[00:00:06] Speaker 04:
Thank you, Your Honors.

[00:00:08] Speaker 04:
May it please the court?

[00:00:11] Speaker 04:
There's a significant disconnect between the district court's attorney's fees order and the record in this case.

[00:00:19] Speaker 04:
And not only the record in this specific case, but the framework of patent and trademark cases generally.

[00:00:26] Speaker 04:
And as a result, the district court's decision sets a new low bar for exceptional case findings under Octane Fitness in multiple respects.

[00:00:36] Speaker 04:
Regarding the patent claims, the district court's decision stands for the proposition that a party can receive no adverse rulings, no sanctions, no admonitions from the court.

[00:00:51] Speaker 04:
It can receive a favorable claim construction order on critical claim terms at issue in the case.

[00:00:59] Speaker 04:
and still be subject to fees simply for subsequently losing an IPR.

[00:01:03] Speaker 02:
Let me focus you on this.

[00:01:04] Speaker 02:
So last year we decided a case called Thermalife in which fees were awarded and upheld on appeal on the basis of an issue, namely infringement, that had by agreement between the parties not been tried.

[00:01:21] Speaker 02:
Infringement was set aside early in the proceedings.

[00:01:24] Speaker 02:
The case went to trial on

[00:01:26] Speaker 02:
validity the defendant won the district court said Defended you won, but really the plaintiff's claim was not unreasonable Defendants said yes, but they never should have brought it in the first place Because it was unreasonable to assert infringement So it can't be that fees are

[00:01:50] Speaker 02:
can be awarded only on the basis of things that happened in the merits litigation, in the sense of past the filing of the complaint.

[00:02:03] Speaker 04:
Understood, Your Honor.

[00:02:03] Speaker 04:
But I think in this case, there's much more.

[00:02:07] Speaker 04:
And the claim construction order that the district court issued negated the two primary prior art references asserted by the defendants.

[00:02:17] Speaker 04:
And more ultimately, the prior art references

[00:02:21] Speaker 04:
that the PTAB relied on in invalidating the patent.

[00:02:26] Speaker 04:
The district court's claim construction order negated those references.

[00:02:30] Speaker 01:
And so at that point you understand the with respect to the the patent case What do you understand the basis for the district courts of warrior fee the weakness of your fees the weakness of your case, right?

[00:02:43] Speaker 04:
That's correct primary I believe the district court cited to two issues for purposes of its attorneys fees order one was the alleged weakness of the claims based upon

[00:02:55] Speaker 04:
the so-called red flag warnings that were presented to Munchkin in the form of the Whiteman and Atkins prior art references.

[00:03:02] Speaker 04:
Those are the same two references that the court's own claim construction order negated.

[00:03:08] Speaker 04:
That's point one of the district court's attorney's fees order.

[00:03:12] Speaker 04:
And the issue is not simply that, was the district court's claim construction order ultimately correct?

[00:03:18] Speaker 04:
Would this court have upheld it on appeal?

[00:03:20] Speaker 04:
That's not the relevant question.

[00:03:22] Speaker 04:
Because the relevant question for fees is not whether we would have prevailed or not prevailed.

[00:03:26] Speaker 04:
It's simply were we reasonable in asserting the claims.

[00:03:29] Speaker 04:
And the district court's claim construction order is critical on that point, because it validated our position.

[00:03:35] Speaker 04:
What do you understand the other part of it to be?

[00:03:37] Speaker 04:
The other point, at least in terms of the patent claims, are the so-called platex cups.

[00:03:43] Speaker 04:
These are alleged prior art.

[00:03:45] Speaker 04:
physical samples that were never part of the case.

[00:03:49] Speaker 04:
This is the poor part.

[00:03:51] Speaker 02:
Can you explain what happened in the fees proceeding with respect to the Playtex cup?

[00:03:59] Speaker 02:
I guess the analogy that I had in cups, there are two of them I guess, had in mind in thinking about how this does or does not

[00:04:07] Speaker 02:
relate to what happened in Thermalife, the question I had was, did Love and Care submit a, let's call it, a prima facie case of invalidity on the basis of the platex cups in the fee proceeding?

[00:04:24] Speaker 04:
I mean, certainly our position would be no.

[00:04:27] Speaker 04:
I believe you could locate pictures of those cups in the record, but there was no analysis.

[00:04:32] Speaker 04:
There were no claim charts that were part of the fees proceeding.

[00:04:36] Speaker 03:
Didn't they try to amend their invalidity contentions?

[00:04:40] Speaker 03:
And in the invalidity contentions, wasn't there some kind of claim analysis?

[00:04:47] Speaker 04:
Yeah, I believe at that time.

[00:04:48] Speaker 03:
OK, so then there was something of a chart.

[00:04:51] Speaker 04:
Correct.

[00:04:53] Speaker 04:
In the underlying case, there were charts.

[00:04:55] Speaker 04:
Now, those charts weren't part of the argument.

[00:04:59] Speaker 04:
The court didn't address those in any significant way in the attorney's fees portion of the case.

[00:05:06] Speaker 01:
The theory was that these plate text cups created an on-sale bar?

