[00:00:00] Speaker 01:
The next case is Carl Zeiss versus Topcon Medical Systems.

[00:00:05] Speaker 01:
Appeal number 21, 1839.

[00:00:10] Speaker 01:
Mr. Carlson.

[00:00:13] Speaker 01:
Before we start your clock ring, can I just confirm, your co-counsel on the video screen is here to answer his client-specific questions, but if we don't have any client-specific questions, you're just going to have all the time, or does he want to use his minute for something special?

[00:00:29] Speaker 03:
First, if there's no client-specific questions, I will use three minutes, if that's okay with you.

[00:00:33] Speaker 01:
Okay, is that right, Mr. Miller?

[00:00:35] Speaker 01:
Yes, it is, Your Honor.

[00:00:36] Speaker 01:
Okay, thanks.

[00:00:40] Speaker 01:
When you're ready, Mr. Carlson.

[00:01:03] Speaker 03:
Good morning.

[00:01:03] Speaker 03:
May it please the court.

[00:01:05] Speaker 03:
The injunction in this case should be vacated.

[00:01:08] Speaker 03:
There should be, no question, but the injunction should be limited to enjoining Topcon from selling this product, glaucoma module.

[00:01:16] Speaker 03:
The clarity for this comes right out of the briefing.

[00:01:21] Speaker 03:
Zeiss in his revised reply brief said, quote, this motion is about glaucoma module, period plus quote, ABPX 2783.

[00:01:31] Speaker 03:
The court seized upon that statement and said in its order, quote, in its revised reply, CZMI now limits the proposed injunction to glaucoma module specifically, period, close quote, ABPX 7, footnote 6.

[00:01:50] Speaker 03:
So there should be no question that glaucoma module is a product injunction.

[00:01:54] Speaker 03:
That's what's stated in clause 1 of the injunction.

[00:01:56] Speaker 00:
Can I ask you just a clarifying factual question to make sure I understand?

[00:02:00] Speaker 00:
So the glaucoma module, that includes the super norm.

[00:02:05] Speaker 03:
Correct.

[00:02:06] Speaker 00:
But it doesn't include the Harmony Decoder project.

[00:02:09] Speaker 03:
Correct.

[00:02:09] Speaker 00:
OK.

[00:02:10] Speaker 00:
Just wanted to make sure I understood that.

[00:02:13] Speaker 03:
And so despite the clarity, we're here.

[00:02:17] Speaker 03:
Zeiss has seized upon over-broad statements in the text of the order itself and seized upon mistakes in the body of the order.

[00:02:30] Speaker 03:
and is now actually moving for contempt of court to try to hold a different product, to hold the top kind of contempt of court for selling a different product that's Harmony, along with the Dicom decoder.

[00:02:44] Speaker 00:
Can I ask you some questions?

[00:02:47] Speaker 03:
What is the status of that motion for contempt?

[00:02:51] Speaker 03:
That's still pending, Your Honor.

[00:02:55] Speaker 03:
We've informed the court about this appeal.

[00:02:58] Speaker 03:
And we think perhaps the court may have tabled that motion in pending resolution of this appeal.

[00:03:03] Speaker 03:
We don't know, but we have informed the court about this appeal.

[00:03:07] Speaker 00:
On the injunction in paragraph two, if the injunction were modified to include an appendix with a list of the trade secrets, would that address your concerns?

[00:03:22] Speaker 03:
If there had been proceedings to establish

[00:03:26] Speaker 03:
that each of those trade secrets or some subset of those trade secrets warranted trade secret status, that it was not generally known in the art, that there was reasonable secrecy, et cetera, then there might be a record upon which to base that expanded junction.

[00:03:47] Speaker 03:
However, the injunction itself needs to be coterminous with what was argued and what was supported in evidence.

[00:03:56] Speaker 00:
And one thing in particular- Does it make a difference that it's a preliminary injunction?

[00:04:00] Speaker 03:
Well, indeed, here's an important point, Your Honor.

[00:04:05] Speaker 03:
With respect to the irreparable harm section of the briefing, in the original brief, in the reply brief, et cetera, Zeiss's motion was expressly limited

[00:04:16] Speaker 03:
to glaucoma module.

[00:04:17] Speaker 03:
And the reason for that is that glaucoma module was about to be released in mid-2020.

[00:04:22] Speaker 03:
And so the irreparable harm was argued to be on the basis of this imminent release of this competing product.

[00:04:32] Speaker 03:
Now, Harmony, by contrast, is already out there in the market.

[00:04:35] Speaker 03:
In fact, Harmony was based on an earlier product called Synergy and an earlier product called iRoot.

[00:04:41] Speaker 03:
And that was out there long before Mr. Kurtzke arrived.

[00:04:46] Speaker 03:
So to try to somehow craft this injunction in a way that would ensnare or encompass harmony, that strains the facts.

[00:04:58] Speaker 03:
It doesn't fit.

[00:04:59] Speaker 00:
What if paragraph two are modified to remove the language, any CZMI, confidential, proprietary, or trade secret information, including

[00:05:09] Speaker 00:
So then it would just be directed to preventing use or obtaining, retaining, et cetera, of files obtained from the hard drive.

