[00:00:00] Speaker 02:
This is Zhejiang Medicine Company versus Koneka Corporation, number 18-1618.

[00:00:37] Speaker 02:
Mister know if you reserve three minutes of your time for rebuttal is that correct.

[00:00:43] Speaker 02:
And Mister Hughes you reserve out of your 15 minutes you reserve to for the cross appeal.

[00:00:49] Speaker 02:
Okay, Mister know you may proceed.

[00:00:59] Speaker 04:
He snow that your honor representing conic corporation.

[00:01:03] Speaker 04:
May it please the court?

[00:01:05] Speaker 04:
I will begin with the sealed tank claim construction issue.

[00:01:13] Speaker 04:
In its opening statement, ZMC defined sealed tank for the court as follows, and I quote, shield means protect what is inside the tank from exposure to the oxygen so it doesn't turn into oxidized Q10.

[00:01:27] Speaker 04:
ZMC then showed oxygen test to the jury

[00:01:32] Speaker 04:
which the test showed that there was oxygen in ZMC's extraction tank.

[00:01:36] Speaker 04:
Then ZMC said to the jury, is there any oxygen in the tank?

[00:01:41] Speaker 04:
That's a good way to determine whether it's sealed or not.

[00:01:44] Speaker 04:
But you can see there was lots of oxygen.

[00:01:46] Speaker 04:
So what does that mean?

[00:01:47] Speaker 04:
It means there is no sealed tank.

[00:01:50] Speaker 04:
And if there is no sealed tank, we don't infringe.

[00:01:53] Speaker 04:
That is not the claim construction that was decided by this court in the Kingdom Wade decision.

[00:02:00] Speaker 04:
But ZMC had a plan and repeated that claim construction to the jury multiple times on day three, day five, day seven, and at least seven times in the closing argument.

[00:02:14] Speaker 04:
Now, and not only was the claim construction incorrect, it was followed up by a video which showed oxygen in the tank to the jury throughout the trial.

[00:02:27] Speaker 04:
My colleague is going to argue there are several reasons why the jury was not misled by ZMC's claim construction, and I will address each of them.

[00:02:37] Speaker 04:
First, they will argue that the claim construction that they proposed to the jury is the claim construction that was decided in the Kingdom Way decision.

[00:02:52] Speaker 04:
There is no support for this argument for the following reasons.

[00:02:56] Speaker 04:
This claim construction was rejected by the claim construction that ZMC presented to the jury.

[00:03:02] Speaker 04:
You have a puzzled question?

[00:03:04] Speaker 01:
I'm just listening.

[00:03:05] Speaker 01:
Go ahead.

[00:03:06] Speaker 04:
This claim construction that ZMC provided to the jury was rejected during the Markman hearing before Judge Gilmore.

[00:03:14] Speaker 04:
During the Markman hearing, Conica made it very clear what its proposed claim construction meant.

[00:03:21] Speaker 04:
And I quote, the issue was not getting air into the tank.

[00:03:25] Speaker 04:
The issue is the vapors from the organic solvent getting out of the tank, which would create a hazard for the plant and the people in the plant because the hexane vapors are dangerous.

[00:03:37] Speaker 04:
So the claim construction that was rendered and decided by the Kingdom Way decision was based on safety concerns, because that's what Judge Gilmore ruled during the Markman hearing in the lower court, and this court adopted her claim construction.

[00:03:53] Speaker 04:
The claim construction that was conic as claim construction had nothing to do with oxygen in the extraction tank.

[00:04:00] Speaker 04:
There was never any reason why there couldn't be oxygen in the extraction tank.

[00:04:07] Speaker 04:
So by ZMC telling the jury if there's oxygen in the tank, there's no infringement.

[00:04:12] Speaker 04:
It was a complete distortion of the meaning of that claim construction, which misled the jury.

[00:04:17] Speaker 04:
Now, neither, first of all, most importantly, neither ZMC or any other party proposed this claim construction to the panel in the Kingdom Way decision.

[00:04:30] Speaker 04:
Before that panel, there were two claim constructions at issue.

[00:04:33] Speaker 04:
One was whether the tank would be completely sealed, which the court rejected, and two, Conica's claim construction

[00:04:42] Speaker 04:
was that the contents of the tank could not be released into the atmosphere for safety reasons.

[00:04:48] Speaker 04:
And that's the exact argument I made to the panel.

[00:04:52] Speaker 04:
And I have the transcript here.

[00:04:55] Speaker 04:
So that, therefore, since ZMC never made that argument before the King Des Moines panel, which decided to claim construction in this case, that argument is waived.

[00:05:06] Speaker 04:
Now, the patent itself, which is very important, the patent itself specifically says

[00:05:12] Speaker 04:
that when producing oxidized Q10, which claims 22 and 33 call for, there is no need to prevent the reduced Q10 from an oxidation reaction.

[00:05:23] Speaker 04:
The patent says that.

[00:05:24] Speaker 04:
It's very clear, right?

[00:05:27] Speaker 04:
During the trial, if you look at the transcript, during the trial, Judge Gilmore repeatedly told ZMC that the claim construction it was telling the jury was incorrect.

