[00:00:00] Speaker 00:
And the first case is for personalized media communications, LLC versus Apple Inc.

[00:00:07] Speaker 00:
21-2275.

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Councilor Martin, you reserve three minutes of your time for rebuttal.

[00:00:17] Speaker 03:
Is that correct?

[00:00:18] Speaker 03:
Correct, Your Honor.

[00:00:20] Speaker 00:
All Council may remove their masks during argument.

[00:00:24] Speaker 03:
Thank you, Your Honor.

[00:00:25] Speaker 00:
Ms.

[00:00:25] Speaker 00:
Mullen, really proceed with your order.

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

[00:00:28] Speaker 01:
Good morning, Your Honors, and may it please the Court.

[00:00:30] Speaker 01:
Kevin Martin on behalf of the Appellant PMC.

[00:00:33] Speaker 01:
With me today, I have Thomas Scott.

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Your Honors, under Hyatt, an applicant can avoid prosecution latches by cooperating with the PTO to advance its applications.

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Within a few years of filing its applications, PMC had offered all of the cooperation that this Court found lacking in Hyatt.

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It had grouped its applications by subject matter, assigned them definite priority dates, reduced their number pursuant to the

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a consolidation agreement, agreed to comply with an administrative requirement, and offered terminal disclaimers.

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The district court committed a legal error by dismissing all of that cooperation as, quote, not material and abused its discretion in finding latches under the totality of circumstances.

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I would like to address three points this morning.

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First, the district court's treatment of Hyatt as a white horse case cannot be squared with this court's actual reasoning and holding in Hyatt

[00:01:21] Speaker 01:
in the vast differences during prosecution of the two sets of applications.

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But what would you say is the chief difference between Hyatt and this case?

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What really seemed to trouble, as I read the decision, what really seemed to trouble the court in Hyatt was the fact that after filing that many applications in 1995, Hyatt then spent 20 years trying to make matters even worse for the PTO.

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He agreed to cooperate with the PTO and then never followed through, multiplied the number of applications,

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And the PTO put in evidence that he serially violated rules and regulations that are designed to try to make prosecution forward in an expeditious fashion.

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The very opposite is the case here.

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Certainly by the end of the 1990s, PMC had entered the consolidation agreement, which was a reasonable exercise of docket management by the PTO.

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It had provided, initially in 1995 and then certainly by 1998,

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demarcations of its applications by subject matter and assign them all definite priority dates.

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We include a sample of that table in our brief.

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So where Hyatt was engaged in activity that seemed designed to delay things for delay's sake, what the evidence shows is that in the 1990s, years before Apple began developing its supposed intervening rights.

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What if hypothetically a patent applicant was found to very clearly engage in

[00:02:48] Speaker 03:
unreasonable delay for 15 years or so, and then for the final five years seem to be a good faith player in trying to prosecute the patents that had been pending for a long time quickly to issuance, because after all, all patent applicants ultimately want to get patents at the end of the day.

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But does the, in my hypothetical, the last five years of

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good faith effort absolve the applicant of the first 15 years of unreasonable delay?

[00:03:22] Speaker 01:
So I think in a case like that, Judge Chen, you'd be looking at a cancer research situation where this court almost seemed to assume in that case that the applicant's conduct for nine years had been an abuse of the patent system, but didn't even reach that issue because it concluded there were not intervening rights.

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And so in this situation,

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The question would become, okay, did intervening rights develop during that initial period of delay?

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And if they did, then there's prosecution latches.

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But if they did not, then just like in cancer research, the defense is not established.

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But again, that's not this situation.

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Here, Apple put in, for example, Apple and the district court focused on the period between the priority date of 1987 and the filing of the applications in 1995.

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There was no evidence that anyone, Apple included,

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developed intervening rights with respect to this patent during that eight year period.

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Apple and district court focused on the period after 2003.

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But by that point, prosecution of these applications was well underway.

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As we point out in our reply brief, and as the record shows, PMC actually had some applications allowed in the 1990s and they paid the allowance fee on those before they were retracted.

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So this is not a company which is just trying to drag things out.

[00:04:36] Speaker 00:
What about where you have the conduct, the early conduct two decades ago that let's say was egregious in nature and here for example the court says that PMC would prosecute his pants serially and it goes on describing, I think you're aware of that paragraph, second PMC would keep his pant portfolio hidden

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until the claim subject matter became widely adopted in the industry.

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And I guess that's when you spring out and seek to enforce the previously hidden patent.

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In a situation like that, doesn't the prior conduct, the historical conduct, come into play?

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Under a fatality of the circumstances test, I guess the court could look at anything.

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afford at what weight it's due.

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The problem with what the district court did here was afford, in a sense, overwhelming weight to conduct that is expressly allowed by statute in the absence of any evidence that intervening rights had developed during those periods.

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This court was very clear in simple technologies too, that you should not be applying this doctrine in such a way that you're officiating statutory provisions.

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In our case, the law was clear for decades that you were allowed to engage

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in serial prosecution of continuation applications.

