[00:00:00] Speaker 03: The case for argument is 20-1102, Colecraft Enterprises v. Artsana. [00:00:07] Speaker 03: Mr. Pezuniak, whenever you're ready. [00:00:10] Speaker 01: Thank you, Your Honor. [00:00:11] Speaker 01: If it may please the Court, the first issue is claim construction, as the District Court used language in its claim construction, which neither party had proposed. [00:00:24] Speaker 01: And that language expanded the meaning of the technical term, pivoting or pivotably far beyond the plain and ordinary meaning of the term, far beyond anything. [00:00:36] Speaker 03: Are you talking about, this is Sharon Post, are you talking about the word move? [00:00:41] Speaker 01: Yes, I am. [00:00:43] Speaker 01: Yes, I am. [00:00:44] Speaker 01: And to go directly, in claim 28, we have the language, pivoting the leg into a stored position. [00:00:57] Speaker 01: The court viewed the term pivoting as meaning, quote, rotate, turn, or move about a fixed point. [00:01:07] Speaker 01: As detailed in our opening brief, neither party had suggested the word move in interpreting the term pivoting. [00:01:19] Speaker 04: Mr. Pezuniac, this is Judge Stoll. [00:01:22] Speaker 04: I have just a housekeeping question. [00:01:25] Speaker 04: You know, when I looked at the expert testimony underlying the judgment of infringement, [00:01:33] Speaker 04: I saw that the expert testimony used the word rotate in describing what the legs were doing. [00:01:39] Speaker 04: It didn't say move. [00:01:41] Speaker 04: So what is your basis for complaining about the district court's use of the word move when that's not even the basis for infringement here? [00:01:51] Speaker 01: I do not believe that nearly because the expert used the word rotate that [00:02:01] Speaker 01: it changed the facts that the jury was instructed that they could find infringement if the leg moved about a fixed point. [00:02:14] Speaker 01: The jury would follow the court's instruction, and even the jury had perfect right to disregard the expert's use of the word rotate, but it could not ignore the court's instruction. [00:02:31] Speaker 01: So it could look at the device that was shown to them and decide, OK, the legs are moving. [00:02:39] Speaker 01: So that comports with the court's claim construction and or jury instruction. [00:02:45] Speaker 01: And so they found infringement. [00:02:48] Speaker 04: What kind of movement about a pivoting point wouldn't be turning or rotating? [00:02:54] Speaker 01: Well, the term move is a very generic term that means any change in location. [00:03:01] Speaker 04: But wasn't it movement about, move about? [00:03:04] Speaker 04: It wasn't just move. [00:03:06] Speaker 04: It was relative to movement about the pivot point. [00:03:13] Speaker 01: No. [00:03:13] Speaker 01: The language is move about a fixed point into a stored position. [00:03:19] Speaker 01: And the term, if you said rotate or turn about a fixed point, you would actually need something that, as the language says, [00:03:31] Speaker 01: There's something like a pin or something about which something rotates or turns. [00:03:37] Speaker 01: When you say move and you look at the images in our opening brief, you can have movement about a fixed point simply because you have legs that are tethered to the hub. [00:03:55] Speaker 01: And they change location. [00:03:57] Speaker 01: And soon as the legs change location, they move about a fixed point, even though they're not rotating or turning about the fixed point. [00:04:09] Speaker 02: Council, does the acute product use pins or shaft? [00:04:17] Speaker 01: Your Honor, there are two totally separate products. [00:04:22] Speaker 01: You have the first original product [00:04:26] Speaker 01: and the first redesign. [00:04:30] Speaker 01: In those cases, yes, there was, we admit there was pivoting at the hub, not at the legs, but at the hub. [00:04:41] Speaker 01: The second redesign, and the second redesign is, we have the images of that in the opening brief. [00:04:50] Speaker 01: One can refer the court to page 42, for example. [00:04:55] Speaker 01: In the second redesign, all you have is a leg that is pulled in and out of the hub. [00:05:03] Speaker 01: And once it's pulled out of the hub, it's attached by a feather, a flexible feather, a fabric. [00:05:13] Speaker 02: There is absolutely no- Doesn't the patent expressly say at column four, line 11 through 15, [00:05:19] Speaker 02: that the legs may be coupled to the hub in any number of ways. [00:05:24] Speaker 02: So right after it discusses the possibility of pins or shafts, it then expressly indicates that there are other ways you could couple the legs to the hub. [00:05:34] Speaker 02: So why aren't your tethered straps fitting right within the patent's expectation of other ways? [00:05:43] Speaker 01: Because that is the claimed term [00:05:47] Speaker 01: is pivoting, not coupling. [00:05:51] Speaker 01: Just because the patent disclosure broadly refers to pivoting and then