[00:00:03] Speaker 03: United States Court of Appeals for the Federal Circuit is now open and in session. [00:00:07] Speaker 03: God save the United States and this honorable court. [00:00:13] Speaker 02: Calling up the case for argument this morning, 192314, Great Batch versus ABX Corporation. [00:00:23] Speaker 02: Mr. Picky, whenever you're ready. [00:00:27] Speaker 01: Thank you, Your Honor. [00:00:28] Speaker 01: Good morning, and may I see the court? [00:00:31] Speaker 01: I'd like to begin this morning by addressing the claim construction issue. [00:00:35] Speaker 01: The district court inserted into the meaning of claim 12 of the 627 patent words and concepts that are nowhere found in the intrinsic record. [00:00:45] Speaker 01: This insertion caused the definition of asymmetrical to be divorced from the filtering performance of the capacitor and thus at odds with the understanding of a person of ordinary skill in the art. [00:00:57] Speaker 01: As this court made clear in its decision in the Hologic, [00:01:00] Speaker 01: Asymmetry is a relative term. [00:01:04] Speaker 01: Therefore, the first step is identifying the reference point. [00:01:08] Speaker 01: Here, the specification and all the other... Can you just clarify... I'm sorry. [00:01:12] Speaker 02: I'm sorry to interrupt. [00:01:13] Speaker 02: This is Judge Crouse. [00:01:14] Speaker 02: Can you just clarify... There's a lot going on in this case, and the case went on for a very long time. [00:01:22] Speaker 02: Judge Stark's first claim construction was quite broad, right? [00:01:28] Speaker 01: His first construction defined asymmetrical as to be not symmetrical. [00:01:38] Speaker 01: And then he provided two examples. [00:01:42] Speaker 01: And those two examples use these terms, non-ground-lead passageway and ground-lead passageway. [00:01:50] Speaker 02: And so that was a challenge to that or to something that happened subsequent to that? [00:01:57] Speaker 01: Our challenge is to that, Your Honor. [00:01:59] Speaker 01: The issue is that if a different claim construction is adopted other than the one that was provided to the jury in 2016, that the first construction, the one that provides the two examples of symmetrical, then it becomes an issue of we would seek a remand because we did not have a fair opportunity [00:02:24] Speaker 01: to argue under a different claim construction. [00:02:27] Speaker 01: However, if this court agrees with ABX's position with respect to the proposed construction that we have put forth on appeal, then it is our position, Your Honor, is that this court can decide non-infringement as a matter of law. [00:02:45] Speaker 01: So going back to that first construction, there's no dispute [00:02:50] Speaker 01: based on the specification and the intrinsic evidence that the reference point that we're all talking about is the ground pin or the second passageway through which that ground pin passes. [00:03:03] Speaker 01: After establishing that reference point, the only evidence in the intrinsic record is that a PASIDA would understand that symmetry and asymmetry must be determined [00:03:14] Speaker 01: based on the relationship between that reference point, the ground pin or the second passageway, and the terminal pin. [00:03:23] Speaker 01: And it's because the placement relates to the filtering performance of the capacitor. [00:03:32] Speaker 01: So first, how do we know that it's true? [00:03:34] Speaker 01: Well, we look to the specification. [00:03:37] Speaker 01: The specification only discusses symmetry and asymmetry with respect to filtering performance. [00:03:44] Speaker 01: It recognizes the twin facts that internal grounding increases impedance and that asymmetry makes this impedance worse. [00:03:54] Speaker 01: Moreover, during the re-examination, Great Batch, the first named inventor on the 67 patent, Mr. Stevenson, and Great Batch's expert, Professor Pilgrim, loudly and consistently argued that symmetry and asymmetry must be determined by the relative placement of the ground pit and the terminal pit. [00:04:14] Speaker 01: It's important to consider these statements in context. [00:04:17] Speaker 01: Claim 11, the internal grounding claim, had already been deemed obvious via interparte review. [00:04:25] Speaker 01: And claim 13, disclosing asymmetrical internally grounded filter feed-through, also had been deemed obvious. [00:04:33] Speaker 01: It was confirmed by this court to be so. [00:04:36] Speaker 01: Great Batch, therefore, was claiming that an asymmetrical internally grounded feed-through filter capacitor