[00:00:00] Speaker 04:
The first case is Unilock versus Google, 2021, 1498, Mr. Lancaster.

[00:00:07] Speaker 04:
So you're arguing Google, the Google case.

[00:00:13] Speaker 01:
The Google case, yes, thank you.

[00:00:15] Speaker 01:
Good morning, and may it please the court.

[00:00:17] Speaker 01:
I'd like to begin with the reason why this, the Google case, is distinct, that any fortress licensing right cannot defeat Unilock standing.

[00:00:27] Speaker 01:
And the reason is this.

[00:00:29] Speaker 01:
Before this suit was filed, the parties entered into a termination agreement to expressly terminate any fortress licensing rights regarding the patents here.

[00:00:40] Speaker 01:
For $26 million, as payment in full for all obligations, Fortress agreed that both prior agreements shall terminate

[00:00:48] Speaker 01:
and that the rights of each of the APCO parties under them shall terminate.

[00:00:53] Speaker 01:
And then for extra clarity, it went on and said there's a mutual release of all claims.

[00:00:57] Speaker 01:
And the definition of claims says it includes all rights, contracts, promises of every kind and nature whatsoever.

[00:01:03] Speaker 01:
that's certainly capacious enough to cover a right to license the patents at issue.

[00:01:09] Speaker 01:
In terminating those agreements, and all the rest.

[00:01:12] Speaker 02:
Even though the license said that right was irrevocable?

[00:01:15] Speaker 01:
Yes, Your Honor.

[00:01:15] Speaker 01:
As the district court said on page 17 of its appendix, this hinges on the meaning of irrevocable.

[00:01:23] Speaker 01:
But under New York law and common understanding, irrevocable does not mean that it's incapable of termination by mutual agreement of the parties.

[00:01:30] Speaker 01:
It means that one party can't unilaterally take it.

[00:01:34] Speaker 01:
For example, if I hand in my license to DMV, the DMV hasn't revoked it.

[00:01:39] Speaker 01:
I've surrendered it.

[00:01:41] Speaker 01:
If I tell my daughter she can see a movie and she decides that she's not going to go, she hasn't revoked my permission to go see a movie.

[00:01:47] Speaker 01:
She's just declined to see it.

[00:01:49] Speaker 01:
A legion of cases makes that clear on pages 40 to 42 of our brief.

[00:01:53] Speaker 01:
It just walks right through it.

[00:01:55] Speaker 01:
Time and again, they say, yes, it says irrevocable.

[00:01:57] Speaker 01:
But that doesn't mean that it can't be.

[00:01:58] Speaker 02:
Am I correct?

[00:01:59] Speaker 02:
This particular issue doesn't have the potential issue preclusion problems in the other two cases?

[00:02:05] Speaker 01:
That's exactly correct.

[00:02:07] Speaker 01:
This agreement didn't exist at the time the Apple case was filed.

[00:02:11] Speaker 01:
And so the district court didn't address it.

[00:02:13] Speaker 01:
It just doesn't come up.

[00:02:14] Speaker 01:
And since we don't have a ruling on this issue, it can't be preclusive.

[00:02:18] Speaker 02:
So if we agree with you on this issue and your view of this issue, we don't have to get to the broader issue of whether the fortress license did something to your standing with regard overall, your bigger argument in the other cases.

[00:02:35] Speaker 01:
That's correct.

[00:02:35] Speaker 01:
That would be just something that the court would have to reach in the other cases.

[00:02:38] Speaker 01:
But in this case, it just can't affect the outcome because

[00:02:41] Speaker 01:
irrevocable does not mean that it's incapable of termination by mutual agreement.

[00:02:46] Speaker 03:
Well, they don't seem to be arguing that anyway.

[00:02:49] Speaker 03:
They appear to agree at page 34 of the red brief that it could be revoked if you use the right language, right?

[00:02:57] Speaker 01:
Right.

[00:02:58] Speaker 01:
I think that they are saying that it naturally, on their brief, they say that it's that sort of right that naturally survives.

[00:03:04] Speaker 01:
the termination agreement.

[00:03:07] Speaker 01:
But if a license that's irrevocable is the sort of thing that the parties can mutually re-determinate, it is not the sort of thing that naturally survives a mutual agreement to terminate.

[00:03:17] Speaker 01:
And so I don't think that argument works at all.

[00:03:19] Speaker 01:
Once the agreement is terminated, once all rights under the agreement are terminated, one of those rights, the right to license, is necessarily terminated as well.

[00:03:27] Speaker 04:
And your suit occurred after that.

[00:03:29] Speaker 01:
Pardon?

[00:03:30] Speaker 04:
You assume the court after that.

[00:03:31] Speaker 01:
That's exactly right.

[00:03:33] Speaker 01:
And it wouldn't make any sense for that licensing right to continue after the create agreement is fully paid in full and after they've terminated the agreement, because this was a security for repayment of the loan.

[00:03:44] Speaker 03:
Well, I guess there could be circumstances in which you would think that the license survived.

[00:03:49] Speaker 03:
For example, if they'd started manufacturing a product under that license,

[00:03:56] Speaker 03:
and relied on the continued existence of the license.

[00:03:59] Speaker 03:
I mean, that's not the situation here, but it doesn't seem to me that it's apparent that in all circumstances, the license would terminate.

[00:04:07] Speaker 01:
So certainly the termination agreement addressed one circumstance that would be similar to that, and that is if you had already issued sublicenses.

