[00:00:00] Speaker 03:
Our next case is number 212106, Connellyke Phillips, NV vs. Tales USA.

[00:00:11] Speaker 03:
Okay, Mr. Syed.

[00:00:16] Speaker 02:
Mr. Syed.

[00:00:16] Speaker 03:
Yeah, okay.

[00:00:18] Speaker 03:
You're up.

[00:00:29] Speaker 02:
need one mistake, an error of long, that is basically snowballed and find its way to each one of the four prongs of the primary junction.

[00:00:41] Speaker 04:
Could we talk about the status of the ITC procedure?

[00:00:44] Speaker 04:
Yes, Your Honor.

[00:00:45] Speaker 04:
My understanding is we're going to hear, or you're going to hear from the ITC by the end of next week?

[00:00:52] Speaker 02:
From the commission, whether they will review or not, and in case they will review what they would review.

[00:00:56] Speaker 02:
That is correct, Your Honor.

[00:00:57] Speaker 04:
Let's assume that they announce at the end of next week they are not going to review any aspect of what the ALJ did.

[00:01:05] Speaker 04:
What does that mean for purposes of this appeal?

[00:01:08] Speaker 02:
For mootness, the case is not moot because they have not said they would not appeal it.

[00:01:14] Speaker 02:
If this court, on appeal.

[00:01:16] Speaker 04:
I mean, I'm just saying, I don't see any irreparable harm right now or two weeks from now, certainly, if ITC were to declare it's not going to touch the ALJ opinion.

[00:01:30] Speaker 02:
I understand, Your Honor, that the point is

[00:01:33] Speaker 02:
If they continue to appeal, and if this court finds that there is one claim that they're infringed, invalid, and enforceable, then the ITC has said that there will be an exclusion order in the heart.

[00:01:47] Speaker 03:
Just back up one second.

[00:01:48] Speaker 02:
Yes, Your Honor.

[00:01:49] Speaker 03:
So if you were to prevail,

[00:01:52] Speaker 03:
at the ITC, are you still agreeable to having a Fram license determined by the district court?

[00:02:01] Speaker 03:
Absolutely.

[00:02:03] Speaker 03:
OK, so the Fram license is still in play?

[00:02:06] Speaker 02:
Absolutely.

[00:02:07] Speaker 03:
OK, so I think what Judge Chen's questions, and I have the same questions, suggest is until you are facing an exclusion order, where's the irreparable injury?

[00:02:20] Speaker 02:
And that's a great question, because the issue here is that we're operating under the cloud of an exclusion order coming down the road, the potential of it.

[00:02:31] Speaker 02:
And as we have explained.

[00:02:33] Speaker 02:
What cases say that clouds are irreparable injury?

[00:02:37] Speaker 02:
So Your Honor, in real tech.

[00:02:40] Speaker 02:
And I'll have this hand for you in a second, in Realtek.

[00:02:42] Speaker 02:
That's the district court case.

[00:02:44] Speaker 02:
That was a district court.

[00:02:45] Speaker 02:
And in Realtek, the implementer received customers' concerns, right?

[00:02:52] Speaker 02:
You've seen this in the affidavit that was in the declarations that was provided by Thomas.

[00:02:59] Speaker 02:
So there are two types of irreparable harm.

[00:03:00] Speaker 02:
One is that customers are concerned.

[00:03:03] Speaker 02:
Are you going to supply me?

[00:03:04] Speaker 02:
Now here, what we're talking about is a product life cycle of four years and in 18 months for you to apply for it.

[00:03:12] Speaker 02:
Because these are modules that are going into devices and the customers.

[00:03:17] Speaker 02:
And you have a lien on your house.

[00:03:19] Speaker 02:
You get to buy two houses if you're a customer.

[00:03:21] Speaker 02:
One that's free and clear.

[00:03:23] Speaker 04:
Have any of the customers actually walked away from sales?

[00:03:26] Speaker 04:
Saying, I am so concerned that I'm actually going to switch over to a new supplier.

[00:03:32] Speaker 02:
Your Honor, honestly, standing here, I cannot tell you either way what happened since, right?

[00:03:37] Speaker 02:
Because first of all, the record that was before the judge at the time that... No customers had walked away.

[00:03:44] Speaker 02:
I don't know either way.

[00:03:45] Speaker 04:
A couple of customers had expressed concerns.

[00:03:48] Speaker 02:
I do not know if they have walked away or they have not.

[00:03:50] Speaker 02:
That may be the case.

[00:03:51] Speaker 02:
I just don't have that knowledge because there were no...

[00:03:54] Speaker 03:
It's your burden to establish a reparable entry.

[00:03:58] Speaker 03:
If, in fact, customers are walking away because of the cloud, it would be nice for you to put in some declarations to that effect.

[00:04:05] Speaker 03:
We don't have that, right?

[00:04:07] Speaker 02:
That's exactly the point.

[00:04:08] Speaker 02:
You do have the declarations from before.

[00:04:10] Speaker 02:
And I guess the question, if I understand it correctly, is that is there a reparable harm today?

[00:04:15] Speaker 02:
What we do now is that the judge made an error back then.

[00:04:17] Speaker 02:
And here's the thing.

[00:04:19] Speaker 03:
Why was there an error back then?

[00:04:22] Speaker 03:
What did the declaration say about customers walking away?

[00:04:27] Speaker 02:
Okay, so the error of law was saying that the friend contract does not obligate, has no effect whatsoever on Phillips

[00:04:41] Speaker 02:
to pursue an exclusion of the market.

[00:04:44] Speaker 03:
That's a different question.

[00:04:45] Speaker 03:
And you may have a good argument about that.

[00:04:47] Speaker 03:
But we're talking for the moment about irreparable injury.

[00:04:51] Speaker 03:
And I'm asking, what did the original declaration say before we got this decision from the ALJ about customer concerns?

[00:05:00] Speaker 03:
What exactly did it say?

[00:05:02] Speaker 02:
Right.

[00:05:03] Speaker 02:
So the declaration basically said, laid out two points, two points.

[00:05:09] Speaker 02:
Where do we find this in the record?

[00:05:11] Speaker 02:
I'm sorry?

[00:05:12] Speaker 02:
Where in the record do we find the declaration?

[00:05:15] Speaker 02:
So, Your Honor, that is the Antonitch Declaration.

[00:05:20] Speaker 02:
And it is APX 446.

[00:05:23] Speaker 02:
I'm sorry.

[00:05:28] Speaker 02:
Yes.

[00:05:29] Speaker 02:
Forgive me.

[00:05:31] Speaker 02:
That's the Morehead Declaration.

[00:05:32] Speaker 02:
And it's APPX 862.

[00:05:38] Speaker 02:
And there, you will see that there are negative press reports that are harmful to Dallas.

[00:05:44] Speaker 02:
Wait a second.

[00:05:50] Speaker 03:
OK.

[00:05:53] Speaker 02:
Eroding the goodwill and reputation.

