[00:00:05] Speaker 02:
Lamp, Incorporated, 2022, 1059.

[00:00:08] Speaker 02:
Mr. Afrasiabi?

[00:00:14] Speaker 00:
Yes, Your Honor.

[00:00:21] Speaker 00:
Good morning.

[00:00:21] Speaker 00:
Good morning, Your Honor.

[00:00:22] Speaker 00:
May it please the court.

[00:00:23] Speaker 00:
Peter Afrasiabi on behalf of the Appellant Neurologics.

[00:00:28] Speaker 00:
Your Honor,

[00:00:28] Speaker 00:
I think the core error of the district court here can be seen on page 364, the first sentence, including footnote two, because that's where the court purports to define pupillometer patent portfolio.

[00:00:43] Speaker 00:
And the court's definition is fundamentally impossibly vague, it's indefinite, and there's not any evidence in the record to support the parties ever even themselves considered it.

[00:00:54] Speaker 00:
Now, if we look at that definition on page 364,

[00:00:58] Speaker 00:
The district court said that pupillometer patents mean pupillometer patents, pupillometer technology, not including pupillometer components subject to the party's field of use.

[00:01:11] Speaker 00:
And it said it meant that as an ordinary term of usage.

[00:01:14] Speaker 00:
Now, there's no reference given for how that was an ordinary term of usage.

[00:01:17] Speaker 00:
And the case law from Ochoa to Orr to Trendmasters that we cited requires that if you are to

[00:01:26] Speaker 00:
Assess this definiteness inquiry and look at objective evidence.

[00:01:30] Speaker 00:
You have to figure out if it's clearly the term that's used.

[00:01:35] Speaker 03:
I'm confused about something, just to be clear.

[00:01:39] Speaker 03:
The opinion at 332 is identical to the opinion at 352?

[00:01:44] Speaker 03:
Is it just printed twice?

[00:01:46] Speaker 00:
I think so, Your Honor, yes.

[00:01:47] Speaker 00:
And so I was referring.

[00:01:49] Speaker 00:
For some reason, I've annotated the one at page 364, that first sentence.

[00:01:53] Speaker 03:
But this is of the district court opinion, page 13.

[00:01:58] Speaker 00:
Correct, page 13 of the district court, the underlying district court opinion.

[00:02:01] Speaker 00:
And so.

[00:02:02] Speaker 01:
Was there ever any discussion with the district court about this components point and whether it was included or not included within the scope of the release?

[00:02:10] Speaker 00:
No.

[00:02:11] Speaker 00:
I mean, it was never discussed by anyone.

[00:02:13] Speaker 00:
Neither of the parties ever discussed it.

[00:02:15] Speaker 00:
And what's very clear from the record, and it's undisputed, at page 266, paragraph 2, the only discussion between the principles of our clients that led to the email exchange, the only discussion was about the seven patents at issue.

[00:02:29] Speaker 00:
That's it.

[00:02:29] Speaker 00:
With an express statement by our client that was not controverted, that that's all that was discussed.

[00:02:34] Speaker 00:
And there was never an idea of covenanting this entire portfolio when this is a lawsuit about this narrow set of patents.

[00:02:41] Speaker 00:
And so all they discussed were the patents.

[00:02:44] Speaker 00:
And so when these new terms of components and technology are interjected.

[00:02:48] Speaker 03:
Interjected.

[00:02:49] Speaker 03:
When were those terms first interjected in front of the district court?

[00:02:54] Speaker 00:
Component was first interjected in front of the district court when

[00:02:59] Speaker 00:
They, the other side, gave us their draft settlement brief back, and it had the word component in it, or the draft settlement agreement, and it had the word component in it.

[00:03:05] Speaker 00:
That then got submitted to the district court in the briefing on the underlying motion.

[00:03:09] Speaker 00:
Technology only appeared in our very original letter to them, where we simply said, we have an IP portfolio on pupilometer technology.

[00:03:17] Speaker 00:
Now, we never said.

[00:03:18] Speaker 00:
PPP, which is sort of this phrase at issue here, we said an IP portfolio.

[00:03:23] Speaker 00:
And they never even declared that when they got a letter from us talking about PPP, that they somehow thought it had something to do with that original letter, which never used the phrase.

[00:03:33] Speaker 00:
It used a different phrase.

[00:03:34] Speaker 00:
And so this is why there's a huge error in the case.

[00:03:37] Speaker 00:
We now have a term that no parties ever negotiated for.

[00:03:40] Speaker 00:
No one knows what it means.

[00:03:41] Speaker 00:
And those three terms, they are not mutually exclusive.

[00:03:45] Speaker 01:
Do we at least know that if there was an agreement, which I understand you think there wasn't, but if there was an agreement, do we at least know that it covers at least the two or up to seven patents that were in the suit?

[00:03:56] Speaker 00:
It only includes the seven patents.

[00:03:59] Speaker 00:
So we know that.

[00:04:00] Speaker 01:
So we know that.

[00:04:01] Speaker 01:
If we have agreement on that, why isn't that enough to resolve this case if there is an agreement?