says, oh, you can also use other coupling, but then limits the claims to pivoting, the broader language in the specification is MOOC. [00:06:11] Speaker 01: We have to consider what did the specification [00:06:15] Speaker 01: identify by the term pivoting. [00:06:19] Speaker 01: And that's the issue here. [00:06:23] Speaker 01: So if I can continue, that the words pivoting or pivotably have to mean only rotating or turning is first of all required because that is the ordinary meaning of the term. [00:06:44] Speaker 01: The Artana submitted to the court dictionary definitions of the term pivoting. [00:06:51] Speaker 01: That was not disputed. [00:06:53] Speaker 01: The court looked at it. [00:06:55] Speaker 02: No dictionary... I guess I'd like to return to Judge Stoll's original point that she asked you about, which is when the district court added to the construction, move about a fixed point [00:07:09] Speaker 02: What is it about that language that makes you believe that it does not continue to implore a rotating or turning? [00:07:19] Speaker 02: Because moving about a fixed point, I mean, I don't know how you move about a fixed point without having some aspect of turning or rotation. [00:07:30] Speaker 01: Well, the term move means any change of location. [00:07:35] Speaker 01: It's a very generic. [00:07:36] Speaker 02: But the term is not move. [00:07:37] Speaker 02: The term is move about a fixed point. [00:07:40] Speaker 02: So it's not just movement. [00:07:41] Speaker 02: It's movement relative to this fixed point. [00:07:46] Speaker 01: Yes, but then why add the word move? [00:07:52] Speaker 01: If you have a construction that says rotate, turn, or move, [00:07:58] Speaker 01: a jury would normally assume that the word move is something different than rotating and turning and could have a broader definition. [00:08:08] Speaker 01: So even if you say about a fixed point, uh, and you take a look at the images, uh, of the, of the structures we're talking about here, for example, the page 42 of our opening brief. [00:08:24] Speaker 01: Yeah. [00:08:25] Speaker 01: A jury could look at, [00:08:28] Speaker 02: What's the difference between rotating and turning? [00:08:32] Speaker 02: To the extent that you said move has to imply some difference, I don't know that I understand him as meaning to give three discrete and different examples so much as he was trying to articulate the meaning and like I do very often with my children, repeat things over and over. [00:08:52] Speaker 01: Well, rotate means that you're turning, I mean, it's a very, it's a specific way of turning in the sense that it implies something like the hands of a clock going, rotating around the dial. [00:09:18] Speaker 01: Turning is a little bit broader. [00:09:21] Speaker 01: because it doesn't require specific rotation, but it still requires something to be going into a left-right type direction. [00:09:33] Speaker 01: Move is now much broader than either rotating or turning, and it just means any change in location. [00:09:44] Speaker 01: So yeah, one could say rotate is somewhat [00:09:50] Speaker 01: unnecessary because turning around would presumably include rotating, but the term move is far broader than either one. [00:10:03] Speaker 01: So again, if you take a look at the images, a jury could very easily look at the hub, look at the legs feathered and say, okay, well, here's the hub, it's a fixed point, and these legs are [00:10:19] Speaker 01: moving around that. [00:10:21] Speaker 01: So I have reached my timeline. [00:10:27] Speaker 03: Will, will we serve the remandee of your time for rebuttal? [00:10:30] Speaker 03: Let's hear from the screen in the row, please. [00:10:34] Speaker 00: Thank you, Your Honor. [00:10:36] Speaker 00: May it please the court. [00:10:39] Speaker 00: I think everything is well covered in our brief, so I'll just highlight a few main points. [00:10:44] Speaker 00: Seventh Circuit law applies for the JMAW and new trial standard. [00:10:49] Speaker 00: And as the district judge noted in his post trial opinion, it's a very high standard in the Seventh Circuit for a new trial. [00:10:57] Speaker 00: It can only be granted if there's a miscarriage of justice or it shocks the conscience or cries out to be overturned. [00:11:05] Speaker 00: And a $3.2 million verdict on $46 million of infringing sales is not shocking to the conscience. [00:11:13] Speaker 00: Appellant made a 23% profit margin on the infringing products. [00:11:19] Speaker 00: So at a 7% royalty, they still were handsomely profited from the willful infringement here. [00:11:29] Speaker 00: The second point is that the district judge was really in the best position to determine J-Mall or a new trial if it was warranted. [00:11:37] Speaker 00: This was a highly visual trial. [00:11:39] Speaker 00: We were fortunate to have all of the products in the courtroom. [00:11:43] Speaker 00: A lot of cases, you're not able to do that. [00:11:46] Speaker 00: So we had the physical