speaker 03:
There was a compound question there.

[00:12:10] Speaker 03:
Is it also correct that it looked like you were going to lose?

[00:12:14] Speaker 01:
Oh, no, we would not concede that, Your Honor.

[00:12:16] Speaker 01:
No, no, I didn't say you were going to concede it.

[00:12:19] Speaker 01:
But they might have thought that.

[00:12:20] Speaker 01:
No, we don't believe that.

[00:12:22] Speaker 01:
That was the situation, and the settlement was favorable in our view.

[00:12:25] Speaker 01:
So the point, though, is they chose when to file this declaratory judgment action, Judge Toronto.

[00:12:31] Speaker 01:
They filed it when they had no US sellers and no meaningful plans.

[00:12:35] Speaker 01:
And it is a technicality, and maybe they wouldn't have had to do much more to create jurisdiction, but they needed to take some concrete steps to showing action.

[00:12:42] Speaker 01:
They're essentially asking for an advisory opinion from this court to clear their way to make US sales when Balsam has taken no direct action against UCP.

[00:12:53] Speaker 05:
But we can't read anything in the fact that they're sort of once burned.

[00:12:56] Speaker 05:
I would assume that UCP was quite shocked to learn that Frontgate took a walk.

[00:13:03] Speaker 05:
Especially in a situation when it looked like they were going to be on infringing.

[00:13:07] Speaker 05:
So we don't know.

[00:13:08] Speaker 05:
Maybe the people in China said, oh, maybe this is kind of, we don't want to play with people like that.

[00:13:13] Speaker 01:
Well, my point, Judge Clevinger, is UCP brought this declaratory judgment action.

[00:13:17] Speaker 01:
It had timed when it brought it.

[00:13:19] Speaker 01:
It brought it within a mere hours of dismissal of the other suit and before it took any meaningful steps.

[00:13:23] Speaker 01:
And even as of the amended complaint,

[00:13:25] Speaker 01:
which is why we addressed the declaration, Your Honor, references in paragraph 7 in our brief.

[00:13:29] Speaker 01:
Even that doesn't have concrete evidence.

[00:13:31] Speaker 03:
It seems to me that your core point is, since they had the same counsel, they could have structured it.

[00:13:36] Speaker 03:
They knew what was happening.

[00:13:38] Speaker 03:
It's hard for them to have been so pro.

[00:13:42] Speaker 01:
I think that they would take issue with that, Your Honor, because Frontenegate had two counsels.

[00:13:49] Speaker 03:
I thought you said that it was the same counsel.

[00:13:53] Speaker 01:
The council who stands here today for UCP was also representing Frontgate, but Frontgate also had additional councils, and it was that council that entered into the settlement.

[00:14:06] Speaker 01:
I would like to try to address the merits in case the court does decide on a jurisdiction.

[00:14:10] Speaker 05:
Can I just one question on issue preclusion?

[00:14:13] Speaker 05:
You didn't say you wanted to talk about it?

[00:14:15] Speaker 01:
Yes, I would like to talk about it.

[00:14:16] Speaker 05:
Just about issue preclusion, I mean, typically in issue preclusion, the first question you ask is whether or not the decision that you're trying to get precluded or not precluded wasn't necessary to the judgment.

[00:14:27] Speaker 05:
And that's Arizona, that's restatement, that's Ninth Circuit law, that's everybody's law.

[00:14:33] Speaker 05:
Because you don't go around precluding something that wasn't necessary.

[00:14:36] Speaker 05:
But I gather that issue is not in front of us.

[00:14:39] Speaker 05:
When we assess whether or not there was issue preclusion here, we assume that that element was satisfied.

[00:14:45] Speaker 01:
No, Your Honor.

[00:14:45] Speaker 01:
I think that's part and parcel of our Arizona argument, which is when something is just settled and voluntarily dismissed as part of a settlement with no indication.

[00:14:53] Speaker 05:
It's very important because the district court below clearly pointed out that you chose not to argue the necessary issue in the district court.

[00:15:03] Speaker 05:
I think the prong that- His opinion says that.

[00:15:06] Speaker 05:
And your adversary, in the red brief, in response to your attempt to make an Arizona argument, says, well, you didn't raise that below.

[00:15:14] Speaker 05:
And you didn't respond to that in your gray brief.

[00:15:16] Speaker 01:
My apology, Aaron.

[00:15:18] Speaker 01:
Balsam did cite Arizona below and make the same point that settlements.

[00:15:24] Speaker 01:
And made the same point that we're making here, which is that claim.

[00:15:26] Speaker 05:
How did the district court then write in his opinion that you only challenge on finality?

[00:15:32] Speaker 01:
I, my memory and I'll check and when I get back up, I'll have a more refined response.

[00:15:40] Speaker 04:
The district court in the summary judgment opinion says the only issue is, you know, issue number two or something, not necessity.

[00:15:45] Speaker 04:
Um, I don't remember in the JA is your district court paper about issue preclusion.

[00:15:53] Speaker 04:
Is that in there in the JA?

[00:15:55] Speaker 01:
Yes, it's all part of the summary judgment briefing, Judge Toronto.

[00:15:58] Speaker 04:
And did you argue that under Arizona, the,

[00:16:02] Speaker 04:
final resolution of the front gate litigation by settlement precluded any kind of issue preclusion of anything actually litigated inside that case?

[00:16:11] Speaker 01:
That we argued that Arizona v. California meant that only claim preclusion would follow from the settlement and the judgment entered as a result of a settlement and not issue preclusion.

[00:16:22] Speaker 04:
If that principle is, I think, as strong as you need it to be, which is that even an actually litigated issue in case number one, the resolution

[00:16:32] Speaker 04:
does not get issue preclusive effect in case number two, simply because case number one was ultimately settled, which is not the facts of Arizona.

[00:16:43] Speaker 04:
It's not the facts of the tax case that Arizona relies on.

[00:16:46] Speaker 04:
I don't see how that broad proposition could be sustained except on the proposition that you did not argue, which is that

[00:16:58] Speaker 04:
If a issue resolution is not necessary to the judgment, then it doesn't count here.

[00:17:06] Speaker 04:
That's why I guess I thought it was important what Judge Clevenger was asking.

[00:17:10] Speaker 04:
The judge here says you did not argue essential to the judgment or necessarily decided.

[00:17:15] Speaker 04:
which seems to give away that issue.

[00:17:18] Speaker 01:
My memory is that the judge didn't... My memory is that the prong one is not about the way that prong one is phrased and what the judge says that we didn't argue is not about necessary to the decision.

[00:17:29] Speaker 05:
You address only the second element.

[00:17:31] Speaker 05:
He sets up a three-part test, the first element being necessarily decided.

[00:17:35] Speaker 05:
He clearly recognizes that that's part of the law.

[00:17:38] Speaker 05:
Balsam's argument against collateral estoppel addressed only the second element, period.

[00:17:43] Speaker 01:
Well, it was decided in the sense that there was an order, a collateral order that decided it.

[00:17:49] Speaker 01:
But even if you think we haven't argued the point that you're making, and I think it is fairly included in our arguments.

[00:17:55] Speaker 05:
You haven't told us why it was necessarily, why that element was satisfied here.

[00:18:01] Speaker 05:
I mean, it's just a lot of words.

[00:18:03] Speaker 05:
The short of the matter is, if you were going to have made an argument that there can be no issue, conclusion here because the decision on claim construction wasn't necessary, the judgment, you would explain why.

[00:18:13] Speaker 01:
It's not necessary to have judgment, Judge Clevenger, because the judgment was just a voluntary dismissal on a stipulation that didn't reach or decide any merits and doesn't say it's because of the claim construction, doesn't say based on the claim construction.

[00:18:30] Speaker 05:
The thing you want to preclude has to be necessary to something.

[00:18:33] Speaker 05:
There has to be an necessity.

[00:18:35] Speaker 01:
A decision on the merits.

[00:18:38] Speaker 01:
And there was no decision here on the merits.

[00:18:40] Speaker 01:
But even if you just look at the prong that the district court does address.

[00:18:43] Speaker 04:
There was no ruling on liability.

[00:18:44] Speaker 04:
There was a decision on the merits in that it was a dismissal with prejudice.

[00:18:48] Speaker 01:
There was a judgment entered that would have claim preclusive effect.

[00:18:54] Speaker 04:
So in one sense, it's on the merits, right?

[00:18:57] Speaker 04:
I mean, isn't that the way you talk about things?

[00:18:58] Speaker 01:
On the merits as opposed to the claim against front gate.

