[00:00:27] Speaker 04:
Next case is Iron Oak Technologies versus Microsoft, 2019-1802.

[00:00:33] Speaker 04:
Is it Mr. McGoggen?

[00:00:34] Speaker 04:
Yes, Your Honor.

[00:00:37] Speaker 02:
Thank you.

[00:00:40] Speaker 02:
May it please the Court?

[00:00:42] Speaker 02:
There are three issues I'd like to talk about today in my prepared comments.

[00:00:46] Speaker 02:
The sufficiency of the 2014 notice letters in providing actual notice to the MDL defendants.

[00:00:54] Speaker 02:
The error made by the district court in its ruling that plaintiffs could not recover damages for identified products if the infringement resulted as a result of the use of some functionality of Microsoft software.

[00:01:08] Speaker 02:
And finally, some of the problems that I think would arise if the new standard that was articulated by the district court was adopted.

[00:01:15] Speaker 02:
Now.

[00:01:16] Speaker 04:
But look, the 2014 letter was addressed to Dale.

[00:01:20] Speaker 04:
Yes, Your Honor.

[00:01:21] Speaker 04:
Not Microsoft.

[00:01:23] Speaker 04:
And it refers to, in general, the jail's laptops and tablets.

[00:01:29] Speaker 04:
And it doesn't say anything about Microsoft's inventions infringing.

[00:01:36] Speaker 04:
There's no notice.

[00:01:39] Speaker 04:
No notice to Microsoft.

[00:01:40] Speaker 02:
There is no notice to Microsoft, Your Honor.

[00:01:42] Speaker 02:
But what the order is directed to and what the issue is, is not whether the plaintiff can collect damages from Microsoft, but whether the plaintiff can collect damages

[00:01:52] Speaker 02:
from defendant products because part of the functionality required for the infringement arises through the use of Microsoft software.

[00:02:01] Speaker 02:
So for example, there was not just the Dale letter.

[00:02:03] Speaker 01:
I thought you were appealing as to Microsoft and as to the OEMs.

[00:02:08] Speaker 02:
Well, we're appealing predominantly to the issue of the OEM liability.

[00:02:12] Speaker 01:
That didn't answer my question.

[00:02:14] Speaker 02:
Well, we're appealing

[00:02:17] Speaker 02:
No, I don't believe so.

[00:02:18] Speaker 02:
I mean, I don't think there's any question.

[00:02:20] Speaker 02:
In fact, it's indicated in the original brief that Microsoft was not provided with notice and that Microsoft is not a party from which the plaintiff is looking to seek damages.

[00:02:29] Speaker 02:
This is an issue of whether or not the notice letters that were sent to Fujitsu, Dell, Asus, and the others

[00:02:36] Speaker 02:
allow Iron Oak to recover damages from those parties if their infringement arises at least in part through the utilization of some Microsoft software.

[00:02:47] Speaker 02:
And that was one of the issues that was sought in a clarification of the district court's order.

[00:02:51] Speaker 02:
Because if you look at the 2014 letters, you're absolutely correct, Judge Laurie.

[00:02:56] Speaker 05:
The only way Microsoft is paying money here is through their agreements to indemnify them with these laptop makers.

[00:03:04] Speaker 02:
Yes.

[00:03:04] Speaker 02:
They're not paying you money directly.

[00:03:05] Speaker 02:
There would be no direct payment.

[00:03:08] Speaker 02:
That's correct, Arne.

[00:03:09] Speaker 02:
That's why there's a dispute here, because Microsoft, and this is discussed in footnote four, the court's original opinion, Microsoft apparently has agreements that say, look, if your infringement arises in part, then you can look to us.

[00:03:22] Speaker 05:
So can we get to letters?

[00:03:25] Speaker 05:
I mean, I'm not unsympathetic to your appeal, but this seems to me to be a very fact-based question of what specific notice your letters provide.

[00:03:35] Speaker 05:
And some of it maybe I just don't understand how these automatic updates occur and who does them.

[00:03:41] Speaker 05:
But I'm looking, for example, we started off with the Dell letter at 122.

[00:03:48] Speaker 05:
in your chart and tell me if this is a fair representation, but it seems like you repeat this language over and over.

[00:03:56] Speaker 05:
We talked about dial-selling computers and laptops in that first paragraph and about

[00:04:02] Speaker 05:
Dell uses various servers, doesn't really say what the various servers are.

[00:04:08] Speaker 05:
And then the second paragraph, it says Dell remotely upgrades the operating software.

[00:04:12] Speaker 05:
And then I guess the rest goes on to talk about how that's done.

[00:04:16] Speaker 05:
That I assume is your main contention about why this remote patching is violated.

[00:04:25] Speaker 05:
When it says Dell,

[00:04:28] Speaker 05:
upgrades and that Dell stores these software updates from servers.

[00:04:32] Speaker 05:
Are you talking about Dell servers?

[00:04:34] Speaker 05:
In that example your honor there would be Dell servers that are used Yes, so Dell is using its own servers or servers at rent or whatever servers it controls to upgrade Operating software or whatever on this laptop.

[00:04:49] Speaker 05:
Yes, wrong.

[00:04:50] Speaker 05:
Are you aware how Microsoft software that's installed on Dell computers gets upgraded?

[00:04:55] Speaker 05:
Is it through the Dell servers or does Microsoft independently send its own patches?

[00:05:00] Speaker 02:
I think there's two ways that the Dell computers can be patched and updated.

[00:05:05] Speaker 02:
One is through Dell software communicating with a Dell server, and one is through Microsoft software operating on the Dell computer communicating with the Microsoft server.

[00:05:15] Speaker 05:
Isn't the second a problem for you with this notice letter?

[00:05:18] Speaker 05:
Because it doesn't seem to cover that.

