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

[00:00:06] Speaker 04:
God save the United States and this honorable court.

[00:00:13] Speaker 04:
Good morning.

[00:00:15] Speaker 04:
We have a busy morning this morning.

[00:00:17] Speaker 04:
We have four cases set for argument and we have one case that has been submitted on the briefs.

[00:00:24] Speaker 04:
We're ready to proceed now with the first case.

[00:00:27] Speaker 04:
And this is Tech Pharmacy Services LLC versus Alexa RX LLC, number 19-1488.

[00:00:39] Speaker 04:
Mr. Melsheimer, are you ready to proceed?

[00:00:42] Speaker 03:
I am, Your Honor.

[00:00:44] Speaker 04:
And I understand that you reserved five minutes for rebuttal, correct?

[00:00:47] Speaker 03:
Yes, Your Honor.

[00:00:50] Speaker 04:
Okay, you may begin.

[00:00:52] Speaker 03:
May it please the court?

[00:00:53] Speaker 03:
I'm Tom Melsheimer.

[00:00:54] Speaker 03:
I'm here on behalf of Alexa.

[00:00:56] Speaker 03:
Fillmore Capital Partners and Golden Gate National Senior Care.

[00:01:01] Speaker 03:
I will refer to these parties collectively as Golden Gate.

[00:01:04] Speaker 03:
I hope the panel is safe and well.

[00:01:07] Speaker 03:
Our main issue on appeal relates to Tech Pharmacy, sometimes called Advanced Pharmacy's breach of contract claim against Golden Gate.

[00:01:16] Speaker 03:
There are two parts to the argument we've made.

[00:01:21] Speaker 03:
The district court's judgment as to the breach of contract claim against Golden Gate should be reversed and rendered in favor of Golden Leving because Tech Pharmacy failed to offer any evidence demonstrating that Golden Gate's alleged breach of the 2009 confidentiality agreement proximately caused Tech Pharmacy's lost profits.

[00:01:44] Speaker 03:
And then second and relatedly, we are entitled to judgment in our favor

[00:01:50] Speaker 03:
Because Tech Pharmacy completely failed to distinguish between the alleged damages attributable to the breach of contract claim, the fraud claim, the patent infringement claim, and the trade secret misappropriation claim, the last three of those claims all having been rejected by the jury.

[00:02:11] Speaker 03:
I'd like to start with proximate cause.

[00:02:13] Speaker 03:
And to do that, we have to first look at the record to determine what confidential information

[00:02:21] Speaker 03:
could have conceivably been the proximate cause of any damage.

[00:02:26] Speaker 03:
We raised this question in our brief, and Tech Pharmacy identified three alleged confidential information.

[00:02:34] Speaker 03:
One was the general site visit to a machine location with no specific confidential information identified.

[00:02:42] Speaker 03:
Another was a conversation between us and the former CEO of Tech Pharmacy, again,

[00:02:49] Speaker 03:
without any identification of any information.

[00:02:52] Speaker 03:
And then finally, the cost of goods sold, and that's at appendix 13032.

[00:02:59] Speaker 03:
Your honors, we must then search for what evidence exists that shows a causal connection between the alleged breach and Tech Pharmacy's lost profits.

[00:03:13] Speaker 03:
They pled a lost profits case, and indeed, their theory is

[00:03:18] Speaker 03:
that but for the use of... Yes?

[00:03:22] Speaker 04:
This is Judge Raina.

[00:03:25] Speaker 04:
I'm very interested in the damages issues here.

[00:03:30] Speaker 04:
Why is it that the evidence that's been submitted as to the value of the tech company being above $50 million, why does that not serve as evidence

[00:03:48] Speaker 04:
that goes to lost profits.

[00:03:50] Speaker 03:
Your Honor, thank you.

[00:03:51] Speaker 03:
Your Honor, because the valuation that the district court pointed to, and indeed that Tech Pharmacy points to on appeal, has nothing to do at all logically or reasonably with their claim of lost profits.

