[00:00:01] Speaker 03:
And our third and final case this morning is number 21-1649, Junker versus Medical Components 8.

[00:00:18] Speaker 03:
Okay, Mr. Zayer.

[00:00:37] Speaker 04:
May it please the court.

[00:00:38] Speaker 04:
May I remove my mask?

[00:00:39] Speaker 04:
Yes.

[00:00:40] Speaker 04:
Alfred Zaire, your honors, for Medical Components, Inc.

[00:00:45] Speaker 04:
It is our position that the trial court committed several errors.

[00:00:50] Speaker 04:
Four specifically.

[00:00:53] Speaker 04:
One related to on sale bar, because the patent, the product was on sale prior to the critical date.

[00:01:00] Speaker 04:
non-infringement because the plaintiff's own expert testified that 40% of the product was not available in the accused device, specifically.

[00:01:14] Speaker 04:
Three, that it was not willful because there was a letter that was sent.

[00:01:18] Speaker 04:
So could you speak up just a little bit?

[00:01:20] Speaker 04:
Pardon me, certainly.

[00:01:21] Speaker 04:
That it could never have been willful because there was a letter sent to Medcom about a different product that it purchased from another company.

[00:01:29] Speaker 04:
And that's the only thing that the plaintiff is relying on for willfulness.

[00:01:36] Speaker 04:
And finally, the article of manufacture, which is a highly contested issue, is our position that the statutory reference that relates to infringement of 171 is the same as 286.

[00:01:47] Speaker 04:
It is the design applied to the article.

[00:01:52] Speaker 00:
Can I ask you about the on-sale bar?

[00:01:54] Speaker 04:
Please do.

[00:01:55] Speaker 00:
There is a letter in the record that's dated February.

[00:01:59] Speaker 00:
And I'm wondering whether that letter was agreed to and whether that resulted in a contract between the predecessor and Boston Scientific.

[00:02:12] Speaker 00:
Was there ever a contract entered into?

[00:02:14] Speaker 04:
Eventually, yes.

[00:02:19] Speaker 04:
When?

[00:02:21] Speaker 00:
I'm just wondering whether do you consider the letter, the February 16th letter, which

[00:02:27] Speaker 00:
J.A.

[00:02:27] Speaker 00:
1577 to 78.

[00:02:29] Speaker 00:
Is that an offer?

[00:02:31] Speaker 04:
The operative letter is a January 8th letter.

[00:02:36] Speaker 00:
I'm asking about a different one.

[00:02:37] Speaker 00:
I'm asking about the letter.

[00:02:39] Speaker 00:
It's dated February 16th, 1999.

[00:02:42] Speaker 00:
It's J.A.

[00:02:44] Speaker 00:
1577 to 78.

[00:02:48] Speaker 00:
Was that accepted?

[00:02:49] Speaker 04:
That letter added

[00:02:53] Speaker 04:
If I had it correctly, that letter is an additional letter that was adding two French sizes.

[00:03:00] Speaker 04:
I do not know if it was ever accepted.

[00:03:02] Speaker 04:
I believe it was because Galt was a primary producer of the Sheath products and sold them to Boston Scientific and many other companies.

[00:03:12] Speaker 04:
So that product was eventually on sale.

[00:03:17] Speaker 04:
But if you're asking me if they accepted this offer, I cannot tell you that.

[00:03:22] Speaker 04:
But the acceptance of an offer doesn't change the fact that it's an offer.

[00:03:26] Speaker 00:
I understand.

[00:03:27] Speaker 00:
I just saw some of the language used in this February letter is similar to the language used in the earlier letters.

[00:03:34] Speaker 00:
So I wanted to answer that question.

[00:03:36] Speaker 04:
I see.

[00:03:37] Speaker 04:
And the letter only adds new products.

[00:03:40] Speaker 04:
The most important thing about the letter is that the letter provides size, quantity, price, payment terms, and delivery terms.

[00:03:49] Speaker 00:
Now you're talking about the January letter, right?

[00:03:51] Speaker 04:
Both letters provide the same, actually.

[00:03:53] Speaker 00:
Are you talking about the January 8th letter now?

[00:03:55] Speaker 04:
January 8th letter, yes, your honor.

[00:03:57] Speaker 04:
That's appendix 00, sorry, that's appendix 1572 to 1573.

[00:04:04] Speaker 04:
That letter under this court's holding in Merck, Merck merely provided, was found to be provided the essential terms of price delivery and payment terms.

[00:04:15] Speaker 00:
But Merck didn't call itself a quotation, right?

[00:04:18] Speaker 00:
The letter in Merck did not refer to itself as a quotation.

[00:04:22] Speaker 04:
Well, a quotation can be an offer.

[00:04:24] Speaker 04:
If you quote, I'm going to sell you my pen for $5.

[00:04:28] Speaker 04:
That's a mere quote for a pen for $5.

[00:04:30] Speaker 04:
But if I tell you, I'm going to give you, it's a one inch pen, it's blue.

[00:04:34] Speaker 04:
I've got one of them.

[00:04:36] Speaker 04:
Here's the price.

[00:04:37] Speaker 04:
I'll deliver it to you tomorrow on Tuesday.

[00:04:39] Speaker 04:
And I have delivery terms FOB this podium.

[00:04:42] Speaker 04:
It's very specific.

[00:04:43] Speaker 00:
I was looking at the restatement.

[00:04:46] Speaker 00:
And their statement says that the word quotation is often used to convey, you know, just in a negotiation that it's not an offer.

[00:04:57] Speaker 00:
And so that is where I realized there is the word alone doesn't indicate for sure whether it's a quotation or offer, but I wanted to give it some meaning.

[00:05:07] Speaker 00:
And of course the district court did hear below.

[00:05:10] Speaker 00:
So I don't think we should just shrug it off.

[00:05:13] Speaker 04:
Well, it's clearly error because the UCC also says no one term can decide what the entire meaning of the offer is.