[00:05:20] Speaker 02:
Well, I would say, Your Honor, I'm going to make two points and then direct you to the second patent.

[00:05:27] Speaker 02:
One point is I think the issue that you may be raising is one of divided and joint infringement, because in an example where a Dell operator.

[00:05:34] Speaker 05:
I don't think so.

[00:05:35] Speaker 05:
I think what I'm trying to get is you have very specific allegations of infringement here, that it's Dell operating its servers to do the upgrades.

[00:05:45] Speaker 05:
It seems to me that if you had said more generally that Dell has

[00:05:49] Speaker 05:
operating systems installed that can be remotely patched and you didn't drill down to its Dell servers versus just any remote patching that might be sufficient, which raises an odd circumstance to me that a more specific infringement letter, which is I think what everybody would prefer, somehow is not sufficient when a more general one might have been.

[00:06:13] Speaker 02:
Right, and I think you raise a very good point, and I'm going to contract.

[00:06:18] Speaker 05:
I don't know what to do with that point, because if I read this as only giving notice that it is Dell using its own servers, and that's what it seems to say, then why does it give notice to even Dell that the remote patching done through the Microsoft server, which I think you agree is a completely different server and a different way of doing it, is covered by this?

[00:06:40] Speaker 02:
Well, I'd raise two points, and then I'm going to contrast that.

[00:06:43] Speaker 02:
with the other patent that's issue in this case is a 658 patent.

[00:06:47] Speaker 02:
If you look, for example, on the first patent where we're talking about kind of the benefits or detriments of a general or specific notice, this one talks about Dell upgrading the software, and Dell stores the software on servers and engage in these activities.

[00:07:02] Speaker 02:
So I think that one is specific, and I think that one you can appropriately say,

[00:07:05] Speaker 02:
is directed to a Dell computer operating to a Dell server, because it says Dell servers there.

[00:07:11] Speaker 02:
Now, I'd like to contrast that, if we can, with the 658 patent.

[00:07:17] Speaker 02:
And I'm going to ask the court to look at, for example, the notice letter that was sent to Fujitsu.

[00:07:23] Speaker 02:
And if you look at the appendix at page 138,

[00:07:27] Speaker 02:
You'll see with respect to the 658 patent, the notice letter indicates that Fujitsu's laptops and fringe, and then it specifically identifies as an example the Lifebook E733 notebook.

[00:07:41] Speaker 02:
And you'll note that it also indicates that that notebook operates at bullet point two with General Windows Professional or Windows Pro.

[00:07:49] Speaker 02:
Now, what the district court did

[00:07:52] Speaker 02:
in its supplemental opinion where it was asked to clarify, it actually said that the letter provided notice to the Lifebook E733.

[00:08:02] Speaker 02:
But what it said in its discussion was, well, if the infringement arises through the operation of the 733 using anything other than Microsoft software, you can get damages for it.

[00:08:14] Speaker 02:
But if the identified product infringes because it uses Microsoft software, then you can't get damages because you didn't identify the Microsoft material in particular.

[00:08:26] Speaker 02:
And so I think that goes to your point about how far do you have to drill down.

[00:08:30] Speaker 02:
I think the law of this.

[00:08:32] Speaker 05:
I'm sorry, I'm not following you at all on this.

[00:08:34] Speaker 05:
Can you be a little bit more specific about what the patent claim is here and where in these pages of 139 you're saying that it specifically gives notice about the Microsoft product?

[00:08:48] Speaker 02:
Yes, Your Honor, and I think we need to start with the product.

[00:08:52] Speaker 02:
The product that would infringe the 658 claim one is not Microsoft software.

[00:08:59] Speaker 02:
The 658 claim was directed to an apparatus that has to include a memory and it has to include a processor and so a Microsoft operating system by itself does not do that.

[00:09:08] Speaker 02:
Now the computer

[00:09:09] Speaker 02:
that is sold by Fujitsu would have a memory, would have a processor, and when operated as these claims discuss, would infringe.

[00:09:20] Speaker 02:
And so what the notice letter does is it identified the Lifebook E733 product as an infringing product.

[00:09:28] Speaker 02:
And we think that this court's notice law is very clear.

[00:09:33] Speaker 02:
It says in order to provide a notice of infringement, you basically have to identify

[00:09:38] Speaker 02:
particular allegation of infringement.

[00:09:41] Speaker 02:
And for example, in the Amstead opinion that Judge Laurie wrote, it said, what you need to do is identify a specific claim, a specific patent, and a specific product or device.

[00:09:52] Speaker 02:
And in this example, the patent, the claim, and the Fujitsu E733 is specifically identified.

[00:09:59] Speaker 02:
But if we go and look at the court's opinion, and I'm going to ask to focus on the court's substance.

[00:10:06] Speaker 05:
Can I just stop you to relate?

[00:10:07] Speaker 05:
I have a hard time following this.

[00:10:09] Speaker 05:
I'm looking at this and I'm still having a hard time and this is not the same question about connecting up what kind of Microsoft product would infringe this because it's an apparatus which is the laptop for selecting communication path and then it's a memory operable to store plurality of ordered list.

[00:10:32] Speaker 05:
It doesn't sound to me like a Microsoft operating system does anything with regard to the

[00:10:37] Speaker 05:
the hardware of the laptop and the memory?

[00:10:41] Speaker 02:
Well, Your Honor, the Microsoft operating system will include some functionality that's described in one example as a connection manager, and it can allow you to determine

[00:10:51] Speaker 02:
which methods of communication you're going to prioritize, whether you're going to use Wi-Fi first, whether you're going to use cellular first, whether you're going to do it through a direct ethernet.