[00:04:06] Speaker 03:
Remember, that $15 million is a reference to an offer

[00:04:13] Speaker 03:
that Golden Gate made for an 85% interest in all of Tech Pharmacy, which would have included all their trade secrets, their patents, their property, anything, an 85% interest in that.

[00:04:28] Speaker 03:
It is not the theory that they went to the jury on.

[00:04:31] Speaker 03:
They did not go to the jury on an issue of the value of the company.

[00:04:37] Speaker 03:
So just because that number's out there and the district court

[00:04:41] Speaker 03:
in an attempt to explain the $15 million damage number said, well, the jury could have looked at this, and that may be that they could have looked at it, but the problem, Your Honor, is it has no relationship whatsoever, causally or otherwise, to the claim of lost profits and but for damages.

[00:05:03] Speaker 04:
Remember, their claim is... This is Judge Rain again.

[00:05:07] Speaker 04:
Why isn't it then just that valuation, why isn't it valuation evidence?

[00:05:12] Speaker 04:
When you sought to offer a controlling interest in the company, why isn't the $50 million indicative of the value of the business venture?

[00:05:22] Speaker 04:
I mean, that's what you offered.

[00:05:25] Speaker 03:
Your Honor, it is some evidence of what we valued an 85% interest in the company.

[00:05:33] Speaker 03:
That's true.

[00:05:35] Speaker 03:
Now, it was not accepted, and we were under no obligation to make that.

[00:05:41] Speaker 03:
But, Your Honor, that's not their claim for damages.

[00:05:44] Speaker 03:
Their claim for damages is that but for our use of confidential information, this is what their expert says, starting at Appendix 7258.

[00:05:53] Speaker 03:
They say that but for our use of some unspecified confidential information,

[00:06:01] Speaker 03:
We wouldn't have been able to create a competitor to them.

[00:06:04] Speaker 03:
And because we created a competitor with that information, they allegedly lost profits.

[00:06:11] Speaker 03:
Our valuation of an 85% interest in their company is not connected to that in any way.

[00:06:18] Speaker 03:
And I would submit that that is simply a bridge too far for this court or for the jury to reach.

[00:06:24] Speaker 03:
It is a number.

[00:06:25] Speaker 03:
that is in the record.

[00:06:27] Speaker 03:
And if we were arguing, if this case was about, well, what was the value of their business?

[00:06:33] Speaker 03:
And they had an expert that said, well, the value was $100 million.

[00:06:36] Speaker 03:
And we had an expert that said, no, the value is $1 million.

[00:06:39] Speaker 03:
Then you'd have a classic case where the jury would be entitled to look at the evidence and come up with their own number.

[00:06:46] Speaker 03:
That is not this case, Your Honor.

[00:06:49] Speaker 03:
This is a case where they specifically were limited

[00:06:53] Speaker 03:
under Delaware law to lost profits of their business as a result of our breaching the confidentiality agreement.

[00:07:02] Speaker 03:
And they said, in the but for world, we wouldn't have been able to have a competing business.

[00:07:08] Speaker 03:
And they offered no evidence from which a reasonable jury could have drawn any number.

[00:07:14] Speaker 03:
Their expert didn't do it, and there's no evidence in the record from which

[00:07:18] Speaker 03:
The jury could have done it.

[00:07:20] Speaker 03:
I don't believe that the $15 million, even though that was a stated number that we offered that was, in some sense, our version of evaluation, you can't simply say, well, that's lost profits in a but for a world.

[00:07:35] Speaker 03:
Their expert didn't try to do that, and no other expert in the trial attempted to do that.

[00:07:44] Speaker 03:
What their expert did do, Your Honor, is he attempted to identify, to show a causal connection between the breach and Tech Pharmacy's lost profits.

[00:07:57] Speaker 03:
Now the truth is, they threw a lot of stuff up against the wall here.

