[00:00:00] Speaker 03:
The first scheduled argument this morning is number 21, 1371, Western Plastics Incorporated against Dubose Strapping Incorporated.

[00:00:11] Speaker 03:
Mr. Williams.

[00:00:18] Speaker 01:
Good morning, Your Honors, and may it please the Court.

[00:00:20] Speaker 01:
My name is Tom Williams.

[00:00:22] Speaker 01:
I am counsel for Dubose Strapping from Grand Rapids.

[00:00:25] Speaker 01:
I'm from McGarry Bear in Grand Rapids, Michigan, and Dubose Strapping is from Clinton, North Carolina.

[00:00:31] Speaker 01:
We're here today to appeal some rulings and a jury verdict that happened in the district of Eastern North Carolina in 2019 I'd like to start on the topic of obviousness if I may But I would like to put kind of the scope and content of prior art in context The patent the 304 patent has a number of asserted claims in this case every element

[00:00:58] Speaker 01:
in the asserted claims 1, 8 through 13, and 22 and 23 is an item that is off the shelf that is in the prior art.

[00:01:08] Speaker 01:
The structure described in the 304 patent has three layers.

[00:01:13] Speaker 01:
Two layers of stretch film.

[00:01:15] Speaker 01:
And in between those two layers of stretch film is sandwiched a netting structure, which is described in the 304 patent as longitudinal ribs that are connected with lateral ribs.

[00:01:27] Speaker 01:
And those longitudinal ribs and lateral rib structure combine to limit the overall stretch of the wrap.

[00:01:35] Speaker 01:
The lateral ribs and longitudinal ribs is off the shelf bail netting.

[00:01:40] Speaker 02:
Council, there's a jury verdict in this case, right?

[00:01:43] Speaker 01:
Yes.

[00:01:44] Speaker 02:
So really, I think the question is, I see it in the obvious inquiry.

[00:01:48] Speaker 02:
is whether there is substantial evidence to support the finding by the jury that the ribs do not have stretching properties that limit stretching of the wrap, right?

[00:01:59] Speaker 01:
Correct.

[00:02:00] Speaker 02:
And so what is your view on whether there is substantial evidence?

[00:02:06] Speaker 01:
Every single element of prior order limits the overall stretch of the wrap.

[00:02:13] Speaker 01:
Stretch film stretches, according to the testimony at trial, 200%, 300%.

[00:02:18] Speaker 02:
What about the Cheryl patent itself, which I believe was the priority you were relying on, saying that that third, that inner layer does not impede the stretching of the first and second plies?

[00:02:33] Speaker 02:
And there's expert testimony interpreting that to say that that means that its stretchability is actually

[00:02:41] Speaker 02:
Plus, it doesn't limit the stretching of the outer layers.

[00:02:45] Speaker 01:
I think, again, putting that in context of what that netting would do in between two layers of stretch film, according to Todd Palmer, the president of Tamanet, who testified at trial, there are no nettings that stretch as much as stretch film.

[00:03:03] Speaker 01:
Commercial stretch film stretches 200% plus.

[00:03:07] Speaker 01:
The netting that he referenced at trial, they said in a lab, the best they've been able to do is about 75%.

[00:03:13] Speaker 02:
So that's your basis for ignoring the contrary testimony.

[00:03:18] Speaker 02:
That is the testimony of the expert who said that this sentence from Cheryl that I've quoted means that it doesn't satisfy the claim limitation.

[00:03:31] Speaker 01:
And this expert, I believe, testified prior to trial, not at trial.

[00:03:38] Speaker 02:
But it was admitted, the jury heard that testimony, right?

[00:03:41] Speaker 01:
The jury heard testimony from Mr. Sherrell himself, who was the inventor on the 909 patent, who said that that impeding statement was not meant that it would stretch the entire length of the stretch film.

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The impeding meant that the netting would simply not break.

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when the wrap was used on an automated wrap machine, and as it wrapped around a steel coil, the netting wouldn't break because it wouldn't accomplish its function if the netting snapped because it was stretched too much during the wrapping process.

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And so Mr. Sherrell testified through video at trial that that impeding statement simply meant that the stretch was to be enough to stretch

[00:04:26] Speaker 01:
and maintain some tension as the wrap was used around the steel coil, but not that the netting was so incredibly stretchable that it would stretch the entire length of the stretch film.

[00:04:40] Speaker 01:
And that reading is a misconstruction of the language in the patent, because there is no netting that stretches as much as stretch film.