[00:04:07] Speaker 00:
Absolutely.

[00:04:07] Speaker 00:
Assuming there's an agreement and assuming we know that it's the seven patents, the reason we don't, Your Honor, is because covenant is not defined.

[00:04:15] Speaker 00:
All it says is, we covenant not to sue you on the PPP.

[00:04:19] Speaker 00:
I would agree with you that it's at most the seven.

[00:04:21] Speaker 00:
And there's another critical fact here for why it's the seven.

[00:04:25] Speaker 00:
If you go to page.

[00:04:27] Speaker 01:
But before you get to it, do we have to decide how much more than the seven it is?

[00:04:32] Speaker 01:
Or is it enough for us to say at least it's the seven and maybe there'll be another case where you sue them on patent number eight and they'll have a defense and you'll argue it out there.

[00:04:42] Speaker 00:
If you say it's just the seven, the case is fine.

[00:04:45] Speaker 01:
If we say it's at least the seven.

[00:04:47] Speaker 00:
Well, no, because there's no evidence that it could be more than the seven.

[00:04:50] Speaker 00:
And this is the point.

[00:04:51] Speaker 00:
The lawsuit.

[00:04:53] Speaker 01:
I'm probably not being clear on my question.

[00:04:55] Speaker 01:
Sorry.

[00:04:56] Speaker 01:
I understand you want it to be no more than the seven.

[00:04:59] Speaker 01:
But if we say it's at least the seven and anything above seven, seven to 22 or whatever else, is another case for another day,

[00:05:11] Speaker 01:
Are we done, or are you insisting on what basis that we have to say today what the full scope of the release is?

[00:05:19] Speaker 00:
We're not done because of this reason.

[00:05:22] Speaker 00:
We have no meaning of the minds on the seven, apparently.

[00:05:27] Speaker 00:
And that's actually a little unclear, because they've never actually said that it's more than seven.

[00:05:32] Speaker 00:
They have legal arguments, but factually, they never said it's more than seven.

[00:05:37] Speaker 00:
But we still don't know the scope of the covenant.

[00:05:39] Speaker 00:
This it wasn't remotely fleshed out or discussed in any way.

[00:05:43] Speaker 00:
Is it future looking?

[00:05:44] Speaker 00:
Is it back looking?

[00:05:46] Speaker 00:
We understand it only attaches to the one product.

[00:05:48] Speaker 03:
But just to focus, I understand the key point of your answer to Judge Stark's question is that if we don't know whether patents 8 through 22 are included, that's highly material.

[00:06:04] Speaker 03:
And there therefore was not a

[00:06:07] Speaker 03:
enforceable agreement so you can't resolve this case even if we thought it must have been correct okay that's correct honor and so

[00:06:19] Speaker 00:
The other fact that's critical here, I think, in the record, which may illuminate the fact that there's- Sorry.

[00:06:25] Speaker 03:
What is the standard of review we would apply to the district's determination that there was a sufficiently definite agreement to be an enforceable agreement?

[00:06:38] Speaker 00:
De novo, Your Honors.

[00:06:39] Speaker 03:
It's de novo because under- Is that a federal law question or an Indiana law question, the standard of review?

[00:06:45] Speaker 00:
Well, your standard of review is federal law, but here it actually doesn't matter because they're both identical.

[00:06:50] Speaker 00:
The Seventh Circuit employs de novo standard of review to assess whether an agreement exists, and the underlying substantive Indiana law that we cited, the Sands case, the Corson, and the Bailey case, they all say that the existence of an agreement is a question of law within Indiana.

[00:07:06] Speaker 01:
How about the element of meaning of the minds?

[00:07:08] Speaker 01:
Isn't that a factual finding?

[00:07:11] Speaker 01:
Don't we have to consider what the intent was of the parties?

[00:07:14] Speaker 00:
Well, if the evidence, Your Honor, is uncontroverted, you may be able to figure out whether there's a meeting of the minds.

[00:07:21] Speaker 00:
But the moment you have controverted evidence as to who understood what, we have an ambiguity.

[00:07:27] Speaker 00:
And that means we can't have an enforceable agreement, because the predicate for the existence of the agreement is a definiteness and unambiguous term.

[00:07:36] Speaker 01:
The district court said that there was a meeting of the minds.

[00:07:40] Speaker 01:
That's an element that needs to be found in order for there to be a valid contract under Indiana law, correct?

[00:07:47] Speaker 00:
There must be a meeting of the minds on all terms, yes.

[00:07:49] Speaker 01:
And the district court said that there was, right?

[00:07:51] Speaker 00:
That's what the district court said, yes.

[00:07:53] Speaker 01:
And we review that finding or conclusion for what?

[00:07:57] Speaker 00:
De novo.

[00:07:58] Speaker 00:
Because the question itself as to whether there's a meeting of the minds, which is necessary to have the existence of a contract, is reviewed de novo in Indiana and in the Seventh Circuit.

[00:08:09] Speaker 00:
But here's what I would say.

