[00:00:01] Speaker 01: The United States Court of Appeals for the Federal Circuit is now open and in session. [00:00:06] Speaker 01: God save the United States and its honorable court. [00:00:12] Speaker 03: Good morning. [00:00:12] Speaker 03: This is Judge Raina. [00:00:14] Speaker 03: Judge Bryson is also on the panel due to unforeseen circumstances. [00:00:20] Speaker 03: We have two judges sitting on the panel this morning, myself and Judge Bryson. [00:00:25] Speaker 03: And the third judge will join the panel at a later time and participate in the [00:00:32] Speaker 03: in our final deliberations and decision. [00:00:36] Speaker 03: This case is conversion wireless licensing versus Apple Inc. [00:00:41] Speaker 03: 2019-2039. [00:00:45] Speaker 03: Mr. Selwyn, you're arguing on behalf of conversion, I understand. [00:00:53] Speaker 03: This is Mark Spencer. [00:00:54] Speaker 03: Mark, yes, Mr. Spencer, sorry. [00:00:57] Speaker 03: Okay, and you're reserving four minutes for rebuttal? [00:01:00] Speaker 04: Yes, Your Honor. [00:01:01] Speaker 03: OK. [00:01:04] Speaker 03: And Mr. Lee, you're arguing on behalf of Apple? [00:01:08] Speaker 02: I am, Your Honor. [00:01:10] Speaker 03: OK. [00:01:11] Speaker 03: All right. [00:01:11] Speaker 03: Well, let's go ahead and get started. [00:01:15] Speaker 03: And Mr. Fenster, you're up. [00:01:21] Speaker 04: Thank you very much, Your Honor, and may it please the court. [00:01:24] Speaker 04: The district court's finding of unenforceability should be reversed because the district court failed to require [00:01:30] Speaker 04: and the record does not support a finding by clear and convincing evidence that Nokia or Conversion obtained any benefits as a result of Nokia's late disclosure. [00:01:43] Speaker 04: Apple was required to prove by clear and convincing evidence that Nokia benefited from Nokia's failure to disclose. [00:01:52] Speaker 04: The district court could not make this finding and instead found at appendix 43 that Apple was not required even to connect [00:02:00] Speaker 04: Nokia's non-disclosure with the inequitable benefit, holding that such but-for proof is not required. [00:02:07] Speaker 03: But that is exactly what... Mr. Spencer, let me ask you a question at this particular point, now that you use the phrase but-for. [00:02:17] Speaker 03: It seems to me that your argument is that we should import verisense, the but-for materiality [00:02:26] Speaker 03: standards to be applied in therisins. [00:02:28] Speaker 03: But yet, I'm not clear as to why you think it should apply. [00:02:33] Speaker 03: And I guess that arises out of a more deeper question that I want to ask you. [00:02:40] Speaker 03: What in your view is a meaningful difference in this particular case between unenforceability under therisins, the atomic bomb, and unenforceability in implied waivers? [00:02:56] Speaker 04: Thank you, Your Honor. [00:02:57] Speaker 04: So first, the reason that I think Therosense should apply is because that's what this court held at page 1368. [00:03:07] Speaker 04: Because implied waiver, like the doctrine of an inequitable conduct discussed in Therosense, may render an entire patent unenforceable, the doctrine should only be applied in instances where the misconduct resulted in an unfair benefit. [00:03:22] Speaker 04: It is not [00:03:24] Speaker 04: sufficient for there to be any misconduct unrelated to a benefit, it has to be material. [00:03:30] Speaker 04: That's what the Therasense en banc court held post Qualcomm. [00:03:36] Speaker 04: And in this case, Core Wireless, this panel, Judge Bryson-Writing, found that Therasense controlled. [00:03:44] Speaker 04: In terms of whether there's a meaningful difference between inequitable conduct [00:03:49] Speaker 04: I do not think that there is a meaningful difference between the so-called atomic bomb unenforceability of the entire patent as to the world versus unenforceability of the entire patent as to a standard. [00:04:02] Speaker 04: The remedy that goes to the remedy, the remedy does have to be tailored, but this is an equitable doctrine. [00:04:09] Speaker 04: There are since specifically held that equitable considerations require but for materiality and clear and convincing evidence. [00:04:19] Speaker 04: This court adopted and applied the Theracents standard and its remand instructions and the district court did not apply those and was unable to because the record does not support it. [00:04:33] Speaker 00: Mr. Fenster, this is Judge Bryson. [00:04:35] Speaker 00: Let me just quickly ask you a question. [00:04:37] Speaker 00: I don't want to take up a lot of your time on this, but a factual question to see if we can agree as to the underlying facts here. [00:04:46] Speaker 00: on which I think there's some murkiness at least in the briefs. [00:04:51] Speaker 