[00:05:20] Speaker 04:
So that's clearly from the UCC.

[00:05:22] Speaker 04:
You can't use one word.

[00:05:23] Speaker 04:
You have to look at the totality of the offer.

[00:05:26] Speaker 04:
And the offer is very specific.

[00:05:29] Speaker 04:
It's price, quantity, sizes.

[00:05:32] Speaker 04:
There are six sizes.

[00:05:35] Speaker 04:
These sizes are French sizes.

[00:05:37] Speaker 04:
That's the size and diameter of the sheath.

[00:05:39] Speaker 04:
There are multiple specific individual offers.

[00:05:43] Speaker 02:
How are we to determine what this letter is referring to?

[00:05:47] Speaker 02:
whether it's referring to the pendant design or not.

[00:05:52] Speaker 04:
Because that's the only thing that they sold.

[00:05:54] Speaker 04:
It's the only product that they sold.

[00:05:57] Speaker 04:
That is the handle with the sheath.

[00:06:01] Speaker 04:
That's the only product they designed and they sold.

[00:06:05] Speaker 04:
And it's not in contention.

[00:06:06] Speaker 04:
That is the product that was ready for patenting.

[00:06:09] Speaker 04:
Both parties stipulated to that.

[00:06:12] Speaker 02:
What does that say that in the letter?

[00:06:13] Speaker 04:
How do we know that?

[00:06:15] Speaker 04:
That was in the trial testimony within the hearing, within the trial that we had before Judge Goldberg.

[00:06:22] Speaker 04:
It was irrefutable.

[00:06:23] Speaker 04:
That letter was referring to this device.

[00:06:25] Speaker 00:
They're saying it's conceded that those products are needed.

[00:06:29] Speaker 04:
Conceded, yes.

[00:06:29] Speaker 04:
It is conceded, yes.

[00:06:32] Speaker 04:
I'll move on to the unsealed bar.

[00:06:35] Speaker 04:
Any questions further from the unsealed bar?

[00:06:39] Speaker 04:
Let me move on to infringement.

[00:06:46] Speaker 04:
The infringement issue is pretty clear.

[00:06:49] Speaker 04:
Mr. Bressler, plaintiff's own counsel, says that the products, specifically the Tearaway, there's two products.

[00:06:57] Speaker 04:
There's the Valve Tearaway and the Tearaway Sheet.

[00:06:59] Speaker 04:
I have them here to show you if your honors would like to see them.

[00:07:03] Speaker 04:
I don't know if you would like to see them.

[00:07:05] Speaker 04:
The products issue.

[00:07:07] Speaker 03:
Is there really a dispute about whether these exhibits that you want to use as visual aids were exhibits in the trial?

[00:07:21] Speaker 03:
Let me ask Mr. Petruzzi if there is any dispute about that.

[00:07:26] Speaker 01:
Your Honor, we have not seen these exhibits.

[00:07:29] Speaker 01:
The actual trial exhibits are either with the court in Philadelphia, or they're with the record that was brought up here.

[00:07:35] Speaker 01:
What they brought to court, I understand, are models from their warehouse that they claim to be the same.

[00:07:42] Speaker 01:
And they may, in fact, be the same, or at least a similar design.

[00:07:46] Speaker 01:
We've never seen them.

[00:07:47] Speaker 01:
And I don't think it's particularly humane, I'll deal with that in my argument.

[00:07:52] Speaker 04:
These articles are marked from the court.

[00:07:54] Speaker 04:
They are the court's articles.

[00:07:55] Speaker 03:
They are the actual exhibits?

[00:07:57] Speaker 03:
Yes, they are.

[00:07:58] Speaker 03:
Why don't you show them to Mr. Petruz?

[00:08:00] Speaker 04:
Yes, sir.

[00:08:08] Speaker 04:
The value of the exhibit is to show you the difference between the claim design and the actual accused product.

[00:08:16] Speaker 01:
I believe the actual marked exhibits were documents.

[00:08:22] Speaker 01:
remarked independently.

[00:08:24] Speaker 01:
I mean, they are the products that were at issue, so that I can see.

[00:08:28] Speaker 03:
So you don't object?

[00:08:30] Speaker 01:
Well, I do object to this whole show and tell presentation.

[00:08:34] Speaker 03:
Well, I mean, that's, you can't do that.

[00:08:37] Speaker 03:
You can only object that they weren't exhibits.

[00:08:40] Speaker 03:
It appears as though they were exhibits at the trial.

[00:08:44] Speaker 01:
They aren't the numbered exhibits they're showing you, but they, I believe, a version of these... Please stand up.

[00:08:50] Speaker 01:
I believe these were exhibits in one form or the other.

[00:08:54] Speaker 01:
I just don't know if these actual physical pieces were the exhibits that we showed the judge.

[00:09:00] Speaker 03:
They're marked as exhibits, right?

[00:09:02] Speaker 01:
Well, as I said, the exhibits that were marked 19A and B were the documents that are in those folders there.

[00:09:09] Speaker 01:
The actual physical exhibits had a separate number.

[00:09:13] Speaker 01:
That's all.

[00:09:14] Speaker 03:
OK, but they're still exhibits.

[00:09:15] Speaker 04:
Go ahead.

[00:09:17] Speaker 04:
The most important one, and I won't waste the court's time, is the valve tear away.

[00:09:23] Speaker 04:
If you turn to, in our brief, if you look at the figures that are on

[00:09:39] Speaker 04:
On pages 6 of the Appellates Brief, you'll see figures 1, 3, 6, and 8.

[00:09:48] Speaker 04:
From that, a simple look at the product will indicate to you that it is nowhere similar.

[00:09:55] Speaker 04:
In fact, Mr. Bressler said the hub design is 40% and it's not the same.

[00:10:01] Speaker 04:
So you cannot have substantial similarity when you only have 60% of the design.

[00:10:06] Speaker 04:
More importantly, what is the prominent feature?