[00:05:55] Speaker 02:
This is the Moorhead Declaration, right?

[00:05:57] Speaker 02:
That is correct, Your Honor.

[00:05:58] Speaker 04:
He works for Thales?

[00:06:01] Speaker 04:
Forgive me, Your Honor.

[00:06:02] Speaker 04:
Mr. Moorhead works for Thales?

[00:06:04] Speaker 04:
That is correct, Your Honor.

[00:06:05] Speaker 04:
OK.

[00:06:05] Speaker 04:
So this is a Thales employee?

[00:06:07] Speaker 02:
Yes.

[00:06:08] Speaker 02:
Yes, Your Honor.

[00:06:09] Speaker 02:
And so you see a lot of confidential information here that's highlighted.

[00:06:16] Speaker 02:
But the issue here is there are two separate ways.

[00:06:19] Speaker 02:
Number one, they're specific customers, not one or two.

[00:06:23] Speaker 03:
But they're not talking about they're walking away from purchases.

[00:06:29] Speaker 03:
from sales.

[00:06:31] Speaker 03:
They're talking about concerns.

[00:06:33] Speaker 02:
Well, Your Honor, when your customer says, I'm concerned, there are two things here.

[00:06:36] Speaker 02:
You have your existing customer about the existing business, and you're also bidding for new business.

[00:06:41] Speaker 03:
OK, so where does this say that new business is going elsewhere because of these concerns?

[00:06:47] Speaker 02:
It does, Your Honor.

[00:06:48] Speaker 02:
Where?

[00:06:49] Speaker 02:
And if you take a look, for example, at paragraph 14.

[00:06:53] Speaker 03:
I have no idea why this stuff is more confidential.

[00:06:57] Speaker 02:
That's fine.

[00:06:58] Speaker 02:
If you look at paragraph 14, it talks about Thales' market share, and it talks about the IoT space considered emerging markets.

[00:07:05] Speaker 02:
10 years away from saturation, right?

[00:07:08] Speaker 02:
And then in the paragraph 15, it talks about how long does it take to bid and the product cycle.

[00:07:16] Speaker 02:
But it doesn't say that customers have deserted us because of the clap.

[00:07:20] Speaker 02:
And the case is here.

[00:07:21] Speaker 02:
Tell us that.

[00:07:23] Speaker 02:
It's very hard to establish who's not coming, right?

[00:07:26] Speaker 02:
But we do know.

[00:07:28] Speaker 02:
This is the commercial officer of Thales, an executive, who's saying, his experience, these facts are not contradicted.

[00:07:37] Speaker 02:
They never contradicted these facts.

[00:07:39] Speaker 02:
They never had a hearing or cross-examination.

[00:07:42] Speaker 04:
It's OK for a fact finder to look at this and say, this is just a little too thin, a little too speculative a conclusory.

[00:07:49] Speaker 04:
There's no hard, tangible evidence.

[00:07:52] Speaker 04:
There's just concerns.

[00:07:55] Speaker 04:
maybe even paranoia that there's going to be loss of market share or loss of ability to access new customers.

[00:08:06] Speaker 03:
And any such concerns have to be ameliorated to some extent by the ALJ's decision, right?

[00:08:12] Speaker 02:
Well, Your Honor, how can you quantify things that are in an emerging industry when you're trying to capture market share?

[00:08:19] Speaker 02:
And when you're one of the main suppliers, and once there's a cloud over your business and your competitor does not have one, this is a commercial officer saying, this is like having a lien on your house.

[00:08:31] Speaker 02:
So the question is, was it?

[00:08:32] Speaker 02:
No.

[00:08:33] Speaker 02:
The judge here, these are the facts before the judge.

[00:08:36] Speaker 02:
They were not contradicted, these facts.

[00:08:37] Speaker 02:
This is very different, by the way, from, say, for example, when you have an infringer.

[00:08:42] Speaker 02:
And you have a patentee, and the patentee is trying to enjoin the infringer.

[00:08:45] Speaker 02:
And the patentee is saying, the infringer being in the market, there's price erosion, or they're capturing my market share.

[00:08:52] Speaker 02:
That's not enough.

[00:08:52] Speaker 02:
Why?

[00:08:53] Speaker 02:
Because just because the infringer is out, you have to show that the market can sustain the higher prices.

[00:08:58] Speaker 02:
Just because the infringer is out, you have to show that you have the capacity to oversupply.

[00:09:02] Speaker 02:
What we're talking about here is an absolute certainty that if there is going to be an exclusion order, you're not selling.

[00:09:09] Speaker 03:
And to say that... So maybe if the current exclusion order, there would be irreparable injury, or maybe even if there were a likelihood of an exclusion order, there would be irreparable injury.

[00:09:21] Speaker 03:
But we don't see a situation now where there's a, you can say that there's a likelihood of an exclusion order having prevailed before the ALJ on multiple grounds.

[00:09:34] Speaker 02:
We don't know what's going to happen on review.

[00:09:36] Speaker 02:
We don't know what's going to happen when they appeal.

[00:09:39] Speaker 02:
We also don't know sitting here.

[00:09:41] Speaker 02:
I don't know that they're not preparing another one in the works.

[00:09:45] Speaker 02:
Capable repetition, right?

[00:09:47] Speaker 02:
This is a very fast time.

[00:09:48] Speaker 02:
They're preparing another one what?

[00:09:50] Speaker 02:
Another ITC case in the works, as far as I'm concerned.

[00:09:53] Speaker 02:
They have not backed away, Your Honor.

[00:09:54] Speaker 02:
You mean for other patents?

[00:09:57] Speaker 02:
Yes, standard essential patents.

[00:10:00] Speaker 02:
Instead of going to the district court and do what they wanted to do.

[00:10:05] Speaker 03:
Let's talk about another aspect of irreparable injury before we run out of time here, and that is you have a potential remedy at the ITC itself to argue that under French law,

[00:10:19] Speaker 03:
that given the ALJ's finding that you negotiate in good faith, that an exclusion order is inappropriate.

[00:10:29] Speaker 03:
Why isn't that an adequate remedy to present this to the, as you have, to the ITC?

[00:10:36] Speaker 02:
I ask myself that question every day, Your Honor.

[00:10:38] Speaker 02:
The ITC will tell you it's not.

[00:10:40] Speaker 02:
The ITC ALJs and Phillips itself cited five decisions from the ITC.

[00:10:45] Speaker 02:
The ALJ decisions,

[00:10:47] Speaker 02:
not so much the Commission, except for one, after the USTR reversed, this is the Apple sent someone.

[00:10:53] Speaker 02:
Since then, there have been five cases, and three of them, the Commission did not join the LJ on friend, and others, they were silent, so we don't know.

[00:11:02] Speaker 03:
Let's put the question this way.

[00:11:07] Speaker 03:
recognition and the FTC has urged the ITC not to issue exclusion orders in a good-faith situation.

