[00:00:01] Speaker 00: The United States Court of Appeals for the Federal Circuit is now open and in session. [00:00:06] Speaker 00: God save the United States and this honorable court. [00:00:10] Speaker 01: Our first case for argument today is 20-1897 Night Glow Industries versus Central Garden and Pet Company. [00:00:19] Speaker 01: Ms. [00:00:19] Speaker 01: Bostwick, please proceed. [00:00:20] Speaker 00: Thank you, Chief Judge Moore. [00:00:24] Speaker 00: May it please the court? [00:00:27] Speaker 00: Central is facing a judgment of over $12 million. [00:00:30] Speaker 00: based on a product, the SmartShield applicator, that lost central money on its previously profitable flea and tick medications. [00:00:38] Speaker 00: Now, at the very most, the evidence presented to the jury showed that ATLB, the third party that designed the SmartShield, might have had the opportunity to have access to an idea for a particular kind of applicator six weeks before plaintiffs published that idea to the world, which was still months before... Ms. [00:00:57] Speaker 03: Boswick, let's look at this. [00:01:01] Speaker 03: In fact, this is a jury verdict. [00:01:03] Speaker 03: The jury presumably found a breach. [00:01:07] Speaker 03: It had evidence that there was $60 million of sales, that there were $30 million in profit, and $11 million in damages. [00:01:21] Speaker 03: So aside from labels, why wasn't justice done? [00:01:30] Speaker 03: in awarding $11 million and why shouldn't we just affirm on that aspect of the case, on the damages? [00:01:43] Speaker 00: Because the judgment rests on two legal errors, Your Honor. [00:01:46] Speaker 00: And the first is New Jersey's economic loss doctrine, which means that the misappropriation claim and therefore the opportunity to award a disgorgement remedy should not have been presented to the jury at all. [00:02:00] Speaker 00: And the critical question for that is whether the plaintiff's claim depends on a duty that is extraneous to the contract. [00:02:08] Speaker 00: And here, the submission of idea tort never even exists if there's a contract. [00:02:13] Speaker 00: It is a rarely used. [00:02:16] Speaker 03: But if we affirm $11 million, as I say, aside from labels, then we're not violating the New Jersey economic law structure. [00:02:30] Speaker 03: were not awarding damages on the same facts on two grounds. [00:02:40] Speaker 00: You would be, Your Honor, because the jury did not award $11 million on the contract claim. [00:02:45] Speaker 00: It awarded $800,000 on the contract claim, and that is because it was properly instructed under contract law to provide compensatory damages, not disgorgement. [00:02:55] Speaker 00: Disgorgement was only an [00:02:58] Speaker 00: a remedy under the tort claim, which should never have gone to the jury. [00:03:02] Speaker 00: So this isn't simply a matter of labels. [00:03:05] Speaker 00: It's not simply a matter of election of remedies. [00:03:08] Speaker 00: It is a significant problem and a legal problem with the verdict. [00:03:19] Speaker 01: Ms. [00:03:19] Speaker 01: Pasek, this is Judge Moore. [00:03:20] Speaker 01: If we don't agree with you on this [00:03:24] Speaker 01: this principle, this economic lost rule principle of yours, and if we think it was appropriate for the misappropriation common law tort to have gone to the jury, do you have alternative arguments about the Australian Dollar Damage Award? [00:03:41] Speaker 00: Yes, we have several. [00:03:43] Speaker 00: One, like the contract claim, we don't believe there is evidence, substantial evidence of use of the idea. [00:03:52] Speaker 00: that took place before April 8, 2010, which is when Ms. [00:03:55] Speaker 00: Markell's idea became public by virtue of the publication of her patent application. [00:04:00] Speaker 00: And so we believe that both verdicts should be reversed on background as well because New Jersey tort law requires novelty as an element of the claim and because the contract said that Central was under no obligation once the idea became public by virtue of someone else's actions here at the plaintiffs. [00:04:22] Speaker 00: Um, we also have explained in our briefing why the damages award was excessive on several different grounds, but I would like to emphasize that this, this tort again cannot exist. [00:04:36] Speaker 00: If