[00:05:21] Speaker 03:
Well, thank you, Your Honor.

[00:05:24] Speaker 03:
One point from the case one, also I'll refer to the Reno Air case cited by Planis.

[00:05:29] Speaker 03:
When the injunction itself is not clear and doesn't say,

[00:05:36] Speaker 03:
But what trade secrets are, what the confidential information is, it must be vacated.

[00:05:41] Speaker 00:
So I'm asking you, if that language was changed, would that satisfy your concerns?

[00:05:46] Speaker 00:
I was not clear.

[00:05:47] Speaker 00:
I want to make sure I'm clear.

[00:05:48] Speaker 00:
And I want to know if it would satisfy your concerns.

[00:05:50] Speaker 00:
It sounds like you're saying maybe it's still too vague.

[00:05:54] Speaker 03:
I think so, yes, Your Honor.

[00:05:55] Speaker 03:
And let me cite the Schmitt v. Lesser case in the Supreme Court.

[00:05:59] Speaker 03:
A point of Rule 65D in the specific requirement therein is to allow meaningful appellate relief.

[00:06:07] Speaker 03:
And when it's unclear from the text of the injunction what was meant to be enjoined, the job of the appellate court

[00:06:15] Speaker 03:
is to remand it for clarity from the district court for its own fact-finding, its own crafting of the injunction.

[00:06:20] Speaker 00:
I understand what you're saying.

[00:06:22] Speaker 00:
I'm not suggesting I'm changing it.

[00:06:24] Speaker 00:
I'm asking you a hypothetical question.

[00:06:26] Speaker 00:
That if the injunction had said what I said, would that be sufficiently clear?

[00:06:31] Speaker 00:
It's talking about

[00:06:31] Speaker 00:
You're enjoining from obtaining, retaining, using, transmitting, et cetera, et cetera, files obtained from the hard drive during the course of former defendants' employment.

[00:06:41] Speaker 03:
Yeah.

[00:06:42] Speaker 03:
It is, Your Honor, and that's exactly what we're doing.

[00:06:43] Speaker 03:
We actually engaged forensic firm Kroll, and they are purging any such information from the Top Gun system.

[00:06:51] Speaker 03:
So your answer is yes, that would be clear.

[00:06:53] Speaker 03:
Yes, that would be clear.

[00:06:57] Speaker 03:
So the injunction itself does not specify the trade secrets.

[00:07:04] Speaker 03:
Nowhere in the text of the order does it mention a trade secret, neither in the injunction itself nor in the body of the order.

[00:07:11] Speaker 03:
The trade secrets are hardly a focus of the proceedings.

[00:07:15] Speaker 03:
The opening brief referenced the list of 115 trade secrets.

[00:07:20] Speaker 03:
The subsequent briefing, the high water mark, is that there's some thumbnail sketches of buckets of trade secrets, dozens per bucket, schematics, source code, marketing lists, et cetera.

[00:07:33] Speaker 03:
But there's no particular recitation of trade secrets.

[00:07:39] Speaker 03:
We're going to refer to the Reno Air case.

[00:07:40] Speaker 03:
That's at 452 of 3rd, 11.6.

[00:07:44] Speaker 03:
It's 10.1133.

[00:07:46] Speaker 03:
That's the Ninth Circuit, saying that when there is no recitation of a particular IP, that's the focus of the injunction.

[00:07:57] Speaker 03:
that injunctions over broad fails to specify this requirement must be demanded.

[00:08:01] Speaker 00:
Was it clear from the briefing below which trade secrets were being asserted?

[00:08:05] Speaker 00:
Like for example, there are some things that are identified starting at page A 3282.

[00:08:12] Speaker 00:
Was that identified during the hearing?

[00:08:15] Speaker 03:
Well, there was no hearing.

[00:08:18] Speaker 03:
It was on the papers.

[00:08:21] Speaker 03:
So it was in the record.

[00:08:22] Speaker 03:
Clearly, there's a list appended in the body, the briefings submitted to the court in the declarations.

[00:08:30] Speaker 03:
But in terms of focusing on anything through a trade secret and trying to satisfy whether that met the legal status of being a trade secret, whether there was reasonable security appended to that trade secret, that was never litigated.

[00:08:45] Speaker 03:
And so the answer is no.

[00:08:48] Speaker 03:
And the test is whether or not it was

[00:08:51] Speaker 03:
For Rule 65, you cannot refer to an external document.

[00:08:56] Speaker 03:
It's got to be within the four corners of the injunction to satisfy the specificity requirements.

[00:09:02] Speaker 03:
And it's also going to be understood by the perspective of a lay person.

[00:09:07] Speaker 03:
Now, the trade secret list itself has been shared, per protective order, with certain members of the internal TOPCON legal department.

[00:09:19] Speaker 03:
But the engineers, the people designing the products, they can't see that.

[00:09:23] Speaker 03:
And so for Topcom, to be able to understand how to comply with that order that references a list that they can't even see, that really strains the bounds of rule 65.