00: I take it your position is that a mobile station can operate consistently with the GPRS standard even if the mobile station is only capable of the two TAV option. [00:05:06] Speaker 00: And it is not required also to have the single TAV option that's described in the 151 patent. [00:05:15] Speaker 00: And that is, I take it, regardless of how the base station is configured. [00:05:22] Speaker 00: Is that right? [00:05:23] Speaker 04: That's exactly right. [00:05:24] Speaker 04: The mobile station, the standard specifically says that when one or two slots are allowed, the mobile station may choose to use one or both. [00:05:35] Speaker 04: The mobile station, the handset, is the one that makes the choice. [00:05:39] Speaker 04: And Judge Cousins finding that [00:05:43] Speaker 04: And this court specifically found that those two options were made optional by the standard. [00:05:50] Speaker 04: The district court made the finding that the base station requires the mobile stations to operate in both modes, but that was clearly erroneous and just confused the three different timing advanced modes. [00:06:05] Speaker 04: There's continuous, initial, and on demand. [00:06:08] Speaker 04: and with the two different options, which are both within the continuous. [00:06:12] Speaker 04: OK. [00:06:12] Speaker 00: And I think for purposes of our discussion, it is the most helpful to me if we refer to the three modes, continuous, initial, and on demand, as modes and the two options for the continuous mode as being single TAV and the two TAV as options so that we don't end up mixing the two together. [00:06:36] Speaker 00: Perfect. [00:06:37] Speaker ?: OK. [00:06:38] Speaker 00: So yes, you are. [00:06:39] Speaker 00: Yeah, and I will, of course, want to hear from Apple as to whether they disagree with anything you've just said about the options. [00:06:47] Speaker 00: But we'll get to Apple when they're up. [00:06:49] Speaker 00: Thank you. [00:06:50] Speaker 04: Thank you. [00:06:51] Speaker 04: So not only did the court fail to require any proof connecting the benefit of the late disclosure, the benefits to the late disclosure, but it also failed to apply the clear and convincing evidence standard. [00:07:05] Speaker 04: It did not even indicate that it was applying the Clearing Commencing Evidence Standard. [00:07:09] Speaker 04: The district court's finding at Appendix 43 is only that Dr. Walker's testimony suggests that Nokia, had Nokia disclosed its IPR, there was a reasonable possibility that the 151 would not have been incorporated into the standard. [00:07:28] Speaker 00: Mr. Fenster, you're sort of fading out, at least for me. [00:07:32] Speaker 00: Maybe raise your voice or get closer to the phone or whatever. [00:07:37] Speaker 04: Yes, thank you. [00:07:37] Speaker 04: Is that better? [00:07:38] Speaker 00: That's better. [00:07:41] Speaker 04: So the district court only found that the testimony suggests a reasonable possibility that the 151 would not have been incorporated into the standard. [00:07:52] Speaker 04: And that is the critical finding that it must have found to show materiality. [00:07:57] Speaker 04: That does not meet this court's standard for clear and convincing evidence. [00:08:01] Speaker 04: It's this court held in their sense [00:08:03] Speaker 04: To meet the clear and convincing evidence standard, the district court had to find that the 151 solution being included in the standard as a result of non-disclosure must be the single most reasonable inference able to be drawn from the evidence. [00:08:19] Speaker 04: Indeed, the evidence must be sufficient to require that finding. [00:08:23] Speaker 04: And if there are multiple inferences available from the evidence, clear and convincing evidence cannot find in any district court [00:08:31] Speaker 04: decision finding so is clear error. [00:08:34] Speaker 04: Here, not only was the evidence susceptible to other reasonable inferences, the evidence strongly suggests that non-disclosure was not relevant to Etsy, the standards body. [00:08:47] Speaker 04: Dr. Walker testified, this is at appendix 970, at page 1420 of the trial transcript, that Etsy chooses the technically best solution regardless of IPR, intellectual property rights. [00:09:02] Speaker 04: And that IPR would only be considered if there were two technically equivalent solutions, one of which had IPR and the other was IPR-free. [00:09:12] Speaker 04: There was no evidence that that narrow circumstance was met. [00:09:16] Speaker 04: And Dr. Walker critically admitted that he had no evidence that Etsy would have chosen another standard but for Nokia's untimely disclosure of the 151 patent that's at appendix 975. [00:09:30] Speaker 00: Mr. Fester, could you address the Qualcomm case? [00:09:34] Speaker 00: In your brief, you