[00:00:00] Speaker 06:
Our next case is number 22-1200, Ameran Inc.

[00:00:03] Speaker 06:
versus Domino's Pizza.

[00:00:06] Speaker 06:
Mr. Ruyak?

[00:00:06] Speaker 04:
Good morning, Your Honors.

[00:00:11] Speaker 04:
We're here on appeal on a 285 ruling made by the district court below, which based on the standards that this court has consistently applied in appellate cases.

[00:00:27] Speaker 04:
We find that it was not an exceptional case and that the district court abused its discretion by not properly identifying the key elements necessary factually to find an exceptional case.

[00:00:43] Speaker 04:
We can't find any case where the district court has found it unreasonable for a plaintiff to continue a case where the Patent Office and the PTEP has repeatedly on multiple CBMs

[00:00:58] Speaker 04:
advised the parties in the court that the claims of the 077 patent, the key patent that was litigated here, on proponents of the evidence standard, more likely than not, had patentable subject matter, and went on to say that in that patentable subject matter, there was eligible limitations that led to that result.

[00:01:23] Speaker 06:
Let's assume for the moment that you're right.

[00:01:26] Speaker 06:
for at least part of the period.

[00:01:29] Speaker 06:
I'm not sure that there's evidence that that's true for all, but for part of the period, it was reasonable to continue to litigate that.

[00:01:37] Speaker 06:
Yes, Your Honor.

[00:01:37] Speaker 06:
We have cases that say if there's misconduct, it has to be, the fees have to be allocated to the fees incurred by the misconduct.

[00:01:51] Speaker 06:
But I'm not aware of a case that says you can't award fees

[00:01:55] Speaker 06:
for the litigation of the entire case if it's ultimately found to be baseless, even though it wasn't found to be baseless until the end of the case.

[00:02:06] Speaker 06:
Do you have any authority that says that under those circumstances, you have to allocate fees between the period where it was reasonable and the period where it was unreasonable?

[00:02:16] Speaker 04:
Yes, Your Honor.

[00:02:17] Speaker 04:
I think that Stonebasket is such a case.

[00:02:21] Speaker 04:
By the way, the court addressed that.

[00:02:22] Speaker 04:
If I could use an analogy, maybe that would help.

[00:02:25] Speaker 06:
Well, an analogy is in cases.

[00:02:27] Speaker 04:
Well, yes, an analogy so that I think we can put the cases into perspective.

[00:02:32] Speaker 04:
Because I think there are a number of cases that, while they don't specifically say that you need to allocate by date, because of the way the cases are written, when it becomes unreasonable is critical.

[00:02:44] Speaker 04:
In this case, the cases were filed.

[00:02:48] Speaker 04:
There were some preliminary motions.

[00:02:50] Speaker 04:
After that, the cases were stayed.

[00:02:51] Speaker 04:
There was no litigation on the four patents that were asserted.

[00:02:57] Speaker 04:
Why?

[00:02:57] Speaker 04:
It was because the CBMs were filed.

[00:02:59] Speaker 04:
So the court stayed the case.

[00:03:00] Speaker 04:
So it would be no litigation until it was sorted out what was valid, what was invalid.

[00:03:06] Speaker 04:
There were multiple CBMs.

[00:03:07] Speaker 04:
And out of that, two things happened.

[00:03:09] Speaker 04:
One, some of the claims of some of the patents were found invalid.

[00:03:13] Speaker 06:
Is there a case that says you have to allocate treats where

[00:03:16] Speaker 06:
With the ground for the 285 award is baselessness.

[00:03:21] Speaker 06:
What cases you have to allocate fees between the period when it was known to be baseless and the period before it was known to be baseless?

[00:03:29] Speaker 04:
I think Stonebasket is one of those cases where there had to be some kind of notice.

[00:03:34] Speaker 04:
the patent holder had to know at some point in time that continuing on after that point in time was unreasonable.

[00:03:42] Speaker 02:
So I guess let me just see if I understand, because there's so many different patents here, whatever.

[00:03:47] Speaker 02:
You're talking about the 077, and you're saying that for the judge to assess fees on your litigating that was an abuse of discretion because

[00:04:00] Speaker 02:
during the stay period, the CBM was rejected, or there was no institution decision?

[00:04:06] Speaker 04:
Well, it was part of that, Your Honor.

[00:04:08] Speaker 04:
It was the fact that, at first, it was rejected, but not only said that there was patentable subject matter.

[00:04:12] Speaker 04:
But then the court lifted the stay and said, let's go.

[00:04:15] Speaker 02:
You said not only that, but who said?

[00:04:18] Speaker 02:
What did you say about that?

[00:04:19] Speaker 04:
The PCAB said that the 077 claims contained eligible subject matter.

[00:04:25] Speaker 04:
And it was more likely than not, this is the quote, that they were patentable.

[00:04:30] Speaker 02:
Can you give us the site for that?

[00:04:31] Speaker 04:
Yes, Your Honor.

[00:04:33] Speaker 04:
The sites for that are in the March 26, 2014, Eligible Subject Matters Appendix 1191 to 1231 is the opinion.

[00:04:48] Speaker 02:
Because they just declined to Institute, right?

[00:04:50] Speaker 02:
There was no decision by them, right?

[00:04:52] Speaker 04:
Well, Appendix 1231, that's true, they declined.

[00:04:57] Speaker 04:
But when they declined, they commented on it.

[00:05:00] Speaker 04:
And they said two things.