[00:10:08] Speaker 04:
The plaintiff says it's these.

[00:10:12] Speaker 00:
Which of the accused products are you showing us right now?

[00:10:14] Speaker 04:
Valve Tearaway Sheath.

[00:10:17] Speaker 04:
There's two products, the Valve Tearaway Sheath.

[00:10:19] Speaker 00:
I have Super Sheath Valve 2.0, or the Super Sheath Valve?

[00:10:23] Speaker 04:
This is the Super Sheath, and this is the Valve Tearaway.

[00:10:29] Speaker ?:
OK.

[00:10:29] Speaker 04:
The super sheath we can concede is similar, but the valve tear-away has no similarity.

[00:10:36] Speaker 04:
The main element that they claim is similar is the rounded, rounded Mickey Mouse ears.

[00:10:42] Speaker 04:
But their own experts said 40% of the design is the hub.

[00:10:45] Speaker 04:
And you can see it's substantially different from the figures that are shown.

[00:10:49] Speaker 04:
And the prominent feature is the introducer.

[00:10:54] Speaker 04:
This is why they buy the product, not because of this.

[00:10:58] Speaker 04:
So that was presented at trial.

[00:11:00] Speaker 04:
Trial court found that, disagreed with that, based upon, and I think erroneous finding of fact, as applied to the law.

[00:11:09] Speaker 04:
So moving on from that, Bresler conceded that the Ralph Careway was not substantially similar.

[00:11:19] Speaker 04:
So the finding of substantial similarity in a design patent just cannot hold, in our view.

[00:11:26] Speaker 04:
I would like to move on to,

[00:11:28] Speaker 04:
the issue related to willfulness.

[00:11:33] Speaker 04:
We received a letter, or it was alleged that we received a letter, in 2009.

[00:11:39] Speaker 04:
That was for a product made by Galt.

[00:11:42] Speaker 04:
That it was not a product made by Medcom.

[00:11:45] Speaker 04:
Medcom, nine years later, makes the product.

[00:11:49] Speaker 04:
never receives a letter.

[00:11:51] Speaker 04:
No one says it's accused of infringement until we were sued.

[00:11:55] Speaker 04:
When we were sued for infringement, we moved off the design and redesigned.

[00:12:00] Speaker 04:
There's no evidence of willful, intentional, egregious acts of willful infringement.

[00:12:06] Speaker 04:
There just isn't.

[00:12:08] Speaker 00:
So it's your view that it's not enough to know about the patent.

[00:12:11] Speaker 00:
You have to also be notified of what product is accused to infringe it?

[00:12:17] Speaker 04:
Well, you have to at least be your own product.

[00:12:19] Speaker 00:
I mean, that is the case for marking, but I don't know if that's the case for willful infringement.

[00:12:24] Speaker 00:
You just have to know about the patent, right?

[00:12:27] Speaker 04:
But you have to have the nidious, willful, intentional bad acts of infringement.

[00:12:33] Speaker 04:
When we were notified by suit, the client redesigned the product.

[00:12:37] Speaker 04:
There is no basis to know that they intentionally continue to infringe the product.

[00:12:43] Speaker 04:
But if the letter is for another company's product, then there is testimony at trial that the chief vice president of engineering, no one who designed, made the product or manufactured it knew anything about the Junker patent.

[00:12:57] Speaker 00:
But just to clarify, you agree that you had notice of the patent through that letter, meaning just that you learned of the patent.

[00:13:05] Speaker 00:
Or not?

[00:13:06] Speaker 00:
Or that your client learned of the patent?

[00:13:08] Speaker 04:
The testimony of the client was that we don't contest that it was mailed.

[00:13:13] Speaker 04:
We could not find any evidence that anybody received it or knew of that patent.

[00:13:19] Speaker 04:
We don't contest that it was mailed.

[00:13:21] Speaker 04:
We don't contest that it was delivered.

[00:13:23] Speaker 00:
In your brief, you say that the 2004 letter was not notice of the patent.

[00:13:28] Speaker 00:
It's in your brief at page 45.

[00:13:30] Speaker 00:
But I'm having a hard time thinking that's true.

[00:13:33] Speaker 00:
You could have an argument that your client willfully infringe, but that letter doesn't provide... I would agree that we have noticed, yes.

[00:13:41] Speaker 04:
If someone sends you a patent, you have notice of a patent.

[00:13:44] Speaker 04:
That's the question.

[00:13:45] Speaker 04:
We cannot deny that.

[00:13:47] Speaker 04:
We don't deny that.

[00:13:48] Speaker 04:
But as applied to the accused article, we didn't even make that product until nine years after that letter.

[00:13:56] Speaker 04:
So it's not really applicable notice.

[00:13:59] Speaker 04:
You just can't have notice of something nine years later, and we expect to remember that.

[00:14:05] Speaker 04:
When we were sued, we moved off, which is a mitigation of any willful intent.

[00:14:11] Speaker 04:
And there's no testimony that anyone who designed or manufactured that product, it was in the company, knew of that patent at that time.

[00:14:20] Speaker 04:
I will move on to the...

[00:14:24] Speaker 04:
issue of accused article.

[00:14:27] Speaker 04:
This has been a very controversial issue in patent design.

[00:14:29] Speaker 04:
I think it's clear that the article itself, in this instance, is the handle.

[00:14:36] Speaker 04:
The patent title is for a handle for introducer sheath.

[00:14:42] Speaker 00:
One of the concerns I have on this issue is I understand that the district court

[00:14:50] Speaker 00:
prohibited your client from introducing evidence on damages relating to just the handle, because it was submitted so late, and that that issue has not been appealed.

[00:15:02] Speaker 00:
Is that right?

[00:15:03] Speaker 04:
And that issue has not been appealed?

[00:15:04] Speaker 00:
That issue has not been appealed.

[00:15:05] Speaker 00:
The discovery ruling, or the exclusion of that damages evidence, has not been appealed.