distinguished Qualcomm, I think, on two grounds. [00:09:39] Speaker 00: One is that it's prethera-sense, and two, that it is, in your view, an egregious misconduct case. [00:09:47] Speaker 00: Assuming that we don't conclude that it is necessarily in the egregious misconduct category, [00:09:57] Speaker 00: How do you deal with Qualcomm, which did not seem to discuss causation at all? [00:10:03] Speaker 00: Or do you think it did, implicitly at least? [00:10:05] Speaker 04: I think it did implicitly. [00:10:07] Speaker 04: So first, it did involve affirmative egregious misconduct. [00:10:10] Speaker 04: There was evidence that Qualcomm hid evidence, lied to the court, knowingly attempted to conceal, carefully orchestrated plans, six attorneys got referred to the bar. [00:10:20] Speaker 04: This was a very different case. [00:10:22] Speaker 04: There, it did impliedly also find causation because their goal of the standards organization was to adopt a solution completely free of intellectual property, which is very different than Etsy. [00:10:36] Speaker 04: The evidence was that the standards body was considering any IP because its goal was a royalty-free baseline. [00:10:44] Speaker 04: That's at Qualcomm at 548, 5S3, 1012, note 2. [00:10:50] Speaker 04: Here, the evidence was that Etsy did not consider intellectual property. [00:10:55] Speaker 04: Its only goal was to avoid unavailable IPR, i.e. [00:10:59] Speaker 04: IPR that was not available on Fran terms. [00:11:03] Speaker 04: And because it's undisputed that Nokia had made a blanket Fran commitment, there, and Dr. Walker's testimony, Fran, Etsy would not have considered it here, whereas in Qualcomm, the evidence was that it was material [00:11:20] Speaker 04: because it deprived the board the body of the opportunity to choose a loyalty-free option. [00:11:31] Speaker 00: Now, that raises for me a second issue, which is in your brief you cite various items, including at several points expert reports. [00:11:45] Speaker 00: Now, I had a hard time figuring out how much of that is actually in the record. [00:11:51] Speaker 00: that was usable by the district court. [00:11:56] Speaker 00: Can you help me on that? [00:11:57] Speaker 00: What is, of the various pieces of evidence going to what Etsy considered and what Etsy was focused on, the argument you just made, how much of that, what in particular of that is in the record and what is not? [00:12:15] Speaker 00: I take it that the expert reports are not in the record. [00:12:19] Speaker 04: The expert reports are not, Your Honor, but the testimony of Dr. Walker specifically. [00:12:25] Speaker 04: Right. [00:12:25] Speaker 00: Yeah, I could see that. [00:12:28] Speaker 00: Anything else that was cited in your brief that actually isn't in the record as such, besides the expert reports? [00:12:39] Speaker 04: I'm not sure it's blanket. [00:12:42] Speaker 04: The primary evidence that we are relying is clearly in the record, which is Dr. Walker's testimony at appendix 917 page 1420. [00:12:51] Speaker 00: And also, I take it the SC standards? [00:12:55] Speaker 04: And the SC standards are also in the record. [00:12:57] Speaker 04: That's correct. [00:12:58] Speaker 04: And the SC standards, yes, Your Honor. [00:13:01] Speaker 03: All right. [00:13:02] Speaker 03: OK. [00:13:02] Speaker 03: I think we're out of time. [00:13:03] Speaker 03: I heard that the buzzer goes off. [00:13:06] Speaker 03: We're off. [00:13:06] Speaker 03: We won't allow you two or four minutes of your time to rebut. [00:13:10] Speaker 03: Thank you, your honor. [00:13:12] Speaker 03: Yes. [00:13:12] Speaker 03: Let's hear from Mr. Lee. [00:13:13] Speaker 02: Thank you, your honor. [00:13:16] Speaker 02: May it please the court. [00:13:17] Speaker 02: My name is Bill Lee and together with my partners, Richard O'Neill and Tim Thread, I represent Apple. [00:13:23] Speaker 02: I'm standing in for Joe Mueller, who tried the case before the district court and argued the first appeal before both of you. [00:13:31] Speaker 02: Mr. Mueller began a patent jury trial on East Texas yesterday. [00:13:35] Speaker 02: That's the reason I'm his understudy for today. [00:13:38] Speaker 03: That's fine, Mr. Gay. [00:13:40] Speaker 03: We're glad to have you. [00:13:41] Speaker 03: Let me ask you a question now. [00:13:44] Speaker 03: How would the world have been different had Nokia disclosed the application to the 152 and Penn in 1998? [00:13:53] Speaker 02: Your Honor, it would have been different, and the district court actually found this specifically in several ways. [00:13:59] Speaker 02: It would have been different because the 151 and Penn became standards essential. [00:14:06] Speaker 02: It would have been different because the 151 patent would not have been part of the patent portfolio that was licensed