[00:08:00] Speaker 03:
Their expert did not attempt to distinguish between the various causes of action.

[00:08:05] Speaker 03:
But he identified, he made five different statements starting at 7258 of the appendix.

[00:08:12] Speaker 03:
And he said this was the evidence of causation.

[00:08:16] Speaker 03:
One, that there were certain benefits associated with remote packaging and dispensing of pharmaceuticals.

[00:08:23] Speaker 03:
No one can test that, and it's not confidential.

[00:08:26] Speaker 03:
He cites the fact that Tech Pharmacy was Golden Living or Golden Gate's most highly recommended provider for services.

[00:08:34] Speaker 03:
Again, no one can test that.

[00:08:36] Speaker 03:
That's not confidential.

[00:08:38] Speaker 03:
Third, he stated that, well, Golden Living had said, or Golden Gate had said, that it only wanted one provider for these services.

[00:08:46] Speaker 03:
And again, no one can test that.

[00:08:48] Speaker 03:
It has nothing to do with confidential information.

[00:08:51] Speaker 03:
Fourthly, he said that the Alexa machines that were developed later and the tech pharmacy machine was functional equivalent.

[00:09:02] Speaker 03:
This generalization still fails to show.

[00:09:05] Speaker 03:
how any specific confidential information was used to form a competitor.

[00:09:10] Speaker 03:
And finally, he says that Alexa, the company that Golden Gate formed, stepped in and took facilities away from Tech Pharmacy.

[00:09:19] Speaker 03:
Now it's true that Alexa became a competitor and may well have taken business from Tech Pharmacy, but that does not show the link between a specific piece of confidential information

[00:09:33] Speaker 03:
that that was used to become a competitor or cause lost profits.

[00:09:36] Speaker 03:
And in fact, Your Honor, this agreement is in this 2009 confidentiality agreement is not an agreement not to compete.

[00:09:47] Speaker 03:
It's at the appendix 105.7a.

[00:09:50] Speaker 03:
It's not an agreement not to compete.

[00:09:53] Speaker 03:
It's not an agreement that offers a right of first refusal.

[00:09:56] Speaker 03:
In fact, it presumes

[00:09:58] Speaker 03:
in it, that there will be no track transaction between the parties at all, and the parties can go on their way.

[00:10:04] Speaker 03:
The only restriction is, is we can't use confidential information as specifically defined in that agreement.

[00:10:12] Speaker 04:
Now... Okay, Counsel, can you go on to the issue of non-infringement?

[00:10:20] Speaker 03:
Yes, Your Honor.

[00:10:21] Speaker 04:
Jay Maul for non-infringement.

[00:10:23] Speaker 03:
Yes, Your Honor.

[00:10:24] Speaker 03:
With respect to that issue, that was a hotly contested issue in front of the jury.

[00:10:32] Speaker 03:
The issue in that was management and control, whether or not the central location or the central pharmacy controlled the dispensing of the medications in the nursing homes.

[00:10:50] Speaker 03:
And it was a hotly contested issue.

[00:10:52] Speaker 03:
If I might just finish that answer, Your Honor, and I know I'm going into my rebuttal time.

[00:11:00] Speaker 03:
That is an issue where we argued that the nurses on the ground in the nursing home had control, that they had some semblance of control that

[00:11:11] Speaker 03:
that the medication could not be dispensed without the nurse taking action, we argued that meant that the central pharmacy was not controlling.

[00:11:19] Speaker 03:
The plaintiffs argued something different.

[00:11:21] Speaker 03:
The jury heard both sides of that and concluded that there was not the managing control as required by the patent and by the court's market construction.

[00:11:34] Speaker 03:
The plaintiff here is trying to rewrite that construction to make it controlled to some extent, I submit,

[00:11:41] Speaker 03:
And that's not the construction.

[00:11:42] Speaker 03:
That's not what the jury heard.