[00:05:14] Speaker 04:
Ostensibly that was that was part of the issue and in the PTAB proceeding there was actually separate discovery taken to try to determine when were those cups actually on sale.

[00:05:25] Speaker 04:
I mean all of these facts were never determined were up in the air were disputed facts.

[00:05:30] Speaker 01:
The IPR wouldn't consider the on-sale bar issue.

[00:05:34] Speaker 04:
That's correct.

[00:05:35] Speaker 04:
But it actually came up because Munchkin attempted to amend its claims before the PTAB.

[00:05:40] Speaker 04:
And that's where that issue became relevant.

[00:05:43] Speaker 04:
Although the PTAB never actually reached the Playtex cups in its decision.

[00:05:49] Speaker 04:
It found that Munchkin was not able to amend its claims for a different reason.

[00:05:54] Speaker 02:
So if I remember right, tell me if I'm wrong, the district court

[00:06:01] Speaker 02:
made some references to the Playtex cups, but did not make findings that those Playtex cups were something that Munchkin was aware of and made it sufficiently clear that your patent claims were invalid, that the assertion of those claims was exceptionally weak.

[00:06:23] Speaker 02:
Am I right?

[00:06:23] Speaker 02:
The district court did not make those findings?

[00:06:25] Speaker 04:
That's true.

[00:06:26] Speaker 02:
But then the next question to me is, what did Love and Care

[00:06:31] Speaker 02:
put in the record, make a showing, what did you say in response?

[00:06:38] Speaker 02:
Maybe the district court's findings are not enough, but then the question we would face is, well, what do we do?

[00:06:43] Speaker 02:
Do we send it back for more, or is the record simply insufficient so that, for example, an outright reversal would be appropriate?

[00:06:53] Speaker 04:
Yes, certainly an outright reversal is our position.

[00:06:57] Speaker 04:
There's nothing in the record, nothing that the district court

[00:07:01] Speaker 04:
Included in its order about even as it relied on that issue outside the record.

[00:07:05] Speaker 04:
There's nothing There's nothing that the district court concluded that would ever tell you that those playtex cups would have been a bar to patent ability in fact during the attorney's fees hearing The district court the district judge actually said To counsel for L&C.

[00:07:21] Speaker 04:
There's nothing in this record that would allow me to conclude that these playtex cups prevent the 993 patent that was the district courts and

[00:07:30] Speaker 04:
uh... language in regards to those cuts so would that include the validity contentions that jen made reference to earlier or i don't know what was in the district courts mind there certainly uh... uh... but obviously our position is uh... that there's nothing there's nothing here first of all that that was new and i want to reframe here a little bit too because uh...

[00:07:56] Speaker 04:
LNC has admitted that prior art that is closely related to and that generally embodies the Playtex cups was, in fact, before the PTO during prosecution.

[00:08:07] Speaker 03:
That's the Valderrama reference, right?

[00:08:09] Speaker 04:
That's correct.

[00:08:10] Speaker 04:
And that reference is listed on the face of the patent.

[00:08:14] Speaker 04:
And so our position all along was that this art is duplicative of art that was already considered by the PTO during prosecution.

[00:08:23] Speaker 03:
Just so I understand, the amended invalidity contentions

[00:08:27] Speaker 03:
That never actually got into the case, right?

[00:08:29] Speaker 04:
That's correct.

[00:08:30] Speaker 03:
That motion was- The court never decided that motion.

[00:08:34] Speaker 04:
That's correct.

[00:08:35] Speaker 04:
The court never said, yes, you can amend your contentions, or no, you can't.

[00:08:39] Speaker 03:
Because the case got stayed due to the IPR.

[00:08:41] Speaker 03:
That's correct.

[00:08:42] Speaker 03:
That's correct, Your Honor.

[00:08:42] Speaker 01:
So was there any briefing or argument in the district court as to whether these platex cops would create an on-sale war?

[00:08:51] Speaker 01:
Not that I'm aware of, Your Honor.

[00:08:54] Speaker 03:
These motion didn't go-

[00:08:56] Speaker 03:
Line by line dime by dot through the claims in comparison to absolutely not the Playtex cups correct Absolutely not and again.

[00:09:06] Speaker 04:
That's why the district court during the fees hearing said there's nothing in this record that would allow me to conclude that the Playtex cups are the patent He hadn't even assessed that issue and gone through it at all Could we unless they're my colleagues have other questions about the patent issue we go to the trademark issue sure what?

[00:09:25] Speaker 01:
Again, what do you understand the district court to have based its fee award on with respect to the trademark?

[00:09:34] Speaker 04:
To be honest with you your honor and with due respect to the district court.

[00:09:37] Speaker 04:
I'm not quite sure I think that the district court would probably cite the weakness of the claims and

[00:09:45] Speaker 04:
The issue there is that, again, there's no substantive rulings.

[00:09:50] Speaker 04:
The court never addressed those claims other than affirmatively allowing Munchkin to assert the claims in its first amended complaint.

[00:09:59] Speaker 04:
So there's no bad faith in bringing the claims.

[00:10:01] Speaker 04:
There's no futility.