[00:11:00] Speaker 02:
And so when the Microsoft's operating system is placed on the computer, you can use the functionality of the operating system, part of that functionality, to create ordered lists of communication paths.

[00:11:14] Speaker 01:
Can I ask whether this makes sense technically?

[00:11:16] Speaker 01:
141 of the appendix, that's the process

[00:11:22] Speaker 01:
a claim to an apparatus, which is the computer itself.

[00:11:25] Speaker 01:
It's got a memory.

[00:11:26] Speaker 01:
Well, that's all the computer.

[00:11:27] Speaker 01:
That's not Microsoft.

[00:11:28] Speaker 01:
Microsoft might be stored on the memory of the operating system, but that's not Microsoft.

[00:11:31] Speaker 01:
But then you've got a processor.

[00:11:33] Speaker 01:
And this processor is processor, which is usually a physical thing inside the computer.

[00:11:39] Speaker 01:
But this limitation says the processor is configured to do certain things.

[00:11:44] Speaker 01:
That necessarily requires software.

[00:11:47] Speaker 01:
The processor itself doesn't come configured to do certain things.

[00:11:51] Speaker 01:
It's software.

[00:11:52] Speaker 01:
that may be preloaded on the computer or may be loaded after the fact, but it's the software that is added to the apparatus that achieves the functions in that limitation.

[00:12:03] Speaker 01:
So whether it's software provided by Fujitsu or software put on the operating system by Microsoft and then the product is sold, your allegation is when this particular Fujitsu laptop is sold, it's got a memory and it's got a processor that performs these functions.

[00:12:19] Speaker 01:
For your purposes, it's almost irrelevant whether Fujitsu loaded the software on that performance, or Microsoft does, because all you had to do, pursuant to all of our case law, is identify a product, a claim, and a patent.

[00:12:32] Speaker 01:
And you've done that.

[00:12:33] Speaker 02:
That's exactly right, Your Honor, and that's the deficiency we see with the district court's opinion.

[00:12:37] Speaker 02:
it goes to the underlying issue of the rationale or the basis of the infringement and in fact the reason I picked this example

[00:12:52] Speaker 01:
Your argument is here today is a little hard to follow, though I think I understand it.

[00:12:59] Speaker 01:
One of the problems I think you have is the district court sort of concluded and just alluded to this, that you almost gave too much information in your notice.

[00:13:10] Speaker 01:
But part of the problem is by virtue of giving too much information,

[00:13:14] Speaker 01:
It almost, kind of like your argument today a little bit, becomes confusing to the person receiving the notice.

[00:13:20] Speaker 01:
So you didn't have to provide these claim charts at all, did you, to satisfy notice?

[00:13:25] Speaker 00:
Did not.

[00:13:25] Speaker 01:
But if you did provide these claim charts and if they were completely and utterly misleading, couldn't that undermine whether you provided notice?

[00:13:33] Speaker 01:
I'm not saying they are.

[00:13:34] Speaker 02:
I would say yes, but the facts matter.

[00:13:39] Speaker 02:
And in this example, you're right.

[00:13:40] Speaker 02:
The law says, the press in this court says you identify a claim, a patent, and a product.

[00:13:47] Speaker 01:
You didn't have to include these claim charts.

[00:13:49] Speaker 02:
We did not.

[00:13:50] Speaker 01:
And we would have met notice.

[00:13:51] Speaker 02:
And we would have met notice.

[00:13:52] Speaker 02:
And so now I think the issue is, was the specific detail so limited and focused that somehow you took a generic identification of a product

[00:14:02] Speaker 02:
in effect, turned it into an identification of a particularly isolated example.

[00:14:07] Speaker 02:
And I would use, for example, I think the Garth opinion

[00:14:11] Speaker 02:
talks about two letters that said your trackball products in French.

[00:14:17] Speaker 02:
And those were found to provide sufficient notice for the trackball products.

[00:14:21] Speaker 02:
That opinion also said they did not necessarily provide notice for some mouse man products, which I believe, if you look at the products, actually didn't include a trackball.

[00:14:31] Speaker 02:
So by identifying a particular category of products, there was to some extent an exclusion of a different type of product.

[00:14:38] Speaker 01:
Can I just ask, when Judge Hughes was asking you about the 275 patent, you pushed us to the 658.

[00:14:45] Speaker 01:
The 658 is a much stronger case for you.

[00:14:48] Speaker 01:
What about the 275?

[00:14:50] Speaker 01:
Is there a difference in the form of those particular claims such that they're not particularly apparatus claims, but rather system claims?

[00:14:59] Speaker 01:
Does that impact whether or not you satisfied the notice requirement?

[00:15:05] Speaker 02:
I don't know that it makes a difference on the system.

[00:15:08] Speaker 02:
I think it's the precise wording of the notice letter.

[00:15:12] Speaker 02:
So if the notice letter, for example, specifically talks about Lenovo storing on servers, then the notice letter would be limited to servers in which Lenovo stored the update.

[00:15:25] Speaker 02:
But if the notice letter, and that's why I picked the 658 patent,

[00:15:29] Speaker 02:
more generally describes the product and doesn't say specifically only through operation of Microsoft software or only through operation of Fujitsu software, then the broad identification of the product should control and you should be able to recover damages for all variants of that product.

[00:15:47] Speaker 02:
that, in fact, infringe, regardless of what the underlying basis is.

[00:15:51] Speaker 02:
Because if you're required to provide enough detail to articulate all of the underlying basis for your infringement, what vendors might supply components that are used, what third-party functionalities are involved, it's obviously going to be very difficult for that to be met in practice.

[00:16:07] Speaker 04:
Council, as you might see, your red light is on.

[00:16:11] Speaker 04:
You still have two billion time.