[00:05:38] Speaker 04:
And I'll give you some examples of that.

[00:05:46] Speaker 04:
Conica's claim construction is with the claim constructed.

[00:05:52] Speaker 02:
I'm a little confused as to your argument, Mr. Noah.

[00:05:56] Speaker 02:
Are you saying that the jury, I mean the judge did not correctly instruct the jury on the claim construction?

[00:06:05] Speaker 04:
Here's the problem, Your Honor.

[00:06:07] Speaker 04:
Yes, the judge read the correct claim construction, the correct words to the jury, right?

[00:06:13] Speaker 04:
That took all of seven seconds.

[00:06:17] Speaker 04:
There was no way the jury could understand that the words that were being read to the jury were correct.

[00:06:23] Speaker 04:
But the meaning of those words were not the correct definition they received from CMC.

[00:06:31] Speaker 02:
At that point, when you read, when this happened, did you object to that instruction?

[00:06:36] Speaker 02:
All right.

[00:06:37] Speaker 04:
Very good question, Your Honor.

[00:06:39] Speaker 04:
Throughout the trial, Conica continually objected to each time that the improper claim construction was used.

[00:06:48] Speaker 04:
twice, Connick moved to strike the testimony for the incorrect claim construction and that was, those motions to strike were denied.

[00:07:00] Speaker 04:
It was obvious to us at the trial that it was futile to try to attempt to file a motion for a revised claim construction because of what happened during the trial.

[00:07:14] Speaker 04:
And I can give you some examples of how Judge Gilmore

[00:07:19] Speaker 04:
handled the objections.

[00:07:22] Speaker 04:
On day six of the trial, for example, ZMC told the court that oxygen in the tank means it's not sealed.

[00:07:29] Speaker 04:
The court said to ZMC, I am not buying that.

[00:07:33] Speaker 04:
And the jury doesn't understand it.

[00:07:35] Speaker 04:
So it's a total and complete waste of time.

[00:07:38] Speaker 04:
But knock yourself out.

[00:07:40] Speaker 04:
Essentially saying to ZMC that even though you're using the incorrect claim construction, you can continue to use it.

[00:07:47] Speaker 04:
On day seven of the trial,

[00:07:49] Speaker 04:
Dr. Taylor, their expert, testified that a sealed tank had to be free of oxygen.

[00:07:55] Speaker 04:
We objected and moved to strike.

[00:07:57] Speaker 04:
The court denied the motion to strike.

[00:08:00] Speaker 04:
and said to the jury, he keeps doing it, ladies and gentlemen.

[00:08:03] Speaker 04:
The court will give you the instructions on how the court will interpret the claim terms.

[00:08:10] Speaker 01:
Just leave it alone.

[00:08:11] Speaker 01:
Your brief very nicely goes into the detail of this.

[00:08:14] Speaker 01:
I'm sorry?

[00:08:15] Speaker 01:
Your brief goes into the detail of this.

[00:08:18] Speaker 01:
OK.

[00:08:18] Speaker 01:
And so I want to know what your thought is on the Verizon case and why the district courts

[00:08:24] Speaker 01:
construction that it gave to the jury, which was the correct construction.

[00:08:28] Speaker 05:
Right.

[00:08:28] Speaker 01:
And the other evidence in the case that was presented to the jury, why that's not sufficient so that this case is like Verizon and that there's no need for a new trial.

[00:08:39] Speaker 04:
All right.

[00:08:40] Speaker 04:
The Verizon case, Your Honor, in the Verizon case, the parties had previously agreed on the claim construction issues, right?

[00:08:49] Speaker 04:
Let me look at my daughter.

[00:08:50] Speaker 04:
They had previously agreed on the claim for trusted issues, and Seal Tank was clearly in dispute throughout the trial in Texas.

[00:09:00] Speaker 04:
In the Verizon, the defendant limited the scope arguments to claim terms that had not been interpreted.

[00:09:07] Speaker 04:
So they were, the arguments that were made in the Verizon case, what the defendant was complaining about is that

[00:09:15] Speaker 04:
Claim terms that had not been decided, there was no claim interpretation for those terms, no claim definition for those terms.

[00:09:21] Speaker 04:
That's the ones that we're complaining about.

[00:09:23] Speaker 04:
We were complaining specifically about claim terms that had been decided by the Federal Circuit, which was the law of the case.

[00:09:32] Speaker 04:
In Verizon, they never objected to the scope arguments during the trial.

[00:09:39] Speaker 04:
We objected each time that the incorrect claim term was used.

[00:09:45] Speaker 04:
And Judge Gilmour told ZMC's counsel that the claim terms they were using were incorrect, multiple times during the trial.

[00:09:55] Speaker 04:
And Verizon also conceded that the scope statement was not objectionable, but somehow taken together, the scope statement for prejudicial.

[00:10:09] Speaker 04:
We never made that argument.

[00:10:11] Speaker 04:
Our complaint was that the

[00:10:14] Speaker 04:
The claim term seal tank being read to the jury was incorrect.

[00:10:19] Speaker 04:
There was no dispute from the beginning that there was oxygen in ZMC's extraction tank.

