[00:00:05] Speaker 06:
data versus BI science.

[00:00:15] Speaker 05:
Good morning your honors may it please the court I would like to begin today with the settlement issue and then move to the issue of personal jurisdiction.

[00:00:24] Speaker 05:
The district court held that on February 23rd 2020 the parties entered into a binding settlement agreement on the night of

[00:00:34] Speaker 06:
I've got a lot of questions.

[00:00:35] Speaker 06:
So let me start with what you started with.

[00:00:37] Speaker 06:
I don't want to get you out of line here.

[00:00:40] Speaker 06:
But am I correct that if we were hypothetically to agree that there was a valid settlement agreement, that would not implicate personal jurisdiction?

[00:00:50] Speaker 05:
I think you are correct.

[00:00:51] Speaker 06:
So personal jurisdiction is off the table.

[00:00:55] Speaker 05:
OK, I appreciate it.

[00:00:55] Speaker 05:
I agree.

[00:00:56] Speaker 05:
Yes.

[00:00:57] Speaker 05:
Shall I continue?

[00:00:58] Speaker 05:
Yes.

[00:00:58] Speaker 05:
Thank you.

[00:00:59] Speaker 05:
that on February 23rd, 2020, the parties entered into a binding settlement agreement in the form of the document that appears at appendix pages five to six, which we call the mediator's proposal.

[00:01:12] Speaker 05:
But that mediator's proposal document did not exist on February 23rd, 2020.

[00:01:18] Speaker 05:
Two days later, Bright Data sent the document to BI Science with an email saying,

[00:01:25] Speaker 05:
We received the completed settlement.

[00:01:27] Speaker 06:
OK.

[00:01:28] Speaker 06:
But we're here reviewing a disproportionate decision, right?

[00:01:31] Speaker 06:
Yes, Your Honor.

[00:01:32] Speaker 06:
What's the standard of review?

[00:01:34] Speaker 06:
I mean, the real issue, none of the issue is mutual assent.

[00:01:38] Speaker 06:
So is that not a question that we view differentially?

[00:01:43] Speaker 05:
Your Honor, there are multiple grounds on which we argue that the mediator's proposal is not a valid settlement.

[00:01:54] Speaker 05:
mutual assent is just one of them.

[00:01:56] Speaker 05:
And as this court held last year in plasma camp, I would agree, your honor, that that is a question of contract formation that is fact based.

[00:02:05] Speaker 05:
But there are other deficiencies in this mediator's proposal document that we submit should be considered on a day noble basis.

[00:02:14] Speaker 05:
For one,

[00:02:16] Speaker 05:
We argue, and we think the record shows clearly that not all essential terms were contained in this mediators proposal that that is evidenced by the fact that bright data set the three page document, but their implementation mechanics schedule and even more strongly.

[00:02:32] Speaker 05:
the arbitrator himself, Mr. Cornelius, writes in his arbitration award that it is essential to give meaning to this agreement that I add the following three pages of terms.

[00:02:43] Speaker 05:
That issue.

[00:02:44] Speaker 07:
Mr. Sheriff, let me, excuse me.

[00:02:45] Speaker 07:
I'm sorry.

[00:02:45] Speaker 07:
For jumping in the middle of a sentence there.

[00:02:47] Speaker 07:
But we had here a motion to enforce the settlement agreement.

[00:02:53] Speaker 07:
And it's at, I think, 1479 of the joint appendix.

[00:02:59] Speaker 07:
And then we have an opposition

[00:03:01] Speaker 07:
to the motion to enforce filed by your client, which is at page 1547.

[00:03:06] Speaker 07:
And significantly, at least to me in there, is in the motion to enforce it, there's a long recitation of facts explaining why there was an agreement.

[00:03:20] Speaker 07:
But then in the response, there's no challenge, as far as I can tell, to that recitation of facts.

[00:03:29] Speaker 07:
And indeed, there are statements

[00:03:31] Speaker 07:
page 1549, the BI agreed, this is in its response, to the framework proposed by the mediator, or the arbitrary, I get, mediator.

[00:03:44] Speaker 07:
And then BI says it cannot perform as contemplated under the mediated settlement.