[00:08:10] Speaker 00:
Even if you employ abusive discretion review, it's an abusive discretion to conclude

[00:08:16] Speaker 00:
where the only patents at issue and ever discussed were the two and maybe the five within the family, and where they have admitted at page 327 of the record, it's a party admission, that even they didn't think that PPP included all the patents.

[00:08:34] Speaker 00:
And that was a phone call that occurred between the council and was memorialized in an email, and it's in the record.

[00:08:39] Speaker 00:
And that was then sent to them.

[00:08:40] Speaker 00:
And they didn't say, what are you saying?

[00:08:42] Speaker 00:
We never said that.

[00:08:43] Speaker 00:
So what we have then is even within some realm of deference, it's an absolute abuse of discretion.

[00:08:49] Speaker 00:
There is no basis to get from PPP to more than seven patents.

[00:08:54] Speaker 00:
There's just nothing in the record.

[00:08:55] Speaker 00:
And so the level of deference one would need would border on just complete amputation to be able to say, well, yeah, I guess it means that.

[00:09:03] Speaker 01:
Isn't it at least a reasonable interpretation of the record here?

[00:09:09] Speaker 01:
that the two CEOs, as you say, never talked about how many patents were within the scope of the release, and that they didn't talk about it because they both understood all along, it was all of your patents.

[00:09:21] Speaker 01:
Isn't that at least a reasonable interpretation?

[00:09:24] Speaker 00:
It's not at all reasonable, Your Honor, for this reason.

[00:09:26] Speaker 00:
If you go to page 266, what our client said is in the phone call, I only discussed the seven.

[00:09:33] Speaker 00:
We never discussed more than seven.

[00:09:35] Speaker 00:
And that's undisputed.

[00:09:37] Speaker 00:
Paragraph two.

[00:09:38] Speaker 00:
page 266.

[00:09:39] Speaker 00:
So there's no reasonable way to get to the conclusion that more than seven were at issue.

[00:09:45] Speaker 00:
They've never even offered a declaration themselves saying that they thought more than seven were at issue.

[00:09:50] Speaker 00:
The case is only about seven.

[00:09:52] Speaker 00:
The settlement was about the case.

[00:09:54] Speaker 01:
What matters, I think, is what is the objective manifestation of the intent.

[00:10:00] Speaker 01:
Even if they didn't think in their minds that it was more than seven,

[00:10:03] Speaker 01:
If objectively looking at what happened here, one were to say, they never talked about it because it was understood since March 2019 when you sent your first letter, all your patents were on the table, then we should uphold it.

[00:10:19] Speaker 00:
That's wrong, Your Honor, for two reasons.

[00:10:21] Speaker 00:
The 2019 letter never said that.

[00:10:23] Speaker 00:
It charged them with infringement on the two.

[00:10:26] Speaker 00:
And it told them.

[00:10:27] Speaker 00:
Go look at the other five in the family.

[00:10:29] Speaker 00:
We don't know everything your app is doing.

[00:10:31] Speaker 00:
So we have five more in the family.

[00:10:33] Speaker 00:
Go look at those.

[00:10:35] Speaker 00:
The only reference to patents beyond the seven was simply in the letter saying, we're in this space.

[00:10:41] Speaker 00:
We've been here.

[00:10:41] Speaker 00:
We have a large portfolio.

[00:10:43] Speaker 00:
But that was just a statement.

[00:10:45] Speaker 00:
We have a large IP portfolio.

[00:10:47] Speaker 00:
And then it said, you're infringing this narrow subset.

[00:10:50] Speaker 00:
And that's it.

[00:10:51] Speaker 00:
The case was about that narrow subset.

[00:10:54] Speaker 00:
And in the settlement talks, they only discussed that subset.

[00:10:58] Speaker 00:
And they were trying to resolve a case only about the seven patents.

[00:11:05] Speaker 00:
What I would also add, Your Honor, is

[00:11:08] Speaker 00:
If we get to then the question of whether there was even ever a meeting of the minds, was there an intention to have an agreement here, or was this just an agreement in principle?

[00:11:15] Speaker 00:
If you look at the record, I think it's 288 and 289, if you trace offer, counteroffer, counteroffer, back and forth, the principles were only talking about money.

[00:11:28] Speaker 00:
And then that's the only time there is a sort of an acceptance.

[00:11:30] Speaker 00:
The words OK was in response to the money.

[00:11:32] Speaker 00:
They reached it.

[00:11:33] Speaker 00:
Then the other side said, we're sending this to our lawyers.

[00:11:36] Speaker 00:
There was no statement of great deal.

[00:11:38] Speaker 00:
The very next statement was, by both of the lawyers, we need to detail this in a document.

[00:11:43] Speaker 00:
And in fact, their lawyers said, we don't want to tell the court to hold the presses, because we may still have disagreements.

[00:11:50] Speaker 00:
We're not there yet.

[00:11:51] Speaker 00:
And that's exactly the language of agreements in principle, which happens all the times in cases.

[00:11:57] Speaker 03:
The record doesn't seem to indicate who and through what mechanism contacted the district court to cancel what there was a session set for the next day or something?

[00:12:11] Speaker 00:
Correct.

