[00:00:02] Speaker 04:
The United States Court of Appeals for the Federal Circuit is now opened and in session.

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God save the United States and this honorable court.

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Good morning, ladies and gentlemen.

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We have four cases this morning, two of them being argued.

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The first is Psionics LLC versus Tamamatsu Photonics 19-2359.

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Mr. Simmons, good morning.

[00:00:29] Speaker 04:
Good morning, Your Honor.

[00:00:35] Speaker 02:
Mr. Simmons, you've raised a lot of issues, and I think we need to get down to the key ones right off the bat.

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Tell us what you think about ownership of patents.

[00:00:53] Speaker 04:
Okay.

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So, Your Honor, the District Court abused its discretion by transferring complete ownership of the disputed U.S.

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patents, this act, based on an incorrect reading of the mutual non-disclosure agreement.

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SONICS and the district court treat the NDA as if it were a one-way NDA, even though it was specifically negotiated to be a two-way mutual NDA.

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Its purpose was for both parties to exchange confidential information.

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At Appendix 2881, which is the MNDA, the preamble states, each of the parties has developed information that each party regards as confidential.

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Each party proposes to disclose certain or such confidential information to the other party.

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Mr. Simmons?

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Council, if you're correct, and this is getting into the cross appeal, why shouldn't that apply to the foreign patents?

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Presumably the foreign patents provided the priority dates for the U.S.

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patents.

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So why isn't what's good for the goose good for the gander?

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We would agree that it should also apply to the foreign patent to the extent that there's evidence of record about the foreign patents.

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So if the finding of co-inventorship were found, then it would apply to the foreign patents.

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All right.

[00:02:21] Speaker 02:
So you're conceding part of the cross appeal.

[00:02:26] Speaker 04:
I'm not completely conceding it, Your Honor.

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I think there was a failure of proof on the cross appeal that the burden was on the plaintiff at the time, the cross appellants.

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to put in evidence of what was contributed to the claims of the foreign patents.

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And in fact, the only foreign patents that were put in the record were the Japanese patents.

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None of the other countries were actually listed by number, even though the cross opponents are asking you to transfer them all to them.

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So I think there's just a failure of proof with respect to the foreign patents.

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I think Judge Marino had a question.

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This is Judge Wallach.

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I had several questions.

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Reference the mutual exchange of confidential information in response to Judge Lurie.

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And on page seven of the blue brief, you say, psionics neglected to direct HBK to return or destroy any information.

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Tell me, did

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Did Hamamatsu direct Psionics to return or destroy any information?

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Not on the record, Your Honor, no.

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So then we can presume that you did not.

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That's correct.

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OK.

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And yet you're saying that you want us to presume that you provided confidential information.

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Is that correct?

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That is also correct, Your Honor.

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And yet you also say, since psionics didn't direct you to destroy anything, then we should presume that it neglected to do that.

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So there's no proof there.

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Is that correct?

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I'm sorry.

[00:04:28] Speaker 04:
I didn't understand that question, Your Honor.

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OK.

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You say they neglected to direct that.

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The mutual non-disclosure agreement says if the disclosing party has not directed the receiving party to return or destroy confidential information, the returning party shall return all such information.

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Did you return anything to Sionics?

[00:05:00] Speaker 04:
No.

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And in fact, Your Honor, that's part of our statute of limitations argument is that the failure to return confidential information under Paragraph 7, the notwithstanding clause, was a breach of the agreement.

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And FANUC was aware of that in February 2008.

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So it knew that we breached, that HBK breached.

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Mr. Simmons, stop talking when I talk.

[00:05:26] Speaker 04:
I'm sorry, Your Honor.

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We'll go a lot faster if you just answer my questions, okay?

[00:05:34] Speaker 00:
Of course.

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On page 21 of the blue brief, Emma Masu asserts that the district court rationalized evidence and that it contended.

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The courts don't do that, do they?

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I'm going to keep going.

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Yeah, I'm sorry.

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I don't understand the question, Your Honor.

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Mike, it wasn't a question.

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It was a statement.

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Courts don't rationalize.

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They don't argue.

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They don't contend.

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They find and they hold.

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On page 31, footnote 6 of the blue brief, Hamamatsu says that Harvard is arguably the richest university in the world.

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What's the basis for that statement?

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Well, what's the relevance of it?

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Yeah.

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Why is it... Do you have anything in the record?

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The answer is no.

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Isn't it?

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Well, the argument made by Cross Appellants was that because they were a small startup company that we were trying to... HBK was trying to drive them out of business.

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So that's the relevance of it.

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Do you have any information in the record to that effect?

[00:06:52] Speaker 04:
Only what's publicly available, Your Honor, not what's specifically in the record.