[00:05:01] Speaker 04:
One, at 1231, we determined that the information presented in the petition does not establish that any claim of the 118 of those 077 patents were more likely than not unpatentable.

[00:05:15] Speaker 04:
They also distinguished the 077 claims from the claims of the other patents that they found ineligible.

[00:05:23] Speaker 02:
I'm sorry, 1231?

[00:05:25] Speaker 04:
Yes, Your Honor.

[00:05:33] Speaker 04:
After the final page of the first set of appendices, the very final page.

[00:05:47] Speaker 02:
Yeah.

[00:05:57] Speaker 02:
So you're saying that

[00:06:00] Speaker 02:
At what point could the judge not look at the claims and say, I think they're clear?

[00:06:11] Speaker 02:
I guess the other question I have is, I may be wrong, but I recall that the judge placed a lot of emphasis with regard to the litigation of the 077 patent on the infringement side of it, not on the validity side of it.

[00:06:24] Speaker 02:
Am I mistaken about that?

[00:06:25] Speaker 04:
He did address the infringement.

[00:06:27] Speaker 04:
And Domino's, in their brief, focuses on the infringement part.

[00:06:30] Speaker 02:
And that was the main focus of what the judge talked about.

[00:06:34] Speaker 04:
No, it was not, Your Honor.

[00:06:35] Speaker 04:
The judge specifically said in his opinion that that was the weak argument, the weaker argument that Domino's had.

[00:06:42] Speaker 04:
He focused the whole thing on his decision two months before trial in this case.

[00:06:47] Speaker 04:
granting the 101 motion.

[00:06:49] Speaker 04:
That was the first time it was raised against the 077 patent in this case.

[00:06:54] Speaker 06:
Certainly it was reasonable for the judge to find it after our decision in the Apple case.

[00:07:00] Speaker 06:
that it was unreasonable to continue, right?

[00:07:03] Speaker 04:
No, Your Honor, because the Apple case only addressed the other three patents.

[00:07:08] Speaker 04:
And when that happened, Amrith dropped those patents and all the claims and also dismissed two appeals that related those patents.

[00:07:15] Speaker 04:
They did what?

[00:07:16] Speaker 06:
Let's assume that we disagree with you.

[00:07:18] Speaker 06:
And we think that after the Apple case, it was reasonable for the district court to find that you're pursuing litigation as basis.

[00:07:27] Speaker 06:
Let's just assume that.

[00:07:28] Speaker 06:
Yes, Your Honor.

[00:07:29] Speaker 06:
The question is, what about the fees before the Apple case?

[00:07:32] Speaker 06:
You rely on these institution, non-institution decisions by the PTAB, and you rely on other things to say that up until that point, at least, we were reasonable in continuing legislation.

[00:07:47] Speaker 06:
So I come back to the question of what case says that you have to allocate fees under those circumstances.

[00:07:54] Speaker 06:
You mentioned stone.

[00:07:55] Speaker 06:
I looked at it in your brief.

[00:07:56] Speaker 06:
You don't describe stone that way in your brief.

[00:07:59] Speaker 06:
I'm not sure what it is.

[00:08:00] Speaker 06:
I don't, I'm not committed to selling cases.

[00:08:03] Speaker 06:
You know, why can't the court say, well, it may have been reasonable to litigate this for a while, but at the end of the day, it was baseless and I can work these for the whole case on that ground.

[00:08:14] Speaker 04:
Well, you're right.

[00:08:15] Speaker 04:
Stone Mountain relies on the concept of notice and when did the patent holder know that it was unreasonable to continue.

[00:08:24] Speaker 04:
And you can't hammer someone all the way back to the beginning if it was reasonable to continue the litigation to a point in time when it became unreasonable.

[00:08:33] Speaker 02:
Well, let's assume, hypothetically.

[00:08:35] Speaker 02:
I think this is just following up on what Judge Dyke said.

[00:08:38] Speaker 02:
If we conclude that shortly by the time the district court litigation resumed after the stay, the Apple decision had found ineligibility of the other three patents in the same family, and that there was no reasonable basis.

[00:08:57] Speaker 02:
Let's assume we don't think that's an abuse of discretion.

[00:09:00] Speaker 02:
So what were the fees beforehand?

[00:09:03] Speaker 02:
I mean, how do you divide it up?

[00:09:05] Speaker 02:
On that hypothetical.

[00:09:06] Speaker 02:
Fees beforehand were minimal.

[00:09:07] Speaker 02:
There was no litigation.

[00:09:08] Speaker 02:
So the real fees that you've been assessed with regard to the 077 are the fees after the stay was lifted.

[00:09:14] Speaker 02:
And by that time, the Apple decision had ruled on ineligibility.

[00:09:20] Speaker 04:
Of the other three patents.

[00:09:21] Speaker 02:
Right, the other thing.

[00:09:22] Speaker 02:
Of the same family.

[00:09:23] Speaker 04:
And the 077 patent had survived multiple attacks on CBMs in the patent office.

[00:09:29] Speaker 02:
OK.

[00:09:29] Speaker 02:
OK.

[00:09:30] Speaker 04:
So it's a green light.

[00:09:32] Speaker 04:
It's not a red light.

[00:09:33] Speaker 04:
If you have a red light, you proceed at your own risk.

[00:09:35] Speaker 04:
It was a green light.

[00:09:36] Speaker 02:
I just round out what I said.

[00:09:40] Speaker 02:
So Judge Dyke's concern, which I share, isn't really apt here necessarily because the fees predominantly, if not almost exclusively, that are assessed on the 077 deal with after the state was lifted.