[00:12:12] Speaker 00:
This was on a Friday, and there was a discovery hearing on the Monday, Your Honor.

[00:12:16] Speaker 00:
The record, I can go outside the record and tell you what happened.

[00:12:18] Speaker 00:
The record doesn't show exactly what happened, but a call was made by counsel, our counsel, to the courtroom deputy.

[00:12:25] Speaker 03:
By your counsel?

[00:12:26] Speaker 00:
Yeah, by our local counsel.

[00:12:28] Speaker 00:
We're counsel in California, but we had a local counsel in Indiana.

[00:12:31] Speaker 00:
And counsel for the other side, they called the court and deputy and actually said.

[00:12:35] Speaker 03:
I'm sorry.

[00:12:36] Speaker 00:
Sorry.

[00:12:37] Speaker 03:
Both sides counsel were on the call?

[00:12:38] Speaker 00:
Both sides counsel were on the phone, speaking to the courtroom deputy for the judge and said,

[00:12:42] Speaker 00:
that we've reached an agreement in principle.

[00:12:44] Speaker 00:
We've reached some sort of agreement.

[00:12:45] Speaker 03:
So the district court, in issuing the order canceling the Monday session, did not say agreement in principle.

[00:12:51] Speaker 03:
It says, I've been told that there was an agreement to settle.

[00:12:56] Speaker 00:
Yes.

[00:12:57] Speaker 00:
Exactly.

[00:12:58] Speaker 00:
And in that phone call, I'll tell you, Your Honor.

[00:13:01] Speaker 00:
our opposing counsel made pains to the court and deputy, I mean, we're outside the record now, but made pains to note to the court and deputy that, hold on, hold on, we're not necessarily quite there, which is completely consistent with his email, because at that point in time on the Friday,

[00:13:15] Speaker 00:
There was no signed final agreement.

[00:13:17] Speaker 00:
Everyone knew that we still had to work it out.

[00:13:19] Speaker 00:
But what we were doing is what we do all the time in litigation.

[00:13:22] Speaker 00:
The district courts are obviously busy with hundreds of cases.

[00:13:25] Speaker 00:
When you reach an agreement in principle, you tell the district court so that they can hold the presses and devote the bandwidth to other cases that are in true litigation mode.

[00:13:32] Speaker 00:
And we're going to work it.

[00:13:33] Speaker 03:
The district court on that same day says the court has been notified that the parties have agreed to a settlement of this case.

[00:13:40] Speaker 03:
This is at A89.

[00:13:42] Speaker 03:
have agreed to a settlement in principle, so I'm going to suspend everything, but I'm not going to cancel it yet because... That's what the court wrote, but what happened is reflected in the emails where the lawyers who were on the... Do you know how big a difference it would make if that call had been recorded and actually the words in principle were used?

[00:14:07] Speaker 00:
I don't think it would make much of a difference at all, because I think when the lawyers are sitting there in the email saying, we have an agreement, what they're talking about is we've got the foundation of the matters that have been between the business people discussed.

[00:14:19] Speaker 00:
We're now going to work out the release and the covenant.

[00:14:21] Speaker 00:
And we obviously expect we're done.

[00:14:23] Speaker 00:
And the point of the message to the district court is, hold the presses on this.

[00:14:27] Speaker 00:
Focus on your other cases.

[00:14:29] Speaker 00:
And if it all falls through, we'll come back to you.

[00:14:31] Speaker 00:
So that's the fundamental point.

[00:14:33] Speaker 02:
Counsel, your time is mostly exhausted.

[00:14:36] Speaker 00:
I will save the balance of my time.

[00:14:37] Speaker 02:
Thank you.

[00:14:38] Speaker 02:
I'm going to give you two minutes for a bottle.

[00:14:40] Speaker 00:
Thank you, Your Honor.

[00:14:45] Speaker ?:
Mr. Sternstein.

[00:14:45] Speaker 02:
Good morning.

[00:14:46] Speaker 02:
May it please the Court?

[00:14:48] Speaker 02:
What I'd like to do is maybe address primarily the questions that were raised by Your Honors during this discussion and from the opening statement.

[00:15:04] Speaker 02:
First of all,

[00:15:05] Speaker 02:
Let me address the burden of proof in this case.

[00:15:10] Speaker 02:
First of all, the standard of review in this case.

[00:15:17] Speaker 02:
There is a conflict of decisions in the Seventh Circuit.

[00:15:23] Speaker 02:
There is actually one case in the Seventh Circuit that recognizes the conflict, but regrettably doesn't resolve that conflict.

[00:15:32] Speaker 02:
So obviously, you have the Newkirk decision that is cited by the appellants saying de novo, you have the Carr decision, which is an earlier decision doing abuse of discretion.

[00:15:47] Speaker 02:
In the reply brief of the appellants, they say that under the Seventh Circuit rules, it is the more recent case that prevails.

[00:15:58] Speaker 03:
Why shouldn't I look at it this way?

[00:16:02] Speaker 03:
So the ordinary formulation of abuse of discretion says there's an abuse of discretion if there's an incorrect legal conclusion.