[00:09:39] Speaker 03:
So far better would be for the court to have articulated particular trade secrets that it had evaluated,

[00:09:46] Speaker 03:
And at that point, perhaps at that point, then that might be a sufficient injunction under Rule 65D.

[00:09:55] Speaker 03:
Now, the problem in this case is compounded by admitted, as I think we'll admit, there's fundamental mistakes in the body and the order.

[00:10:07] Speaker 03:
Now, they refer to it as a mere typographical error.

[00:10:10] Speaker 03:
It's not a typo.

[00:10:11] Speaker 03:
It's a fundamental misunderstanding of fact as to what was in front of the court.

[00:10:16] Speaker 03:
And this relates to a particular exhibit named Elman Exhibit 4.

[00:10:21] Speaker 03:
Elman Exhibit 4 relates only to OCT data, that's optical coherence tomography data, for use in harmony.

[00:10:31] Speaker 03:
Elman Exhibit 4 has nothing to do with HFA data.

[00:10:35] Speaker 03:
It has nothing to do with glaucoma module.

[00:10:38] Speaker 03:
And in its briefings, Zeiss

[00:10:41] Speaker 03:
as it laid out its case about misappropriation related to HFA data, related to Glockhoff module, the interwoven element exhibit four.

[00:10:50] Speaker 03:
And the court picked up on that in its own order, giving its explanation of its reasoning as to why it's enjoining Glockhoff module because of alleged misconduct related to HFA files in the middle of a paragraph that relates to HFA files expressly.

[00:11:11] Speaker 03:
the court pivoted and relied on elements of it for.

[00:11:15] Speaker 03:
With no recognition that elements of it for related to a different set of data and a different product, nonetheless, the court relied on that to anchor its finding that HFA data had been misappropriated and that glaucoma module should be enjoined.

[00:11:35] Speaker 00:
And that other data, are you able under the confidentiality to say what that is?

[00:11:42] Speaker 03:
Well, yes.

[00:11:42] Speaker 03:
Other data is the OCT data.

[00:11:45] Speaker 00:
OK.

[00:11:45] Speaker 00:
I just didn't want to say it if I couldn't.

[00:11:48] Speaker 00:
And so in your view, that shows that the court misunderstood.

[00:11:54] Speaker 00:
But you're not really challenging whether an injunction should have been granted at all.

[00:11:58] Speaker 00:
It's a little odd to me, to be honest, that you're not challenging the injunction.

[00:12:04] Speaker 00:
Instead, you're just scoping.

[00:12:05] Speaker 00:
You're challenging the scope of the injunction.

[00:12:08] Speaker 03:
And that's exactly correct, Your Honor.

[00:12:12] Speaker 03:
We're not contesting at this point the injunction against glaucoma module.

[00:12:16] Speaker 03:
We stopped selling it at large expense and disruption to the client.

[00:12:20] Speaker 03:
We're not contesting that.

[00:12:22] Speaker 03:
So we took glaucoma module off the market.

[00:12:24] Speaker 03:
The problem is this injunction is crafted.

[00:12:28] Speaker 03:
It casts a shadow over a completely different product that, yes, top cons continue to sell.

[00:12:34] Speaker 03:
And that's why

[00:12:37] Speaker 03:
Zeiss has moved it for contempt of court because we're selling this other product.

[00:12:41] Speaker 03:
And that's exactly what Rule 65 is meant to prohibit in the Schmitt v. Lester case, this cloud of contempt that arises from an interpretation that's vague, that can't be reasonably understood.

[00:12:56] Speaker 03:
That's the whole point of Rule 65D and why that specificity must be reinforced.

[00:13:02] Speaker 01:
So is there something beyond the glaucoma module part of the injection, the number one thing?

[00:13:09] Speaker 01:
Is there something left that you think that you would agree to being enjoying, that this is just too broad?

[00:13:19] Speaker 01:
Was there some use of the HFA data to do something with harmony and not just the glaucoma module?

[00:13:28] Speaker 03:
So the HFA data that was the focus of the allegations, those were being provided to a third-party developer named Kelsey.

[00:13:36] Speaker 03:
What they were trying to do was basically make an OCR, trying to read the numerical values off the PDF sheets of these HFA reports.

[00:13:46] Speaker 03:
And that OCRing, the processing of these PDF files, that was specific for SuperNorm, which is the module used within Glaucoma module.

[00:13:59] Speaker 03:
So that injunction related to this alleged misconduct relates specifically only to glaucoma module.

[00:14:07] Speaker 00:
And so the concern is that by talking about HFA data, using evidence that was actually OCT data, that the judge was actually arguing that the Harmony decoder project is at issue.

[00:14:23] Speaker 03:
I think it can be read that way.

[00:14:26] Speaker 00:
OK.

[00:14:27] Speaker 03:
It can be read that way.

[00:14:29] Speaker 03:
And we saw that.

[00:14:30] Speaker 03:
We said, wow, we need to clean this up.

[00:14:32] Speaker 03:
And we tried to resolve it with Zeiss.

[00:14:35] Speaker 03:
But instead, they're digging in and moving for a conducted court.

[00:14:40] Speaker 03:
Because we are selling that DICOM decoder for use in Harmony.

[00:14:44] Speaker 03:
Yes, we're still selling that.