would have not been obvious [00:04:44] Speaker 01: because TECETA would have understood that that capacitor would have had worse performance because asymmetry relates to the relationship between the ground pin and the terminal pin. [00:04:56] Speaker 01: Indeed, they reiterated that every electrical engineer window, that inductance and thus impedance, increases when the distance that a signal needs to travel through a conductor, here the ground plate and the ground pin, increases. [00:05:11] Speaker 01: This principle even has a name, the Biot-Savart principle. [00:05:15] Speaker 01: And Mr. Stevenson discussed this principle at length in his declaration before the PTO. [00:05:21] Speaker 01: This is at Appendix 13043. [00:05:25] Speaker 01: You know, Rayfesh, aren't your courts... Excuse me a minute. [00:05:28] Speaker 02: You're talking about the reexamination history right now, right? [00:05:31] Speaker 02: Yes, Your Honor. [00:05:33] Speaker 02: Did you make the district court aware of the reexamination history? [00:05:39] Speaker 02: And did you seek to have him, if you did, did you want him to review his claim construction findings based on the re-exam? [00:05:49] Speaker 01: We did, Your Honor. [00:05:50] Speaker 01: So before the 2019 trial, there was a discussion about the meaning of claim 12 in connection with non-infringing alternatives, and we had actually sought [00:06:03] Speaker 01: to strike Great Branch's expert report because we believe that they were using an incorrect claim construction and therefore the topic came up at that time. [00:06:12] Speaker 01: We specifically asked Judge Stark that if he was going to revisit the meaning of asymmetrical that he needed to look to have full briefing which included the re-examination argument. [00:06:27] Speaker 01: He declined to do so but the re-examination [00:06:30] Speaker 01: examination papers were put before him. [00:06:33] Speaker 01: But you will see that Judge Stark decided that he believed that his claim construction, his first claim construction was broad enough to encompass potential arguments where the definition of asymmetry could be defined and determined by things other than these passageways. [00:06:53] Speaker 01: So it was in fact before him. [00:06:55] Speaker 01: However, he declined to essentially review that evidence. [00:07:01] Speaker 00: This is Judge Rainham. [00:07:03] Speaker 00: During the re-examination, did you assert that the passageway layout was the only way to measure symmetry of the capacitor? [00:07:14] Speaker 01: The passageway... Yes, Your Honor. [00:07:15] Speaker 01: It is AVX position that the only way to measure both symmetry and asymmetry is with respect to the first and second passageways. [00:07:29] Speaker 01: That has consistently been our position. [00:07:31] Speaker 01: In fact, this whole issue, this issue has come up in part because AVX moved initially for summary judgment that the patent claim 12 was indefinite because the experts and GRAPHATCH had taken a number of different positions with respect to the meaning of asymmetry. [00:07:51] Speaker 01: So this case has a lot of oddities. [00:07:54] Speaker 01: with respect to procedure. [00:07:56] Speaker 01: And so therefore, there was never really a full standard Markman proceeding with respect to asymmetry. [00:08:04] Speaker 01: It came up in the context of a summary judgment on indefiniteness. [00:08:09] Speaker 01: Judge Stark declined to find the patent indefinite and at that time rendered this claim construction that included non-ground lead and ground lead passageway examples in defining symmetry. [00:08:26] Speaker 01: So the last, a couple other points with respect to symmetry order. [00:08:33] Speaker 01: One is that Great Batch in its briefing suggests that we need to show a disclaimer in order to rely on the re-examination, file history, and the statements that are put forth by the declarants. [00:08:50] Speaker 01: But there's no need for a disclaimer here. [00:08:54] Speaker 01: The undisputed intrinsic record and the only evidence of what a patheta would understand asymmetrical to mean establishes as a fact that symmetry and asymmetry are to be determined based on the relationship between the first and second passageways. [00:09:10] Speaker 01: And GRAYPATH never in any of its briefings disputes these facts. [00:09:15] Speaker 01: It simply says, well, it could be other things. [00:09:18] Speaker 01: The problem with that is that symmetry and asymmetry are mutually exclusive things. [00:09:26] Speaker 01: You can't have something that's both