[00:04:51] Speaker 01:
The netting stretch, the 5G, 6G products, those strands stretch about 5% to 15%.

[00:04:57] Speaker 01:
The Taminate product stretches 40% to 60%.

[00:05:01] Speaker 01:
These are the ranges that those nettings, when mounted between stretch film, stretch.

[00:05:08] Speaker 02:
So it's your view that Mr. Clark's declaration should be disregarded as a matter of fact?

[00:05:14] Speaker 01:
Mr. Clark's declaration before the Patent Office?

[00:05:16] Speaker 01:
Yes.

[00:05:18] Speaker 01:
Mr. Clark's declaration before the Patent Office has a number of factual misstatements in it.

[00:05:24] Speaker 02:
And that your view is that the jury could not rely on that?

[00:05:28] Speaker 02:
And I guess your view is that the examiner's determination about what Cheryl teaches should be disregarded?

[00:05:36] Speaker 01:
The examiner initially took the exact same view that Mr. Sherrell did in interpreting that statement, that impeding was simply enough to stretch around when making the rejection.

[00:05:51] Speaker 02:
The problem I'm having with your argument is that there is some contrary evidence that the jury found.

[00:05:57] Speaker 02:
And so I feel like you're trying to re-, I mean, there is some contrary evidence that the jury could have relied on to make an alternate finding to the one that you're suggesting.

[00:06:06] Speaker 02:
And so I'm trying to figure out what you want us to do with that evidence.

[00:06:11] Speaker 01:
Well, I believe the evidence that states that there's nettings that stretch as much as stretch film is simply not true.

[00:06:20] Speaker 01:
OK.

[00:06:20] Speaker 01:
And that would be an opinion on products that simply don't exist.

[00:06:25] Speaker 01:
And so the differences between the

[00:06:31] Speaker 01:
scoping content of the prior art and the claimed invention in the 304 patent, there are no differences.

[00:06:38] Speaker 01:
The prior art stretch films and bale netting have the longitudinal strands, they have the lateral strands, and they limit stretch of the wrap when mounted in between two layers of stretch film.

[00:06:50] Speaker 04:
Does the prior art stretch substantially more than the patent?

[00:06:56] Speaker 01:
I believe the prior art stretches less than the patent.

[00:07:00] Speaker 04:
And so the- Wait, that's what- OK, finish your answer.

[00:07:08] Speaker 01:
Thank you, your honor.

[00:07:10] Speaker 01:
There's multiple items of prior art.

[00:07:12] Speaker 01:
There's the stretch film and bale netting.

[00:07:14] Speaker 01:
The bale netting stretches less than stretch film and would limit the overall stretch of the wrap when it's mounted in between stretch film.

[00:07:20] Speaker 01:
The 5G and 6G products.

[00:07:23] Speaker 01:
There are strands that are pressed between two layers of stretch film.

[00:07:28] Speaker 01:
Those stretch only about 5% to 15%.

[00:07:31] Speaker 01:
And the Orpin reference is another reference which shows strands and mesh in between layers of stretch film.

[00:07:39] Speaker 01:
And that limits the overall stretch of the wrap.

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And all of these reinforcements, because they're thicker than the stretch film,

[00:07:47] Speaker 01:
limit the overall stretch of the route.

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And so the only difference that was argued at the point of novelty in the prosecution of the application was that the difference between the claimed invention and the prior order was that the claimed invention limits

[00:08:07] Speaker 01:
the overall stretch of the wrap, has the stretching properties which limit the overall stretch of the wrap.

[00:08:12] Speaker 01:
And every single reinforcement used in the prior art limits the overall stretch in the wrap.

[00:08:18] Speaker 01:
They have those same stretching properties.

[00:08:20] Speaker 01:
Because according to the Markman opinion, the stretching properties need mean nothing more than the elongation to break of the netting is less than the elongation to break of the stretch film.

[00:08:37] Speaker 01:
Every single prior art reference has that limitation.

[00:08:41] Speaker 01:
They attempted to claim that the lateral strands were a patentable feature before the examiner.

[00:08:48] Speaker 01:
That was rejected.

[00:08:51] Speaker 01:
And then what they ended up claiming was that the stretching properties have to limit the overall stretch of the wrap.

[00:08:59] Speaker 01:
That feature is in the prior art.

[00:09:03] Speaker 04:
And I believe to... Well, but we're not talking anticipation, right?

[00:09:08] Speaker 04:
So the jury would have had to find not just that all these various components were in the prior art, but they would have combined them in the particular way that the patent did.