[00:11:16] Speaker 03:
If the ITC heeds that and says, well, we're going to recognize that as a defense, why isn't the opportunity to present that to the ITC and have them decide the French law question

[00:11:31] Speaker 03:
an adequate remedy that prevents irreparable injury.

[00:11:36] Speaker 02:
Until that happens, Your Honor, it's disheartening.

[00:11:39] Speaker 02:
Each one of the ALJs tell you the statute that authorized us to have the ITC says nothing about the CPs.

[00:11:45] Speaker 02:
It says something about the friend.

[00:11:47] Speaker 02:
Each one of them that have written these decisions will tell you it doesn't even fit under the public interest factors.

[00:11:55] Speaker 02:
So what if there's a friend violation?

[00:11:57] Speaker 02:
That's what they say, Your Honor.

[00:11:59] Speaker 04:
That's what the ALJs have said.

[00:12:01] Speaker 04:
But it's not so clear to us that it's 100% certainty that the Commission would adopt such a position.

[00:12:10] Speaker 04:
maybe the court is trying to make to you right now is it's less than clear that a willing licensee in the context of an ITC proceeding will necessarily be forced to confront an exclusion order from the commission.

[00:12:26] Speaker 04:
Because the commission very well might take into account these statutory public factors and incorporate the

[00:12:33] Speaker 04:
the part about the Fran commitment and you were a willing licensee and conclude that it's not in the public interest to issue an exclusion order.

[00:12:41] Speaker 02:
Absolutely.

[00:12:42] Speaker 02:
And the uncertainty that your honor just touched on, both of your honors, is exactly the problem.

[00:12:47] Speaker 02:
It's the cloud over the business, right?

[00:12:50] Speaker 02:
And that's the key.

[00:12:51] Speaker 02:
We are winning the licensee.

[00:12:52] Speaker 02:
We've bent over backwards.

[00:12:53] Speaker 02:
We've gone beyond.

[00:12:55] Speaker 02:
We have said we're happy to deal with worldwide portfolio.

[00:12:58] Speaker 02:
We're happy to have the Delaware court basically set the rate in different terms and conditions for European parents.

[00:13:06] Speaker 02:
And we are not going to

[00:13:08] Speaker 02:
require or ask for adjudication on these patents even before you do that.

[00:13:15] Speaker 02:
So we have bent over backwards, but still we have to live with that uncertainty.

[00:13:19] Speaker 02:
These are very, a competitor that does not.

[00:13:21] Speaker 02:
In a market that's versioning, this IoT market, these things, more and more we see more and more devices that are having this capability.

[00:13:31] Speaker 02:
And forgive me, Chief Judge Moore, I'm not sure if you want to ask a question.

[00:13:35] Speaker 01:
Is it the case that the ITC is supposed to decide whether to review by June 16?

[00:13:43] Speaker 02:
I'm sorry.

[00:13:43] Speaker 02:
That's my understanding, that the ITC said that it will let us know whether it will review if it will review anything by June 16.

[00:13:51] Speaker 01:
And if they decide not to review, isn't this case moot?

[00:13:55] Speaker 02:
Your Honor, as long as they keep appealing it.

[00:13:58] Speaker 02:
And if this court reverses on one claim, then the ITC said there will be an exclusion order.

[00:14:04] Speaker 03:
But what about if the ITC declines to review it in the appeal to this court?

[00:14:09] Speaker 03:
We're talking about many months of further litigation.

[00:14:14] Speaker 03:
Isn't that an opportunity, then, for the district court to determine the friend rate so that you have a license and that would, in fact, move the whole thing?

[00:14:23] Speaker 02:
And that's a wonderful point, Your Honor.

[00:14:26] Speaker 02:
It's many months of uncertainties.

[00:14:27] Speaker 02:
Meanwhile, by the way, they've had all that time.

[00:14:31] Speaker 02:
They pled.

[00:14:32] Speaker 02:
They're the one that claimed, and they're the one that wanted to do the rate setting.

[00:14:35] Speaker 02:
We said yes.

[00:14:36] Speaker 02:
Until today, we still haven't moved.

[00:14:39] Speaker 02:
They want to go to the ITC to set the friend rate.

[00:14:42] Speaker 02:
That's not the place to do it.

[00:14:44] Speaker 02:
That's not where we said we would do it.

[00:14:46] Speaker 02:
Okay, Chief Judge Moore, did you have other questions?

[00:14:47] Speaker 01:
This makes no sense to me, Council.

[00:14:49] Speaker 01:
Council, this makes no sense to me.

[00:14:50] Speaker 01:
You argued two kinds of injury, in fact, for your irreparable harm.

[00:14:55] Speaker 01:
The first is having to defend at the ITC.

[00:14:57] Speaker 01:
Well, if they decline to continue after June 16th, that's over.

[00:15:02] Speaker 01:
The second, you argued

[00:15:04] Speaker 01:
was that the ITDT decision may not be favorable to you.

[00:15:08] Speaker 01:
Again, if they do, it's over.

[00:15:10] Speaker 01:
And you're no longer under the threat of any exclusion order.

[00:15:13] Speaker 01:
So I don't understand your irreparable harm injury at all.

[00:15:17] Speaker 02:
Right.

[00:15:18] Speaker 02:
Thank you, Your Honor.

[00:15:19] Speaker 02:
So to be clear, what we're arguing is that as long as there's a possibility that there is an exclusion order that's coming, there's a cloud on the business.

[00:15:27] Speaker 04:
I guess the idea is if the ITC next week were to say, we're fine with the ALJ decision in all aspects, if Phillips appeals the final determination by the ALJ, which becomes the final decision of the ITC to us, the Federal Circuit, then you're still living under the cloud.

[00:15:47] Speaker 02:
We are, because they're still not moving on the straight setting, Your Honor.

[00:15:50] Speaker 01:
You seem to think that a preliminary injunction ought to exist.

[00:15:56] Speaker 01:
It's a very unusual remedy.

[00:15:58] Speaker 01:
And you seem to think it ought to exist even if you're living under a sliver of a cloud, if the ITC decides

[00:16:06] Speaker 01:
not to review, and you've put in no evidence whatsoever of actual customers walking away, quite frankly, your arguments seem minuscule to nonexistent in terms of irreparable harm on what's supposed to be a very difficult to obtain remedy.

[00:16:25] Speaker 01:
I just see no legitimacy in this argument.

[00:16:28] Speaker 02:
Thank you, Your Honor.

[00:16:30] Speaker 02:
I see my time's up.

[00:16:32] Speaker 02:
Go ahead.

[00:16:33] Speaker 02:
Thank you.

[00:16:34] Speaker 02:
Your Honor, there are cases, in the cases that we cited, they do mention that losing business, losing business, that even losing out on business is something that's hard to prove.

[00:16:45] Speaker 02:
We have real tech, that they have the specific facts, the same specific facts, less facts than what we have here, right?

[00:16:51] Speaker 02:
And it was deemed to be irreparable harm.

[00:16:53] Speaker 02:
And we are dealing here with a situation where the ITC, maybe the risk has gone down, but the effect is so humongous.