[00:09:57] Speaker 02:
And she found at that time there was no basis for you to go forward.

[00:10:02] Speaker 02:
Right, that's the timing.

[00:10:04] Speaker 04:
No, the judge never identified the timing.

[00:10:07] Speaker 04:
That's one of the problems.

[00:10:09] Speaker 04:
Judge Sebron never identified the timing.

[00:10:11] Speaker 04:
He just looped everything together and said from the beginning.

[00:10:13] Speaker 02:
But nothing was really happening.

[00:10:15] Speaker 02:
I mean, until the stay lifted.

[00:10:16] Speaker 04:
What?

[00:10:17] Speaker 04:
But when the stay lifted, it lifted because we were moving ahead on the patents that were valid.

[00:10:23] Speaker 04:
The 077 patents had not been found invalid.

[00:10:26] Speaker 04:
They had been supported by the Patent Office, reaffirmed as valid in effect, more likely than not valid.

[00:10:32] Speaker 04:
Domino's, in their brief at page 39, admits that there was no reason not to go forward with the 077 claims.

[00:10:41] Speaker 04:
They admit that.

[00:10:42] Speaker 04:
What that means, they've admitted it was reasonable to proceed at that point.

[00:10:46] Speaker 02:
Is that fair?

[00:10:47] Speaker 02:
You're saying they should have what?

[00:10:49] Speaker 02:
Rejected the opportunity to lift the stay?

[00:10:51] Speaker 02:
They agreed to lift the stay.

[00:10:53] Speaker 02:
Of course they did.

[00:10:54] Speaker 02:
That doesn't demonstrate that they think

[00:10:56] Speaker 02:
that there was a reasonable basis to pursue these claims, right?

[00:10:59] Speaker 04:
They filed no motion in the court.

[00:11:01] Speaker 04:
If they thought these claims were invalid, as opposed to what the patent and the PTB-AB did, they should have made some motion in that regard.

[00:11:11] Speaker 02:
Well, there was some rejection motion, wasn't there?

[00:11:13] Speaker 02:
Pardon me?

[00:11:14] Speaker 02:
Was there some rejection motion?

[00:11:16] Speaker 04:
Not until a month before trial.

[00:11:19] Speaker 04:
18 months later, there was 18 months of litigation.

[00:11:21] Speaker 02:
Am I missing something?

[00:11:22] Speaker 02:
Was this having to do with the fact that Pizza Hut dropped out, and there was a settlement, and then they took over for Pizza Hut?

[00:11:29] Speaker 04:
No.

[00:11:30] Speaker 04:
No one filed a motion on either non-infringement or 101 or validity until two months before trial.

[00:11:39] Speaker 04:
In that period between the lifting of the stay and the time when that was raised as an issue, there were nothing but approvals.

[00:11:47] Speaker 04:
We won the markman.

[00:11:49] Speaker 04:
No non-infringement claims on the markman.

[00:11:52] Speaker 04:
There was another PTAB decision in December of 17 where they said, even in light of Apple and Mayo and Alice, we the PTAB still believe these patents are valid.

[00:12:05] Speaker 04:
The problem with this case is that the judge didn't look at it in that chronology.

[00:12:09] Speaker 04:
When was it under Stone-Basket?

[00:12:13] Speaker 04:
When did Amirath really know or have reason to know the proceeding they did at their risk because the patents were likely invalid or unenforceable?

[00:12:23] Speaker 04:
It didn't happen.

[00:12:25] Speaker 04:
All the parties agreed to lift the state and go forward with full-scale litigation.

[00:12:30] Speaker 04:
No one raised that issue again in conflict with the patent office.

[00:12:34] Speaker 05:
Can I ask you, let's just assume we disagree with all of that, and that when the Apple decision issued, your going forward was unreasonable and insufficient for finding exceptional conduct.

[00:12:50] Speaker 05:
I know you disagree with that, except that how much of the attorney fees awarded were for that?

[00:12:56] Speaker 04:
Virtually nothing.

[00:12:57] Speaker 05:
OK.

[00:12:58] Speaker 04:
Because at that point, the case was staged so that everybody could figure out.

[00:13:03] Speaker 04:
Think about this.

[00:13:03] Speaker 04:
Everybody could figure out through the Patent Office whether these claims are valid or invalid.

[00:13:08] Speaker 04:
The Patent Office spoke.

[00:13:09] Speaker 04:
The Court of Appeals here spoke.

[00:13:11] Speaker 04:
077 claims were valid.

[00:13:13] Speaker 04:
The others were not.

[00:13:14] Speaker 02:
And you were talking about a second PTAB decision?

[00:13:18] Speaker 04:
Yes, Your Honor.

[00:13:18] Speaker 04:
There were three of them.

[00:13:20] Speaker 02:
And didn't they just deny institution in that case because a substantially similar petition was brought before?

[00:13:27] Speaker 02:
No.

[00:13:28] Speaker 04:
They actually addressed it because the Starbucks defendant in this case asked them to consider their prior decision in light of Alice and Mayo and the Apple decision.

[00:13:40] Speaker 04:
And the PTAP reviewed that and said specifically, and that is that

[00:13:50] Speaker 04:
That's on Appendix 860, 861.

[00:13:54] Speaker 04:
They said, we have reviewed it in light of those Supreme Court decisions and the Pellet decision.

[00:14:02] Speaker 04:
And we still believe that the 077 claims have eligible subject matter.