[00:19:01] Speaker 01:
It's a claim preclusion.

[00:19:03] Speaker 01:
But Judge Toronto, there are cases involving settlements, including in the Ninth Circuit.

[00:19:08] Speaker 01:
So the St.

[00:19:08] Speaker 01:
Paul case that we cite in our reply brief is about a settlement.

[00:19:13] Speaker 01:
It's on all fours, except they're applying Alaska law, but Alaska applies the restatement, as does the Ninth Circuit, as does this Supreme Court.

[00:19:22] Speaker 01:
And what they say is that a partial summary judgment had been entered on a legal question in the prior case.

[00:19:30] Speaker 01:
And then the settlement intervened.

[00:19:32] Speaker 01:
That's what the ninth secret says.

[00:19:33] Speaker 01:
But settlement intervened.

[00:19:34] Speaker 01:
So we don't find that sufficiently final for preclusion and allow the parties to re-linigate it.

[00:19:40] Speaker 04:
But that goes to the sufficient finality question.

[00:19:43] Speaker 04:
And I guess, except for the Alaska case and maybe the St.

[00:19:46] Speaker 04:
Paul, the Supreme Court cases, Arizona and whatnot, and even the restatement comment, all are talking about situations in which the

[00:19:59] Speaker 04:
issue whose resolution is now asserted to be precluded was in fact merely consented to the last time, not an adjudicated issue in a case that was ultimately resolved by settlement.

[00:20:16] Speaker 01:
But the principle stepping back from it, the principle is the same, which is that a settlement that doesn't resolve the issues finally on the merits.

[00:20:24] Speaker 01:
So here the claim construction order was never applied.

[00:20:27] Speaker 01:
It never was put to the test.

[00:20:28] Speaker 01:
It's an interlocutory order that would have been subject to revision by the district court at any time had the case continued.

[00:20:35] Speaker 01:
It's, in essence, just like a preview of the jury instructions.

[00:20:38] Speaker 04:
We've had at least one case, I think it's called e-commerce, where we gave issue preclusive effect to a- I think you may be thinking of e-digital.

[00:20:46] Speaker 01:
E-digital, I'm sorry.

[00:20:47] Speaker 01:
And e-digital says, in the text of it, it says that the settlement was based on the claim construction.

[00:20:52] Speaker 01:
And that's not the case here.

[00:20:54] Speaker 01:
This court also has had two other cases, Varden and Interconnect Planning, where parties have voluntarily dismissed

[00:21:01] Speaker 01:
cases and this court has, after claim obstruction, after partial summary judgment, even in Varden, and this court to allow for reissue, and this court held the party not barred.

[00:21:13] Speaker 01:
And that is consistent with the Ninth Circuit law.

[00:21:16] Speaker 01:
In Lubin, the Ninth Circuit held a prior judgment.

[00:21:18] Speaker 04:
As a kind of as a general principle matter or by

[00:21:21] Speaker 04:
thinking in a case-specific way about whether the earlier ruling was sufficiently final?

[00:21:28] Speaker 01:
Applying the sufficiently final test and noting both the intercollect planning and in Varden, which is the factors I was saying.

[00:21:36] Speaker 01:
It's in claim construction's interlocutory order.

[00:21:39] Speaker 01:
There's no right to appeal it.

[00:21:41] Speaker 01:
This court has repeatedly declined to take things on interlocutory appeal after claim construction.

[00:21:45] Speaker 01:
It's inherently not final as things proceed.

[00:21:48] Speaker 01:
And this case makes clear, like the claim instruction here in this case, it was later clarified to mean something.

[00:21:55] Speaker 01:
We didn't understand it to me at summary judgment, which is one of the reasons this court doesn't take things on interlocutory review.

[00:22:02] Speaker 01:
We never had a chance to appeal it.

[00:22:04] Speaker 01:
In Varden and InterConnect planning, this court reasoned that although we might have been able to do procedural machinations to try to get it up somehow before settling, we're not required to do that to settle.

[00:22:13] Speaker 05:
Your right to appeal it issue seemed to me

[00:22:15] Speaker 05:
And the parties have essentially argued the same thing in Varden and interconnect planning to this court.

[00:22:31] Speaker 01:
And this court held that you're not required, nor would it be really good policy, to force parties who want to settle to otherwise continue to litigate so that the patentee won't have to fear at some point down the road potentially being held to issue preclusion on a claim construction.

[00:22:45] Speaker 01:
It will greatly deter settlements after claim construction if this court holds every patentee must appeal.

[00:22:50] Speaker 03:
I know you wanted to pivot to the merits, but you're so far in past your time.

[00:22:59] Speaker 03:
What I'm going to do is let you have your three minutes when you come back up, and you can try to address your claim construction there, because you never even got to it.

[00:23:14] Speaker 01:
May I just make one sentence about the illicit infringement so that I don't unfairly give rebuttal?

[00:23:21] Speaker 03:
You want to keep going?

[00:23:23] Speaker 04:
I'd like to.

[00:23:26] Speaker 04:
OK.

[00:23:29] Speaker 04:
Here, I guess, is the point on the merits that has been the subject of my focus.

[00:23:37] Speaker 04:
I'm hard-pressed to think of the word pivot or pivot point as something that applies when there isn't a two-fold connection, which I'm

[00:23:48] Speaker 04:
think basically Judge Orrick had in mind when he stressed from which turns on together, that there is a physical connection between the object that is pivoting and the pivot point, and that connector is moving at the point.

[00:24:04] Speaker 04:
There's motion at the point, which is not true of the accused product here.

[00:24:10] Speaker 04:
Here you have this kind of idealized point

[00:24:14] Speaker 04:
on the tongue of the device that fits in between the two things.

[00:24:21] Speaker 04:
Nothing is moving at that point.

[00:24:22] Speaker 04:
It's just a piece on the metal.

[00:24:24] Speaker 04:
In fact, that metal piece could actually have a hole there and nothing would change.

[00:24:29] Speaker 04:
But every pivot I think of, which is either a lever on a fulcrum or anything else, has some physical thing that, at the pivot point, is turning right there.

[00:24:40] Speaker 04:
And that's true in figure 18.

[00:24:42] Speaker 04:
It's true in every embodiment.

[00:24:45] Speaker 04:
But it's not true in the accused product.

[00:24:47] Speaker 04:
And it would seem to be captured by Judge Oreck's claim construction that emphasizes it's a point from which there is turning or from which the second trunk turns on that point.

[00:25:01] Speaker 04:
That's my... So is that a claim construction question or a... It may be a compound question, but see if you can address what I tried to just communicate.

[00:25:10] Speaker 01:
So there is no fixed point requirement in the claim language or in the definitions of pivot, given the ordinary definition.

[00:25:19] Speaker 01:
Pivot does not include a fixed point limitation.

[00:25:22] Speaker 01:
That's a negative limitation that Judge Orrick has read into the claims.

[00:25:26] Speaker 01:
And there's certainly no requirement that it be connected on.

[00:25:29] Speaker 01:
And I don't think his initial claim construction actually required it to be connected on.

[00:25:32] Speaker 01:
because he interpreted rotating to be comparable to pivoting.

[00:25:37] Speaker 04:
It seems to me quite a lot of your brief sounds like it's saying, and I think is actually kind of meant to say, that if you have an object moving in a circular path, then whatever is in the center of the circle is a pivot.

[00:25:51] Speaker 04:
And that seems to me troublesome because it seems to me that focuses on the path of the movement and not the mechanism of the movement.

[00:25:58] Speaker 04:
And the pivot point is about a specific mechanism.

[00:26:00] Speaker 04:
You can have a lot of mechanisms.

[00:26:02] Speaker 04:
If I'm running around a track, I'm not pivoting on the center of the 50-yard line.

[00:26:10] Speaker 04:
running around it, and it's at the center of my motion, but the shape of the path is not enough to make the mechanism a pivot.

[00:26:17] Speaker 04:
And so what I've been concentrating on is it seems to me that the mechanism that makes a pivot, and I think it may even be slightly different from your connected to, but I think it's actually slightly more than that, that there is a physical connection.

[00:26:30] Speaker 04:
That physical connection is

[00:26:32] Speaker 04:
determining the motion, or at least part of the motion, and that connector is moving at the point.

[00:26:39] Speaker 04:
I don't think it matters whether it's actually a fixed point or not, but it's moving at the pivot.

[00:26:45] Speaker 01:
So I'm not sure, that was the long explanation, but if I can just tell you how I understand the patent.