[00:16:13] Speaker 04:
We'll give you four minutes from about

[00:16:22] Speaker 03:
Fugere.

[00:16:25] Speaker 03:
May it please the court, Josh Fugere, on behalf of Microsoft.

[00:16:29] Speaker 03:
I think Judge Hughes, Judge Lurie, and Judge Moore, you all have it exactly right that what matters here is the notice that was given and the notice that was given as the district court found.

[00:16:39] Speaker 03:
And as Iron Oak has not challenged on appeal, it was specific to proprietary software for the defendants who got the notice.

[00:16:47] Speaker 03:
There was nothing connecting that notice as to that proprietary software to Microsoft until 2017 when a lawsuit was filed.

[00:16:57] Speaker 03:
Nothing in the record whatsoever to say that that proprietary software works in the same way as Microsoft software, that they're interchangeable.

[00:17:04] Speaker 01:
I don't understand.

[00:17:05] Speaker 01:
Are you arguing that Microsoft can't?

[00:17:08] Speaker 01:
I mean, part of the district court judgment was you can't sue Microsoft.

[00:17:12] Speaker 03:
Correct.

[00:17:12] Speaker 01:
And I understood him to suggest that we weren't trying to.

[00:17:16] Speaker 01:
That wasn't what this appeal was about.

[00:17:17] Speaker 01:
So are you focused on that issue?

[00:17:19] Speaker 01:
Because I think he's conceded it.

[00:17:21] Speaker 01:
Or are you somehow saying their failure to give Microsoft notice

[00:17:25] Speaker 03:
No, it's not a failure to give Microsoft notice it's it's what the notice provided to the OEMs and I think the context is in if you Step back and think about the declaratory judgment action that Microsoft follows or that Microsoft filed and that's the only

[00:17:43] Speaker 03:
That's the only final judgment that's on appeal here.

[00:17:46] Speaker 03:
That declaratory judgment specifically said, we seek judgment of non-infringement as to both Microsoft and as to Microsoft products and services.

[00:17:55] Speaker 03:
And that is what mooted the underlying DJ action and gave rise to the final judgment, is the district court's decision that not only can you not recover damages from Microsoft, which, as you say, they explicitly concede,

[00:18:08] Speaker 03:
but that you cannot recover damages from the individual OEMs for alleged infringement by a Microsoft product or service.

[00:18:17] Speaker 03:
That's the specific, that's what mooted the DJ action, and that's the order that's up on appeal now.

[00:18:24] Speaker 01:
I'm confused.

[00:18:24] Speaker 01:
I thought the order on appeal now was whether or not notice was sufficient for the OEMs for this case to proceed.

[00:18:32] Speaker 03:
Sufficient for the OEMs as to Microsoft specifically on page 15.

[00:18:37] Speaker 03:
I think it is and footnote four of their brief They say there are other software products at issue in each of the underlying cases that are not Microsoft products That's not what this case is about.

[00:18:47] Speaker 03:
That's not what this appeal is about whether they can pursue an infringement claim for damages against Dell for Dell's connection manager or Fujitsu I don't understand.

[00:18:56] Speaker 01:
Why do they have to know what connection they have to identify a product?

[00:19:01] Speaker 01:
They don't have to know, for example, who the supplier is of every processor in their product.

[00:19:05] Speaker 01:
I bet that the computer that Fujitsu sells involves a lot of components that were supplied by a lot of subs.

[00:19:13] Speaker 01:
Why does a patentee have to know and identify by name the subs

[00:19:21] Speaker 01:
whose products are contained within the box that is being accused of infringement.

[00:19:26] Speaker 03:
They don't necessarily have to identify them by name.

[00:19:28] Speaker 03:
But what this court has said in Amstead and continually thereafter is that you need to give a specific charge of infringement by an accused device or product.

[00:19:37] Speaker 03:
And I don't think, as Iron Oak wants to, you can decouple those two things.

[00:19:41] Speaker 01:
Well, let's start with the Fujitsu letter and page 138 to 139, which is the 658 patent.

[00:19:49] Speaker 01:
How is this deficient?

[00:19:52] Speaker 03:
There is no specific charge of infringement anywhere in here as to any Microsoft product or service.

[00:19:59] Speaker 01:
No, it's a charge against the Fujitsu laptop.

[00:20:02] Speaker 01:
And in fact, they couldn't possibly sue a Microsoft service or product because this is an apparatus claim.

[00:20:08] Speaker 01:
They're not accusing a Microsoft apparatus.

[00:20:11] Speaker 01:
They're accusing a Fujitsu apparatus, which has a memory and a processor, a processor capable of performing certain functions.

[00:20:18] Speaker 01:
which apparently are being performed by Microsoft software that's loaded onto the Fujitsu apparatus.

[00:20:24] Speaker 01:
I don't understand.

[00:20:25] Speaker 05:
And they're not trying to get money from Microsoft.

[00:20:27] Speaker 05:
They're trying to get money from Fujitsu.

[00:20:29] Speaker 05:
So why do they have to give notice about Microsoft products, rather than just saying, Fujitsu, you manufacture a laptop that infringes this patent?

[00:20:39] Speaker 03:
Because you need a specific charge of infringement.

[00:20:42] Speaker 03:
And it matters what that charge of infringement as to a particular product says.

[00:20:46] Speaker 03:
How specific?

[00:20:47] Speaker 05:
Can't you just, isn't our precedent just, your company manufactures these products.

[00:20:53] Speaker 05:
Here are our patent claims.

[00:20:55] Speaker 05:
We've looked at this and we think your products operate to infringe these claims.

[00:21:01] Speaker 03:
No, that's not what it is.

[00:21:04] Speaker 03:
And that's explicitly what Gart said.

[00:21:06] Speaker 03:
That's what Gart was all about.