to numerous entities. [00:14:15] Speaker 02: It would have been different because Conversion could not have called its CEO at the trial to talk about a portfolio license that he believed demonstrated the value of the patent. [00:14:26] Speaker 03: It would have been different. [00:14:28] Speaker 03: I'm aware of these points that you're raising, but does it matter that [00:14:33] Speaker 03: that Nokia in 1998 had made a fran commitment? [00:14:39] Speaker 02: Yes. [00:14:40] Speaker 02: No, it does not, Your Honor, and for reasons that you've already addressed in the panel decision and the decision denying rehearing on Bonk. [00:14:49] Speaker 02: As the prior opinions demonstrate, the fran commitment and the disclosure commitment are two separate commitments with two different purposes, although they overlap to some degree. [00:15:02] Speaker 02: If there had been disclosure and the standard had been different, then there would have been no 151 path that was essential. [00:15:12] Speaker 02: And there would have been no basis to license it at all. [00:15:16] Speaker 02: So the different things that I identified in response to your first question would not have occurred. [00:15:24] Speaker 02: And that actually brings us, Judge Raina, to your first question on the causation issue. [00:15:28] Speaker 02: And I think this is the place where [00:15:30] Speaker 02: We would suggest a careful reading of Judge Cousins' opinion is important because Mr. Fenster has focused on page A43. [00:15:39] Speaker 02: That is the paragraph that begins finally, but the heart of the opinion is at A41. [00:15:47] Speaker 02: And at A41, the district court specifically quoted the panel's opinion requiring the misconduct result in an unfair benefit. [00:15:58] Speaker 02: that the patentee obtained an unjust advantage or an undeserved competitive advantage. [00:16:03] Speaker 02: So he literally went through what was in the opinion and the mandate. [00:16:08] Speaker 02: He then specifically found that Nokia and Converse had obtained, and the word was such an unfair competitive advantage, and then detailed the specific factual findings, which included that which I just began to catalog. [00:16:25] Speaker 00: Mr. Lee, the problem that I have is that the district court and then you in your brief have argued that the but-for standard does not apply. [00:16:40] Speaker 00: And so I'm unclear as to what standard of causation you think is applicable. [00:16:46] Speaker 02: Your Honor, thank you for the question because I think it's an important one. [00:16:51] Speaker 02: The reason that the but-for causation [00:16:55] Speaker 02: quote is in the final paragraph on page A43 is because the district court was addressing a specific argument made by conversant. [00:17:08] Speaker 02: And that specific argument was that in addition to having the unfair competitive advantage or unjust benefit result from the misconduct, there was an additional requirement. [00:17:20] Speaker 02: And this is very clear at the first page of the reply memo. [00:17:25] Speaker 02: Their but-for standard requires that we demonstrate that but for the misconduct, SC would not have adopted the 151 patent technology. [00:17:37] Speaker 02: So what Judge Cousins is saying in the finally paragraph is two pages earlier, he has articulated the court's mandate. [00:17:47] Speaker 02: He's applied it. [00:17:48] Speaker 02: He's found the facts. [00:17:50] Speaker 02: He then, in the next two pages, [00:17:53] Speaker 02: is addressing the specific arguments made by conversant. [00:17:57] Speaker 02: And the argument on but for a causation was not that there was no causation requirement, because he had just applied a causation requirement two pages earlier. [00:18:07] Speaker 02: He was rejecting the proposition, I'm sorry, that we were also required to establish conclusively that FC would not have adopted the 151 patent technology into the standard. [00:18:22] Speaker 02: That is something very close to the detrimental reliance argument that the panel has rejected previously. [00:18:30] Speaker 02: It is very close to the detrimental reliance argument that was made in Qualcomm, where the argument was made that Broadcom had to demonstrate that they would have acted differently. [00:18:42] Speaker 00: So I think this is where... I'm not hearing this exactly. [00:18:47] Speaker 00: What is your causation test? [00:18:52] Speaker 00: you have one, or are you simply saying that the breach of the duty of disclosure was in and of itself sufficient to justify a remedy? [00:19:03] Speaker 02: No, I would not go that far. [00:19:05] Speaker 02: I think the standard is one. [00:19:09] Speaker 02: It is the test that was articulated in the decision, which is the patentee's misconduct must result in an unfair benefit, or the patentee must obtain