there is a contract, it is a, it is not a preexisting duty in the law. [00:04:42] Speaker 00: It is something that a court implies on principles of unjust enrichment. [00:04:47] Speaker 00: If the plaintiff doesn't have a contract. [00:04:50] Speaker 00: Here the plaintiff has a contract. [00:04:52] Speaker 00: The plaintiff has a contract that governs not only confidentiality and non-disclosure, but repeatedly imposes obligations on Central not to use the idea, not to make a product including it, not to have a third party develop a product including it. [00:05:08] Speaker 00: Ms. [00:05:09] Speaker 00: Markel chose, right, this is a contract she brought to four-paws. [00:05:14] Speaker 00: She chose to protect herself through contract. [00:05:17] Speaker 00: She testified that the purpose of this was so that a company doesn't, quote, steal her idea. [00:05:23] Speaker 00: And she has to proceed under contract law. [00:05:27] Speaker 00: There's no basis for a court to come in after the fact and nonetheless imply this tort. [00:05:33] Speaker 02: Well, wouldn't Ms. [00:05:35] Speaker 02: Voskowitz, isn't your argument [00:05:38] Speaker 02: about this seemingly inconsistent with the restatement. [00:05:42] Speaker 02: Doesn't the restatement suggest that in circumstances like this, you can have both a claim for misappropriation under tort law and a breach of contract fund? [00:05:57] Speaker 00: The restatement says as a matter of general statement of law that the existence of a contract protecting trade secrets doesn't preclude a separate cause of action in tort. [00:06:08] Speaker 00: But the restatement doesn't account for New Jersey's law, which says that you have to look at the contract duties to see if there ever is a tort that comes into being. [00:06:18] Speaker 00: And what courts have held, regardless of the restatement, is that these misappropriation of trade secret claims cannot go forward based on the economic loss doctrine. [00:06:29] Speaker 00: They held that in Trico, held that in Helmedica, held a similar claim barred in Novartis, and the plaintiffs do not address those cases. [00:06:44] Speaker 01: Just to be clear, the cases that you're citing are all district court cases in New Jersey attempting to interpret New Jersey state law. [00:06:54] Speaker 01: Is that correct? [00:06:55] Speaker 01: These are not New Jersey state courts. [00:06:58] Speaker 00: Those three that I just mentioned, Your Honor, are from the district of New Jersey. [00:07:03] Speaker 00: But if we look at what the Supreme Court of New Jersey has said, going back to 1951 in the Moser case, they've said that you cannot have [00:07:11] Speaker 00: A contract implied in law, there it was quantum marrow it, which is a very similar theory to the unjust enrichment theory at issue here. [00:07:17] Speaker 00: You cannot have an implied contract on the same subject matter as an express contract. [00:07:24] Speaker 00: More recently, they've held in the Salteel case the exact same thing. [00:07:28] Speaker 00: And the reason why is that New Jersey has this policy. [00:07:31] Speaker 00: It says the third circuit put it in the traveler's case. [00:07:34] Speaker 00: New Jersey's strong resistance to the user patient of contract law by tort law. [00:07:40] Speaker 00: In the state capital case, they talked about New Jersey's preference for contract law to govern disputes that were or could have been foreseen. [00:07:47] Speaker 00: Here, we know the parties foresaw exactly the problem that Ms. [00:07:52] Speaker 00: Markell now claims has happened, which is central using her idea for its own purposes and without working with her on it. [00:08:02] Speaker 01: We have a contract on the exact subject at issue, the exact... In the event that we were to disagree with you and believe that the restatement controlled and that we didn't agree with you, that there couldn't be these two causes of actions, can you please move to your other arguments about the damage award? [00:08:24] Speaker 00: Certainly. [00:08:25] Speaker 00: Can I start with the... I'm sorry, Your Honor. [00:08:28] Speaker 02: I was just going to say, and particularly the Head Start issue, [00:08:34] Speaker 00: Certainly. [00:08:34] Speaker 00: So, you know, at most here, the benefit that Central got was a six-week head start from the rest of the