products there, and the witnesses testified our expert assessment. [00:11:51] Speaker 00: Okay. [00:11:51] Speaker 02: Hey, Council, I think we kind of know what the standards of review are. [00:11:54] Speaker 02: Why don't you actually address the claim construction since that's a de novo question of law? [00:11:59] Speaker 00: Sure. [00:11:59] Speaker 00: Absolutely. [00:12:00] Speaker 00: Now, as Your Honor said, the terms rotate, turn, or move are three ways of saying the same thing. [00:12:11] Speaker 00: when you look at the district court's construction in the context of these claims. [00:12:16] Speaker 00: And especially if you look at claim 28, it says pivoting the leg into a stored position. [00:12:23] Speaker 00: So when you say moving a leg about a fixed point to get the leg into the stored position, that's going from figure three of the patent to figure four, where the legs are all parallel to each other. [00:12:38] Speaker 00: So it's not just any kind of movement. [00:12:41] Speaker 00: it would be moving the leg about a fixed point to go from figure three to figure four, which is exactly what all of the accused products do. [00:12:50] Speaker 00: Now, Mr. Pezuniac was not at the trial, so I don't fault him for this, but nowhere was it argued that moving was how we were presenting the case. [00:13:03] Speaker 00: Everything was from our expert witness to the opening statement to the closing argument dealt with rotating. [00:13:09] Speaker 00: about a fixed point. [00:13:11] Speaker 00: So movement had nothing to do with this case. [00:13:14] Speaker 00: It wasn't argued to the jury. [00:13:15] Speaker 00: And you have to assume the jury followed the evidence. [00:13:19] Speaker 00: The other thing is they say the term move came out of thin air. [00:13:23] Speaker 00: But the judge actually was relying on the dictionary definition, which gave an example of a quarterback pivoting to hand the ball off to a running back. [00:13:35] Speaker 00: And the dictionary said, [00:13:37] Speaker 00: that that was movement about a fixed point. [00:13:41] Speaker 00: Because this is extrinsic evidence that the judge was considering, I don't believe this is de novo, but rather abuse of discretion for considering extrinsic evidence, which the judge was just applying the straight dictionary. [00:13:57] Speaker 00: There was no magic. [00:13:59] Speaker 00: I think they said there was some [00:14:02] Speaker 00: It was like impossible to know where this came from or it came out of thin air. [00:14:06] Speaker 00: It didn't. [00:14:06] Speaker 00: It was right from the dictionary. [00:14:08] Speaker 00: And the appellant never raised this issue with the district court. [00:14:13] Speaker 00: Never said, Judge, you added the term move in there. [00:14:16] Speaker 00: We think that was a mistake. [00:14:19] Speaker 00: And especially here, you had two separate claim constructions at two separate times because the patent was in reexamination. [00:14:29] Speaker 00: So Claim 20 came out of the re-exam with no amendments. [00:14:34] Speaker 00: It was simply changed from dependent to independent form. [00:14:37] Speaker 00: And the appellant said that they were fine with the judge's earlier construction of pivoting. [00:14:45] Speaker 00: They never, and they had a full opportunity to do so both in briefing, you know, it's expensive briefing on this. [00:14:53] Speaker 00: They could have complained about movement and they didn't. [00:14:57] Speaker 00: So I hope that answers the question on the claim construction. [00:15:04] Speaker 03: Anything further? [00:15:07] Speaker 00: I would just touch on damages briefly. [00:15:10] Speaker 00: This was not a runaway jury by any means, 3.2 million damage on 46 million in sales. [00:15:18] Speaker 00: And the royalty rate was exactly 7%. [00:15:21] Speaker 00: The jury calculated damages to the penny. [00:15:25] Speaker 00: The judge in his post trial ruling actually said the evidence would support a verdict of 7.7%. [00:15:33] Speaker 00: So the judge found the evidence actually would allow a higher verdict than what we got. [00:15:42] Speaker 00: And our expert on damages went through in extensive detail how he applied the apportionments [00:15:53] Speaker 00: or value of the patented invention, and there were several factors that went into that. [00:16:00] Speaker 00: The testimony of our president that the reason people are buying this product is because of the patented features. [00:16:08] Speaker 00: This was the first and only product in the marketplace where you could use a Play Gym with the Play Yard and then also use it separately with a mat. [00:16:19] Speaker 00: So if you're going from, say, the [00:16:21] Speaker 00: the child's bedroom in front of the TV. [00:16:24] Speaker 00: You could use the play gym in both locations. [00:16:27] Speaker 00: And with the hub, which was never used before, the legs could rotate down into a stored position. [00:16:35] Speaker 00: So the only reason for this