an unjust advantage. [00:19:22] Speaker 00: And the unfair benefit, I take it, flows from the fact that Etsy ultimately adopted something that at least incorporated in part the 151 patent. [00:19:42] Speaker 00: Because all the benefits flow from that. [00:19:45] Speaker 00: Without Etsy having adopted something that more or less [00:19:49] Speaker 00: incorporated the 151 patent, then there would have been none of the other benefits would apply, right? [00:19:56] Speaker 02: Yes. [00:19:57] Speaker 00: So the question is, to try to get at this, let me ask you this question. [00:20:03] Speaker 00: Suppose that the patentee, Nokia at that time, did not disclose, as it was required to do, the existence of its IP [00:20:19] Speaker 00: But it so happened that FC already knew about that and went ahead and went ahead with the standard that it ultimately adopted. [00:20:32] Speaker 00: Would you think that there would be a remedy available in that case? [00:20:40] Speaker 02: Your Honor, two things. [00:20:43] Speaker 02: That's not the facts of our case. [00:20:45] Speaker 00: I understand. [00:20:45] Speaker 00: That's why I'm trying to get at the hypothetical in order to see what your test is. [00:20:51] Speaker 02: But if it were, if I were to take the test I've tried to describe which is resulted in or obtained from, there would be a question on the facts of whether it in fact resulted from or was obtained by. [00:21:08] Speaker 00: And in fact, Your Honor, that's what I'm trying to understand is do you think on those facts there would be any result flowing from the non-disclosure since Etsy would already have known about the patent? [00:21:29] Speaker 02: I think that if the specific facts were that Etsy knew about the patent and the patent application, that would be very hard to make it [00:21:38] Speaker 02: an argument that it resulted from. [00:21:40] Speaker 02: On the other hand, if it were slightly different, which is Etsy knew that Nokia was doing work in this arena, but didn't know about the patent application and the patent application had not been disclosed, which the obligation under 4.1 second sentence would require, then it would result from. [00:22:02] Speaker 00: And I think... Aren't you really saying then that [00:22:07] Speaker 00: If Etsy would have done something other than what it did, had it known about the patent, then there's causation, but otherwise not. [00:22:19] Speaker 02: No, Your Honor, I think that's too narrow. [00:22:22] Speaker 02: And I think that Qualcomm would not allow us to articulate something that narrowly. [00:22:27] Speaker 02: And I think the panel's decision when you distinguish equitable estoppel, [00:22:32] Speaker 02: on a detrimental reliance basis also which suggests it's too narrow. [00:22:38] Speaker 02: I think a premise of both Qualcomm and the panel's decision is that to the extent there was conduct that occurred years ago and then a delay of four years in making a disclosure to require the proponent of implied waiver to demonstrate conclusively that but for that misconduct the world would have been different [00:23:01] Speaker 02: is basically rewarding the misconduct. [00:23:04] Speaker 02: That's what Qualcomm is saying. [00:23:08] Speaker 00: And in this particular instance... Well, Qualcomm, as I understand it, did not really address causation at all. [00:23:14] Speaker 00: I mean, the parties, well, you would know better than I since I think you argued that case on the part of the winning side. [00:23:22] Speaker 00: But if I recall, there was nothing in the briefs in Qualcomm except for one [00:23:31] Speaker 00: very brief reference to causation in the appellant's brief about saying that because they had agreed to license the property and because there was no infringement, that there was no possible [00:23:57] Speaker 00: But that was the only argument I could see in the briefs about causation. [00:24:01] Speaker 00: So the court didn't address causation, as far as I can see. [00:24:04] Speaker 00: It wasn't argued to them. [00:24:06] Speaker 02: You're right. [00:24:07] Speaker 02: I did try that case, and I did argue that case. [00:24:10] Speaker 02: And the reason I think Mr. Phillips and I argued against each other before the Federal Circuit, the reason that causation was an issue is it was, at the end of the day, on that record in much the same as is true on this record. [00:24:26] Speaker 02: It was clear that what happened was Qualcomm had a patent. [00:24:30] Speaker 02: It asserted that it was standard essential. [00:24:32] Speaker 02: It asserted it to get an advantage in the litigation. [00:24:36] Speaker 02: Now it turned out not to be true based upon the jury's finding of no infringement, but they received an advantage during that process and during the licensing that your honor referred