[00:00:43] Speaker 03: Our next case is Renettix. [00:00:46] Speaker 03: I think I finally learned to pronounce it correctly. [00:00:50] Speaker 03: And Lidos versus Apple, 2019-10-50. [00:00:53] Speaker 03: Mr. Lee. [00:00:54] Speaker 03: Thank you, Your Honor. [00:00:59] Speaker 01: May it please the court, my name is Bill Lee. [00:01:01] Speaker 01: And together with my partner, Brittany Amati, we represent Apple. [00:01:06] Speaker 01: In an earlier case, Apple lost the judgment on the same patents at issue before you. [00:01:12] Speaker 01: Apple then did precisely what the law encourages. [00:01:15] Speaker 01: It redesigned the features of the accused products, FaceTime and VPN On Demand, to avoid infringement. [00:01:24] Speaker 01: Those redesigned products, the features of which are not in dispute, do not infringe the asserted claims of the pet. [00:01:33] Speaker 01: So let me go directly to the 504 and 211 pets. [00:01:37] Speaker 01: The district court erred in concluding and then instructing the jury that a DNS system does not include a DNS. [00:01:47] Speaker 01: As the panel knows, every claim of the 504 and 211 patents requires a domain name service system or DNS system. [00:02:01] Speaker 01: As the court also knows, the district court construed the embedded term [00:02:06] Speaker 01: domain name service, or DNS, as requiring the return of an IP address. [00:02:13] Speaker 01: Notwithstanding that, the district court instructed the jury that the term DNS system does not incorporate the concept of a DNS. [00:02:26] Speaker 03: Are you talking only about Claim 5? [00:02:29] Speaker 01: No. [00:02:29] Speaker 01: We're talking in this instance, Your Honor, about all the claims. [00:02:32] Speaker 01: Claim 5 is dealt with separately on the collateral estoppel issue. [00:02:36] Speaker 01: But all of the asserted claims of the 504 and 211 have this requirement of a domain name service system. [00:02:45] Speaker 01: They also, as a consequence, we say, include the concept of a domain name service. [00:02:52] Speaker 01: That is what the claims say on their face. [00:02:56] Speaker 01: It's a little bit the [00:02:58] Speaker 01: The instruction of the court is a little bit as if you took the words Court of Appeals for the Federal Circuit and then instructed the jury that it doesn't include a court. [00:03:08] Speaker 01: It doesn't make any sense. [00:03:10] Speaker 02: Does it matter that I think I'm looking at the right page, 2758, what the judge told the jury was you were instructed that the construction for domain name service system, an element of all the asserted claims of 504211, does not incorporate or include the court's construction [00:03:27] Speaker 01: for that term. [00:03:28] Speaker 01: It mattered greatly, Your Honor, because the Court adopted that conclusion and gave that instruction. [00:03:36] Speaker 01: We were precluded from putting into evidence the non-infringement defense that would have demonstrated both the design around and no infringement. [00:03:45] Speaker 01: A domain name service, as defined in the first case, as consistently defined, requires the return of an IP address. [00:03:55] Speaker 01: The focus of the first case in this case is something called the accept push. [00:04:00] Speaker 01: And in the first case, the accept push returned an IP address. [00:04:04] Speaker 01: Apple then redesigned after the first case. [00:04:06] Speaker 02: But it sends some other information from which, in the end, the callee makes a direct call to the caller. [00:04:11] Speaker 01: Actually, Your Honor, that's wrong as a matter of fact and wrong completely unsupported by the record. [00:04:16] Speaker 02: It sends a certificate plus some other information. [00:04:19] Speaker 02: And none of that. [00:04:20] Speaker 02: And it allows the callee to make the call to the caller [00:04:23] Speaker 02: at which point they're both exchanging IP addresses, but more importantly, having a direct connection. [00:04:27] Speaker 01: Your Honor, that's what Vernetix would have you believe. [00:04:29] Speaker 01: Well, tell me why that's wrong. [00:04:30] Speaker 01: It's incorrect. [00:04:31] Speaker 01: The first thing is we should focus on what Vernetix claims is the domain name service. [00:04:39] Speaker 01: So set aside for a second the claim construction error. [00:04:42] Speaker 01: Let's assume that it requires a domain name service. [00:04:45] Speaker 01: Let's assume that that requires the return of an IP address. [00:04:49] Speaker 01: The thing that was identified by Vernetix [00:04:53] Speaker 01: as providing or satisfying that limitation was the accept push with the IP address return. [00:05:00] Speaker 01: That's it. [00:05:02] Speaker 01: We took the IP address out. [00:05:04] Speaker 01: There is nothing in the accept push, nothing that would satisfy the name of a domain name server. [00:05:11] Speaker 01: The fact that [00:05:12] Speaker 01: There is another portion of the product that would allow you eventually through a relay server or a direct independent protocol to make a call doesn't satisfy the limitations of the claim. [00:05:26] Speaker 01: So the argument that was made to you is an argument that is completely unrelated to the allegations that were made at trial. [00:05:33] Speaker 