[00:10:26] Speaker 04:
In the Kingdom Way appeal, we dropped claims 9 and 11 because they had the inert gas atmosphere claim terms, so everyone knew there was oxygen in their extraction tank.

[00:10:37] Speaker 04:
So ZMC, by saying that's what the claim definition of seal tank meant,

[00:10:43] Speaker 04:
It was clearly not an infringement issue.

[00:10:48] Speaker 04:
Did I answer your question, Your Honor?

[00:10:51] Speaker 04:
Sure.

[00:10:51] Speaker 04:
OK.

[00:10:53] Speaker 04:
So in terms of, let's go back to the issue on why we didn't ask for a new jury instruction.

[00:11:02] Speaker 04:
If there's a Fifth Circuit case, Hammond-Burth at Southwestern Gas Pipeline, 821 Fed 2nd, 299, where the Fifth Circuit held

[00:11:13] Speaker 04:
In cases where the trial court has been presented with undisputed facts and a disputed question of law, where parties' arguments on the question of law have been brought to the court's attention, and where the court has decided the question of law during the course of the trial, we have not required the unsuccessful advocate to object to the jury charge to preserve the issue for appellate review.

[00:11:39] Speaker 04:
We objected throughout the trial

[00:11:47] Speaker 04:
Judge Gilmer listened to our objections and denied our motions to strike.

[00:11:53] Speaker 04:
Federal rule of evidence 103 reaches the same conclusion.

[00:11:57] Speaker 04:
That is why we didn't ask the court for a revised jury instruction because it would have been futile.

[00:12:07] Speaker 04:
Our position, Your Honors, is under the general verdict rule, changing the subject, is that

[00:12:13] Speaker 04:
The definition that was given to the jury on sealed tank resulted in a legal error because that definition was incorrect.

[00:12:22] Speaker 04:
Under the general reverted rule, if there is a legal error on either sealed tank or oxidizing, there has to be a new trial if we can show that there was evidence under the correct claim construction for sealed tank and oxidizing.

[00:12:41] Speaker 04:
And we have that evidence.

[00:12:44] Speaker 03:
Let's see if I understand exactly what you're saying about the correctness of the instruction.

[00:12:50] Speaker 04:
Yes.

[00:12:50] Speaker 03:
Initially, I think in response to Judge Stoll's question very early in your argument, you said that the instruction itself was correct.

[00:12:58] Speaker 03:
But now we're saying, well, the district court's instruction on this, the seven-second instruction was correct.

[00:13:05] Speaker 03:
Now you're saying, well, it really wasn't correct because of everything that happened at trial.

[00:13:10] Speaker 03:
Are you saying it should have been supplemented, or what is wrong?

[00:13:15] Speaker 04:
I can see that there is some confusion here.

[00:13:18] Speaker 04:
So let me explain.

[00:13:21] Speaker 04:
The claim construction says the tank's contents must be prevented from exposure to the atmosphere.

[00:13:29] Speaker 04:
That's what the claim construction says, right?

[00:13:33] Speaker 04:
That meant, and that's what I argued before the panel in the Kingdom Way case, that that meant the contents could not be released into the atmosphere because the hexane vapors were dangerous.

[00:13:46] Speaker 04:
That's what Judge Gilmour decided.

[00:13:48] Speaker 04:
That was the argument made before Judge Gilmour.

[00:13:51] Speaker 04:
Judge Gilmour said that the claim construction meant the contents could not leave the tank for safety reasons.

[00:13:56] Speaker 03:
So it was your argument that the instruction that was given to the jury was erroneous because it didn't include that latter clause?

[00:14:03] Speaker 03:
No.

[00:14:03] Speaker 03:
That the term...

[00:14:06] Speaker 03:
vapors should not be free to go out.

[00:14:10] Speaker 04:
No, the words given to the jury was the words that the Kingdom Wake Court had concluded.

[00:14:19] Speaker 04:
And therefore was correct to that extent.

[00:14:22] Speaker 04:
Let me try it one more time.

[00:14:25] Speaker 04:
If the claim construction says the tank's contents must be prevented from exposure to the atmosphere, that meant, after every argument in this case, meant that the contents of the tank

[00:14:36] Speaker 04:
Right, the hexane papers could not be released.

[00:14:41] Speaker 04:
The argument that was given by ZMC is those same words meant that you couldn't allow oxygen coming into the tank.

[00:14:49] Speaker 01:
Didn't they also present testimony and evidence that there was hexane that was being released into the atmosphere?

[00:14:55] Speaker 04:
Yes, I've got the answer to that, your honor.

[00:14:58] Speaker 04:
Right.

[00:14:59] Speaker 04:
So let me address that issue.

[00:15:01] Speaker 03:
Is it clear what I meant when I... No, actually it's not.

[00:15:06] Speaker 03:
You were saying that the instruction was correct, but it needed to be tweaked or supplemented by saying that what is meant by this instruction is that the vapors cannot be allowed to escape into the atmosphere.

[00:15:25] Speaker 03:
You said I was wrong in thinking that that was what you're arguing.