[00:06:56] Speaker 00:
Uh-huh.

[00:06:58] Speaker 00:
Um, okay.

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Let's get back to substance.

[00:07:01] Speaker 00:
Um, and, and Jay, uh... Also, what about the statute of... I'm sorry?

[00:07:07] Speaker 02:
Also, what about the statute of limitations?

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Uh, the jury seemed to, uh, find, uh, that that was not a bar for all, all the damages to the breach claim.

[00:07:22] Speaker 04:
I'm sorry, Your Honor.

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What we're specifically focused on here today is that the failure to return within the 30 days, as Judge Wallace pointed out, did not withstanding clause.

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Since Phaonix did not ask for HBK to return the information within 30 days, HBK had to return the information within 30 days.

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And it did not.

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And that was a breach.

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And Phaonix has admitted at least three times in its red brief

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that the failure to return the confidential information caused its harm.

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So, our argument is that the failure to return the confidential information on February 10, 2008, was a breach, and Phoenix was aware of it.

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They knew that HBK still had its information.

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In fact... Apparently, the jury found that that was not a bug, and these are facts, are they not?

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The jury found that

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It was immaterial.

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The breach was immaterial or that Hamamatsu had concealed the breach.

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And so this is a jury finding based on facts.

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Don't we have to give a lot of deference to that?

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So there's two issues here.

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There's one issue.

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There's a breach by failure to return the information within 30 days.

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And the second was in a second argument that's in our brief, and we'll stand by it,

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is in February of 2009 when Hamamatsu sent detailed drawings that then FANIX would be on notice that Hamamatsu was still using its confidential information, which would be a second type of breach.

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With respect to the breach that the jury found, they found it based upon a February 1st, 2008 report that would demonstrate Hamamatsu was using the confidential information, but that was a different concealment argument.

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With respect to not returning the information,

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Phonics knew it didn't have its information back.

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In fact, Dr. Carey was asked about the February 2008 email.

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He says, did you feel at that point in time that you needed to tell Hamamatsu not to reference your proprietary information?

[00:09:36] Speaker 04:
No, I think they said they were not going to.

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So that was Appendix 820, which demonstrates implicitly that Phonics knew Hamamatsu still had its confidential information.

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And the harm could have been prevented by

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them asking for it back.

[00:09:53] Speaker 01:
Counselor, this is Judge Raina.

[00:09:56] Speaker 01:
It seems to me that under Massachusetts law, a jury can be charged with determining whether a claim is barred by the statute of limitations, right?

[00:10:07] Speaker 01:
Let's provide a fair Massachusetts law.

[00:10:09] Speaker 01:
Okay.

[00:10:10] Speaker 01:
So here, the jury determined that the nonreturn of information was not a material breach.

[00:10:19] Speaker 01:
Why should we disturb that finding?

[00:10:22] Speaker 04:
So there was a lot of confusing information put in during the trial about what allegedly was lulling or defrauding of Sonics.

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But Sonics couldn't have defrauded.

[00:10:35] Speaker 01:
I understand that, counselor.

[00:10:37] Speaker 01:
I understand that.

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And that information and those questions were put to the jury.

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And the jury deemed that the return of information, the non-return, was not a material breach.

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It seems to me that that was fairly within the right of the jury to decide.

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And my question is, looking at that determination, why should we disturb that jury determination?

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Right.

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So this court reviews it without deference to the district court and applies to no reasonable juror standards.

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There's no dispute that the information was not returned by the deadline of February 10, 2008.

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That failure to return was a breach because Section 7 required the return within 30 days.

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So there could have been no lulling and no reasonable juror could have concluded that HPK returned silence with confidential information.

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Therefore, a reasonable juror would have had to conclude that HPK breached by not returning it.

[00:11:34] Speaker 01:
But at the same time, HPK is also making a number of assurances that it's not using silence as confidential information.

[00:11:44] Speaker 01:
So it seems to me that your arguments to the jury that you did not use silence as confidential information

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goes against does not help your argument concerning the jury verdict.

[00:11:58] Speaker 04:
I think I understand.

[00:11:59] Speaker 04:
One of the issues at trial was whether the information was confidential or not.

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And HPK put on evidence about what it believed was not confidential.

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So HPK had a good faith belief that it wasn't using Sinox's confidential information.

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So had HPK returned the information,

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there could have been no dispute about what was confidential and what was not.

[00:12:21] Speaker 01:
Again, that's a good attorney argument, but the jury... And it's an argument that was put to the jury and the jury held against you.

[00:12:30] Speaker 01:
Why should we disturb that finding by the jury?

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Because no reasonable juror could have found it, Halamatsu returned the information, and Cyanics basically has never argued that it did.

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And that term was material.