[00:09:20] Speaker 01:
And I believe the Sherrell 909 patent at column 6, lines 5 through 14 provides that basis to combine netting and stretch film.

[00:09:30] Speaker 01:
And then it becomes a simple KSR analysis.

[00:09:33] Speaker 04:
Well, but here's the problem.

[00:09:35] Speaker 04:
I mean, if this was all in the prior art and was all obvious, then why wasn't your client just practicing the prior art instead of copying the patented invention?

[00:09:45] Speaker 01:
Our client absolutely believed he was copying the prior audit.

[00:09:48] Speaker 04:
Sure, but there's different testimony on that.

[00:09:50] Speaker 04:
And the jury clearly found otherwise in its black box verdict.

[00:09:55] Speaker 04:
I mean, I personally think you have a pretty good obvious in this case, but we're not sitting de novo on this.

[00:10:02] Speaker 04:
We're reviewing whether there's any reason.

[00:10:04] Speaker 04:
And there's not just the actual disclosures in the combination, but there is also commercial success in copying evidence that the jury could have found

[00:10:13] Speaker 04:
Secondary consideration to support a finding of non-obviousness.

[00:10:17] Speaker 04:
What do we do with all that?

[00:10:18] Speaker 01:
Well, I believe the secondary considerations are not secondary considerations at all the Longfellow need these products started being made when the automated wrapping machine started being used in the late 1990s early 2000s Mr.. Sherrell's patent was filed in 2003 and

[00:10:37] Speaker 01:
So we're talking about.

[00:10:38] Speaker 04:
Well, OK.

[00:10:39] Speaker 04:
Let's not talk about long-held need.

[00:10:40] Speaker 04:
Let's talk about commercial success.

[00:10:42] Speaker 04:
It was commercially successful.

[00:10:44] Speaker 04:
Let's talk about copy.

[00:10:46] Speaker 04:
And I know you don't think it was copied, but I think there's evidence to suggest that it is copied.

[00:10:51] Speaker 01:
I believe commercial success had nothing to do with the product itself, but the fact that ITW was the sole US distributor.

[00:10:57] Speaker 04:
It doesn't matter what you believe or I believe.

[00:10:59] Speaker 04:
It's what evidence the jury was given that they could have relied on.

[00:11:02] Speaker 04:
And I just don't understand why that in itself is not sufficient.

[00:11:07] Speaker 01:
The commercial success, the product was not successful when Global Pro was distributing it early on in its life.

[00:11:17] Speaker 01:
ITW had relationships with every single steel mill in the United States and the product sales increased when ITW bought Global Pro and then began distributing it.

[00:11:30] Speaker 01:
And so when ITW had 90% of the market, suddenly all of the steel mills had that product available to purchase from it.

[00:11:39] Speaker 04:
And that also goes to... I understand, and I understand that's your view of the evidence, but I'm pretty sure that when you sit down, your friend on the other side is going to get up and give a different view of the commercial success evidence.

[00:11:50] Speaker 04:
And as long as that evidence is in the record, what can we do about this case?

[00:11:55] Speaker 01:
You should only get to

[00:11:57] Speaker 01:
the secondary considerations if you have an obvious invention in the first place.

[00:12:04] Speaker 01:
And there are the long felt need, the commercial success, failure of others, there are actually successful products going on.

[00:12:13] Speaker 01:
So there's no failure of others in this area.

[00:12:16] Speaker 01:
And it has to be related to the

[00:12:21] Speaker 01:
feature that was patentable, and that is the limitation of stretch.

[00:12:24] Speaker 01:
That limitation of stretch was already in the prior art.

[00:12:29] Speaker 01:
There was no structure that stretched as much as the stretch film did when reinforced.

[00:12:42] Speaker 03:
Okay, let's hear from the other side as you have your rebuttal.

[00:12:45] Speaker 00:
Thank you, Your Honor.

[00:12:47] Speaker 03:
Mr. Forbus.

[00:12:48] Speaker 00:
Good morning, Your Honors.

[00:12:50] Speaker 00:
Lisa Court.

[00:12:51] Speaker 00:
I'm Glenn Forbus, representing Western Plastics.

[00:12:55] Speaker 00:
So I think the questions from the bench are appropriate, because this was a jury trial.

[00:13:02] Speaker 00:
And the question before the court is not to relitigate the issue

[00:13:07] Speaker 00:
as if we were before the Patent Office making arguments of my attorneys, but to look at what the evidence supported and was there sufficient evidence to support the jury's findings on the questions of facts.