01: So there are two problems. [00:05:36] Speaker 01: for vernetics. [00:05:37] Speaker 01: The first on this is they would have you conclude that the phrase domain name service system does not include a domain name server. [00:05:48] Speaker 01: That service, that makes no sense as a matter of the plain language. [00:05:54] Speaker 01: It is inconsistent with the specification. [00:05:57] Speaker 01: It is inconsistent with Judge Davis's rulings previously. [00:06:02] Speaker 01: It's inconsistent with the manner in which their own expert testified in the first case. [00:06:06] Speaker 01: And your honor, it's in fact inconsistent with every action by all the parties until we redesign the product. [00:06:15] Speaker 01: And when we redesign a product to take out the caller ID, the callee ID, which was what was specifically identified in the first case as providing the domain name service, all of a sudden, all of a sudden, the correct construction of domain name service didn't include [00:06:37] Speaker 01: the return of the IP address. [00:06:39] Speaker 01: Now, I think there are two things that would indicate to you that that's a problem for Bernetics. [00:06:44] Speaker 01: The first is there is really no substantive argument made to you on the claim construction issue. [00:06:50] Speaker 01: There's no substantive argument to support the concept that you can take domain name service system and make the first three words completely irrelevant and inconsequential. [00:07:02] Speaker 01: The second is that their argument that [00:07:05] Speaker 01: that this doesn't require a reversal as to the FaceTime products. [00:07:10] Speaker 01: And I should say it's important, Your Honor, because the FaceTime products are the products accused of infringing the FaceTime. [00:07:17] Speaker 01: The FaceTime feature is a different set of products than those that were accused of infringing by the VPN on-demand feature. [00:07:28] Speaker 01: They overlap to some degree, but there are products that are subject to the revenue base for FaceTime that were not in VPN on-demand. [00:07:36] Speaker 01: So you have first the claim construction issue and consistent conduct or consistent interpretation, and it's consistent with the words, [00:07:45] Speaker 01: It's consistent with the specification. [00:07:48] Speaker 01: It's consistent with Judge Davis's interpretation. [00:07:51] Speaker 01: It's consistent with the first trial. [00:07:53] Speaker 01: And it's consistent with logic and common sense. [00:07:58] Speaker 01: What you get this time around. [00:08:01] Speaker 02: Did Apple propose this construction to Judge Davis? [00:08:05] Speaker 02: I thought my recollection is they proposed it. [00:08:08] Speaker 02: You proposed something without it. [00:08:10] Speaker 02: Judge Davis said, I don't need it. [00:08:12] Speaker 02: because the rest of the claim language specifies exactly what this device is supposed to do. [00:08:17] Speaker 01: Your Honor, 80% correct, 20% I think requires clarification. [00:08:22] Speaker 01: They did propose it precisely as is. [00:08:25] Speaker 01: We've never disputed that portion of it. [00:08:28] Speaker 01: We said in the first case that there was an additional requirement that there be a determination of whether the domain name was a standard domain name or a top-level security domain name. [00:08:38] Speaker 02: Correct me if I'm wrong. [00:08:39] Speaker 02: I thought your claim construction did not actually include what theirs did, which is that the domain name service system had to have a domain name service function. [00:08:50] Speaker 01: Your Honor, respectfully, that's not correct. [00:08:52] Speaker 01: Ours had that and required more. [00:08:55] Speaker 01: And both parties consistently [00:08:58] Speaker 01: consistently said it requires the return of an IP address. [00:09:02] Speaker 01: And probably most importantly, Your Honor, once Judge Davis interpreted the claim, and this is at A22214, this is where he made his interpretation. [00:09:15] Speaker 01: And he said, it's a lookup service that returns an IP address for request a domain name to the requester. [00:09:22] Speaker 01: That's what everybody lives with. [00:09:25] Speaker 01: So you have before you, [00:09:27] Speaker 01: a claim interpretation that is incorrect as a matter of law, inconsistent with the claim language, inconsistent with the specification, inconsistent with the conduct of the parties. [00:09:40] Speaker 01: You have before you an undisputed design around product that removes the very feature, the call EID, that had been identified as that which created a domain name service. [00:09:56] Speaker 01: And at the end of the day, it is an error of consequence because the revenue bases for FaceTime and VPN on demand are different, and because the jury rendered its substantial verdict based upon infringement of four pens. [00:10:15] Speaker 03: Mr. Lee, would you [00:10:19] Speaker 03: Would you move to a question of issue preclusion regarding invalidity defense? [00:10:24] Speaker 01: Yes. [00:10:25] Speaker 01: So Your Honor, we suggest, and we've argued to you in the briefs, that voter verified address that issue. [00:10:32] Speaker 01: Now, when the district court decided that having pursued an anticipation