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of that specific rifle shot issue.

[00:12:48] Speaker 01:
But your argument is also that you never did use any of the confidential information.

[00:12:54] Speaker 04:
Well, HBK didn't believe it was using confidential information because HBK believes Sinox's technology was limited to texturing in sulfur.

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And HBK textured in nitrogen, never in sulfur.

[00:13:06] Speaker 04:
So HBK had a good faith belief that they weren't using Sinox's technology.

[00:13:12] Speaker 02:
OK.

[00:13:13] Speaker 02:
You wanted to save eight minutes, and that's fine.

[00:13:20] Speaker 02:
But if you wanted to continue a little bit into your rebuttal time, that's all right, because probably your cross appeal is sort of lighter than your main appeal.

[00:13:31] Speaker 02:
Up to you.

[00:13:35] Speaker 04:
I have a lot more.

[00:13:36] Speaker 04:
I'd like to answer your questions, Judge Wallach.

[00:13:40] Speaker 00:
All right.

[00:13:41] Speaker 00:
Let's start with Marina.

[00:13:45] Speaker 00:
On page 50 of the blue brief, Amamatsu contends that district abuse discretion when considering the lack of factual findings related to the content of the disputed patents.

[00:14:00] Speaker 00:
The verdict is as to the claim under Massachusetts law for breach of contract, we find for psionics.

[00:14:07] Speaker 00:
Did Hamamatsu request specific jury instructions going through each of those issues?

[00:14:21] Speaker 04:
So the disputed patents were really only in the case to determine inventorship.

[00:14:28] Speaker 04:
So the only instructions about that was, I couldn't hear you, sorry.

[00:14:34] Speaker 00:
Did you ask for a jury instruction which

[00:14:37] Speaker 00:
Let the jury specifically decide whether your argument about psionics being on notice was sufficient to defeat their claims.

[00:14:57] Speaker 04:
I don't believe we did.

[00:15:01] Speaker 00:
Okay.

[00:15:04] Speaker 00:
On page 52 of the blue brief,

[00:15:07] Speaker 00:
You say the district court enjoined Hamamatsu indefinitely from selling the accused products, even though those would never be independently actioned, effectively a punishment for an earlier breach.

[00:15:23] Speaker 00:
What's your legal authority for that statement?

[00:15:26] Speaker 00:
I mean, effectively, under your standard, isn't every injunction a punishment?

[00:15:34] Speaker 04:
The district court found awarded a permanent injunction in this case.

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And the parties had specifically negotiated a seven-year confidentiality period.

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And after the seven years was up, that would no longer apply.

[00:15:47] Speaker 04:
By the district court awarding a permanent injunction, it basically read out the seven-year negotiated term.

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And that's in Section 8 of Appendix 2882.

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The obligation set forth in Section 2 shall remain in effect for a period of seven years.

[00:16:04] Speaker 04:
So, by issuing a permanent injunction.

[00:16:08] Speaker 02:
Counsel, you're down to about five minutes of rebuttal time.

[00:16:11] Speaker 02:
Do you want to say that?

[00:16:12] Speaker 04:
Yes.

[00:16:13] Speaker 04:
May I reserve the five minutes, Your Honor?

[00:16:15] Speaker 02:
Yes.

[00:16:17] Speaker 02:
All right.

[00:16:18] Speaker 02:
Mr. Bellanger.

[00:16:21] Speaker 03:
Thank you, Your Honor.

[00:16:23] Speaker 03:
So, I want to just start with addressing, if it pleases the court, the question on the ownership of the foreign patents.

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during his argument suggested there was no evidence presented regarding ownership of the Japanese parent applications and that's just not the case.

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There's multiple citations for the record in the gray brief at page 59 where we put in extensive evidence including testimony from Dr. Carey that the Japanese patent applications

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The figures were identical to those in the U.S.

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case, but more importantly, that Hamamatsu themselves filed the U.S.

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applications under 35 USC 119A stating that they were for the same inventions as the Japanese applications.

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And in fact, HPK stipulated to that fact at trial.

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So there is a stipulation as well as record evidence that amply supports that the finding of ownership of the U.S.

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patents should apply equally to the foreign patents.

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And the citations to the record are found in the gray brief, pages 59 and 60.

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Do you accept that the ownership of the patents worldwide should be joint because the parties work together?

[00:17:40] Speaker 03:
No, Your Honor.

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So we strongly dispute that.

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And that very argument was put to the district court.

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And we do not believe that the district court abuses discretion

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in finding sole ownership as opposed to joint ownership based on an interpretation of the contract as well as the district court considering Hamamatsu's argument that there was possibly some unidentified Hamamatsu confidential information disclosed and discounting that.