[00:26:52] Speaker 01:
It's pivot-joint, not pivot-point, which I think is important.

[00:26:56] Speaker 01:
The claims 5 is a dependent claim.

[00:26:59] Speaker 01:
It makes clear it's limited to the kind of point that you're thinking of when you think of what you think of as your common point and rotating around a circle.

[00:27:06] Speaker 01:
And the specification makes clear that's just the simplest embodiment of a pivot.

[00:27:11] Speaker 01:
It's not the only thing that can be a pivot joint in this patent.

[00:27:14] Speaker 01:
And figure 8 does have two different pivot joints.

[00:27:17] Speaker 01:
But the pivot joint in figure 18 is the 136.

[00:27:21] Speaker 01:
It's the whole thing.

[00:27:23] Speaker 01:
It's both pivot points.

[00:27:24] Speaker 04:
And our expert's animation shows that... Right, but if you're willing to assume with me for a minute that a pivot joint is a joint that has a pivot in it, and so now we're talking about whether there is a pivot.

[00:27:37] Speaker 04:
A pivot has to have a pivot point.

[00:27:39] Speaker 04:
Maybe it can even move around, but it seems to me it has to have a physical connector where that connector is moving at the pivot point.

[00:27:48] Speaker 04:
Just enough that there is, you know, your, your, uh, accused product, this kind of complicated, um, I forget what is sort of ball and track system.

[00:27:58] Speaker 04:
Yeah.

[00:27:58] Speaker 04:
Track system is all physically connected, but no motion is taking place at the asserted pivot point by Dr. McCarthy.

[00:28:06] Speaker 04:
I assume you don't do the pin.

[00:28:07] Speaker 04:
You are not arguing the pins as pivot points.

[00:28:10] Speaker 01:
Well, they address that in their brief, and we argue that in our reply brief, that the pivots do move.

[00:28:14] Speaker 04:
You didn't do it in your blue brief, so you rested only on the big yellow square on the top.

[00:28:21] Speaker 04:
We focused on that.

[00:28:22] Speaker 01:
That's true.

[00:28:24] Speaker 01:
So to the claim construction point, we don't agree that a pivot joint has to have a pivot.

[00:28:33] Speaker 01:
A pivot joint could be the simplest embodiment of a pivot, like an axle and a hole.

[00:28:37] Speaker 01:
That's what the specification says in column 17.

[00:28:40] Speaker 01:
But then it says, but that's just the simplest embodiment of a pivot.

[00:28:47] Speaker 01:
On page 41 and 42, we show how figure 18 would work.

[00:28:52] Speaker 04:
But figure 18 has exactly that pivot point.

[00:28:56] Speaker 04:
It's a double thing, right?

[00:28:57] Speaker 01:
Yes, Your Honor.

[00:28:58] Speaker 04:
It's the one that's actually pivoting at the pivot point in the center.

[00:29:02] Speaker 04:
And then there's a separate joint as it moves along the track.

[00:29:06] Speaker 01:
But the pivot joint in the figure, this is on page 41 of our brief, the pivot joint is 136.

[00:29:12] Speaker 01:
It's both of the pins and the bracket

[00:29:17] Speaker 01:
The specification doesn't describe a pivot joint as having a pivot, like you're saying.

[00:29:24] Speaker 01:
The pivot joint is something that allows a function, which is the second trunk to pivot around the first trunk.

[00:29:31] Speaker 01:
And the only connection is that the pivot joint somehow connects those two things.

[00:29:36] Speaker 01:
At a minimum, Judge Trump, there's a dispute of fact on the doctrine of equivalence.

[00:29:40] Speaker 01:
Because even if you think it requires exactly what you say, on page 62 in the animation there, it shows that their figure moves translationally and rotationally.

[00:29:51] Speaker 01:
And the district court resolved the dispute of fact in concluding otherwise.

[00:29:55] Speaker 01:
Thank you, Your Honors.

[00:29:58] Speaker 03:
I'll still give you three minutes.

[00:30:02] Speaker 02:
Good morning.

[00:30:03] Speaker 02:
May it please the court?

[00:30:04] Speaker 02:
I'm Patricia Peden on behalf of UCP.

[00:30:07] Speaker 03:
Is claim one of the 718 Petton representative or illustrative of the asserted claim?

[00:30:13] Speaker 02:
Claim one, yes, of the 718.

[00:30:16] Speaker 02:
That was pretty much what the court was looking at during claims construction and during summary judgment, because claim one claims a pivot joint.

[00:30:26] Speaker 02:
And all parties agreed throughout the entirety of the proceedings below that the pivot joint of claim one

[00:30:32] Speaker 02:
was the same thing as pivotably attached and pivotably joined in the 077 package.

[00:30:37] Speaker 03:
That was a yes or no.

[00:30:39] Speaker 02:
You don't have to keep going.

[00:30:40] Speaker 03:
On page 9 of the RedBerry, you say that Balsam made its accusations and pleadings in its local patent rule disclosures and letters to UCP's counsel and threatened to add UCP as a defendant in open court.

[00:30:54] Speaker 03:
And you cite to JA 766.

[00:30:58] Speaker 03:
Where's the citation to the prior case statement?

[00:31:01] Speaker 03:
Is that in the record?

[00:31:02] Speaker 02:
I don't know.

[00:31:05] Speaker 02:
The prior case statement, the front gates, yes, it would be in the record attached to our opposition to the motion to dismiss the first amended complaint.

[00:31:18] Speaker 03:
On page nine of the red brief, you say that at the outset of the front gate case, Balsam filed a motion for TRO seeking to remove UCP's trees from the market.

[00:31:29] Speaker 03:
Is that UCP's or is it front gates?

[00:31:31] Speaker 02:
It's UCP's, because UCP made and sold the trees to Frontgate, who then resold them.

[00:31:38] Speaker 03:
Then why aren't they Frontgate's trees?

[00:31:40] Speaker 02:
Well, they're both parties' trees.

[00:31:43] Speaker 02:
UCP's a manufacturer.

[00:31:45] Speaker 03:
So UCP continues to own them.

[00:31:47] Speaker 03:
Is that your point?

[00:31:49] Speaker 02:
The ones that they have in inventory, the ones that are on order, some of them are held by UCP until they're sold to Frontgate.

[00:32:00] Speaker 03:
On page 21 of the red brief, you say that UCP was led to believe Balsam would seek to recoup its losses by suing UCP, perhaps in another court, where Balsam might seek to evade the claim construction order.

[00:32:20] Speaker 03:
What's your factual basis in the record for that?

[00:32:23] Speaker 02:
I think it's in the coup declaration that's attached to our opposition to the motion to dismiss the fact.

[00:32:36] Speaker 04:
Can you address the case of controversy question?

[00:32:43] Speaker 04:
First of all, looking backwards to the time before the settlement, does the record tell us

[00:32:50] Speaker 04:
roughly how many trees UCP had sold through Frontgate?

[00:32:55] Speaker 02:
Yes, the record at the TRO proceedings, Frontgate alleges that there are millions of dollars of sales of the Frontgate trees.

[00:33:04] Speaker 04:
This is the TRO proceeding in Frontgate.

[00:33:07] Speaker 02:
Yes.

[00:33:08] Speaker 02:
We're not talking about one, two, three trees.

[00:33:11] Speaker 02:
We're talking about hundreds or thousands of trees.

[00:33:13] Speaker 05:
It was very important to them and they were looking forward to the Christmas market and there was a timing on that issue.

[00:33:19] Speaker 02:
Right.

[00:33:19] Speaker 05:
But also there was testimony at some stage where someone on your side wasn't certain how long the relationship with Frontgate lasted.

[00:33:29] Speaker 05:
Whether it was two years or three years, they were uncertain.

[00:33:33] Speaker 02:
Yes, I think that the front gate relationship for this particular tree, I can't give you an exact time period, but it was about maybe two years.

[00:33:43] Speaker 05:
Nobody seemed to know.

[00:33:44] Speaker 05:
I mean, it was like fuzzy.

[00:33:45] Speaker 02:
Right.

[00:33:46] Speaker 02:
So I would like to address this.

[00:33:49] Speaker 03:
Where in the record is that hundreds of thousands of trees?

[00:33:51] Speaker 03:
I was curious.

[00:33:52] Speaker 02:
It would be in the TRO proceedings.

[00:33:55] Speaker 02:
It wasn't our argument.

[00:33:57] Speaker 02:
It was Balsam's argument.

[00:33:58] Speaker 02:
So I don't know exactly what it was, but it was, it referred to SEC filings and statements that Frontgate made about how popular and profitable these trees were.