world. [00:08:44] Speaker 00: What plaintiffs allege was misappropriated here is they allege that Mr. Blomquist, who had access to the idea, disclosed it at the February 2010 meeting. [00:08:54] Speaker 00: All the evidence is that he didn't, but that's their allegation. [00:08:57] Speaker 00: And so if that's true, that's six weeks before April 8th, 2010, and that's when the entirety of her idea was disclosed to the public in her patent application. [00:09:08] Speaker 00: Now, at that point, she has, you know, she has rights under the patent law. [00:09:12] Speaker 00: Of course, we don't infringe, as the district court found. [00:09:14] Speaker 00: But as to the state law claims then, her damages are limited to that six-week head start or should have been. [00:09:22] Speaker 00: And that's, you know, if we look at the restatement of unfair competition, it says that at Section 45 comment. [00:09:28] Speaker 01: Well, counsel, that's really a legal position, right? [00:09:31] Speaker 01: That as a matter of law, she should be limited to damages under those circumstances. [00:09:37] Speaker 01: Is that right? [00:09:40] Speaker 00: It is, although the District of New Jersey has said that this is a question of the facts of the case. [00:09:48] Speaker 01: The facts of the case, but you're saying as a matter of law misappropriation damages should be limited to the head start period when something goes public. [00:10:00] Speaker 01: Correct. [00:10:00] Speaker 01: I mean, that's a question of law, but you didn't ask for any sort of instruction. [00:10:05] Speaker 01: In fact, the misappropriation damages instructions that were given to the jury were jointly proffered by both parties. [00:10:13] Speaker 01: And so there was nothing presented to the jury that would suggest that they were expected to view the law that way. [00:10:21] Speaker 00: So I disagree with that, Your Honor, in two respects. [00:10:24] Speaker 00: For one thing, we did before this joint instruction, we did ask for an instruction that would have told the... Please continue. [00:10:33] Speaker 00: ...that would have told the jury that the damages here should have been limited to the incremental benefit. [00:10:39] Speaker 00: And so that accounts for both the apportionment concept as well as the timing concept, but also the instruction that was given to the jury have this causation requirement, right? [00:10:49] Speaker 00: the jury was required to tie and plaintiffs were required to tie the harm to the misconduct. [00:10:56] Speaker 00: And here if the misconduct is limited to those six weeks, there is no evidence that plaintiffs put forward, no evidence in the record that allowed the jury to make that calculation. [00:11:07] Speaker 00: except for central evidence, which showed there was no profit whatsoever. [00:11:11] Speaker 01: Just so I understand, because I'm questioning this from a preservation issue, you said you asked for a jury instruction on incremental benefit. [00:11:21] Speaker 01: Did you preserve a complaint [00:11:25] Speaker 01: Did you renew an objection? [00:11:28] Speaker 01: I mean, when you ultimately consented to the instruction that was gone, is it your view that you preserved an argument that the jury instructions as proffered to the jury were legally improper? [00:11:44] Speaker 00: I believe that the jury instructions were legally improper because it did have that causation element. [00:11:49] Speaker 00: We filed a motion in limine, and I apologize, the language I quoted was from our motion in limine, our jury instruction said based upon the use. [00:11:57] Speaker 00: And then we filed a post trial motion asking for a new trial on this very ground. [00:12:03] Speaker 01: You filed a post trial, you're talking about your 50B motion? [00:12:08] Speaker 01: Correct. [00:12:09] Speaker 02: And in the 50B? [00:12:11] Speaker 02: And also a trial motion. [00:12:13] Speaker 00: Yes, it was a combined rule 50 B motion and rule 59 motion. [00:12:18] Speaker 00: And the district court did not find that we waived this. [00:12:22] Speaker 00: The district court simply refused to enforce Head Start because it said that one of the cases, the Taos case, that this court decided arose under Texas, not New Jersey law. [00:12:33] Speaker 01: And do you have any New Jersey law on this point? [00:12:39] Speaker 00: No, because, again, this