[00:03:51] Speaker 07:
So getting back to the point that Judge Croce is raising about the standard of review here, how in the face of that can we say

[00:04:00] Speaker 07:
that the judge was wrong here in saying it was a settlement agreement.

[00:04:05] Speaker 07:
I'll just add, you had at the hearing, Mr. Cornelia was saying, I conclude there was a settlement.

[00:04:14] Speaker 07:
Putting that all together, I don't see how you can overrule what the judge did here, and I'll let you respond.

[00:04:21] Speaker 05:
Thank you, Your Honor.

[00:04:21] Speaker 05:
It would be my pleasure.

[00:04:23] Speaker 05:
Your Honor, it is true that in the March 25th, 2020,

[00:04:28] Speaker 05:
opposition to Bright Data's motion to enforce the settlement, that there are arguments made that would assume the validity of the settlement agreements, but at the same time, on one of those pages that you're on a reference on page 1549, as well as- Do you not agree that reading the response in its totality, the main argument, if not almost virtually, the exclusive argument, was not that there was no settlement agreement,

[00:04:58] Speaker 06:
But other stuff, I mean, what is it?

[00:05:00] Speaker 06:
I mean, you're arguing we should read in a provision that says you can be excused in extraordinary circumstances based on COVID.

[00:05:08] Speaker 06:
All of that is predicated on the fact there's a settlement here and we should have been excused from it.

[00:05:14] Speaker 06:
So do you not, because when you read the transcript from Chief Judge Gilstrap, I think he was kind of incredulous.

[00:05:22] Speaker 06:
that where is this, because you did raise it here, nobody's disputing that, the question of whether or not there was a settlement of that.

[00:05:29] Speaker 06:
And he pointed out that it was not raised before.

[00:05:35] Speaker 05:
I think that, Your Honor, Mr. Finley did push back, and that was at 1659 to 1660.

[00:05:42] Speaker 05:
He staked out his position.

[00:05:44] Speaker 05:
I think, Your Honor, Judge Schall, that although Judge Crost is correct, the main argument assumes the validity.

[00:05:51] Speaker 05:
There are numerous statements at those pages 1549, 50, 51, and 52 that there was no binding agreement, that B.I.

[00:05:59] Speaker 05:
Science always understood that there would be further negotiations within this framework.

[00:06:04] Speaker 05:
I actually like the quote that you used, Your Honor Judge Shaw, because that is BI science's understanding.

[00:06:10] Speaker 01:
Can we just look at, you're saying that in this document, which is the response, the opposition to enforce the settlement agreement, that you specifically staked out a legal argument that there was no settlement agreement at all?

[00:06:25] Speaker 05:
Not a binding settlement.

[00:06:27] Speaker 01:
For where?

[00:06:27] Speaker 05:
I have some quotes for the panel at 1549.

[00:06:32] Speaker 05:
The ice science agreed to the framework proposed by the mediator as a way to resolve this case.

[00:06:39] Speaker 05:
I will try to find it on the page.

[00:06:42] Speaker 05:
Yes, that would be the first full paragraph, Your Honors.

[00:06:46] Speaker 05:
BI Science agreed to the second line.

[00:06:48] Speaker 05:
BI Science agreed to the framework proposed by the mediator as a way to hopefully resolve this case.

[00:06:56] Speaker 05:
That is not a commitment that BI Science has.

[00:06:59] Speaker 06:
And then it says, accordingly, at the bottom of the page, I think this is one of the things that Judge Schall was referencing, BI Science cannot perform as contemplated under the mediated settlement at the current time.

[00:07:12] Speaker 06:
And it contends it should be excused from performance

[00:07:16] Speaker 06:
in light of the impossibility, impracticality of the current situation, meaning the recent uptick in the COVID pandemic.

[00:07:26] Speaker 05:
You're absolutely right, Your Honor.

[00:07:27] Speaker 05:
There are statements here, as I concede, and must.

[00:07:31] Speaker 05:
that do assume the validity of the settlement agreement.

[00:07:34] Speaker 05:
Getting back to your question, Judge Hughes, I think- I mean, here's the problem I have.

[00:07:39] Speaker 01:
You have straight sentences, but they're coming under different legal arguments.