[00:34:13] Speaker 03:
That's a lot for a $1,000 Christmas tree.

[00:34:16] Speaker 02:
Yes.

[00:34:17] Speaker 05:
So if I could address the case or controversy or the... Was there any evidence in the record about what UCP might do if its relationship with Frontgate was terminated?

[00:34:28] Speaker 05:
What were their plans for the American market?

[00:34:30] Speaker 02:
In the coup declaration, there is evidence of that.

[00:34:35] Speaker 02:
So what UCP says is that it spent a lot of money to design and manufacture these trees.

[00:34:42] Speaker 02:
And this, Judge Clevenger, is where you were right on point with the Akiva case.

[00:34:46] Speaker 02:
The DJ jurisdiction doesn't require that a product actually be on the market, right?

[00:34:53] Speaker 02:
You need to have meaningful preparation.

[00:34:55] Speaker 02:
And that's so that you can look at the product and the accused claims, and you know what it is that you're being accused of infringing.

[00:35:01] Speaker 02:
We're well beyond meaningful preparations here.

[00:35:04] Speaker 02:
We've made the trees.

[00:35:05] Speaker 02:
We've designed them.

[00:35:06] Speaker 02:
We've patented them.

[00:35:07] Speaker 02:
We've sold them.

[00:35:08] Speaker 02:
And they're still on sale, even at the time of settlement.

[00:35:14] Speaker 03:
Well, that was because of the terms of the settlement.

[00:35:17] Speaker 02:
Well, the terms of the settlements.

[00:35:19] Speaker 03:
The terms were that the front gate could sell the inventory.

[00:35:23] Speaker 02:
Exactly.

[00:35:24] Speaker 02:
And UCP was still potentially liable for six years of past damages.

[00:35:31] Speaker 03:
It seems to me that what you're saying is that UCP and front gate are the same entity.

[00:35:39] Speaker 03:
That seems to be your argument.

[00:35:40] Speaker 02:
No.

[00:35:42] Speaker 02:
UCP is the seller or the maker of the tree, the manufacturer.

[00:35:46] Speaker 03:
I understand that.

[00:35:48] Speaker 03:
They're not actually taking action in the United States.

[00:35:53] Speaker 03:
Frontgate is.

[00:35:55] Speaker 02:
UCP is selling to Frontgate in the United States.

[00:36:02] Speaker 03:
How are the contracts drafted?

[00:36:03] Speaker 03:
Are they FOB?

[00:36:06] Speaker 02:
I don't know how the contracts are drafted.

[00:36:08] Speaker 02:
But let me put it this way, General.

[00:36:09] Speaker 05:
Don't you think that?

[00:36:10] Speaker 05:
I think UCP would be subject to a 337 action.

[00:36:13] Speaker 02:
Yes, or it could be subject to personal jurisdiction.

[00:36:16] Speaker 02:
In the record, when Balsam tells the court that they may add UCP as a party, they say, you know, they're subject to personal jurisdiction here under Beverly Hills fan, because they're selling trees into the United States market.

[00:36:30] Speaker 04:
And foreign activities that induce a domestic sale are covered by 271, right?

[00:36:36] Speaker 02:
I am not certain of that, Your Honor.

[00:36:39] Speaker 02:
I know the argument at the district court was, if UCP makes a trade and sells it into the United States to Frontgate, it is subject to personal jurisdiction here and can be sued here.

[00:36:51] Speaker 03:
So you say it, when you cite to the statement that Balsam told the court that it might sue UCP, you cite to 766 in the joint appendix.

[00:37:06] Speaker 03:
That's a stretch.

[00:37:08] Speaker 03:
What the court said was, Balsam told me in the last case that maybe you were going to bring UCP into the litigation.

[00:37:16] Speaker 03:
You settled around it.

[00:37:18] Speaker 03:
This is like proxy fight in reverse.

[00:37:22] Speaker 03:
How do you get your statement that they were going to sue UCP?

[00:37:30] Speaker 02:
I apologize if it's that strong in our brief.

[00:37:33] Speaker 02:
The argument was whether or not Balsam had ever made an actual statement to UCP.

[00:37:44] Speaker 03:
Well, they made a statement to the court that they might do it.

[00:37:47] Speaker 03:
Yes, which is an F. Did they make a statement to UCP that they might do it?

[00:37:52] Speaker 02:
As counsel told you, they knew UCP was participating in the lawsuit.

[00:37:58] Speaker 02:
So when you made a statement in court.

[00:38:00] Speaker 03:
So UCP was represented by counsel in the lawsuit.

[00:38:02] Speaker 02:
It wasn't represented by counsel.

[00:38:04] Speaker 02:
It was indemnifying.

[00:38:06] Speaker 02:
And Balsam knew that UCP was directing the day-to-day litigation.

[00:38:12] Speaker 02:
They knew a statement made in court was being made to UCP.

[00:38:18] Speaker 05:
At some stage in the game, obviously, UCP wasn't controlling the talk because UCP can't have been happy with what happened in the settlement agreement.

[00:38:29] Speaker 02:
Well, exactly.

[00:38:31] Speaker 02:
So on that point, the timing of the DJ action.

[00:38:36] Speaker 02:
Balsam says, well, UCP could dictate the timing of it.

[00:38:40] Speaker 02:
UCP, out of the blue, finds that its customer has settled.

[00:38:45] Speaker 02:
It didn't get a release.

[00:38:47] Speaker 02:
It was legitimately had a reasonable apprehension that it was about to get sued.

[00:38:53] Speaker 02:
It had been told it had jurisdiction.

[00:38:54] Speaker 02:
Its trees had been accused.

[00:38:57] Speaker 02:
Claim charts had been drawn.

[00:38:58] Speaker 02:
It was our product that issue in the Frontgate case.

[00:39:01] Speaker 02:
There was no doubt that they accused our product.

[00:39:04] Speaker 02:
The only issue is whether or not the settlement mooted the legal dispute, because that's what DJ jurisdiction requires, right?

[00:39:12] Speaker 02:
A legal dispute between the parties.

[00:39:14] Speaker 02:
And it clearly did not.

[00:39:16] Speaker 02:
Because we could still be sued both for the trees that were being sold for past damages and even for the offers of sale that the coup Declaration says that we were we were in the process the only way this case would have been mooted on the legal controversy between the parties is If balsam had given us the covenant not to sue that we requested yes that happened after we filed suit, but the point there is that

[00:39:43] Speaker 02:
that the suit was active.

[00:39:44] Speaker 02:
There's a live controversy that needed to be resolved.

[00:39:48] Speaker 02:
It could have been moot with a covenant not to sue.

[00:39:51] Speaker 02:
They didn't give us a covenant not to sue.

[00:39:53] Speaker 02:
And so.

[00:39:54] Speaker 04:
Did you say you got a covenant not to sue?

[00:39:56] Speaker 02:
No, we requested one.

[00:39:58] Speaker 04:
You didn't get it.

[00:39:59] Speaker 02:
And we didn't get it.

[00:40:00] Speaker 04:
I thought you said something about it happened after you sued.

[00:40:03] Speaker 02:
We requested the covenant after we filed our DJ action.

[00:40:06] Speaker 04:
And they said?

[00:40:07] Speaker 02:
No.

[00:40:08] Speaker 04:
OK.

[00:40:09] Speaker 04:
That's off the table.

[00:40:10] Speaker 04:
I wonder what they were doing.

[00:40:12] Speaker 02:
I suggest, Your Honors, that if this case where our products were actually litigated and they were still on sale and we couldn't get a covenant not to sue, this would be a sea change, I think, in this Court's post-metamune jurisprudence.

[00:40:30] Speaker 03:
How quickly did you file suit?

[00:40:32] Speaker 02:
Excuse me?

[00:40:33] Speaker 03:
How quickly did you file suit?

[00:40:34] Speaker 03:
Ms.

[00:40:35] Speaker 03:
Maynard said hours.

[00:40:36] Speaker 02:
It was the next day.

[00:40:38] Speaker 02:
Yeah, so it was shortly thereafter.

[00:40:41] Speaker 03:
Less than five hours.

[00:40:42] Speaker 02:
It was quick.

[00:40:43] Speaker 03:
Did you have a complaint ready to go?

[00:40:47] Speaker 02:
We scrambled.

[00:40:48] Speaker 02:
We scrambled.

[00:40:49] Speaker 02:
UCP honestly thought, sincerely thought they were about ready to get hit with an infringement suit someplace in a court where the claims construction would be redone and maybe not as favorable to our position.