tort has never gone forward in New Jersey. [00:12:43] Speaker 00: It's never been successful. [00:12:44] Speaker 00: There are only three cases even addressing it. [00:12:47] Speaker 00: But what we do have is the Third Circuit cases that we cited, the Parr and the Midland cases, which suggest that New Jersey would follow this approach, which, again, is laid out in the restatement. [00:12:57] Speaker 00: And if the court believes that the restatement should govern as to economic loss, despite the New Jersey case law, then I think certainly it should govern here. [00:13:05] Speaker 00: And also the district of New Jersey case cited by the plaintiffs, the Kilbar case, does say that the Head Start application depends on the facts of the case. [00:13:13] Speaker 00: And we think the facts here certainly support the application of it. [00:13:18] Speaker 00: When we were talking about $11 million of sales that were made two years after the idea became public. [00:13:25] Speaker 01: And if we were to potentially agree that that seems like an excessive verdict, that it doesn't seem [00:13:33] Speaker 01: tethered to the six-week period in a meaningful way, I assume the right result would be vacating and remanding for the court to have a new trial on that issue. [00:13:44] Speaker 01: Is that right? [00:13:44] Speaker 01: What is your position on the remedy? [00:13:47] Speaker 00: So we've asked for just a reversal because we have thought, Jamal, on the basis that there is no evidence that Central made any profit based on the applicator, but certainly a new trial would be appropriate as well. [00:14:00] Speaker 01: Okay, so the only way you would get a reversal is if we believe there was no evidence at all of damages, in your view. [00:14:11] Speaker 00: Or if you believe that it was plaintiff's burden to put those damages on and that their failure to meet that burden justifies a reversal. [00:14:23] Speaker 01: Okay, thank you, counsel. [00:14:24] Speaker 01: Let's hear from closing counsel, Mr. Norman. [00:14:29] Speaker 04: May it please the court? [00:14:30] Speaker 04: The economic loss doctrine simply does not apply to misappropriation. [00:14:36] Speaker 04: Central's argument that it does runs contrary to the Third Circuit, the restatement, and common sense. [00:14:43] Speaker 04: Accepting Central's view of the economic loss doctrine would destroy NDAs in New Jersey. [00:14:49] Speaker 04: Inventors use NDAs to protect rights, not to undermine them. [00:14:55] Speaker 04: In a far pharmaceutical cited in Nicolo's main brief of page 26, [00:15:00] Speaker 04: The Third Circuit held that the plaintiff there had demonstrated a reasonable likelihood that it would prevail in a trade secret case because the parties had signed a non-disclosure agreement. [00:15:11] Speaker 04: That NDA did not preempt the tort. [00:15:14] Speaker 04: It was supporting evidence. [00:15:16] Speaker 04: And the restatement of law of unfair competition, which has been relied on by both the Third Circuit and New Jersey appellate courts, it says, [00:15:30] Speaker 04: And we quote that in our brief at page 25, it says, the existence of an express or implied in fact contract protecting trade secrets does not preclude a separate cause of action in court under the rules of this section. [00:15:43] Speaker 02: It goes on to say- Mr. Normans, Judge Dyke, if you're right about New Jersey following the restatement, then that's a problem for you on the hit start issue, isn't it? [00:15:55] Speaker 02: Because the restatement says explicitly that damages [00:16:00] Speaker 02: for misappropriation have to be limited to the head start period where there's a subsequent disclosure, for example, by the filing of a patent application. [00:16:12] Speaker 04: Yeah, except we do have some case law on this point. [00:16:18] Speaker 04: One is the kill law. [00:16:21] Speaker 02: Just stick with me for one moment. [00:16:22] Speaker 02: If the restatement governs here, you lose on this point, right? [00:16:28] Speaker 04: I don't think so. [00:16:30] Speaker 04: Why? [00:16:32] Speaker 04: Because, well, use ends upon publication number one unless, I'm sorry, novelty is lost upon publication unless the use occurred before. [00:16:51] Speaker 04: If the use began beforehand, then [00:16:55] Speaker 04: then it's not lost. [00:16:57] Speaker 