[00:21:07] Speaker 05:
Gart was about unidentified separate products.

[00:21:14] Speaker 05:
They have identified a specific laptop here and says that specific laptop infringes.

[00:21:21] Speaker 05:
Gart doesn't speak to this case.

[00:21:24] Speaker 03:
I respectfully disagree.

[00:21:27] Speaker 05:
So you're saying that subcomponents are somehow different than the entirety of the component?

[00:21:33] Speaker 03:
No, I'm saying that what this court has said and what the statute says explicitly is that the charge has to be of the infringement.

[00:21:41] Speaker 05:
And so when you come in and say...

[00:21:44] Speaker 05:
I mean, we can look at the 658 claim.

[00:21:46] Speaker 05:
It's an apparatus claim.

[00:21:48] Speaker 05:
And they're saying your laptop is the apparatus that infringes.

[00:21:53] Speaker 05:
And it does all of this.

[00:21:56] Speaker 05:
isn't that specific notice of infringement?

[00:21:58] Speaker 03:
It does all of this by way of your proprietary software.

[00:22:02] Speaker 03:
That's what the notice letter says.

[00:22:04] Speaker 05:
And what the district court... Where on the notice letter does that say this, opposed to the claim charge?

[00:22:08] Speaker 05:
Because this is getting into the problem I have here, which I think would create a... I mean, just be a bad policy that... of saying if you're too specific,

[00:22:19] Speaker 05:
then you haven't given notice when general notice was provided.

[00:22:23] Speaker 03:
I don't know that that's true, because at the end of the day, what this statute is getting at is what the accused infringer gets noticed on.

[00:22:31] Speaker 05:
Let me ask you this hypothetical.

[00:22:32] Speaker 05:
We've been talking about this stuff.

[00:22:35] Speaker 05:
If you take away the claim charts and just have the letters, do the letters mention proprietary software anywhere?

[00:22:45] Speaker 03:
So I don't think the letters would be noticed to anything without the contracts.

[00:22:48] Speaker 03:
I don't think that there's a specific charge of infringement anywhere in those letters that would qualify under Amstead.

[00:22:55] Speaker 05:
And that's because they don't identify specific products by name, like this laptop, this laptop, this laptop.

[00:23:02] Speaker 03:
No, not necessarily.

[00:23:03] Speaker 03:
It's because they don't explicitly identify any specific charge of infringement with respect to software, which is what these patents are all about.

[00:23:10] Speaker 03:
These patents are all about software.

[00:23:11] Speaker 03:
They're not about, I mean sure, they run on a generic computer, and I think Iron Ope appreciated that when they sent these letters.

[00:23:18] Speaker 05:
Can I take you to another point before I forget about it and we run out of time?

[00:23:23] Speaker 05:
Sure.

[00:23:23] Speaker 05:
This case still has, all the cases against the laptop makers are still pending.

[00:23:27] Speaker 03:
Correct.

[00:23:28] Speaker 03:
As to their proprietary software.

[00:23:30] Speaker 05:
Okay, but they're not here.

[00:23:32] Speaker 03:
Correct.

[00:23:32] Speaker 05:
At all.

[00:23:33] Speaker 05:
Right.

[00:23:33] Speaker 05:
So whether or not

[00:23:35] Speaker 05:
I'm a little confused, frankly, procedurally about this case and why it's a final judgment on a lot of these issues.

[00:23:44] Speaker 05:
So Microsoft had a declaratory judgment action, which is why you're in this case.

[00:23:48] Speaker 05:
And what was the declaratory judgment action?

[00:23:50] Speaker 03:
The declaratory judgment action, which is I think at 229 to 233 in the appendix,

[00:23:56] Speaker 03:
was both as to infringement or damages collected directly from Microsoft, but also as to any Microsoft.

[00:24:04] Speaker 05:
Did they sue Microsoft for damages?

[00:24:06] Speaker 03:
No.

[00:24:07] Speaker 05:
So the way- Why did you file a declaratory judgment when there was no suit against you on damages?

[00:24:13] Speaker 03:
Because what happened was in late 2017, I think it was one of the last two of these suits against the computer manufacturers, it was the one against Dell, they explicitly called out for the first time in that complaint the Microsoft Automatic Update and Connection Manager.

[00:24:30] Speaker 03:
And that was what put Microsoft on notice that its products were being accused.

[00:24:36] Speaker 03:
And so then Microsoft saw that Iron Oak had filed a bunch of these other suits and filed the DJ action that said explicitly, these lawsuits have placed the cloud over our products.

[00:24:50] Speaker 03:
Our customers are being accused in all of these different lawsuits.

[00:24:53] Speaker 03:
And so we're seeking a declaration of non-infringement as to our products and services.

[00:24:59] Speaker 05:
And that declaration never been sued.

[00:25:02] Speaker 03:
That's correct.

[00:25:03] Speaker 03:
That's correct.

[00:25:05] Speaker 05:
So procedurally, all that's up here is that declaratory judgment action.

[00:25:10] Speaker 05:
Yes.

[00:25:11] Speaker 05:
Honestly, now that we're sitting here talking about it, I don't understand how there's a final judgment as to whether proper notice was given to all of the actual laptop makers, because those cases are still pending.

[00:25:25] Speaker 01:
They are, and in the- Wait, let me make sure I understand it.

[00:25:28] Speaker 01:
Sure.

[00:25:28] Speaker 01:
Those cases are pending, but hasn't the district court ruled that those cases cannot continue on

[00:25:36] Speaker 01:
the allegation or incorporating into them any allegation that any portion of the claim limitations are being satisfied by virtue of the Microsoft software?

[00:25:46] Speaker 03:
By virtue of, that's correct.