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It was a very common practice during that period.

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And Congress, in a sense, grandfathered that in 1995, when it did not, in the context of the grandfathering provision for the GATT implementing legislation, put in any kind of maximum period.

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It's simply put in place the grandfathering period.

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I would also note that- Mr. Martin, the district court was aware of all that, and we're reviewing for abuse of discretion.

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Are we not?

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You are your honor.

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So under a totality of circumstances and you're concerned about the weight that was given or not given to a particular piece of evidence, I don't know that that does it for you.

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How could we find an abuse of discretion and how the district court weighed all of that?

[00:06:42] Speaker 01:
Sharon, if you look at the totality of the circumstances test and the abuse of discretion standard, both of those require the district court to focus on legally relevant factors and on evidence, which is actually supported by the record.

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And so on the subject we were just talking about, we think if you look at symbol two, and if you look at the ultimate holding in Hyatt, which was not that Hyatt was guilty of latches because he filed his applications too late.

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The court said that Hyatt had had the chance to avoid prosecution latches if he had behaved better during prosecution.

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We think it's clear that simply saying that this continuation application was filed eight years after the priority date

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Therefore you lose is not the law.

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Did Hayat say something like the magnitude of the delay alone was enough to find that it was prima facie unreasonable?

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Hayat took into account, well, so two points there, Judge Chen.

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First, if you look at the, again, looking at the remand order, the court did not say that Hayat's applications were dead in the water simply because he filed them too late.

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The court remanded with specific instructions for Hayat to try to explain

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his delays.

[00:07:45] Speaker 03:
Right, I'm just trying to remember.

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I thought there was one passage that pointed out that just a long period of delay from where things stood at that point in time back to the earliest priority date Mr. Hayek was relying on was such a long

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span of time, but that alone was enough to conclude, at least at a prima facie level, that there was unreasonable delay.

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Am I mis-remembering the opinion?

[00:08:13] Speaker 01:
There is language like that, Your Honor, but I think that also needs to be viewed in the context of HIATS being a Section 145 action not involving an issued patent, which has a presumption of validity.

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And so when you look at what was happening in that case, you had that long initial period

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Well, symbol technologies, too, also had a long period of delay.

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And in that case, the patent owner got hit with prosecution latches, right?

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He was hit by a prosecution latch.

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That was a granted patent.

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It was a granted patent.

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So in the Lemelson situation, what the evidence showed was that he waited, I think, between 19 and close to 40 years even to file the applications.

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And there was very strong evidence in that case that during that intervening period, he had been specifically monitoring developments in industry and crafting the claims

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So what this court said was that there was strong evidence of intervening rights.

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Apple put in absolutely no evidence in this case that anyone was developing the technology claimed by the 091 patent.

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between 1987 and 1995.

[00:09:11] Speaker 03:
The decrypting method in question, the first time that was introduced into an application was in 2003.

[00:09:18] Speaker 03:
Is that right?

[00:09:20] Speaker 01:
Well, no, your honor.

[00:09:21] Speaker 01:
It was limited to decryption in 2003, but the actual claim was introduced in 1996 with enabled and disabled language.

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And then over the course of prosecution, enabled and disabled

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was narrow to decrypted and encrypted.

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And that was the same year Apple came out with Fair Play?

[00:09:42] Speaker 01:
2003 is the same year that Apple came out with Fair Play, Your Honor.

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But again, Apple put in absolutely no evidence that the broader enabling and disabling language that had appeared in the claims beginning in 1996 would not have covered Fair Play.

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So if you look at a case like

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Webster, that involved a reissue patent where there was a broadening.

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And what was agreed just in that case was that the applicant had been monitoring the industry and then broadening claims in a reissue.

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What we have here is a claim going in with broader language.

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And then as is very typical, obviously, during prosecution, it was narrowed over time.

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And I think there's no, even beyond Apple's failure to show that the 2003 amendment was broadening in some way, it's clearly narrowing.

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If you look at this court's decision the last time

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Apple and PMC were before the court a couple of years ago in the IPR appeal.

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The question there was whether decryption is limited only to digital data and as opposed to scrambled analog data.

[00:10:46] Speaker 03:
I don't recall.

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Is this an argument that was made below about

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whether this enable, disable, signal claim necessarily and clearly encompassed encrypting decrypting?

[00:11:01] Speaker 01:
Well, no, Your Honor, and that's part of the problem, which is that throughout this case, we've been reacting to arguments made late or not at all by Apple.

[00:11:10] Speaker 03:
And so the question- I'm just trying to figure out for purposes of

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what I'm responsible for, do I need to actually make some kind of independent inquiry as to whether or not I should understand previously filed claims here as necessarily and clearly encompassing the encrypting, decrypting method claim that was introduced in 2003?

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So I think, Your Honor, what you could do for your purposes is decide that Apple put in no evidence at all, expert or otherwise, that the 2003 claim was in some ways broader

[00:11:41] Speaker 01:
The 2003 version of the claim was somebody broader than the claim that had been there since 1996.