symmetric and asymmetric at the same time. [00:09:30] Speaker 01: And we know that in part because Great Batch tells us so. [00:09:34] Speaker 01: In its response to the office action, it said it would not be reasonable to have a construction of symmetry and asymmetry that overlaps. [00:09:41] Speaker 01: That's an Appendix 13345. [00:09:44] Speaker 02: Before your time runs out, let me just get some clarification of something I think you said a few minutes ago. [00:09:50] Speaker 02: You're saying that if we were to agree with your construction, then there would be no need to remand this. [00:09:58] Speaker 02: Is there some sort of stipulation that there's no infringement under your construction, or how are we supposed to litigate that issue in the first instance on appeal? [00:10:09] Speaker 01: Well, Your Honor, there's sufficient evidence that we put forth in our briefing. [00:10:15] Speaker 01: And there's also simply just the evidence in the record that is before you as to what these capacitors look like that show that if the only thing that is to be considered is the first and second passageways, then it is very clear that AVX's part meets the definition of state symmetry. [00:10:37] Speaker 01: this mirror image example that ChargeStar crafted, and therefore it cannot be asymmetrical. [00:10:45] Speaker 01: And in fact, there's trial testimony from Greyfash's expert when he was at trial if this RF pin, which is a separate kind of passageway that's nowhere discussed in the patent or in the record, if the RF pin was not there, would the part be symmetric? [00:11:05] Speaker 01: And the expert answered, yes. [00:11:07] Speaker 01: So we believe that there is no dispute. [00:11:11] Speaker 01: There's no factual dispute remaining. [00:11:13] Speaker 01: And therefore, this court could decide without remanding that there's no infringement. [00:11:21] Speaker 01: Before I run out of time, Your Honor, I would just like to make a few points with respect to the damages issues that were raised. [00:11:30] Speaker 01: Primarily, the issue on Ingenio is price erosion. [00:11:36] Speaker 01: And with respect to price erosion, there was a before price. [00:11:40] Speaker 01: There was an after price. [00:11:42] Speaker 01: And that price was the same. [00:11:44] Speaker 01: And Great Batch will try to deflect and talk about part numbers. [00:11:48] Speaker 01: But that before price was the price of a feed-through filter that had both filters. [00:11:55] Speaker 02: I assume that's an argument you made to the jury. [00:12:00] Speaker 01: It was an argument, Your Honor, that we made to the jury. [00:12:05] Speaker 01: The problem wasn't that the jury heard all kinds of evidence, expert evidence that was inadmissible and unreliable. [00:12:13] Speaker 02: And therefore, well, challenging the district court's determinations with respect to that too. [00:12:21] Speaker 02: I didn't see there's a lot of issues in this appeal, but that one I didn't see. [00:12:26] Speaker 01: Yes, your honor. [00:12:27] Speaker 01: We are in fact challenging one of the issues [00:12:29] Speaker 02: So in order to agree with you on the damages, we would have to find the district court abused his discretion in ruling on your motions to exclude the expert testimony. [00:12:43] Speaker 02: And then if we agreed that he was wrong about that and he abused his discretion, then we would evaluate your analysis [00:12:54] Speaker 02: Without those, I'm not sure what you expect us to do. [00:12:57] Speaker 02: We obviously cannot hold another trial here at the affiliate court level. [00:13:03] Speaker 01: Yes, Your Honor, we're not asking you to hold another trial. [00:13:07] Speaker 01: I think there is a matter of law issue, which is that this court should not allow, when there is an established before price and established after price, this court should not allow an expert to come in and point to random pieces of evidence [00:13:24] Speaker 01: to create a price erosion claim where none exists. [00:13:27] Speaker 01: It leads to an absurd result, which is what we had here. [00:13:31] Speaker 02: Do you have any cases to support your legal contention here? [00:13:36] Speaker 01: Well, Your Honor, I think we would point to the Vulcan engineering case. [00:13:40] Speaker 01: In that case, the court said that it's the patentee's burden to show both price erosion and the amount of price erosion. [00:13:48] Speaker 01: And clearly, that cannot happen. [00:13:51] Speaker 01: as a matter of law when there's an established before price that is the same as the after