[00:15:29] Speaker 04:
No, I'm sorry, Your Honor.

[00:15:30] Speaker 04:
You are correct.

[00:15:31] Speaker 04:
It means that the vapors cannot be allowed to escape into the atmosphere.

[00:15:36] Speaker 03:
So that should have been added to the instruction.

[00:15:39] Speaker 03:
Is that your argument?

[00:15:42] Speaker 04:
Well, that's a simple question.

[00:15:46] Speaker 04:
The words of the claim construction

[00:15:51] Speaker 04:
decided by the Kingdom Way panel can mean two different things.

[00:15:58] Speaker 03:
And your argument, I thought, was that one of those two things is wrong and the other is right, and therefore the judge should have instructed the jury as to the right one and precluded them from concluding infringement or non-infringement based on the other.

[00:16:13] Speaker 03:
That's correct.

[00:16:14] Speaker 03:
OK, that's the answer to my question.

[00:16:19] Speaker 02:
All right, so.

[00:16:20] Speaker 02:
And you're out of time, Mr. Noah.

[00:16:23] Speaker 02:
I'm out of time?

[00:16:24] Speaker 02:
Yes, sir.

[00:16:25] Speaker 02:
I'll restore some of your rebuttal time back, OK?

[00:16:30] Speaker 02:
OK.

[00:16:30] Speaker 02:
Mr. Hughes.

[00:16:38] Speaker 00:
Thank you, Your Honor.

[00:16:38] Speaker 00:
May it please the Court, Paul Hughes for Appellee Cross Appellant ZMC.

[00:16:43] Speaker 00:
Before I dive into each of the different incidents that Connick had discussed, I'd just like to step back for a moment and talk about a few general principles.

[00:16:50] Speaker 00:
The first is the jury in this case was properly instructed.

[00:16:55] Speaker 00:
The jury instructions were stipulated by both parties prior to trial, and no party after they stipulated to the jury instructions asked the district court to instruct the jury in a different fashion.

[00:17:07] Speaker 02:
So is this case like Verizon, and if so, how?

[00:17:10] Speaker 00:
Yes, Your Honor, I think it's just like Verizon, because like in Verizon, there was agreement as to the claim construction.

[00:17:16] Speaker 00:
There wasn't a claim construction dispute.

[00:17:18] Speaker 00:
And the argument that was made in Verizon was that attorney arguments somehow confused the jury from following its proper instructions.

[00:17:26] Speaker 00:
This court rejected that argument.

[00:17:28] Speaker 00:
And it applied Verizon also in function media versus Google to reject that argument.

[00:17:33] Speaker 00:
And the reasoning the court gave in function media was to say, if you allow this kind of argument, it would mean that any jury trial in which whenever an attorney doesn't use the precise language that's ultimately used in the jury arguments in the course of their argument, that would become recipe for an appeal and reversal.

[00:17:51] Speaker 00:
And that's not at all what this court allows in that kind of abusive expression.

[00:17:54] Speaker 03:
So your argument that I take it is then

[00:17:56] Speaker 03:
they got the instruction to which they agreed, and had they gotten to the point of the judge instructing the jury and feeling they had felt that that instruction could have been misunderstood as they view it to cover the exposure of the contents to the atmosphere as opposed to the exposure of the atmosphere to the contents, then they should have asked for a supplemental instruction clarifying that point, which they either would have gotten or not.

[00:18:25] Speaker 03:
And the failure to ask constitutes, I take it your argument is, a waiver of the right to any such supplemental instruction.

[00:18:32] Speaker 00:
Yes, Your Honor, that's precisely correct.

[00:18:33] Speaker 00:
Because if that's not the case, any losing party to a jury verdict is always going to be able to find an instruction that they wish had a bit more specificity on it.

[00:18:42] Speaker 00:
And if they weren't obligated to bring that to the district court's attention, this court would be inundated with appeals from every time that there is a jury verdict in a patent case.

[00:18:50] Speaker 00:
We are and we are.

[00:18:52] Speaker 00:
Yes, Your Honor, but they would have an argument that they don't have to preserve for appeal their contention that over the course of trial something has changed and the district court is obligated to modify or tweak a jury instruction from what the party agreed.

[00:19:06] Speaker 00:
Here, Conica and ZMC got together, they agreed on the jury instructions and no one asked the district court to instruct the jury in any way differently.

[00:19:14] Speaker 00:
This court is aware there's a very strong presumption that juries follow their instructions

[00:19:19] Speaker 00:
That is really the backbone of the jury trial system.

[00:19:21] Speaker 00:
That's how curative instructions and everything along these lines work.

[00:19:26] Speaker 00:
My second broad point is that there was abundant evidence in the record for which the jury could find two multiple theories of non-infringement, both with the seal tank and the oxidizing.

[00:19:35] Speaker 00:
We can talk through that, but we lay that out in our briefs.

[00:19:37] Speaker 00:
The third point is that it is an extraordinarily high standard for them to meet to suggest that this kind of prejudicial jury statement, the jury argument confuses the jury and is a reason to set aside a jury verdict in the context of a properly instructed jury.