[00:13:18] Speaker 04:
But why isn't it just a logical conclusion, as your friend seems to suggest, that any time you sandwich any kind of netting

[00:13:27] Speaker 04:
within two plastic layers that it's going to limit stretchability.

[00:13:33] Speaker 04:
It may limit it to lesser or larger degrees, but isn't it just common sense that something that's mesh is going to limit stretching?

[00:13:42] Speaker 00:
So the first question is that the markman consideration for that term was that the mesh would stretch less than the film.

[00:13:52] Speaker 00:
That was the marketing construction, which is not in debate today.

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And so there's no evidence in the record of a person of ordinary skill in the art or otherwise suggesting that that would have been common sense.

[00:14:07] Speaker 00:
And I think that what's important here is starting with the very first factor of Graham, which is who is the person of ordinary skill in the art.

[00:14:14] Speaker 00:
That's one of the factors that must have been presented.

[00:14:17] Speaker 00:
There had to be evidence of that.

[00:14:19] Speaker 00:
And the record is devoid of that.

[00:14:21] Speaker 00:
And when you look at the briefing, even here at the Federal Circuit, my opponent doesn't even point to one iota of evidence of who that person of ordinary skill of the art is.

[00:14:30] Speaker 02:
But what is your evidence that would support the jury verdict?

[00:14:34] Speaker 00:
So in the first instance, the evidence that we have that would support the jury's verdict is, one, of course, it's not our burden of proof, right?

[00:14:42] Speaker 00:
So it is what was the evidence that supported the obviousness argument from the defendant?

[00:14:48] Speaker 00:
And we would say that there's no testimony that would suggest that it was an obvious combination from any person of ordinary skill in the art.

[00:14:56] Speaker 00:
The record is devoid of that.

[00:14:58] Speaker 00:
There's no evidence of who a person of ordinary skill in the art is in the very first place.

[00:15:04] Speaker 00:
Now we went beyond that right and we presented affirmative evidence that it was not obvious even though we didn't have to I think that I think that they failed in their proofs to meet their clear convincing burden

[00:15:15] Speaker 00:
But we went beyond that.

[00:15:16] Speaker 00:
Mr. Clark testified that this wasn't just putting two things together.

[00:15:21] Speaker 00:
There was inventive effort that went into it.

[00:15:23] Speaker 00:
Yes, he did it in 24 hours.

[00:15:25] Speaker 00:
But it was still inventive effort of determining what the relative stretching of the middle layer was to the outside layers to make it so that it could stretch enough to wrap a metal coil, but still limit the stretching of the wrap.

[00:15:39] Speaker 02:
But why doesn't Cheryl disclose that claim element?

[00:15:43] Speaker 00:
Okay, because Sheryl discloses exactly the opposite, right?

[00:15:46] Speaker 00:
Sheryl, as the patent office found, discloses that the mesh or scrim does not impede the stretching of the wrap.

[00:15:58] Speaker 00:
It's just the opposite of what's claimed in the Western Plastics patent.

[00:16:01] Speaker 00:
Now, that's not, you know, has been made out throughout this old case some sort of accidental or improper construction or understanding of what that term means.

[00:16:12] Speaker 00:
If you look, and we cited it in our brief, the Sherrell 909 patent wasn't directed just to metal coils.

[00:16:20] Speaker 00:
The Sherrell 909 patent taught that it is directed to wrapping a wide range of products, pallets of plastic bottles, plastic extruded parts.

[00:16:31] Speaker 00:
And so in those instances, there was testimony at the trial that you want the wrap

[00:16:37] Speaker 00:
to expand, to stretch as much as possible, right?

[00:16:40] Speaker 00:
Because it's all about how much yield can you get from the wrap to wrap up these pieces of plastic on a pallet.

[00:16:46] Speaker 00:
And so you wouldn't want that inner mesh to restrict the stretching of the wrap, okay?

[00:16:52] Speaker 00:
And if you look, and that's in column seven of the 909 patent where it talks about that.

[00:16:56] Speaker 00:
So the patent office, the examiner's construction of that language of reviewing the 909 patent prior art was absolutely correct.

[00:17:04] Speaker 00:
The jury heard evidence of that and they were able to, and entitled to, conclude the same thing, that the 909 patent was directed to the exact opposite, a mesh that did not restrict the stretching of the route.

[00:17:18] Speaker 03:
So is the principal argument that even though it was a small change, that the benefits were unexpected?