price. [00:13:56] Speaker 01: And so I think the Vulcan Engineering case does support our argument. [00:14:01] Speaker 01: And with that, Your Honor, if I have any rebuttal time, I'd like to reserve it. [00:14:05] Speaker 02: Thank you. [00:14:08] Speaker 02: Mr. Muldoon, whenever you're ready. [00:14:14] Speaker 03: May it please the court? [00:14:16] Speaker 03: The district court's construction of asymmetry was not limited to the examples. [00:14:21] Speaker 03: Judge Stark made clear that asymmetry was a measure of the capacitor as a whole, and AVX agreed at the pre-trial conference of the appendix 110 to 111, as well as during the infringement trial at appendix 2854. [00:14:37] Speaker 03: Judge Stark's statement in the fall of 2018... I'll try to interrupt, sir. [00:14:42] Speaker 02: It's not your fault, but could you keep your voice a little lower? [00:14:48] Speaker 03: Yes ma'am. [00:14:49] Speaker 02: Thank you. [00:14:56] Speaker 03: Judge Stark's statement in the fall of 2018 was not a change in the construction because the court had been clear all along that asymmetry was evaluated for the capacitor as a whole. [00:15:07] Speaker 03: In this December 2015 ruling before the first trial, the court said in ruling on this AVX motion, symmetry in the court's view is not necessarily and always evaluated with respect to the first and second passageways. [00:15:23] Speaker 03: This is all in context of claim 12 of the 627 patent. [00:15:26] Speaker 03: There is no disclaimer in the patent or any other basis to limit the claim scope in a way that the defendant's motion argues. [00:15:35] Speaker 03: that asymmetry is measured on the capacitor as a whole and not on any particular one feature in isolation is also what Great Batch said repeatedly during the reexamination. [00:15:48] Speaker 03: At appendix 13344, Great Batch's response to the first office action said, quote, claim 12 requires that the capacitor as a whole be asymmetrical and not just a layer of the capacitor be asymmetrical. [00:16:06] Speaker 03: And the re-examination panel's ultimate construction was that asymmetrical means having two sides or halves that are not the same, not symmetrical. [00:16:16] Speaker 03: And that construction wasn't limited to pins or passageways. [00:16:21] Speaker 03: Now AVX points to arguments Great Batch made during the re-examination about a figure from the Stevenson 539 patent, a piece of prior art asserted in the re-exam. [00:16:32] Speaker 03: A one figure, figure 25 from the 539 patent is featured at page 27 of AVX's reply brief. [00:16:41] Speaker 03: However, that plate, that layer wasn't even asymmetrical. [00:16:46] Speaker 03: AVX claimed it was asymmetrical because they drew a vertical line through the testing point. [00:16:52] Speaker 03: If they had just drawn the line horizontally, you'd see that it was actually a symmetrical plate. [00:16:58] Speaker 03: But in order to respond to those issues, we addressed that point but concluded at 13367 that merely showing that an electrode plate itself is asymmetrical does not show that the capacitor is asymmetrical as required by claim 12. [00:17:17] Speaker 03: This was all consistent with the district court's claim construction that asymmetry is measured of the capacitor as a whole and not any particular feature in isolation. [00:17:28] Speaker 03: For example, if the claim was that a car was asymmetrical, you wouldn't look solely at the headlights when you know that there is a single steering wheel, a single accelerator, and a brake pedal that are all off centerline. [00:17:42] Speaker 03: Claim 12 does not say that a particular feature of the capacitor is asymmetrically arranged, as AVX argues. [00:17:49] Speaker 03: It says that the capacitor is asymmetrical. [00:17:53] Speaker 03: And that indicates, as Judge Stark found, that asymmetry is measured at the overall capacitor and not just pins and passageways. [00:18:01] Speaker 03: AVX is asking the court to read limitations from the specification into the claim, and Judge Stark over and over rejected that request, and this court should do the same. [00:18:12] Speaker 03: Judge Stark correctly decided that substantial evidence supported the jury's verdict on the Ingenio price erosion damages. [00:18:20] Speaker 03: As outlined in the grain processing decision, damages are evaluated by constructing a hypothetical but for world before the infringement started. [00:18:30] Speaker 03: Here, however, despite more than a 10-year history of Great Batch being the sole supplier of feed-through filter assemblies to Boston Scientific, AVX started