[00:41:06] Speaker 02:
If I may turn to collateral estoppel.

[00:41:08] Speaker 04:
Please do.

[00:41:10] Speaker 04:
Clearly, Balsam did raise the Arizona point in its summary judgment papers.

[00:41:16] Speaker 04:
So whatever the label, it made the point in terms that

[00:41:21] Speaker 04:
absent clearly expressed intent.

[00:41:22] Speaker 04:
Otherwise, settlement agreements and their resulting case dismissals and judgments don't give rise to issue preclusion, citing Arizona among other things in a cell therapeutics case.

[00:41:33] Speaker 04:
So they didn't waive the theory.

[00:41:39] Speaker 04:
So why are they wrong, in your view, to say that the Arizona principle

[00:41:48] Speaker 04:
applies here and makes the claim construction ruling in the Frontgate case not a legitimate subject for issue preclusion?

[00:41:57] Speaker 02:
So, Your Honor, one principle from Arizona 3 applies.

[00:42:02] Speaker 02:
It's just not the one that Balsam's relying on.

[00:42:05] Speaker 02:
And let me explain.

[00:42:07] Speaker 02:
Arizona 3 actually had multiple preclusion issues involved.

[00:42:13] Speaker 02:
Part A of the opinion talks about issue preclusion.

[00:42:17] Speaker 02:
And part B of the opinion talks about settlement preclusion.

[00:42:21] Speaker 02:
And the problem in Arizona 3 was that the settlement between the parties.

[00:42:29] Speaker 04:
Let me just see.

[00:42:29] Speaker 04:
I mean, I think we're on the same page.

[00:42:32] Speaker 04:
And tell me if I'm wrong.

[00:42:33] Speaker 04:
So Arizona did not need to state the broad principle drawn from Comment D of Restatement Second of Judgment Section 27 or state the principle as broadly as it states it.

[00:42:44] Speaker 04:
because it had a situation in which the issue that was being discussed was actually itself consented, the resolution was consented to, it hadn't been litigated, so that's a different fact, and it also was opaque.

[00:42:56] Speaker 04:
So what Arizona said is broader than what it needed to say.

[00:43:01] Speaker 04:
So I'm talking here about the principle it articulates.

[00:43:06] Speaker 04:
Why does that not, the case is easily distinguishable on its facts, but we don't ordinarily get to do that with Supreme Court opinions, right?

[00:43:15] Speaker 04:
So why is the principle inapplicable?

[00:43:18] Speaker 02:
So the principle is inapplicable to our case because the issue preclusion in our case isn't a settlement.

[00:43:28] Speaker 02:
I think that that's the confusion because Balsam's brief talks a lot about the front gate settlement.

[00:43:35] Speaker 04:
Right, but the principle that was articulated in Arizona by drawing on comment D of the restatement in Wright and Miller is that nothing in a previously settled case gets issued reclusive effect unless the parties up to that case intended it.

[00:43:56] Speaker 02:
Yes, I do.

[00:43:58] Speaker 04:
Which is a striking proposition.

[00:44:00] Speaker 02:
Yeah.

[00:44:01] Speaker 02:
And I think if that's how you read the principle that the Supreme Court is laying down, that it didn't need to reach it, and it's wrong, and it doesn't.

[00:44:10] Speaker 02:
Well, I mean, it's.

[00:44:11] Speaker 03:
Why don't we write them a letter?

[00:44:13] Speaker 02:
Yes, exactly.

[00:44:14] Speaker 02:
It's wrong on those facts, because I think what.

[00:44:18] Speaker 04:
But on the Alaska case and St.

[00:44:21] Speaker 04:
Paul, is St.

[00:44:23] Speaker 04:
Paul the same as the Alaska case?

[00:44:24] Speaker 04:
Yeah, OK.

[00:44:25] Speaker 04:
So St.

[00:44:25] Speaker 04:
Paul was applying state law preclusion through 1738 or something.

[00:44:29] Speaker 02:
It was applying Alaska law.

[00:44:30] Speaker 02:
In fact, the district court judge, St.

[00:44:33] Speaker 02:
Paul Fire was Balsam's primary argument below.

[00:44:36] Speaker 02:
And the district court judge looked at it in detail and said, look, it's Alaska law.

[00:44:41] Speaker 02:
It's rarely been cited.

[00:44:42] Speaker 02:
It's in a different context.

[00:44:44] Speaker 04:
I think Ms.

[00:44:45] Speaker 04:
Maynard cited a couple of our

[00:44:47] Speaker 04:
cases as well, interconnect planning, and Varden, something like that?

[00:44:53] Speaker 02:
Yes, let me address those.

[00:44:54] Speaker 02:
But let me start with Arizona, because I think there's some confusion here.

[00:44:59] Speaker 02:
In Arizona, there were two different issue preclusion decisions going on.

[00:45:06] Speaker 02:
The first one was about a fact finding in a prior case.

[00:45:11] Speaker 02:
So in Arizona 1, the Supreme Court decided

[00:45:15] Speaker 02:
what lands were going to get water rights.

[00:45:18] Speaker 02:
In Arizona, too, the parties argued, oh, we forgot to include some lands.

[00:45:23] Speaker 02:
There are some omitted lands.

[00:45:26] Speaker 02:
And so in Arizona 3, when there were disputed lands, the party said, hey, you already decided back in Arizona 1 what the lands were.

[00:45:36] Speaker 02:
And so that's issue preclusion.

[00:45:38] Speaker 02:
And what the Supreme Court said on the issue that was decided, on the thing that had actually been decided, which is what the lands were.

[00:45:46] Speaker 04:
That was in Arizona 1.

[00:45:48] Speaker 02:
In Arizona 1, it said, no, we've already decided what lands are going to get water.

[00:45:54] Speaker 02:
That's getting issue preclusion because we decided that issue and we did in 1952, you're done.

[00:46:00] Speaker 02:
On the second part of the court's order, it's dealing with a settlement.

[00:46:06] Speaker 02:
And the court says, no, the settlement is an issue of preclusion, because the parties had advanced two, or the plaintiff in that case, had advanced two contradictory theories.

[00:46:18] Speaker 02:
Either the contract was valid, and we were owed money, or the contract was void.

[00:46:24] Speaker 02:
No court ever decided that issue.

[00:46:27] Speaker 02:
There wasn't an opinion.

[00:46:28] Speaker 02:
There was nothing to resolve those facts, and the party settled.

[00:46:32] Speaker 02:
And the court said, a settlement itself

[00:46:36] Speaker 02:
doesn't give you issue preclusion.

[00:46:39] Speaker 02:
That's not what we're talking about.

[00:46:40] Speaker 02:
Some issue had to be decided.

[00:46:42] Speaker 02:
We have to be able to look to see what the court did.

[00:46:45] Speaker 02:
I'm sorry.

[00:46:46] Speaker 04:
And it's in the context of that second that the, let's call it the Comedie principle is brought up.

[00:46:53] Speaker 02:
Exactly.

[00:46:53] Speaker 02:
It's settled.

[00:46:53] Speaker 04:
But it is stated, it's strikingly broad.

[00:46:56] Speaker 04:
Comedie is strikingly broad.

[00:46:58] Speaker 04:
And to the extent it seems to assert a fact that it's plainly false.

[00:47:04] Speaker 04:
It says, in any consent judgment, there is no issue actually decided.

[00:47:07] Speaker 04:
That's plainly false.

[00:47:09] Speaker 04:
Well, that's plainly false.

[00:47:09] Speaker 04:
There's no issue decided in the final judgment.

[00:47:13] Speaker 04:
That would be true.

[00:47:15] Speaker 02:
Exactly.

[00:47:16] Speaker 02:
And in part, that's because of what a settlement is and how it's different.

[00:47:20] Speaker 02:
At settlement, the parties are settling claims.

[00:47:24] Speaker 02:
Here, the balsam front gate settlement settled claims of infringement, claims of invalidity, legal claims.

[00:47:33] Speaker 02:
And we have no way of knowing what the parties agreed to.

[00:47:37] Speaker 02:
And the court said nothing about that.

[00:47:39] Speaker 02:
So that settlement doesn't get preclusive effect.

[00:47:43] Speaker 02:
We've never argued that the settlement gives us preclusive effect.

[00:47:46] Speaker 02:
In fact, in the DJ action, we had to go through summary judgment to get a finding of non-infringement because there wasn't preclusive effect.

[00:47:55] Speaker 02:
It's a different argument.

[00:47:57] Speaker 02:
And what the court found is the settlements are relevant.