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And I point, Your Honor, to Appendix 585 to 586 and Appendix 838 where there is record evidence

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that supports the district court's finding that no confidential information was disclosed by Hamamatsu to Sionics.

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And what the district court found, and we believe is a correct reading of the contract, but for this court's purposes, not an abuse of discretion in reading the contract, is that it would be antithetical to the purpose of Section 5 of the agreement to say that Hamamatsu could take Sionics' confidential information, misuse it to develop products, and file patents on it,

[00:18:52] Speaker 03:
And because they allegedly, without evidence, mixed Cyanics with confidential information with some of its own confidential information, somehow it became the co-owner of that confidential information.

[00:19:03] Speaker 02:
So, firstly... If Hamamatsu is stated to be a co-inventor, companies aren't inventors.

[00:19:16] Speaker 02:
Hamamatsu's scientists, engineers,

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must have made contributions.

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And whether it's confidential or not is not relevant to inventorship.

[00:19:28] Speaker 02:
So why, if the parties work together, wasn't Hamamatsu's inventor a contributor, and therefore, Hamamatsu would be entitled to co-ownership?

[00:19:44] Speaker 03:
Because respectfully, Your Honor, the district court disagreed with that interpretation of the contract.

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The contract states that Psionics, as the party disclosing confidential information, would be the sole owner of any patents in or resulting from the confidential information.

[00:20:03] Speaker 03:
And so the finding does comport with the record evidence that Hamamatsu took the confidential information, used it in order to file the patents, and

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whether their individuals could be characterized as co-inventors, as your honor is correct, they are not the owners, the contract would control.

[00:20:28] Speaker 03:
And the contract states the psionics would maintain ownership, not just of its own confidential information, but any patents that were derived from that confidential information.

[00:20:37] Speaker 03:
So, it's sort of either the poisonous tree argument or the basis for the judge's finding of sole ownership.

[00:20:45] Speaker 01:
Counselor, this is Judge Arena.

[00:20:48] Speaker 01:
Let me ask you a quick question regarding the award of the injunction.

[00:20:53] Speaker 01:
HPK is arguing that the award was overbroad because it enjoined all the products that practiced the disputed patent.

[00:21:01] Speaker 01:
And it did that without finding infringement.

[00:21:04] Speaker 01:
What's your response to that argument?

[00:21:08] Speaker 03:
Yes, Your Honor.

[00:21:09] Speaker 03:
So I believe that

[00:21:11] Speaker 03:
There was evidence presented and we said it in the brief that the products did practice the disputed patent.

[00:21:18] Speaker 03:
There was testimony from the fact witness of Hamamatsu.

[00:21:21] Speaker 03:
There was also evidence presented that the basis for advertising those disputed products was based on the same technical content as in the disputed patent.

[00:21:35] Speaker 01:
But aren't those arguments a little...

[00:21:39] Speaker 01:
unstable because it never was a finding of infringement.

[00:21:44] Speaker 03:
I would concede there was not a finding of infringement.

[00:21:47] Speaker 03:
There was a finding of a breach of contract based on the same confidential information that made its way both into the products and the patent.

[00:21:55] Speaker 03:
And so the court enjoined further sale of the products that used that confidential information and enjoined sale of the same past products that also

[00:22:05] Speaker 01:
But that's not what the injunction does.

[00:22:09] Speaker 01:
It's not limited to product center.

[00:22:13] Speaker 01:
It's limited to products practicing the disputed patent.

[00:22:19] Speaker 01:
It doesn't say anything about the confidential information.

[00:22:24] Speaker 03:
And respectfully, I think it says and or, so it does refer to the disputed patents and says and or practicing the disputed patents.

[00:22:34] Speaker 03:
I would point out, Your Honor, that Hamamatsu did ask the district court for clarification of that portion of the injunction.

[00:22:40] Speaker 03:
They actually asked that the court substitute the word practicing for the word infringing, but they also asked for a finding that a certain process be found to be outside the scope of the injunction, and it does apply.

[00:22:55] Speaker 01:
Okay, so in an argument in the future that there's products that are practicing the disputed pen, can

[00:23:03] Speaker 01:
Does the injunction include that within a scope or does there have to be some type of finding of infringement?

[00:23:14] Speaker 01:
I'm concerned that the injunction may deal out the necessity of finding infringement in the future.

[00:23:24] Speaker 01:
All you have to say is that the products are practicing the disputed patent.

[00:23:30] Speaker 03:
And I think the scope of the injunction is consistent with the court's authority.

[00:23:36] Speaker 03:
The First Circuit gives courts broad authority to effectuate that it covers the products that were litigated.

[00:23:43] Speaker 03:
And this court's precedent is clear, products that are only color will be different from the products that were litigated would also be covered.