[00:16:12] Speaker 03:
or if there's a clearly Arona is fact finding, or if there's some sort of crazy other kind of judgment.

[00:16:20] Speaker 03:
So to say abuse of discretion is actually not yet to answer what the standard of review is for the points in dispute.

[00:16:29] Speaker 03:
So once you say the key point in dispute, there are two points in dispute.

[00:16:35] Speaker 03:
was this email exchange meant to be an agreement versus an agreement in principle?

[00:16:40] Speaker 03:
But let's say more important, whether there were essential terms missing.

[00:16:45] Speaker 03:
And so there's actually no conflict, because the essential terms missing is a matter of law, and therefore an abuse of discretion if it's incorrect as a matter of law.

[00:16:57] Speaker 02:
OK.

[00:16:57] Speaker 02:
I would say it a little differently, Your Honor, in the context that I think the issue to be decided

[00:17:04] Speaker 02:
as just Stark was pointing out.

[00:17:07] Speaker 02:
is really a factual issue.

[00:17:10] Speaker 02:
What was the intent of the parties?

[00:17:12] Speaker 02:
And the intent of the parties is factual.

[00:17:15] Speaker 02:
And if anything, that would be clear here.

[00:17:17] Speaker 02:
All right, I think that I see.

[00:17:19] Speaker 01:
Certainly contracts are the issue of law.

[00:17:22] Speaker 01:
Did you say that in your brief?

[00:17:24] Speaker 01:
I don't know that I saw any reference to it.

[00:17:25] Speaker 02:
No, we did not say that in our brief as far as the factual issue.

[00:17:29] Speaker 02:
We were simply addressing the Carr case that said abuse of discretion.

[00:17:37] Speaker 02:
in the question that was raised, that raises it into a different significance.

[00:17:45] Speaker 02:
And that's where, in response to that question, I'm pointing out that point.

[00:17:52] Speaker 02:
You have a questionable look.

[00:17:54] Speaker 02:
I don't know if I've answered it.

[00:17:55] Speaker 02:
Oh, I always have questionable ones.

[00:17:58] Speaker 02:
OK.

[00:17:58] Speaker 02:
Certainly, Your Honor.

[00:18:01] Speaker 02:
So number one, we would say,

[00:18:05] Speaker 02:
abuse of discretion.

[00:18:07] Speaker 02:
And if anything, if you do go past that, we would say it's an intent issue.

[00:18:12] Speaker 02:
The next thing is, what was the intent of the parties?

[00:18:19] Speaker 02:
And if you look at what law applies, what law applies to the formation, the construction, and the enforceability of a settlement agreement is the law of Indiana.

[00:18:34] Speaker 02:
District court said that it was the law of Indiana that applied to that.

[00:18:39] Speaker 02:
And we said it was the law of Indiana that applied to that.

[00:18:43] Speaker 02:
And it was never disputed by opposing counsel, by the appellant.

[00:18:48] Speaker 02:
So we would say it's clearly the law of Indiana.

[00:18:51] Speaker 02:
And that's an important issue, because the law of Indiana is very favorable, and I would say even presumptively, to finding that settlement agreement

[00:19:03] Speaker 02:
is valid and enforceable in the case law that we've cited.

[00:19:09] Speaker 01:
Let me run something by you.

[00:19:11] Speaker 01:
Sure.

[00:19:11] Speaker 01:
If we were to review the meeting of the minds or intent element for clear error and say there was no clear error in the district court's finding that there was a meeting of the minds, but also say that it's completely unambiguous and unclear what the scope of the release term, this patent portfolio term, is, where would that leave us?

[00:19:31] Speaker 01:
And what would we do?

[00:19:34] Speaker 01:
There's an agreement but with an ambiguous material term.

[00:19:40] Speaker 02:
Okay, if it is under Indiana law, first of all, if it is unambiguous,

[00:19:49] Speaker 02:
That's the end of it.

[00:19:50] Speaker 02:
If there's a clear intent, it's unambiguous.

[00:19:53] Speaker 02:
There's no interpretation either of it.

[00:19:54] Speaker 02:
That's easy.

[00:19:55] Speaker 02:
OK.

[00:19:55] Speaker 02:
If it is ambiguous under Indiana law, then the court can say, we can now look what was the intent of the parties and then still enforce the agreement.

[00:20:07] Speaker 01:
And where does that leave us here?

[00:20:09] Speaker 01:
You have a release to two patents, seven patents, 22 patents, or an infinite number.

[00:20:15] Speaker 02:
I would say if the ambiguity was resolved,

[00:20:18] Speaker 02:
So you have an unambiguous agreement that there's the meetings of the mind.

[00:20:26] Speaker 02:
That's it.

[00:20:27] Speaker 02:
Keep in mind, the only thing that was asked for in our motion wasn't a definition.

[00:20:33] Speaker 02:
And the Indiana courts don't ask for a definition.

[00:20:37] Speaker 02:
We simply said enforce the agreement and dismiss the case.

[00:20:42] Speaker 02:
And that's what the court did.

[00:20:44] Speaker 02:
The court said, I find this unambiguous, and I'm going to enforce it and dismiss the case.