[00:11:47] Speaker 00:
Let's go back a little bit to the comment that you made regarding the procedural posture of this case, making it different from some of our precedent.

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Hyatt was a section 145 case.

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This is a validity case.

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Explain to me, in your mind, what difference does it make?

[00:12:07] Speaker 01:
The difference that it makes is twofold, your honor.

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This court has been clear in cases like Hyatt, as well as Boeghese, that at the end of the day, that the PTO was responsible for managing its docket and has given deference with respect to its docket management decisions.

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In Hyatt, the PTO had refused to issue patents to Mr. Hyatt.

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And when Mr. Hyatt brought an action challenging that, the PTO raised prosecution latches.

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And in our case, the PTO has never raised prosecution latches against us.

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And when an individual examiner raised prosecution latches against us, the PTO was an organization.

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The issue of abandonment was raised in this case.

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It was raised by the individual examiner, and then the PTO vacated that order.

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I think as much as agencies ever do apologize to us, and it's never raised it again.

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My understanding is, though, that the prosecution latches rejection was withdrawn not because the supervisor examiner disagreed with the merits of that determination, but it was because the supervising examiner was

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under what we now know is that misimpression at the time that prosecution latches couldn't be applied by a patent examiner.

[00:13:21] Speaker 01:
Sure.

[00:13:22] Speaker 01:
Apple argues that.

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There's absolutely no evidence to support that.

[00:13:25] Speaker 01:
And if you look at the timeline here, the timeline refutes it because the board's decision in Bogeysi actually predated the supervisory examiner's action vacating

[00:13:38] Speaker 03:
Federal Circuit Bogeysi decision didn't come out till after the supervising examiner took the action.

[00:13:44] Speaker 01:
That's true, Your Honor, but the question is what was in the supervisory examiner's mind at the time.

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Apple has no evidence of what was in the supervisory examiner's mind at the time.

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in the evidence that is at the board.

[00:13:54] Speaker 03:
There was a statement saying something like prosecution latches isn't a patentability determination, and we should only be making patentability determinations.

[00:14:02] Speaker 01:
No, Your Honor.

[00:14:04] Speaker 01:
There's not a statement that says prosecution latches is not a patentability determination.

[00:14:07] Speaker 01:
What the supervisor examiner said was that this was not undertaken subject to an investigation authorized by law or something.

[00:14:18] Speaker 01:
And if you look at examiner Luther's memo,

[00:14:21] Speaker 01:
It's a bit of a hot mess.

[00:14:23] Speaker 01:
I mean, in addition to his comments about our conduct during prosecution, he's attacking law firms for trying to represent people in infringement litigation where they have witnesses who work for the law firm.

[00:14:36] Speaker 04:
Can we go back to Hyatt just for a moment?

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The district court found that the evidence of your client's strategy

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of delay in submarine patents was very strong here and I think maybe a distinction or stronger than even in Hyatt.

[00:14:55] Speaker 04:
Was it abuse of discretion to make those findings and to give that great weight?

[00:14:59] Speaker 01:
It was, Your Honor, for at least two reasons.

[00:15:00] Speaker 01:
First, we think the evidence does not support a finding that PMC was engaged in a submarine patenting process.

[00:15:09] Speaker 00:
There was evidence that... Is that a factual issue for us?

[00:15:12] Speaker 01:
That is a factual issue reviewed for clear error.

[00:15:16] Speaker 01:
The evidence the district court was pointing to concerned licensing efforts in the early 1990s.

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And the evidence is actually extraordinarily clear that by 1992, so years before these applications were filed, a decade before the intervening rights period, PMC had surfaced.

[00:15:31] Speaker 01:
The evidence, as we walked through in the brief, shows that we were reaching out to dozens of companies in that period, including there's evidence in Apple.

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to talk to them about our technology.

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And then the second important point in response to that question is that by 1989, our complete specification had issued.

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The technology was out there.

[00:15:53] Speaker 01:
And as Apple has never made, it abandoned any 112 argument that the claims of the 091 patent were not disclosed by the specification.

[00:16:01] Speaker 00:
Okay, we ate up all your rebuttal time with our questions, so we'll restore your rebuttal when you get back up, okay?

[00:16:08] Speaker 00:
Thanks, Your Honor.

[00:16:09] Speaker 00:
Thank you.

[00:16:11] Speaker 00:
Mr. Aquinn.

[00:16:13] Speaker 02:
Thank you, Judge Ranam.

[00:16:13] Speaker 02:
May I please the court?

[00:16:14] Speaker 02:
John Aquinn on behalf of Apple.

[00:16:17] Speaker 02:
Judge Chen, I want to come back to a question that you were asking about, because at the time that the supervisory examiner withdrew the notice of objection, PMC itself had specifically argued to the supervisory examiner

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that there was no authority to make a latches-based rejection.

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And you can see that at the appendix at page 21,160 to 62.