[00:11:44] Speaker 03:
The jury heard evidence on both sides.

[00:11:46] Speaker 03:
They were entitled to find, as they did, that there was no infringement.

[00:11:50] Speaker 03:
I'll reserve the rest of my time, Your Honor.

[00:12:05] Speaker 00:
Good morning, Your Honors, and may it please the court, Jessica Ellsworth for Tech Pharmacy.

[00:12:11] Speaker 00:
Council began this morning by telling you that their contract appeal rests on two arguments, one about proximate causation and one about damages.

[00:12:22] Speaker 00:
I want to be clear on what their appeal doesn't involve, and that's an appeal of the district court's finding that the jury was within its discretion to find that there was a breach of the agreement.

[00:12:35] Speaker 00:
At footnote one of the defendant's reply brief, they suggest that they are also making an argument

[00:12:41] Speaker 00:
about whether there was a breach of the contract.

[00:12:44] Speaker 00:
But that argument was not presented in their opening brief and is waived.

[00:12:48] Speaker 00:
So that leaves them with two issues and two issues only, proximate cause and damages.

[00:12:54] Speaker 00:
And those two issues really go together.

[00:12:56] Speaker 00:
This was a three-week trial to a jury who heard extensive witness testimony and saw extensive documentary evidence showing that Tech Pharmacy shared extensive confidential information

[00:13:10] Speaker 00:
with the defendant under a confidentiality agreement that limited the defendant's use of that information.

[00:13:18] Speaker 00:
And then the defendant turned around and created a very similar competing business.

[00:13:25] Speaker 04:
All of the... This is Judge Raina.

[00:13:28] Speaker 04:
Let's assume for a minute that there was a breach and that's not a dispute.

[00:13:35] Speaker 04:
Your opponent argues that there's no damages.

[00:13:38] Speaker 04:
There's no connection between the jury award of damages and back to the breach.

[00:13:45] Speaker 04:
What's your reply to that?

[00:13:47] Speaker 00:
Certainly, Your Honor.

[00:13:50] Speaker 00:
For one thing, the jury was free to infer from the extensive testimony about the confidential information that was provided and the development of the very similar competing business that the confidential information played a role in it.

[00:14:05] Speaker 00:
After all, it violated the confidentiality agreement if the defendants used the confidential information even to just accelerate the research and development of their own device and systems.

[00:14:16] Speaker 00:
Here, under Delaware law, which applies and just requires an estimate of damages, you have an expert who testified extensively for 25 pages how he calculated the lost profits

[00:14:30] Speaker 00:
Tech Pharmacy would have made in the absence of wrongful conduct by the defendants.

[00:14:36] Speaker 00:
And the jury was instructed to use lost profits for the contract claim.

[00:14:42] Speaker 00:
If you look at Dr. Ugone's testimony about how he reached his calculation, and it runs from roughly page 7250 to 7274 of the appendix,

[00:14:53] Speaker 00:
He carefully walks through the evidence showing that there was a demand for Tech Pharmacy's machines from Golden Living, the evidence showing that Golden Living, without Elixir, would have looked to Tech Pharmacy to fill its needs.

[00:15:08] Speaker 00:
He walks through the revenue, the cost, and the profits on a per-machine basis, Tech Pharmacy's manufacturing and marketing capabilities, the cost of making machines, and of course, the number that he presented to the jury was $65 million.

[00:15:23] Speaker 00:
But then the defendants cross-examined him, and they argued that Tech Pharmacy's system was only approved in three states, and Golden Living operated in 20.

[00:15:31] Speaker 00:
They talked about there being no basis in their cross-examination for 30 placements at non-Golden Living facilities.

[00:15:41] Speaker 00:
And then they presented their own expert on damages, who opined that the damages number should be adjusted down to approximately a million.