[00:19:53] Speaker 00:
The abusive discretion standard is really at its height here because the trial court has a front row seat to what's happening in the court.

[00:19:59] Speaker 00:
And as my friend read, there were several instances in which the district court was carefully policing the parties and talking about each of the various incidents that Conica describes in their brief.

[00:20:09] Speaker 00:
This is not a court that was asleep at the switch by any stretch.

[00:20:12] Speaker 00:
The court was vigorous in enforcing the claim construction throughout the case.

[00:20:17] Speaker 00:
So there's certainly no basis to find that the district court abused its discretion in finding that there was no basis to have a new trial in the context of this particular case.

[00:20:27] Speaker 00:
Now, I'll talk for a moment about the discussion

[00:20:30] Speaker 00:
Connika raises about oxygen being into the tank and to talk about that both from a factual Matter as to why that supports our theory of non-infringement and second their argument that they want a separate construction I think those arguments are waived for reasons judge Bryson said I don't think they're before the court but the court even thinks about addressing them first it is an appropriate theory of non-infringement that we presented to the court if Atmospheric air enters the tank that is a basis to believe that it's not a sealed construction

[00:20:57] Speaker 00:
Why is that?

[00:20:57] Speaker 00:
This court's construction from the Kingdom Way case as a sealed tank is, quote, a tank that prevents exposure of the tank's contents to the atmosphere.

[00:21:05] Speaker 00:
If the outside atmosphere enters the tank, the tank's contents are not being protected from exposure to the atmosphere.

[00:21:13] Speaker 00:
It's a very straightforward argument.

[00:21:14] Speaker 00:
Our evidence showed two things, as Judge Stoll noted, both that the contents of the tank were escaping into the atmosphere.

[00:21:20] Speaker 00:
That's the hexane smell.

[00:21:21] Speaker 00:
But additionally, during the extraction step,

[00:21:24] Speaker 00:
that there was an oxygen spike, that there was a lower level of relative oxygen in the tank, and at some point that oxygen level spiked up.

[00:21:31] Speaker 00:
And the expert testimony is what was the cause of that spike?

[00:21:34] Speaker 00:
The cause of the spike was atmospheric air coming in through the vent valve assembly entering the tank, demonstrating that it is not a sealed tank.

[00:21:42] Speaker 00:
Now, Conica, as I think they've explained, their argument seems to hinge on this notion that the sealed tank should only prevent escape of material to the outsides, which we have evidence of, and doesn't preclude a tank that allows the entry of atmospheric air into the tank.

[00:21:59] Speaker 00:
But as we said, that's contrary to what this court's construction in the Kingdom Way case is.

[00:22:05] Speaker 00:
And frankly, that's contrary to what Conica has said throughout other stages of this case.

[00:22:09] Speaker 00:
So in their summary judgment opposition brief, this is at appendix pages 3313 to 3314, Conica said a sealed tank must, quote, prevent entry of outside air.

[00:22:19] Speaker 00:
That's the argument that they've made.

[00:22:21] Speaker 00:
And we're in agreement with that.

[00:22:22] Speaker 00:
If outside atmospheric air can enter the tank, it's not a sealed tank.

[00:22:26] Speaker 00:
It's consistent with this court's construction.

[00:22:29] Speaker 00:
Further, in the Kingdom Way case, appendix page 3385, Conica argues that a tank must, quote,

[00:22:34] Speaker 00:
protect the contents of the tank from outside contamination.

[00:22:38] Speaker 00:
If atmospheric air can enter the tank, then there is direct contamination, and that is not a sealed tank.

[00:22:45] Speaker 00:
Conica's argument now, as they presented in both their briefs and argument today, suggests that what is really an issue here is not a sealed tank, but a safety tank.

[00:22:53] Speaker 00:
And as long as the tank maximizes operational safety, that's the way in which it should be construed.

[00:22:59] Speaker 03:
What was the citation?

[00:23:00] Speaker 03:
I think it was to the summary judgment

[00:23:03] Speaker 03:
briefing that you just... It was appendix, yes your honor, it was appendix page 3313 to 3314.

[00:23:10] Speaker 00:
Okay, thank you.

[00:23:15] Speaker 00:
So Conica's argument that sealed tanks should take on some other means because there is a way for this procedure to operate safely with atmospheric air entering the tank.

[00:23:26] Speaker 00:
That may well be true as a factual matter, but that isn't a sealed tank.

[00:23:29] Speaker 00:
Sealed tank has a particular meaning, and that was the meaning this court gave it in the Kingdom Way decision, which we said is a tank that prevents exposure to the tank's contents of the atmosphere.

[00:23:38] Speaker 00:
In that same decision, the court was quite clear in construing the sealed tank, looking to figures

[00:23:42] Speaker 00:
1 and 8, and the court said figure 1 and 8, example 8, suggested the sealed tank should be sealed to the atmosphere.

[00:23:49] Speaker 00:
So the court said the sealed tank should be sealed to the atmosphere.

[00:23:51] Speaker 00:
That's a natural reading of sealed tank.

[00:23:53] Speaker 00:
And atmospheric air that enters the tank demonstrates that it is not a sealed tank.