infringing these patents [00:18:42] Speaker 03: before there was an established contract price for Ingenio. [00:18:46] Speaker 03: And therefore, Dr. Strickland, the damage expert, had to determine price erosion from the best available evidence to reconstruct the but for market. [00:18:55] Speaker 03: Dr. Strickland's analysis included a comprehensive review of documents and testimony regarding Boston Scientific and Great Batch's negotiation of the 2011 supply agreement, which established the eroded prices. [00:19:09] Speaker 03: He spoke to numerous Great Batch employees about costing, pricing, and reviewed thousands of documents produced by Great Batch and ABX. [00:19:17] Speaker 03: He also based his opinions on the testimony of Robert Beckman, Great Batch's vice president of finance and the finance lead on the contract negotiations, testified that the Falcon and other Ingenio quotations [00:19:33] Speaker 03: and the repeated price concessions given to Boston Scientific during those negotiations resulted in Mr. Beckman's opinion that the Ingenio price was reduced at least $25 because of AVX. [00:19:49] Speaker 03: As demonstrated by the testimony and documentary evidence, Boston Scientific developed AVX as a second source of supply for both the Ingenio and Frontier see-through filter assemblies [00:20:02] Speaker 03: in order to force break-patch to lower its prices. [00:20:05] Speaker 03: The VIP Platinum Program poster at the appendix 7018, Boston Scientific identified and qualified AVX as, quote, the second source for manufacturing filtered feed-throughs, creating competition and enabling vertical integration of the unfiltered feed-through. [00:20:25] Speaker 03: That VIP platinum program expressly names Ingenio and Next Generation Pacers, which is the products here at question on the Ingenio price erosion damages. [00:20:39] Speaker 03: To help develop the infringing AVX Ingenio, Boston Scientific provided AVX Ingenio unfiltered feed-throughs that were manufactured and designed by Great Batch as part of a top-secret project. [00:20:54] Speaker 03: During the negotiations, Boston Scientific continually pressured Great Batch to lower its prices. [00:21:00] Speaker 03: Based on this evidence and the other evidence cited in Great Batch's brief, Dr. Strickland defined that Great Batch could have charged $30 more or about 37% more for Ingenio filtering. [00:21:13] Speaker 03: And this is consistent with Boston Scientific's statements in the VIP poster that it achieved a 42% price reduction for filtering. [00:21:23] Speaker 03: and that competitive pricing was $50 to $60 for filtering. [00:21:28] Speaker 03: Further, Dr. Strickland testified based on comparative quotations and Great Batch's initial prices for an Ingenio filter were $29 to $44 higher than those of AVX. [00:21:42] Speaker 03: As AVX's argument, the Boston Scientific accepted Great Batch's price on Ingenio feed-through filter assembly [00:21:52] Speaker 03: That product did not form a basis of the price erosion and loss profits that was sought in this action. [00:22:00] Speaker 03: AVX could not have gone ahead and made that entire feed-through filter assembly. [00:22:04] Speaker 03: It did not have the technology or capability to manufacture the unfiltered feed-through together with the filtering. [00:22:13] Speaker 03: The price erosion claim was based on the filtering only, which is a separate product with separate price number [00:22:21] Speaker 03: listed under the 2011 contract. [00:22:25] Speaker 03: And ADX's argument that there was no erosion of the $50 price was an issue of fact clearly resolved against ADX by the jury. [00:22:36] Speaker 03: After Graypatch moved for reconsideration in light of HALO, the district court applied the wrong test on ADX's motion for summary judgment of no infringement, namely, [00:22:47] Speaker 03: Court held that Great Batch had to demonstrate egregious infringement. [00:22:52] Speaker 03: And while egregious infringement is required for enhanced damages, willful infringement only requires subjective willfulness or intentional unknowing infringement. [00:23:01] Speaker 03: And the court's decision denied Great Batch of its seventh amendment right to a jury verdict on the issues of willfulness. [00:23:12] Speaker 02: So we've already had three trials with respect to this case, right? [00:23:16] Speaker 00: Four, Your Honor. [00:23:18] Speaker 02: Oh, I missed one. [00:23:20] Speaker 02: But anyway, you're seeking another trial on willfulness, which I guess will have to include everything because it's the underlying conduct