to. [00:24:48] Speaker 02: That was the reason that causation was an issue because no one disputed it. [00:24:54] Speaker 02: I think that if you take Qualcomm, which Therasense did not overrule, implied waiver is a different doctrine than inequitable conduct, if you take Qualcomm on its face, there cannot be any requirement that you demonstrate that but for the misconduct [00:25:18] Speaker 02: the standard would be different, because in that case, the patent was found to be not essential, eventually. [00:25:24] Speaker 02: But before you got to that point in time, just as here, just as here, you were in a circumstance where there was, to use the panel's phrase, an undue competitive advantage. [00:25:38] Speaker 02: And to answer a question, Your Honor, I asked Mr. Spencer, but also to hopefully put a point of emphasis on this, is [00:25:46] Speaker 02: Both experts agreed that for the handset manufacturer, that's Apple, the two or three procedures, or 2A and 2B and one, were all absolutely mandatory. [00:26:01] Speaker 00: That's the quote. [00:26:03] Speaker 00: We're using the word procedures here. [00:26:06] Speaker 00: If we could stick with the three modes and two options, that would be helpful to me. [00:26:13] Speaker 02: Yeah, and you'll see that at Appendix 933, their expert conceded that from the phone's perspective, all three were absolutely mandatory. [00:26:25] Speaker 00: Well, nobody disputes that. [00:26:28] Speaker 00: And here's where is the crux of the problem that I have with the positions that you and the appellant have taken. [00:26:36] Speaker 00: I think you're arguing past one another. [00:26:40] Speaker 00: You're saying all three modes, [00:26:43] Speaker 00: are essential, and that's what Mr. Wessel, I guess it was, said. [00:26:47] Speaker 00: And that's certainly true. [00:26:48] Speaker 00: No one disputes that. [00:26:50] Speaker 00: The question, though, is were the two options for the continuous mode, single and TAV and two TAV, were those optional? [00:27:01] Speaker 00: In other words, could Apple simply have used the two TAV mode and it would have made no difference [00:27:11] Speaker 00: to the operation of its mobile phones in the system. [00:27:17] Speaker 02: And Your Honor, I think that at page A933 and A659, well, maybe not using the precise phrase that Your Honor is using, you'll see that both experts agree that from the perspective of the mobile handset manufacturer, that was not an option. [00:27:36] Speaker 02: You had to have both options, as Your Honor described it. [00:27:42] Speaker 02: Let me tell you one other thing in answer to this question. [00:27:45] Speaker 02: There's a $3 million verdict that is in place. [00:27:52] Speaker 02: If the district court's decision that this patent is unenforceable as a result of the misconduct is not affirmed, then conversant will have achieved a $3 million verdict against a handset manufacturer [00:28:10] Speaker 02: based upon assertions in the complaint throughout the litigation that the 151 patent was essential. [00:28:18] Speaker 02: That is not one of the specific benefits that's relied upon by Judge Cousins in his opinion, but it is undoubtedly a specific benefit. [00:28:29] Speaker 00: Let me, and I hate to spend more of your time on this, although I guess at this point it's, [00:28:37] Speaker 03: Mr. Lee is out of time, but Judge Breslin, go ahead. [00:28:43] Speaker 00: Yeah, I just have this down because this is something that I think in thinking about this case it's important at least to me to be sure I'm standing on firm ground. [00:28:55] Speaker 00: Now you refer to Appendix 933 and that's the point at which Dr. Wessel says that [00:29:05] Speaker 00: You understand that from the mobile station, the phone's perspective, it is absolutely mandatory that they perform all three, correct? [00:29:13] Speaker 00: And he says, yeah, that's right. [00:29:15] Speaker 00: He's talking, as I understand it at that point, about the three modes, not the two options. [00:29:24] Speaker 00: Is your understanding of his testimony different from mine? [00:29:29] Speaker 02: Actually, Your Honor, I think that his [00:29:31] Speaker 02: My understanding of his testimony and the other page I cited to at 659 would be that the phone would have to have all three. [00:29:41] Speaker 02: You're both option one and option two. [00:29:43] Speaker 00: Remember, we're talking about just the two options, not the three modes. [00:29:51] Speaker 02: And the answer is yes, Your Honor. [00:29:53] Speaker 02: I don't think there was any real dispute that you had to have both modes from the handset manufacturer's perspective. [00:30:01] Speaker 00: Okay, and the other site besides 933 that you gave me was what? [00:30:06] Speaker 02: It's 659. [00:30:07] Speaker 00: 659, okay, thank you. [00:30:11] Speaker 02: And it's described there as three different procedures, Your Honor. [00:30:15] Speaker 00: Well, again, the procedures, whenever we're talking about three, as I understand it, we are talking about the on-demand, continuous, and initial, and nobody disputes [00:30:27] Speaker 00: those three are all essential. [00:30:30] Speaker 00: The question that I'm focused on is whether the two options, one TAV or two TAV, are both essential. [00:30:38] Speaker 00: And when you point me to evidence that they're talking about the three, they're talking, as I understand it, about the three modes. [00:30:47] Speaker 00: Do you have a different understanding of that? [00:30:50] Speaker 02: No, but even for the one mode where you're asking whether they're optional, [00:30:55] Speaker 00: Right. [00:30:55] Speaker 00: The test money of the two experts is... The mode is optional. [00:30:58] Speaker 00: The question is, are the options of one TAV or two TAV optional? [00:31:03] Speaker 00: Can you have only one? [00:31:06] Speaker 02: Your Honor, the answer, let me just, and I know I'm way over my time, so let me just give you two quick answers. [00:31:11] Speaker 00: This is, I'm using up time, so it's not your fault. [00:31:16] Speaker 02: Your Honor, if two quick answers. [00:31:19] Speaker 02: The first is that I think the fair reading of the testimony is that the option that would be covered by the 151 patent was mandatory. [00:31:28] Speaker 02: That's what the experts would be asking. [00:31:31] Speaker 02: And the best indication to you of that that it's true, if that wasn't true, why did Nokia sign a declaration of essentiality, make the representation in the complaint, make the representations in the infringement contentions [00:31:49] Speaker 02: and offer the testimony trial that it was essential. [00:31:52] Speaker 02: If it were truly just one mode of, one option of one mode that was not essential, they never could have made those allegations. [00:32:04] Speaker 00: All right. [00:32:06] Speaker 03: Thank you. [00:32:07] Speaker 03: Okay. [00:32:07] Speaker 03: Thank you, Mr. Lee. [00:32:09] Speaker 03: Um, let's go to back to Mr. Fester. [00:32:12] Speaker 03: Um, you have four minutes left and I'm going to extend that to seven minutes if you need it. [00:32:17] Speaker 04: Thank you very much, Your Honor. [00:32:18] Speaker 04: Can you hear me fine? [00:32:20] Speaker 03: Yes, I can hear you. [00:32:22] Speaker 04: Thank you. [00:32:22] Speaker 04: So first of all, Judge Bryson, just with respect to your question regarding the three options and the two modes, you were absolutely right that the testimony was clearly and only that the three modes were required. [00:32:38] Speaker 04: But the expert testimony by both Dr. Wessel and Apple's expert were that the options were optional. [00:32:47] Speaker 04: And that evidence is cited in our opening brief at pages 54 to 56. [00:32:52] Speaker 04: Dr. Wessel at page 56 of our brief cites at appendix 361. [00:32:58] Speaker 04: Standard gives the mobile station the choice whether to use the 151 invention or whether to use two timing advanced values. [00:33:07] Speaker 04: And in fact, Apple's experts relied on the two TAV solution as a non-infringing alternative [00:33:14] Speaker 04: All of the evidence was that the options were optional. [00:33:18] Speaker 04: And the standard expressly says the MS may choose, the mobile station may choose. [00:33:25] Speaker 04: So there is no evidence to support that the two options were required. [00:33:33] Speaker 04: All of the evidence, and I encourage you to look at pages 54 to 56 of our brief, that has it clearly laid out with all of the evidence [00:33:42] Speaker 04: that the two options were optional and that's why we had to try this case as a source code case. [00:33:50] Speaker 04: We did not go into trial saying that it was essential and therefore they infringed. [00:33:56] Speaker 04: We went into trial saying the standard gave them two options and Apple had the choice to use one or two and we had to go to the source code and the source code showed that given the choice, Apple chose one. [00:34:08] Speaker 00: Of course, Mr. Lee cited the [00:34:12] Speaker 00: various places in the record where Nokia and our conversant referred to the 151 process as essential, including Nokia's disclosures to Etsy. [00:34:32] Speaker 04: So in the declaration to Etsy, that declaration is only that it may be essential [00:34:38] Speaker 04: And it's not that it is essential. [00:34:40] Speaker 04: And that was a reasonable disclosure by Nokia, a good faith disclosure, that one of the options, if someone practiced one of the options within the standard, that would require a, that would use the 151 patent. [00:34:57] Speaker 04: It was not a declaration that this is essential under the