[00:48:00] Speaker 02:
Because UCP is not asking for preclusive effect of a settlement, we never did.

[00:48:06] Speaker 02:
What we were asking for was preclusive effect of a court order.

[00:48:11] Speaker 04:
But doesn't the distinction you are rightly making between the claim construction adopted in Frontgate and the infringement question, which was not decided in Frontgate, help one see why essentially the Arizona principle broadly conceived

[00:48:29] Speaker 04:
makes sense here, which is that the resolution of the claim construction question was only one step on the way to the final judgment, and the final judgment was ultimately by consent.

[00:48:44] Speaker 02:
That is often the case in issue preclusion, right?

[00:48:47] Speaker 02:
The only way to... Often the case in settled cases, that's what I thought is pretty... Well, it was the Ninth Circuit dealt with this case or settlement case and Bates versus Union Oil.

[00:49:03] Speaker 02:
Now, Bates had gone through

[00:49:06] Speaker 02:
through a final decision, but settled thereafter.

[00:49:10] Speaker 02:
And it was immaterial to the court's decision that the case had settled, because... But that's after, right?

[00:49:17] Speaker 04:
I mean, it's after a final judgment.

[00:49:19] Speaker 04:
So that would make it essentially like U.S.

[00:49:22] Speaker 04:
Bancorp, Bonheur Mall, where if you settle on appeal, case goes away, the underlying judgment

[00:49:29] Speaker 04:
continues to have preclusive effect unless you go back and get it undone, which was not done.

[00:49:34] Speaker 02:
True.

[00:49:34] Speaker 02:
OK, so maybe it's more like this court's opinion in e-digital, right?

[00:49:38] Speaker 04:
Right, but the issue was not raised there.

[00:49:40] Speaker 04:
I looked at the briefs.

[00:49:40] Speaker 04:
Nobody raised this question.

[00:49:42] Speaker 02:
I have it as being cited in the briefs.

[00:49:45] Speaker 04:
Not for any argument, I don't think.

[00:49:49] Speaker 04:
That's true.

[00:49:49] Speaker 04:
It was cited once in the summary of argument, but no argument was made on it.

[00:49:54] Speaker 04:
That's exactly right.

[00:49:55] Speaker 04:
But there's no reference to it in the brief because that would not be a cognizable argument here.

[00:49:59] Speaker 02:
OK.

[00:50:00] Speaker 02:
So this is why issue preclusion applied in this case and why it applies in the context of a Markman hearing is because issue preclusion

[00:50:10] Speaker 02:
is simply a principle of whether or not a court has put in enough work, has done all of the work that's necessary to come to a sufficiently final decision.

[00:50:22] Speaker 02:
The fact that that decision is in the process of a case, the case could go all the way through.

[00:50:28] Speaker 02:
It could settle.

[00:50:29] Speaker 02:
It doesn't change the fact.

[00:50:31] Speaker 03:
Could it have been modified by the district court?

[00:50:33] Speaker 02:
Nobody made that request, not even at settlement.

[00:50:36] Speaker 03:
That's not what I asked you.

[00:50:38] Speaker 03:
And then the answer clearly is yes, as a matter of law.

[00:50:41] Speaker 02:
Yes.

[00:50:41] Speaker 02:
I mean, any order can be modified by a court probably until the end.

[00:50:46] Speaker 02:
As the case proceeds.

[00:50:47] Speaker 02:
As the case proceeds.

[00:50:48] Speaker 02:
But that proves too much, because then you would never have issue preclusion until after a final judgment.

[00:50:53] Speaker 02:
And clearly, issue preclusion is something different than res judicata.

[00:50:58] Speaker 02:
What the Ninth Circuit and what Varden

[00:51:01] Speaker 02:
in this court and the restatement says is that appealability is one of the factors that you look at for issue preclusion.

[00:51:13] Speaker 02:
Because in the Ninth Circuit, a settlement is sufficient judgment

[00:51:17] Speaker 02:
for issue preclusion.

[00:51:19] Speaker 02:
And so you're looking at a different thing.

[00:51:21] Speaker 02:
We're not talking about a settlement.

[00:51:23] Speaker 02:
We're not talking about holding somebody collaterally stopped for a claim.

[00:51:27] Speaker 02:
We're talking about an issue that was briefed and decided by the court.

[00:51:32] Speaker 02:
And here, this court was the same judge that had done the claims construction.

[00:51:37] Speaker 02:
He knew he wasn't going to change his claim to construction.

[00:51:42] Speaker 02:
And Balsam admitted that it was final when, after the judicial recusal, it wrote to us and it told the court that Judge Oreck made clear he wouldn't be changing his claims construction.

[00:51:56] Speaker 02:
So everybody knew this claims construction was final.

[00:52:00] Speaker 04:
I vaguely recall that.

[00:52:02] Speaker 04:
That's in the JA, I think.

[00:52:04] Speaker 02:
It is.

[00:52:04] Speaker 04:
At the very, very end, maybe?

[00:52:13] Speaker 02:
One second, I can find it for you.

[00:52:21] Speaker 02:
Because I think it's an important point.

[00:52:35] Speaker 02:
Here it is.

[00:52:41] Speaker 02:
It is.

[00:52:43] Speaker 02:
in the appendix at 1036 What's it say and it says?

[00:52:52] Speaker 02:
While judge Orrick made clear he intended to enter the same claims constructions even if he determined that collateral estoppel did not apply Judge Chen may not And who said whose words are those that's that is balsam's counsel This is the email on June 22nd it is

[00:53:14] Speaker 02:
So there was no question.

[00:53:15] Speaker 05:
So you're saying it doesn't really make any difference.

[00:53:17] Speaker 05:
It's going to be the same anyhow.

[00:53:19] Speaker 05:
The difference is that because there was claim preclusion here, Balsam didn't get a chance to make any arguments.

[00:53:27] Speaker 05:
If the judge had, in essence, said, well, guess what?

[00:53:30] Speaker 05:
I'm not going to issue preclude, but what am I going to do?

[00:53:32] Speaker 05:
I'm going to have a one-minute hearing.

[00:53:34] Speaker 05:
I'm going to tell you that I'm going to adopt the claim construction before.

[00:53:38] Speaker 05:
Balsam could have said, Your Honor, you were wrong.

[00:53:42] Speaker 05:
Right?

[00:53:43] Speaker 05:
Yes.

[00:53:44] Speaker 05:
And tried to convince the judge he was wrong.

[00:53:47] Speaker 02:
Yes.

[00:53:47] Speaker 05:
They didn't get that opportunity.

[00:53:49] Speaker 05:
That's what issue preclusion denied them that opportunity.

[00:53:52] Speaker 02:
Right.

[00:53:52] Speaker 02:
They made the argument in a case management.

[00:53:55] Speaker 02:
Right.

[00:53:56] Speaker 02:
Exactly.

[00:53:56] Speaker 05:
We can't just say, well, we don't care one way or the other.

[00:53:59] Speaker 05:
It would have been the same.

[00:54:01] Speaker 05:
So we'll just treat them as though practice.

[00:54:04] Speaker 05:
That's where you were going with that language you were quoting.

[00:54:08] Speaker 02:
Exactly.

[00:54:08] Speaker 05:
Why does it make any difference?

[00:54:10] Speaker 05:
Well, I think your counsel would say it makes a great deal of difference

[00:54:14] Speaker 05:
And she didn't really get a chance to go at the judge again.

[00:54:17] Speaker 02:
Right, but that's exactly what issue preclusion is.

[00:54:20] Speaker 02:
This judge spent an enormous amount of time.

[00:54:22] Speaker 05:
There's no question that it was the same patents, the same claim terms, that we were- Well, but what we know is that the judge turned around and on the summary judgment slipped something in that wasn't in before, i.e.

[00:54:35] Speaker 05:
directly connected.

[00:54:37] Speaker 02:
No, it was always in.

[00:54:39] Speaker 05:
That's what you're saying.

[00:54:41] Speaker 05:
I've read the TR.

[00:54:42] Speaker 05:
I've read the transcripts of the entirety before that.

[00:54:45] Speaker 05:
And I would tell you, I'm not of the view that it was clearly implied and decided in the original claim construction.

[00:54:53] Speaker 05:
And whether or not it was is an issue that you would at least say there's argument on.

[00:54:59] Speaker 05:
And your adversary wasn't given a chance to argue with the judge about that before the judge slapped directly connected onto the claims.

[00:55:08] Speaker 05:
So this whole notion that it doesn't really make much difference one way or the other because the judge would have done the same thing anyway seems to me to be not something that moves me.