[00:14:52] Speaker ?:
OK.

[00:14:53] Speaker 03:
See, we're well into my rebuttal time, so I'll reserve when I can.

[00:14:58] Speaker 03:
Sure.

[00:15:22] Speaker 02:
Good morning, your honors.

[00:15:23] Speaker 02:
May it please the court, Jeremy Elman from Allen Overy for appellate Carl Zeiss Meditech, Inc.

[00:15:29] Speaker 02:
So what are we arguing about today?

[00:15:31] Speaker 02:
Defendants present a very narrow challenge to a portion of the district court's order.

[00:15:35] Speaker 02:
Like the court just asked, Mr. Carlson said that he would accept maybe the hard drive and that he read the order expansively to potentially include the DICOM decoder.

[00:15:49] Speaker 02:
So we asked, why are we here?

[00:15:50] Speaker 02:
What are we arguing about?

[00:15:52] Speaker 02:
And Judge Dole said, you didn't challenge the whole injunction.

[00:15:55] Speaker 02:
You're just challenging a very narrow portion.

[00:15:57] Speaker 02:
So Zeiss very much agrees that it's a very narrow issue that we're

[00:16:01] Speaker 02:
Considering today, defendants assert that Clause 2 of the injunction is not specific and should be set aside under Rule 65D.

[00:16:08] Speaker 02:
Under Controlling Ninth Circuit Law, unless Topcom can show that Clause 2 is so vague that there's no reasonably specific meaning.

[00:16:15] Speaker 01:
Can you just get right to it?

[00:16:16] Speaker 01:
What is Clause 2 supposed to address that Clause 1 does?

[00:16:20] Speaker 02:
Clause 2 has the hard drive and all the files obtained during the course of employment was us.

[00:16:24] Speaker 00:
What else?

[00:16:25] Speaker 00:
Now, here's my specific question.

[00:16:27] Speaker 00:
Are there things beyond what's on the hard drive?

[00:16:30] Speaker 02:
So there's the hard drive, which is 35,000 files.

[00:16:32] Speaker 02:
There's the files that the employees took.

[00:16:34] Speaker 02:
And then there's anything else that's been derived from that, like the product that they're trying to keep on the market.

[00:16:40] Speaker 00:
So it's your view that paragraph two does cover the Hermione Decoder project?

[00:16:44] Speaker 02:
Yes, absolutely.

[00:16:45] Speaker 01:
That's what I was asking.

[00:16:46] Speaker 01:
That's absolutely right.

[00:16:47] Speaker 01:
What the secrets are.

[00:16:47] Speaker 01:
I get what the secrets are.

[00:16:49] Speaker ?:
Yes.

[00:16:49] Speaker 01:
So your view is those secrets led to something in harmony.

[00:16:55] Speaker 01:
Absolutely.

[00:16:55] Speaker 01:
Not all of harmony.

[00:16:56] Speaker 02:
Not all of harmony, correct.

[00:16:57] Speaker 02:
That is the database management platform, correct.

[00:16:59] Speaker 02:
But the decoder is to decode Zeiss's confidential OCT data.

[00:17:04] Speaker 02:
Zeiss is the only party.

[00:17:05] Speaker 02:
I'm sorry, you're out.

[00:17:06] Speaker 00:
Go ahead.

[00:17:08] Speaker 02:
Zeiss is the only party that can decode Zeiss OCT data.

[00:17:12] Speaker 02:
This decoder decodes Zeiss OCT data.

[00:17:14] Speaker 02:
And the only way that Topcon is able to do it, the reason why I brought this case, is because a bunch of employees took files from Zeiss to develop things like the decoder as well as the HFA extractor.

[00:17:26] Speaker 02:
So there's multiple projects going on.

[00:17:28] Speaker 02:
There's a Zeiss RIP project at Topcon.

[00:17:31] Speaker 00:
Let me ask my question.

[00:17:32] Speaker 00:
Mr. Carlson said that your original motion for preliminary injunction was limited to the glaucoma module.

[00:17:39] Speaker 02:
Oh, absolutely not, Your Honor.

[00:17:41] Speaker 00:
Yeah, that's absolutely incorrect.

[00:17:42] Speaker 00:
OK, can you tell me where that would be?

[00:17:44] Speaker 02:
Yeah, in the appendix 7, we asked for three different types of relief.

[00:17:48] Speaker 02:
One of them was to prevent the release of the glaucoma module, which hadn't been released yet.

[00:17:52] Speaker 02:
But the first two clauses ask for a forensic examination of all the other files that were taken by the former employees and asking them to stop using it and to return it.

[00:18:00] Speaker 02:
So if you look at appendix 7, we asked for three different things.

[00:18:03] Speaker 00:
This is the court's order.

[00:18:05] Speaker 02:
This is the court's order, right.

[00:18:07] Speaker 02:
Court's order, appendix 7.

[00:18:08] Speaker 02:
I'm happy to read it to you.

[00:18:09] Speaker 02:
But we asked for three different types of relief.

[00:18:12] Speaker 02:
The court granted our relief in full.

[00:18:15] Speaker 02:
So what clause two is about is the court's granted all our relief.