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And of course, the examiner did ultimately withdraw, excuse me, the supervisory examiner ultimately withdrew on the grounds that the notice of objection was, quote, unrelated to the issue of patentability, end quote.

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That's at appendix 21,282.

[00:16:55] Speaker 02:
Now, taking a step back, the district court did not abuse its discretion in weighing the facts and considering the totality of the circumstances here, concluding that as a matter of equity, prosecution latches should apply to these extreme facts, facts which are not likely to recur given the intervening changes in the law.

[00:17:12] Speaker 02:
Now here, Hyatt did specifically say that the magnitude of delay can be enough to trigger latches.

[00:17:19] Speaker 02:
At page 1368 of the Hyatt opinion, Hyatt says that.

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And here, PMC has not purported to invent anything since filing its last priority application in 1987.

[00:17:33] Speaker 00:
Yet through a series of serialized, in its words, Council, what difference does it make that this case arises out of the district court

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as opposed to Hyatt, which came up on the section 145 type action.

[00:17:46] Speaker 02:
Yeah, Judge Rana, I don't think it makes any difference in terms of the ultimate inquiry here.

[00:17:51] Speaker 02:
The district court, the only difference that it may have made, the district court found that we should be held to a clear and convincing standard of evidence and found that we met that standard.

[00:17:59] Speaker 02:
I suppose that is a possible difference in terms of the posture.

[00:18:04] Speaker 02:
But I don't think that there's any other difference and certainly not one that's material to the outcome here.

[00:18:09] Speaker 02:
I mean, here, as in Hyatt,

[00:18:11] Speaker 02:
Hyatt had allowed claims.

[00:18:14] Speaker 02:
In fact, the examiners who were handling prosecution did not raise latches.

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Latches was only raised as a litigation defense by the patent office after claims, in fact, had been allowed.

[00:18:28] Speaker 02:
And a patent would have issued, except that Hyatt then took the case to district court.

[00:18:32] Speaker 02:
So I don't think there's a difference in that respect.

[00:18:34] Speaker 03:
I suppose one other possible distinction is that, and Judge Gilstrap pointed this out, is that in Hyatt, there was a presumption of latches after a six-year period of, let's say, unreasonable delay.

[00:18:49] Speaker 03:
And Judge Gilstrap declined to apply that presumption in this case.

[00:18:53] Speaker 03:
I mean, obviously, in a case against the PTO, that's an ex parte case.

[00:18:58] Speaker 03:
Here, this is inter partes.

[00:19:01] Speaker 03:
And so was it wrong for Judge Gilstrap to say, in these kinds of contested cases and hotly disputed litigation, it's incumbent on the defendant to actually prove with some affirmative defense that there was prejudice to somebody somewhere?

[00:19:17] Speaker 02:
Sure, Judge Chen.

[00:19:18] Speaker 02:
So just to take a step back, obviously Judge Gilstrap found that we met our burden with respect to the presumption.

[00:19:25] Speaker 02:
And so I don't think the court ultimately has to decide that issue in this case.

[00:19:29] Speaker 02:
But I think if you look at the reasoning in cancer research and the reasoning in Hyatt, then a presumption would apply after six years.

[00:19:38] Speaker 02:
And the reason that I say that is because, and that would be true

[00:19:41] Speaker 02:
in litigated cases, not just patent office cases.

[00:19:45] Speaker 02:
And the reason that I say that is the reason that cancer research found that there was a requirement to prove prejudice at all was because that was true as in every other latch's defense.

[00:19:59] Speaker 02:
I mean, that's, I think, verbatim the way that the court described it in cancer research at page 729 of that decision.

[00:20:10] Speaker 02:
And of course, in Hyatt, the court applied a presumption noting that borrowing from the presumption of latches that was described in the Wanlis versus GE case.

[00:20:24] Speaker 02:
And Wanlis versus GE was a litigation case.

[00:20:26] Speaker 02:
It didn't involve prosecution latches at all.

[00:20:29] Speaker 02:
It involved litigation latches.

[00:20:31] Speaker 02:
And yet had found that a presumption of six years should apply.

[00:20:34] Speaker 04:
So I think basically- If you were to apply that presumption, when would the clock start?

[00:20:38] Speaker 04:
Six years from what?

[00:20:40] Speaker 02:
Well, I mean, Judge Storak, I think it would have started arguably six years from 1981, certainly six years from 1987.

[00:20:48] Speaker 02:
In this case, I don't think the court has to decide whether a presumption applies or not.

[00:20:52] Speaker 02:
This looks nothing like the case in cancer research where the patent had issued

[00:20:58] Speaker 02:
And it was years before anybody began investing in the allegedly infringing technology.

[00:21:03] Speaker 00:
Did the GATT, the entry of the GATT into force, did that reset the clock with respect to delay prior to that time?

[00:21:11] Speaker 02:
Judge Raina, I don't think it reset the delay.

[00:21:13] Speaker 02:
I think that the actions that PMC took as a result of the GATT bubble exacerbated the delay.