[00:10:02] Speaker 04:
There's no motion to dismiss brought by LNC.

[00:10:05] Speaker 03:
Was there something that either LNC or the district court could point to that was new to the court

[00:10:14] Speaker 03:
in deciding the attorney's fees motion compared to any facts that the court reviewed when deciding whether to grant the first amended complaint.

[00:10:25] Speaker 03:
No, Your Honor.

[00:10:27] Speaker 03:
Because obviously, LNC complained at that time that you shouldn't be allowed to amend your complaint because the mark that you wanted to assert then was already a mark you had been using, had been using for a few years.

[00:10:41] Speaker 03:
And so therefore, you shouldn't be allowed

[00:10:43] Speaker 03:
now claim that this is a new mark.

[00:10:46] Speaker 04:
Correct.

[00:10:46] Speaker 04:
All of the arguments that LNC made at the time of the attorney's fees motion, and all of the facts, the very few facts that the district works on.

[00:10:54] Speaker 03:
OK, but you had been using that mark since 2012.

[00:10:59] Speaker 04:
Correct.

[00:10:59] Speaker 03:
So why didn't you assert it earlier?

[00:11:03] Speaker 03:
I guess the concern is that you painted a picture that you weren't really using that mark, and then you

[00:11:12] Speaker 03:
decided later that, okay, now you wanted to shift over to this new mark when in fact you had been using the mark and it had been applied to commercial products.

[00:11:23] Speaker 03:
So it's a bit of a confusing story that you have.

[00:11:27] Speaker 04:
Sure.

[00:11:28] Speaker 04:
I don't think it's an issue of us painting a picture that we weren't using the mark.

[00:11:32] Speaker 04:
We never said anything about the updated mark in our original complaint.

[00:11:37] Speaker 04:
We simply chose, because at that time,

[00:11:39] Speaker 04:
The registration that munchkin had was for what's called the original click lock logo.

[00:11:44] Speaker 04:
That's the that's the mark that we pursued in our original claims Businesses and marketing departments being what they are The logo tweaked ever so slightly it shifted ever so slightly and

[00:11:58] Speaker 03:
Over time and what do you mean by that tweaked it over time when they all were in existence as of 2012?

[00:12:04] Speaker 04:
I think the the use this is where we were using and then this is now where We're going to shift our use right when you say shift I don't understand that verb because they all existed they all exist in 2012 So how can you say shift?

[00:12:22] Speaker 03:
They all existed and they were all being applied to different products?

[00:12:26] Speaker 04:
In terms of what the business was putting forward.

[00:12:29] Speaker 04:
I think frankly there was probably a little inconsistency in terms of the use.

[00:12:34] Speaker 03:
Well the current logo, what you refer to as the current logo.

[00:12:38] Speaker 03:
It was being used in interstate commerce as of 2012.

[00:12:43] Speaker 03:
Is that right?

[00:12:43] Speaker 03:
Correct.

[00:12:44] Speaker 03:
Okay.

[00:12:45] Speaker 03:
So you can't really tell me that the company shifted to using that mark in 2014 when in fact

[00:12:54] Speaker 03:
it had already been used beginning in 2012 in interstate commerce.

[00:12:58] Speaker 04:
I think I misunderstood.

[00:12:59] Speaker 03:
So I don't like it when you say shift over.

[00:13:02] Speaker 04:
The original ClickLock logo, I'm sorry, I misunderstood.

[00:13:06] Speaker 04:
The original ClickLock logo, yes, dated to 2012, as did the updated ClickLock logo, the use.

[00:13:17] Speaker 04:
The applications, there was a registration on the original, and there was not an application on the second.

[00:13:23] Speaker 04:
the business decided that they wanted to focus more on the second mark that they had, and that's why the application trailed, that second application trailed.

[00:13:35] Speaker 04:
All of these facts, regardless, all of these facts about the use of the mark, when the mark was used, whether there was any delay on Munchkin's part,

[00:13:44] Speaker 04:
in asserting those marks.

[00:13:46] Speaker 04:
All of those issues were before the district court and raised violence.

[00:13:50] Speaker 01:
What would be the basis for awarding fees because you delayed in asserting the mark?

[00:13:55] Speaker 01:
I'm not following that.

[00:13:57] Speaker 04:
In our view, the whole issue of when were you using a mark and did you know about the updated mark earlier, that issue can only possibly really be relevant to the issue of did Munchkin delay

[00:14:14] Speaker 04:
in finally asserting that mark in the litigation.

[00:14:16] Speaker 04:
So what if it did delay?

[00:14:19] Speaker 04:
What's the significance of that?

[00:14:21] Speaker 04:
Because when you're moving to amend a complaint, a delay is an explicit factor that the district court considers in whether we should have been allowed to amend the complaint at that time.

[00:14:31] Speaker 04:
And so in addition to looking at, was there any bad faith?

[00:14:33] Speaker 04:
Would the claims be futile?

[00:14:35] Speaker 01:
The idea was that there was a misstatement in the motion for leave to amend.

[00:14:39] Speaker 01:
Is that the idea?

[00:14:40] Speaker 01:
No.