[00:18:19] Speaker 02:
All of the files that were taken from Zeiss that went to Topcon, all of those are part of the injunction.

[00:18:25] Speaker 02:
And the court actually mentions that in various places in her order.

[00:18:29] Speaker 02:
If you look at appendix 15, appendix 16, appendix 18, there are various findings by the district judge where she found that the former employees took various types of business information, financial information, marketing information.

[00:18:44] Speaker 02:
So all of that is also part of Clause 2, as well as there's a specific finding that the defendants took both HFA and OCT files.

[00:18:55] Speaker 02:
So there's no dispute.

[00:18:55] Speaker 02:
I'm happy to read it to you at Appendix 16.

[00:18:59] Speaker 02:
So we think it's clear that Clause 2 is broader

[00:19:02] Speaker 02:
and intentionally broader by the district court.

[00:19:06] Speaker 02:
It's any CZMI information that's confidential, proprietary, or trade secret.

[00:19:12] Speaker 02:
So it's not just about trade secrets.

[00:19:13] Speaker 00:
Mr. Carson raised an interesting issue, which was how are they supposed to share with their engineers what it is that they can't do, even if there was some sort of appendix attached to the injunction that identified the trade secrets.

[00:19:29] Speaker 00:
How would that work?

[00:19:31] Speaker 02:
Well, I think it's very simple.

[00:19:32] Speaker 02:
Any ZEISS information is not allowed to be a top con.

[00:19:37] Speaker 02:
And so these engineers are people who work on products.

[00:19:41] Speaker 02:
So anything that's labeled ZEISS, any sort of ZEISS information that the former employees obtained

[00:19:46] Speaker 02:
is within scope of Clause 2.

[00:19:48] Speaker 00:
Why would Clause 2 be OK if it just referred to the hard drives?

[00:19:54] Speaker 00:
It's plural of former employees.

[00:19:56] Speaker 02:
Well, it's hard drives.

[00:19:57] Speaker 02:
There's also emails that they took.

[00:19:58] Speaker 02:
So if it's hard drives and it's also files that were taken by the employees during the course of employment with ZEISS, that would be OK for that to be a part of it.

[00:20:09] Speaker 02:
But what about things that they're deriving from those files, like the decoder, that they're using OCT data from ZEISS and then they're developing something else?

[00:20:16] Speaker 02:
Topcon has tried to make the argument that if they take Zeiss's information and develop something else, then they're allowed to use it, right, if they keep going.

[00:20:25] Speaker 01:
So... When you say Zeiss data, do you mean Zeiss data that they took in the hard drives or they took stuff and they have the knowledge and they're now getting...

[00:20:36] Speaker 01:
the OCT data from their customers and stuff that's Zeiss data in a certain sense, but it's not the data that was taken by the employees.

[00:20:46] Speaker 02:
Only from Zeiss.

[00:20:47] Speaker 02:
Only Zeiss data.

[00:20:48] Speaker 02:
So Zeiss has the data.

[00:20:49] Speaker 02:
If it's data from a customer, if it's something that's available to Topcon otherwise, then that's not Zeiss confidential data.

[00:20:54] Speaker 01:
Even if it's from a Zeiss machine, that's not what you're referring to.

[00:20:57] Speaker 01:
That's correct, Ron.

[00:20:58] Speaker 02:
Yes, that's correct.

[00:20:59] Speaker 00:
So when you talk about something that's derived,

[00:21:01] Speaker 00:
from ZEISS data, it would be whatever the software, whatever it is that's derived from the OCT data, for example.

[00:21:10] Speaker 00:
Right.

[00:21:10] Speaker 02:
If you take, for example, the IMG export license that they deceived ZEISS into getting.

[00:21:15] Speaker 02:
So it's a license that they deceived ZEISS

[00:21:18] Speaker 02:
into giving them secretly by deception.

[00:21:22] Speaker 02:
And then they went ahead and developed a product based on that.

[00:21:26] Speaker 02:
And so that file would also be something that was misappropriated from Zeiss.

[00:21:33] Speaker 02:
But it happened after the injunction came out.

[00:21:34] Speaker 02:
Because remember, this is a preliminary injunction.

[00:21:36] Speaker 02:
And the district court only had limited information.

[00:21:39] Speaker 02:
It came out later from Kroll's reporting that this IMG export license had been obtained improperly by top government.

[00:21:46] Speaker 00:
At what point do you go back and try to change the scope of the license because new facts are discovered?

[00:21:51] Speaker 02:
I'm sorry, the scope of the license?

[00:21:53] Speaker 00:
Yeah, I'm sorry, the injunction.

[00:21:55] Speaker 02:
Sorry.

[00:21:56] Speaker 02:
Sure.

[00:21:56] Speaker 02:
Well, of course, as a preliminary injunction, we've sought contempt on this issue of the decoder.

[00:22:02] Speaker 02:
We don't think that we need to go back and seek any reconsideration of the scope, because clause 2 is perfectly sufficient.

[00:22:10] Speaker 02:
It's sufficiently clear to Topcon what the relief is.