definition. [00:35:02] Speaker 04: But that was a good faith disclosure that it may be essential. [00:35:07] Speaker 00: Of course, in your complaint, you make a more conclusive statement that it is essential. [00:35:16] Speaker 04: That's true. [00:35:16] Speaker 04: But Your Honor's question, which I think is the critical one, is was the option required or not? [00:35:23] Speaker 04: And the reason that that's required, that that question is essential, is because we go back to causation. [00:35:31] Speaker 04: And whether it's but for causation or not, this Court has held [00:35:36] Speaker 04: that there must be some causal nexus. [00:35:39] Speaker 04: And I do think it is, but for that's what the Supreme Court has said from requires that that's what it means. [00:35:48] Speaker 04: But however you articulate that standard, there has to be some causal nexus showing that the benefits, which all depend on it being in the standard even as an option, resulted from the late disclosure. [00:36:03] Speaker 04: And if there was no... [00:36:05] Speaker 03: Mr. President, let's say that, just assume that we were to reverse or vacate on this in remand with respect to the issue of causation. [00:36:15] Speaker 03: What would you say that our instructions to the court should be? [00:36:20] Speaker 04: So, Your Honor, I don't think that a remand is called for. [00:36:24] Speaker 04: I think a reversal is called for. [00:36:26] Speaker 04: And the reason for that, Your Honor, is this is a closed record. [00:36:31] Speaker 04: The Apple actually [00:36:33] Speaker 04: asked the court to close the record, and the district court found that no additional discovery or findings were necessary. [00:36:41] Speaker 04: The court gave the district court clear instructions on that record, and the district court just did not apply either the NEXUS standard or the clear instructions. [00:36:52] Speaker 03: I don't understand. [00:36:53] Speaker 03: Are you saying that we at the appellate level should decide the causation question as a matter of law? [00:37:01] Speaker 03: I think that your honor should find that the district court... And I say that because it seems to me that your argument that you're making in the briefs and some of the amici make is that this argument is more one of policy as opposed to law. [00:37:18] Speaker 04: No, I don't think it's policy. [00:37:20] Speaker 04: I think as a matter of law, this court held in the first court wireless in 1368 that because this is an equitable case, causation must be required. [00:37:30] Speaker 04: and this court can review, does review the district court's finding for clear error and here there is a legal error in that it failed to expressly rejected the causal nexus requirement and that the clear and convincing evidence standard was not met. [00:37:50] Speaker 03: And a careful reading of... Doesn't that mean that the district court should make the [00:37:58] Speaker 03: causation and finding in the first instance? [00:38:03] Speaker 04: Your Honor, I think that the district court did make those findings at appendix 43. [00:38:08] Speaker 03: You seem to argue that they did not. [00:38:09] Speaker 03: That they did not address causation at all. [00:38:12] Speaker 04: Well, I think that at page 43 of the appendix, [00:38:18] Speaker 04: Judge Cousins addressed the only evidence of causation and what he found is that Dr. West Walker's testimony suggests that had Nokia disclosed its IPR, there was a reasonable possibility that the 151 patent would not have been incorporated into the standards. [00:38:40] Speaker 04: That is, so he did address causation, he could not make the finding required. [00:38:46] Speaker 04: And this court can, and I believe should, decide that that's my thing. [00:38:50] Speaker 03: Let's go back, and I want you to answer my question. [00:38:53] Speaker 03: If we were to remit on causation, what instructions should we be giving to the district court? [00:39:00] Speaker 04: Is there clear and convincing evidence that the standards that [00:39:08] Speaker 04: the benefit that the 151 option was included in the standard as a result of Nokia's late disclosure. [00:39:19] Speaker 04: In other words, that the standard would not have included it, but for the late disclosure. [00:39:28] Speaker 03: Okay. [00:39:28] Speaker 03: Mr. Bryson, do you have any other questions? [00:39:32] Speaker 00: No, I don't. [00:39:33] Speaker 00: Thank you. [00:39:34] Speaker 03: Okay. [00:39:35] Speaker 03: I think we have the case and we thank the parties for their arguments. [00:39:39] Speaker 03: Very interesting. [00:39:41] Speaker 03: And this court now remains in recess. [00:39:44] Speaker 03: Thank you, Your Honor. [00:39:46] Speaker 01: Thank you, Your Honor. [00:39:47] Speaker 01: The Honorable Court is adjourned until tomorrow morning at 10 a.m.