[00:15:51] Speaker 00:
What happens in a fairly routine setting at a trial, where parties give juries sets of numbers that each of them offer and their basis for those numbers, and the juries get to weigh the evidence, weigh the testimony, and make classic credibility and judgment calls that courts give deference to, like the district court did below after having sat through the trial and denying the J-Moll motion.

[00:16:17] Speaker 00:
For the same reasons that the district court denied the motion,

[00:16:20] Speaker 00:
this court should affirm that determination.

[00:16:24] Speaker 02:
Excuse me, this is Judge Schall here.

[00:16:29] Speaker 02:
I don't want to jump in on you, but I wanted to see if I could maybe ask you a question on a different area if I could.

[00:16:38] Speaker 02:
What do you say about the 101 argument that is raised by your colleague on the other side, that really what you have here

[00:16:50] Speaker 02:
is a situation where the claims are related to nothing but the traditional process of pharmaceutical approval and distribution and so forth, so that they're abstract.

[00:17:05] Speaker 02:
What is your response to that, if you could?

[00:17:08] Speaker 00:
Certainly, Your Honor.

[00:17:10] Speaker 00:
The defendant's argument on 101 essentially boils down to the fact that there is technology involved in this and that this is a claim, the claims are here are for systems and methods of remotely controlling and operating pharmaceutical dispensing.

[00:17:30] Speaker 00:
But that's where the defendant's argument stops and that's not where the claims stop.

[00:17:34] Speaker 00:
whether this court comes at it through Alice Step 1 or Alice Step 2, the question that the court is ultimately trying to answer, you know, what these two Alice Steps get at, is whether there is some improper attempt to monopolize, in this case, an abstract idea.

[00:17:53] Speaker 00:
And if I could, Your Honor, I'd like to just give you five examples from the claims that show that the claimed methods and systems are not a monopoly on the idea of remote dispensing.

[00:18:04] Speaker 00:
And I'm going to use claim seven of the 019 patent, because that's what the district court looked at below and the parties have used at various times.

[00:18:12] Speaker 00:
So first, that claim requires that the machine package and dispense the drugs into disposable packages.

[00:18:19] Speaker 00:
So if a machine uses prepackaged pharmaceuticals or it uses reusable packaging, it's outside the claim, even though the system would still engage in remote dispensing.

[00:18:32] Speaker 04:
Is it your argument that the dispensing cart, that's the machine you're talking about, correct?

[00:18:40] Speaker 00:
Yes, Your Honor.

[00:18:42] Speaker 00:
There is a machine used in the claims that is a dispensing cart, yes.

[00:18:47] Speaker 04:
Okay.

[00:18:47] Speaker 04:
And are you saying that this is not a general purpose computer of any kind?

[00:18:56] Speaker 00:
It does involve a computer, but it's a particular kind of machine that can hold capsules with hundreds of different drugs that are required to be dispensed by a pharmacist.

[00:19:12] Speaker 01:
Hi, this is Judge Stoll.

[00:19:15] Speaker 01:
So following up on Judge Raina's question, because it's a specific computer or system machine made to dispense medication,

[00:19:26] Speaker 01:
The question was whether you thought it was a general purpose computer, like a PC.

[00:19:31] Speaker 01:
And so what is your answer to that?

[00:19:33] Speaker 00:
No, it's not.

[00:19:35] Speaker 00:
It has some similarities in that it has hardware components, some of which are computer hardware components.

[00:19:41] Speaker 00:
But it's in no way a generic computer.

[00:19:46] Speaker 02:
Ms.

[00:19:48] Speaker 02:
Ellsworth, I have one question, Judge Shaw here.

[00:19:53] Speaker 02:
How do the medications physically get into the cart?

[00:19:57] Speaker 02:
Somebody has to put them in there, correct?

[00:20:00] Speaker 00:
That's right.

[00:20:01] Speaker 00:
And one of the things that is described in the patent is the way that the pharmacist at the central pharmacy is in charge of refilling and maintaining the inventory within the cart.

[00:20:15] Speaker 00:
OK.