[00:17:27] Speaker 00:
That's where I was going next, absolutely.

[00:17:30] Speaker 00:
Because yes, in retrospect, it's one of those inventions where if you stand back and you look, you know, at what happened...

[00:17:36] Speaker 00:
Well, it wasn't obvious that if you put this layer between this layer, et cetera.

[00:17:40] Speaker 00:
But that's hindsight.

[00:17:42] Speaker 00:
And Mr. Clark also testified at trial that there were unexpected results as a result of this combination.

[00:17:49] Speaker 00:
He didn't know, going into it, that you'd be able to wrap the steel coils at a lesser tension, which improved the wrapping of the steel coils.

[00:17:59] Speaker 00:
Because when you stretch the film less, you're less likely to get holes in the wrap.

[00:18:06] Speaker 00:
But at the same time, you have enough stretchability in there that you can wrap the coil.

[00:18:11] Speaker 00:
So he had unexpected results.

[00:18:12] Speaker 00:
And finally, it was not expected necessarily that the way you had the longitudinal and transverse ribs would prevent the zippering, once you got a hole into the wrap, would prevent zippering of that hole, basically the tear propagating along.

[00:18:30] Speaker 00:
So that was another unexpected result that he testified to at trial.

[00:18:33] Speaker 00:
And finally,

[00:18:34] Speaker 00:
You know, he testified about this idea that once he had it built, he could see it acted as a failsafe, right?

[00:18:42] Speaker 00:
Because sometimes these wrapping machines malfunction or the settings aren't right.

[00:18:46] Speaker 00:
And if they wrap it too much, if they stretch it too much, the inner mesh would break and give a visual indicator to the operator that there was a problem.

[00:18:57] Speaker 00:
And they would stop the wrapping.

[00:18:58] Speaker 00:
And that's important because when you wrap these multi-million dollar steel coils,

[00:19:04] Speaker 00:
and you put them on the back of a truck.

[00:19:06] Speaker 00:
You don't want there to be any hole in there.

[00:19:09] Speaker 00:
You want to be perfectly wrapped, because otherwise it'll rust and destroy the value of that coil.

[00:19:15] Speaker 00:
And then finally, the other evidence of non-obviousness is all of the secondary considerations.

[00:19:22] Speaker 00:
Commercial success.

[00:19:23] Speaker 00:
Mr. Kellerman himself said, this is our premier product in the industry.

[00:19:30] Speaker 00:
He said, and not only did he say that,

[00:19:34] Speaker 00:
backed up with his actions because he migrated customers that he had in ITW in 2010 and 11, migrated them from products that ITW was making to the new product, to the new Panacea product.

[00:19:50] Speaker 00:
So not only did he say that it was a premier product, and not only did the commercial success show in sales,

[00:19:57] Speaker 00:
But Kellerman was moving customers from the 6G, 5G products to the new Panacea product.

[00:20:06] Speaker 00:
The copying is, you know, we've briefed that extensively.

[00:20:09] Speaker 00:
We think that Mr. Kellerman absolutely copied the Panacea product.

[00:20:14] Speaker 00:
He was motivated to do that.

[00:20:16] Speaker 00:
He did it.

[00:20:16] Speaker 00:
There's evidence that he talked to suppliers about how to make the product like Panacea.

[00:20:22] Speaker 00:
They tested the Panacea product for the stretching capability, and then they made it.

[00:20:27] Speaker 00:
One second.

[00:20:39] Speaker 00:
And the last thing is this idea that there weren't any wraps or any meshes that stretched more than the films.

[00:20:48] Speaker 00:
What Mr. Williams probably means is that there weren't a lot of those commercially available, right?

[00:20:56] Speaker 00:
Because we all know, and there was evidence at trial, that you could make custom films that stretch less than the mesh.

[00:21:05] Speaker 00:
You could make mesh that stretched more than the films.

[00:21:07] Speaker 00:
And in fact, Mr. Clark testified at trial that there were, in fact, available products on the market like that, to the extent you want to only rely on commercial products.

[00:21:15] Speaker 02:
Do you have a record site for that?

[00:21:17] Speaker 00:
I do.

[00:21:17] Speaker 00:
I will get that to you on my reply.

[00:21:22] Speaker 00:
I want to spend a little bit of my time now on the combination of willfulness and how it applies to our counter appeal for exceptional case.

[00:21:32] Speaker 00:
So we've detailed extensively in our briefing what we believe to be egregious willful conduct.