[00:04:17] Speaker 01:
those sublicenses would survive termination, so those third parties wouldn't be prejudiced.

[00:04:22] Speaker 01:
But there's nothing like that.

[00:04:23] Speaker 03:
And given the nature of the party, there's nothing in the record here to suggest that they've availed themselves.

[00:04:28] Speaker 01:
They've done anything to utilize the license.

[00:04:34] Speaker 01:
Fortress denied it even had a right to sub-license at this time.

[00:04:38] Speaker 01:
It was a right that was disputed and never exercised.

[00:04:41] Speaker 01:
And so it's just nothing in this record that would suggest that the parties would think that this is some sort of right that would survive the termination agreement, especially since it's a security.

[00:04:50] Speaker 01:
Once the loan's paid off in full, there's no reason for that never-exercised security right to continue.

[00:04:57] Speaker 01:
It would be a bit like saying, you know, I've paid off my mortgage, the bank has agreed that I've paid off my mortgage, but the bank still has a lien on my house, can still foreclose, or can rent out my bedroom in order to ensure it gets paid.

[00:05:07] Speaker 01:
It doesn't make sense there, and it makes no sense here either.

[00:05:12] Speaker 04:
If we don't agree with you, what about the WEAV case, if I've pronounced it properly?

[00:05:21] Speaker 04:
Isn't that a real problem for you?

[00:05:23] Speaker 01:
In terms of whether we have standing.

[00:05:25] Speaker 01:
Yes.

[00:05:25] Speaker 01:
Yes.

[00:05:26] Speaker 01:
And I think the problem with cases like WEAV and the like is they conflate exclusive licensee standing with patent owner standing.

[00:05:34] Speaker 01:
And patent owners are distinct in that whenever you are the owner of a patent, if you have not surrendered

[00:05:41] Speaker 01:
all substantial rights so as to make somebody else the patent owner, you have standing.

[00:05:45] Speaker 01:
As the court said in Pandrell, establishing ownership of a patent that has been infringed satisfies the requirements of Article III standing or aspects.

[00:05:53] Speaker 01:
Because we conclude that the contrar was the owner of the 747 patent when the original complaint was filed and thus had standing to sue in this action, we vacate the district court's dismissal.

[00:06:03] Speaker 01:
Section 154 is very clear that it gives the right to exclude to the patent owner.

[00:06:09] Speaker 01:
The fact that the patent owner will license other people at times doesn't mean that it loses that statutory right of exclusion.

[00:06:15] Speaker 04:
That's true under- I would agree with you that the court came to be off the track when it was talking about what constitutes an exclusive license.

[00:06:26] Speaker 04:
The discussion of right height was way off, because right height dealt with distributors.

[00:06:33] Speaker 01:
Exactly.

[00:06:34] Speaker 04:
But the court also said,

[00:06:37] Speaker 04:
that the ownership in this case, that if we have found that an exclusive licensee with the right to sue no longer had standing, because a punitive defendant could obtain a license, then

[00:07:09] Speaker 01:
So if I remember we have correctly, in that case, the concern was whether somebody was an exclusive licensee.

[00:07:17] Speaker 01:
And when somebody else has the right to license the infringer, you're not an exclusive licensee.

[00:07:23] Speaker 01:
But it doesn't mean that if you're the owner of the patent and there are people with the right to license you as the owner of the patent,

[00:07:28] Speaker 01:
lose your right to exclude, because not only does the statute, section 154 itself, give you that right.

[00:07:33] Speaker 01:
It says, add a patentee, you have the right to exclude.

[00:07:36] Speaker 01:
The common experience tells you that, too.

[00:07:39] Speaker 01:
My daughter may be able to invite whoever she wants to our house, but that doesn't mean I lose standing when someone who no one invited invades the premises.

[00:07:47] Speaker 01:
My wife and I might have a joint bank account in our account, and we can draw from it, and we can give other people to draw from it.

[00:07:52] Speaker 01:
That doesn't mean that the fact that there's multiple people out there who can utilize this

[00:07:56] Speaker 01:
that we lose standing to object when someone embezzles all of our money.

[00:08:00] Speaker 01:
Patent law is the same way.

[00:08:01] Speaker 01:
If you're the owner of the patent, 154 gives you the fundamental patent right, which is the right to exclude.

[00:08:09] Speaker 01:
That doesn't go away with other people having licenses.

[00:08:12] Speaker 01:
It's also clear that when you are, and the reason we have this sort of code.

[00:08:16] Speaker 03:
Suppose the patent owner is granted an exclusive license to someone else and says, I surrender the right to license the patent myself.

[00:08:25] Speaker 01:
Yeah, so it's not altogether.

[00:08:29] Speaker 01:
They lose the right to license themselves.

[00:08:32] Speaker 01:
But it doesn't mean necessarily they lack the right to exclude, because that comes from the statute itself.

[00:08:37] Speaker 01:
And you don't lose that unless you cease to be the patent holder, unless you've transferred all substantial rights.

[00:08:45] Speaker 01:
Now, the reason we look at licensees so carefully is because the Supreme Court and independent wireless in 1926 kind of winked well beyond the statute.

[00:08:53] Speaker 01:
The statute says the right to exclude is with your patentee.

[00:08:56] Speaker 01:
It's with your owner.

[00:08:57] Speaker 01:
That's the heartland of the right to exclude.

[00:09:00] Speaker 03:
An independent wireless... Surely if the patent transfered the right to license and the right to sue for infringement would no longer have rights that gave it standing, right?