[00:21:21] Speaker 02:
You have a patent here that at a minimum claims priorities in 1987.

[00:21:25] Speaker 02:
Now, they say, oh, we made it clear to the patent office which ones were 1987 and which ones were 1981.

[00:21:30] Speaker 02:
But in this case, even though they say it was clear to the patent office it was 1987, in this very case, you can see at appendix 3168 that they argued that the priority date for this patent is 1981.

[00:21:44] Speaker 02:
So they were going back and forth on their priority dates.

[00:21:46] Speaker 02:
But regardless, from 1987 to the time this application was filed was

[00:21:51] Speaker 02:
eight years.

[00:21:52] Speaker 02:
That's enough, as Hyatt said, to trigger latches.

[00:21:56] Speaker 02:
Then you have another eight years before you have the introduction of a claim that has encryption, decryption, or decryption keys.

[00:22:03] Speaker 03:
Let me get this straight.

[00:22:04] Speaker 03:
Are you suggesting that if someone files a continuation application eight years after the parent application, that's a prima facie unreasonable delay and is potentially subject to prosecution latches?

[00:22:17] Speaker 02:
Judge Raina, excuse me, Judge Chin, I think that

[00:22:21] Speaker 02:
Sometimes prosecution does take a long time.

[00:22:24] Speaker 02:
To be sure.

[00:22:25] Speaker 03:
Sometimes that's the fault of the PTO.

[00:22:28] Speaker 02:
Absolutely, Judge Shin.

[00:22:30] Speaker 02:
That can certainly be the case.

[00:22:32] Speaker 02:
And that is why I think this court's case law is quite clear that it is, number one, a totality of the circumstances test.

[00:22:41] Speaker 02:
Number two, that it is a fact-intensive inquiry.

[00:22:44] Speaker 02:
And you have to look at it in the context of the overall behavior.

[00:22:48] Speaker 02:
And here, what you have is,

[00:22:50] Speaker 02:
what the district court recounted, a deliberate intentional strategy to delay as long as possible in the filing of applications until they were confronted with the GATT deadline.

[00:23:01] Speaker 02:
And so this idea that it took them until 1994 or 1995 to figure out what the inventions were, as though this was like a treasure hunt through their own specification, to figure out what their inventions were when they, in fact, have contemporaneous documents from that period of time saying that this was

[00:23:20] Speaker 02:
that this was deliberate, that they were going to deliberately prosecute over time, so that it was, quote, as prolonged as possible, Appendix 731, and that they had, at Appendix 37844, a long-range plan to account for

[00:23:37] Speaker 02:
the time required for the development in the marketplace.

[00:23:42] Speaker 02:
So I think that the district court here, of course, was rightly, was right to take that into account in assessing not only the conduct that was occurring prior to the filing of this particular application in 1995, but then the conduct that occurred after 1995.

[00:24:02] Speaker 02:
They make the consolidation agreement the cornerstone of their argument on appeal to suggest that somehow that precludes laches as a matter of law.

[00:24:11] Speaker 02:
And I don't see, number one, how that could possibly be consistent with the doctrine of prosecution laches, which is an equitable doctrine, which reviews the totality of the circumstances and, of course, is reviewed for an abuse of discretion.

[00:24:26] Speaker 02:
But whatever you think of the consolidation agreement, number one, it came

[00:24:31] Speaker 02:
years after they filed this application in the patent office.

[00:24:35] Speaker 02:
Number two, it then by their own admission took them at least 18 months to complete consolidation.

[00:24:41] Speaker 02:
And you have contemporaneous statements from the examiners saying that that itself was unreasonable.

[00:24:49] Speaker 04:
Are you contending that by the time of the consolidation agreement they had already done enough abusive conduct that they were never going to have enforceable patents?

[00:24:57] Speaker 02:
Judge Stark, I'm saying that by the time that you got to the consolidation agreement here, and by the time you get to the conduct that the district court recounted in 2003 with respect to this patent or its A-Track 145 application counterpart, that this was a case where laches would have been appropriate to apply.

[00:25:20] Speaker 02:
And indeed, it should be no surprise to them

[00:25:22] Speaker 02:
the latches of being asserted was asserted against them in 1995.

[00:25:25] Speaker 04:
So no matter, and this goes back to questions you were asked already, but no matter how good faith the patentee or the applicant acted with after, say, sometime in the 90s, they were inevitably going to end up with unenforceable patents as long as somebody could show intervening rights.

[00:25:45] Speaker 02:
I think that after a certain period of time, given the conduct that occurred here,

[00:25:50] Speaker 02:
and the x and and what the district court found was the only reasonable explanation for the conduct here on the facts that if if someone could establish intervening rights in a relevant time period then then yes uh... you have you have a patent and here that's not going to be important this related to that if we were to affirm the district court here uh... without render all of p m c's patent portfolio unenforceable provided that somebody comes along and shows intervening rights sure no i i appreciate the question judge stark and

[00:26:19] Speaker 02:
I think the short answer is

[00:26:22] Speaker 02:
that it would certainly be relevant.