[00:14:40] Speaker 04:
The idea is simply that the court was aware of all these issues.

[00:14:44] Speaker 04:
It found that, OK, there might be an issue of delay here.

[00:14:48] Speaker 04:
Munchkin arguably delayed in bringing this mark in this case, the updated ClickLog logo.

[00:14:56] Speaker 04:
But at the time that Munchkin filed its first amended complaint, the court resolved that issue in Munchkin's favor by saying, I don't think there's any prejudice here as a result of any delay.

[00:15:07] Speaker 04:
And so I'm going to allow you, Munchkin, to amend your complaint and assert you.

[00:15:11] Speaker 02:
And in your view, besides the question about allowing the amendment, the delay in asserting the claim has no legal relevance to the exceptional weakness or lack

[00:15:24] Speaker 04:
That's correct, especially because again, Munchkin was entitled to rely on the district courts resolving that issue in favor of allowing the claims.

[00:15:34] Speaker 04:
Once the district court allowed those claims, affirmatively allowed the claims, knowing all of the arguments that were on the table, Munchkin was allowed to, and it was perfectly reasonable for Munchkin to rely upon

[00:15:47] Speaker 04:
decision so where you end up at the end of the day on the trademark claims is that Munchkin was ultimately penalized and attorney's fees were awarded because it pursued for a short amount of time a claim that the district court expressly allowed it to pursue and in our view that's that's just not simply proper and and in fact give some perverse

[00:16:11] Speaker 04:
results because The district courts reasoning is really kind of fundamental fundamentally inconsistent and when you look at the patent case and the trademark case in the context of the patent case Munchkin had a critical claim construction ruling that negated the primary Getting a little repetitive here.

[00:16:30] Speaker 01:
We're out of time.

[00:16:31] Speaker 01:
We'll give you two minutes.

[00:16:33] Speaker 01:
Okay.

[00:16:33] Speaker 01:
Thank you your honor

[00:16:45] Speaker 01:
Good morning, your honors.

[00:16:47] Speaker 01:
Since we were just talking about the trademark claim, let's start with that.

[00:16:51] Speaker 01:
What's the basis for awarding fees on the trademark claim?

[00:16:58] Speaker 00:
The court awarded fees on the trademark in the case on the second period, but not in the first period.

[00:17:05] Speaker 00:
So it did not award fees concerning the assertion in the original complaint for the registered mark.

[00:17:11] Speaker 00:
Why?

[00:17:11] Speaker 00:
What's the basis for awarding fees on the trademark?

[00:17:14] Speaker 00:
I think that it was a terribly weak case.

[00:17:17] Speaker 00:
And if you look at appendix page 3597, you'll see hopefully color photographs of the original mark and my client mark.

[00:17:34] Speaker 00:
And when I look at it, I see no chance whatsoever that Munchkin could have prevailed.

[00:17:42] Speaker 03:
Did you say 3597?

[00:17:46] Speaker 03:
Those are the different versions of the ClickLock logo.

[00:17:53] Speaker 03:
Did you want to show us something that compared the ClickLock logo to your... Oh, the click gets in the middle?

[00:17:59] Speaker 00:
Click gets in the middle.

[00:18:00] Speaker 00:
That's my client's mark.

[00:18:02] Speaker 02:
Does the color make a difference because we have black and white?

[00:18:04] Speaker 00:
One of the differences... I'd be happy to give you my color copy.

[00:18:11] Speaker 00:
One of the differences is that in the Munchkin logos and embodiments, the predominant color is blue, whereas in the Love and Care, the predominant color is yellow.

[00:18:25] Speaker 00:
Munchkin expressly disclaimed click lock.

[00:18:30] Speaker 02:
So on the blue brief at 47 has the current and the Love and Care in color.

[00:18:35] Speaker 00:
That's right.

[00:18:39] Speaker 01:
So the district court didn't make any findings about this, right?

[00:18:44] Speaker 00:
I think that's correct, Your Honor.

[00:18:46] Speaker 00:
I could give you a number of significant differences between the case, between my client's mark and theirs.

[00:18:56] Speaker 00:
And that would be the word click lock by Munchkin.

[00:19:02] Speaker 01:
So would it be fair to say this is the sole justification, in your view, for awarding fees on the trade market claim?

[00:19:09] Speaker 01:
Was that there was no likelihood of confusion?

[00:19:12] Speaker 00:
I don't know.

[00:19:13] Speaker 00:
I think the judge saw it as a weak case.

[00:19:15] Speaker 00:
I don't know.

[00:19:16] Speaker 00:
The judge saw that they withdrew the original claim.

[00:19:20] Speaker 00:
Then they decided to assert an unregistered mark and they asserted trade dress.

[00:19:26] Speaker 01:
But in your view, I'm trying to find out what in your view is the basis for awarding fees on the trademark.

[00:19:33] Speaker 01:
You pointed out your view not addressed by the district court.

[00:19:38] Speaker 01:
but there's no likelihood of confusion between the two marks.

[00:19:41] Speaker 01:
I'm now asking you, is there anything else that would justify an award of fees on the trademark claim?