[00:23:50] Speaker 03:
And so the finding is would cover

[00:23:55] Speaker 03:
products that have the attributes of the disputed product.

[00:23:59] Speaker 03:
So I apologize, Your Honor, but just backing up and making one clarification point.

[00:24:04] Speaker 03:
So the disputed patent on the end product, the end result, the asserted patent and the patent infringement was based on a specific process.

[00:24:13] Speaker 03:
And so there was extensive evidence put on a trial by Hamamatsu and considered by the district court that there may be two different processes by which to achieve the end result of the disputed products

[00:24:24] Speaker 03:
that are described in the disputed patents.

[00:24:27] Speaker 03:
And so the clarification that Hamamatsu asked for was to exclude one of those two processes.

[00:24:32] Speaker 03:
And we would respectfully submit that the end product is what's being enjoined, not the process by which it's made under the contract.

[00:24:39] Speaker 01:
Thank you.

[00:24:39] Speaker 01:
Thank you.

[00:24:41] Speaker 02:
Council, back to ownership again.

[00:24:42] Speaker 02:
Was there no evidence that Hamamatsu contributed confidential information to the joint research?

[00:24:53] Speaker 03:
I'm not aware of any.

[00:24:54] Speaker 03:
such information, there was definitely evidence presented that they did not.

[00:25:00] Speaker 03:
And that was certainly evidence that the jury and the judge could have believed and would have supported the judge's finding of sole ownership.

[00:25:09] Speaker 02:
Now, on the statute of limitations issue, if we found that there was a bar because there was a breach in 08,

[00:25:20] Speaker 02:
Does that eliminate all the non-patent remedies?

[00:25:27] Speaker 03:
If this court were to find that there was a special, yes, I believe that would eliminate the contract remedy.

[00:25:35] Speaker 02:
Yes, Your Honor.

[00:25:36] Speaker 02:
OK.

[00:25:36] Speaker 02:
Now defend the conclusion that the 2008 failure to return the information

[00:25:49] Speaker 02:
marked the breach because the jury didn't find that.

[00:25:53] Speaker 03:
Correct.

[00:25:54] Speaker 03:
All of Mr. Simmons' arguments were presented to the jury and that evidence was presented to the jury around the question of whether there was a volleying or fraudulent concealment of any breach.

[00:26:04] Speaker 03:
And the record evidence is clear that Stionix asked Hamamatsu to secure his confidential information and to confirm that it would not use it.

[00:26:13] Speaker 03:
and Hamamatsu so confirmed.

[00:26:15] Speaker 03:
They confirmed that they would make no use of the information, and so they had no interest in the technology.

[00:26:20] Speaker 03:
And so that is certainly under First Circuit standards of whether evidence was so strongly and overwhelmingly inconsistent with the verdict that no reasonable jury could have returned it.

[00:26:32] Speaker 03:
There's definitely evidence in the record that the jury could have waved to say that that was not a material breach to merely keep information and make no use of it.

[00:26:42] Speaker 03:
The quibbling between the definition of what it means to secure information versus destroy it, the material breach here with the use of the information, and to suggest that merely allowing Hamamatsu to keep information without using it is the same as allowing them to keep information and use it, which they repeatedly insisted they would not do.

[00:27:01] Speaker 03:
I think that is certainly evidence that it's supportive of the jury's verdict of no violation of the statute of limitations.

[00:27:13] Speaker 02:
You may proceed.

[00:27:16] Speaker 03:
Thank you.

[00:27:21] Speaker 03:
And just to make sure that I'm directing you to the correct record evidence, Appendix Pages 3013 to 3017 is the email exchange at the time in 2008 where Mr. Kobayashi of Hamamatsu and Mr. Saylor at Bionics

[00:27:42] Speaker 03:
had an exchange of emails where Kalamazoo repeatedly assured Psyonix that it would not make any use of its confidential information and would respect it.

[00:27:51] Speaker 03:
So I think that adequately supports the jury's verdict.

[00:27:58] Speaker 03:
Regarding the patent injunction, I know in the required brief, appellants contend that there's no evidence of competition.

[00:28:10] Speaker 03:
Just to touch on that briefly,

[00:28:12] Speaker 03:
I believe this case, this court's case law is clear that competition is not the sole requirement for enjoining further infringement.

[00:28:22] Speaker 03:
But if it were, there is record evidence of competition.

[00:28:25] Speaker 03:
And specifically, there's record evidence that Psionics was harmed through the loss of a contract with Nikon.

[00:28:33] Speaker 03:
And there's also record evidence that, and this is at,

[00:28:39] Speaker 03:
Appendix 1238, the Kanamatsu was supplying the fringing products to Nikon and had a contractual relation to Nikon.