[00:09:11] Speaker 01:
No, I don't think that's necessarily true, because you would have to look.

[00:09:15] Speaker 01:
And this court's very careful and very contextual in looking at those things.

[00:09:18] Speaker 01:
You would have to conclude that the patent owner has given away all substantial rights.

[00:09:22] Speaker 03:
How can it be that they've given away the right to sue for infringement that they have standing?

[00:09:27] Speaker 01:
Well, they certainly have an injury in fact, and they have the right to exclude under the statute.

[00:09:32] Speaker 01:
They may, as a matter of cause of action, have surrendered their ability to assert a cause of action.

[00:09:36] Speaker 01:
There might be a contractual defense that you're not the right person to sue.

[00:09:40] Speaker 01:
But I don't think, unless you actually look at it and say, they have surrendered all substantial right.

[00:09:46] Speaker 01:
They've ceased to be the patentee.

[00:09:47] Speaker 01:
then they still have standing to sue.

[00:09:49] Speaker 01:
And I think case in case recognizes that.

[00:09:51] Speaker 01:
Alfred Mann, for example, either the patent licensor did not transfer all substantial rights to the exclusive licensee, in which case the licensor remains the owner of the patent and retains the right to sue for infringement, or the licensor did transfer all substantial rights to the exclusive licensee, in which case the licensee becomes the owner of the patent for standing purposes and gains the right to sue on its own.

[00:10:10] Speaker 01:
It's one or the other.

[00:10:11] Speaker 01:
There's always an owner of the patent.

[00:10:13] Speaker 01:
If you've surrendered ownership by surrendering all substantial rights, then that other person, your licensee has become effectively the patentee and they can sue in their own neighborhood.

[00:10:23] Speaker 01:
If you've retained ownership, if you have not surrendered all substantial rights, you still have the right to sue.

[00:10:28] Speaker 01:
And the very fact that we'd like to.

[00:10:30] Speaker 03:
My hypothetical, they've given up the right to sue.

[00:10:33] Speaker 01:
If they've given up.

[00:10:34] Speaker 03:
You're trying to argue too much.

[00:10:35] Speaker 01:
OK.

[00:10:36] Speaker 01:
Even if that were a case, if you gave that much, you might come to the conclusion that, look, you have at that point surrendered all substantial rights.

[00:10:43] Speaker 01:
You don't have the right to exclude others because you've given that up.

[00:10:46] Speaker 01:
You don't have the right to sue.

[00:10:48] Speaker 01:
You don't have the right.

[00:10:48] Speaker 01:
At some point, you cross that line.

[00:10:50] Speaker 01:
But this court's cases all point that line.

[00:10:52] Speaker 01:
And there's no argument here that Unilock somehow crossed the line and gave up all substantial right to the patents.

[00:11:01] Speaker 01:
I see that I'm into what would be my rebuttal time.

[00:11:03] Speaker 01:
If I can reserve the range of my time for rebuttal, thank you very much.

[00:11:07] Speaker 04:
Mr. Bagatell.

[00:11:09] Speaker 00:
Good morning, Your Honors.

[00:11:10] Speaker 00:
May it please the court, Dan Bagatell, on behalf of Google, with me and my colleagues, Andrew DeFrain and Soap and Shaw, whether a patent owner

[00:11:18] Speaker 00:
automatically has an Article III right to sue is an interesting legal question.

[00:11:22] Speaker 00:
But the court need not and should not reach it in this case or in the other two cases because of two reasons.

[00:11:28] Speaker 00:
First, Unilock has collaterally stopped from contesting whether it had Article III standing as of 2017.

[00:11:34] Speaker 00:
And second of all, the 2018 payoff agreement made no difference in those circumstances.

[00:11:40] Speaker 00:
The court shouldn't be vassal about that.

[00:11:42] Speaker 00:
This is not an issue that arises.

[00:11:44] Speaker 03:
I have trouble.

[00:11:45] Speaker 03:
with your theory that the agreement didn't eliminate the license.

[00:11:54] Speaker 03:
The language is pretty broad.

[00:11:56] Speaker 03:
You seem to agree that the fact that it's all irrevocable and the original agreement is not determinative.

[00:12:06] Speaker 03:
When I read these provisions of the termination agreement, it says they've given up all rights under the agreement.

[00:12:14] Speaker 03:
And this would appear to apply to a license as well.

[00:12:20] Speaker 00:
That's not quite right.

[00:12:21] Speaker 00:
What we agreed on was that the word irrevocable does not mean that Uniloc and Fortress could bilaterally agree to terminate the rights.

[00:12:29] Speaker 00:
In fact, the dismissal here is with prejudice.

[00:12:32] Speaker 00:
Fortress and Uniloc could solve this problem today.

[00:12:34] Speaker 00:
This is a dismissal without prejudice.

[00:12:37] Speaker 00:
But getting to the termination agreement, the difficulty for Uniloc is that there's nothing in that agreement that says we're terminating Fortress's license.

[00:12:46] Speaker 00:
It does have a termination provision, but it's subject to an exception in 2BY, which basically says the release does not apply to things that survive based on what was in the original 2014 agreements, one of which, in Section 6, provided all rights that, by their nature, survive and continue, survive and continue.

[00:13:07] Speaker 00:
And that is what we are hanging our hat on.

[00:13:09] Speaker 00:
And that is where the comment is.