[00:15:13] Speaker 00:
We did not appeal that, Your Honor.

[00:15:17] Speaker 00:
The case that there will be no damages evidence relating to the handle alone.

[00:15:23] Speaker 00:
Instead, the damages evidence is for an article of manufacture that includes the sheath.

[00:15:29] Speaker 04:
Right?

[00:15:29] Speaker 04:
And the introducer.

[00:15:30] Speaker 00:
Right.

[00:15:31] Speaker 04:
Right.

[00:15:34] Speaker 04:
And the introducer.

[00:15:36] Speaker 04:
We objected to that at the trial court.

[00:15:39] Speaker 04:
However, our position is the article of manufacture

[00:15:44] Speaker 04:
Regardless of the damage information provided, that doesn't determine what's infringing.

[00:15:48] Speaker 04:
What's infringing in terms of the article manufacturer is what the article is.

[00:15:52] Speaker 00:
But this issue that you're talking about is for purposes of damages.

[00:15:56] Speaker 00:
And you're arguing that damages should be limited to the handle.

[00:16:00] Speaker 00:
But yet you don't have evidence on what the damages would be limited to the handle because it was submitted late and it was excluded.

[00:16:11] Speaker 00:
So why should we even be addressing this issue?

[00:16:13] Speaker 04:
Well, we believe the court erred in not including that evidence into the record.

[00:16:20] Speaker 04:
If this court concludes that the handle, the article manufacturer, the patent covers the handle, then we would hope that it would be remanded back for further proceeding regarding damages to the handle.

[00:16:35] Speaker 04:
The court has the damages to the handle.

[00:16:38] Speaker 04:
It's available.

[00:16:39] Speaker 04:
We made it available.

[00:16:39] Speaker 03:
Well, it's their job to present the evidence as to if it's limited to the handle, to present the damages case as to the handle, right?

[00:16:47] Speaker 03:
Yes, sir.

[00:16:47] Speaker 03:
We provided that.

[00:16:48] Speaker 03:
We provided that.

[00:16:50] Speaker 03:
It's excluded, but the assumption is it's properly excluded.

[00:16:53] Speaker 03:
But still, they have to present evidence as to the damages to the handle, if that's all they're entitled to.

[00:17:00] Speaker 03:
True.

[00:17:00] Speaker 03:
But if there's no evidence... They don't have to make their damages case.

[00:17:04] Speaker 04:
It's true.

[00:17:05] Speaker 04:
But our position is

[00:17:08] Speaker 04:
that the article itself is only the handle.

[00:17:15] Speaker 03:
Okay, we'll list the further questions.

[00:17:18] Speaker 03:
We'll give you two minutes for rebuttal and we'll hear from Mr. Petruzzi.

[00:17:51] Speaker 01:
May I remove my mask?

[00:17:56] Speaker 01:
Yes.

[00:17:56] Speaker 01:
May it please the court, Jim Petruzzi for the appellee, Larry Younger.

[00:18:00] Speaker 01:
I wanted to just address one quick issue that Judge Sol had, and that was this February 16th letter.

[00:18:08] Speaker 01:
That's after the critical date.

[00:18:10] Speaker 01:
So it would not have formed a basis.

[00:18:12] Speaker 00:
I understand that, but did that, was that letter accepted and then there was a sale?

[00:18:20] Speaker 00:
That's my question.

[00:18:21] Speaker 01:
We have no evidence that that letter led to a specific sale.

[00:18:25] Speaker 01:
What we do know is that the letters sent prior to the critical date are mere quotations.

[00:18:31] Speaker 01:
the court lays that out very clearly.

[00:18:32] Speaker 03:
If you look at the restatement standards, this was not like an advertisement or a broadly disseminated quotation.

[00:18:41] Speaker 03:
This was to a single person based on a prior discussion that they had.

[00:18:47] Speaker 03:
And it seems to have complete terms in it.

[00:18:50] Speaker 03:
So even under the restatement test, this would seem to be an offer, doesn't it?

[00:18:55] Speaker 01:
Well, the doctrine that's been established is that the offer has to be such that a simple acceptance

[00:19:00] Speaker 01:
would make a binding contract.

[00:19:01] Speaker 01:
And here, you would have to not just say, I accept.

[00:19:05] Speaker 01:
You'd have to say, I accept five units at this price and this way.

[00:19:09] Speaker 03:
Look, every time there's an offer for sale, it's up to the buyer to say how much the buyer wants, right?

[00:19:19] Speaker 01:
That then is the offer.

[00:19:20] Speaker 01:
That's the purchase order.

[00:19:22] Speaker 01:
And in this context of these deals, that's what the witness said, that buyers make a purchase order

[00:19:28] Speaker 01:
And then we invoice and fill it.

[00:19:30] Speaker 03:
That doesn't mean that the original quotation isn't an offer.

[00:19:34] Speaker 03:
They're accepted by saying we'd like 50 units at this price.

[00:19:39] Speaker 03:
Why isn't that a completed contract once that's done?

[00:19:43] Speaker 01:
Well, again, the case law says it has to be by simple acceptance.

[00:19:47] Speaker 01:
If you're going to add extra terms, you're not just accepting an offer.

[00:19:51] Speaker 01:
What case says that quantity has to be part of the offer?

[00:19:54] Speaker 03:
Well, I just think in the context of what was being done here... But John says that quantity has to be part of the offer.

[00:20:01] Speaker 01:
Well, the quantity would have to be part of the offer.

[00:20:03] Speaker 01:
You wouldn't know what you're accepting.

[00:20:05] Speaker 03:
Suppose the guy... He accepts... I accept your offer to sell me units, and the number I'd like is 50.

[00:20:14] Speaker 01:
Well, I think the problem with that is that in these contexts, what you're saying is that a purchaser could say to the seller,

[00:20:22] Speaker 01:
I see your quotation.