of Section 102 defense in the first case, we were issue precluded on all invalidity defenses, the district court acknowledged that the court had not yet reached that issue. [00:10:48] Speaker 01: You have, in our view, [00:10:49] Speaker 01: we disagree, reached that issue and voter verified, where notwithstanding the assertion of 102 and 103 defenses previously, the court reached the section 101 defense as independent and different and decided it. [00:11:08] Speaker 01: That if the district court was correct and voter verified, if the district court was correct and all invalidity defenses were [00:11:19] Speaker 01: part and parcel of the same, voter verified would have come out differently. [00:11:25] Speaker 01: As a matter of the statute, where Section 101, 102, and 103 are independent bases to invalidate a patent, as is Section 101. [00:11:34] Speaker 03: Why should one be able to pick and choose, make one defense, and if one loses, come back later on with others? [00:11:41] Speaker 01: Your Honor, that's the argument. [00:11:44] Speaker 01: The reality is when you have a 5-day trial, you pick your best defenses and you try them. [00:11:49] Speaker 01: And if you've tried them, you should be issue precluded. [00:11:53] Speaker 01: But if you have not tried them and they're not part of the trial, which is what happened here. [00:11:58] Speaker 03: But that's a decision you made. [00:11:59] Speaker 03: That's a strategic decision. [00:12:02] Speaker 01: It's a strategic decision you make, Your Honor, but it's not a strategic decision that should determine whether there is issue preclusion or not. [00:12:09] Speaker 01: As a matter of statutory of the statute, Section 101, 102, and 103, [00:12:16] Speaker 01: are different provisions. [00:12:18] Speaker 01: As a matter of the legal principles that govern them, they are different provisions. [00:12:24] Speaker 04: Notwithstanding the preclusion argument, how about the fact that this claim five has already been found invalid in another patent, basically the same thing? [00:12:36] Speaker 04: Why would we consider it still alive for the purposes of this case? [00:12:41] Speaker 01: It has, Your Honor. [00:12:42] Speaker 01: That takes us to the second issue preclusion argument. [00:12:45] Speaker 01: And let me say this about it quickly, and then I just want to mention something very quickly on the deep end on demand. [00:12:53] Speaker 01: All of the asserted claims, except for claim 5 of the 504 patent, have been determined not patentable as a result of final decisions of this court. [00:13:04] Speaker 01: There, in fact, have been now, I think, seven decisions of this court looking at 12 patents that come from these common specifications in validating 341 claims. [00:13:15] Speaker 01: The only claim standing that allows us to do anything with face time is claim five of the 504 pet. [00:13:23] Speaker 01: It is patentably indistinct from claim five of the 211 pet. [00:13:28] Speaker 01: In fact, if anything, it's broader. [00:13:30] Speaker 01: Now, the argument's principally made to you, and I'm not going to, I don't want to use all my rebuttal time, but the arguments made to you are principally procedural arguments. [00:13:41] Speaker 01: There's a little bit of an argument that they're patentably distinct [00:13:44] Speaker 01: They're not, if the court applies the principles you would apply in an obvious double patenting case, they're not indistinct at all. [00:13:52] Speaker 01: The fact that those claims, that claim 5 to 211, has been determined not patentable should clearly stop them from asserting that it is here. [00:14:03] Speaker 01: And it certainly doesn't make sense to have the affirmation of a judgment of this magnitude depend upon a claim that is, according to us, both not patentable [00:14:14] Speaker 01: And they're clearly stopped from doing so. [00:14:16] Speaker 02: Can I just ask you, I mean, I understand that Bernetix's argument is whatever the effect of 211-5's unpatentability on 504-5's unpatentability, it cannot at present be a matter of issue preclusion for the simple reason that the burden, the level of proof is different between [00:14:40] Speaker 02: between the board proceeding and the district court. [00:14:44] Speaker 02: It may, as you have argued, be awfully close to being declared soon by the board to be unpatentable under the same standard, maybe even for collateral estoppel. [00:14:58] Speaker 02: But it hasn't yet. [00:14:59] Speaker 02: And in the absence of that, we can't collaterally estop in the district court where the burden is clear and convincing evidence. [00:15:08] Speaker 01: Your Honor, I think that's [00:15:09] Speaker 01: That's an argument that's made to you, and it's incorrect. [00:15:12] Speaker 01: I'll do it quickly to preserve whatever rip out of time I have. [00:15:16] Speaker 01: If you take the XY decision and you take the non-precedential decision of last week in the Ayl case, you can collaterally stop what happens in the district court with a decision from the PTO. [00:15:29] Speaker 03: Is it collateral estoppel, or is it just that the patent is dead, the claim is dead? [00:15:34] Speaker 01: It's a great question. [00:15:35] Speaker 01: And I think the best way to view it, and no, I don't think anybody's