[00:28:49] Speaker 03:
At the same time, Nikon was discontinuing its work with products.

[00:28:52] Speaker 03:
And so that is evidence within the record that a reasonable jury could have concluded and that the trial court could have relied on to find that there was direct competition.

[00:29:05] Speaker 03:
On the issue of willfulness, just to hit that briefly,

[00:29:09] Speaker 03:
And that is also relevant to the cross appeal.

[00:29:13] Speaker 03:
So on the issue of willfulness, there's undisputed record evidence that the parent application for the patent that was found to be entrenched and willfully entrenched by the jury, that parent application was in Hamamatsu's files.

[00:29:28] Speaker 03:
It was studied and evaluated in the context of developing the infringing products.

[00:29:35] Speaker 03:
There's evidence that they copied the Xionics technology.

[00:29:39] Speaker 03:
Ample evidence, I think in some of the briefs, Hamamatsu says the patent was not filed until after the alleged bad act.

[00:29:47] Speaker 03:
That's just not consistent with the record.

[00:29:49] Speaker 03:
The record is that they had a copy of the exact specification, parent application, inner files, and they had that specification before they copied Cyanics' products.

[00:30:03] Speaker 03:
And so that should not be a, not provide the ability to find steps to finding the willfulness

[00:30:09] Speaker 03:
Further, there was evidence that Hamamatsu was monitoring Harvard's patents and Zionics' patents.

[00:30:15] Speaker 03:
While the only specific evidence of monitoring the patent family at issue was extended from 2006 to 2009, that was sufficient, as the trial court found, to create an inference that that monitoring continued until after the issuance of the 367 patent at issue.

[00:30:34] Speaker 03:
So there's certainly evidence to support their wilderness finding.

[00:30:38] Speaker 03:
And I was, if I could shift to the cross field briefly, Your Honor.

[00:30:47] Speaker 05:
Yes, go ahead.

[00:30:49] Speaker 03:
So on the issue of exceptional case, I would just say briefly, we believe that the trial court's error there was in misapprehending the standard for finding the case exceptional in believing that some subjective bad faith on the

[00:31:08] Speaker 03:
part of counsel is required.

[00:31:10] Speaker 03:
And we believe that this court consistently has held that the finding of willfulness by itself and objectively unreasonable behavior can support a finding of... Counselor, are you saying that the court did not apply octane in its analysis?

[00:31:28] Speaker 03:
Did not octane correctly.

[00:31:29] Speaker 03:
That's right, Your Honor, because... Correctly.

[00:31:33] Speaker 03:
Okay.

[00:31:33] Speaker 03:
Correct.

[00:31:33] Speaker 03:
The court does cite the octane.

[00:31:35] Speaker 03:
However, the court, we believe respectfully, misapplied it by believing there was a subjective intent requirement as opposed to looking at the conduct objectively and also acknowledging that a finding of willful infringement, which we have here, can be enough to find the case exceptional.

[00:31:56] Speaker 02:
You mean the judgment was low octane?

[00:32:03] Speaker 03:
Yes, sir.

[00:32:04] Speaker 02:
You may continue or we'll save the remainder of your time for the cross appeal if there's something to respond to from a felon.

[00:32:17] Speaker 02:
So we'll save it for you.

[00:32:19] Speaker 03:
And Your Honor, just one last point if you don't mind on the prejudgment interest question.

[00:32:24] Speaker 03:
There was a new case cited in the felon's reply brief on that point.

[00:32:31] Speaker 03:
It was a Massachusetts state trial court decision.

[00:32:35] Speaker 03:
And I would just point out that the case that we rely on and that the district court relied on was the First Circuit opinion finding that unjust enrichment was damages subject to the statutory interest requirement that application of prejudging interest is mandatory and that the First Circuit case is binding

[00:32:59] Speaker 03:
on the Massachusetts District Court, and that a Massachusetts trial court decision, which is what appellants cite, is not binding on the Massachusetts District Court.

[00:33:09] Speaker 03:
And the support for that is O'Connor v. Oakhurst, 851th at 3rd, 62 at 72, that's its first circuit, 2017 opinion that notes that state trial court decisions are not binding on a federal district court when applying Massachusetts law.

[00:33:26] Speaker 03:
And so for that reason, among the others,

[00:33:29] Speaker 03:
articulated in the brief, we believe the trial court correctly applied Section 6C in finding that prejudgment interest applies to unjust and racial crimes.

[00:33:41] Speaker 02:
Thank you, counsel.

[00:33:42] Speaker 02:
Mr. Simmons?

[00:33:44] Speaker 04:
Thank you, Your Honor.

[00:33:46] Speaker 02:
Perhaps five minutes.