[00:21:41] Speaker 00:
And this is not a case where Mr. Kellerman, who was responsible for bringing this product to market, it's not a case where he, you know, took a risk or, you know, it was close.

[00:21:55] Speaker 00:
He copied the product.

[00:21:57] Speaker 04:
Isn't that what the wilfulness finding gets you though?

[00:22:00] Speaker 04:
I mean, here's my problem with this is,

[00:22:03] Speaker 04:
You know, first of all, you've got a really good center of review for you on the obviousness issue.

[00:22:08] Speaker 04:
You've got a really bad center of review for you on this, right?

[00:22:12] Speaker 04:
Except case we review for abuse of discretion.

[00:22:14] Speaker 04:
Correct.

[00:22:15] Speaker 04:
The obviousness question to me seems a very, very close question.

[00:22:19] Speaker 04:
And the fact that you won means you won, and you showed copying, and you got willfulness damages.

[00:22:24] Speaker 04:
But that doesn't show that this case was so frivolous or egregiously out of the norm that you should get attorney's fees, does it?

[00:22:33] Speaker 04:
It just shows that you were successful in convincing the jury of your view of the facts.

[00:22:39] Speaker 04:
Why is that an exceptional case?

[00:22:43] Speaker 00:
The reason we believe that this is an exceptional case is because it's not a run-of-the-mill willfulness case.

[00:22:50] Speaker 00:
This is a case where Mr. Tellerman... Let me just ask.

[00:22:53] Speaker 04:
Is this where you're going?

[00:22:55] Speaker 04:
Do you think that there's just no possible way that they could have ever proved obviousness here?

[00:23:00] Speaker 00:
Well, no.

[00:23:01] Speaker 00:
I don't think that... There was clearly questions of fact about obviousness, and it went to the jury.

[00:23:06] Speaker 00:
So the jury could have concluded based upon the evidence, et cetera.

[00:23:09] Speaker 00:
They could have concluded perhaps either way.

[00:23:11] Speaker 00:
I don't know, right?

[00:23:13] Speaker 00:
That's not the issue, right?

[00:23:15] Speaker 00:
Because the obviousness case that was presented at trial was not something that Mr. Kellerman relied upon at the time of the willfulness.

[00:23:25] Speaker 00:
This was an obviousness case that was developed during litigation.

[00:23:29] Speaker 00:
Mr. Kellerman relied upon one thing and one thing only.

[00:23:32] Speaker 04:
Right.

[00:23:32] Speaker 04:
That's why it can't defeat the willfulness finding, but it can still defeat an exceptional case finding in the way this case was litigated, can't it?

[00:23:40] Speaker 00:
I don't disagree.

[00:23:43] Speaker 04:
At least it's not an abuse of discretion.

[00:23:48] Speaker 00:
What do you think the abuse of discretion here is?

[00:23:51] Speaker 00:
I think the abuse of discretion was the misweighing of the evidence

[00:23:56] Speaker 04:
Aren't you out there immediately when you talk about weighing evidence?

[00:24:00] Speaker 04:
What's that?

[00:24:00] Speaker 04:
Aren't you out immediately on an abuse of discretion standard when you talk about mis-weighing evidence?

[00:24:06] Speaker 04:
I mean, that's stuff that the Supreme Court has told us to lead to the district courts.

[00:24:10] Speaker 04:
I think there has to be basically one view of how this should have come out for an exceptional case finding.

[00:24:16] Speaker 04:
Maybe not all that way, but it has to be pretty close, doesn't it?

[00:24:19] Speaker 00:
Well, our point on an exceptional case is only on the willfulness.

[00:24:23] Speaker 00:
It's not on the rest of it.

[00:24:23] Speaker 00:
And our point is this, and it's simply this.

[00:24:26] Speaker 00:
You have a case where Mr. Kellerman went to two lawyers.

[00:24:30] Speaker 00:
And he was told the product that you're going to bring to market is a problem.

[00:24:34] Speaker 00:
And if you're going to bring it to market, you need to shore up this invalidity case based upon the prototype, which they never did.

[00:24:41] Speaker 00:
And so as this case stands, in my opinion, you have a situation where a defendant goes to a lawyer.

[00:24:48] Speaker 00:
And I'm not saying going to the lawyer was the problem.

[00:24:50] Speaker 00:
He went to the lawyer.

[00:24:51] Speaker 00:
The lawyer told him,

[00:24:53] Speaker 00:
If you make this particular type of product where the mesh stretches less than the film, you've got a problem.