[00:13:10] Speaker 03:
If you look at page 913 of the appendix,

[00:13:14] Speaker 03:
in D1 is that the right of each of the applicable parties under the applicable agreement shall terminate.

[00:13:20] Speaker 03:
Pretty broad language, doesn't it?

[00:13:22] Speaker 00:
Yes, but I think you need to look at 915, Your Honor.

[00:13:25] Speaker 00:
Take a look where they're talking about basically all the rights that are being given up in 2BY contain an exception for any provision of any released agreement that survives the termination of such released agreement in accordance with its terms.

[00:13:39] Speaker 00:
So then we turn back to the original patent license agreement.

[00:13:44] Speaker 00:
Section 6, which is on page 614, it says, survival.

[00:13:51] Speaker 00:
Any rights and obligations which by their nature survive and continue after expiration or termination of this agreement will survive and continue and bind the parties and their successors and their signs until such rights are extinguished.

[00:14:05] Speaker 00:
And that is what we did not have here.

[00:14:06] Speaker 00:
This is a right that was a paid up

[00:14:10] Speaker 00:
perpetual license.

[00:14:11] Speaker 00:
I mean, it was an irrevocable license.

[00:14:14] Speaker 03:
Why is that a right that by its nature survives?

[00:14:19] Speaker 03:
The agreement specifically provides that sublicenses survive.

[00:14:22] Speaker 03:
Why does the license by its nature survive?

[00:14:25] Speaker 00:
Well, they needed a special provision for sublicensees.

[00:14:28] Speaker 00:
I think, actually, that's been addressed in an opinion, I believe your honor may have written it, where it's an ambiguous otherwise.

[00:14:35] Speaker 00:
And so they put that in there specifically to make clear that sublicensees' rights survive.

[00:14:39] Speaker 00:
The rights of fortresses are governed by 6.0.

[00:14:42] Speaker 00:
It's not a specific versus the general issue.

[00:14:45] Speaker 00:
The specific is specific to the rights of sublicensees, of which we are not one.

[00:14:51] Speaker 00:
But the rights of fortress survive based on section 6 and the question is what is by nature survived and continued?

[00:14:58] Speaker 03:
Why is that?

[00:14:59] Speaker 03:
Why does the license by its nature survive and continue?

[00:15:04] Speaker 00:
Because the license was fully vested and irrevocable by Uniloc

[00:15:10] Speaker 00:
and perpetual.

[00:15:12] Speaker 02:
It is unethical by UNILOC, but why not able to be terminated by joint agreement of the parties in exchange for consideration?

[00:15:21] Speaker 00:
I agree that it could be, but I submit that it was not, because there's nothing in that agreement that says UNILOC's license is terminated.

[00:15:29] Speaker 00:
And the agreement is terminated.

[00:15:33] Speaker 00:
And certainly, they paid off the principal that they were owed.

[00:15:36] Speaker 00:
That does not answer the question of whether Fortress' rights, vis-a-vis the rest of the world, not Unilock, whether they have a license that they can still exercise, including the right to sublicense.

[00:15:47] Speaker 02:
But Fortress never sublicensed.

[00:15:50] Speaker 00:
As far as we know, it did not.

[00:15:51] Speaker 02:
They never exercised this right.

[00:15:53] Speaker 02:
So what Vest did?

[00:15:55] Speaker 02:
They had a pending right to sublicense, but they never used it.

[00:16:00] Speaker 00:
Well, it was usable as of the date of the default, which actually was the date of the agreement, because they were actually in default from the get-go, because they falsely represented and warranted that there had been no challenges to the patents.

[00:16:15] Speaker 00:
In fact, there had been challenges.

[00:16:16] Speaker 00:
Some of them are eventually held invalid or unpatentable.

[00:16:21] Speaker 00:
But basically, getting back to the issue, the question is, why does it, by its nature, survive?

[00:16:27] Speaker 00:
Because it was granted, and the license survives.

[00:16:31] Speaker 00:
It's not an absolute thing where you just simply terminate it because the agreement is terminated.

[00:16:37] Speaker 00:
Unilock gave Fortress the right to use the license upon the event of a default.

[00:16:47] Speaker 00:
It's indisputable that there were numerous events of default, both in 2014 and 2017.

[00:16:51] Speaker 00:
That right invested.

[00:16:54] Speaker 00:
It was irrevocable by Unilog itself.

[00:16:57] Speaker 00:
And so there had to be something that specifically terminated it, and nothing terminated it.

[00:17:00] Speaker 00:
Actually, that's not quite true.

[00:17:01] Speaker 00:
They could also terminate it by provisions 7.3 x, y, and z. There were three ways to annul a default.

[00:17:10] Speaker 00:
None of those happened.

[00:17:10] Speaker 00:
There was no waiver.

[00:17:11] Speaker 00:
There was no express amendment that expressly cured the defaults.

[00:17:15] Speaker 00:
And the defaults didn't go away.

[00:17:17] Speaker 00:
Uniloc didn't cure them in any way.

[00:17:19] Speaker 00:
The financial defaults not receiving the necessary revenue didn't go away.

[00:17:24] Speaker 00:
That was never solved.

[00:17:25] Speaker 00:
And certainly the existence of challenges and the invalidity of the patent didn't go away.

[00:17:29] Speaker 00:
The challenges continued and patents died.

[00:17:32] Speaker 00:
So they remained in default.

[00:17:35] Speaker 00:
Those defaults were not cured.