[00:19:47] Speaker 00:
That it was so weak a case that they withdrew it.

[00:19:51] Speaker 00:
Withdrew it?

[00:19:51] Speaker 00:
That's the basis for awarding fees?

[00:19:53] Speaker 00:
They abandoned their trademark claim.

[00:19:55] Speaker 01:
An award of fees because somebody withdrew a claim?

[00:19:58] Speaker 00:
They should never have asserted this claim.

[00:20:00] Speaker 01:
Well, that's a different question.

[00:20:01] Speaker 01:
But certainly the fact that they withdrew it isn't the basis for awarding fees, right?

[00:20:08] Speaker 01:
I don't know that I would agree with that, Your Honor.

[00:20:11] Speaker 01:
Really?

[00:20:12] Speaker 03:
Any time someone withdraws a claim, they're going to get slapped with attorney's fees?

[00:20:16] Speaker 03:
Not always.

[00:20:18] Speaker 03:
OK, but right now, that's the only reason you've articulated that the district court gave us.

[00:20:25] Speaker 03:
So we can't obviously affirm something like that, because it sounds like, in fact, the ruling is premised on the view that any time a party withdraws a claim, they're going to get slapped with fees.

[00:20:38] Speaker 03:
It doesn't work.

[00:20:39] Speaker 00:
I don't argue that any time a litigant withdraws a claim, it should be slapped with fees.

[00:20:45] Speaker 00:
But sometimes that happens.

[00:20:48] Speaker 00:
And it's because they stated a claim that should never have been stated.

[00:20:53] Speaker 00:
Perhaps it wouldn't have passed muster under Twombly.

[00:20:55] Speaker 00:
Or some reason, it's a claim that should never have been made.

[00:20:58] Speaker 00:
It was a very weak claim.

[00:21:01] Speaker 02:
trade dress different from trademark for purposes of what we're now discussing or was there a separate district court?

[00:21:10] Speaker 02:
Did the district court say something separately about trade dress?

[00:21:13] Speaker 02:
Which I think was a separate count of the complaint.

[00:21:15] Speaker 00:
It was a separate count.

[00:21:16] Speaker 00:
The trade dress claim was doomed because they had not been using this trade dress long enough to establish secondary meaning to engender a likelihood of confusion in the minds of the consuming public.

[00:21:30] Speaker 03:
How do we know that, though?

[00:21:32] Speaker 03:
They were using it for two years, and then they filed the First Amendment complaint.

[00:21:38] Speaker 03:
But why, as a matter of law, is two years insufficient amount of time to establish secondary meaning to a trade dress of a product design?

[00:21:48] Speaker 00:
I believe that most courts have found that two years is much too little time.

[00:21:52] Speaker 00:
Isn't that a fact-dependent inquiry, though?

[00:21:56] Speaker 00:
That is a fact issue that could be tried, and my

[00:22:00] Speaker 00:
It wasn't tried here, though.

[00:22:01] Speaker 00:
It did not get tried here because they withdrew the claim.

[00:22:05] Speaker 01:
In fact, they possibly sustained the district court when it didn't make any findings about this stuff.

[00:22:19] Speaker 00:
I don't know what further I can say, Your Honor, about that.

[00:22:23] Speaker 00:
OK, well, maybe it was shift to the patent claim, patent fees.

[00:22:33] Speaker 00:
In this case, the district court properly exercised its discretion.

[00:22:38] Speaker 00:
It was aware of the initial success that Munchkin had in the case.

[00:22:43] Speaker 00:
But in the fee motion, it became aware of other facts that had not yet come to light, and it reviewed the record as it must to determine the totality of the circumstances.

[00:22:57] Speaker 01:
It never made any findings about the plate text cuts being prior art, right?

[00:23:03] Speaker 00:
That is correct.

[00:23:04] Speaker 00:
It did not make findings on that.

[00:23:07] Speaker 00:
So what findings did it make that help you here?

[00:23:16] Speaker 00:
It was concerned essentially with the red flag warnings that the two pieces of prior art on which the PTAB relied

[00:23:26] Speaker 00:
in invalidating the case, were quickly located and quickly drawn to the attention of Munchkin.

[00:23:37] Speaker 01:
But isn't it clear from the record that under the district court's claim construction, the status of those two references as invalidating prior art was quite uncertain?

[00:23:53] Speaker 00:
If that claim construction could withstand scrutiny, it would certainly call it into question.

[00:23:59] Speaker 03:
So is the award of fees on the patent claim at least partially premised on the view that the district court's own markman order was totally unreasonable, a totally unreasonable reading of the claims?

[00:24:15] Speaker 00:
No, I do not think that is the case.

[00:24:18] Speaker 03:
But the whole idea of the patent claim being essentially frivolous is that the claims were so clearly understood that these references would invalidate them.

[00:24:31] Speaker 03:
But of course, the district court read the claims differently.

[00:24:37] Speaker 00:
That's right.

[00:24:38] Speaker 03:
So to say that their patent infringement claim was exceptionally weak, you have to

[00:24:46] Speaker 03:
conclude that the district court's markman order was particularly unreasonable in its conception of the claims.