[00:24:59] Speaker 00:
So shore up the ability case based upon the prototype, and he can do it.

[00:25:05] Speaker 00:
That's the problem.

[00:25:06] Speaker 00:
And you know, one thing is willfulness if it is

[00:25:09] Speaker 00:
you're taking an extreme risk and you knew or should have known that there was an infringement.

[00:25:12] Speaker 04:
Can you bring this back around to, I mean it still seems to me you're talking about willfulness.

[00:25:16] Speaker 00:
We are.

[00:25:16] Speaker 04:
Bring it back around to why that means that the district court should have awarded attorney fees for finding this an exceptional case.

[00:25:28] Speaker 00:
Like I said, the reason is because as it stands.

[00:25:31] Speaker 04:
Can you give me any precedent to suggest that willfulness alone, pre-litigation, is sufficient for an exceptional case finding too?

[00:25:41] Speaker 00:
We cited precedent in our brief that

[00:25:43] Speaker 00:
Willfulness is one of the factors to consider in an exceptional case.

[00:25:47] Speaker 02:
We've also held that willfulness does not dictate.

[00:25:50] Speaker 00:
Of course.

[00:25:51] Speaker 00:
Willfulness does not mandate an exceptional case.

[00:25:54] Speaker 00:
And the only reason we're here on the exceptional case issue isn't because it's willful.

[00:26:00] Speaker 00:
It was because it was willful in the sense of you were told, not that you should have known, but you were told this was going to be a problem product by a lawyer and you took it to market anyways.

[00:26:13] Speaker 00:
That's the problem.

[00:26:13] Speaker 04:
And in my view... But that's true in almost all willfulness cases.

[00:26:17] Speaker 04:
It seems to me the rule you're advocating would end up with an exceptional case award.

[00:26:22] Speaker 04:
in every case where willfulness was found.

[00:26:25] Speaker 04:
And that just isn't the law, is it?

[00:26:28] Speaker 00:
That's not the law.

[00:26:29] Speaker 00:
But I'm not aware.

[00:26:30] Speaker 00:
I have not been involved in it.

[00:26:32] Speaker 00:
I'm not aware of cases where the defendant is.

[00:26:35] Speaker 04:
Let's just assume, I think, that the invalidity question here was close.

[00:26:40] Speaker 04:
And it was basically a 50-50 toss-up.

[00:26:43] Speaker 04:
Even if they knew if they lost, they were going to be found to have willfully infringed because they copied it.

[00:26:49] Speaker 04:
Aren't they entitled to go forward and put on

[00:26:52] Speaker 04:
a very good invalidity defense without being subject to exceptional case findings?

[00:26:58] Speaker 00:
I would say under normal circumstances, yes.

[00:27:00] Speaker 00:
Again, the reason I go back to exceptional case here is as it stands on the willfulness side, right, it's so egregious, in my opinion, right, that we have a case out there now that says if you get an opinion from a lawyer, patent lawyer, who tells you that you've got a problem and you go forward, that's not exceptional.

[00:27:18] Speaker 00:
That's a normal case.

[00:27:19] Speaker 04:
And I think that that's problematic.

[00:27:20] Speaker 04:
It seems like it is a normal case sometimes.

[00:27:23] Speaker 04:
And you get compensated for that by getting the willfulness damages.

[00:27:26] Speaker 04:
They took the risk about going forward and willfully infringing when they thought they might have a potential invalidity claim.

[00:27:34] Speaker 00:
I understand, Your Honor.

[00:27:36] Speaker 00:
So with that, I can answer any other questions with my time left.

[00:27:39] Speaker 00:
Otherwise, I'm complete.

[00:27:43] Speaker 03:
Thank you.

[00:27:43] Speaker 03:
Thank you.

[00:27:52] Speaker 03:
OK, Mr. Williams.

[00:27:56] Speaker 01:
Thank you, Your Honors.

[00:27:58] Speaker 01:
I believe this is not an exceptional case.

[00:28:01] Speaker 01:
I'd like to start with the last issue.

[00:28:04] Speaker 01:
There's no conduct that was pointed to by the district court that we acted in anything but in an exemplary manner.

[00:28:14] Speaker 01:
When the Markman opinion came out,

[00:28:16] Speaker 01:
We offered to stipulate to infringement as a defendant.

[00:28:21] Speaker 01:
And after that, the judge pointed to no discovery disputes.