[00:20:51] Speaker 02:
That's all that's necessary.

[00:20:52] Speaker 02:
But can we simply affirm the decision without setting forth what the agreement consisted of?

[00:21:00] Speaker 02:
Yes.

[00:21:01] Speaker 02:
You could do it because under- Couldn't that leave an argument for a future case?

[00:21:06] Speaker 02:
that argument can be made.

[00:21:08] Speaker 02:
And that's exactly what Judge Starks was talking about.

[00:21:11] Speaker 03:
And could that argument be that in the next case with patent number eight?

[00:21:18] Speaker 03:
Can it be that the agreement is so ambiguous that it's unenforceable?

[00:21:24] Speaker 02:
Well, you've already had a decision that it is enforceable.

[00:21:27] Speaker 02:
So that question would be, now, what is the intent?

[00:21:31] Speaker 03:
So in order to decide that it's enforceable, we actually do need to decide whether it is sufficiently ambiguous to be enforceable.

[00:21:46] Speaker 03:
Correct.

[00:21:47] Speaker 03:
So it sounds like we can't really escape dealing with the uncertainty of whether this patent covers patents 8 through 22.

[00:21:59] Speaker 02:
Well, you're going to consider it, certainly.

[00:22:01] Speaker 02:
But what you're actually holding as opposed to what might be dicta in the case is you could say.

[00:22:08] Speaker 03:
I thought in response to my question you said that if we say that this is enforceable so as to dismiss this case, the question of enforceability in the next case, the other side will be precluded by.

[00:22:24] Speaker 02:
of enforceability, correct.

[00:22:26] Speaker 02:
The issue of enforceability would be already established.

[00:22:29] Speaker 02:
You are correct.

[00:22:30] Speaker 01:
OK.

[00:22:30] Speaker 01:
The standard, as I understand it, for Indiana law would be that all essential terms need to be sufficiently definite to allow reasonable and logical interpretation.

[00:22:40] Speaker 01:
That's from the Sand case.

[00:22:42] Speaker 00:
Correct.

[00:22:43] Speaker 01:
Are you arguing that?

[00:22:46] Speaker 01:
this portfolio term could be sufficiently definite to allow reasonable and logical interpretation, even if we leave it having some degree of ambiguity above the seven patents.

[00:22:57] Speaker 02:
If, in your opinion, you leave it?

[00:23:00] Speaker 02:
Yes.

[00:23:00] Speaker 02:
Yes.

[00:23:01] Speaker 01:
I think it is.

[00:23:02] Speaker 01:
And is that what the district court did, in your view?

[00:23:05] Speaker 02:
I think, in essence, it is.

[00:23:07] Speaker 02:
What was the holding of the district court?

[00:23:11] Speaker 02:
The district court held that the

[00:23:15] Speaker 02:
Agreement was enforceable, and therefore, the case was dismissed.

[00:23:22] Speaker 02:
That was actually the holding.

[00:23:24] Speaker 02:
In getting there, the district court said, well, make comments on what it might be interpreted as.

[00:23:32] Speaker 02:
But the actual holding was just, I find it unambiguous, and therefore, I'm going to enforce it, and therefore, the case was dismissed.

[00:23:44] Speaker 01:
If we affirm, and there is a next case, are you reserving the right to argue that you have a license to all of their patent portfolio?

[00:23:55] Speaker 02:
All of the patent portfolio, and I would make one correction to one part of the brief, Your Honor.

[00:24:00] Speaker 02:
All of their portfolio from patents that existed at the time of the agreement between the parties.

[00:24:07] Speaker 02:
July of 2020?

[00:24:09] Speaker 02:
Correct, as of July of 2020.

[00:24:11] Speaker 03:
What's the basis for that timing limit?

[00:24:14] Speaker 02:
That timing limit was actually in the negotiations, in what was sent by the parties.

[00:24:24] Speaker 02:
It's also explained on page 35 of our brief.

[00:24:28] Speaker 02:
Regrettably, on page 48 of our brief, when we concluded, we did not put in that comment.

[00:24:34] Speaker 02:
But it's consistent with what we have said before.

[00:24:36] Speaker 03:
Because I don't see that in the little four numbered points.

[00:24:43] Speaker 02:
If you look at, I'll dig it out, Your Honor, but if you look at

[00:24:50] Speaker 02:
Page 35 of our brief, for one thing.

[00:24:53] Speaker 02:
I'm really interested in the appendix, not your brief.

[00:24:56] Speaker 02:
OK.

[00:24:57] Speaker 02:
And which page from the appendix are you looking at, Your Honor?

[00:25:00] Speaker 03:
Well, the 288 or 289 to 290 is, and a couple more pages, is the central set of email exchanges up to the, basically up to the telephone call to the court.

[00:25:18] Speaker 01:
Isn't it correct that as far as the discussion went about the portfolio, it was just always the phrase, neuro-optics, few kilometer patent portfolio, and there was no discussion of applications or date of existence of patents?

[00:25:33] Speaker 02:
We were taking the language as it said.