04: And that's what the case law says. [00:16:58] Speaker 04: That's what it says in the Kilbar case. [00:17:02] Speaker 02: I'm sorry. [00:17:02] Speaker 02: I'm not following this. [00:17:03] Speaker 02: I'm talking about section 45 of the restatement, which specifically says that in a head start situation, you only get the head start damages. [00:17:14] Speaker 02: And my question is, we'll get to your argument about New Jersey law. [00:17:18] Speaker 02: I'm just asking you now only about the restatement. [00:17:22] Speaker 02: Under the restatement rule, [00:17:24] Speaker 02: we would have to vacate and remand the damages here, right? [00:17:29] Speaker 04: I don't really know what the restatement says on that. [00:17:33] Speaker 04: What I do know, though, is this is not an issue that the federal raised at trial. [00:17:42] Speaker 04: It constitutes a waiver. [00:17:45] Speaker 04: And also, there was evidence. [00:17:49] Speaker 04: So there was evidence at trial that [00:17:51] Speaker 04: that there were $12 million in profits in the first six months. [00:17:57] Speaker 04: So causation was in the jury instruction. [00:18:01] Speaker 02: But you never presented any evidence of a head start period. [00:18:05] Speaker 02: You never mentioned that at all in the case you presented to the jury on damages, right? [00:18:11] Speaker 04: A head start is a defense. [00:18:13] Speaker 04: So that would have been incumbent upon the judge to raise. [00:18:16] Speaker 04: What I'm saying is... Wait, wait, wait. [00:18:18] Speaker 02: Who says it's a defense? [00:18:20] Speaker 02: In our Tao's case, we treated it as part of the plaintiff's burden. [00:18:24] Speaker 02: What says that this is a defense? [00:18:27] Speaker 02: The restatement certainly doesn't say that. [00:18:29] Speaker 04: So in the Tao's case, you were still, what was still being, it was being applied was taxless law. [00:18:37] Speaker 04: And there, the New Jersey Supreme Court has certainly signed in on this particular issue. [00:18:47] Speaker 04: If we're going to be looking at law, we should be looking to the law in New Jersey. [00:18:55] Speaker 04: And I would direct the court to the Gatcho, the Adolf Gatcho, the American Barking Court case. [00:19:04] Speaker 04: That's the 1995 one. [00:19:06] Speaker 04: There's two of those, two Adolf Gatcho cases cited in our briefs. [00:19:11] Speaker 02: Okay, but all those cases seem to hold is that subsequent [00:19:15] Speaker 02: publication doesn't eliminate the cause of action, which seems to be correct. [00:19:21] Speaker 02: But they're not addressing the question of whether damages are limited to the head start period. [00:19:26] Speaker 02: There's no discussion of that at all. [00:19:29] Speaker 04: But they do, because you've got the kill bar case, which did say that the damages would continue. [00:19:43] Speaker 04: The kill bar case was a [00:19:45] Speaker 04: It was a district court case, but that case was affirmed by the Third Circuit. [00:19:51] Speaker 04: And so the Kilbara case, looking at this issue, indicated that with respect to that party, the damages would continue if the use occurred before publication. [00:20:10] Speaker 04: And that seems to be the case with the Gachew case as well, because [00:20:16] Speaker 04: even injunctive release was available after a publication of a patent. [00:20:25] Speaker 04: So even though the secret was in a patent that's published, injunction was still available. [00:20:33] Speaker 03: Counsel, what about your cross-appeal argument on assignment of patents? [00:20:40] Speaker 03: Do you want to address that? [00:20:43] Speaker 04: Yes. [00:20:46] Speaker 04: With respect to the breach of contract action, the contract, the jury was specifically instructed as to, the jury was specifically instructed as to a duty to disclose and assign patent rights. [00:21:06] Speaker 04: The jury found that central violated that by failing to disclose and assign their patents. [00:21:14] Speaker 04: So because of that, [00:21:17] Speaker 04: And there was ample evidence, clear evidence that the jury was right on that point. [00:21:24] Speaker 04: In fact, the judge affirmed the jury's finding. [00:21:29] Speaker 04: So the judge then saying there's not ample evidence to tie the patents in is inconsistent with what the jury