[00:14:09] Speaker 04:
And we're not changing our decision.

[00:14:12] Speaker 04:
Your Honor, what do I do as a lawyer representing a client in this situation?

[00:14:17] Speaker 04:
When do I tell them, this company had 48 licenses with this technology.

[00:14:22] Speaker 04:
They had 48 licenses.

[00:14:24] Speaker 04:
They were pursuing it, and the patent office said, your patents are fine.

[00:14:27] Speaker 04:
Go ahead.

[00:14:28] Speaker 04:
The court says, OK, we're going to lift the stay.

[00:14:31] Speaker 04:
Go ahead.

[00:14:32] Speaker 04:
We're fine for you on markment.

[00:14:34] Speaker 04:
They also dismissed a tax on infringement on the contentions.

[00:14:40] Speaker 04:
What do you say?

[00:14:41] Speaker 04:
Abandon it?

[00:14:41] Speaker 04:
Give up and walk away?

[00:14:42] Speaker 04:
That can't be the result here.

[00:14:45] Speaker 04:
The result has to be based on when did the client know or have reason to know that the 077 claims would be invalid.

[00:14:55] Speaker 06:
But you're not able to cite a case that says it's improper for the district court to award fees going back if at the end of the day the district court concludes that the litigation is baseless.

[00:15:09] Speaker 06:
I mean, there are cases requiring allocation with respect to misconduct.

[00:15:16] Speaker 06:
I have not found a case, and you have not called me such a case to my attention, saying that at the end of the day, it's baseless.

[00:15:24] Speaker 06:
You cannot award fees going back to the beginning.

[00:15:27] Speaker 04:
But Your Honor, maybe then this is the case that has to say that, because it would be contrary to every aspect of patent law, the presumption of validity.

[00:15:36] Speaker 05:
Where did you argue that in your blue brief?

[00:15:39] Speaker 04:
We did argue it, Your Honor.

[00:15:40] Speaker 04:
But where?

[00:15:43] Speaker 04:
Well...

[00:15:50] Speaker 04:
You mean that this would be a unique case?

[00:15:52] Speaker 05:
That we should allocate based upon when it became unreasonable or exceptional.

[00:15:57] Speaker 04:
Well, the whole last section of our brief, Your Honor.

[00:16:00] Speaker 04:
I read it.

[00:16:01] Speaker 04:
It says that the court did not properly allocate at the point in time when it became unreasonable.

[00:16:07] Speaker 04:
That's the point we made.

[00:16:09] Speaker 04:
That to do something else would be to say that every case would be an exceptional case if in the end

[00:16:19] Speaker 04:
In the end, you find that the patents are ineligible.

[00:16:23] Speaker 04:
Your Honor, I urge you to consider the fact that when you're litigating a case, there are a lot of contrary decisions.

[00:16:32] Speaker 04:
But until it's clear to the patent holder that his case does not have a base that's baseless, the Munchkin case is a clear example of that.

[00:16:44] Speaker 04:
It can't just be weakness.

[00:16:46] Speaker 04:
It's got to be baseless.

[00:16:49] Speaker 04:
And when did that happen in this case?

[00:16:50] Speaker 04:
It didn't happen until the very end when they threw the Hail Mary in the air on 101.

[00:16:58] Speaker 04:
It was 10 days before trial.

[00:16:59] Speaker 01:
Can I just ask you, because we don't have these cases that often, is facelessness a requirement under octane?

[00:17:06] Speaker 04:
Your Honor, it's one element of it.

[00:17:08] Speaker 04:
On octane fitness, the court said you don't have to have both objectively unreasonable and bad faith.

[00:17:15] Speaker 06:
But the following case was... It's not a requirement, but it's a ground for awarding fees.

[00:17:19] Speaker 04:
Right, a ground for awarding fees.

[00:17:24] Speaker 04:
But how can a patent holder who's got the presumption of validity and the right to enforce a patent is told after review the patent office that you're okay?

[00:17:36] Speaker 04:
And the court says we're going to go ahead with full-blown litigation.

[00:17:39] Speaker 04:
No one says at that point that there's another attack on the patent.

[00:17:46] Speaker 04:
And you go forward.

[00:17:47] Speaker 04:
And it's not until the very end that both infringement are raised and validity are raised.

[00:17:52] Speaker 04:
Infringement is never decided by the court.

[00:17:54] Speaker 04:
It would have required an additional markman decision to do that.

[00:17:59] Speaker 04:
And I just think, Your Honor, if you look at the cases, even though there's not, there wasn't an allocation of stone basket because it was reversed.

[00:18:09] Speaker 04:
But the whole notion of stone basket is there has to be a point in time when the patent holder has no reason to know that the case is not valid.

[00:18:18] Speaker 06:
You don't cite stone for that proposition in your brief.

[00:18:21] Speaker 06:
Pardon me?

[00:18:22] Speaker 06:
You don't cite stone for that proposition in your brief.

[00:18:27] Speaker 04:
That is the case we've cited, your Honor.

[00:18:29] Speaker 04:
And we say, yes, it's unreasonable and the notice is required.

[00:18:59] Speaker 07:
And please the court your honors Frank Angellary for Domino's.

[00:19:07] Speaker 07:
Judge Sabra should be affirmed because he conducted a classic totality of the circumstances analysis under octane and there were a lot of circumstances in this case for patents.

[00:19:18] Speaker 06:
What about the question of awarding fees for its apparent cases baseless?