[00:07:43] Speaker 01:
If we were talking about whether you preserved an argument for appeal or made it properly

[00:07:51] Speaker 01:
these straight sentences probably wouldn't cut it, would they?

[00:07:54] Speaker 01:
And also, why, if your response was there's no settlement, wouldn't your first argument be point one, there was no legal settlement.

[00:08:05] Speaker 01:
Here's the legal standards for a settlement.

[00:08:07] Speaker 01:
Here, why we don't have one.

[00:08:09] Speaker 01:
None of that's in this opposition.

[00:08:11] Speaker 01:
I mean, I take some of your arguments are somewhat persuasive to me, frankly, about why, if you look at the document itself,

[00:08:21] Speaker 01:
that it doesn't appear like a settlement.

[00:08:23] Speaker 01:
It's, you know, it was sent in by the mediator.

[00:08:25] Speaker 01:
It's not signed by both parties.

[00:08:27] Speaker 01:
It has settlement in principle.

[00:08:29] Speaker 01:
That, to me, all of that contemplates that the actual settlement agreement is going to be worked out later.

[00:08:34] Speaker 01:
But it's the course of conduct after that happens, particularly in this motion and the response to the motion that troubles me.

[00:08:41] Speaker 01:
It seems like you actually were proceeding under the impression that you did have a settlement agreement.

[00:08:46] Speaker 01:
Why should we conclude that those straight sentences you're going to cite me are not to preserve

[00:08:51] Speaker 01:
the argument that there wasn't a settlement.

[00:08:55] Speaker 05:
In response, I would say, Your Honor, that Judge Gilstrap decided to accept that as BI Science's position.

[00:09:02] Speaker 05:
He states at page 1685 of the appendix during that April 13, 2020 hearing, that I understand the position you've taken today, and I certainly respect it.

[00:09:13] Speaker 06:
But that's not really responsive, I don't think, to what Judge Hughes is getting at.

[00:09:18] Speaker 06:
Even though Judge

[00:09:28] Speaker 06:
If, in fact, we were to say that there was no mutual assent, it really matters in how we evaluate whether there was or wasn't the fact that you didn't press hardly at all, if at all, in your reply.

[00:09:43] Speaker 06:
So it goes to, and I think maybe Judge Gilstrap was affected by that.

[00:09:47] Speaker 06:
So even if you're right that it wasn't technically a waiver, let me ask you about that.

[00:09:55] Speaker 06:
Chief Judge Gilstrap has been around a very long time.

[00:09:58] Speaker 06:
done, I don't know, I think I can hear, patent cases, and probably close to that number are settlements, since the vast majority do not go to trial.

[00:10:09] Speaker 06:
Shouldn't we consider that?

[00:10:12] Speaker 06:
I mean, different courts may have different practices.

[00:10:14] Speaker 06:
The federal government may have a different way of construing settlements agreements in principle when they've been mediated, and whether that constitutes a real settlement or not.

[00:10:24] Speaker 06:
Is it some deference owed to this judge

[00:10:28] Speaker 06:
And in fact, he said this to your counsel.

[00:10:30] Speaker 06:
He said, you've been here for decades.

[00:10:32] Speaker 06:
You've practiced before me tons of times.

[00:10:35] Speaker 06:
You filed this thing.

[00:10:37] Speaker 06:
This thing was filed with me.

[00:10:38] Speaker 06:
And even though it said, in principle, you know the way things are construed here.

[00:10:42] Speaker 06:
You know the way things are done here.

[00:10:45] Speaker 06:
And this, to me, was a final binding agreement.

[00:10:50] Speaker 06:
Doesn't that matter in this context?

[00:10:54] Speaker 05:
Perhaps it matters, Your Honor, but I don't think at all, as a matter of law, it is sufficient.

[00:10:59] Speaker 05:
And I think very important data points in that respect are the numerous cases that we cited in which there were reports of settlements, including not just settlement in principle, but reports of this case has settled to the courts, including the Eastern District of Texas.

[00:11:15] Speaker 05:
And that would be the Pruitt case, Pruitt.

[00:11:17] Speaker 06:
OK, well one thing is that it's a little, it's also, though this goes to the point we've been talking about this morning,

[00:11:23] Speaker 06:
was even though you raised it at the oral hearing, in addition to your other arguments about how there are other reasons, even if there is a settlement agreement, you never cited any cases.