[00:25:36] Speaker 02:
And that's the PPP, if you will.

[00:25:39] Speaker 02:
pupillometer patent portfolio is talking about their patent portfolio.

[00:25:44] Speaker 02:
So it's not talking about applications.

[00:25:46] Speaker 02:
And we're saying that was an agreement reached on that date.

[00:25:50] Speaker 01:
So I think I have the same question as Judge Taranto.

[00:25:53] Speaker 01:
Why is the date of the existence of the patents determined by the date of these emails as opposed to March 2019 when they first contacted you or some date in the future you have a license to any applications that may materialize into patents?

[00:26:14] Speaker 01:
How do we know what you all agreed on?

[00:26:15] Speaker 02:
I would say that if we agree to the patents, they're talking about that date.

[00:26:21] Speaker 02:
That's why I would interpret it that way.

[00:26:22] Speaker 01:
But they could be talking about patents in July of 2020 that include applications that will turn into patents in 2022.

[00:26:30] Speaker 02:
And my response would be patents that exist at that date means patents that exist at that date, not something that later issues.

[00:26:40] Speaker 01:
Fair enough, but sorry, does it say patents that exist at this date?

[00:26:44] Speaker 02:
That wasn't something that is specified specifically.

[00:26:49] Speaker 02:
I would say if we're talking about patents and the agreement is that date, that's when it would be looked at.

[00:26:55] Speaker 02:
We do talk about the 152 patent.

[00:26:58] Speaker 02:
We added it in during our brief.

[00:27:00] Speaker 02:
And that's because that was a patent that did issue prior to that date.

[00:27:05] Speaker 02:
It was based on the prior patents, but it issued prior to the date of the

[00:27:11] Speaker 02:
parties, that's too what we proposed in discussions with them.

[00:27:17] Speaker 02:
So we did do that.

[00:27:19] Speaker 02:
But in looking at one of the issues that was talked about too is what is reasonable?

[00:27:26] Speaker 02:
What is a reasonable interpretation?

[00:27:30] Speaker 02:
And I would say certainly a reasonable interpretation is that

[00:27:36] Speaker 02:
It has to be all the patents.

[00:27:37] Speaker 02:
It's not just limited to seven patents.

[00:27:41] Speaker 02:
The language in the agreement was the pupilometer patent portfolio.

[00:27:48] Speaker 02:
There's nothing in that language that limits it to seven patents.

[00:27:53] Speaker 02:
And you do look to the outward manifestation of that, as you mentioned, in discussing that.

[00:28:00] Speaker 02:
The only outward manifestation at all between the parties that was ever raised

[00:28:06] Speaker 02:
was that the discussion in that March 27th letter that said, this is our patent portfolio on our pupilometer technology.

[00:28:20] Speaker 02:
And I would say that is no different than PPP.

[00:28:25] Speaker 03:
Can I ask you this?

[00:28:26] Speaker 03:
Sure.

[00:28:27] Speaker 03:
Am I understanding correctly that you think that the district court's footnote referring to components is incorrect?

[00:28:35] Speaker 02:
I would say that that's incorrect.

[00:28:36] Speaker 02:
Correct.

[00:28:38] Speaker 02:
Correct.

[00:28:39] Speaker 03:
I agree with that.

[00:28:40] Speaker 03:
Why doesn't, and I think Neuroptics lawyer suggested this, why doesn't that either

[00:28:51] Speaker 03:
mean that it's actually pretty darn deeply uncertain what patents, even as of this date, would be covered.

[00:29:04] Speaker 03:
Because even the district court thought that patents, I don't know if it's all, the entirety of a patent or just patent claims that were limited to components would not be covered.

[00:29:14] Speaker 03:
You think, oh no, no, no, it actually covers.

[00:29:18] Speaker 03:
Patents that are described in that footnote and in any event if or yeah And if if the meaning has is what the district court said it is mainly having to do with components Isn't it?

[00:29:32] Speaker 03:
I guess I looked at some of these other patents, right?

[00:29:35] Speaker 03:
It's not self-evident to me at least which ones would be described as component patents, okay?

[00:29:43] Speaker 02:
In our view of what it is and

[00:29:46] Speaker 02:
and why I said that the district court was wrong in that footnote, Your Honor, is in why we tried to be more specific in our current briefs as to what we're talking about.

[00:29:59] Speaker 02:
Because at this point in time, we know what patents were issued by the date of the agreement.

[00:30:05] Speaker 02:
And I would say being more specific, we're looking at the patents that are in that letter, which I'd also say is the same as PPP.

[00:30:16] Speaker 02:
And if you do look, like you said, on some of the specific patents, some of them could be construed as components to be used with a device.

[00:30:26] Speaker 02:
For example, there were basically like a contact lens that is specifically to be used with the machines for a pupillometer.

[00:30:36] Speaker 02:
So I would term that as a component.

[00:30:39] Speaker 02:
And that's why I think being as most specific as we can, we would say, take a look at that

[00:30:46] Speaker 02:
at that letter, and that defines it in the best way possible.

[00:30:54] Speaker 02:
All right.