[00:26:25] Speaker 02:
Whatever this court does will be relevant to PMC's other patents.

[00:26:30] Speaker 02:
Obviously, the district court made factual findings here with respect to the totality of the circumstances and the family of patents beyond this patent.

[00:26:39] Speaker 02:
But his decision also considered the particulars of this patent and when this claim was introduced.

[00:26:47] Speaker 02:
And so not being familiar with all of the other

[00:26:50] Speaker 02:
patents that have perhaps been asserted out in the room.

[00:26:53] Speaker 03:
So they won't be arguing collateral estoppel in trial court two years from now, if this were to be affirmed?

[00:26:59] Speaker 02:
Judge Chen, respectfully, I wouldn't want to prejudge any type of argument, not knowing what the prosecution history of any other patent would look like.

[00:27:08] Speaker 02:
If you were talking about, say, the 145 patent, excuse me, the 160 patent, that was the 145 application,

[00:27:15] Speaker 02:
that is the A-track counterpart to this patent, which was relegated to the B-track, and therefore put on ice for like a decade under their approach with the consolidation plan, probably would be a very strong argument that it's really factually indistinguishable.

[00:27:33] Speaker 02:
But I wouldn't want to prejudge other patents.

[00:27:37] Speaker 02:
I mean, they purport to have different inventions

[00:27:40] Speaker 02:
And so I don't know, for example, when a particular claim would have been introduced at a particular point in time.

[00:27:48] Speaker 02:
I know in this case, it wasn't introduced into this application until 2011, and it wasn't introduced in the... The A application in 2003.

[00:27:57] Speaker 03:
Correct.

[00:27:57] Speaker 03:
What about the other side's argument that this encryption-decryption scheme was always part of at least some of their claims that were pending in the agency many years before 2003?

[00:28:10] Speaker 03:
They narrowed the claim to the decryption embodiment.

[00:28:14] Speaker 02:
Well, a few points in response, Judge Chen.

[00:28:17] Speaker 02:
First, if you look at Appendix 25, the district court viewed this as being materially different subject matter.

[00:28:22] Speaker 02:
It is an entirely rewritten claim.

[00:28:24] Speaker 02:
I mean, almost word for word, the claim has changed.

[00:28:27] Speaker 02:
And this court was concerned about that and, in fact, pointed to that in Hyatt itself.

[00:28:32] Speaker 02:
I mean, if you look in the government's brief in the Hyatt case at pages

[00:28:37] Speaker 02:
11, 12, and 15, one of the points that the government made was that, quote, claims were nearly rewritten via amendment, end quote.

[00:28:45] Speaker 02:
And this court, in recounting the sheer raw passage of time that had occurred in Hyatt, didn't just look at when the applications were filed, but also specifically at page 1367, looked at when claims were introduced, including rewritten claims.

[00:29:03] Speaker 02:
The question, of course, when a claim is introduced, whether it's via amendment or otherwise, is when are you first presenting that particular invention?

[00:29:16] Speaker 02:
And that, of course, is relevant to what is the relevant prior art, among other things.

[00:29:20] Speaker 02:
And as our double patenting expert testified at Appendix 9436, when you have a revision like that, well, it essentially resets prosecution of the claim.

[00:29:33] Speaker 03:
So assuming for the moment that PMC was a fair player starting in 2003 going forward, and fair play wasn't introduced until 2003, can you say that you were prejudiced by that?

[00:29:54] Speaker 03:
Because during the time that you began commercializing fair play,

[00:30:02] Speaker 03:
By then, PMC arguably was a fair player from that point to the finish line.

[00:30:08] Speaker 02:
Sure.

[00:30:08] Speaker 02:
And I do want to come back to the premise of the question, because I think if you look at the examiner Harvey's statements in 2002, which the supervisory examiner signed on to, I don't think that that's fair.

[00:30:21] Speaker 02:
But to answer your question, Judge Chin,

[00:30:23] Speaker 02:
You have the district court specifically found at page 39 that PMC delayed prosecution of an instruct to enable signal based encryption method at the PTO until at least 2003, and in so delaying prejudice Apple, which had already begun

[00:30:40] Speaker 02:
investing in fair play development and continued to do so.

[00:30:43] Speaker 02:
So the district court found that there was overlap even if you want to put a laser focus, and I don't think it's correct to do so, but even if you want to put a laser focus on the time period that they are focused on, they stipulated that development began in the early 2000s

[00:30:58] Speaker 02:
One of our developers testified that that is when the development had taken place and that Apple could have done something different at the time.

[00:31:09] Speaker 02:
You can say appendix 4711.

[00:31:11] Speaker 02:
And you don't need to have a commercialized product.

[00:31:13] Speaker 02:
I think cancer research is quite clear that the question is whether you've invested in, worked on, or used during the period of delay.