addressed this precisely, is this. [00:15:43] Speaker 01: For the claims that were specifically an issue before the PTO, which is all the claims, but claim five of the 504, they are deader than a doornail. [00:15:51] Speaker 01: The only question left is claim five of the 504 patent. [00:15:56] Speaker 01: And if it's patentably indistinct, [00:15:59] Speaker 01: The combination of the XY decision and the Yale decision and the Ohio-Willow decision gives you a very simple and compelling logic, which is this. [00:16:08] Speaker 01: If you have a claim that's patentably indistinct and the patent office has determined it's not patentable, how can it be that in a district court, someone is allowed to pursue a claim based upon that patentably indistinct, not patentable, subject matter? [00:16:23] Speaker 01: Last sentence I'll say, if I could. [00:16:26] Speaker 01: On the VPN on demand, [00:16:29] Speaker 01: Claims, again, we designed around. [00:16:33] Speaker 01: The claims are very specific. [00:16:35] Speaker 01: They require three different things. [00:16:38] Speaker 01: They require a determination. [00:16:40] Speaker 01: They require something happening in response to the determination. [00:16:44] Speaker 01: And they require it being automatic. [00:16:47] Speaker 01: We took that out. [00:16:49] Speaker 01: We stopped doing it. [00:16:51] Speaker 01: There is no infringement. [00:16:53] Speaker 01: Thank you, Your Honor. [00:16:55] Speaker 03: We'll give you three minutes for a bottle. [00:16:57] Speaker 03: Mr. Lee, Mr. Lampkin. [00:17:15] Speaker 00: Thank you. [00:17:15] Speaker 00: May it please the court. [00:17:16] Speaker 00: I'd like to begin where Mr. Lee began, which is whether or not the DNSS, the Domain Name Server System, [00:17:22] Speaker 00: necessarily incorporates all the features that are found in a traditional domain name server, such that it has to return an IP address. [00:17:31] Speaker 00: We think the claims make absolutely clear that that's not the case. [00:17:35] Speaker 00: So if I could turn to page 45, where we actually have the claims laid out in our brief. [00:17:40] Speaker 00: If you look, the third bracketed limitation is to receive a query for a network address. [00:17:46] Speaker 00: I'm sorry, page what? [00:17:47] Speaker 00: 45 of our brief, Judge Toronto. [00:17:48] Speaker 00: Your brief. [00:17:51] Speaker 00: The third one is to receive a query for a network address. [00:17:55] Speaker 00: But if you look at the limitations, returning a network address, like a conventional prior art domain name server might or would, it's not in there. [00:18:04] Speaker 00: That is a very telling omission. [00:18:06] Speaker 00: And in fact, one of the critical elements of the invention is, rather than doing what an old prior art domain name server would do, is return something other than an IP address. [00:18:15] Speaker 00: And that's the fourth item. [00:18:16] Speaker 00: to comprise an indication that the domain name service system supports establishing a secure communications link. [00:18:23] Speaker 00: So what happens is it gets a request for an IP address, but it doesn't give one back. [00:18:28] Speaker 00: It gives an indication that the system supports a secure communications link. [00:18:33] Speaker 00: It's also evident that it doesn't incorporate every element of a prior conventional DNS for a second reason. [00:18:39] Speaker 00: If you look, the first three items, connected to communications network, storing a plurality of domain names and corresponding network addresses, [00:18:46] Speaker 00: and receiving queries for network addresses, those are all things that a standard IRR domain name server would do. [00:18:52] Speaker 00: If we incorporated everything that they do like that. [00:18:55] Speaker 02: Can I just ask, are you suggesting that one or more of the four elements of this claim one is actually inconsistent with it being what you would call a conventional DNS by which I guess I think the parties mean [00:19:16] Speaker 02: returns an IP address? [00:19:17] Speaker 00: Yeah, I think the fourth one is what it's returning. [00:19:21] Speaker 00: And it can also return. [00:19:22] Speaker 00: And there's a dependent claim which has it returning an IP address. [00:19:25] Speaker 02: Why is returning an indication that the system supports establishing a secure communication link inconsistent with returning an IP address? [00:19:35] Speaker 00: No, I'm not saying that it's inconsistent because there is a dependent claim which says, return an IP address. [00:19:41] Speaker 00: And that I believe is claim five. [00:19:44] Speaker 00: So when they wanted to include a returning, and I'm sorry, it's claim 15 on page 261. [00:19:51] Speaker 00: It says the system of claim one wherein the domain name service system is configured to provide in response to the query the network address. [00:19:59] Speaker 00: So when the draftsman wanted to require it to return a network address, they included explicitly in a dependent claim. [00:20:06] Speaker 00: This claim omits it entirely. [00:20:08] Speaker 00: And it omits it even though the first three elements [00:20:11] Speaker 00: The first things, being connected to a network, having a priority of network name, domain names, and