[00:20:24] Speaker 01:
I'm going to ask you to sell me 10,000 units.

[00:20:27] Speaker 01:
That's clearly not how these operations work.

[00:20:29] Speaker 01:
They are done in a way that you put out your prices, you put out the product, and then the buyer makes a purchase order.

[00:20:36] Speaker 03:
You're saying that's not how these things work, but that's not the evidence of this case.

[00:20:40] Speaker 03:
The evidence of this case, the testimony is that this is how things work.

[00:20:45] Speaker 01:
No, the evidence by Mr. Eddings was that purchasers make a purchase order.

[00:20:49] Speaker 03:
Yes, but he also said that in the business, this quotation is considered to be an offer to sell.

[00:21:00] Speaker 01:
Well, I know he said that, but the fact is that the court was correct in finding that these were preliminary negotiations.

[00:21:06] Speaker 02:
What other information would be required in order to make this a viable offer?

[00:21:12] Speaker 02:
If you look at it,

[00:21:13] Speaker 02:
It's got quantities.

[00:21:14] Speaker 02:
It has size.

[00:21:16] Speaker 02:
It has price.

[00:21:17] Speaker 02:
It's got sliding prices based on purchases of larger orders.

[00:21:23] Speaker 02:
And it even has all the terms for shipment.

[00:21:27] Speaker 02:
And it's got the terms for payment.

[00:21:30] Speaker 02:
Why couldn't a person just rely on that and say, with reference to your January offer, send me

[00:21:38] Speaker 02:
3,000 units size 4F at the price of $4.45 and I'll send the check within 20 days as required.

[00:21:49] Speaker 01:
Well again, it's our view that these are preliminary negotiations by the terms of the letter.

[00:21:54] Speaker 01:
It's still talking about what are your dimensional requirements.

[00:21:57] Speaker 01:
It does not specify

[00:21:59] Speaker 01:
a specific quantity and price that a simple acceptance would create a binding contract.

[00:22:04] Speaker 01:
That is what the case law says.

[00:22:06] Speaker 01:
That's why quotes typically are not contract.

[00:22:08] Speaker 03:
I can't even cite any case that says that the offer has to specify a specific quantity.

[00:22:15] Speaker 03:
It's up to the buyer in accepting the offer to say, this is how much I want.

[00:22:21] Speaker 01:
I understand that in this context, it's the buyer.

[00:22:25] Speaker 01:
It's just like when you sell a house.

[00:22:26] Speaker 01:
You put it on the market for a price,

[00:22:29] Speaker 01:
Somebody can't just say, I take it.

[00:22:31] Speaker 01:
They are making an offer to you.

[00:22:34] Speaker 01:
You're inviting an offer from the purchaser to buy product at whatever quantity, sure.

[00:22:39] Speaker 01:
But you cannot force the seller, such as Mr. Eddings, who puts he'll sell 50,000 units for 470 to the production of 2 million units just because you come back and say, sell me 2 million units at 470.

[00:22:54] Speaker 01:
That wouldn't be a binding contract.

[00:22:55] Speaker 03:
Is there anything else that's missing in this offer?

[00:23:01] Speaker 01:
Well, I don't think it's sufficiently specific, given that the parties were talking about what they wanted, changes in the product, what the product might be done for specific purposes of Boston Scientific Court.

[00:23:12] Speaker 01:
I don't dispute that the quote, like many quotes, lists price and quantities and other elements.

[00:23:19] Speaker 01:
But I just don't believe that that's sufficient under the law to create a binding contract by a simple acceptance.

[00:23:26] Speaker 02:
I want for you to help clarify something for me.

[00:23:29] Speaker 02:
Just real quickly, and I brought this up earlier, and am I correct that I heard you all say that this January offer is, everyone's conceded that this is directed to or involves or references the design pattern?

[00:23:57] Speaker 01:
I believe that at the time that they were making this proposal of Boston Scientific, this quote, they had a prototype of what later became the product that was then patented.

[00:24:12] Speaker 01:
So it was in connection with these products.

[00:24:14] Speaker 01:
It's not some other product.

[00:24:16] Speaker 02:
And the parties conceded that?

[00:24:18] Speaker 02:
The parties have conceded that the letter involves a pen that designed?

[00:24:24] Speaker 01:
I think we conceded that.

[00:24:26] Speaker 01:
The thing that was shown at those meetings was a predecessor to the patented design, and it was ready for patenting.

[00:24:33] Speaker 01:
That issue, I think, was resolved.

[00:24:36] Speaker 02:
The issue on at the court and what the judge went through... To me, this is key because if anything's missing from the letter, what is it that's being sold?

[00:24:45] Speaker 02:
And at that, it's not just these introducers.

[00:24:49] Speaker 02:
We're dealing with whether this is the design patent that we're talking about.

[00:24:56] Speaker 02:
But you all have clarified that for me by saying that, yes, even though it doesn't say it, there's nothing here that would indicate to me that we're talking about the patent design.

[00:25:08] Speaker 02:
But you all have conceded here.

[00:25:10] Speaker 02:
in court that that's exactly what this was.

[00:25:12] Speaker 01:
It wasn't the patented design.

[00:25:13] Speaker 01:
It was a early prototype.

[00:25:16] Speaker 01:
They did not have these different sizes available.

[00:25:19] Speaker 01:
They were still not even at a point of manufacture.

[00:25:22] Speaker 00:
They were trying to generate.

[00:25:24] Speaker 00:
Do you concede that the invention was ready for patenting?

[00:25:30] Speaker 01:
I believe it was ready for patenting at that time, yes.

[00:25:33] Speaker 00:
At the time of January 8th?

[00:25:35] Speaker 01:
I think so, yes.

[00:25:37] Speaker 01:
Again, it's our position that the nature of this kind of quotation is not sufficient to create a binding contract upon simple acceptance.

[00:25:46] Speaker 01:
So unless there's other questions, that was the basis for summary judgment.