[00:55:18] Speaker 02:
I understand.

[00:55:19] Speaker 02:
I would I would say this in the Ninth Circuit.

[00:55:22] Speaker 02:
Issue preclusion is a multi-factor test.

[00:55:25] Speaker 02:
The judge looked at all of those tests.

[00:55:26] Speaker 02:
He applied the facts.

[00:55:27] Speaker 02:
It's an abuse of discretion standard.

[00:55:30] Speaker 02:
And on the finality, which was the only issue below, on finality, he found his own construction sufficiently final.

[00:55:38] Speaker 02:
And I don't think he's an abuse of discretion.

[00:55:42] Speaker 05:
If I may.

[00:55:42] Speaker 05:
What about the directly connected?

[00:55:44] Speaker 05:
Pardon me.

[00:55:45] Speaker 05:
Yes, if I may.

[00:55:45] Speaker 05:
I don't know what I'm talking about on issue preclusion or necessary to the judgment.

[00:55:51] Speaker 05:
talking, and I think well, about the general principle from Arizona, which Balsam raised below and said, well, you can't have issue of reclusion with a settlement, period, cite Arizona.

[00:56:02] Speaker 05:
I understand that to have been the extent of their argument on Arizona below.

[00:56:08] Speaker 02:
Well, their argument about Arizona was that collateral estoppel could not apply to the settlement.

[00:56:14] Speaker 02:
And we weren't trying to apply collateral estoppel to the settlement.

[00:56:18] Speaker 05:
The subsidiary question, once you are addressing a preclusion issue claim or issue of preclusion, was the judgment that you're seeking preclusion effect or necessary to the judgment?

[00:56:31] Speaker 02:
If you're applying collateral estoppel to a judgment,

[00:56:37] Speaker 05:
Well, this is a better question.

[00:56:41] Speaker 05:
How do you apply the necessary to element, which everybody knows exists in preclusion law?

[00:56:47] Speaker 05:
How do you apply it to a case that gets settled, where you've had a fully developed fact issue and a decision and an interlocutor, the right even to have an appeal?

[00:57:05] Speaker 05:
But then the case settles out.

[00:57:08] Speaker 02:
Then you would do it the way Arizona did with the settlement that occurred in that case.

[00:57:14] Speaker 02:
You would look to see if there was a court order or some sort of court finding on the issue and whether or not it was necessary in that case or some collateral issue that didn't really address the claims.

[00:57:29] Speaker 02:
our case because we weren't applying collateral estoppel to a judgment.

[00:57:33] Speaker 02:
We were applying collateral estoppel to an issue, and then we took through summary judgment to get to judgment.

[00:57:40] Speaker 05:
But if one wants to establish collateral estoppel, don't you have to show that even as to the issue, the claim instruction was necessary to something?

[00:57:51] Speaker 02:
Well, I think in the context of Markman, the claims construction is necessary as its own thing, right?

[00:57:58] Speaker 02:
This is an issue of law for the court.

[00:57:59] Speaker 05:
Is it necessary to a hypothetical question about the scope of the claims that no one cares about?

[00:58:05] Speaker 02:
Well, no, because the issues in this case were invalidity and non-infringement.

[00:58:11] Speaker 02:
And so what Markman tells us is in that step, much like in contract interpretation, the court has to tell us what the claims mean.

[00:58:19] Speaker 02:
That's a function of law.

[00:58:20] Speaker 02:
That's never going to get appealed.

[00:58:22] Speaker 02:
The jury is never going to hear a dispute over Markman terms.

[00:58:27] Speaker 02:
And so if this case had settled on some procedural grounds

[00:58:34] Speaker 02:
and we were trying to apply issue preclusion to the settlements, then there would be an argument about whether or not a Markman order might have been relevant to whatever the grounds was for the settlement.

[00:58:45] Speaker 02:
But we're talking about a Markman order that we're applying collateral estoppel to that issue.

[00:58:52] Speaker 02:
And as I understand Balsam's argument, the argument is was you should never have issue preclusion to Markman orders.

[00:59:00] Speaker 02:
And what I would say to that is issue preclusion applies in litigation

[00:59:04] Speaker 02:
generally to all parties.

[00:59:06] Speaker 02:
And there is nothing about a Markman order that merits special treatment.

[00:59:12] Speaker 03:
I don't think that is their argument.

[00:59:14] Speaker 03:
At some point in the proceeding, when the case is litigated and there's finality to it, I'm sure that they concede that the Markman is a valid determination.

[00:59:29] Speaker 02:
Right.

[00:59:29] Speaker 02:
And we've reached that point here.

[00:59:31] Speaker 02:
Because under the Ninth Circuit law,

[00:59:33] Speaker 02:
issue of preclusion, it only has to be sufficiently firm.

[00:59:38] Speaker 04:
Can I ask you about the merits?

[00:59:40] Speaker 02:
Yes, please.

[00:59:41] Speaker 04:
So I'm not quite sure what role in, now I'm really thinking about literal infringement, okay, not doctrine of equivalence, is played by this articulation that there has to be

[00:59:58] Speaker 04:
a connection all by itself, in part because it seems to me when I look at this slotted device on the accused product, there's plainly a connection.

[01:00:10] Speaker 04:
It just goes up and around and out like that.

[01:00:13] Speaker 04:
So they're connected.

[01:00:16] Speaker 04:
So I'm not quite sure why

[01:00:19] Speaker 04:
why it matters whether one says, for literal infringement, how one can say, as I think Judge Orrick did say, there is no connection.

[01:00:30] Speaker 04:
I took the real point to be that there is no turning on this fixed point.

[01:00:35] Speaker 02:
Right.

[01:00:36] Speaker 02:
It is a bit confusing in the briefs, and I think part of the problem here is that Balsam's brief focused on the in a circle around a fixed point language.

[01:00:49] Speaker 02:
What happened below?

[01:00:51] Speaker 04:
But the around got taken out and it may, when it's turned on and the turn on follows from which, which strikes me as meaning that there is a physical connection causing the, um, the, um, the rotation.

[01:01:06] Speaker 04:
And that, that connector is moving at the point.

[01:01:09] Speaker 04:
That's the point.

[01:01:10] Speaker 04:
I'm just going to keep saying it over and over because I've spent days and days trying to find the words to capture what a pivot is.

[01:01:17] Speaker 04:
And I guess that's.

[01:01:18] Speaker 04:
That's what I've rested on at the moment.

[01:01:19] Speaker 02:
Yes.

[01:01:20] Speaker 02:
So we did this in the Markman hearing as well, in the joint appendix at 3947.

[01:01:25] Speaker 02:
What was that page number?

[01:01:30] Speaker 02:
3947.

[01:01:32] Speaker 04:
This isn't the oral argument about the claim construction.

[01:01:36] Speaker 02:
Right.

[01:01:36] Speaker 02:
So what had happened is we had originally proposed a construction that was in a circle around a fixed point.

[01:01:45] Speaker 02:
And that's because if you're moving in a circle around a fixed point, the movement has to be on the fixed point.

[01:01:51] Speaker 04:
No, it doesn't.

[01:01:52] Speaker 04:
If you're running around a circular track, it absolutely does not.

[01:01:55] Speaker 02:
OK.

[01:01:55] Speaker 02:
That was the claims construction that was proposed.

[01:01:58] Speaker 04:
Judge Orrick did something helpful to you, saying, no, that's too broad.

[01:02:02] Speaker 02:
He said, no, that's too broad.

[01:02:04] Speaker 02:
He said also he was dealing with this figure 18 and the videos on how the ends of the second trunk move.

[01:02:11] Speaker 02:
And what George Orrick said at the claims construction hearing was, look, I don't care about how things

[01:02:17] Speaker 02:
how the trunks move, I don't care about in a circle.

[01:02:21] Speaker 02:
What is claimed here is a structure.

[01:02:23] Speaker 02:
And we're going to have a mark, we're going to have a claims construction that defines the structure.

[01:02:28] Speaker 02:
And so he said, we're taking out in a circle.

[01:02:31] Speaker 02:
And I said to him at this point, I said, okay, well, if we're going to take out in a circle, then we need to make sure that we say it's on a fixed point, because there's a problem having a construction where something is moving around a fixed point that's not physically attached.

[01:02:47] Speaker 02:
and so we had this conversation and Judge Orrick agreed and he put in from From which from which and on a fixed point from which the second trunk turns on a fixed point to address this very issue and It and it wasn't a surprise to Balsam.