found. [00:21:42] Speaker 04: So the judge should have considered the issue of whether [00:21:46] Speaker 04: The patent should have been assigned. [00:21:50] Speaker 02: The jury didn't consider the assignment question, right? [00:21:54] Speaker 04: That's the only issue that the jury was instructed on with respect to the breach of contract. [00:22:01] Speaker 04: The jury instruction was if you, let's see, what is the jury instruction? [00:22:12] Speaker 04: The jury was instructed to central breach the confidentiality agreement by failing to disclose and assign. [00:22:18] Speaker 04: And that's, and that jury instruction is on Appendix Page 72. [00:22:24] Speaker 04: And that's what the jury, and to them the jury was, the jury awarded damages for the use of those patents to the date of the, to the date of the trial. [00:22:42] Speaker 02: Yeah, but the jury wasn't asked to determine whether the patent should be assigned, right? [00:22:47] Speaker 04: No, no, no. [00:22:48] Speaker 04: That's certainly a question for the court. [00:22:51] Speaker 04: That's going to be a question for the trial court. [00:22:57] Speaker 04: But what I'm saying is what they decided was there was ample evidence tying. [00:23:04] Speaker 04: So the jury found that there was a duty to assign, but it's still going to be up to the trial court to decide [00:23:13] Speaker 04: in her discretion whether to assign. [00:23:15] Speaker 04: What we're saying is she didn't even exercise that discretion because she, as a matter of fact, concluded that there wasn't ample evidence. [00:23:28] Speaker 04: But there was ample evidence as found by the jury. [00:23:32] Speaker 04: There was substantial evidence. [00:23:35] Speaker 02: Do we review the judge's determination in that respect under the clearly erroneous standard? [00:23:43] Speaker 04: Yes, well I think in a sense it should be the substantial evidence because it's a finding of the jury. [00:23:51] Speaker 04: Now if the judge, so the judge didn't actually exercise her discretion, there's nowhere indicated that she's doing it based on her discretion as to whether assignments of patents would be the proper thing to do here. [00:24:13] Speaker 04: I would like to switch over to the patent side. [00:24:21] Speaker 04: So with the trial court's claim construction change, the claims of the 445 patent cover nothing. [00:24:29] Speaker 04: After all, there's no such thing as a non-slashed rubber. [00:24:34] Speaker 04: So following the Markman hearing, the trial court defined rubber as elastic polymer capable of being flexed [00:24:42] Speaker 04: natural and or synthetically made. [00:24:45] Speaker 04: Based on that construction, the jury found infringement and willfulness. [00:24:50] Speaker 04: After trial, the trial court incorrectly ruled Ms. [00:24:53] Speaker 04: Markel disavowed plastic from the scope of the claim term rubber. [00:24:58] Speaker 03: But even central... A claim covered plastic and it was canceled and the remaining claim covered rubber. [00:25:09] Speaker 03: So why isn't it clear that plastic was disavowed? [00:25:13] Speaker 03: We're not talking about a plastic property of something such as rubber, but we're talking about a plastic, and plastic was disavowed. [00:25:24] Speaker 04: Well, plastic wasn't disavowed. [00:25:27] Speaker 04: One, there is no such thing as a non-plastic rubber, because rubber is a polymer. [00:25:34] Speaker 04: That's what both of the experts said, and that polymers and plastic [00:25:39] Speaker 04: are synonymous. [00:25:40] Speaker 04: And it's even in their expert textbook. [00:25:44] Speaker 04: So logically, that means that rubbers are plastics. [00:25:48] Speaker 04: And we also have claim 16, which explicitly requires that there be a lightweight polymer. [00:26:00] Speaker 04: So that's a lightweight plastic. [00:26:09] Speaker 04: So but anyway, I want to make one more point on this Head Start. [00:26:15] Speaker 04: So however you look at it, the evidence in the case was that within the first six months, central profited by over $12 million on this product. [00:26:33] Speaker 04: So if we're talking about a Head Start, we're not talking six weeks anyway. [00:26:36] Speaker 04: We're talking much longer than six weeks. [00:26:39] Speaker 02: So... Why would that be true? [00:26:43] Speaker 04: Well, because the disclosure and