[00:23:58] Speaker 00:
So then to go back to our broader point again, with respect to sealed tank, we have evidence going both directions, both with the construction that Conica is at least now willing to concede, that if material is in the tank and it exits the tank, that

[00:24:11] Speaker 00:
that that's not a sealed tank, and we have lots of evidence of that.

[00:24:14] Speaker 00:
Alternatively, if atmospheric air from outside enters the tank, it's not a sealed tank.

[00:24:20] Speaker 00:
We have substantial evidence on that.

[00:24:22] Speaker 00:
We have evidence on both of these theories, both of which are well within this court's construction of sealed tank.

[00:24:29] Speaker 00:
But to go back to where I started at the end of the day, this is a clear case in which the parties agreed to the jury instructions.

[00:24:37] Speaker 00:
The jury was properly instructed.

[00:24:39] Speaker 00:
There was never any objection.

[00:24:40] Speaker 00:
to the nature of the jury instructions with respect to sealed tank or oxidizing.

[00:24:44] Speaker 00:
The jury, having had these proper instructions, had very substantial evidence with which to conclude in ZMC's favor.

[00:24:52] Speaker 00:
It ultimately did so, and we think there's no way to find an abuse of discretion against this backdrop.

[00:25:00] Speaker 00:
Now, we throughout our brief, I believe, talked through each of the different incidences that

[00:25:10] Speaker 00:
Conica describes where they think that there was a particular issue.

[00:25:13] Speaker 00:
Conica just raised two of the particular issues that repeat throughout their briefs.

[00:25:18] Speaker 00:
One is a sidebar conversation before the jury.

[00:25:21] Speaker 00:
This is the discussion in appendix page 1584, where the court suggests that the jury is not understanding the argument.

[00:25:27] Speaker 00:
Again, that is not the judge saying that she's allowing some sort of improper construction to get argued to the jury.

[00:25:34] Speaker 00:
When the court reads the broader context, which we describe in our brief,

[00:25:38] Speaker 00:
ZMC's argument is making very clear that it's the argument about oxygen entering the tank and oxygen from outside the system entering the tank.

[00:25:45] Speaker 00:
The argument was not that if there's the presence of any oxygen in the tank, that's what does it.

[00:25:49] Speaker 00:
The argument, as was made very clear around appendix pages 1583 to 1584 before Judge Gilmore, was it is evidence that atmospheric air from outside the tank is entering.

[00:26:00] Speaker 00:
My friend also made a notion to appendix page 1997 about the quote where Judge Gilmore described

[00:26:07] Speaker 00:
inconsistent testimony.

[00:26:09] Speaker 00:
Well, I think there are at least two things notable about that passage.

[00:26:11] Speaker 00:
The first is the court very clearly told the jury, I, the court, will be instructing you as to what the law is.

[00:26:17] Speaker 00:
Judge Gilmour repeated that throughout the trial and she repeated it twice in that particular passage.

[00:26:21] Speaker 00:
So Judge Gilmour is telling her jury in this context, I will tell you what the law is and you will follow my instructions, not the party's, which is of course correct.

[00:26:28] Speaker 00:
There's nothing erroneous about that.

[00:26:30] Speaker 00:
But the second point is when the court looks to the broader passage, there was no improper argument regarding claim construction in any stretch.

[00:26:38] Speaker 00:
So we think that there was no inconsistent or wrong claim construction that was being argued there.

[00:26:46] Speaker 00:
I'll turn to the utility cross appeal for just one moment, Your Honor.

[00:26:50] Speaker 00:
Let me ask you first.

[00:26:51] Speaker 03:
Is this a conditional cross appeal?

[00:26:54] Speaker 03:
You referred to it in your brief as in the alternative.

[00:27:00] Speaker 03:
Well, is it conditional?

[00:27:01] Speaker 00:
Your Honor, we have not framed our briefs as being a conditional cross-appeal.

[00:27:05] Speaker 00:
We have a standalone claim for declaratory judgment of invalidity that this goes to.

[00:27:10] Speaker 03:
I will say, if the court- Nonetheless, a party can see that this is conditional, if you choose to do so.

[00:27:20] Speaker 00:
Your Honor, yes.

[00:27:21] Speaker 00:
If the court affirms in its whole the jury verdict, we will stipulate that the cross-appeal would be conditional in that event,

[00:27:29] Speaker 00:
The emcee would be satisfied with an affirmance of the jury trial that they do not infringe these claims.

[00:27:35] Speaker 00:
And that would be a satisfactory resolution to this case.

[00:27:37] Speaker 00:
Thank you, Your Honor.

[00:27:39] Speaker 00:
But I'll just touch on the utility argument for a moment.

[00:27:42] Speaker 00:
The court question here is whether or not

[00:27:45] Speaker 00:
for the utility analysis when the claim is to an improvement of a known manufacturing process, the utility analysis focuses on the output of the whole process or if it focuses on the improvement.

[00:27:57] Speaker 00:
We think there are very substantial reasons to think it needs to focus on the improvement or else a non-obvious but yet non-useful limitation

[00:28:03] Speaker 00:
could have the effect of preempting an otherwise known manufacturing process.