[00:20:16] Speaker 00:
And that brings up, again, another thing that I think shows that this is not a monopoly

[00:20:20] Speaker 00:
on remote dispensing.

[00:20:22] Speaker 00:
The pharmacy in this hub and spoke system that is claimed in these patents requires that all the dispensing units be remote from a central pharmacy and server.

[00:20:33] Speaker 00:
So if someone set up a system where there was, in fact, a machine like this located in the same site as the pharmacy, you would be outside the bounds of the specific invention that is detailed in these claims.

[00:20:49] Speaker 04:
I'd like for you to clarify something for me.

[00:20:54] Speaker 04:
Now, this same system was used in hospitals, correct?

[00:21:03] Speaker 00:
Your Honor, no.

[00:21:05] Speaker 00:
This system was not used in hospitals.

[00:21:06] Speaker 04:
There were... Electronic dispensing carts were not used in hospitals prior to this invention?

[00:21:15] Speaker 00:
Electronic dispensing cards were.

[00:21:17] Speaker 00:
The patent describes this in column one of the 019 patent.

[00:21:21] Speaker 00:
It describes electronic dispensing cards being stored on each floor of the hospital to get instructions from the hospital's pharmacy computer.

[00:21:30] Speaker 04:
Right.

[00:21:30] Speaker 04:
So what your invention does here, it takes this dispensing from a remote location and it's applicable to nursing homes.

[00:21:42] Speaker 00:
That's correct, Your Honor.

[00:21:45] Speaker 04:
It's the same machine, correct?

[00:21:50] Speaker 00:
It is the same machine in some senses, but as the patent describes, it has been significantly adapted to be able to be remotely controllable.

[00:22:03] Speaker 04:
The point I'm trying to get to is, isn't your strong point here, or isn't this case about the software, and whether the inventive step or concept is in the software?

[00:22:15] Speaker 04:
That's step two.

[00:22:17] Speaker 00:
Your Honor, I think that the software plays an extremely important role here, because this Court has routinely held that where software claims are directed to improvements in the functionality of a computer or a network platform, that that's enough under ALICE to be a patentable invention.

[00:22:36] Speaker 04:
There's really no question.

[00:22:38] Speaker 04:
I hear you're saying there's no computer.

[00:22:43] Speaker 04:
Judge, it shows question.

[00:22:44] Speaker 04:
He said that there was no computer.

[00:22:48] Speaker 00:
So what I intended to say was that there was no generic computer.

[00:22:51] Speaker 00:
This is not generic computing technology.

[00:22:54] Speaker 00:
There certainly are computers involved.

[00:22:57] Speaker 00:
There is a computer at the central pharmacy that is the one that manages and controls the remote dispensing units.

[00:23:05] Speaker 00:
And then the remote dispensing units that are connected via software.

[00:23:09] Speaker 00:
And it's really that software technology that enabled a pharmacist sitting in one location

[00:23:16] Speaker 00:
to enter some instructions that result in medication coming out in individually packaged envelopes or identified for specific patients in many other locations.

[00:23:30] Speaker 00:
That whole system, so a computer on one end, a dispensing card that has a computer on the other end, and software that can bridge the two, is the invention.

[00:23:41] Speaker 00:
And then it is limited to particular types of machines operating at a particular distance from the pharmacy.

[00:23:49] Speaker 00:
The claims require multiple dispensing units to be used.

[00:23:54] Speaker 00:
So if someone set up a system that just was remote control of a single dispensing unit, that's outside the claims.

[00:24:01] Speaker 00:
The claims also require dispensing into a separate and removable container.

[00:24:06] Speaker 00:
So if there's no separate and removable container used, you're outside the claims, even though you might have a system that includes remote dispensing.

[00:24:14] Speaker 00:
And then the last element of claim seven of the 019 patent requires a particular way of getting the prescriptions from the long-term care facility to the pharmacy.