the... If you look at all the use that began, and that's going to be laid out a bit in the trial court's opinion at May 21 to 23. [00:26:56] Speaker 04: So the disclosure was in their possession before, I mean, by mid-2009. [00:27:08] Speaker 04: And then there were communications that they had with Ms. [00:27:17] Speaker 04: Markel. [00:27:19] Speaker 04: So they had communications with Ms. [00:27:20] Speaker 04: Markel, and they began this project speed in 2009. [00:27:27] Speaker 04: And they had their first project speed meeting in November 2009, and the person to whom [00:27:38] Speaker 04: The person to whom Ms. [00:27:39] Speaker 04: Markell disclosed her invention, that is the person who headed up Project Speed. [00:27:45] Speaker 04: And that was six months before trial. [00:27:51] Speaker 04: I mean, six months before. [00:27:52] Speaker 04: And the key thing is they waived this issue. [00:27:57] Speaker 04: They could have had this in a jury instruction, and they chose not to. [00:28:01] Speaker 04: And in any event, the evidence there was that [00:28:06] Speaker 04: There were $12 million in damages and $12 million in profits in this first six months. [00:28:12] Speaker 04: So I'll reserve the rest of my time for rebuttal. [00:28:14] Speaker 04: Thank you. [00:28:16] Speaker 01: Okay. [00:28:16] Speaker 01: Thank you, counsel. [00:28:17] Speaker 01: Let's have Ms. [00:28:19] Speaker 01: Dostwick and she has some rebuttal time. [00:28:20] Speaker 01: Please proceed. [00:28:23] Speaker 00: Thank you, Chief Judge Moore. [00:28:24] Speaker 00: I want to very briefly touch on the claim construction point before I get back to the Head Start issue. [00:28:34] Speaker 00: What Council is saying is, in fact, a logical fallacy. [00:28:37] Speaker 00: The argument is, rubbers are polymers and plastics are polymers, so therefore rubbers are plastics. [00:28:43] Speaker 00: That's simply not true. [00:28:44] Speaker 00: It's not true in the world, and we know it's not true in the context of the 445 patent because, as Judge Lurie noted, the applicant distinguished plastics by amending her claims to be limited to rubber. [00:28:57] Speaker 00: As to the head start, [00:28:59] Speaker 00: What the restatement says, and this is, again, the restatement of unfair competition, section 45, comment H, that a plaintiff is entitled to damages, quote, only for the period of time that the information would have remained unavailable to the defendant without misappropriation. [00:29:17] Speaker 00: That's the head start point. [00:29:18] Speaker 00: That was plaintiff's burden to prove. [00:29:20] Speaker 00: They've said that New Jersey law is contrary. [00:29:23] Speaker 00: It's not. [00:29:24] Speaker 00: In the Adolf Scott Showcase, as Judge Dyke noted, it says that you can have a cause of action for use that happened pre-disclosure, pre-public disclosure. [00:29:35] Speaker 00: It does not say what you get in terms of damages, and I'd note that in the Scott Showcase, there the defendant's company did not even exist before the misappropriation. [00:29:46] Speaker 01: So what about Kilbar Council? [00:29:49] Speaker 01: That district court case, which is affirmed by the Third Circuit, I very much get your point on Restatement Section 45, but of course, if New Jersey law differs from the Restatement, we would be bound by New Jersey law. [00:30:02] Speaker 01: I recognize Kilbar is a district court case, but do you have any means of distinguishing it? [00:30:07] Speaker 01: Because it seems to directly contradict Section 45 of the Restatement. [00:30:12] Speaker 00: I don't think it does. [00:30:14] Speaker 00: And there the district court again said that the Head Start is available. [00:30:19] Speaker 00: it just uh... that the head start principles available it just depends on the fact and there what the district court relied on to allow uh... uh... greater damages with the creatures fact of that case including there the uh... defendant had actually taken the trade secret that was no longer available to the plaintiff and had refused to return it and on that basis the district court uh... imposed greater damages and [00:30:43] Speaker 00: The Third Circuit summarily affirmed, so there is no sort of specific guidance from the Third Circuit on that principle. [00:30:50] Speaker 01: Well, what about the fact that