[00:25:48] Speaker 01:
Right, so the cases aren't continuing against the OEMs.

[00:25:52] Speaker 01:
The OEMs now have been exempted to the extent that any of the elements of the claims are being performed by the Microsoft software.

[00:26:02] Speaker 03:
That's correct, but the cases are all continuing as to the OEMs.

[00:26:07] Speaker 01:
But only as to their proprietary software, if it is their proprietary software that performs any of the functions.

[00:26:14] Speaker 05:
That's correct.

[00:26:14] Speaker 05:
So isn't the ruling that Microsoft can't be the basis for liability in those cases an interlocutory ruling?

[00:26:22] Speaker 05:
Well, the only judgment in those cases, because the only judgment we have is against Microsoft.

[00:26:27] Speaker 05:
We don't have a final judgment that incorporates.

[00:26:30] Speaker 05:
Again, they're clearly barred by that, but that's the whole point of not being able to assure interoperatory rulings until they get a final judgment on all of their claims that they could get a final judgment against

[00:26:43] Speaker 05:
You know, whoever all these laptop makers for the proprietary software and then appeal and say, but the district court was wrong to preclude us from getting damages for the Microsoft projects.

[00:26:54] Speaker 03:
But that the final judgment that's on appeal here is only the final judgment from the Microsoft DJ action.

[00:26:59] Speaker 03:
That's at appendix 14.

[00:27:00] Speaker 05:
I don't really frankly understand why you even have an appropriate DJ action when you weren't sued or threatened with sued and all you're doing is... You didn't move to intervene, did you?

[00:27:11] Speaker 03:
We did as to Dell and HP, which was the first ones where this percolated up to actually specifically accusing Microsoft product.

[00:27:20] Speaker 03:
And we were granted a right to intervention in those cases.

[00:27:23] Speaker 03:
And then when everything was consolidated into the MDL is when Microsoft said,

[00:27:28] Speaker 05:
What was the basis for your intervention?

[00:27:31] Speaker 03:
That our proprietary software was being accused of infringement and there were counterclaims.

[00:27:35] Speaker 03:
And there were counterclaims in the DJ action too, saying we accused your automatic update and connection manager of infringement.

[00:27:45] Speaker 04:
Was there a motion to dismiss the DJ action, lack of case of controversy?

[00:27:51] Speaker 03:
No.

[00:27:51] Speaker 03:
The parties have been aligned on the efficiency of doing it this way from the beginning.

[00:27:56] Speaker 05:
The parties are always aligned on efficiency of getting what they consider the most important issues on appeal to us quickly and often ignore the final judgment rule.

[00:28:07] Speaker 03:
Sure, but respectfully, I think that that rule is satisfied here with respect to this final judgment in the DJI action.

[00:28:13] Speaker 05:
Because the DJI action was appropriate and because that's a final judgment.

[00:28:16] Speaker 03:
Correct.

[00:28:16] Speaker 03:
Right.

[00:28:17] Speaker 03:
It's a final judgment as to the DJI action, which sought peace as to Microsoft products and services across the board.

[00:28:24] Speaker 03:
And that's what that Appendix 14 in that one is.

[00:28:27] Speaker 01:
So to be clear, what Appendix 14 says is they can't

[00:28:34] Speaker 01:
they can't get judgment from the defendants plural.

[00:28:39] Speaker 01:
And then in the footnote, they cite as joint defendants all of the companies, Fujitsu and Delivery.

[00:28:47] Speaker 01:
So this judgment, while it may have arisen in the context of this Microsoft DJ action, this particular judgment that was issued at Appendix 14 extends to all of the defendants, does it not?

[00:29:03] Speaker 01:
It is to the extent they're using Microsoft software.

[00:29:08] Speaker 03:
Right.

[00:29:08] Speaker 03:
But only by way of the declaratory judgment that Microsoft saw, which was both that, and this is at appendix 233, that neither Microsoft nor its product services or technology have infringed directly or indirectly.

[00:29:23] Speaker 01:
So the decision by the district board.

[00:29:25] Speaker 01:
Let me be clear about one thing.

[00:29:28] Speaker 01:
Sure.

[00:29:28] Speaker 01:
Affirm that the DJ against Microsoft was properly dismissed for failure to have provided Microsoft with timely notice of infringement.

[00:29:41] Speaker 01:
But if if the entire briefing in this case is focused on the OEM right.

[00:29:49] Speaker 01:
How do we not speak to that and won't that leave the district court at sea potentially on the wrong course if, for example, I think there was sufficient notice for that?

[00:29:59] Speaker 03:
Because the declaratory judgment that was, what the DJ says is that because Iron Note cannot recover damages from both Microsoft or from the OEMs for infringement by Microsoft's products and services, and it was both of those that were a part of- But those are two different issues, right?

[00:30:18] Speaker 05:
Here's my problem.

[00:30:19] Speaker 05:
I'm with you.

[00:30:20] Speaker 05:
There was no notice to Microsoft.

[00:30:23] Speaker 05:
So they can't recover damages from Microsoft.

[00:30:27] Speaker 05:
They don't appear to be seeking them now.

[00:30:29] Speaker 05:
If they were at some point, that's fine.

[00:30:31] Speaker 05:
We can affirm and say no notice to Microsoft because they didn't try to get any to you.

[00:30:36] Speaker 05:
But the judgment as to all those laptops,

[00:30:39] Speaker 05:
makers seems like it's not a final judgment because you agree that those cases are still ongoing as to other issues.

[00:30:47] Speaker 05:
Did anybody ask for a rule 54B judgment on this?

[00:30:50] Speaker 03:
Not that I'm aware of, no.

[00:30:51] Speaker 05:
I mean, this case is procedurally a mess.

[00:30:54] Speaker 03:
It is unorthodox, for sure.