[00:24:27] Speaker 00:
And that's through use of a document scanner.

[00:24:29] Speaker 00:
So in systems that are set up other ways,

[00:24:32] Speaker 00:
where our scripts are phoned in or hand delivered or doctors use e-prescribing, the system again is not covered by the claims.

[00:24:40] Speaker 00:
So here we really do have inventive software that enabled these dispensing units to be used in ways that they had not been used before.

[00:24:50] Speaker 00:
It is a specific improvement to computer capability and it is claimed in a specific setup

[00:24:58] Speaker 00:
so that it does not claim the abstract idea of remote dispensing.

[00:25:05] Speaker 00:
If I could turn just briefly to the cross appeal.

[00:25:15] Speaker 00:
A reasonable jury could not have concluded that defendant system doesn't practice the control element in all six claims and just to very quickly give the court a comparison, an analogy that I think shows why.

[00:25:27] Speaker 00:
If you imagine filling a prescription through a mail order pharmacy, the pharmacist has to receive the prescription

[00:25:34] Speaker 00:
fill a vial, put the right number of pills in, put them in a bag, staple it shut, put your name on it, and send the package to you.

[00:25:42] Speaker 00:
The fact that you have to open your mailbox and then open the package doesn't change that it is in fact the pharmacist who controlled the dispensing of the medication.

[00:25:52] Speaker 00:
And I think that shows why the jury here, no reasonable jury could have concluded that the nurse pushing a dispense button changed the control of the dispensing.

[00:26:02] Speaker 00:
I'd like to reserve the remainder of my time for rebuttal on the cross-appeal.

[00:26:07] Speaker 04:
OK.

[00:26:08] Speaker 04:
Thank you.

[00:26:13] Speaker 03:
May it please the court?

[00:26:15] Speaker 04:
Yes, sir.

[00:26:15] Speaker 03:
Go ahead.

[00:26:17] Speaker 03:
Your Honors, I would like to say quite plainly that the point that was made, which I tried to preview, is this notion on the breach of contract that, well, there's all this evidence, and there's competing things, and the jury's free to infer.

[00:26:33] Speaker 03:
That's just not the right way to look at this under these facts.

[00:26:37] Speaker 03:
Their expert never calculated lost profits related to the breach of contract.

[00:26:43] Speaker 03:
We did not offer a competing theory on the breach of contract.

[00:26:47] Speaker 03:
So this is not a case where there's all this evidence out there and competing theories.

[00:26:53] Speaker 03:
The problem with this is, and this is true if you look at their own briefing, their own briefing is pretty light on record sites because they know that the argument they're making is kind of causation in the air.

[00:27:08] Speaker 03:
They're making this suggestion that, well, somewhere there must have been some causation because there was information out there, and that somehow the jury should have been able to find causation.

[00:27:18] Speaker 03:
That's not the way this court's presidents work.

[00:27:21] Speaker 03:
That's not the way Delaware law works.

[00:27:23] Speaker 03:
They decided to put four or five different theories in front of the jury.

[00:27:27] Speaker 03:
They've had very good focus on their damages for the patent infringement and the trade secret misappropriation.

[00:27:34] Speaker 03:
They said their expert never once said breach of contract and damages in the same sentence.

[00:27:39] Speaker 03:
So the jury was left to speculate on what information would be

[00:27:45] Speaker 03:
assuming that we used it, how that approximately caused damage.

[00:27:50] Speaker 03:
And again, with respect to the valuation of the company, that could have been a theory of damage in some respect, but it's not lost profits, and there's no indication that that number was in any way linked to some specific amount of, or some specific identifiable confidential information.

[00:28:08] Speaker 03:
That's not, again, that's not

[00:28:10] Speaker 03:
creating an overly undue burden on them.

[00:28:13] Speaker 03:
That's not trying to go back and second-guess the jury.

[00:28:16] Speaker 03:
That's simply looking at what the rules say.