[00:19:27] Speaker 07:
Uh, he, he addressed that.

[00:19:28] Speaker 07:
So there's probably two answers to that, I think, Your Honor.

[00:19:32] Speaker 07:
One is, uh, the baselessness isn't required.

[00:19:36] Speaker 07:
He looked at the totality of circumstances, which included the litigation conduct over the entire... Well, she certainly awarded fees because she concluded it was baseless, right?

[00:19:46] Speaker 07:
I believe he did award fees in part because he concluded it was baseless.

[00:19:50] Speaker 07:
He also cited the litigation or the conduct of the litigation.

[00:19:56] Speaker 07:
Council, I believe, misspoke when Judge Prost asked about the

[00:20:01] Speaker 07:
weak infringement side of the case.

[00:20:03] Speaker 07:
The judge did not say that that was the lesser part of his opinion.

[00:20:08] Speaker 07:
He did say that the litigation conduct was not Domino's strongest ground, but he in no way limited his finding of clear non-infringement.

[00:20:18] Speaker 06:
We can't affirm just because some of what the district court relied on was correct.

[00:20:24] Speaker 06:
If the district court relied on things that he shouldn't have relied on.

[00:20:29] Speaker 07:
I don't believe the district court relied on anything he shouldn't have relied on.

[00:20:31] Speaker 07:
He relied on.

[00:20:32] Speaker 06:
But their argument is it wasn't apparent the case was baseless until the end.

[00:20:39] Speaker 06:
I'm not sure that's right.

[00:20:40] Speaker 06:
But it's assumed for the moment that's correct.

[00:20:44] Speaker 06:
Can the court award fees for the whole litigation?

[00:20:48] Speaker 06:
Because as it turns out, it's baseless at the end.

[00:20:52] Speaker 07:
Well, if it's baseless at the end, it's baseless at the beginning.

[00:20:54] Speaker 07:
And at some level, part of it's baseless at the beginning.

[00:20:58] Speaker 06:
They didn't know it was their connection.

[00:21:00] Speaker 02:
Well, what do you rely on?

[00:21:03] Speaker 02:
I mean, just to follow up Judge Dyke's question, what do you mean?

[00:21:05] Speaker 02:
I mean, we've already established, OK, by the time the stay is up, we've got the Apple decision, and we've got a rejection for institution under the CDM.

[00:21:18] Speaker 02:
So what, at that point in time, was sufficient that they should have known, the other side should have known, that they shouldn't proceed with this?

[00:21:25] Speaker 02:
This patent has gone down.

[00:21:27] Speaker 07:
Two major things, Your Honor.

[00:21:29] Speaker 07:
First, on the infringement side, which they know.

[00:21:32] Speaker 07:
They know their case.

[00:21:33] Speaker 07:
We don't know it until they tell us what it is.

[00:21:36] Speaker 07:
The judge said that a cursory review at Appendix 10 of our menus would have established that they were not synchronous.

[00:21:43] Speaker 07:
All the claims require synchronism.

[00:21:45] Speaker 06:
No, no, no, no, no.

[00:21:45] Speaker 06:
That's not responsive to the question.

[00:21:48] Speaker 06:
We're talking about the award based on the theory of baselessness.

[00:21:52] Speaker 06:
Yeah.

[00:21:52] Speaker 06:
OK?

[00:21:53] Speaker 06:
And the question is,

[00:21:54] Speaker 06:
if it was not baseless from the beginning, and you have more fees going back to the beginning.

[00:22:00] Speaker 06:
And if so, why?

[00:22:02] Speaker 07:
I'm sorry that I misunderstood Judge Prost's question.

[00:22:04] Speaker 07:
I thought she was asking me for why we thought it was baseless from the beginning.

[00:22:09] Speaker 07:
So if I misunderstood, I apologize.

[00:22:11] Speaker 07:
So now I don't understand.

[00:22:15] Speaker 07:
What's the question?

[00:22:16] Speaker 07:
Because I want to make sure I answer the right question.

[00:22:18] Speaker 06:
Well, I don't need to reframe the question.

[00:22:22] Speaker 06:
I thought the question was,

[00:22:23] Speaker 06:
In terms of the, let's focus on the human language.

[00:22:26] Speaker 06:
Okay, sure.

[00:22:27] Speaker 06:
So what is the basis for concluding that it was apparent that it was invalid from the beginning?

[00:22:36] Speaker 07:
Well, you have the, let's start from the beginning, pre-Apple?

[00:22:40] Speaker 07:
Is that the question?

[00:22:42] Speaker 07:
I guess you'd have to say the, the

[00:22:47] Speaker 07:
the menu soft verdict.

[00:22:49] Speaker 07:
I don't know if the judge concluded that the 101 on 077 was baseless from the beginning, because he looked at the whole case.

[00:22:57] Speaker 02:
But when did the clock start running on the fees?

[00:22:59] Speaker 02:
I think your friend conceded that essentially the fees were incurred after the stay was lifted.

[00:23:07] Speaker 07:
He said most of the fees were after the stay was lifted, and we agree with that, Your Honor.

[00:23:12] Speaker 02:
So okay, so let's move to when the state was lifted.

[00:23:17] Speaker 02:
What was the state of affairs that would have led them to conclude that there was no basis for going forward?

[00:23:27] Speaker 07:
So my understanding of that question is there's two bases.

[00:23:30] Speaker 07:
One is the infringement, which I say the judge said that a cursory review would have showed that, and that's something they can do at the beginning of the case, frankly.