[00:22:13] Speaker 02:
It's anything that Topcon took from ZEISS.

[00:22:16] Speaker 02:
But again, that's a limited body of information.

[00:22:18] Speaker 02:
It's limited to what we're saying here.

[00:22:20] Speaker 01:
It's very clear to me, because you're now talking about this other improper use of the license through their customers to get, or somehow to get, which doesn't even seem like it was covered at the time of this injunction.

[00:22:32] Speaker 01:
But you're now saying that's another thing.

[00:22:34] Speaker 01:
How can that be clear that this injunction was meant to cover that separate data?

[00:22:39] Speaker 02:
I'll tell you exactly why, Your Honor, because the forensic examination that the district court ordered uncovered that license.

[00:22:46] Speaker 00:
Just to be clear, we're not addressing this in any way.

[00:22:49] Speaker 00:
I mean, obviously, it's not before us.

[00:22:52] Speaker 00:
That's correct.

[00:22:53] Speaker 01:
I'm still confused about what you're talking about.

[00:23:00] Speaker 01:
I get the HFA data.

[00:23:01] Speaker 01:
I think I do, at least.

[00:23:02] Speaker 01:
Maybe I'm overconfident on that too, but when you're talking about the OCT data that they improperly obtained, are you including in that licensing data, that later acquired licensing data?

[00:23:16] Speaker 00:
Yes.

[00:23:17] Speaker 01:
Okay, but let's set that aside.

[00:23:19] Speaker 01:
Is there OCT data that they obtained

[00:23:23] Speaker 01:
Not through that, but from the hard drives they took with them?

[00:23:27] Speaker 02:
Yes, Your Honor.

[00:23:27] Speaker 02:
They obtained OCT data from the hard drives.

[00:23:29] Speaker 01:
Correct.

[00:23:31] Speaker 01:
And is that clear from anything?

[00:23:33] Speaker 01:
Because it's not clear to me.

[00:23:34] Speaker 02:
Yes, it's clear on Appendix 16, if I could read from line 12.

[00:23:38] Speaker 02:
Defendants do not dispute that Kersky transmitted those and other HFA and OCT files to persons at Topcon and to Kelsey.

[00:23:48] Speaker 02:
So OCT data is clearly within the scope.

[00:23:51] Speaker 00:
So I have one more question for you, which is, and I apologize.

[00:23:54] Speaker 00:
I might even have more.

[00:23:55] Speaker 00:
But is this list of the trade secrets that I find starting at page 30 to 82, is that the most comprehensive list that we have before us and that was considered by the court below?

[00:24:08] Speaker 02:
Yes, Your Honor, yes.

[00:24:10] Speaker 02:
That list was before the court.

[00:24:12] Speaker 02:
And Topcon did not challenge those trade secrets in the below briefing, did not challenge that they were sufficiently identified.

[00:24:19] Speaker 02:
And all of those trade secrets relate to HFA and OCT.

[00:24:23] Speaker 02:
I mean, this is not an unbounded list.

[00:24:25] Speaker 02:
It all relates, and it's all tied to the products at issue here.

[00:24:28] Speaker 00:
So what about in footnote one?

[00:24:30] Speaker 00:
It says the present disclosure is limited to Glockoma workplace.

[00:24:35] Speaker 02:
Yes, but also in footnote one, it also says that it will be, it's limited to glaucoma workplace, which is Zeiss' product.

[00:24:41] Speaker 02:
So Zeiss' product glaucoma workplace works with Zeiss' OCT and Zeiss' HFA data.

[00:24:48] Speaker 02:
So it's limited.

[00:24:48] Speaker 02:
So if you look at trade secrets 34 through 37, I'm sorry, 44 through 47, it talks about OCT data, specifically.

[00:24:57] Speaker 00:
I get it.

[00:24:57] Speaker 00:
Your glaucoma workspace covers both the visual field analysis and the retinas gaming.

[00:25:04] Speaker 00:
And their full coma module is only covering the HFA data.

[00:25:10] Speaker 02:
Well, to be clear, Your Honor, they intended to eventually

[00:25:15] Speaker 02:
have both HFA and OCT read ZEISS data.

[00:25:19] Speaker 02:
That's in their documents and their records.

[00:25:20] Speaker 02:
So it was an entire scheme to do both HFA and OCT.

[00:25:24] Speaker 02:
And in fact, to do other products as well is what Topcom was intending to do, because ZEISS is the market leader in all of these products that are to diagnose and treat glaucoma.

[00:25:34] Speaker 02:
So Topcom wanted to be completely device agnostic, and they've advertised that.

[00:25:38] Speaker 02:
So the feature that they have right now is HFA, OCT, and there's other types of data as well.

[00:25:43] Speaker 02:
We'd also point that the district court also credited that the former employees had taken other types of files.

[00:25:50] Speaker 02:
And I'd read from appendix 15 where it says, other former employees also copied confidential information to external memory devices before leaving CZMI for Topcom.

[00:26:02] Speaker 02:
So Clause 2 covers that.

[00:26:04] Speaker 02:
Clause 2 covers what the other former employees took as well.

[00:26:06] Speaker 02:
So it's not just HFA, and it's not just glaucoma module.