receiving queries are things that typical domain name, conventional domain name servers do all the time. [00:20:22] Speaker 00: Those would be completely superfluous if this system had to do and had to have everything that a conventional domain name service does. [00:20:31] Speaker 00: And then, in addition, if you turn to the specification, there's a figure there, figure 33, and that's on appendix page 230. [00:20:39] Speaker 00: And it lists a standard DNS with the label STD DNS. [00:20:44] Speaker 00: And so when the draftsman wanted to say standard DNS, they said standard DNS. [00:20:49] Speaker 00: So if you also look at appendix page 254, column 39, line 6-23, talks about conventional domain name services. [00:20:59] Speaker 00: Or appendix 259, column 50, line 37, standard DNS. [00:21:04] Speaker 00: What this invention was is it took something that pre-existed, your conventional domain name server, and it used it for a completely different purpose. [00:21:12] Speaker 00: Rather than just returning IP addresses, it gives you the indication that this system supports secure communications links. [00:21:20] Speaker 00: It's inappropriate to go back and say, well, [00:21:22] Speaker 00: We're going to read into it a further limitation it doesn't have and require it to do everything a standard DNS does, including an IP address. [00:21:30] Speaker 03: Mr. Lampton, would you address the preclusion issues relating to invalidity number one and then plan five? [00:21:38] Speaker 00: Sure. [00:21:39] Speaker 00: First, with respect to whether Apple is a stop from litigating invalidity. [00:21:43] Speaker 00: The answer, we think, is yes. [00:21:45] Speaker 00: And it's for actually a much more direct reason. [00:21:48] Speaker 00: And that is that obviousness was actually litigated in the first trial. [00:21:54] Speaker 00: Apple tried to remove and asked for a dismissal without prejudice of its obviousness counterclaim. [00:22:00] Speaker 00: And the district court said no, and the reason was it wouldn't agree to dismissal. [00:22:05] Speaker 00: The Apple would not agree to dismissal. [00:22:08] Speaker 00: It wouldn't have the same effect as if we tried it to a jury. [00:22:12] Speaker 00: And the jury returned an adverse finding. [00:22:13] Speaker 00: And the court entered judgment on the finding adverse to Apple. [00:22:16] Speaker 00: So Apple tried to withdraw its counterclaim of obviousness. [00:22:19] Speaker 00: And the district court said no. [00:22:20] Speaker 00: And when the district court says no, you can't withdraw it. [00:22:24] Speaker 00: You have to try it. [00:22:25] Speaker 00: And the issue actually was tried. [00:22:27] Speaker 00: Because right up to the end, we got a Rule 50A decision. [00:22:31] Speaker 00: Judgment is a matter of law. [00:22:32] Speaker 00: And Rule 50A allows a judgment to be entered as a matter of law, quote, after a party has been fully heard on an issue during a jury trial. [00:22:40] Speaker 00: That is a judgment with preclusive effect. [00:22:43] Speaker 00: And Wright and Miller. [00:22:44] Speaker 03: What about the general principle concerning whether raising one issue, you can raise one defense issue and not be precluded with respect to others? [00:22:56] Speaker 00: Right. [00:22:56] Speaker 00: So that has two components. [00:22:58] Speaker 00: The first is the very specific issue of obviousness here was litigated. [00:23:02] Speaker 00: And Wright and Miller tells you that says, this is a quote from them, that the collateral stop applies to any issue framed by the pleadings. [00:23:09] Speaker 00: and not withdrawn, even though it has not been raised at trial in any way. [00:23:14] Speaker 00: This was framed by the pleadings. [00:23:15] Speaker 00: It was in the pre-trial orders. [00:23:19] Speaker 00: Apple was denied the ability to withdraw it, and it lost on a Rule 58 judgment. [00:23:24] Speaker 00: The issue of obviousness itself was tried. [00:23:26] Speaker 00: In fact, the reference, the prior reference that Apple was pushing during the trial, [00:23:30] Speaker 00: if you were to take a look at their expert report, which is at 28,000. [00:23:33] Speaker 03: In other words, you don't want to answer the broader question. [00:23:35] Speaker 00: OK. [00:23:36] Speaker 00: And the broader question is, yes, we think that at least when you're talking about anticipation and obviousness, invalidity is a single issue. [00:23:44] Speaker 00: And it's a single issue. [00:23:45] Speaker 03: In other words, a prior art issue as opposed to a written description issue. [00:23:49] Speaker 00: Exactly. [00:23:50] Speaker 00: Because it's the question of validity in light of the prior art. [00:23:53] Speaker 00: And so when courts are trying to figure out what constitutes a single issue, they look at things like, would you expect [00:24:00] Speaker 00: pre-trial discovery to touch on all this. [00:24:02] Speaker 00: And if you look at this case, [00:24:03] Speaker 00: pretrial describer is rife with discussions about what is the prior, what renders it obvious. [00:24:08] Speaker 04: So in this case, if they're amended, then they'd be free to bring up 101, right? [00:24:14] Speaker 04: I'm sorry? [00:24:15] Speaker 04: They would be free to bring up 101. [00:24:17] Speaker 00: I think that having not raised it before and having had it come up on appeal and not having asked for 101, there would be a mandate issue on that. [00:24:25] Speaker 00: But I think in some other case, if they're looking for issue preclusion, I think 101 might well be out there. [00:24:30] Speaker 00: if one takes the narrow review of invalidity being invalidity in light of the prior art. [00:24:35] Speaker 00: I think there's another point, which is if you're looking at the actual trial of evidence, at page 28,961 is their expert report. [00:24:42] Speaker 00: And the prior art reference they're referring to, Kiyuchi, is there both as an anticipation reference and as an obviousness reference. [00:24:51] Speaker 00: It's a single reference, obviousness argument. [00:24:53] Speaker 00: So when they're putting in Kiyuchi at trial, that's an overlap with the exact evidence they're using for anticipation. [00:24:59] Speaker 00: And so when courts are looking at whether or not something's a single issue or multiple issues, they're looking at the degree of overlap. [00:25:04] Speaker 00: And here, the degree of overlap was 100%. [00:25:06] Speaker 00: So regardless whether the court would say across the board, for Claude Ostapel purposes, invalidity is a single issue, certainly when you're looking at invalidity in light of prior art, and the prior art overlaps, and the discovery covers all that prior art, [00:25:23] Speaker 00: The answer should be it's cloudiest. [00:25:25] Speaker 04: So how about the fact that this claim is basically dead anyway because of a ruling in another patent? [00:25:31] Speaker 04: Why would we continue on this case, finishing off our infringement of what we know is a dead patent, or at least claim? [00:25:40] Speaker 00: So Claim 5 of 504 hasn't been invalidated by this court, hasn't been canceled by the PTO. [00:25:46] Speaker 00: In fact, this court has twice reversed PTO efforts to invalidate that claim. [00:25:51] Speaker 00: What Apple's asking is for the court to take [00:25:53] Speaker 00: a different patent that was invalidated under a lower standard, a lower burden of proof, and apply that to collidery stop, claim five of the 504, in a case where a higher burden of proof applies. [00:26:05] Speaker 00: And as a matter of horn book collateral stop-all law, you can't do that. [00:26:09] Speaker 00: The Supreme Court, in a case called Grogan, said, no, you have to have the same burden of proof. [00:26:14] Speaker 00: B&B hardware makes that clear. [00:26:15] Speaker 04: We're not talking about collateral stop-all. [00:26:17] Speaker 00: Pardon? [00:26:17] Speaker 04: We're talking about a claim that has been found invalid. [00:26:21] Speaker 00: So another patent and and and it's it's here now you have an infringement verdict sizable and We'd be going through a useless exercise to continue along will be not no I don't think at all well first the vast bulk of the verdicts stands on the VPN alone I think 480 million dollars the verdict how do we know that either way so that is based on the fact that the parties agreed that the [00:26:48] Speaker 00: The jury used a rate of $1.20 per unit, regardless of the amount of infringement. [00:26:54] Speaker 00: And there was considerable overlap. [00:26:55] Speaker 00: So even if it infringed two patents rather than one, the amount was the same. [00:27:00] Speaker 00: And under Catalina Lighting, likewise, it doesn't really matter how many patents you infringe. [00:27:04] Speaker 00: One infringement yields to one royalty. [00:27:07] Speaker 00: And so both parties agreed on the amount. [00:27:09] Speaker 02: So do you think it's a ministerial exercise to trim the remedy? [00:27:14] Speaker 02: to the 135, 151? [00:27:18] Speaker 00: Yes, actually it would. [00:27:19] Speaker 00: And in fact, there is an exhibit that went through. [00:27:21] Speaker 00: And I'll give Mr. Lee my copy. [00:27:24] Speaker 00: But the jury saw an exhibit that did VPN on demand only because there was some lack of overlap. [00:27:30] Speaker 00: And everybody agreed on the number of units, 384,528,255. [00:27:34] Speaker 00: That's from their expert. [00:27:37] Speaker 00: And the royalty amount was $461 million. [00:27:40] Speaker 00: So a relatively small portion, admittedly a lot of money, but a relatively small portion of space time. [00:27:46] Speaker 02: Is it sufficiently evident that a court can legitimately say the jury adopted that calculation? [00:27:55] Speaker 00: Well, certainly when the parties agreed, the royalty rate used by the jury and the royalty base, it is ministerial. [00:28:01] Speaker 00: And there's a case called Oynes versus Walgren. [00:28:04] Speaker 00: And I think under Oynes versus Walgren, you can remit down. [00:28:06] Speaker 00: And it's the plaintiff's option to either retry or accept the remittitor. [00:28:09] Speaker 02: down to the number that's... Unless there's genuine uncertainty about what the jury actually thinks. [00:28:14] Speaker 00: Yeah, and I don't think in this case there can be any genuine certainty because if you look at Apple's brief at page 27, they admit the jury used $1.20 per unit regardless of the number of infringements. [00:28:23] Speaker 00: And in fact, the royalty base was agreed on by both act courts at 384 million