[00:28:19] Speaker 03:
They have to connect the dots.

[00:28:20] Speaker 03:
Their own experts said that they had to have a causal link.

[00:28:26] Speaker 04:
Why is it that under Delaware law, the jury doesn't have the ability, the right to infer causation from the circumstances?

[00:28:36] Speaker 04:
Here you presented a number of circumstances before the jury, and the jury apparently picked one.

[00:28:43] Speaker 04:
Why is that not correct?

[00:28:47] Speaker 03:
Your Honor, it is certainly correct that the jury is entitled to infer causation from circumstances, but that inference has to be reasonable and it has to be based on the evidence.

[00:28:59] Speaker 03:
They can't simply look for causation in the air or pick up causation like lint in your pocket.

[00:29:06] Speaker 03:
They've got to have some link

[00:29:08] Speaker 03:
between what was used and taken by us allegedly.

[00:29:12] Speaker 03:
And remember, their theory was but for causation.

[00:29:16] Speaker 03:
It was, but for this breach, we would never have been able to set up this competing business.

[00:29:21] Speaker 03:
They could have offered other theories of damages.

[00:29:24] Speaker 03:
Even with respect to the breach of contract, they chose not to.

[00:29:28] Speaker 03:
Their expert assumed a world in which every liability theory was present.

[00:29:34] Speaker 03:
When multiple assumptions underlying that but-for theory fell apart, no patent infringement, no trade secret misappropriation, no fraud, you're then left to look in the record for whatever information was used in the breach of contract claim that caused that same, according to him, but-for world.

[00:29:52] Speaker 03:
And that simply is absent from the record.

[00:29:55] Speaker 03:
Now, with respect to the 101 argument, Your Honor, we believe that this case is plainly covered by charge point.

[00:30:03] Speaker 03:
The court's questions have drawn out the idea that the machine here, the ADU, the automated dispensing unit, was acknowledged to be well known in the prior arc.

[00:30:14] Speaker 03:
All they've got is the network system, just like the network system in the charge point case.

[00:30:20] Speaker 03:
And if I might finish, Your Honor, or I can stop right there.

[00:30:25] Speaker 04:
You can give us a short conclusion.

[00:30:28] Speaker 03:
Your Honors, thank you.

[00:30:30] Speaker 03:
With respect to the charge point matter, we believe that is the controlling case here on 101.

[00:30:36] Speaker 03:
The primary issue for us is causation.

[00:30:38] Speaker 03:
You can't have causation in the air.

[00:30:41] Speaker 03:
They have to make the link.

[00:30:42] Speaker 03:
Their expert didn't do it.

[00:30:44] Speaker 03:
The Tiles case is helpful in this regard, and we suggest that the judgment on the breach of contract be reversed and rendered in our favor.

[00:30:53] Speaker 03:
Thank you very much.

[00:30:54] Speaker 04:
Thank you.

[00:30:56] Speaker 04:
We'll hear from Counselor Ellsworth now.

[00:31:00] Speaker 00:
Thank you, Your Honor.

[00:31:01] Speaker 00:
Just on the cross-appeal, because I think I'm limited to that in my cross-rebuttal, the jury instructions here said to use the common meaning for any words the court did not define.

[00:31:12] Speaker 00:
And the common meaning of control is something that determines the behavior of.

[00:31:16] Speaker 00:
Here, the jury heard undisputed evidence, and you can see it recited in our cross-appeal reply at page 3.

[00:31:22] Speaker 00:
that ELLICSA's central pharmacy computer instructs the dispensing units in their system as to what medication to package, in what dose, at what time, and for what patient.

[00:31:34] Speaker 00:
No nurse can change or affect what medication comes out of the machine.

[00:31:39] Speaker 00:
For those reasons, as further explained in our brief, we request the court affirm on all grounds in the appeal and reverse on the patent JML motion in the cross-appeal.

[00:31:48] Speaker 00:
Thank you, Your Honor.