[00:26:11] Speaker 02:
And Mr. Carlson talked about glaucoma modules as if that's the only product at issue.

[00:26:16] Speaker 02:
But clearly, ZEISS has asked for more than just glaucoma module.

[00:26:20] Speaker 02:
ZEISS, like I pointed to in Appendix 7, asked for a forensic examination of other files.

[00:26:26] Speaker 02:
And so we think it's plain that Clause 2 should be upheld.

[00:26:30] Speaker 02:
And that's all that we're talking about here.

[00:26:32] Speaker 02:
Topcon did not challenge the injunction.

[00:26:34] Speaker 02:
Topcon did not challenge Clause 1 of the injunction.

[00:26:38] Speaker 02:
Like Mr. Croll said, they are undergoing forensic investigation by Croll right now, and we're supposed to get a report next week.

[00:26:45] Speaker 02:
So how can Topcon come into this court and say, we don't understand Clause 2 when they've hired a parole and they're conducting this investigation?

[00:26:53] Speaker 02:
We don't think it's correct that they can come in and say it's nonspecific.

[00:26:58] Speaker 02:
So I didn't hear Topcon's counsel mention that last section that we talked about.

[00:27:03] Speaker 02:
You asked about the hard drive.

[00:27:04] Speaker 02:
I didn't hear him mention the other files that the other employees took.

[00:27:07] Speaker 02:
And we think that case is positive.

[00:27:08] Speaker 02:
We think it's really clear if you read Clause 2.

[00:27:12] Speaker 02:
Clause two, the last part of clause two refers to the hard drive, and it refers to the files that the employees took during the course of their employment with ZEISS.

[00:27:21] Speaker 02:
And all of their case law is about nonspecific injunctions.

[00:27:27] Speaker 02:
Clause 2 is more specific than any of the cases cited by defendants.

[00:27:32] Speaker 02:
So.

[00:27:33] Speaker 00:
I haven't asked you the same question I asked, which is, I mean, how would it impact you if their language, NECZMI, confidential proprietary or trade secret information including, was deleted?

[00:27:45] Speaker 00:
I mean, you'd still have protection of all the things you've just mentioned, which is,

[00:27:49] Speaker 00:
any files obtained from the hard drive or during the course of former defendant's employment.

[00:27:53] Speaker 00:
Why isn't that enough to protect you?

[00:27:55] Speaker 02:
Well, we certainly like that language, which Mr. Carlson has avoid mentioning.

[00:27:59] Speaker 02:
So to answer your question, we'd be OK with that, as long as it's pending the forensic examination.

[00:28:05] Speaker 02:
Because what if they took a prototype of one of Zeiss' products?

[00:28:08] Speaker 02:
Would that fit within that?

[00:28:09] Speaker 02:
It's not in the hard drive, but it's part of the ongoing forensic examination.

[00:28:13] Speaker 02:
What if they took the algorithm for another product?

[00:28:16] Speaker 02:
We're still doing this forensic investigation.

[00:28:17] Speaker 02:
There's a lot of files that were taken here.

[00:28:20] Speaker 02:
35,000 alone on the hard drive.

[00:28:22] Speaker 02:
So what if there's information that was taken by the employees that's not covered by that specific language of clause two?

[00:28:30] Speaker 02:
So that's why the judge said any.

[00:28:33] Speaker 02:
CZMI, Confidential Proprietary Trade Secret Information.

[00:28:37] Speaker 02:
And we haven't mentioned here that there's a breach of contract claim that the judge found the likelihood of success on.

[00:28:42] Speaker 02:
The breach of contract as well as trade secret misappropriation.

[00:28:45] Speaker 02:
So the relief is broader in the preliminary injunction.

[00:28:48] Speaker 02:
So we would want clause two to include the same language, because it's specific, because it's, again, limited to the- Just make sure I understand.

[00:28:55] Speaker 00:
You can't identify or think of anything today.

[00:28:58] Speaker 00:
that wouldn't be included in this second clause, that is, the any files obtained from language.

[00:29:03] Speaker 00:
But you're saying it could be.

[00:29:05] Speaker 02:
Any files obtained by, you mean, beyond that?

[00:29:07] Speaker 00:
Well, it says, again, I'm asking what exists in terms of CZMI, confidential, proprietary, or trade secret information that is outside of the language, any files obtained from the hard drive during the course of former defendant's employment with CZMI.

[00:29:24] Speaker 00:
That's what I'm trying to figure out.

[00:29:26] Speaker 02:
Well, there are certainly a lot of other things that we can think of.

[00:29:28] Speaker 02:
We're not required to catalog the entire universe.

[00:29:31] Speaker 02:
No, you're not.

[00:29:32] Speaker 02:
I'm just wondering.

[00:29:32] Speaker 02:
Right.

[00:29:32] Speaker 02:
I mean, they could have taken a prototype.

[00:29:34] Speaker 02:
They could have taken an algorithm.

[00:29:35] Speaker 02:
They could have taken devices that Zeiss uses.

[00:29:38] Speaker 02:
These people worked at Zeiss for a collective amount, I think, of about 90 years between the eight employees.