[00:17:05] Speaker 02:
And that's why they want to go to ITC, because they know the effect of an exclusion order being foreclosed from the United States market is so huge that the risk is intolerable.

[00:17:20] Speaker 02:
And that plays out in the commercial reality.

[00:17:22] Speaker 02:
We have submitted affidavits here.

[00:17:24] Speaker 02:
They did not contradict it.

[00:17:25] Speaker 04:
Can I ask you a different question?

[00:17:28] Speaker 04:
You're way out of time, but we haven't touched on likelihood of success in the merits, and I just want to ask one question.

[00:17:36] Speaker 04:
Is it your view that an implementer like Thales

[00:17:41] Speaker 04:
could engage in stonewalling for many years, for five years, and really be a bad faith negotiator in an undisputed way.

[00:17:56] Speaker 04:
And then once the implementer is finally hailed into court by the patent owner, by the standard essential patent holder,

[00:18:05] Speaker 04:
and sued for infringement finally, the implementer could then, at that time, after many, many years of stonewalling, say, aha, OK, district court, please set the rate, and I will follow whatever rate you set.

[00:18:21] Speaker 04:
And I am now a willing licensee.

[00:18:24] Speaker 04:
Is that good enough to be deemed a willing licensee despite many, many years of what everyone would agree was bad behavior?

[00:18:32] Speaker 02:
That's a great question too.

[00:18:33] Speaker 02:
So what's the answer?

[00:18:35] Speaker 02:
So to begin with, we have not been negotiating bad faith at all.

[00:18:39] Speaker 02:
And the hypothetical, whether there's an implementer who's doing that, it depends on the circumstances.

[00:18:44] Speaker 02:
There are absolutely grounds not to allow the implementer to continue.

[00:18:50] Speaker 02:
It depends on the harm that's being done to the patent holder.

[00:18:54] Speaker 02:
And we have seen this back from the DOJ's prior position on this.

[00:19:03] Speaker 02:
Injunctions in that case should be available.

[00:19:07] Speaker 02:
So you can have the implementer.

[00:19:10] Speaker 04:
So therefore the answer is yes.

[00:19:13] Speaker 04:
That person, despite

[00:19:15] Speaker 04:
declaring in court that that person's a willing licensee, they actually, in fact, are not a willing licensee, given the five years of bad behavior.

[00:19:25] Speaker 02:
And other circumstances.

[00:19:26] Speaker 02:
For example, how did this affect them slightly to affect the patent holder?

[00:19:32] Speaker 02:
Are they losing market share?

[00:19:34] Speaker 02:
Are they not going to be compensated?

[00:19:36] Speaker 02:
Is this a fly by not company?

[00:19:37] Speaker 02:
Are they insolvent?

[00:19:38] Speaker 04:
OK, so given your answer to the hypothetical, then why doesn't that undercut your position that

[00:19:45] Speaker 04:
Given that on appeal, you haven't made any presentation to us that convincingly shows that you were, in fact, a willing licensee for those prior five years of negotiation.

[00:19:59] Speaker 04:
Instead, you rely solely on the fact that by the time you finally got hailed into court, only at that time you declared yourself to be a willing licensee.

[00:20:08] Speaker 04:
Why does that make it sell?

[00:20:09] Speaker 02:
It's a great question.

[00:20:11] Speaker 02:
And the reason for that is because that was the beginning of the case.

[00:20:14] Speaker 02:
There was no discovery yet.

[00:20:15] Speaker 02:
They had cherry picked some facts and said, look, they're bad.

[00:20:18] Speaker 03:
Did you argue to the district court that you were negotiating in good faith?

[00:20:26] Speaker 02:
The district court did not even want to get into that.

[00:20:28] Speaker 02:
And that's yet another reason here.

[00:20:29] Speaker 03:
Did you argue that?

[00:20:30] Speaker 02:
Well, we did, yes, Your Honor.

[00:20:32] Speaker 02:
And in our briefing, we did mention to the court that we are willing to license it, even during the negotiation.

[00:20:37] Speaker 02:
And they're for good reasons.

[00:20:39] Speaker 04:
But in your briefing to us, your theory for why you are a willing licensee rests solely on the position that you made that declaration in court, correct?

[00:20:53] Speaker 02:
Your Honor, absolutely, because there is no issue of fact here, and also there is no issue of fact that Phillips is 100% going to be compensated.

[00:21:01] Speaker 02:
They will not be suffering any of these harms in the hypothetical.

[00:21:04] Speaker 04:
But what if we conclude that that's an incomplete

[00:21:06] Speaker 04:
theory to establish that you're a willing licensee.

[00:21:10] Speaker 04:
To establish you're a willing licensee, you have to go further than just by the time you finally get hailed into court, you make that declaration.

[00:21:17] Speaker 04:
But you also have to establish that you were in good faith trying to negotiate for a friend license, right?

[00:21:27] Speaker 02:
No, Your Honor.

[00:21:28] Speaker 02:
As a matter of fact, we did establish that we're 100% willing to licensee because we also established

[00:21:33] Speaker 02:
that Philips itself admitted that once it gets the friend terms and conditions, they're 100% going to be compensated and they will not be harmed at all.

[00:21:42] Speaker 02:
They'll get everything they're entitled to and they're not entitled to anything more.

[00:21:45] Speaker 03:
No, no, no, you're not addressing the question.

[00:21:47] Speaker 03:
The question, the concern is that

[00:21:52] Speaker 03:
And looking to the Borghetti testimony, for example, before the ITC and the finding of the ALJ at the ITC, the suggestion is that under French law, a good faith negotiator is protected from an injunction.

[00:22:13] Speaker 03:
And we're trying to find out whether your client fits that category.

[00:22:20] Speaker 02:
You seem to be resisting that.

[00:22:22] Speaker 02:
It fits that category in different ways.

[00:22:25] Speaker 03:
Not because of going to court, but because of its conduct over the last few years in the negotiations.

[00:22:33] Speaker 02:
It's because of both.

[00:22:34] Speaker 02:
Because most of the time, when you go to court and you surrender, you say, I will do.

[00:22:39] Speaker 02:
I will pay you what you deserve.

[00:22:41] Speaker 03:
Put that aside for one moment.

[00:22:43] Speaker 02:
But that matters, because it's always easy to say that matters.

[00:22:45] Speaker 03:
Well, suppose we say it doesn't matter.

[00:22:47] Speaker 03:
Suppose we say that you have to establish that you were in good faith during the negotiations.

[00:22:55] Speaker 02:
Nobody has held that.

[00:22:56] Speaker 02:
The UK didn't hold that.

[00:22:58] Speaker 02:
In the UK, an unmarked planet.

[00:23:00] Speaker 03:
Well, you're fighting the hypothetical.

[00:23:02] Speaker 03:
Again, I'm telling you, let's suppose the hypothetical is that going to court is not enough in and of itself to establish good faith.

[00:23:11] Speaker 03:
Have you made a record that you were negotiating with Phillips in good faith over the last four years?