[00:17:36] Speaker 00:
There were three ways to solve the problem.

[00:17:38] Speaker 00:
And they could even have solved it a fourth way in the termination agreement.

[00:17:42] Speaker 00:
the payoff agreement.

[00:17:44] Speaker 00:
But they did not.

[00:17:45] Speaker 02:
So it really just comes down to how broadly we read the termination agreement?

[00:17:51] Speaker 00:
Yes, in part.

[00:17:52] Speaker 00:
Yes.

[00:17:53] Speaker 00:
I would say that the question is, what is by its nature survived?

[00:17:58] Speaker 00:
There is some case law that deals with perpetual rights.

[00:18:02] Speaker 00:
And I would submit there's no distinction here between a perpetual right and an end.

[00:18:05] Speaker 02:
If we agree with your friend's argument about this termination agreement and it got rid of,

[00:18:12] Speaker 02:
the fortress license, then does Google have, or does Unilac have standing to sue Google?

[00:18:19] Speaker 00:
Yes.

[00:18:20] Speaker 00:
We have to win two issues.

[00:18:24] Speaker 00:
I think the first set is dealt with by the collateral estoppel problem.

[00:18:27] Speaker 00:
But if you don't, then you reach the automatic Article III standing issue, which I would love to reach if your honors are interested.

[00:18:32] Speaker 00:
But we also need to win the payoff and termination agreement issue, because that occurred before we were sued in the latter part of 2018.

[00:18:43] Speaker 00:
Would your honors like me to address the collateral estoppel issue or anything else?

[00:18:47] Speaker 00:
I don't want to get out of turn.

[00:18:49] Speaker 00:
Turning to the collateral estoppel issue, there's no dispute over the basic elements of collateral estoppel.

[00:18:57] Speaker 00:
I mean, basically, it's the same issue.

[00:18:58] Speaker 00:
It's actually lay-dedicated.

[00:19:00] Speaker 00:
It's necessary to the judgment.

[00:19:01] Speaker 00:
It's full and fair opportunity to live here.

[00:19:03] Speaker 03:
But Wright and Miller, in some of the cases, suggest that where it's a non-mutual collateral estoppel situation, there's some room for not applying it.

[00:19:12] Speaker 03:
Grant, you did the discussion right, nor is it a little bit opaque.

[00:19:18] Speaker 00:
It certainly is.

[00:19:19] Speaker 00:
And the restatement also lists circumstances where non-mutual collateral estoppel may not be appropriate.

[00:19:25] Speaker 00:
For example, I think your cases have addressed the circumstances where there may not have been a full and fair opportunity to litigate.

[00:19:30] Speaker 00:
It may have been very low stakes.

[00:19:32] Speaker 00:
you know, a $300,000 issue, and now you're dealing with a $100 million issue.

[00:19:36] Speaker 00:
There are all sorts of reasons that might apply.

[00:19:39] Speaker 00:
None of them apply in this case.

[00:19:41] Speaker 00:
What have they raised?

[00:19:42] Speaker 00:
They've raised basically no judicial economy.

[00:19:45] Speaker 00:
Well, obviously there would be judicial economy.

[00:19:47] Speaker 00:
You'd certainly get rid of

[00:19:49] Speaker 00:
the Motorola and Blackboard cases in half of this case.

[00:19:53] Speaker 00:
And they also raised the fact that there has been a settlement.

[00:19:55] Speaker 00:
But the US bank work, the Supreme Court rejected the notion that simply settling is a reason to get rid of preclusive effects.

[00:20:03] Speaker 02:
What if after they'd settled, they'd asked for a remand and for the district court to vacate the Apple decision and the district court had denied it?

[00:20:11] Speaker 02:
Would that have been a basis for us not to apply issue preclusion because it had been settled and they hadn't

[00:20:17] Speaker 02:
been given an opportunity to appeal that decision, or at least get it vacated?

[00:20:21] Speaker 00:
Well, what they should have done is made it conditional on district court approval.

[00:20:25] Speaker 00:
They did not do that.

[00:20:26] Speaker 00:
They didn't even ask Judge Alsop to do it.

[00:20:30] Speaker 00:
They didn't ask this court to remand Judge Alsop.

[00:20:32] Speaker 00:
And they simply chose not to do it.

[00:20:34] Speaker 00:
And the idea that they were unaware of collateral estoppel is simply untenable.

[00:20:42] Speaker 00:
Learned a colleague on the other side.

[00:20:43] Speaker 00:
We've known each other for 35 years.

[00:20:45] Speaker 00:
They spot issues very well.

[00:20:46] Speaker 00:
They raised five issues in their appeal brief that were not raised by district court counsel.

[00:20:50] Speaker 00:
The idea that they were unaware of collateral estoppel is pretty far-fetched.

[00:20:54] Speaker 03:
What difference would it make if they were unaware of collateral estoppel?

[00:20:57] Speaker 03:
Well, I don't think it does.

[00:20:59] Speaker 03:
We assume that people are aware of what the law is.

[00:21:01] Speaker 00:
Yeah.

[00:21:02] Speaker 00:
But it's not an unfair situation.

[00:21:04] Speaker 00:
And let me get back to that.

[00:21:05] Speaker 00:
It's fundamentally not unfair.

[00:21:07] Speaker 00:
What we have here is a dismissal without prejudice.

[00:21:11] Speaker 00:
It was solvable.

[00:21:12] Speaker 00:
by Unilock and Fortress at any time, and they simply elected not to do it.