[00:25:51] Speaker 01:
And that's why the court granted it is because these were preliminary negotiations.

[00:25:55] Speaker 01:
And that's, he went through all that.

[00:25:56] Speaker 00:
This is a legal issue, right?

[00:25:58] Speaker 00:
Yes.

[00:25:58] Speaker 00:
Both parties have moved for summary judgment, right?

[00:26:01] Speaker 00:
Yes.

[00:26:02] Speaker 00:
And the underlying facts, which includes the language of the letters,

[00:26:07] Speaker 00:
Nobody disputes those facts.

[00:26:09] Speaker 01:
The letters speak for themselves, yes.

[00:26:10] Speaker 00:
That's right.

[00:26:11] Speaker 00:
And so that's what makes it an issue that's appropriate for summary judgment, right?

[00:26:15] Speaker 01:
Correct.

[00:26:16] Speaker 01:
And the letters within the letters themselves indicate that these were preliminary negotiations.

[00:26:21] Speaker 01:
And that's why the court rejected it.

[00:26:22] Speaker 00:
And you're specifically saying that this is preliminary negotiations because there isn't a quantity specified?

[00:26:29] Speaker 01:
Well, there's language right in the letter itself that says if you should have any specific dimensional requirements,

[00:26:34] Speaker 01:
This product could generally be tailored to your specification.

[00:26:38] Speaker 01:
They don't even have a product yet that Boston Scientific might buy.

[00:26:42] Speaker 01:
They're still talking about the product, the design of it, what might fit their requirements.

[00:26:48] Speaker 03:
That's why we don't think they can offer.

[00:26:49] Speaker 03:
You have, for example, in the Supreme Court's decision at PATH,

[00:26:53] Speaker 03:
There wasn't a product available yet.

[00:26:56] Speaker 03:
In fact, it was a situation which was normal to me, offers without actual product in production.

[00:27:06] Speaker 01:
Exactly the facts of path, right?

[00:27:09] Speaker 01:
Correct.

[00:27:09] Speaker 01:
But what I'm saying is that the nature of the discussions, we're reading the letter, looking at what it says, we're looking at the negotiations.

[00:27:17] Speaker 01:
These are all facts.

[00:27:19] Speaker 01:
They're contained within the undisputed letter.

[00:27:21] Speaker 03:
Why does the fact that it suggests that we could tailor our product to your needs suggest that what they're offering is not an offer that could be accepted?

[00:27:34] Speaker 03:
Well, because it's, again, preliminary negotiation.

[00:27:36] Speaker 03:
It doesn't say we can't tell you what the price would be unless we know what your requirements are.

[00:27:42] Speaker 03:
It says, here's what we're offering, and if you want something different, we'll talk about it.

[00:27:47] Speaker 03:
It doesn't make it any less an offer, does it?

[00:27:49] Speaker 01:
Well, I think it makes the discussion

[00:27:51] Speaker 01:
exactly that, that it's preliminary discussions with the party.

[00:27:54] Speaker 01:
They're not in a position to simply accept that letter and create a binding contract.

[00:28:00] Speaker 01:
Otherwise, any quote that's out there that has any number of units for any number of prices, a buyer could come in and say, okay, I accept.

[00:28:10] Speaker 01:
Give me 10 million of those for $4.

[00:28:12] Speaker 01:
And I

[00:28:14] Speaker 01:
Just don't believe that was the nature of this.

[00:28:16] Speaker 03:
It doesn't have to be an offer to sell 10 million.

[00:28:22] Speaker 03:
It's an offer and it gives quantities.

[00:28:24] Speaker 03:
It says for 5,000, it's 445.

[00:28:28] Speaker 03:
Somebody could say, I'll take 5,000 at 445.

[00:28:32] Speaker 03:
We don't have to deal with a situation in which they say, we'll take a million.

[00:28:35] Speaker 03:
Maybe it's not an offer to sell a million, but that doesn't make any difference.

[00:28:39] Speaker 03:
All it has to be is an offer to sell one.

[00:28:42] Speaker 01:
But it has to be such that a simple acceptance will create a binding contract.

[00:28:48] Speaker 00:
And in my view... What if they say, we'll take $5,000 of the 4F-6F?

[00:28:54] Speaker 01:
That's not a simple acceptance.

[00:28:55] Speaker 01:
A simple acceptance in the cases we were reading is, I accept.

[00:29:00] Speaker 01:
Simple acceptance.

[00:29:02] Speaker 01:
Otherwise, certainly, if Boston Scientific said, we would like $10,000 of these at the price, then Zentech would have accepted that

[00:29:12] Speaker 01:
purchase order offer and created a binding contract.

[00:29:15] Speaker 02:
I think the restatement, the UCC both contemplate that there has to be simple acceptance.

[00:29:29] Speaker 02:
And this is a design pen, not a utility pen or apparatus or something like that.

[00:29:37] Speaker 02:
Does that make a difference in this case if this is a design pen that we're talking about with respect to the on-sale bar?

[00:29:46] Speaker 01:
I don't see where that would make a difference.

[00:29:48] Speaker 01:
I think the issue with on-sale, you've got to remember this was not the patentee who put it on sale.

[00:29:54] Speaker 01:
This was a company that

[00:29:57] Speaker 01:
took the invention, who the patentee sued for breaching a confidentiality agreement and got damages against in 2003.

[00:30:04] Speaker 01:
I actually tried that case.

[00:30:06] Speaker 01:
They were the ones who were out there pitching this product in this context before they really had anything to sell.

[00:30:13] Speaker 01:
It was a prototype.

[00:30:15] Speaker 01:
They put these kind of quotes out to get interest because they're trying to get an order, purchase order, so they can then pay for the manufacturer of the product.

[00:30:24] Speaker 01:
And that's the way this situation works with these companies.

[00:30:28] Speaker 01:
So again, it's our position that notwithstanding that it has ranges of products, ranges of prices, an acceptance would not create a binding contract.