[00:29:44] Speaker 02:
They've taken things like pricing information, product planning.

[00:29:49] Speaker 00:
Things that aren't on files.

[00:29:51] Speaker 02:
Things that aren't files, right?

[00:29:52] Speaker 02:
They could take things that aren't files.

[00:29:54] Speaker 02:
I mean, information in the trade secret law is not limited just to physical files, right?

[00:29:59] Speaker 02:
So they could have taken printouts.

[00:30:01] Speaker 02:
It could be other things besides just files that were still finding out in the forensic examination.

[00:30:06] Speaker 02:
Again, I refer to that license that they obtained later on.

[00:30:11] Speaker 02:
But that's because they used information that they knew from the course of their employment.

[00:30:16] Speaker 02:
They took information that they learned during the course of their employment that to decode the ZEISS data, they needed this IMG license.

[00:30:22] Speaker 02:
They took that information, so that falls under clause two.

[00:30:25] Speaker 02:
And then they went out and convinced some doctor to give them this license outside the scope of the doctor's agreement.

[00:30:31] Speaker 02:
So I would say that would also be an example.

[00:30:33] Speaker 02:
You wanted to say something that didn't qualify necessarily as a file, even though the IMG export license literally is a file.

[00:30:40] Speaker 02:
So we would think it's under clause two.

[00:30:43] Speaker 02:
But talking to that doctor and emailing him and convincing him, we would also consider that to be within clause two of any CZMI.

[00:30:51] Speaker 02:
Information because it's confidential to know that you need to use that license to decode Zeiss's data the contents of that license are Confidential so the IMT license is a confidential document, but that hadn't been produced at the time of floating a junction I Think you going beyond your time.

[00:31:09] Speaker 01:
Thank you.

[00:31:10] Speaker 01:
We have your case.

[00:31:11] Speaker 01:
Thank you

[00:31:21] Speaker 01:
Mr. Carlson, I'll give you three minutes.

[00:31:23] Speaker 03:
Thank you, Your Honor.

[00:31:33] Speaker 03:
I'd like to address whether or not the injunction should be limited to the hard drive, as Your Honors have suggested.

[00:31:42] Speaker 03:
Here's the problem with it.

[00:31:45] Speaker 03:
We are absolutely complying with the

[00:31:49] Speaker 03:
basic plan to remove all ZEISS information from Topcon hardwares, Topcon computers, leave it with the Kroll forensic expert, and it's out of Topcon's computers.

[00:32:02] Speaker 03:
That's happening right now.

[00:32:04] Speaker 03:
And as Mr. Elman noted, we expect to have this Kroll report next week, as soon as next week.

[00:32:09] Speaker 03:
The problem is that interpreting that

[00:32:15] Speaker 03:
revise the injunction that the court has proposed, that's where the problem is going to be.

[00:32:20] Speaker 03:
And the reason is because of Elman Exhibit 4.

[00:32:25] Speaker 03:
Elman Exhibit 4 was an email chain about OCT data for use possibly in Harmony.

[00:32:34] Speaker 03:
The alleged finding and misconduct that the court reported in pages 17 and 18

[00:32:44] Speaker 03:
which relates to that element of the floor.

[00:32:47] Speaker 03:
That was a mistake.

[00:32:49] Speaker 03:
It was a fundamental misunderstanding of what she thought was going on with respect to that email chain.

[00:32:57] Speaker 03:
And so the factual finding, if there is any, is very much in question.

[00:33:03] Speaker 03:
Because the court is quite clear from the text of the order

[00:33:08] Speaker 03:
that the court thought that element exhibit 4 related to the HFA files that she was concerned about and the Glockholm module she was concerned about.

[00:33:17] Speaker 03:
And so to bootstrap onto all these other allegations a supposition that OCT data is somehow tainted, that's a stretch.

[00:33:27] Speaker 03:
And that would be actually fact-finding, I believe, by this court.

[00:33:31] Speaker 03:
And the better vehicle, if the court is concerned about this, would be to remand for the district court

[00:33:38] Speaker 03:
to craft whatever remedy the district court thinks is appropriate in view of what was a concern.

[00:33:45] Speaker 03:
There was concern about element exhibit four.

[00:33:48] Speaker 03:
And I think the better approach is to have the district court resolve that in the first instance, rather than this court try to recraft an injunction to fit what is honestly a questionable set of findings by the court.

[00:34:07] Speaker 03:
Also, furthermore, the OCT data that was questioned there, that was never used in glaucoma module, and there were no OCT data from ZEISS using glaucoma module.

[00:34:20] Speaker 03:
Glaucoma module could not use ZEISS OCT files.

[00:34:25] Speaker 03:
It was never used.

[00:34:26] Speaker 03:
And so there is no link between OCT and the glaucoma module that's at issue in the case.

[00:34:33] Speaker 03:
Furthermore, the IMG export license file, there was not a single finding by the district court in relation to the IMG export file.

[00:34:42] Speaker 03:
That came up later in the case.

[00:34:44] Speaker 03:
The Zeiss briefed it.

[00:34:45] Speaker 03:
The court recorded not one iota to the Zeiss IMG export license theory.