[00:28:25] Speaker 01:
The judge indicated that our positions were reasonable, even if ultimately unsuccessful at the district court level, and did not point to any bad faith behavior whatsoever, and could only complement us at the district court level.

[00:28:40] Speaker 01:
So I believe that the exceptional case motion is completely unavailable.

[00:28:47] Speaker 01:
Some comments on willfulness.

[00:28:48] Speaker 01:
I do believe that the willfulness finding discounted what we are even referring to in this room today as a toss-up on invalidity.

[00:28:59] Speaker 01:
A substantial invalidity position can be mitigating with respect to willfulness.

[00:29:05] Speaker 01:
And Mr. Kellerman was not copying the panacea.

[00:29:09] Speaker 02:
It is a highly factual issue, though, right?

[00:29:11] Speaker 02:
And the Supreme Court has said that that objective factor you're referring to cannot be

[00:29:16] Speaker 02:
something that eliminates a willfulness finding, right?

[00:29:20] Speaker 01:
Yes, Your Honor.

[00:29:21] Speaker 01:
I absolutely agree with that.

[00:29:23] Speaker 01:
It is a highly fact-intensive analysis.

[00:29:26] Speaker 01:
But when weighed with all of the facts that Mr. Kellerman was at ITW in 2003, was an inventor on the Sherrell patent,

[00:29:36] Speaker 01:
knew that the Taminat was made between stretch film that was used at trials at the document show at least it was intended to be used at trials at steel mills.

[00:29:49] Speaker 01:
and was told by an attorney, if you make what you made at ITW in 2003, that is a safe harbor.

[00:29:57] Speaker 01:
And when he went to Taminet to seek out product to put in between the stretch film, he was tried to be upsold by the president of Taminet to get their latest and greatest product.

[00:30:09] Speaker 01:
He turned that down.

[00:30:11] Speaker 01:
because he said, I want what you sold us at ITW in 2003.

[00:30:15] Speaker 01:
His state of mind was not one that said, boy, give me your best product.

[00:30:20] Speaker 01:
He was following the lawyer's advice to say, give me what you gave me in 2003, because that's what I'm going to make.

[00:30:28] Speaker 01:
He also made some design around attempts

[00:30:30] Speaker 01:
during the litigation to try and avoid infringement and resolve the case.

[00:30:35] Speaker 01:
And I believe those are also mitigating factors.

[00:30:38] Speaker 01:
But again, I do concede it's a highly fact-intensive analysis.

[00:30:43] Speaker 01:
If there's no other questions, that is my time.

[00:30:46] Speaker 03:
Any more questions for Mr. Williams?

[00:30:49] Speaker 03:
Thank you.

[00:30:49] Speaker 03:
Thanks to both counsel.

[00:30:51] Speaker 03:
The case is taken under submission.

[00:30:55] Speaker 03:
waived your argument on the cross-appeal since you didn't mention it in your case.

[00:31:02] Speaker 03:
Do you want to hear argument on the cross-appeal in attorney's fees?

[00:31:05] Speaker 02:
I think he did mention it.

[00:31:06] Speaker 02:
He did mention it.

[00:31:08] Speaker 02:
Yes, he mentioned it.

[00:31:10] Speaker 00:
I did.

[00:31:10] Speaker 00:
I did address the exceptional case on the original.

[00:31:13] Speaker 02:
All right.

[00:31:14] Speaker 04:
I mean, if you have stuff on that, what you're about to give us isn't exceptional case stuff, is it?

[00:31:19] Speaker 04:
No, it's not.

[00:31:20] Speaker 02:
But I had asked for a case site, and if you could just give me the case site.

[00:31:23] Speaker 00:
So you asked for a case for record sites to where Clark testified about other types of mesh that could be made in films.

[00:31:31] Speaker 00:
That's an appendix 5822 through 5823.

[00:31:37] Speaker 00:
And that's lines 41, or page 41, lines 1 through 22.

[00:31:44] Speaker 00:
Also, the appendix 5824 through 5926.

[00:31:48] Speaker 00:
That's at page 43, line 12 through page 45, line 17.

[00:31:55] Speaker 02:
Thank you.

[00:31:56] Speaker 00:
Thank you.

[00:31:56] Speaker 02:
Thank you, Your Honor.

[00:31:58] Speaker 01:
Your Honor, thank you very much.

[00:32:00] Speaker 01:
We would sit and rest on our briefs for all other issues.

[00:32:03] Speaker 02:
Okay.

[00:32:03] Speaker 01:
Thank you.

[00:32:03] Speaker 02:
Thank you.