[00:28:08] Speaker 00:
Whether or not this is a useful improvement is certainly something not before the court.

[00:28:13] Speaker 00:
That's the factual question that we think should be put to the jury or to the fact finder below.

[00:28:17] Speaker 00:
So we certainly don't ask the court to decide that here.

[00:28:19] Speaker 03:
I take it that this seems to come up very infrequently.

[00:28:24] Speaker 03:
And the only two cases that were cited are cases from before the creation of this court.

[00:28:29] Speaker 03:
Perhaps the reason for that is that if there is a particular limitation that has no utility, that most people won't use it.

[00:28:38] Speaker 00:
Well, I think that's probably right, Your Honor, but... This is a question in my mind.

[00:28:42] Speaker 00:
Why do you?

[00:28:43] Speaker 00:
Well, why do we have a design on it?

[00:28:44] Speaker 00:
I think the problem here is, well, first, this is retrospective damages.

[00:28:47] Speaker 00:
I understand.

[00:28:47] Speaker 03:
So the question here is, maybe we could... We don't have a category of cases in which there may be somebody that has used it for reasons unbeknownst to anyone, but they've used it and they didn't bother to

[00:28:59] Speaker 03:
design around.

[00:28:59] Speaker 00:
Well, I think that might be right, Your Honor, but I think the broader theoretical problem with this is you add a limitation that's not useful, but then you have the problem of preemption.

[00:29:07] Speaker 00:
So here the requirement is over 70 mole percent limitation, and then I agree there would be a way for when you're creating oxidized CoQ10 to design around that, not reach that limitation.

[00:29:17] Speaker 00:
Simply by not using any reduction at all.

[00:29:20] Speaker 00:
But, Your Honor, the problem becomes once you allow that limitation, then the next

[00:29:25] Speaker 00:
person comes along where the same person comes along and patents the 50 to 70 percent mole limitation, then you patent the 30 to 50 percent and you patent the less than 30.

[00:29:32] Speaker 00:
The problem is if you can identify a non-obvious distinction and then patent it one by one by one in steps, that would lead to the preemption of the otherwise known manufacturing process in a way that would be problematic.

[00:29:43] Speaker 03:
Well, at some point it would be problematic because you would get to a point in which it would have some theoretical utility.

[00:29:49] Speaker 03:
in which case the utility argument goes away.

[00:29:51] Speaker 00:
That is true, Your Honor, but then what you're really doing is just being a trap for the wary.

[00:29:56] Speaker 00:
And at some point there might be a utility argument, and if they can identify what that is and patent that, we're fine with it.

[00:30:01] Speaker 00:
But the point is they have to actually identify what the mole percent is that actually has utility, and it can't be something that they have just randomly picked.

[00:30:08] Speaker 00:
And then use that as a club to sue folks who are using known manufacturing processes and, unbeknownst to them, are hitting what we believe is an irrelevant

[00:30:18] Speaker 00:
step or irrelevant mold limitation.

[00:30:21] Speaker 00:
And so that's why we think there should be utility analysis.

[00:30:23] Speaker 00:
Now, maybe they can show that, as a matter of fact.

[00:30:25] Speaker 00:
That's not before the court.

[00:30:26] Speaker 00:
The question is, have they identified in the patent or anything else that would be appropriate to look at a utility for that particular limitation?

[00:30:33] Speaker 00:
We certainly don't think that they've done so.

[00:30:35] Speaker 00:
It's a factual question, again, that we don't think is before the court.

[00:30:37] Speaker 00:
But the fundamental question is, does the utility analysis apply to this context, or does it apply just to the output of the process that it produces?

[00:30:46] Speaker 00:
oxidized CoQ10 and we think the analysis has to be on the improvement that's consistent with all the courts section 101 cases in the subject matter area where the court looks to what the patent claims are directed to and we think that same kind of directed to analysis would properly apply in the context of section 101 and utility.

[00:31:05] Speaker 03:
And yet they really haven't been any cases from this court at all I guess on this issue right?

[00:31:11] Speaker 00:
That's right Your Honor I don't think it's an issue that's going to come up with any frequency so I don't think this has any

[00:31:16] Speaker 00:
the sorts of effects that one-on-one subject matter does, because it is going to be quite rare.

[00:31:22] Speaker 03:
Well, I suppose that's probably right, yeah.

[00:31:25] Speaker 00:
I don't think the circumstances that give rise to this are ones that are likely to occur.

[00:31:28] Speaker 00:
I do think that's right, Your Honor.

[00:31:31] Speaker 00:
Thank you.

[00:31:31] Speaker 02:
Thank you.

[00:31:35] Speaker 04:
Your Honor, let me address the utilities industry briefly.

[00:31:40] Speaker 04:
Dr. Alpert, the liberty expert for Conica,

[00:31:45] Speaker 04:
pointed out at appendix 1443 and 1444 that the reduced Q10 has increased solubility over oxidized Q10 and because of that increased solubility you can use less hexane as a solvent which means less production cost because hexane is expensive and there's a higher rate of discovery of recovery I should say for the

[00:32:12] Speaker 04:
for the product, which means that it's making more reduced Q10 first because the solubility is different than oxidized Q10, saves money, and you get a better product by the mere fact that you get 70 more percent of reduced Q10 before that reduced Q10 is oxidized.