[00:23:19] Speaker 03:
I apparently argued that to the ALJ in the ITC.

[00:23:24] Speaker 03:
Did you argue that to the district court?

[00:23:26] Speaker 02:
Well, Your Honor, the district court specifically in the appendix on page 151.

[00:23:32] Speaker 03:
You are not answering my question.

[00:23:34] Speaker 02:
Your Honor, there is no time to do that, right?

[00:23:36] Speaker 02:
Because for the judge to evaluate whether we're negotiating in good faith, the judge has to really look at what the friend issues are, right?

[00:23:44] Speaker 02:
Did they make a friend offer?

[00:23:46] Speaker 04:
Did they make a friend counter offer?

[00:23:47] Speaker 04:
Let's focus the question.

[00:23:48] Speaker 04:
You're answering Judge Dyke's question by focusing on what the district court did or did not do.

[00:23:54] Speaker 04:
And his question, as well as my question, is what did you do?

[00:23:58] Speaker 04:
What did you present to the district court in your motion for a preliminary injunction as to the question of establishing that you were in fact negotiating in good faith during all those years?

[00:24:11] Speaker 02:
We, in our brief, explained the circumstances, why their facts, what they said, are not true.

[00:24:18] Speaker 02:
Some of them, right?

[00:24:19] Speaker 02:
Not all of them, because we had not yet seen some of what their licenses are.

[00:24:25] Speaker 02:
But more importantly, Your Honor, when you're moving for a PI early on, it's putting the cart before the horse, right?

[00:24:31] Speaker 03:
Because if you would require for a PI that we have to go and to- We're asking you, as a hypothetical, to assume

[00:24:40] Speaker 03:
that in order to get a PI, you have to establish that you were negotiating in good faith.

[00:24:45] Speaker 03:
OK?

[00:24:46] Speaker 03:
And we're asking you, did you attempt to make that shine?

[00:24:50] Speaker 03:
I know the district court didn't decide the issue, but were you trying to get the district court to decide that issue?

[00:24:57] Speaker 02:
we put in our brief certain parts of it, the court said he didn't want to hear them.

[00:25:03] Speaker 02:
And that's the appendix 151, right?

[00:25:04] Speaker 02:
The court said, I am not going to, you say it's friend.

[00:25:07] Speaker 02:
He was talking to Phillips's counsel.

[00:25:09] Speaker 02:
They say it's not friend.

[00:25:11] Speaker 02:
I'm not going to get into that, right?

[00:25:12] Speaker 02:
Because the good faith, your honor, only arises when if somebody, as Apple-Morolla, this court said, if somebody repeatedly coming to you and asking you for non-friend terms, a condition, refusal of that, regardless of how long, is not bad faith.

[00:25:26] Speaker 02:
So it is a question of fact.

[00:25:28] Speaker 04:
But I think we also said, on the other hand, on the other foot, if someone has been refusing friend offers and has been negotiating in bad faith, that could very well be a legitimate circumstance for an injunction.

[00:25:44] Speaker 02:
Absolutely, in the same case two months before.

[00:25:47] Speaker 02:
And so it turns onto a factual question of which you need discovery, right?

[00:25:52] Speaker 02:
Because everybody is going to tell the judge, I'm in good faith.

[00:25:56] Speaker 02:
And the question is, if you would like to make a rule, Your Honor, in the hypothetical, to say, we require that you demonstrate that you are acting in good faith,

[00:26:07] Speaker 02:
100% determining from the judge, right?

[00:26:10] Speaker 02:
Then basically you've said, you can't even apply for a PI until we're done with discovery, until the judge actually does a resection.

[00:26:16] Speaker 03:
That's ridiculous.

[00:26:17] Speaker 03:
I mean, all the time, in preliminary injunction context, judges have to make those kinds of determinations.

[00:26:24] Speaker 03:
And people have limited discovery for that purpose and make those kinds of arguments.

[00:26:28] Speaker 04:
And it's a likelihood of success standard, right?

[00:26:30] Speaker 02:
I'm sorry?

[00:26:31] Speaker 02:
It's a likelihood of success standard.

[00:26:33] Speaker 02:
It is a likelihood of success case.

[00:26:35] Speaker 02:
And we have demonstrated a likelihood of success case.

[00:26:37] Speaker 02:
Another thing, Your Honor, this is under French law.

[00:26:39] Speaker 02:
Huawei ZTE said, Huawei ZTE said, which is the European Court of Justice, as you very well know, this said, even when the actual punitive licensee

[00:26:53] Speaker 02:
even if they don't respond timely, even if they don't take a friend offer, if they submit themselves to a neutral adjudicator, then that's fine.

[00:27:03] Speaker 02:
And why is that?

[00:27:04] Speaker 02:
This is very important.

[00:27:06] Speaker 02:
Because how do I know it's friend?

[00:27:08] Speaker 02:
How do I know it's friend?

[00:27:09] Speaker 02:
It could be a difference not only of opinion, a difference from stands for when people are coming from different industries, what my product can sustain and not sustain.

[00:27:20] Speaker 02:
So the key here is this.

[00:27:23] Speaker 02:
The key here is this, who's holding all the cards?

[00:27:25] Speaker 02:
Should the licensor, should we have a hypothetical where the licensor hold all the cards?

[00:27:31] Speaker 02:
Not only do they self-declare the patent, but they self-declare that it's a friend.

[00:27:35] Speaker 02:
And they just declare it as such.

[00:27:37] Speaker 02:
And you don't get to see their licenses.

[00:27:41] Speaker 02:
They don't show you their licenses.

[00:27:42] Speaker 02:
They don't show you.

[00:27:43] Speaker 02:
They may cherry pick, cherry pick things that we know not all the licenses.

[00:27:48] Speaker 01:
OK, we need to move on and hear from the other side now.

[00:27:51] Speaker 02:
Thank you.

[00:27:57] Speaker 03:
All right, Mr. Thompson, we'll give you two minutes for rebuttal, Mr. Zieden.

[00:28:04] Speaker 05:
Good morning, Your Honors.

[00:28:05] Speaker 05:
May it please the Court?

[00:28:07] Speaker 03:
Let's talk first a bit about likelihood of success.

[00:28:11] Speaker 03:
I find the apparent contradiction in Mr. Begedi's testimony to be somewhat troubling.

[00:28:19] Speaker 03:
Before the district court, he says there's no protection under French law against injunctions.

[00:28:27] Speaker 03:
And then before the ITC, he appears to say there is a protection against injunctions under French law if you're negotiating good faith.

[00:28:38] Speaker 05:
Well, Your Honor, I would submit that that is actually the submission from Tallis, that his testimony was inconsistent and the ITC is actually not true.

[00:28:48] Speaker 05:
And I'll direct you to a citation where they actually argued it, that he had said that injunctions are not proper.

[00:28:57] Speaker 05:
And it's their reply, Tallis' reply, DI 62 at page 5.

[00:29:03] Speaker 05:
And I'll quote what they wrote.