[00:33:50] Speaker 04:
So briefly on the exceptional case, we've made it clear in our brief that the opinion as a whole demonstrates the district court correctly applied octane fitness

[00:33:59] Speaker 04:
The cross-appellants presented their or framed it in the way they did and the district court just responded to it.

[00:34:08] Speaker 04:
We'll also point out that the district court lived with the case for three years and exercised its discretion and did not find that the case stood out amongst others.

[00:34:18] Speaker 04:
This is just a rehash of the case under an exceptional case motion.

[00:34:22] Speaker 04:
And I'm going to go back to the ownership issue.

[00:34:24] Speaker 04:
We talked about whether Kalamazo inventors contributed confidential information.

[00:34:29] Speaker 04:
The MNDA presumes that information disclosed between the parties is confidential under Section 1, unless proven otherwise, which Cyanics didn't do.

[00:34:39] Speaker 04:
The record demonstrates that the information HPK disclosed during the evaluation included proprietary methods and know-how, which are by definition confidential under the agreement.

[00:34:50] Speaker 04:
And that's site appendix 1107 to 1108 and appendix 1111 to 1112.

[00:34:55] Speaker 01:
The reality is,

[00:34:59] Speaker 04:
Both parties exchange confidential information.

[00:35:02] Speaker 04:
So in Section 5, Appendix 2882, the receiving party acknowledges the disclosing party claims ownership of the confidential information disclosed by the disclosing party and all patent rights in or arising from such confidential information.

[00:35:17] Speaker 04:
In this case, both were disclosing parties and both were receiving parties.

[00:35:22] Speaker 04:
During the evaluation, each party disclosed confidential information to the other.

[00:35:26] Speaker 04:
So it follows that each claims ownership and the patent rights arising from such confidential information, they respectively disclosed.

[00:35:33] Speaker 04:
The only thing that they're referring to that they're not aware of confidential information was testimony from Psionics' Dr. Carey, who said he wasn't aware of any, but he wouldn't be in a position to know.

[00:35:45] Speaker 04:
And if I could turn to the breach of contract injunction, you have pointed out that the injunction calls for practicing the disputed patents.

[00:35:53] Speaker 04:
Will this court previously held and make them?

[00:35:55] Speaker 04:
which is 881S3, 1323, that even in a breach of contract case, injunctions which merely forbid practicing a patent are overly broad.

[00:36:05] Speaker 04:
The injunction here is just like Macom.

[00:36:08] Speaker 04:
It merely forbids practicing the U.S.

[00:36:09] Speaker 04:
dispute of patents, and it's overly broad for that reason.

[00:36:14] Speaker 04:
The dispute of patents were only in the case to determine inventorship.

[00:36:17] Speaker 04:
There was no adjudication as to the scope of the claims or an analysis of what products would be infringing them, not even the accused products.

[00:36:24] Speaker 04:
And the cross-appellants in their grade brief at 16 to 17 now urge that the injunction is even broader because they say that practicing means the injunction is worldwide with respect to these US patents.

[00:36:37] Speaker 04:
If I could turn to the foreign ownership issue just briefly.

[00:36:41] Speaker 04:
I think the cross-appellants are relying on a stipulation about 35 UST 119.

[00:36:49] Speaker 04:
We agree we made that stipulation.

[00:36:51] Speaker 04:
But making their argument, it's an improper understanding of Section 119.

[00:36:55] Speaker 04:
119 doesn't require that the US patents be a translation of the Japanese patents.

[00:37:01] Speaker 04:
That's inaccurate.

[00:37:03] Speaker 04:
And we actually disputed that on the record.

[00:37:05] Speaker 04:
Unfortunately, it's not in the appendix because it wasn't submitted in the briefs.

[00:37:09] Speaker 04:
But if it pleases the court, we can submit pages of the transcript from that day of the trial.

[00:37:18] Speaker 04:
And we'd also note that

[00:37:21] Speaker 04:
cross-appellants are asking the district court, and now this court, to transfer a list of foreign patents without ever giving the court the patent numbers.

[00:37:30] Speaker 04:
So there's patents in China, Europe, Korea, Taiwan, none of which are of record in the case.

[00:37:37] Speaker 04:
And that's a failure of proof by the cross-appellants.

[00:37:46] Speaker 04:
Any questions, Your Honor?

[00:37:50] Speaker 02:
Apparently not.

[00:37:51] Speaker 02:
No.

[00:37:52] Speaker 02:
Thank you, Your Honor.

[00:37:54] Speaker 04:
Thank you, panel.

[00:37:55] Speaker 02:
Mr. Villanger has, what, three minutes to respond on foreign patents and attorney fees.

[00:38:04] Speaker 03:
Thank you, Your Honor.