with regard to infringement. [00:23:32] Speaker 02: So you're seeking another trial on that for purposes of trying to get enhanced damages? [00:23:40] Speaker 03: Yes, Your Honor. [00:23:43] Speaker 03: Okay. [00:23:44] Speaker 03: I'll reserve my remaining three minutes for rebuttal. [00:23:51] Speaker 02: Okay, so my understanding is the only cross-appel issue you've raised is willfulness, is that right? [00:23:59] Speaker 03: No, Your Honor. [00:24:00] Speaker 03: There was the issue of ABX never offered legally sufficient evidence of non-infringing alternatives to the 627 patent, which was the primary reason for the ABX granting a new trial on damages. [00:24:13] Speaker 03: The alternative court jury was a purely paper invention conceived a month before trial and that was never built, never tested or accepted under green processing and microchemical as a matter of law that could not have been available. [00:24:28] Speaker 03: And therefore, since that was the primary basis for the second trial on damages, we would ask the court reinstate the jury verdict on damages for the 627 patent from the first trial. [00:24:44] Speaker 02: Mr. Picky? [00:24:47] Speaker 01: Yes, Your Honor. [00:24:48] Speaker 01: A few points. [00:24:49] Speaker 01: First, with respect to just revisit the claim construction for one moment, because Mr. Muldoon pointed to a passage from the re-examination claiming that Great Batch asserted that it was the asymmetry is to be decided by looking at the capacitor as a whole. [00:25:08] Speaker 01: And I think that that [00:25:11] Speaker 01: reading, while it may have been with the words on the page, I don't think it actually captured the argument. [00:25:16] Speaker 01: In fact, throughout the re-examination, there are places where Great Batch says you cannot, one, a person of ordinary skill in the art simply cannot ignore the passageways through which the ground pin and the terminal pins pass. [00:25:32] Speaker 01: And one of those examples, it's cited on page 27 of our reply brief, it's at Appendix [00:25:38] Speaker 01: Since asymmetry is measured based on the claimed ground leads, simply ignoring the passageways when considering asymmetry would not be reasonable. [00:25:51] Speaker 01: That was the position that they put forth at the PTO. [00:25:54] Speaker 01: That was the position they said was what a person of ordinary school of the art would understand. [00:25:59] Speaker 01: And now today, they're running away from that re-examination history. [00:26:04] Speaker 01: The second point, Your Honor, is Mr. Muldoon points to a lot of evidence [00:26:08] Speaker 01: that Dr. Strickland considered. [00:26:11] Speaker 01: He was their damages expert. [00:26:13] Speaker 01: But that evidence related to Frontier, related to a different part. [00:26:19] Speaker 01: Didn't relate to Ingenio. [00:26:21] Speaker 01: And so I asked this court to look carefully at the evidence that was presented. [00:26:27] Speaker 01: AVX, there was a verdict on price erosion for the Frontier part. [00:26:32] Speaker 01: And AVX was not appealing that issue. [00:26:34] Speaker 01: The question for this court is, what is the evidence [00:26:37] Speaker 01: on price erosion for EGNL. [00:26:39] Speaker 01: And the evidence is that the before and after price were the same. [00:26:45] Speaker 02: All right. [00:26:46] Speaker 02: Your time has expired, I believe. [00:26:48] Speaker 02: Did you hear the buzzer? [00:26:51] Speaker 01: I did, Your Honor. [00:26:52] Speaker 02: Okay. [00:26:53] Speaker 02: And you haven't responded to the cross-appeal, as I heard you. [00:26:56] Speaker 02: Is that correct? [00:26:58] Speaker 01: Um, we have not, your honor, those, I mean, we have the papers. [00:27:02] Speaker 01: Well, I'm not inviting you to, yeah. [00:27:05] Speaker 02: Um, but I just, that goes to the fact that your friend, Mr. Muldoon will not have anything to respond to, um, as the cross appellant since I just want to confirm with everyone that I heard it correctly and that you did not touch on to the cross appeal in your rebuttal. [00:27:21] Speaker 02: And which means that Mr. Muldoon will not have an opportunity to respond because there's nothing to respond to. [00:27:27] Speaker 02: Mr. Muldoon, do you understand what I'm saying? [00:27:30] Speaker 02: Am I missing something? [00:27:33] Speaker 03: No, Your Honor, I believe you're correct. [00:27:35] Speaker 02: Okay, thank you. [00:27:36] Speaker 02: All right, that concludes the proceeding this morning. [00:27:39] Speaker 02: We thank both counsel and the cases submitted.