[00:31:22] Speaker 02:
Now, I don't think the period of delay here ended in 2003, not only because of the statements of

[00:31:28] Speaker 02:
of examiner Harvey, not to be confused with inventor Harvey, but also because I think

[00:31:35] Speaker 02:
for the same reasons this court found in Hyatt that it was fair... I see I'm into my... Go ahead and just start.

[00:31:42] Speaker 02:
Also, I have a question to ask.

[00:31:43] Speaker 00:
Okay.

[00:31:43] Speaker 02:
Thank you, Judge Raina.

[00:31:45] Speaker 02:
I think for the same reasons this court found in Hyatt at page 1365 that it was fair to attribute litigation delay to, in that case, Hyatt, that it's fair to attribute the delay that occurred during re-examination to PMC.

[00:32:01] Speaker 02:
And the PTO spoke to that at appendix

[00:32:03] Speaker 02:
16,857 and 19,038 among other places.

[00:32:09] Speaker 02:
And then you have the fact that they just had this parked application sitting out there, which the district court found that they wouldn't have been able to do but for their abuse in the first place, so that they could then in 2011 retread a claim with no consequence as to the start date of the time of the patent.

[00:32:27] Speaker 04:
But if we are focused on the period of 2003 and later,

[00:32:32] Speaker 04:
What is it that you think you proved that they did that was abusive of the patent prosecution process after 2003?

[00:32:40] Speaker 04:
And in that regards, is it this 2011 amendment, which they say in their gray brief is a completely new argument that you're making and one that is incorrect?

[00:32:52] Speaker 04:
Could you just address that for me?

[00:32:53] Speaker 02:
Sure, I'd be happy to.

[00:32:54] Speaker 02:
So Judge Stark, the district court itself found

[00:32:58] Speaker 02:
that the delay from the manner in which they prosecuted these 328 applications caused a delay to continue.

[00:33:06] Speaker 04:
You have basically a spillover argument.

[00:33:08] Speaker 04:
We've already talked about that.

[00:33:10] Speaker 04:
Things they did early had lasting consequences.

[00:33:12] Speaker 04:
But if we were, despite your argument, to focus like a laser on 2003 and after, what is it you think you prove that they did abusively after 2003 and thereabouts?

[00:33:26] Speaker 02:
And I'm sorry if I'm not answering your question directly.

[00:33:30] Speaker 02:
If you look, for example, at the appendix at $48,056, where you see the Patent Office continuing to struggle

[00:33:42] Speaker 02:
with, quote, precisely what it is the applicant claims.

[00:33:45] Speaker 02:
This is an office action in July of 2002 that is not responded to until January of 2003.

[00:33:52] Speaker 02:
And there is no substantive response to the concerns that were identified by Examiner Harvey and that Supervisor Examiner Fehl signed off.

[00:34:04] Speaker 02:
The 145A application?

[00:34:06] Speaker 02:
This is in the 145A application.

[00:34:08] Speaker 02:
That's exactly right.

[00:34:10] Speaker 02:
And he, in fact, specifically said at appendix 48,056, same page, that applicant had declined to provide the assistance that they were looking for.

[00:34:21] Speaker 02:
And he also specifically noted at appendix 48,067 not only the unusual large number of references.

[00:34:31] Speaker 02:
I mean, there are, like, I think it's some

[00:34:34] Speaker 02:
32 pages of references here at the beginning of the patent, but noted that they were continuing to make arguments about the dates with certain references that were wrong, that were contrary to what the patent office had already found.

[00:34:46] Speaker 02:
And then by 2005... OK, Mr. O'Quinn, can you conclude your argument?

[00:34:52] Speaker 02:
I will.

[00:34:52] Speaker 02:
Thank you, Judge Arenas.

[00:34:53] Speaker 02:
So by 2005, at appendix 19,042, the patent office said that these applications still required special prosecution review procedures

[00:35:03] Speaker 02:
still required special attention because of the concerns over potential double patenting.

[00:35:08] Speaker 02:
And it said that the petitioners have contributed to the lengthy prosecution.

[00:35:12] Speaker 02:
I thank the court for its time.

[00:35:13] Speaker 02:
I'm happy to answer any additional questions if there are any.

[00:35:18] Speaker 00:
Thank you.

[00:35:20] Speaker 00:
Thank you.

[00:35:20] Speaker 01:
Mr. Martin, when are we restoring your 30-minute rebuttal time?

[00:35:23] Speaker 01:
Thank you, Your Honor.

[00:35:25] Speaker 01:
So Your Honor, I was just addressing a few of the points that were raised during my friend's argument.

[00:35:29] Speaker 01:
First, there was a question about whether they're essentially arguing for a presumption of latches that could be raised in any case where a continuation application gets filed more than six years after the priority date.

[00:35:40] Speaker 01:
That's effectively what they are asking for.

[00:35:42] Speaker 01:
And it's what this court did not do in similar technologies, and it's what this court did not do in Hyatt.