the case says, accordingly, this is the conclusion in Kilbar, accordingly, the court determines as a matter of law that Head Start is not available to these defendants on the facts in this case. [00:31:04] Speaker 01: And so I understand that that's focused on the facts. [00:31:08] Speaker 01: but saying the way in which this is worded makes it sound like a defense, not part of what the plaintiff's burden of proof would be. [00:31:16] Speaker 00: So I think if your honor reviews the whole of the opinion, that's not what the court is saying. [00:31:24] Speaker 00: What the court says back at page 426 [00:31:29] Speaker 00: Um, it slides first, you know, the cases in this area all turn very narrowly on particular facts and circumstances. [00:31:36] Speaker 00: Each case doesn't tell unique circumstances. [00:31:38] Speaker 00: And then later on in that page it says, in fashioning an adequate monetary remedy, the court must consider that defendants did not merely wrongly obtain and use plaintiff's know-how as a competitor. [00:31:47] Speaker 00: They refuse to return the know-how and thereby completely precluding Remington. [00:31:52] Speaker 00: That's the point I was referring to earlier. [00:31:55] Speaker 00: I don't think it is plausible to read Kilbar in the whole as a complete bar on the Head Start Doctrine in this area. [00:32:06] Speaker 01: Well, I'm not saying... Particularly given that... Counsel, I'm not suggesting it's a bar on the Head Start Doctrine, but I'm wondering who has the burden of coming forward with evidence related to Head. [00:32:19] Speaker 00: And I think there we would again return to the principle that it's the claimant's burden [00:32:24] Speaker 00: in all of these cases to show, you know, at least a reasonable approximation of the amount of wrongful gain. [00:32:31] Speaker 00: If there's lingering uncertainty, then it becomes the defense's burden. [00:32:35] Speaker 00: But what plaintiffs had to do was actually present evidence tying the damages to the alleged harm. [00:32:46] Speaker 01: Okay. [00:32:47] Speaker 01: Any further questions? [00:32:49] Speaker 03: No. [00:32:50] Speaker 01: Okay, thank you, Ms. [00:32:51] Speaker 01: Boswick. [00:32:53] Speaker 01: Mr. Norman, you have rebuttal time. [00:32:56] Speaker 01: I just want to remind you, your rebuttal is limited to the only issue she addressed in your cross-appeal, which is claim construction. [00:33:05] Speaker 04: Okay. [00:33:05] Speaker 04: And on that particular issue, she's incorrect when she says that not all, I don't know, I think she indicated that not all rubbers are plastic, and that's just not the case. [00:33:19] Speaker 04: of the undisputed evidence at trial. [00:33:23] Speaker 04: Central's expert testified that rubber is a polymer and that polymers and plastics are synonymous. [00:33:30] Speaker 04: So that means all rubbers are plastics. [00:33:36] Speaker 04: Not all plastics are rubber. [00:33:38] Speaker 04: Rubber is an elastic plastic. [00:33:42] Speaker 04: That's the distinction. [00:33:43] Speaker 04: So the claims weren't narrowed to eliminate plastic. [00:33:48] Speaker 04: They were narrowed by the use of the word rubber to make for elastic plastics, elastic polymers, and no disavowal occurred. [00:34:02] Speaker 04: There were no statements made by the applicant whatsoever as to... No disavowal occurred? [00:34:08] Speaker 02: The amendment had no significance? [00:34:11] Speaker 04: I'm not saying the amendment... It wasn't a disavowal is what I'm saying. [00:34:17] Speaker 04: The amendment, it was certainly a narrowing amendment, but the term rubber is still to be given its ordinary meaning. [00:34:24] Speaker 04: It's not a disavowal. [00:34:26] Speaker 04: It's just, it still is to be given its ordinary meaning. [00:34:31] Speaker 04: There was no, so there was, there was no lack of confidence. [00:34:36] Speaker 04: There was no disavowal. [00:34:37] Speaker 04: So, I mean, with all that, we request that the court affirm the judgment of misappropriation of breach of contract and reverse the trial court's grant of JMOL [00:34:46] Speaker 04: on the patent claim and grant the other reliefs requested in our briefs. [00:34:50] Speaker 04: Thank you. [00:34:52] Speaker 01: I thank both counsel for their argument. [00:34:54] Speaker 01: This case is taken under submission.