units. [00:28:28] Speaker 02: Are there different products for the 151, 135 on the VPN and the FaceTime? [00:28:36] Speaker 00: All the things that had FaceTime also had VPN demand, but not everything on VPN on demand had FaceTime. [00:28:42] Speaker 00: So if you... Is that agreed? [00:28:44] Speaker 00: I think that is agreed. [00:28:45] Speaker 00: The overlap is just that the VPN demand is somewhat narrower, but it's narrower only to the tune of 50 million units, and so it doesn't affect the verdict as dramatically as... So you're saying it's agreed that the VPN is a subset of the FaceTime, and it's also agreed by how much it's a subset? [00:29:01] Speaker 00: I think the record is clear that both experts, based on their, yes, I think that it would be impossible to look at the record and say they came out differently in the party's concessions. [00:29:09] Speaker 00: I would have to defer to Mr. Lee to see if he agrees with me, but I don't think it's possible to actually dispute that. [00:29:15] Speaker 00: But even setting that aside, I don't think it's correct to say that claim five of the 504 is in any sense dead. [00:29:20] Speaker 00: And I think Forsinius tells you how you can know whether Patton is dead. [00:29:23] Speaker 00: And a patent is dead when it's canceled. [00:29:26] Speaker 00: When the PTO went wrong. [00:29:27] Speaker 02: You used a fairly nice phrase in your brief, slated for cancellation. [00:29:32] Speaker 02: Correct. [00:29:33] Speaker 02: So pronounced and nulled void ab initio by a properly final Article III involving or Article III bypassed forum is when the only thing left is a ministerial action about which the PTO seems not to be particularly [00:29:53] Speaker 02: that doesn't care very much. [00:29:54] Speaker 02: I gather every year or so it looks and sees which ones do we have to cancel, but nothing really turns on that. [00:30:00] Speaker 02: So pronouncement of annulment is necessary. [00:30:05] Speaker 02: And that hasn't been done on 504-5, right? [00:30:08] Speaker 02: But it has been done on 211-5. [00:30:09] Speaker 00: Well, 211 hasn't gone through that either. [00:30:12] Speaker 00: Nothing's been actually canceled. [00:30:13] Speaker 00: No, but it's been pronounced. [00:30:15] Speaker 02: It's been slated for cancellation in your first subject to cert review. [00:30:20] Speaker 00: Judge Ronto, I think the presumption that you're running with is that just because the claim five of the 211 was pronounced invalid and upheld by this court, that necessarily the PTO will reach the same result with respect to claim five. [00:30:31] Speaker 00: No, no, no. [00:30:32] Speaker 02: I understand that you have some potentially important, potentially dispositive procedural and authority arguments about the role of the old [00:30:43] Speaker 02: Interparties re-exam and its inconsistency with using collateral estoppel to be inconsistent with 317. [00:30:50] Speaker 02: What you don't seem to have, I have not seen you present an argument that says how could 5045 possibly be invalid if 2115 is invalid. [00:31:05] Speaker 00: So I think as a matter of law, what matters here and what's been asked for application of collateral estoppel [00:31:11] Speaker 00: and collateral estoppel cannot apply to the difference of burdens. [00:31:15] Speaker 00: And those burdens make an enormous difference. [00:31:17] Speaker 00: So specifically with respect to Claim 5 or the 211, the PTO invalidated that based on the notion that a reference called Proveno had the indication that it supports secure communications. [00:31:33] Speaker 00: And all Proveno did was return. [00:31:35] Speaker 03: There's a difference of burdens in the patent office because that's what the statute says. [00:31:40] Speaker 03: And when it's dead in the patent office, even though if there had been the same burden as in the district court, it might have been different. [00:31:48] Speaker 03: That's not something we can deal with. [00:31:51] Speaker 00: Correct. [00:31:52] Speaker 00: But I think the answer is that for collateral estoppel, it's not [00:31:56] Speaker 00: You have to take the burden of proof into account. [00:31:58] Speaker 03: Is it collateral estoppel, or is it that the claim no longer lives? [00:32:03] Speaker 00: The claim no longer lives once it's canceled. [00:32:06] Speaker 00: And we do not believe claim five. [00:32:08] Speaker 00: If we're going to defer to the PTO, let's see what the PTO does with claim five. [00:32:12] Speaker 00: We do not believe that PTO will invalidate claim five of the five before patent. [00:32:17] Speaker 00: that has not been overturned by the PTO and upheld by this court. [00:32:20] Speaker 02: It's twice reversed the efforts. [00:32:22] Speaker 02: What do you expect the timing to be once, what is it, Tuesday or something, the mandate issues on, I can't remember the numbers, 1571, 1791. [00:32:32] Speaker 02: That's the one that the second rehearing was just [00:32:36] Speaker 00: So I don't know the precise time, but it will certainly be a period of time before the PTO acts and then cancellation doesn't take effect until this court would affirm. [00:32:47] Speaker 00: And I think when you're looking at this, it's not as if Apple hasn't had nine years, nine years to challenge