[00:29:05] Speaker 05:
They wrote, Professor Bugetti admits that seeking injunctions can be bad faith and thus a breach.

[00:29:11] Speaker 05:
That was, by the way, at the district court level, not here.

[00:29:14] Speaker 05:
I don't mean the reply brief here.

[00:29:16] Speaker 05:
It was a reply brief in front of the district.

[00:29:18] Speaker 03:
You're not addressing what I'm asking about.

[00:29:20] Speaker 03:
His testimony.

[00:29:22] Speaker 03:
in his declaration here in the district court proceeding seems to be inconsistent with what he said to the ITC because before the ITC he appeared to recognize that French law protects against injunctions if you are negotiating in good faith.

[00:29:40] Speaker 05:
What he said is that if, well, first off, the duty of good faith is dependent upon the circumstances of the negotiation.

[00:29:51] Speaker 05:
So if the patent owner complies with the Etsy agreement by, for example, making a friend offer

[00:30:01] Speaker 05:
then it's upon the licensee to accept it.

[00:30:04] Speaker 05:
At that point in time, there is no obligation not to seek an injunction.

[00:30:09] Speaker 05:
In fact, the Etsy agreement will contemplate that you do look for it.

[00:30:14] Speaker 04:
I'm sorry.

[00:30:14] Speaker 04:
I'm not hearing you directly responding to the question.

[00:30:18] Speaker 04:
OK.

[00:30:18] Speaker 04:
The question is,

[00:30:20] Speaker 04:
Did Dr. Baggetti say one thing to the ITC and then a different thing to the district court when it comes to whether or not implementers who negotiate in good faith are protected against the specter of an injunction?

[00:30:38] Speaker 05:
I would suggest that the answer to what he said, and he did not contradict himself, is that Appendix 1540

[00:30:45] Speaker 05:
paragraph 89, where he says that you need to look at the circumstances.

[00:30:51] Speaker 05:
And in fact, that was understood all over.

[00:30:52] Speaker 03:
He didn't say that in his declaration here.

[00:30:54] Speaker 03:
He didn't say anything about you need to look at the circumstances.

[00:30:58] Speaker 03:
He said that French law provides no protection against an injunction.

[00:31:03] Speaker 03:
And he talked about the history of this 1993 proposal and so on and so forth.

[00:31:11] Speaker 05:
I would submit that that's... I don't read his testimony to say that.

[00:31:14] Speaker 03:
I think what he said is if... and it was always... Do you agree that French law protects against an injunction when the implementer is negotiating in good faith?

[00:31:26] Speaker 05:
And what I'm saying is... Yes or no?

[00:31:30] Speaker 05:
If the other circumstances are true, including that the patent order has somehow violated, then yes.

[00:31:37] Speaker 03:
What other circumstances?

[00:31:40] Speaker 03:
Does it protect a potential licensee who is negotiating in good faith from an injunction?

[00:31:46] Speaker 05:
Yes, if you are actually a willing licensee.

[00:31:50] Speaker 04:
Just saying you are doesn't do it.

[00:31:51] Speaker 04:
That's fine.

[00:31:52] Speaker 04:
But what if it's established?

[00:31:53] Speaker 04:
What if the fact finder concludes that the implementer is a willing licensee?

[00:32:01] Speaker 05:
To make that conclusion, I would submit you have to look at what the patent owner did.

[00:32:06] Speaker 04:
But yes.

[00:32:07] Speaker 04:
But the answer is yes.

[00:32:08] Speaker 04:
The answer is yes.

[00:32:10] Speaker 04:
OK.

[00:32:11] Speaker 04:
So theoretically, you were in the middle of an ITC proceeding.

[00:32:17] Speaker 04:
Your claims, your patent claims, were found to have been infringed.

[00:32:20] Speaker 04:
They're valid and infringed.

[00:32:22] Speaker 04:
At the same time, the fact finder concludes that the implementer was a willing licensee all along.

[00:32:30] Speaker 05:
All along?

[00:32:31] Speaker 04:
All along.

[00:32:33] Speaker 04:
You, based on the position you just told us 30 seconds ago, you would have no right to an injunction, to an exclusion order in the ITC.

[00:32:43] Speaker 04:
Is that right?

[00:32:44] Speaker 05:
No, it's not.

[00:32:45] Speaker 05:
Because if you comply with the Etsy agreement, then you may seek an injunction.

[00:32:50] Speaker 05:
And one way you do that- Wait a second.

[00:32:52] Speaker 04:
Now you're walking back from what I heard from you before.

[00:32:56] Speaker 04:
What I heard you before say to our question was,

[00:33:01] Speaker 04:
you can't get an injunction if the implementer was a willing licensee.

[00:33:07] Speaker 05:
And what I'm saying is you can't be a willing licensee if the patent order complied with that seat.

[00:33:13] Speaker 05:
That's what I'm saying.

[00:33:14] Speaker 05:
That's, I think, the difference.

[00:33:16] Speaker 04:
OK.

[00:33:16] Speaker 04:
But just put aside your theories of what makes a person a willing licensee versus an unwilling licensee.

[00:33:23] Speaker 04:
If the fact finder concludes that the implementer was a willing licensee,

[00:33:28] Speaker 04:
then it's game over, no injunction, no exclusion order is merited.

[00:33:35] Speaker 05:
And yes, and subsidiary to that would be that they need to find that the patent owner didn't comply with that seat, because you can't be a willing licensee.

[00:33:43] Speaker 04:
Fine, fine.

[00:33:44] Speaker 04:
That's different.

[00:33:45] Speaker 04:
But I'm just saying, if you are agreeing, I think, with the idea that in an ITC proceeding, the commission should not be issuing exclusion order against a deemed willing licensee.

[00:34:02] Speaker 04:
Forget about your little reasons why someone is or is not a legitimate willing licensee.

[00:34:08] Speaker 04:
But if someone is a willing licensee, then there can't be a limited exclusion order against that willing licensee.

[00:34:15] Speaker 05:
I think that maybe there's a difference between the ultimate conclusion.

[00:34:19] Speaker 05:
I think in some respects, you're asking be the ultimate conclusion.

[00:34:22] Speaker 03:
Mr. Waffling, could you answer the question, please?

[00:34:24] Speaker 03:
If the person is a willing licensee, do you agree that no exclusion order can issue?

[00:34:34] Speaker 03:
No.

[00:34:35] Speaker 03:
Why not?

[00:34:36] Speaker 05:
Because if the patent owner is complied with the Etsy agreement,

[00:34:40] Speaker 05:
They, by the terms of the SC agreement, something that was very carefully negotiated among the members of the group, because it's a contract and it took years to come to, if the patent owner provides a Fran license and it's rejected with undue delay, then you can seek an injunction.

[00:35:00] Speaker 05:
And this court has held that as well.

[00:35:02] Speaker 04:
But what if the fact finder concludes that there was no undue delay, and that there were, in fact, legitimate reasons to decline that fran rate offer?