[00:30:40] Speaker 03:
It actually specifies quantities.

[00:30:46] Speaker 03:
It says 5,000.

[00:30:47] Speaker 03:
You order 5,000, it's 445.

[00:30:50] Speaker 03:
There's no doubt about the quantities, is there?

[00:30:53] Speaker 03:
It's available.

[00:30:54] Speaker 03:
That's made by the offer.

[00:30:55] Speaker 03:
They've offered to sell 5,000 for 445.

[00:31:00] Speaker 01:
Well, the way I read that in the context of these kinds of quotes is these are various ranges of product.

[00:31:06] Speaker 01:
When you buy up to 5,000, it might be the one price and then the next and the next.

[00:31:11] Speaker 01:
So, you know, again, there's no doubt that it has a price, no doubt that has quantities at that price.

[00:31:18] Speaker 01:
The question is under the UCC and restatement, would it form a binding contract

[00:31:23] Speaker 01:
by simple acceptance.

[00:31:25] Speaker 02:
This has more than quantity and price.

[00:31:28] Speaker 02:
This also has all the terms of shipment.

[00:31:31] Speaker 02:
It speaks in terms of FOB, Athens, Texas.

[00:31:34] Speaker 02:
It's saying that from the factory gate, this is going to be yours.

[00:31:38] Speaker 02:
It's going to be non-sterile, net, 30 days, shipment in bulk.

[00:31:45] Speaker 01:
Well, Mr. Ennings also testified that he wasn't able to identify when he could ship because he knew he didn't have a product to ship.

[00:31:53] Speaker 01:
And so, yes, I agree, it says what it says, but again, it's no different than any other price sheet that lists quoted products, you know, FOB, you know, Athens.

[00:32:02] Speaker 00:
It is different than other price sheets in that it's directed to a particular company, right?

[00:32:07] Speaker 00:
It's directed to one party.

[00:32:09] Speaker 00:
I mean, don't we have in the restatement, it says one of the factors to consider is the number of persons to whom a communication is addressed?

[00:32:17] Speaker 01:
Well, this was their standard quote letter.

[00:32:21] Speaker 01:
go into that in this, in the underlying case.

[00:32:23] Speaker 00:
Is there evidence of that?

[00:32:24] Speaker 00:
That it's a standard quote letter?

[00:32:26] Speaker 01:
Not in the record.

[00:32:29] Speaker 01:
No.

[00:32:30] Speaker 01:
Okay.

[00:32:30] Speaker 01:
Yeah.

[00:32:31] Speaker 00:
But I can, I mean, Mr. Eding's declaration would seem to suggest something different.

[00:32:37] Speaker 01:
Well, he was trying to make a sale, obviously to Boston Scientific, but he wasn't offering to sell.

[00:32:45] Speaker 01:
He was talking to them to get them interested.

[00:32:49] Speaker 01:
getting them to say, I want this French size, I want these dimensional requirements, then he would go make them if they made that order.

[00:32:55] Speaker 00:
And this, do I remember correctly that this January 8th letter was in response to some earlier communication?

[00:33:02] Speaker 01:
Well, I don't know that.

[00:33:03] Speaker 01:
We had a hearsay objection at trial about that issue.

[00:33:08] Speaker 01:
The letters are the only record evidence the jet relied on for purposes of the on-sale bar.

[00:33:14] Speaker 01:
They were just looking at these letters.

[00:33:15] Speaker 03:
It says, thank you for this opportunity to provide this quotation.

[00:33:22] Speaker 01:
Right, well, that's the hearsay issue.

[00:33:23] Speaker 01:
You're testifying in the documents to what maybe Boston Scientific said.

[00:33:28] Speaker 03:
We're looking at the document.

[00:33:28] Speaker 03:
The question is to figure out whether it's an offer for sale.

[00:33:31] Speaker 03:
We look at the document.

[00:33:32] Speaker 03:
There's nothing hearsay about it.

[00:33:35] Speaker 01:
Well, again, it says it's a quotation.

[00:33:36] Speaker 01:
And I think the judge relied on that because of the restatement, because of the UCC, and because of the doctrine that it requires simple acceptance.

[00:33:43] Speaker 01:
So that's the basis of the decision we think was properly done in that case.

[00:33:50] Speaker 03:
We'll give you a minute to address the other issues if you want.

[00:33:56] Speaker 01:
Well, I don't think on the article of manufacture, I think your point is well taken and exactly right.

[00:34:02] Speaker 01:
It'd be moot basically to rule on that at this point because they did not appeal the exclusionary order.

[00:34:06] Speaker 00:
There is no evidence.

[00:34:07] Speaker 00:
But who has the burden of proving damages?

[00:34:11] Speaker 01:
Well, we did, and we did prove damages.

[00:34:13] Speaker 01:
And we proved it with respect to the article of manufacture that throughout the litigation,

[00:34:19] Speaker 01:
Both parties agreed it was the entire introducer sheet.

[00:34:21] Speaker 00:
But if the article of manufacture was the handle, which might be a factual issue or legal issue, it seems to be disputed here.

[00:34:31] Speaker 00:
If it were the handle, that would be your voting to prove what the damages are, right?

[00:34:36] Speaker 01:
Well, we did, though, because the handle is not a separate component.

[00:34:41] Speaker 01:
And so that design, as applied to the defendant's products, is the whole product.

[00:34:46] Speaker 01:
The introducer sheet is the product, just like the Apple case.

[00:34:49] Speaker 01:
was applied to a phone.

[00:34:50] Speaker 00:
I don't know if you heard, but Judge Dyke answered the question I asked pretty well.

[00:34:55] Speaker 00:
And he said that, well, it's not your burden to prove damages.

[00:34:59] Speaker 00:
So how do you respond to that?

[00:35:01] Speaker 00:
I mean, I made a point, but I'm not sure it's well taken anymore, given that it's your burden to prove damages.