[01:03:07] Speaker 02:
They it wasn't You know, they knew exactly because in the Joint Appendix at 3959

[01:03:17] Speaker 02:
This is Balsam's counsel, and he says, oh, Judge Orrick, I think you're mistaken when you say a pivot joint is requiring pivoting to occur on that point.

[01:03:28] Speaker 02:
We all knew that that was what the claims construction was.

[01:03:31] Speaker 02:
Nor was there any dispute over what a pivot means.

[01:03:35] Speaker 02:
During the claims construction process, balsam never offered an ordinary meaning of pivot.

[01:03:41] Speaker 02:
Not one time.

[01:03:42] Speaker 02:
It didn't dispute our dictionary definition of pivot or that pivot joint had to be construed as a joint term.

[01:03:50] Speaker 02:
Balsam didn't dispute that ordinary meaning because its position was

[01:03:55] Speaker 02:
His position was that the patentee had offered a special meaning.

[01:04:00] Speaker 03:
You're 20 minutes past your time.

[01:04:02] Speaker 03:
So if I can just... Wrap it up.

[01:04:04] Speaker 02:
Okay, one minute.

[01:04:06] Speaker 02:
Special meaning is at 3816.

[01:04:08] Speaker 02:
That doesn't actually mean one minute.

[01:04:10] Speaker 02:
It means wrap it up.

[01:04:12] Speaker 02:
Okay.

[01:04:12] Speaker 02:
Can I tell... I want to just briefly address the summary judgment because I haven't had a chance to talk at all about... As I said, you're 20 minutes.

[01:04:21] Speaker 02:
All right, Your Honor.

[01:04:23] Speaker 03:
Wrap it up.

[01:04:24] Speaker 03:
You can finish your sentence.

[01:04:27] Speaker 02:
UCP brought a no evidence summary judgment motion.

[01:04:32] Speaker 02:
And it's important here because Balsam says we failed to prove this, we failed to prove that.

[01:04:37] Speaker 02:
In opposing our summary judgment motion, there's no claim analysis, no limitation by limitation analysis.

[01:04:44] Speaker 02:
There is nothing to show infringement, even if McCarthy's declaration.

[01:04:50] Speaker 02:
Thank you, Your Honor.

[01:04:58] Speaker 04:
But were you precluded in the summary judgment filing from making claim construction arguments?

[01:05:04] Speaker 01:
We were precluded.

[01:05:06] Speaker 01:
No, the summary judgment arguments were lumped in, both their motion to have collateral estoppel apply and summary judgment.

[01:05:13] Speaker 04:
Could you have said, first, there's no collateral estoppel.

[01:05:18] Speaker 04:
Second, here is we want to now persuade you that you were wrong the last time.

[01:05:23] Speaker 01:
We said the judge had already indicated he was going to adopt his previous construction.

[01:05:28] Speaker 01:
And the only question was whether he was going to adopt it, just import it into the record in a way such that we could appeal it to this court, which is what we said.

[01:05:35] Speaker 01:
We still object to your claim constructions, but at least let us appeal it.

[01:05:38] Speaker 01:
or whether their view was going to prevail and we were going to be precluded.

[01:05:42] Speaker 01:
So we didn't argue anew the claim constructions, but we did renew our original request.

[01:05:47] Speaker 01:
And he did allow us to import all of that into this record.

[01:05:51] Speaker 01:
I assume, so in case you disagreed with his argument that it was precluded, we could appeal it.

[01:05:56] Speaker 01:
And I think it is important that we weren't requiring him to do a whole do-over.

[01:06:00] Speaker 01:
We just want it to be entered in this case in such a way that we could appeal it.

[01:06:04] Speaker 01:
And Judge Clevinger, we did raise the issue on page A

[01:06:07] Speaker 01:
Appendix 1120, this is a reading from the collateral estoppel section of the brief below.

[01:06:12] Speaker 01:
Determination of the issue in the prior litigation must have been a critical and necessary part of the judgment in the earlier action.

[01:06:19] Speaker 01:
Absent clearly expressed intent, otherwise settlement agreements and the resulting case dismissals and judgment don't give rise to issue preclusion.

[01:06:26] Speaker 01:
The language you quoted me before where you gave me the district court language, the very next sentence says, nobody disputes this is the very same claim construction issue.

[01:06:34] Speaker 01:
And we don't dispute it is the same issue.

[01:06:36] Speaker 01:
The question is whether it was necessary to any judgment on the merits.

[01:06:40] Speaker 01:
And that we have contested all along.

[01:06:43] Speaker 01:
On the fixed point, Your Honor, the claim construction that's wrong is that fixed point is a negative limitation read into the claims.

[01:06:52] Speaker 01:
That's nowhere.

[01:06:52] Speaker 01:
The patent is fixed 100 times and never in conjunction with pivoting.

[01:06:56] Speaker 01:
The point around which something is rotating can move.

[01:07:01] Speaker 01:
It does not need to be the point of connection, Judge Toronto, and I point you to the examiner when he distinguished Smith, he called that pivoting.

[01:07:10] Speaker 01:
This is the screw in prior art.

[01:07:14] Speaker 01:
That could be a hollow tube, and he saw it pivoting around the axle up and down.

[01:07:21] Speaker 01:
It didn't have to be connected to the axle.

[01:07:22] Speaker 01:
Something could pivot around something that's not connected to it.

[01:07:25] Speaker 01:
On DOE, the judge decided to dispute a fact.

[01:07:30] Speaker 01:
The judge held both for the same rationale for vitiation and that no reasonable fact finder could find DOE here, Dr. Nerva Clements' infringement, because their product moves only by translation.

[01:07:43] Speaker 01:
Dr. McCarthy, our expert, testified that is not so.

[01:07:47] Speaker 01:
And in fact, it is engineering impossible.

[01:07:50] Speaker 04:
But I guess that George said a couple of things in rejecting DOE, but the one that I guess I

[01:07:59] Speaker 04:
want to focus on independent deviation.

[01:08:03] Speaker 04:
Was it paragraph 33?

[01:08:04] Speaker 04:
The way paragraph of Dr. McCarthy, which says the way is the same because the path of the thing is still a circle.

[01:08:14] Speaker 04:
And that seems to me to be just insufficient on its face because it doesn't address the mechanism by which the path ends up being the same.

[01:08:24] Speaker 01:
Looking at the DOE analysis, there's a page, AA 1149 and AA 1159, Dr. McCarthy's declaration.

[01:08:34] Speaker 01:
Yeah.

[01:08:34] Speaker 01:
And so this is in the face of no evidence on their part.

[01:08:39] Speaker 04:
This is paragraph 100.

[01:08:43] Speaker 04:
I'm sorry.

[01:08:43] Speaker 04:
So it's 1149, yes.

[01:08:46] Speaker 01:
This is one paragraph on the way.

[01:08:48] Speaker 01:
Well, I think you have to read the whole thing in context, because I think he goes on, actually, to show that it is exactly the same way, this figure on page A1150, where he's put the blue tube over their movable trunk.

[01:09:02] Speaker 01:
and shown how a green pivot, if it were attached to that, would move.

[01:09:09] Speaker 01:
And their thing is moving in exactly the same way as figure 18.

[01:09:12] Speaker 01:
It looks just like figure 18, which they conclude is covered by the claims.

[01:09:17] Speaker 04:
Did anybody make anything in this case of the fact that the track is not actually circular but has straightaways like a running track?

[01:09:24] Speaker 04:
So it, in fact, would not be just like at the end of a radius.

[01:09:29] Speaker 04:
I didn't see anybody making it.

[01:09:30] Speaker 01:
So they argue that their thing moves only translationally somehow.

[01:09:36] Speaker 01:
But translational movement doesn't change the angle of something, as our expert testified.

[01:09:40] Speaker 01:
And so it's physically impossible to not rotate and still invert, which their tree clearly does.

[01:09:48] Speaker 01:
And this is a dispute of fact.

[01:09:49] Speaker 01:
Even if you reject all of our other arguments,

[01:09:52] Speaker 01:
which I wish you would not.

[01:09:54] Speaker 01:
But this is a dispute of fact, and the judge wrongly squarely decided it's a dispute of fact.

[01:09:58] Speaker 01:
And Dr. McCarthy clearly applies his claim of discretion because he shows exactly how it did happen.

[01:10:06] Speaker 01:
I appreciate your indulgence.

[01:10:08] Speaker 01:
If the court has any further questions, I'd be happy to.

[01:10:12] Speaker 03:
Thank you.

[01:10:13] Speaker 01:
We request that you reverse.