[00:35:13] Speaker 04:
Now, maybe at the time it was less than clear there was a fran rate, but after all of the investigation that took place,

[00:35:19] Speaker 04:
it's finally concluded by the tribunal that it was, after all, a friend rate.

[00:35:24] Speaker 04:
But it wasn't so clear at the time of the negotiations.

[00:35:27] Speaker 04:
And so therefore, there was a good faith basis for declining that at that time, because the implementer didn't have enough of a basis to, at that time, understand that it was a friend rate.

[00:35:39] Speaker 04:
And so therefore, the fact finder concludes that the licensee, the implementer, was a willing licensee.

[00:35:45] Speaker 05:
OK, in a fact pattern like that, of course, hypothetical, you have to go to the contract.

[00:35:55] Speaker 05:
And the contract specifically says, as carefully negotiated, that the patent owner will be prepared to offer a friend license.

[00:36:04] Speaker 05:
If you've done that, you've offered the benefit that was contemplated by the agreement.

[00:36:10] Speaker 03:
OK, suppose that is a determination that the patent owner didn't offer a friend license.

[00:36:15] Speaker 03:
And that under those circumstances, do you agree that an ITC exclusion order should not issue?

[00:36:24] Speaker 05:
If the finding was that the patent owner had failed to offer Fram licenses, then yes.

[00:36:30] Speaker 05:
And I think that if they were willing licensee, yes, you would have the implied covenant of good faith, then yes.

[00:36:37] Speaker 05:
That way you could reach out to that source.

[00:36:39] Speaker 03:
And your view is that the ITC, under its authority, is obligated not to issue an exclusion order under those circumstances?

[00:36:50] Speaker 05:
I'm not sure that we have addressed all circumstances.

[00:36:54] Speaker 05:
But in that circumstance, I think that the ITC would review it and make the decision.

[00:37:00] Speaker 01:
I think they would not.

[00:37:02] Speaker 01:
Council, are we talking?

[00:37:03] Speaker 01:
Oh, I'm sorry.

[00:37:04] Speaker 05:
Excuse me.

[00:37:06] Speaker 05:
I didn't realize that it was you, Your Honor.

[00:37:08] Speaker 03:
Chief Judge Morris is asking a question.

[00:37:09] Speaker 05:
Yes.

[00:37:10] Speaker 05:
I'm sorry, Your Honor.

[00:37:12] Speaker 01:
And we're only talking about an understanding of French law.

[00:37:16] Speaker 01:
I understand Delaware law might parallel in many ways.

[00:37:19] Speaker 01:
But right now, we're only talking about under French law, right?

[00:37:22] Speaker 01:
So to the extent that broad statements are being made about what would or wouldn't prevent an exclusion order, that's only if a case arises potentially under French law.

[00:37:33] Speaker 05:
Is that right?

[00:37:38] Speaker 05:
The law in relation to the meaning of the contract is definitely French law.

[00:37:44] Speaker 05:
And Borghetti, in appendix 1503, specifically 1518 of paragraph 43, says that that obligation is to make an offer within the franc range.

[00:37:56] Speaker 05:
And when you do that, then you've given the benefit contemplated by the agreement.

[00:38:01] Speaker 03:
Okay, but look, we're talking about whether the ITC is an adequate forum to resolve the issues that are before us today on the merits.

[00:38:12] Speaker 03:
Do you agree that the ITC should apply French law if it provides a defense to an injunction in making its determination as to whether an exclusion order should issue?

[00:38:26] Speaker 03:
Does it provide a forum for the resolution of that issue?

[00:38:30] Speaker 05:
Yes, and in fact, TALIS.

[00:38:32] Speaker 03:
So that means that the ITC should not issue an exclusion order if we have a willing licensee.

[00:38:41] Speaker 05:
For our earlier discussion with the clarifications we made, yes.

[00:38:46] Speaker 03:
OK.

[00:38:47] Speaker 05:
And I would say that, by the way, the question as to whether the ITC is offering due process, I think the suggestion that they're not is untrue.

[00:38:56] Speaker 05:
TALIS raised in its public interest statement from day one, which is in appendix 1250 to 51, they argued, and I'll quote, Phillips has refused to grant TALIS a license on France.

[00:39:08] Speaker 05:
That's what they argued.

[00:39:10] Speaker 05:
It became, then, part of the institution, which we cited in our brief.

[00:39:14] Speaker 03:
OK, your view is that Thales is raising this French law defense at the ITC.

[00:39:23] Speaker 05:
Exactly.

[00:39:24] Speaker 05:
And, Your Honors, you asked about the status.

[00:39:27] Speaker 05:
The status on April 15, one of the decisions at the ALJ level was that all five offers from Phillips were fracked.

[00:39:37] Speaker 04:
Right.

[00:39:37] Speaker 04:
And if the ITC next week declines to review the ALJ decision, are you going to appeal that ALJ decision?

[00:39:47] Speaker 05:
I can't say one way or the other, because I haven't consulted with my client.

[00:39:50] Speaker 05:
But I think that is definitely within the realm of possibility.

[00:39:56] Speaker 04:
Why did you file an ITC case?

[00:39:59] Speaker 04:
Why can't the Delaware Civil Action handle everything?

[00:40:04] Speaker 04:
request an injunction in the Delaware Civil Act.

[00:40:07] Speaker 04:
Is that right?

[00:40:08] Speaker 04:
That's right.

[00:40:10] Speaker 04:
OK, so why do you need the ITC?

[00:40:12] Speaker 05:
ITC cases are different from district court cases.

[00:40:16] Speaker 05:
They have different elements.

[00:40:18] Speaker 05:
And they're based upon different, congressionally mandated rights.

[00:40:23] Speaker 03:
So the one that I'm going to answer the question of, why do you need to go to the ITC if you're going to get a Fran license by agreement of both parties from the district court?

[00:40:34] Speaker 05:
Well, I don't think that that's necessarily true.

[00:40:39] Speaker 05:
The likelihood of success that was their burden of showing would have been that their counterclaim DJ would go forward.

[00:40:49] Speaker 05:
But that's far from clear.

[00:40:51] Speaker 03:
I don't understand what you're saying.

[00:40:52] Speaker 03:
If both parties have agreed that the district court should determine what a Fram license is, that the district court will determine what the Fram license is, and there will be a license, why do you need an exclusion order?

[00:41:09] Speaker 05:
Those circumstances haven't occurred.

[00:41:12] Speaker 05:
If they would have, then perhaps you'd have to address that circumstance.

[00:41:16] Speaker 05:
But that just hasn't happened here.

[00:41:19] Speaker 05:
And they haven't shown that it will.

[00:41:21] Speaker 05:
They haven't shown that there's a court, and the district court hasn't said that the judge would accept jurisdiction.

[00:41:29] Speaker 05:
And this is, by the way, something that they could bring up at the ITC for consideration.

[00:41:34] Speaker 05:
The district court specifically asked them

[00:41:36] Speaker 05:
Appendix 54.