[00:30:56] Speaker 05:
Well, neither of you were very helpful in explaining why this is a final judgment appropriate for appeal as to the laptop makers.

[00:31:04] Speaker 03:
I think the reason it's a final judgment as to everybody is that the declaratory judgment that Microsoft saw and that was mooted by the order as to both the laptop makers.

[00:31:14] Speaker 05:
But the only final judgment here is that

[00:31:17] Speaker 05:
No, it's against Microsoft.

[00:31:19] Speaker 05:
And so we've right firm.

[00:31:21] Speaker 05:
We're only affirming as to Microsoft, right?

[00:31:24] Speaker 03:
But so here's another way to think if you that the piece as to Microsoft, there is still a part of the declaratory judgment that seeks judgment of non infringement as to Microsoft products and services.

[00:31:35] Speaker 03:
And it's that piece that had to be combined with the other piece that mooted the whole thing.

[00:31:40] Speaker 03:
If you affirm as to the ability to collect damages from Microsoft directly, that doesn't moot the entirety of the DJ action.

[00:31:46] Speaker 03:
And I think that's what the parties and the district court were doing at appendix 14 in issuing the final judgment.

[00:31:55] Speaker 03:
I see my time is up.

[00:31:56] Speaker 03:
I'm happy to keep going.

[00:31:59] Speaker 04:
Giving your opponent a little extra time, do you want a final sentence or two to sum up?

[00:32:06] Speaker 03:
Sure.

[00:32:06] Speaker 03:
I would just reiterate that at the end of the day, 287 notice is a doctrine that focuses on the patentees and what the patentees does.

[00:32:16] Speaker 03:
The patentee here provided notice as to a particular piece of proprietary software and nothing else.

[00:32:21] Speaker 03:
That's what the district court found.

[00:32:22] Speaker 03:
They haven't disputed that on appeal.

[00:32:24] Speaker 03:
And there's no record evidence whatsoever as to how anybody would have known that Microsoft products or services were at issue in 2014.

[00:32:31] Speaker 03:
And so we would respectfully urge the court to affirm.

[00:32:34] Speaker 04:
Thank you, counsel.

[00:32:37] Speaker 02:
Yes, thank you, Your Honor.

[00:32:40] Speaker 02:
I want to address two points.

[00:32:42] Speaker 02:
First, on the notice issue, this is all about notice to the OEMs and whether or not they can be liable for damages for products that use Microsoft operating systems that result in some of the functionality in the claims.

[00:32:58] Speaker 02:
That is the issue on appeal.

[00:33:01] Speaker 02:
And I think, Judge Moore, you're right that the judge's decision below addresses that issue and says conclusively

[00:33:08] Speaker 02:
that you cannot collect damages from any of the defendants if they're infringement of right.

[00:33:13] Speaker 01:
Judge Hughes's point is a good one, and I don't know what to do with it, which is, but there remains other issues still pending between the OEMs and the patentee in this case that are unresolved.

[00:33:26] Speaker 01:
So normally, when a judge resolves half of a case or half of the product claims, but not the others, we don't have jurisdiction.

[00:33:34] Speaker 01:
So what do we do about that?

[00:33:35] Speaker 02:
Well, I think there is jurisdiction and the reason.

[00:33:38] Speaker 05:
Let me ask you this.

[00:33:40] Speaker 05:
If Microsoft wasn't in this case.

[00:33:43] Speaker 05:
but the laptop makers had moved for partial summary judgment saying, okay, maybe as to our proprietary software, we got noticed, but not as to Microsoft.

[00:33:56] Speaker 05:
And the judge had granted partial summary judgment and said, yes, you can't proceed for damages against Microsoft, but you can on the others.

[00:34:03] Speaker 05:
That order is not immediately appealable, right?

[00:34:06] Speaker 02:
I would agree with that in the absence of certification, yes.

[00:34:08] Speaker 05:
Right, and none of that was done here?

[00:34:10] Speaker 02:
No.

[00:34:11] Speaker 05:
And there was no 54B?

[00:34:12] Speaker 05:
No, Your Honor.

[00:34:13] Speaker 05:
Okay, so tell me how a declaratory judgment action by Microsoft somehow makes the decision against the other parties where you can see cases are still ongoing, final as to an issue.

[00:34:26] Speaker 02:
Certainly, Your Honor.

[00:34:27] Speaker 02:
I think this goes to the declaratory nature of the action filed by Microsoft.

[00:34:32] Speaker 02:
Microsoft filed a declaratory judgment

[00:34:34] Speaker 02:
which, of course, has to have some underlying real dispute where the party's rights can be impacted by a decision.

[00:34:41] Speaker 02:
And if you look at the declaratory judgment action that Microsoft filed, a large part of it, in fact, the only important part of it, was this issue of whether customers who use Microsoft software infringe the patent and are liable to damages.

[00:34:57] Speaker 02:
Because it was that damage liability.

[00:34:59] Speaker 05:
I understand all that, but the judgment that's, the only judgment that's final is as to Microsoft.

[00:35:05] Speaker 02:
Well, that's the only final judgment.

[00:35:08] Speaker 02:
But the final judgment as to Microsoft is based on a particular issue.

[00:35:14] Speaker 02:
And that issue is whether or not the customer, because if the court's decision to...

[00:35:20] Speaker 05:
as to Microsoft.

[00:35:22] Speaker 05:
Sure, that ruling is going to be conclusively held against you in the cases ongoing against the laptop.

[00:35:29] Speaker 05:
And it would be supremely inefficient to have to make you go through all that and then come up here and say the notice was wrong or not.

[00:35:36] Speaker 05:
But that's the point of the final judgment rule.