[00:30:55] Speaker 02:
Do you have one final thought, Counsel?

[00:30:57] Speaker 02:
Yes, I would.

[00:30:58] Speaker 02:
One thing to sum it up, Your Honor, is I think if you look at what is a reasonable interpretation on this agreement, what would be reasonable is it would be looking at the, it would be

[00:31:15] Speaker 02:
that, number one, the agreement is not ambiguous, common language, common use in patent cases.

[00:31:24] Speaker 02:
If you do try and if you find some ambiguity and you want to try to fix that ambiguity or resolve that ambiguity, as the courts say, then you would be going into what is reasonable.

[00:31:40] Speaker 02:
And what is reasonable is,

[00:31:42] Speaker 02:
outward manifestation, the only outward manifestation, is what's in that letter.

[00:31:50] Speaker 02:
And that includes the 22 US patents.

[00:31:54] Speaker 02:
And there was never, never any outward manifestation of limiting the phrase to seven patents only.

[00:32:01] Speaker 02:
Thank you, Counselor.

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

[00:32:07] Speaker 02:
Mr. Atrasiabi, we'll give you two minutes for rebuttal.

[00:32:16] Speaker 00:
Thank you, Your Honor.

[00:32:17] Speaker 00:
I'd like to start with one critical point to, I believe, your question, Judge Stark.

[00:32:21] Speaker 00:
And that is, even if it's just the seven patents, or even if it's all 22, or even if we pick 15, we don't have clarity even as to what products this covenant and promise allegedly attaches to.

[00:32:34] Speaker 00:
It's our understanding.

[00:32:35] Speaker 00:
It's only their application.

[00:32:37] Speaker 01:
They think and used to work there enough here to allow a reasonable and logical interpretation.

[00:32:42] Speaker 01:
Aren't you asking for too much?

[00:32:44] Speaker 00:
No, because the covenant, we understand it to only attach to their product and it to not in any way be a license.

[00:32:52] Speaker 00:
to be able to go out and create new products under one of our other 18 patents, which are in medical diagnostic areas, head rests, all these things that they don't even do.

[00:33:02] Speaker 01:
Aren't there enforceable contracts out there?

[00:33:04] Speaker 01:
We see them in court probably every day that have ambiguous terms, and that's what leads to litigation.

[00:33:11] Speaker 00:
You have contracts with ambiguous terms, but you can't say that because there's an ambiguity, therefore a contract exists, and that's the difference.

[00:33:17] Speaker 00:
If a contract unequivocally exists, sometimes there's an ambiguity in it, and there's a process to run it to ground.

[00:33:23] Speaker 00:
But the threshold question here is, under the Ochoa case from Indiana, did we even have a meeting of the minds on all the definite terms?

[00:33:30] Speaker 00:
Because if there's an ambiguity on the essential material terms, then there isn't even a contract that springs into existence.

[00:33:37] Speaker 01:
And here, the covenant is- I still don't understand why we don't review that for clear errors.

[00:33:42] Speaker 01:
And the district court found there was a meeting of the minds sufficient to dismiss this case.

[00:33:47] Speaker 00:
Well, because the standard of view is de novo.

[00:33:49] Speaker 00:
But even under clear error, there's no facts in the record to even support a meeting of the mind.

[00:33:54] Speaker 00:
Because the district court concluded that the meeting of the minds was on this convoluted definition, which no one has ever advanced or understood.

[00:34:01] Speaker 00:
It's indecipherable.

[00:34:03] Speaker 00:
How could there have been a meeting of the minds on that?

[00:34:05] Speaker 00:
It's impossible.

[00:34:06] Speaker 00:
Because no one has said they thought that's what it meant.

[00:34:09] Speaker 00:
And we don't even know what it means today when you take that sentence and the footnote together.

[00:34:13] Speaker 00:
The other point I think I would add is, and this is critical under the Teichy case of Indiana, if there's a construct that's reasonable on the one hand versus one on the other hand that leads to odd and unjust results, you always go with a reasonable one.

[00:34:26] Speaker 00:
Well here, it's undisputed that the only issue was their one application, which we believed infringed two patents, maybe five more.

[00:34:34] Speaker 00:
The idea that that leads to a covenant on

[00:34:37] Speaker 00:
with a right to create new products is beyond the bounds of anything that was ever discussed anywhere.

[00:34:43] Speaker 00:
It can't have been agreed.

[00:34:44] Speaker 00:
And that's unjust.

[00:34:45] Speaker 00:
I mean, our client, as explained, and it's undisputed, has invested years and tens of millions of dollars in a portfolio.

[00:34:50] Speaker 00:
Just because it sent a letter a few years ago saying that we have a portfolio doesn't mean that they now get a covenant to the whole portfolio.

[00:34:56] Speaker 00:
That's the fundamental problem.

[00:34:57] Speaker 02:
Council, your time has expired.

[00:34:59] Speaker 02:
And I think we have your case.

[00:35:01] Speaker 02:
And the case is submitted.

[00:35:03] Speaker 00:
Thank you, Your Honors.

[00:35:03] Speaker 02:
That concludes our arguments for today.