[00:38:05] Speaker 03:
And I would start with counsel on the foreign patent issue.

[00:38:11] Speaker 03:
Counsel made an observation that Dr. Carey wouldn't be in a position to know whether Hamamatsu had provided confidential information.

[00:38:18] Speaker 03:
respectfully, Dr. Carey was the principal individual involved in the collaboration, and he testified clearly, Appendix 585, was any of the information in this exhibit Hamamatsu confidential to your knowledge?

[00:38:32] Speaker 03:
No.

[00:38:32] Speaker 03:
He then, at Appendix 640-41, was walked through in the Hamamatsu patents themselves.

[00:38:39] Speaker 03:
There was a specific comparison between the prior art, what Hamamatsu themselves characterized as the prior art, and the inventive example

[00:38:48] Speaker 03:
And what Mr. Simmons has just argued is confidential to Hamamatsu is exactly what was defined by Hamamatsu's prior art.

[00:38:57] Speaker 03:
Dr. Carey was asked about whether anything in the patent examples was Hamamatsu's confidential information, and he testified no.

[00:39:05] Speaker 03:
And so this is evidence that the district court surely could have reasonably considered in finding that Sionics should be deemed a sole owner.

[00:39:16] Speaker 03:
to put a finer point on it, essentially they're saying that they could appropriate confidential information from Bionics and become a co-owner of it by mixing it with their own.

[00:39:25] Speaker 03:
And certainly the trial court considered that argument and rejected it based on the court's, we believe, correct, but certainly not.

[00:39:34] Speaker 02:
Mr. Blanchard, you're asking for co-ownership of all the foreign patents.

[00:39:41] Speaker 02:
You haven't specified them.

[00:39:42] Speaker 02:
You haven't made them a record, have you?

[00:39:44] Speaker 03:
We did make the foreign parent, the Japanese parent, of record.

[00:39:49] Speaker 02:
The Japanese parents?

[00:39:51] Speaker 02:
The catalog you're asking for?

[00:39:56] Speaker 02:
And the string side is in page 59 of our... You're just asking for the Japanese patents, not the Korean and Chinese and the European?

[00:40:08] Speaker 03:
We're asking for the children, so it's a matter of record.

[00:40:12] Speaker 03:
the patents that issue from those parent applications.

[00:40:16] Speaker 03:
And so, which is a typical... I would just turn this to somewhat of a policy issue that it's typical for contracts to assign ownership to foreign patents by stating that it applies to the priority application and any patents issuing from the priority application and that's what we're asking about.

[00:40:33] Speaker 03:
But I can see, Your Honor, that what's in the record is all of the prior

[00:40:40] Speaker 03:
have all the priority applications and the Richardson case does exactly this, Your Honor, is by saying that the assignment is for the priority application and all patents issuing from the priority application under Richardson proper... Counselor, but doesn't section 119 require, the priority requires that they be for the same invention?

[00:41:02] Speaker 01:
Are you saying that all of these foreign patents from the countries other than Japan are all for the same invention?

[00:41:11] Speaker 03:
That's what we're asking for an assignment of.

[00:41:13] Speaker 03:
Yes, Your Honor.

[00:41:13] Speaker 03:
There's patents filed under the Patent Cooperation Treaty.

[00:41:16] Speaker 01:
I know you're asking for an assignment of them, but are they all for the same invention?

[00:41:20] Speaker 01:
Has that been shown?

[00:41:25] Speaker 03:
Yes, Your Honor.

[00:41:26] Speaker 03:
We believe it has been shown by the way that simply by claiming priority under the PCP, they are claiming that they are the full and patent valid for the same invention.

[00:41:37] Speaker 02:
Well, enough to claim.

[00:41:38] Speaker 02:
That's a claim.

[00:41:39] Speaker 02:
Unless there's an adjudication, one doesn't necessarily get the benefit of the priority application.

[00:41:48] Speaker 02:
But I understand your position.

[00:41:51] Speaker 03:
And if I could break it into, respectfully, certainly the Japanese parents are in the record.

[00:41:58] Speaker 03:
They were the subject of expressed testimony.

[00:42:01] Speaker 03:
And they're the subject of stipulation that they are in fact for the same invention.

[00:42:04] Speaker 03:
So at a minimum, the Japanese patents should be assigned.

[00:42:08] Speaker 03:
We believe that that same finding on Richardson applies to all of the other foreign applications, but we would at a minimum submit that the Japanese patent and Japanese parent should be assigned under the same rationale.

[00:42:25] Speaker 02:
Thank you, counsel.

[00:42:26] Speaker 02:
We will take action on the submission.

[00:42:29] Speaker 03:
Thank you, Your Honor.