[00:32:34] Speaker 03:
Let me go back for a moment to the... I don't think you made that argument in your brief, did you?

[00:32:39] Speaker 04:
I'm sorry?

[00:32:40] Speaker 03:
You didn't make that argument in your brief, if I recall.

[00:32:42] Speaker 04:
Yes, there is a section in our brief on utility, yes, Your Honor.

[00:32:45] Speaker 03:
Well, there is a section on utility, but the argument based on the 1443-44, I don't recall that being made in your brief.

[00:32:55] Speaker 04:
We certainly cited Dr. Alpert's testimony, and I gave the appendix numbers for Dr. Alpert's testimony.

[00:33:07] Speaker 04:
So that should also be in the brief.

[00:33:48] Speaker 03:
Well, I'm not seeing it, but... I'm not seeing it either.

[00:34:13] Speaker 04:
What I just said, I may have mentioned the wrong numbers, but at page 54 of our reply brief, we talk about utility.

[00:34:25] Speaker 03:
Yes, you do.

[00:34:26] Speaker 03:
But the question is, do you make the argument that you're just now making about the utility?

[00:34:31] Speaker 03:
And I don't recall that argument or the citation to Dr. Almer's testimony as being part of that argument.

[00:34:40] Speaker 04:
Let me find it.

[00:35:01] Speaker 03:
Did you say 1443 of the appendix?

[00:35:04] Speaker 03:
Yes.

[00:35:06] Speaker 03:
I don't have 1443 in my appendix.

[00:35:10] Speaker 03:
My appendix skips from 1438 to 1459.

[00:35:13] Speaker 04:
Let me check the appendix again.

[00:35:25] Speaker 04:
Yeah, appendix at 1443, line 14.

[00:35:29] Speaker 04:
And appendix 1444, line 18.

[00:35:32] Speaker 03:
Well, but the copy of the appendix that we were given does not have those pages in it unless they are misplaced.

[00:35:39] Speaker 04:
Well, I apologize, Your Honor.

[00:35:44] Speaker 01:
Only the pages that are actually cited in the briefs will be put in the appendix that's prepared for the court.

[00:35:52] Speaker 04:
Okay, all right, so I understand that.

[00:35:55] Speaker 04:
We made the Albert argument in the brief, so I gave you the wrong... You made it... You didn't make the Albert argument in the brief, right?

[00:36:05] Speaker 03:
We made the utility argument in the brief.

[00:36:08] Speaker 03:
You didn't make the particular utility argument that you're now asserting in the brief, as I understand it.

[00:36:14] Speaker 03:
I don't see anything that is even close to this argument in your section on utility.

[00:36:21] Speaker 04:
I think I gave you the wrong citation, but I but I apologize your honor.

[00:36:26] Speaker 02:
I mean That's fine.

[00:36:29] Speaker 02:
I you're you're out of your time also Unless you want to conclude very very briefly My only conclusion I have your honor is on the the claim definition for seal tank.

[00:36:44] Speaker 04:
I Made that argument before the kingdom way panel You your honor was one of the judges on that panel

[00:36:51] Speaker 04:
I specifically argued that the purpose of the sealed tank was to prevent the contents from leaving for safety reasons.

[00:37:00] Speaker 04:
Judge Gilmour, that's what she said.

[00:37:02] Speaker 04:
And the court adopted Judge Gilmour's exact words.

[00:37:07] Speaker 04:
Therefore, correct or not, my belief was always that that's what the claim construction meant, not to prevent oxygen from coming into the tank because the patent says

[00:37:20] Speaker 04:
There is no reason to do that.

[00:37:22] Speaker 04:
When you're making oxidized Q10, the patent specifically says that.

[00:37:27] Speaker 04:
And I can give you the actual quote of where the patent says that specifically.

[00:37:35] Speaker 04:
So our argument has been the same before Judge Gilmore, before the ITC, before Judge Flasier, before the Court and the Kingdom Way argument.

[00:37:46] Speaker 04:
And in this brief, that that's what the claim term means.

[00:37:51] Speaker 04:
Because this court adopted Judge Gilmore's language.

[00:37:57] Speaker 02:
I think you've made that point already.

[00:38:01] Speaker 02:
I guess I did, Your Honor.

[00:38:03] Speaker 02:
OK, appreciate it.

[00:38:07] Speaker 02:
Mr. Hughes, you addressed your cross claim.

[00:38:10] Speaker 02:
Your Honor, I have nothing to add.

[00:38:11] Speaker 00:
Do you have anything else?

[00:38:13] Speaker 00:
I'll take any questions the court might have.

[00:38:16] Speaker 02:
OK, we don't have any questions.

[00:38:17] Speaker 00:
Thank you.

[00:38:17] Speaker 02:
Thank you, Your Honor.

[00:38:18] Speaker 02:
Thank the parties for their arguments.