these patents and get them declared invalid. [00:32:56] Speaker 00: We've been we've been litigating this, but an al-apples tried and tried. [00:32:59] Speaker 00: But what it hasn't done is succeeded in having the claim, that vast remaining claim of this patent declared invalid. [00:33:06] Speaker 00: This court is three times. [00:33:07] Speaker 02: Just so I understand, your view is that even without the 504, you have $480 million on this judgment. [00:33:19] Speaker 00: Yes, that's correct. [00:33:20] Speaker 00: Because that's what would remain based on VPN on demand alone. [00:33:23] Speaker 00: And so even without the 504 you can just do a ministerial calculation and the numbers still 480 million dollars, but look at some point Article three courts does their decisions have to have meeting at some point they have to become final We can't constantly wait for the next IPR which can be brought by anybody there's no requirement of standing to bring an IPR and wait for its outcome and after nine years of litigation and four trials it's time now is that time Apple gives us no reason to believe that the standards for a stay are [00:33:53] Speaker 00: and the standards of stay are set, that it would simplify litigation, et cetera, et cetera, will be met if we sit around and wait for yet another tribunal to go through this. [00:34:00] Speaker 00: And we actually don't think that this patent is going to be invalidated for the variety of reasons that you gave, Judge Toronto. [00:34:06] Speaker 00: And for that reason, we're just reciting what you said. [00:34:09] Speaker 00: Yes. [00:34:09] Speaker 00: Well, we believe in what we said, and we like having it recited by you. [00:34:14] Speaker 00: So given that, it seems to me that after Apple's had nine years to get these invalidated, the proper answer is for the courts to [00:34:22] Speaker 00: pass on the case and make the decision. [00:34:24] Speaker 00: Article III courts are here for a reason. [00:34:26] Speaker 00: Their job is not superseded by that of the PTO. [00:34:29] Speaker 00: And it's certainly not superseded by the PTO based on IPRs, which can be filed by any person at any time. [00:34:34] Speaker 00: If that were the rule, if we waited for them for that, then there would never be a case that could ever go final. [00:34:39] Speaker 03: It would be set to succeed. [00:34:40] Speaker 03: In principle, we agree that we're not superseded by the PTO. [00:34:43] Speaker 03: Pardon? [00:34:44] Speaker 03: In principle, we agree that we're not superseded by the PTO. [00:34:48] Speaker 00: I think in principle, in fact, and in practicality, that would be a horrific result. [00:34:52] Speaker 00: If the court has no further questions, it looks like I'm past my time. [00:34:56] Speaker 00: I'd be happy to address VPN on demand briefly if there is an interest in that. [00:35:00] Speaker 00: But if the court has no questions, I'd be happy to defer. [00:35:02] Speaker 03: Thank you. [00:35:02] Speaker 03: Mr. Lemkin, Mr. Lee, three minutes for a bottle. [00:35:07] Speaker 01: I could be very brief, Your Honor. [00:35:09] Speaker 01: First, Judge Toronto, on your question, if you go to Appendix 21108, you will see, in response to your earlier question, [00:35:22] Speaker 01: our proposed construction. [00:35:24] Speaker 01: And the second portion is the addition. [00:35:27] Speaker 01: The interesting thing, having had Mr. Lampton's argument, is if you were to step back and say, what is a domain name service system? [00:35:36] Speaker 01: Now, we can give you a precise articulation based upon the claim interpretation today. [00:35:41] Speaker 01: I don't think you can give an answer based upon what they've said to you today. [00:35:45] Speaker 01: Second point. [00:35:48] Speaker 01: The vernetics asked the district court on the issue preclusion issue, Your Honor. [00:35:53] Speaker 01: They asked the district court to enter a judgment on obviousness. [00:35:59] Speaker 01: The district court refused at pages A, 22395 to 396 because it had never been presented to the jury. [00:36:08] Speaker 01: And that is why there is no issue preclusion. [00:36:13] Speaker 01: Third point is, on this different burden of proof [00:36:15] Speaker 01: In both the XY and the ALE cases, it was a determination by the PTO applied to a district court proceeding. [00:36:22] Speaker 01: It's been done before. [00:36:24] Speaker 01: And the last point is this. [00:36:26] Speaker 01: Judge Toronto, it's not a ministerial act. [00:36:29] Speaker 01: While we agreed that if four patents were infringed, it would be a single rate, we said at trial that if it were two patents, it would be a single rate, but a different rate. [00:36:39] Speaker 01: If it were three patents, it would be a single rate, but a different rate. [00:36:42] Speaker 01: So it's not a ministerial computation. [00:36:46] Speaker 01: of what the royalty base is. [00:36:47] Speaker 01: Mr. Lamkin's accurate in terms of VPN on demand being a subset. [00:36:52] Speaker 01: But there is a different rate question and a different base question. [00:36:56] Speaker 01: It's not a ministerial act. [00:36:57] Speaker 01: Thank you, Your Honor. [00:36:58] Speaker 03: Thank you, Mr. Lee. [00:36:59] Speaker 03: We'll take the case under the grocery.