product, anyone could buy a regular play yard with the play gym or separately buy a mat with the play gym. [00:16:43] Speaker 00: This was the only product that combined them both. [00:16:46] Speaker 00: And as the judge found too, it's common sense. [00:16:49] Speaker 00: It was right on the package. [00:16:50] Speaker 00: showing all three positions of the accused products, where it's used with the play yard, the mat, and then in the stored position, you can see the person wheeling the product out of the house. [00:17:02] Speaker 00: So there was a lot of evidence on the value of the invention, which would have supported an even higher royalty rate than the jury awarded. [00:17:13] Speaker 00: And that's, I think, everything else is pretty well laid out, unless there are any other questions. [00:17:21] Speaker 03: Hearing none, thank you. [00:17:23] Speaker 00: Thank you, Your Honors. [00:17:31] Speaker 03: Mr. Brazuniac, you've got some time left on rebuttal. [00:17:35] Speaker 01: Thank you, Your Honor. [00:17:37] Speaker 01: Mr. De Niro stated that the trial involved the word rotating and not moving. [00:17:45] Speaker 01: That argument was not presented in Epoley's brief. [00:17:53] Speaker 01: And in fact, if one refers to Colcraft's answering brief, there's no discussion or quotations from testimony or closing argument where [00:18:11] Speaker 01: the patentee focused on the word rotating. [00:18:17] Speaker 01: In fact, again, the jury instructions is what controls here and the jury could be expected to have followed the jury instructions. [00:18:30] Speaker 01: Mr. De Niro is very inaccurate in stating that or suggesting that the district court [00:18:39] Speaker 01: referred to a dictionary definition in stating or referring to movement. [00:18:47] Speaker 01: In fact, there is no dictionary definition that defines pivoting as merely movement about a fixed point. [00:18:59] Speaker 01: Mr. DeMiro referred to a quarterback. [00:19:02] Speaker 01: Well, of course, the quarterback rotates [00:19:05] Speaker 01: his pivot foot around a fixed point, which is the ground, that is pivoting. [00:19:12] Speaker 01: Having a couple legs dangling by a flexible feather is not. [00:19:20] Speaker 01: Mr. De Niro stated that we did not ask for a re-argument. [00:19:25] Speaker 03: Well, of course... I'm sure he doesn't mind, but I think you keep calling him Mr. De Niro, and I think that's Mr. De Niro. [00:19:31] Speaker 01: Yes, I'm sorry. [00:19:33] Speaker 01: I apologize. [00:19:39] Speaker 01: I'm showing my age. [00:19:43] Speaker 01: Council referred, asked why we didn't ask for re-argument. [00:19:53] Speaker 01: Well, the standards for re-argument are very, very narrow. [00:20:00] Speaker 01: Council also said that we agreed with the court in the first construction. [00:20:05] Speaker 01: That is not correct. [00:20:06] Speaker 01: Again, the court rendered its construction of the term pivoting to include movement. [00:20:14] Speaker 01: We were bound by that determination. [00:20:17] Speaker 01: So we did not have a basis where we argument under the local rules [00:20:24] Speaker 01: What we did is then added the additional limitations into the claim construction to make sure that we had the proper definition of pivoting that would have excluded the situation such as we found here. [00:20:41] Speaker 01: We certainly never agreed to the claim construction proposed by the court. [00:20:50] Speaker 01: I guess the topics of indirect infringement are sufficiently covered in the brief. [00:20:58] Speaker 01: As to the damages, first of all, we don't have infringing sales issue as to whether there was infringement, of course, is still open. [00:21:11] Speaker 01: The fact remains that the damages turned completely [00:21:18] Speaker 01: on the submission of the Graco settlement. [00:21:22] Speaker 01: Yet, for reasons explained in our opening brief and reply briefs, the Graco settlement was unreliable and could not be used. [00:21:33] Speaker 01: Colcraft admits that Graco knew nothing about the patent before it was sued, and then it settled the case 11 weeks later without any discovery, without answering any complaint. [00:21:47] Speaker 01: Most importantly, Graco never paid any running royalty equal to 5%. [00:21:56] Speaker 01: The whole Graco settlement appears to be nothing more than an advantageous agreement whereby Graco paid whatever it paid and we don't know what it was. [00:22:15] Speaker 01: what could have been a small amount of money to get out of the lawsuit. [00:22:20] Speaker 01: They agreed to a 5% running royalty, knowing that they would never have to pay. [00:22:30] Speaker 01: So in any event, for that reason, we don't believe the Graco settlement is valid. [00:22:38] Speaker 03: Thank you. [00:22:39] Speaker 03: We thank both sides. [00:22:41] Speaker 03: The case is submitted and that concludes our proceeding for this morning. [00:22:47] Speaker 01: The honorable court is adjourned until tomorrow morning at 10 a.m.