[00:24:56] Speaker 00:
I don't.

[00:24:57] Speaker 00:
I don't have to make that argument, although I believe that that is the case.

[00:25:01] Speaker 03:
What happened here is... But if the claim construction debate is a close question, where maybe reasonable minds could differ,

[00:25:11] Speaker 03:
then certainly we couldn't sit here and say that the patent infringement theory is unreasonable, could we?

[00:25:21] Speaker 00:
We can, if I may explain.

[00:25:25] Speaker 00:
When Munchkin sued us or asserted their patent claim, they knew that we would have the right to go to the PTAB where the rule of construction for the claims would be broadest reasonable interpretation.

[00:25:36] Speaker 00:
If you look over the clamp construction briefings, there was tremendous consternation over the

[00:25:41] Speaker 00:
the use of the word shoulder, which was introduced at the very, very end of prosecution of this patent.

[00:25:47] Speaker 00:
And the word shoulder was not explained in the amendment, and it was not used anywhere in the patent specification.

[00:25:55] Speaker 00:
And everybody was trying to figure out what the shoulder is.

[00:25:58] Speaker 00:
At the PTAB and at the district court, Munchkin was alleging that there had to be a layered construction of these claim elements.

[00:26:07] Speaker 00:
Well, that was not part of the claim element.

[00:26:09] Speaker 00:
And the board took the broadest reasonable interpretation.

[00:26:12] Speaker 03:
Their other side's argument was that the shoulder is connected to the neck, right?

[00:26:20] Speaker 03:
The neck is joined to the shoulder.

[00:26:23] Speaker 00:
OK.

[00:26:23] Speaker 03:
There isn't some intervening element that separates the neck from the shoulder.

[00:26:29] Speaker 00:
And yes, they did argue that.

[00:26:32] Speaker 00:
But they've claimed us not to say that.

[00:26:35] Speaker 01:
OK, but that's something that's debatable, right?

[00:26:39] Speaker 01:
There isn't been any finding that the defense against the IPR was frivolous, right?

[00:26:48] Speaker 00:
That is correct.

[00:26:50] Speaker 00:
There was no finding that their defense at the PTAB was frivolous.

[00:26:54] Speaker 01:
Well, then how can you award fees for the PTAB proceeding if what they were doing was non-frivolous?

[00:27:04] Speaker 00:
All I said was that there was no finding of that.

[00:27:07] Speaker 00:
I believe that their case at the PTAB was frivolous personally.

[00:27:11] Speaker 00:
Did the PTAB say that?

[00:27:13] Speaker 00:
No.

[00:27:16] Speaker 02:
Is it relevant for us to consider the appeal that we heard from the PTAB and whether we thought it was frivolous?

[00:27:30] Speaker 00:
I think it would be relevant, but it's not worth it.

[00:27:33] Speaker 02:
We ruled 36th it, right?

[00:27:35] Speaker 02:
But we affirmed without opinion in that case.

[00:27:37] Speaker 02:
That doesn't imply that we thought that it was frivolous to challenge the PTAB rule.

[00:27:45] Speaker 00:
I agree.

[00:27:48] Speaker 00:
The problem here is that Munchkin knew that this case was likely to go to the PTAB, and it would there receive the broadest reasonable interpretation.

[00:27:58] Speaker 00:
And that's probably why they opposed the stake.

[00:28:00] Speaker 00:
They wanted to continue litigating in the district court to try to get to a judgment before the PTAB reached the final written decision under a different interpretation of the claim language.

[00:28:10] Speaker 00:
And the PTAB said, look, you don't have language in these claims to support the argument that you're making.

[00:28:18] Speaker 00:
And under the broadest reasonable interpretation, there's plenty of prior art.

[00:28:21] Speaker 00:
And they basically agreed that we found two anticipations.

[00:28:26] Speaker 00:
Then they also found obviousness based on these two references.

[00:28:29] Speaker 01:
What do you mean they agreed that there were two anticipations?

[00:28:33] Speaker 01:
Who agreed?

[00:28:34] Speaker 01:
The board.

[00:28:37] Speaker 01:
Look, there are plenty of cases saying the fact that you lose doesn't mean that your claim was frivolous.

[00:28:43] Speaker 01:
What's the basis for saying that the assertion of validity, non-invalidity, was frivolous?

[00:28:56] Speaker 00:
The question is whether this is an exceptional case.

[00:29:00] Speaker 00:
And what makes this case exceptional is that we quickly cited two or more pieces of prior art that Munchkin should have known were going to be a problem for them at the PTAB.

[00:29:14] Speaker 00:
Second.

[00:29:14] Speaker 00:
So they knew that it was going to be a problem.

[00:29:19] Speaker 01:
Is that a basis for awarding the fees?

[00:29:21] Speaker 00:
Not in itself, but there were other

[00:29:23] Speaker 00:
other events.

[00:29:24] Speaker 00:
There was the fact that they knew about the Playtex prior art, which they asserted against somebody.

[00:29:37] Speaker 00:
Yes, they asserted a claim against Playtex when Playtex was basically puffing, saying we have the best click lock technology or something like that.