[00:41:38] Speaker 05:
Why didn't you seek expedited resolution?

[00:41:41] Speaker 05:
He has calloused that and they had no answer for that if they actually thought that they wanted to go forward with it.

[00:41:46] Speaker 04:
But the situation... I guess I'm confused.

[00:41:50] Speaker 04:
What do you want?

[00:41:51] Speaker 04:
Do you want a framerate or do you want to enjoin fails from practicing your patents?

[00:41:59] Speaker 04:
Which one is it?

[00:42:00] Speaker 01:
Which what we want is them to accept the friend offers that we provided and they won't do that because if you look at their job, yes I mean isn't isn't your shouldn't your answer be that we've made five different friend offers and they're just obstructing the process and that you had to resort to the exclusion order or the attempted injunction because they're not truly a willing licensee and

[00:42:25] Speaker 05:
Well, that's exactly right, Your Honor.

[00:42:27] Speaker 05:
And Tallis failed to show a likelihood of success that the five pending offers from Phillips breached the franned obligation that thereby justified Tallis's four-year delay before the ITC investigation was started.

[00:42:40] Speaker 03:
OK, but the ALJ determined they were negotiating good faith, correct?

[00:42:46] Speaker 05:
The AOJ found also that Philip Toffer's guess, but that he said that they were negotiating in good faith.

[00:42:54] Speaker 05:
That they had been willing, but they had to.

[00:42:56] Speaker 03:
Yes.

[00:42:57] Speaker 03:
AOJ found they were negotiating in good faith, correct?

[00:43:00] Speaker 03:
They also said that they had been willing.

[00:43:01] Speaker 03:
No, forget about also.

[00:43:02] Speaker 03:
Just answer my question.

[00:43:03] Speaker 03:
He found they were negotiating in good faith, right?

[00:43:07] Speaker 05:
I don't know that he went quite that far.

[00:43:09] Speaker 05:
I think he said that they were willing at the time.

[00:43:14] Speaker 05:
I would need to review his actual ruling, which is not part of my records.

[00:43:19] Speaker 04:
They were situationally willing?

[00:43:21] Speaker 04:
I don't understand that.

[00:43:23] Speaker 05:
No, no, no.

[00:43:25] Speaker 04:
Sometimes like an on-off switch.

[00:43:26] Speaker 04:
Sometimes they were willing.

[00:43:28] Speaker 04:
Sometimes they were unwilling.

[00:43:29] Speaker 05:
Well, they didn't offer any proof that their counter-offices were frank.

[00:43:33] Speaker 05:
So I think that the record was incomplete by their choice.

[00:43:37] Speaker 05:
All they argued to the ALJ was that Philip's offers were not frank.

[00:43:48] Speaker 03:
All right, unless there are further questions.

[00:43:50] Speaker 03:
Chief Judge Moore, do you have any further questions?

[00:43:54] Speaker 03:
OK, hearing none.

[00:43:55] Speaker 03:
Thank you, Mr. Thompson.

[00:43:57] Speaker 05:
Thank you, Your Honor.

[00:44:02] Speaker 03:
Mr. Ziedman, you have two minutes.

[00:44:03] Speaker 02:
Thank you, Your Honor.

[00:44:06] Speaker 02:
Your Honor, I wasn't going to mention this, because it's not in the record, the ALJ's RD.

[00:44:12] Speaker 02:
But now that Council for Phillips have mentioned it, you're right.

[00:44:16] Speaker 02:
The ALJ found independently.

[00:44:18] Speaker 02:
that Falas has been negotiating in good faith all along those five years.

[00:44:23] Speaker 02:
In addition to that, he also found that Falas was a willing licensing, solely because

[00:44:30] Speaker 02:
Also, it agreed to adjudicate the framed rates.

[00:44:33] Speaker 02:
And Chief Judge Moore, you asked a great question here.

[00:44:35] Speaker 02:
That would be the case if somebody was negotiating in bad faith.

[00:44:39] Speaker 02:
But we were not, even under what the LJ said.

[00:44:41] Speaker 02:
Now, of course, the LJ still found, nonetheless, that there should be an exclusion order.

[00:44:47] Speaker 02:
And that's the problem that I was trying to mention before.

[00:44:49] Speaker 02:
And I didn't really want to go to the RD, because it's not on the record.

[00:44:52] Speaker 02:
But obviously, you've read it, Your Honor.

[00:44:54] Speaker 02:
I do have it here.

[00:44:55] Speaker 03:
The LJ said exactly what he said.

[00:45:04] Speaker 02:
Well, it wasn't the RD.

[00:45:06] Speaker 02:
I'm sorry.

[00:45:07] Speaker 02:
I'm trying to understand.

[00:45:08] Speaker 02:
Are you referring to the RD, Your Honor, the LJRD?

[00:45:11] Speaker 02:
Yes.

[00:45:12] Speaker 02:
Yeah.

[00:45:13] Speaker 02:
It was not out yet at the time that we did all the briefings.

[00:45:17] Speaker 02:
But a couple of things I didn't quickly just want to point out.

[00:45:20] Speaker 03:
Only the J letters are for subsequent developments.

[00:45:23] Speaker 03:
That's right.

[00:45:23] Speaker 03:
This is a subsequent development.

[00:45:25] Speaker 03:
One of you should have told us about it.

[00:45:27] Speaker 02:
But go ahead.

[00:45:30] Speaker 02:
And Your Honor,

[00:45:31] Speaker 02:
I just wanted to give the point of attention to a couple of things.

[00:45:35] Speaker 02:
On real tech, when we're talking about irreparable harm, it is in 998.

[00:45:39] Speaker 02:
The one thing in answer to Chief Judge Moore's question, and also your question, and Judge Jen's question, which is, what's happening now?

[00:45:49] Speaker 02:
The judge made a clear error that's fundamental, and it goes through a lot of issues.

[00:45:55] Speaker 02:
And that is basically that.

[00:45:57] Speaker 02:
Phillips and any patent owner who encumbers their patent with a frank promise has unfettered access to exclude anybody from the market.

[00:46:05] Speaker 02:
Your Honor, what's happened now is not before this court.

[00:46:09] Speaker 02:
We can't talk about fact-finding here.

[00:46:11] Speaker 02:
But if this court reverses and remains with instruction as to correct the error, that now you cannot try to exclude the will and licensee,

[00:46:22] Speaker 02:
As Chief Judge Moore mentioned then, the judge can look at the specific extent of the reprobable harm that exists today.

[00:46:30] Speaker 02:
We can have the fact finding on that.

[00:46:32] Speaker 02:
And then tailor any injunction or not, as he sees fit, based on that new fact finding.

[00:46:39] Speaker 03:
OK.

[00:46:40] Speaker 03:
I think we're out of time.

[00:46:41] Speaker 03:
Thank you.

[00:46:41] Speaker 03:
Thank you, Your Honor.

[00:46:42] Speaker 03:
Thank both counsels.

[00:46:43] Speaker 03:
The case is submitted.