[00:35:49] Speaker 01:
In both of those cases, there had to be a showing of either intervening rights during that earlier period, which Apple never tried to argue here and the district court did not find, or there needs to be a focus on conduct during prosecution.

[00:36:01] Speaker 01:
Now let's talk about the conduct during prosecution.

[00:36:04] Speaker 01:
You just heard extensive

[00:36:06] Speaker 01:
quotations from the 2002 examiner Harvey office action refer to conduct post 2003 conduct post 2003 so for laser focusing on on that or even the period slightly beforehand even though cancer research seemed to be focused really on the period of delay and not the period of delay plus some period of time that examiner

[00:36:27] Speaker 01:
Harvey office action in 2002 was something that Apple did not identify during discovery, did not raise a trial raised for the first time in passing in its post-trial brief.

[00:36:38] Speaker 01:
If latches is supposed to be something which concerns egregious conduct, it should not be trial by ambush.

[00:36:43] Speaker 01:
The egregious conduct should be something that jumps off the page, not something that someone pulls out for the first time in a post-trial brief.

[00:36:51] Speaker 01:
We filed a response to all of examiner Harvey's 30 examples of conduct.

[00:36:56] Speaker 01:
all of which were substantive issues.

[00:36:58] Speaker 01:
And Apple made no effort at trial to show who was right and who was wrong, that Examiner Harvey's 30 examples actually were correct.

[00:37:07] Speaker 01:
What we can say is that once the suspension for reexaminations was lifted in 2009, we just immediately jumped right back into examination with the PTO and received dozens of applications granted

[00:37:21] Speaker 01:
within a year, even more in the years that followed, including this patent in 2012.

[00:37:27] Speaker 01:
So the PTO did not view what was going on with our prosecution of these applications as the kind of situation, like a Hyatt, in which the applicant was trying to have delay for delay's sake.

[00:37:41] Speaker 01:
How many applications are still pending?

[00:37:43] Speaker 01:
I do not know the answer to that question, Your Honor.

[00:37:46] Speaker 01:
If there's any, it's no more than a handful.

[00:37:49] Speaker 01:
We received almost 100 applications granted in the years immediately following the lifting of that suspension for reexaminations.

[00:37:58] Speaker 01:
And I think an important point here is that PMC has consistently offered terminal disclaimers where appropriate.

[00:38:05] Speaker 01:
In the 1990s, PMC offered to terminally disclaim the 145A application.

[00:38:09] Speaker 01:
to the first of any application that issued from that entire set of 1995 applications.

[00:38:14] Speaker 01:
But weren't those claims reintroduced at a later time?

[00:38:17] Speaker 01:
So if you were to follow Claim 13, the Asserted Claim 13, that was originally introduced in the 507 application as Claim 3 in 1996.

[00:38:27] Speaker 01:
It was amended in 1997.

[00:38:29] Speaker 01:
We then had some delay for those in-race Schneller rejections.

[00:38:32] Speaker 01:
Once we got over that, we then negotiated the consolidation agreement.

[00:38:36] Speaker 01:
Claim three as of 1997 was moved to the 145A application in 2000.

[00:38:43] Speaker 01:
So it wasn't just introduced in 2000 the way the district court thought.

[00:38:46] Speaker 01:
It was then amended in 2003.

[00:38:49] Speaker 01:
Apple never showed that that amendment was egregious because it was broadening in the way this court thought would be a problem, or the Supreme Court thought was a problem with Webster.

[00:38:57] Speaker 01:
So basically, they're setting up a situation where if you have

[00:39:02] Speaker 01:
even routine narrowing claim amendments to get past the prior art, more than a few years after the priority date, there's going to be a prosecution latches on defense.

[00:39:11] Speaker 04:
On the prejudice, do we review the district court there for abuse of discretion as well?

[00:39:17] Speaker 04:
Or is there a question of law here about this laser focus concept, which we've all now talked about, like what period we would look to for that.

[00:39:25] Speaker 01:
So we think it was an abusive lawyer.

[00:39:27] Speaker 01:
an error of law, Your Honor.

[00:39:29] Speaker 01:
We think it's an abuse of discretion, broadly.

[00:39:31] Speaker 01:
Abuse of discretion includes both errors of law and clear errors of fact.

[00:39:35] Speaker 01:
And we think it was an error of law for the district court to point to that 2003 amendment, narrowing amendment, at least certainly not shown to be broadening, and to say that that somehow supports a prosecution.

[00:39:46] Speaker 04:
Is the error of law looking at the time frame before Apple developed intervening rights, or is it some additional error of law?

[00:39:56] Speaker 01:
The error of law is not looking at the reason for the amendment, essentially saying there was an amendment and therefore that constitutes latches in some way.

[00:40:05] Speaker 01:
If the amendment was not broadening, it's impossible for them to show prejudice.

[00:40:11] Speaker 00:
Okay.

[00:40:11] Speaker 00:
We thank you.

[00:40:12] Speaker 00:
Thank you, Your Honor.

[00:40:13] Speaker 00:
So we thank the parties for their arguments.