[00:21:17] Speaker 00:
I don't know why.

[00:21:18] Speaker 00:
They could be back in court tomorrow.

[00:21:20] Speaker 03:
Well, you know why, because they'd be giving up a lot of the damages.

[00:21:24] Speaker 00:
I don't know why they didn't do it in 2017 or 2018, Your Honor, and when it would have been a much smaller issue.

[00:21:31] Speaker 00:
But honestly, I'm not the one to answer that question.

[00:21:34] Speaker 00:
But the point is, this is not like we are saying the patent is forever unenforceable.

[00:21:39] Speaker 00:
It's not unenforceable.

[00:21:41] Speaker 00:
They simply don't have standing to enforce it.

[00:21:44] Speaker 00:
If you would like, I can turn to the automatic Article III standing issue, or I can continue on collateral estoppel if you prefer.

[00:21:52] Speaker 00:
You're OK.

[00:21:53] Speaker 00:
OK.

[00:21:53] Speaker 00:
Well, let me address the automatic Article III standing issue.

[00:21:56] Speaker 00:
And our position is that patent owners have Article III standing as long as they have exclusionary rights, but not when they don't.

[00:22:05] Speaker 00:
You start out with exclusionary rights, but you can contract them away.

[00:22:09] Speaker 00:
And that happened in the Moro case when the right to sue and ownership were split.

[00:22:14] Speaker 00:
And that's what happened here.

[00:22:16] Speaker 00:
It's not some sort of talisman or magic potion.

[00:22:19] Speaker 02:
Where is the right to sue and ownership split here?

[00:22:22] Speaker 00:
No, no, no.

[00:22:23] Speaker 00:
What I'm saying is that you can have a situation where you've lost exclusionary rights.

[00:22:26] Speaker 02:
That's the issue I find troublesome here is that there's no indication that Uniloc ever transferred either the right to sue or an exclusive right to license.

[00:22:37] Speaker 02:
They maintained the right to sue.

[00:22:39] Speaker 02:
They maintained a right to license to other people.

[00:22:42] Speaker 02:
They just gave a license to Fortress as well, the sublicense.

[00:22:45] Speaker 00:
A license with the free right to sublicense unfettered, which meant that

[00:22:50] Speaker 00:
Unalot could not choose whom to exclude.

[00:22:52] Speaker 00:
Fortress could exclude anyone whom Fortress wanted.

[00:22:55] Speaker 04:
But Fortress didn't.

[00:22:57] Speaker 00:
They did not.

[00:22:59] Speaker 00:
But that's not the issue.

[00:23:01] Speaker 00:
I think, actually, if you take a look at the Luminara case, I think that's probably the clearest example.

[00:23:07] Speaker 00:
This was a case in which the patent owner was Candela slash Luminara.

[00:23:13] Speaker 00:
and the defendant was Leon.

[00:23:15] Speaker 00:
And there was an issue about whether Disney was entitled to license other people as affiliates.

[00:23:20] Speaker 04:
But look, let's look at this.

[00:23:21] Speaker 04:
The Unilock did not, in an agreement, agree not to enforce its right to sue.

[00:23:32] Speaker 04:
And there was no license that was tricked, such an exclusive license that's tantamount to an assignment.

[00:23:39] Speaker 04:
So they didn't deprive themselves of the right to sue.

[00:23:43] Speaker 00:
What they did do, however, and I'm not arguing section 282.

[00:23:48] Speaker 00:
standing, Your Honor, or statutory right to sue.

[00:23:52] Speaker 00:
The question is Article III standing.

[00:23:54] Speaker 00:
Mr. Lampkin repeatedly mentioned Section 154.

[00:23:57] Speaker 00:
That is the exclusionary right.

[00:23:59] Speaker 00:
That is the sine qua non of the right to sue for infringement of patent rights.

[00:24:06] Speaker 00:
If you don't have exclusionary rights, you can't sue, even if you are nominally the patent owner.

[00:24:10] Speaker 00:
There's no reason to say simply that you have the nominal status as a patent owner.

[00:24:13] Speaker 00:
That changes everything.

[00:24:14] Speaker 00:
This court has said repeatedly, we don't just look at the labels.

[00:24:17] Speaker 04:
Well, they didn't deprive themselves of exclusionary rights.

[00:24:22] Speaker 00:
They gave away the right to exclude two unilaterally by contract and then by defaulting.

[00:24:27] Speaker 04:
They gave away the right to sue someone whom Fortress had licensed, and Fortress hadn't licensed anyone.

[00:24:35] Speaker 00:
But they gave away the right to decide who could be sued.

[00:24:39] Speaker 00:
They let somebody else stand in and say, I can excuse you.

[00:24:43] Speaker 00:
Fortress, we could have gone to Fortress and gotten a license.

[00:24:48] Speaker 00:
And there's nothing Unilock could do about it.

[00:24:50] Speaker 00:
And that is what this court has looked at, to see whether you have the right to exclude the particular defendants.

[00:24:56] Speaker 00:
I'm not sure what the correct pronunciation is.

[00:24:59] Speaker 03:
You're just using a phrase which has to be read in context.

[00:25:04] Speaker 03:
They have the right to exclude these people, assuming that somebody else doesn't take an action.

[00:25:13] Speaker 03:
So they have, it seems to me, and you don't dispute that they have the right to sue for infringement,

[00:25:21] Speaker 00:
I would say it's not a question of statutory ownership.