[00:35:38] Speaker 05:
And I'm still confused as to how the declaratory judgment action by Microsoft

[00:35:45] Speaker 05:
somehow turns the cases that are still ongoing against the laptop makers into cases that received a final judgment appropriate for appeal.

[00:35:56] Speaker 05:
It seems like it was a partial summary judgment that's an interlocutory ruling that has to wait until the final judgment in each of those cases, no matter how efficient.

[00:36:06] Speaker 02:
I would say, Your Honor, if that was the decision, then that would mean that in the underlying OEM cases,

[00:36:12] Speaker 02:
there's still the possibility of liability accruing to Microsoft by virtue of their indemnity agreements.

[00:36:19] Speaker 01:
That doesn't matter though.

[00:36:20] Speaker 01:
I mean, whether Microsoft may end up liable by virtue of their indemnity agreements.

[00:36:25] Speaker 01:
That's not the question.

[00:36:26] Speaker 02:
Well, I think it's that...

[00:36:29] Speaker 05:
contract dispute between the laptop makers and Microsoft.

[00:36:32] Speaker 05:
You're not suing Microsoft for damages.

[00:36:36] Speaker 01:
And so that... Well, you did because you counterclaimed.

[00:36:39] Speaker 02:
We did not sue them for damages.

[00:36:40] Speaker 01:
I thought you counterclaimed.

[00:36:41] Speaker 02:
But we did not sue them for damages.

[00:36:43] Speaker 02:
We've never sought damages.

[00:36:45] Speaker 02:
That was never an issue.

[00:36:47] Speaker 02:
And the counterclaim was not directed to their operating systems in general.

[00:36:50] Speaker 01:
Is there any basis?

[00:36:51] Speaker 01:
I mean, because I think that it would be ridiculously inefficient to send this back without resolving this OEM notice question.

[00:36:57] Speaker 01:
Is there any

[00:36:58] Speaker 01:
thing given that this was an MDL that could suggest somehow something different about it.

[00:37:04] Speaker 01:
I don't know, because I, I am listening carefully to what Judge Hughes

[00:37:10] Speaker 01:
is questioning you about, and it really does sound difficult.

[00:37:13] Speaker 01:
Or what about sending you back down to get it certified and holding the case while that happens?

[00:37:18] Speaker 02:
I'd advance maybe two things.

[00:37:21] Speaker 02:
One is a question of whether you can effectively certify in this circumstance to address the issue.

[00:37:27] Speaker 02:
And the other issue I would raise is focusing on the declaratory judgment and why I believe this is a final judgment in that case that has to be resolved.

[00:37:36] Speaker 02:
That declaratory judgment

[00:37:38] Speaker 02:
sought to eliminate Microsoft's liability under the IROM patents, either directly or derivatively.

[00:37:46] Speaker 02:
And I think that their potential derivative liability.

[00:37:49] Speaker 05:
Let me be clear.

[00:37:51] Speaker 05:
And make sure I understand you.

[00:37:52] Speaker 05:
You did not sue Microsoft under any kind of contributory or amusement, essentially.

[00:37:57] Speaker 05:
No.

[00:37:58] Speaker 05:
So the case and controversy between you with regard to Microsoft is only because of their declaratory judgment action and whatever counter crime you're filed.

[00:38:09] Speaker 02:
With respect to this issue, yes.

[00:38:10] Speaker 02:
But I think that's sufficient to maintain the declaratory judgment jurisdiction.

[00:38:16] Speaker 02:
When you look at the requirements for declaratory judgment

[00:38:20] Speaker 05:
And so if we affirm and say Microsoft obviously did not get sufficient notice, they can't be liable for damages to you, that conclusively solves that issue.

[00:38:36] Speaker 05:
It doesn't conclusively solve the issue of whether the underlying laptop makers got notice or not in the declaratory judgment action.

[00:38:46] Speaker 05:
entirely on board that it would be incredibly inefficient not to resolve this, but we have the final judgment rules for reasons and I don't really see a path forward here in reaching the cases with the laptop makers via the declaratory judgment action because I think it's pretty clear that if we didn't have the declaratory judgment action and we only had the partial ruling about Microsoft, we wouldn't be here.

[00:39:10] Speaker 02:
I agree, but the reason I believe it's appropriate for the court to address that issue is if this court was to vacate, for example, this decision, then the basis for the dismissal of the declaratory judgment action is gone.

[00:39:26] Speaker 02:
Because at that time, there's still a controversy between the parties as to Microsoft's liability resulting from infringement of these patents.

[00:39:36] Speaker 02:
Because at that point, there would still be Microsoft claiming it has rights that are potentially affected by the resolution of this particular issue.

[00:39:47] Speaker 02:
The decision that the court made, the reason it was a final judgment.

[00:39:51] Speaker 05:
Is the possible indemnification agreement, is that a basis for declaratory judgment?

[00:40:01] Speaker 05:
Action, jurisdiction?

[00:40:03] Speaker 02:
I believe that it is.

[00:40:04] Speaker 05:
We're not threatening to sue them.

[00:40:06] Speaker 02:
No.

[00:40:06] Speaker 02:
I don't know the answer to this.

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

[00:40:08] Speaker 02:
And I would say, I think Microsoft thought it was when it brought the action.

[00:40:12] Speaker 02:
We thought it was appropriate because there was enough of a concrete issue to be appropriately resolved.

[00:40:17] Speaker 02:
And the court accepted the jurisdiction.

[00:40:19] Speaker 02:
So I think to your question, is this indemnification liability sufficient to give rise to a declaratory judgment, case, or controversy?

[00:40:28] Speaker 02:
I think the answer is yes.

[00:40:29] Speaker 04:
And that's why this is an appropriate final judgment.

[00:40:35] Speaker 04:
Thank you.