[00:23:39] Speaker 07:
That's got nothing to do with validity.

[00:23:40] Speaker 07:
But with respect to validity, Your Honor, the Apple decision was a clear signal that the case going forward had no merit for three reasons.

[00:23:50] Speaker 07:
If you compare the Apple decision with this court's panel decision on the merits of our case, they match up very closely.

[00:23:59] Speaker 07:
So in Apple, the court found step one was invalid or was not met.

[00:24:05] Speaker 05:
But what do you do?

[00:24:07] Speaker 05:
I understand your argument, but what do you do if you're the lawyer for Amaranth and you've got the Apple decision, but you've also got the PTAB saying, we think these are eligible.

[00:24:18] Speaker 05:
I mean, that is a bit of a quandary.

[00:24:21] Speaker 05:
Can't they rely on the PTAB to at least go forward and take the chance that they're somehow distinguishable from Apple?

[00:24:32] Speaker 07:
If they're distinguishable from Apple, they should have been able to articulate that, Your Honor, in the panel decision before this court in our case.

[00:24:39] Speaker 07:
They didn't.

[00:24:40] Speaker 07:
They ran the same argument.

[00:24:41] Speaker 07:
In both Apple and this court, step one was not met because they're results-oriented.

[00:24:47] Speaker 07:
Step two was not met because the spec says the software is commonly known.

[00:24:52] Speaker 07:
And in fact, Apple addressed synchronous claims.

[00:24:54] Speaker 07:
But separately, Your Honor, with respect to the PTAB, the PTAB did not address the case on the merits.

[00:25:00] Speaker 07:
The pages that counsel cited were from the 2014 decision.

[00:25:04] Speaker 07:
2017 decision clearly analyzed it under 324 and 325, which are just discretionary denials.

[00:25:11] Speaker 06:
Well, really, where did you show us where they said that?

[00:25:15] Speaker 06:
Where who said what?

[00:25:16] Speaker 06:
Well, where they said they didn't re-analyze that decision after that.

[00:25:23] Speaker 06:
I don't know what they said, what we've considered to happen, doesn't change

[00:25:30] Speaker 07:
They said that the petitioner presented the same arguments on the substance and that the petitioner was arguing that the law had changed and they said that's not enough for us to revisit it.

[00:25:46] Speaker 07:
There is a footnote where they address Apple that's on appendix 858.

[00:25:51] Speaker 07:
And the panel does say there are a number of limitations found in the 077 patent claims that are not in related patents.

[00:25:59] Speaker 07:
They don't identify the limitations.

[00:26:00] Speaker 06:
OK, but it's not just saying, we're going to deny this because it's a repetitive request.

[00:26:06] Speaker 06:
They appear to be addressing merits.

[00:26:09] Speaker 06:
I wasn't saying that we're so convinced after after that these claims are not invalid under 101.

[00:26:18] Speaker 07:
They didn't institute, Your Honor, that's fair.

[00:26:21] Speaker 07:
But Apple is a higher authority than the PTAB, and this Court is a higher authority than the PTAB, and the plaintiff made the same essential arguments to this Court when arguing the 077 patent that they made for Apple.

[00:26:36] Speaker 07:
And so the point, Your Honor, is your question is how are they supposed to know?

[00:26:40] Speaker 07:
Well, if they've got

[00:26:42] Speaker 07:
a different frame of reference or a different set of arguments for this patent over the others, then that would have manifested in the panel decision here.

[00:26:50] Speaker 06:
Let's try a higher level.

[00:26:51] Speaker 06:
Sure.

[00:26:53] Speaker 06:
Suppose we were to conclude that halfway through, up to the point halfway through the case, it would be reasonable to litigate and there was no conclusive evidence that the patent was

[00:27:14] Speaker 06:
that, nonetheless, despite that finding, you can award fees for the entire case?

[00:27:21] Speaker 07:
So I have to clarify a question on your hypothetical, because the district court did look at the manner of litigation which applied across the whole case.

[00:27:29] Speaker 07:
So I think the answer to your question is... Is it just baselessness?

[00:27:32] Speaker 06:
Suppose the award is entirely based on a finding of baselessness.

[00:27:38] Speaker 06:
under my hypothetical can the award can the district court work for the earlier part of the case.

[00:27:46] Speaker 07:
It's a discretionary question so I think it depends on the facts but if it's just I suppose if your honors if the hypothetical is so sort of pristine if you will that

[00:27:57] Speaker 07:
You have a case that's proceeding.

[00:27:58] Speaker 07:
It's perfectly fine.

[00:28:00] Speaker 07:
And then on a particular date, some event happens and the litigants know that, okay, this is the date when it becomes baseless and then it proceeds.

[00:28:08] Speaker 07:
I think then that would be a good break point.

[00:28:10] Speaker 07:
But that's not the facts of our case.

[00:28:12] Speaker 06:
Well, I understand.

[00:28:13] Speaker 06:
What do you mean good break point?

[00:28:15] Speaker 06:
They can't award fees for the earlier period.

[00:28:18] Speaker 07:
I think you could, it would depend on the facts, but you could make a good argument that it's... I gave you the facts.

[00:28:22] Speaker 07:
Well, I think that would be a good case for not awarding fees for the prior period.

[00:28:26] Speaker 07:
If there's nothing going on that's sort of octane-worthy before a particular event, and the particular event happens, then that certainly is within the judge's discretion to not award fees for that part.