[00:25:26] Speaker 00:
It is a question of the Article III standing, which returns on their right to exclude this particular defendant.

[00:25:32] Speaker 02:
Can we just back up?

[00:25:33] Speaker 02:
I mean, if you look in terms of basic Article III standing, they have a legally protected interest, right?

[00:25:39] Speaker 00:
I think that's the question, Your Honor.

[00:25:42] Speaker 00:
The legally protected interest is the exclusionary right.

[00:25:45] Speaker 02:
Their ownership of the patent.

[00:25:47] Speaker 00:
No, what the patent gives you is the right to exclude.

[00:25:50] Speaker 00:
The patent doesn't give you anything else.

[00:25:52] Speaker 00:
You always have the right to exclude.

[00:25:53] Speaker 02:
Where did they give up the right to exclude?

[00:25:54] Speaker 02:
They gave up the right for another company to sub-license.

[00:25:59] Speaker 02:
But they could still sue everybody else that either they hadn't licensed or that company hadn't sub-licensed.

[00:26:06] Speaker 02:
Think the answer is if another company in this case fortress can come in and forgive a Defendant just doesn't seem I understand your argument, but that just doesn't seem right to me because fortress may choose not to sub license anybody in which case the only people that that That you know what can't sue our fortress they can sue everybody else because fortress hasn't sub license anybody well I guess my position better

[00:26:31] Speaker 02:
Way of looking, sorry, I know I keep pausing and then going on.

[00:26:34] Speaker 02:
Why isn't that the better way of looking at Article 3 standing?

[00:26:38] Speaker 02:
Now, it could be true that if you get sued and you know Fortress can license you, you can go get a license, even a retroactive one, and then you can assert that and say, well, they don't have a cause of action here because we have a license.

[00:26:51] Speaker 02:
But why does that go to legally protected interest?

[00:26:56] Speaker 00:
because the legally protected interest under section 154 and the springboard cases and the sports cases is the right to exclude.

[00:27:04] Speaker 00:
And our position is that when you don't have the right to stop somebody, when somebody else can forgive infringement at their will.

[00:27:10] Speaker 02:
I mean, you're assuming this is circular because you're assuming that they don't have the right to exclude when they give a potential license with a potential sublicense to somebody else.

[00:27:21] Speaker 02:
Where have we ever said that?

[00:27:23] Speaker 00:
Well, the court certainly said that in the context of exclusive licensees.

[00:27:28] Speaker 00:
I will acknowledge there is not a square holding in either way about what is the situation with patent owners because it happens so rarely.

[00:27:34] Speaker 03:
OK, but the result of your argument is that nobody can sue for infringement.

[00:27:40] Speaker 00:
Well, it's fixable.

[00:27:41] Speaker 00:
It's a dismissal without prejudice.

[00:27:42] Speaker 00:
They can be fixed.

[00:27:43] Speaker 03:
No, no, no.

[00:27:44] Speaker 03:
But under the legal structure the way it is, your theory is no one can sue for infringement.

[00:27:50] Speaker 00:
At that moment, and the same was true in Moro.

[00:27:54] Speaker 00:
is exactly what this court held.

[00:27:55] Speaker 04:
That's why there's no holding along those lines.

[00:28:00] Speaker 00:
Well, there was a holding in Morrill, actually.

[00:28:02] Speaker 04:
That's a absurd result.

[00:28:05] Speaker 00:
No.

[00:28:05] Speaker 00:
Actually, I think in Morrill, there was a holding that they couldn't proceed, because in that case, the right to serve in the ownership were separated.

[00:28:13] Speaker 04:
You have a final thought?

[00:28:16] Speaker 00:
No, Your Honor.

[00:28:16] Speaker 00:
I'll submit.

[00:28:17] Speaker 00:
Thank you.

[00:28:18] Speaker 04:
Thank you.

[00:28:20] Speaker 04:
Mr. Lampton, why is there no estoppel against in this case?

[00:28:30] Speaker 04:
Please do not dismantle the court.

[00:28:32] Speaker 01:
You should see me at home.

[00:28:36] Speaker 01:
So the answer is portraiture.

[00:28:41] Speaker 01:
It wasn't the basis of the decision below.

[00:28:43] Speaker 01:
It wasn't raised below.

[00:28:45] Speaker 01:
Google notified the district court of the decision in Apple three days after it was issued.

[00:28:50] Speaker 01:
It was issued on a Friday.

[00:28:51] Speaker 01:
Google notified on Monday.

[00:28:53] Speaker 01:
It said that there were similar issues involving the same.

[00:28:56] Speaker 03:
This third circuit case, which seems to be the only case that deals with this question, says that you can move to sue until the judgment becomes final, right?

[00:29:07] Speaker 01:
The Third Circuit, if you're talking about five unlabeled boxes, yes.

[00:29:10] Speaker 01:
So of course, Google has invoked that case.

[00:29:12] Speaker 01:
This case comes out of the Ninth Circuit, not the Third Circuit.

[00:29:16] Speaker 03:
That's the problem with our law looking at regional circuit law.

[00:29:19] Speaker 01:
That's correct.

[00:29:21] Speaker 03:
Because the same judgment has different effects on different circuits.

[00:29:24] Speaker 03:
That can't be.

[00:29:26] Speaker 01:
And I think they don't cite any decisions from this circuit either.

[00:29:29] Speaker 01:
And the reason is that five unlabeled boxes doesn't get rid of the rule that you force it.