[00:29:51] Speaker 00:
What happened was that Munchkin... Was that a patent assertion or a trademark assertion?

[00:29:55] Speaker 00:
That was a trademark or a... No, that was a false advertising case.

[00:30:01] Speaker 00:
False advertising case.

[00:30:03] Speaker 00:
And to their complaint, they attached photographs

[00:30:06] Speaker 00:
of these Playtex products.

[00:30:08] Speaker 00:
They admit that they knew about the products, right?

[00:30:11] Speaker 00:
And this is true.

[00:30:12] Speaker 00:
And they never revealed those products to the patent office when they went to get a patent.

[00:30:18] Speaker 03:
But they revealed the Valderrama reference was submitted.

[00:30:22] Speaker 03:
Valderrama is an engineer at Playtex.

[00:30:25] Speaker 03:
Correct.

[00:30:25] Speaker 03:
And, you know, the Valderrama reference seems to, as even you acknowledged, correspond to the Playtex product.

[00:30:32] Speaker 00:
Only in part.

[00:30:33] Speaker 00:
I didn't, I didn't.

[00:30:34] Speaker 03:
Which they generally embodies.

[00:30:36] Speaker 00:
Yes, but the, I'm sorry for interrupting you.

[00:30:39] Speaker 03:
Didn't your phrase, wasn't your phrase is generally embodied by?

[00:30:43] Speaker 00:
I think so.

[00:30:44] Speaker 00:
But the important question was, is there a platform and an upstanding member that would cause this click?

[00:30:55] Speaker 00:
And that is different.

[00:30:56] Speaker 00:
We provided claim charts, which you can see in the appendix around 2887 and following, that show why the Playtex cups anticipate the claim that Munchkin obtained.

[00:31:11] Speaker 02:
Is that the proposed invalidity contention amendments or something?

[00:31:16] Speaker 00:
That was in the proposed amendment to the validity contention.

[00:31:20] Speaker 02:
Which were never

[00:31:22] Speaker 02:
Admitted into the record.

[00:31:25] Speaker 02:
He was just attached to a motion, right?

[00:31:27] Speaker 02:
That was a motion that the judge did not rule on because the case got stayed and in the fee proceeding did you Call attention to that material again and say to the judge here's a

[00:31:47] Speaker 02:
To the extent that we are asserting unreasonable, exceptional weakness based on the platex cups, here is the case we would make to show that with the platex cups, it was unreasonable to assert these patents and attach those proposed invalidity contentions.

[00:32:08] Speaker 02:
I'm trying to understand what was in the fee motion you submitted.

[00:32:13] Speaker 00:
That was in the fee motion.

[00:32:15] Speaker 00:
The judge referred to it.

[00:32:16] Speaker 00:
at appendix 12.

[00:32:27] Speaker 00:
So the point was that there was anticipatory prior art that Munchkin had in his possession.

[00:32:36] Speaker 00:
It did not disclose it to the patent office.

[00:32:38] Speaker 00:
It did not reveal it in response to interrogatories.

[00:32:42] Speaker 00:
And we just had happened to trip upon it ourselves and said, wait a minute, what about this?

[00:32:47] Speaker 00:
Please respond to this interrogatory, and we want to see those cops.

[00:32:52] Speaker 03:
So just so I understand, this reference to the motion for amended invalidity contentions, this is more of a point the district court seems to be making is that Munchkin was on notice that there was

[00:33:12] Speaker 03:
an invalidity argument based on the plate text cups.

[00:33:16] Speaker 03:
It wasn't the district court reaching a conclusion based on the substance of those invalidity contentions that, in fact, Loving Care was making a very compelling case of invalidity in these amended invalidity contentions.

[00:33:38] Speaker 00:
I believe that is true, Your Honor.

[00:33:43] Speaker 03:
And in your fee motion itself, again, to what extent did you do some kind of detailed comparison or any kind of substantive comparison between what is illustrated in these Pleitex cups and the limitations in these claims, these 993 claims?

[00:34:16] Speaker 00:
I frankly have to go back and look to see what counsel argued.

[00:34:24] Speaker 00:
I think that they did argue it, Your Honors.

[00:34:27] Speaker 03:
I know they argued the institution rates of success, right, the statistical

[00:34:35] Speaker 01:
percentage win rates for petitioners once a IPR petition is granted the idea being that as soon as an IPR is initiated because of the win rate they should have given up no the I Thought that the sequence here Was that

[00:35:05] Speaker 00:
We filed the IPR petition.

[00:35:14] Speaker 01:
What does the win rate have to do with anything?

[00:35:19] Speaker 01:
Why did the district court cite that?

[00:35:21] Speaker 01:
What are we supposed to get out of that?

[00:35:26] Speaker 00:
The motion to stay was not filed until institution was granted.

[00:35:30] Speaker 00:
It was not filed immediately upon filing the petition.

[00:35:33] Speaker 00:
But that's not answering the question.

[00:35:35] Speaker 01:
What's the significance of the win rate in IPRs as far as the award of attorney speaks is concerned?

[00:35:48] Speaker 00:
The significance of citing the win rate in IPRs was

[00:35:53] Speaker 00:
in order to get the judge to stay the case and not continue to waste more money litigating at the district court.