[00:28:40] Speaker 07:
Having said that, hypotheticals are tough in this case.

[00:28:43] Speaker 06:
That's not the question.

[00:28:43] Speaker 06:
Not a question of whether the judge can refuse to award fees.

[00:28:47] Speaker 06:
My question is,

[00:28:48] Speaker 06:
Can the judge award fees in his discretion for the earlier period?

[00:28:53] Speaker 07:
I think the answer would be, if that case makes it truly exceptional, I suppose from the plaintiff's perspective, Your Honor, they'll say, we didn't know.

[00:29:02] Speaker 07:
From the defendant's perspective, Your Honor.

[00:29:05] Speaker 06:
I don't know if I know, but what's the answer to the question?

[00:29:06] Speaker 07:
The answer is yes.

[00:29:07] Speaker 07:
Can the judge award fees for the earlier period?

[00:29:10] Speaker 07:
The reason, Your Honor, is from the defense's perspective, it doesn't make a difference.

[00:29:15] Speaker 07:
Because the defense had authority.

[00:29:17] Speaker 07:
Is there any authority?

[00:29:19] Speaker 07:
I'm not aware of authority that deals with that sort of clean of a hypothetical.

[00:29:26] Speaker 07:
But again, in this case, there were a lot of circumstances.

[00:29:30] Speaker 07:
The first three patents that were found to be weak, the plaintiff doesn't even challenge that.

[00:29:37] Speaker 02:
can I just get some certification for what you did we're talking about right before that was that there were two PTAB proceedings and I thought the second one was rejected by the PTAB and this is an appendix 1255 because it did

[00:29:55] Speaker 02:
They'd filed other petitions, and they said it would simply just be on fear to the patent owner to go again.

[00:30:01] Speaker 02:
I thought it was on the process ground and not on the substantive ground that that went down.

[00:30:08] Speaker 07:
I'm not sure if there's redundancy in the appendix, but I know that at 1193, Your Honor, you have a 2014 decision on the merits.

[00:30:16] Speaker 07:
And at appendix 849, you have, or 848, you have a 2017 decision that cites 324 and 325.

[00:30:25] Speaker 07:
And they do in a footnote, Your Honor, a footnote on page 858, talk about the Apple decision.

[00:30:39] Speaker 07:
Just a further sort of comment.

[00:30:43] Speaker 02:
And that's the 2017 or the 2014?

[00:30:44] Speaker 07:
The 2017 decision, Your Honor, starts at 848.

[00:30:49] Speaker 07:
Okay, thank you.

[00:30:50] Speaker 07:
At 856, there's a summary of the various proceedings.

[00:30:53] Speaker 06:
The 2017 is the one that mentioned that.

[00:30:55] Speaker 07:
Correct.

[00:31:04] Speaker 07:
Some of the other questions that were asked about why the summary judgment came later.

[00:31:11] Speaker 07:
There was a trial on priority involving a party called IP DEV that sort of delayed things.

[00:31:22] Speaker 07:
The Stone case was cited.

[00:31:26] Speaker 07:
In that case, the district court found no notice because there was a key prior act that was sort of buried in invalid contentions.

[00:31:31] Speaker 07:
That's not the case here.

[00:31:33] Speaker 07:
And then on Munchkin as well, that's really distinguishable because there, the party had taken inconsistent positions on whether some conduct was allowable or not.

[00:31:52] Speaker 07:
I think there's just two final points, Your Honor, that are worth mentioning.

[00:31:57] Speaker 07:
And they have to do with the sort of general conduct of the case.

[00:32:02] Speaker 07:
The plaintiff is sort of saying, we didn't know, we didn't know, we didn't know.

[00:32:06] Speaker 07:
But one of the things that the district court found significant, and I think it is significant, with the idea of suing 40 people and making the case sort of larger than it has to be,

[00:32:17] Speaker 07:
After the Pizza Hut settlement, we moved to bring the 101 issue to the fore, and Amaranth strongly opposed it.

[00:32:25] Speaker 07:
And if Amaranth was trying to sort of get to the right answer and minimize things, they would have said, okay, let's let the 101 motion go, but they strongly opposed it.

[00:32:33] Speaker 07:
That's a fact that this district court was aware of, that this district court lived with this sort of litigation conduct.

[00:32:40] Speaker 07:
And then the second thing is there's this notion that, hey, if you'd told us, we would have stopped, maybe.

[00:32:46] Speaker 07:
Well, that's obviously not true, because this court found summary judgment on all but two of the, excuse me, affirmed summary judgment on all but two of the claims.

[00:32:54] Speaker 07:
Those two claims were remanded just for jurisdictional purposes, and they continued.

[00:32:58] Speaker 07:
So that the idea that this is somehow Domino's fault for not sort of raising things early enough, it's not accurate.

[00:33:06] Speaker 07:
And at the end of the day, the district court found essentially objectively unreasonable infringement.

[00:33:14] Speaker 07:
The Apple decision makes the invalidity objectively unreasonable.

[00:33:19] Speaker 07:
And the district court lived through 10 years of litigation conduct that he addressed in his decision, all of which are part of the totality of circumstances that support fees.

[00:33:28] Speaker 07:
Unless the court has any questions, I will step down.

[00:33:32] Speaker 06:
OK, thank you.

[00:33:40] Speaker 04:
One clarifying fact, I'm not sure is that important because the opinion in this case followed the judge's 101 decision in September of 2018 after all the litigation had concluded almost.