[00:29:37] Speaker 01:
your collateral estoppel argument if you don't raise it at the most prompt reasonable opportunity.

[00:29:45] Speaker 01:
It doesn't get rid of the exceptional circumstances you must show.

[00:29:49] Speaker 01:
It's just best understood as a case in which there were exceptional circumstances for the failure to raise it more promptly.

[00:29:56] Speaker 01:
So in that case, for example, we were dealing with neutral, not non-mutual stoppals.

[00:30:00] Speaker 01:
You had one party that would have been.

[00:30:01] Speaker 03:
But you have no case the other way that suggests that by waiting until the judgment becomes final, you somehow surrendered the issue, right?

[00:30:09] Speaker 01:
Oh, yes, absolutely.

[00:30:10] Speaker 01:
So the Seneca-Kwayuga case from the 10th Circuit made it very clear that if you sit on your hands until after judgment, that's too late.

[00:30:18] Speaker 01:
And it's clear that that should be the case, because the whole point of collateral stoppal or issue preclusion

[00:30:23] Speaker 01:
is to save everybody time and energy.

[00:30:25] Speaker 01:
But because they didn't raise this before the district court, the district court went off and addressed the merits.

[00:30:31] Speaker 01:
Because they didn't raise this before the district court, they're now asking this court to address collateral estoppel in the first instance where no court has before.

[00:30:38] Speaker 01:
Because they didn't raise collateral estoppel in the district court, we file an opening brief addressing only the issues the district court had ruled on.

[00:30:47] Speaker 01:
We ended up having to address this for the first time on reply.

[00:30:50] Speaker 01:
All those things point against judicial economy.

[00:30:52] Speaker 01:
And it would be especially unfair to do that here, because for one thing.

[00:30:58] Speaker 02:
Why doesn't it make more sense to wait until it becomes final to assert issue preclusion?

[00:31:04] Speaker 02:
I mean, when it's not final, why would other district courts defer to a non-final ruling?

[00:31:10] Speaker 02:
It might get reversed on appeal.

[00:31:11] Speaker 02:
They might disagree with it.

[00:31:13] Speaker 02:
A whole host of reasons why you wouldn't assert it until it became final.

[00:31:18] Speaker 01:
So the general rule.

[00:31:21] Speaker 01:
and this case's decision of Farmacia actually applies that rule, is that a decision is preclusive even if it's pending on direct review.

[00:31:29] Speaker 01:
And in Farmacia, this court applied issue preclusion to a case, even though that other case was still pending on direct review and said, look, if we reverse, then you can go back and ask for reopening.

[00:31:39] Speaker 01:
But we're not going to slow things down here, waiting for that to happen.

[00:31:43] Speaker 01:
And there's no exception to that rule, simply saying, well, there's a pending appeal.

[00:31:47] Speaker 01:
You can always get around it.

[00:31:48] Speaker 01:
There's an exceptional circumstances rule.

[00:31:50] Speaker 01:
like in five unmarked boxes, where you had mutual collateral stop.

[00:31:55] Speaker 03:
What's your 10th Circuit case?

[00:31:57] Speaker 01:
Where do you discuss that?

[00:31:58] Speaker 01:
Cuyuga, Seneca, Tribe.

[00:31:59] Speaker 01:
Where do you discuss that?

[00:32:02] Speaker 01:
I'd have to look at the brief.

[00:32:03] Speaker 01:
I can give you the, it's 327 F1030, and it says,

[00:32:08] Speaker 01:
permitting related assertion collateral estoppel would do nothing to vindicate the two primary policies behind the doctrine, conserving judicial resources and protecting the parties from the expense and vexation of relegation of issues another party previously litigated.

[00:32:21] Speaker 01:
That's precisely the case here.

[00:32:22] Speaker 03:
We not only have- What I'm trying to get at, is that a case in which they waited until the judgment became final and were held to be precluded as a result of that?

[00:32:31] Speaker 01:
Yes.

[00:32:32] Speaker 01:
They didn't raise it in the district court, and then the judgment became final, and they raised it for the first time on appeal.

[00:32:38] Speaker 03:
No, no, no.

[00:32:39] Speaker 01:
Oh, I see.

[00:32:40] Speaker 01:
I see.

[00:32:40] Speaker 01:
The question is, is that a case in which the judgment was still pending on appeal and they hadn't raised it?

[00:32:46] Speaker 01:
No, that is not a case like that.

[00:32:48] Speaker 01:
But I think the standard rule is, you've got to raise it in the first practical opportunity.

[00:32:54] Speaker 03:
There's nowhere in that case which says that waiting until the judgment becomes final is fatal to your argument.

[00:33:00] Speaker 01:
I don't think I have a case that says that.

[00:33:03] Speaker 01:
But I do think the principle that the case is preclusive

[00:33:06] Speaker 01:
means that you should be raising a personal appeal.

[00:33:09] Speaker 01:
And the judge below in this case very much might have wanted to know if this was preclusive.

[00:33:14] Speaker 01:
She actually cited the Alsop opinion approvingly for various reasons on page 15.

[00:33:19] Speaker 01:
And we could have avoided all the discussion of the merits, which we've occupied a lot of time with already, if this had simply been raised below, which it was not.

[00:33:28] Speaker 01:
I see I'm through my time in 30 seconds as well.

[00:33:30] Speaker 01:
Thank you very much.

[00:33:30] Speaker 04:
Thank you.

[00:33:32] Speaker 04:
The case is submitted.