[00:35:59] Speaker 01:
He seems to think it has to do with attorneys.

[00:36:04] Speaker 00:
It's very hard to understand.

[00:36:10] Speaker 00:
It seemed to me that in considering the totality, there were many reasons that the magistrate judge

[00:36:21] Speaker 00:
believe this was an exceptional case, and it had to do with the weakness of this trademark case, the weakness of the patent case, the immediacy of finding these two references, the successful IPR, and then finding out that Munchkin was aware of this further prior art, which it managed never to tell the Patent Office, despite the fact that these

[00:36:50] Speaker 00:
photographs of what was in their possession was dated on May 13, 2011, and they filed their first patent application the following month.

[00:37:00] Speaker 01:
Okay, I think we're out of time.

[00:37:01] Speaker 01:
Thank you, Your Honors.

[00:37:02] Speaker 01:
Thank you, Mr. Mansell.

[00:37:05] Speaker 01:
Mr. McCallum, do you have something to add?

[00:37:14] Speaker 04:
To the Playtex cups and understanding your honor's point about this court's authority allowing in certain instances decisions or facts to be considered outside the record for purposes of attorney's fees, we would just submit respectfully that if we're needing to litigate the validity of a patent based upon prior art that

[00:37:42] Speaker 04:
was never actually formally admitted into the case that were just too far afield from the record at that point, and that's particularly true.

[00:37:50] Speaker 01:
What did they argue about the platex cups in the attorney's fees motion?

[00:37:54] Speaker 04:
I'm sorry, can you repeat it?

[00:37:55] Speaker 01:
What did they argue about the platex cups in the attorney's fees

[00:38:00] Speaker 04:
My recollection is simply that they referenced the fact that they had located the cups, that they had moved to introduce the cups into the case via their motion for leave to amend their invalidity contentions, and that in their view, those platex cups would invalidate the patent.

[00:38:17] Speaker 04:
I believe that was the gist of their argument.

[00:38:20] Speaker 02:
Without submitting any specific discussion,

[00:38:25] Speaker 04:
cups onto it or asking for as I'm reading the motion page 18 to 19 of the summary of the motion for fees asking for them now to be admitted into the record I believe that's correct allowing for the fact that you know they I'm sure they referenced the underlying invalidity contention and incorporated them by reference into the brief but certainly I think we're talking about the content of the briefing and what was discussed that just wasn't there

[00:38:55] Speaker 03:
So we've obviously identified a number of concerns.

[00:39:00] Speaker 03:
But theoretically, if we were to find that this order for fees is not affirmable, then why wouldn't this go back?

[00:39:11] Speaker 03:
Because the district court didn't address certain questions and instead relied on things that you may have been led astray by, for example, success rates based on

[00:39:25] Speaker 03:
PTAB IPR institutions.

[00:39:28] Speaker 04:
Our view, Your Honor, would be there's no need for a remand because there's simply nothing in the record that would establish that this is an exceptional case.

[00:39:36] Speaker 04:
And in order to even get close to that issue, you have to go simply too far outside the record.

[00:39:42] Speaker 03:
What about the trademark infringement claim being allegedly exceptionally weak because of the differences between the two logos?

[00:39:51] Speaker 04:
I mean, I think if we're at the point of, you know, after the fact just trying to argue about differences between, you know, colors or how a mark sounds, again, we're too far from the record.

[00:40:05] Speaker 04:
And certainly, and we cited these cases in our brief, there have been plenty of cases that have found that claims are reasonable when the marks at issue are a lot further apart than the marks at issue here.

[00:40:16] Speaker 04:
I mean, we have marks that have the same exact primary word involved.

[00:40:21] Speaker 04:
got a logo that looks very similar.

[00:40:23] Speaker 04:
They both have distinctive aspects of the logo that are identical in terms of arrows and interlocking arrows.

[00:40:29] Speaker 04:
So I mean, our view is certainly there's enough to be at least reasonable there.

[00:40:33] Speaker 04:
We wouldn't have had to win the claim.

[00:40:35] Speaker 04:
It's just, was it a reasonable claim?

[00:40:37] Speaker 01:
What do the cases say about going outside the record and determining the award of attorney's fee?

[00:40:45] Speaker 01:
There's language in the Supreme Court cases saying this shouldn't be the occasion for a new litigation.

[00:40:51] Speaker 01:
Right.

[00:40:51] Speaker 01:
I mean certainly you're not going to have discovery on the merits and trial on the merits in connection with the attorneys.

[00:40:58] Speaker 01:
Do the cases say the district court is limited to the record that has already been made?

[00:41:04] Speaker 04:
I don't know if the cases get that specific.

[00:41:06] Speaker 04:
Certainly the gist of the authorities is that

[00:41:10] Speaker 04:
Finding of an exceptionality should be readily apparent from the record and that you shouldn't have to get into many trials on the merits After the fact in order to get to a finding of exceptionality So I think the weight of authority certainly suggests that it should be readily apparent from the record, and that's just not the case here Thank you, mr.. Thank you council of cases so