[00:33:53] Speaker 04:
But this court did find that there was a difference between the other patents and the 077, and specifically in its opinion at 219 WL5681315 discussed the fact that they understood and reaffirmed what the patent board had said, that these were different and distinct from those claims that were decided in that Apple decision.

[00:34:18] Speaker 04:
So there was no question that this was a different issue for the 077 claims.

[00:34:22] Speaker 04:
They were distinct claims.

[00:34:23] Speaker 04:
They had different limitations.

[00:34:26] Speaker 04:
And again, Your Honor, I think it's very important, certainly to any client, and would be a bad precedent if

[00:34:36] Speaker 04:
There's no notice, and there's no indication to a patent holder until a certain point that his patents are invalid to hit him for the entire case.

[00:34:45] Speaker 05:
Do you think the district court's exceptional case finding is based entirely on the invalidity ground?

[00:34:53] Speaker 04:
No.

[00:34:54] Speaker 04:
Although the judge said it was a weaker part of it, I think the core was, yes, invalidity.

[00:34:58] Speaker 04:
But he also mentioned the fact that there was this infringement issue.

[00:35:02] Speaker 04:
But that infringement issue also wasn't raised until two months before trial and required an additional markment.

[00:35:09] Speaker 05:
But I don't understand why it's incumbent upon the defendant to point out weaknesses in your case.

[00:35:16] Speaker 05:
Now, if you have good grounds to think that there's validity going forward, that's one thing.

[00:35:21] Speaker 05:
You know whether you're infringing or not.

[00:35:23] Speaker 05:
It's not their obligation.

[00:35:25] Speaker 04:
Your Honor, we had 23 infringement contentions in the case.

[00:35:31] Speaker 04:
Dominos attacked them, and the judge rejected every attack on the infringement.

[00:35:35] Speaker 05:
When did you find out that they weren't synchronous?

[00:35:39] Speaker 04:
They were synchronous.

[00:35:40] Speaker 04:
Synchronous is not the issue here.

[00:35:41] Speaker 04:
That is not correct.

[00:35:44] Speaker 04:
It's not synchronous.

[00:35:45] Speaker 04:
OK, I'm not going to take time to discuss it that way.

[00:35:46] Speaker 04:
No, I understand.

[00:35:47] Speaker 04:
And that's the problem, because it required a claim construction on the term's main menu.

[00:35:54] Speaker 04:
That was the issue of whether that was a synchronous or not.

[00:35:57] Speaker 04:
It was not about synchronous.

[00:35:58] Speaker 04:
Everybody agreed on the term synchronous.

[00:36:00] Speaker 04:
But Domino said, this is a new issue in June of 18.

[00:36:04] Speaker 04:
We need a Markman judge.

[00:36:06] Speaker 04:
Judge asked for briefs, but never decided it.

[00:36:09] Speaker 04:
So until that was decided, how could we see whether it applied to our claims?

[00:36:14] Speaker 02:
They moved for some re-judgment.

[00:36:17] Speaker 04:
But like two months before trial and wanting a new Markman decision, they never raised it in Markman.

[00:36:25] Speaker 04:
The Markmans decided they'd never file a motion.

[00:36:28] Speaker 04:
So it was a Hail Mary at the end.

[00:36:31] Speaker 04:
And we'll never know the outcome, because we'll never know what the judge would have done with the Markman.

[00:36:35] Speaker 04:
So this whole infringement thing is just a red herring.

[00:36:38] Speaker 04:
It's really about whether or not these patents were eligible.

[00:36:42] Speaker 04:
And when did we find out?

[00:36:45] Speaker 02:
I'm sorry.

[00:36:45] Speaker 02:
I don't want to take your time, but I'm just very... I thought the facts were clear.

[00:36:50] Speaker 02:
After the stay was lifted, there were summary judgment motions.

[00:36:54] Speaker 02:
No.

[00:36:54] Speaker 02:
Pizza Hut did its 101 on 101, and they did theirs on non-infringement.

[00:37:00] Speaker 04:
No, Your Honor.

[00:37:01] Speaker 04:
No?

[00:37:01] Speaker 04:
No, that's not what happened.

[00:37:03] Speaker 04:
What happened was the stay was lifted in January of 17.

[00:37:05] Speaker 04:
There were no motions of any kind on validity or infringement until two months before trial in June of 2018.

[00:37:18] Speaker 04:
And then 10 days before trial, the 101 motion was granted after the parties were sent to mediation and after pizza had settled for a very substantial settlement.

[00:37:30] Speaker 04:
If you look at it from the perspective of my client, there was nothing in that period of time that would indicate, other than what the patent office said, that these patents were likely valid.

[00:37:41] Speaker 04:
No one challenged it.

[00:37:43] Speaker 04:
The court didn't.

[00:37:43] Speaker 04:
The parties didn't.

[00:37:45] Speaker 04:
And this is kind of the case, again, of Stone Basket.

[00:37:49] Speaker 04:
You can't lay in the weeds.

[00:37:51] Speaker 04:
Right and and if you believe the patents invalid you have to say you have to step up Tell us because the alternative is we've got the patent.

[00:38:00] Speaker 04:
I was saying it's valid So what do we do?

[00:38:04] Speaker 04:
What do I do in representing this client?

[00:38:07] Speaker 04:
say just abandon it because you want in the patent office you want the markman you want on the infringement contentions no one's raised an issue i'd just go to the city i've got a band in the case because of this apple decision that dealt with different claims that were different in different patents i can't do that thank you thank you thank you very much