[00:35:08] Speaker 01:
Again, we did prove damages because we proved damages

[00:35:12] Speaker 00:
So in other words, maybe it doesn't matter whether their damages evidence on the handle were excluded or not, and we still should address this issue.

[00:35:20] Speaker 01:
It is a fiction to say there would be damages on this handle by itself.

[00:35:25] Speaker 01:
It's never sold separately.

[00:35:27] Speaker 01:
It's never made separately.

[00:35:28] Speaker 00:
That would probably be a fiction in many cases then, right?

[00:35:33] Speaker 00:
I mean, what you're saying makes it so the Supreme Court's ruling would never apply.

[00:35:40] Speaker 00:
in a situation where the smallest saleable unit is something less than what the design covers or is affixed to?

[00:35:49] Speaker 01:
No, it would be if you, if you, looking at the Apple factors, meet the various factors that it is separable, that it is sometimes sold separately, it might be considered a component.

[00:35:58] Speaker 00:
So your view would be it's only when it's sold separately that you're entitled to, uh,

[00:36:06] Speaker 00:
a portion, if you will, or identify the article of manufacturers being only that part of a device on which the design is a fixed.

[00:36:15] Speaker 01:
Well, this is sort of a backdoor portion of an argument that's being made, but if the item you're talking about is separately sold and you can identify that, I think certainly you could probably assess damages because there is a market for that thing here.

[00:36:30] Speaker 01:
The judge applied the design.

[00:36:33] Speaker 01:
to the product, as the case law says, that the defendant is selling.

[00:36:37] Speaker 01:
And so the product that's being sold and the way it was marketed, specifically touting these features, that's the article for which damages apply, which is a different, I think the case law is fairly clear, that's a slightly different analysis than, you know, what the claim comes.

[00:36:55] Speaker 00:
It's not a per se rule, right?

[00:36:57] Speaker 00:
There is no per se rule.

[00:37:00] Speaker 00:
of the type that you're advocating, right?

[00:37:02] Speaker 00:
There's no per se rule that for a multi-component device, the article of manufacture will always be the full device.

[00:37:12] Speaker 00:
There's no per se rule like that, even if the full device is the only thing that's sold.

[00:37:20] Speaker 01:
Well, I would say that and the converse that they're arguing is there's no per se rule that because the design patent shows one thing, it can't be applied to something else.

[00:37:30] Speaker 01:
And in the case of article manufacturer, both parties agree it's based on factual determinations entitled to clear, you know, clear error, deference to the district court.

[00:37:40] Speaker 01:
So I believe that the damages that were given are the damages for the infringement, infringement being

[00:37:48] Speaker 01:
the sale of the introducer sheath, which shows this very prominent feature.

[00:37:53] Speaker 01:
And if we go back to the district court, because of the exclusionary order, there is no evidence for them to argue an alternative damage number.

[00:38:02] Speaker 03:
It was their damage theory.

[00:38:05] Speaker 03:
If it's a smaller unit, that's the basis for damage.

[00:38:09] Speaker 03:
It's up to you to show the damages with respect to that unit.

[00:38:12] Speaker 01:
Well, I contend that we did show the damages with respect to that unit, because it's applied to the overall product that all the parties agreed was the article manufactured throughout the litigation.

[00:38:23] Speaker 03:
I think we're out of time.

[00:38:24] Speaker 03:
We'll answer other questions.

[00:38:25] Speaker 01:
Thank you, Mr. President.

[00:38:28] Speaker 03:
Thank you.

[00:38:28] Speaker 03:
Mr. Saylor, we have two minutes.

[00:38:46] Speaker 04:
Thank you, Your Honor.

[00:38:48] Speaker 04:
Just to pick up on the on-sale issue, all the cases that were cited by the plaintiff, there were many of them, each and every one of those was missing a material term.

[00:38:59] Speaker 04:
Quantity was not in one.

[00:39:01] Speaker 04:
The cases that were cited was the ML, MC, LTD.

[00:39:05] Speaker 04:
That did not have, it was just a price quote, just $5.

[00:39:09] Speaker 04:
It didn't have any terms whatsoever.

[00:39:11] Speaker 04:
The Arrow case, there's no price, it has no quantity.

[00:39:14] Speaker 04:
The Medflow case, it was a flyer.

[00:39:17] Speaker 04:
It was just sent out to everyone.

[00:39:19] Speaker 04:
There is not a single case that plaintiff has provided that says a offer that has a price quotation, delivery dates, quantity, and the rest is just not an offer.

[00:39:36] Speaker 04:
It's an offer, I think, as your honors were pointing out.

[00:39:40] Speaker 04:
And the one that was pointed out, the 11 French at $5 at $5,000, $10,000.

[00:39:46] Speaker 04:
Galt and the prior company, Zentec, was owned by Galt.

[00:39:56] Speaker 04:
Galt was a major manufacturer of equipment, and it sold to Boston Scientific, who's known to everyone.

[00:40:02] Speaker 04:
These were real specific offers made by specific companies to specific people.

[00:40:07] Speaker 04:
It's an offer for sale, in our view.

[00:40:09] Speaker 04:
Plaintiff never had damage expert, never provided damages.

[00:40:13] Speaker 04:
We did our best to provide damages.

[00:40:15] Speaker 04:
Once the Luxembourg case came out, we then scrambled to provide an article of damages.

[00:40:20] Speaker 04:
But it's not our burden.

[00:40:21] Speaker 04:
We did our best at this trial to help the court determine what the real values were.

[00:40:26] Speaker 04:
And that's why we provided damage information.

[00:40:29] Speaker 04:
Plaintiff provided no damages, and it is their burden.

[00:40:31] Speaker 04:
Thank you very much.

[00:40:33] Speaker 03:
I thank both counsel.

[00:40:34] Speaker 03:
The case is submitted.

[00:40:35] Speaker 03:
That concludes our session for this morning.