[00:11:39] Speaker 06:
You didn't raise Texas Rule 11, which is one of the centerpieces of your briefing before us, that it's problematic.

[00:11:46] Speaker 06:
I think my recollection is all you said to Chief Judge Gilstrap was,

[00:11:51] Speaker 06:
disagreeing with the cases the other side had cited.

[00:11:55] Speaker 06:
So you didn't make any kind of legal argument when you're saying, as a matter of law, it shouldn't be construed.

[00:12:01] Speaker 06:
You didn't make that argument to Judge Kielstraf, did you?

[00:12:04] Speaker 05:
Your Honor, the opposition to the motion to enforce does appear starting at page 1547.

[00:12:13] Speaker 05:
I can't explain the tactics of trial.

[00:12:17] Speaker 06:
We know you didn't really raise anything there.

[00:12:20] Speaker 06:
What about at the oral hearing?

[00:12:21] Speaker 06:
You did raise the issue at the oral hearing before Chief Judge Gilschow, but you didn't make a fulsome legal argument.

[00:12:28] Speaker 06:
You didn't ask for a motion to leave to file a legal thing.

[00:12:32] Speaker 06:
So you're coming up here with all of these cases that you say we ought

[00:12:35] Speaker 06:
conclude as a matter of law that this was not a settlement.

[00:12:39] Speaker 06:
None of that was argued to Chief Judge Gilstrap, right?

[00:12:43] Speaker 05:
For the most part, Your Honor is correct.

[00:12:45] Speaker 05:
Chief Judge Gilstrap says that page 1676 of the transcript, are you telling me that your position now is that there are missing material terms and there is no binding signature?

[00:12:56] Speaker 05:
And that was the position that was brought.

[00:12:59] Speaker 05:
And citations on that argument.

[00:13:03] Speaker 06:
But he didn't argue any case law.

[00:13:04] Speaker 06:
He didn't cite Texas Rule 11, which is the centerpiece of your briefing here.

[00:13:10] Speaker 06:
And he didn't cite any of the cases that you cited.

[00:13:13] Speaker 06:
That is correct, Your Honor.

[00:13:16] Speaker 06:
OK, can I ask you just the same issue, but kind of another piece of it, which is the arbitration award.

[00:13:25] Speaker 06:
here, when I look at the award, so I'm looking at your legal question.

[00:13:31] Speaker 06:
It said an agreement in principle, and you say they were material terms.

[00:13:35] Speaker 06:
It doesn't constitute an agreement because there were so many open issues.

[00:13:38] Speaker 06:
So I think the best place to look for what the open issues were is the arbitration award, because those were the issues you were disputing.

[00:13:46] Speaker 06:
Is that a fair thing for me to look at?

[00:13:50] Speaker 05:
Not necessarily, Your Honor, because

[00:13:53] Speaker 05:
What Judge Gilstrap did was, at Bright Data's request, first decide whether or not there was a binding agreement.

[00:14:02] Speaker 05:
And then there were disputes how to implement or resolve the 17 terms of what Judge Gilstrap found was a binding agreement.

[00:14:10] Speaker 05:
But there were problems of missing material terms that aren't in there that were not within the scope of arbitration, which assumed that the mediator's proposal were the four corners of a binding agreement.

[00:14:23] Speaker 06:
I'll accept that for your argument.

[00:14:26] Speaker 06:
But nonetheless, if we look at the arbitration agreement and the issues that presumably were raised by you, in terms of the disputing terms, as a way of trying to figure out whether or not there was enough of an agreement.

[00:14:43] Speaker 06:
Because you agree that you can have a valid settlement agreement, and there could be

[00:14:49] Speaker 06:
little things still left out, either for arbitration or for ironing out after the settlement agreement.

[00:14:56] Speaker 06:
It doesn't seem to me like these issues that were raised in terms of the disputed terms are necessarily, they don't persuade me that, yeah, there was really no agreement.

[00:15:06] Speaker 06:
If there remained a serious dispute about these material terms, it really points to the direction there was no agreement.

[00:15:13] Speaker 06:
You're not thinking that these were those kinds of terms, right?

[00:15:18] Speaker 05:
Your Honor, the terms that were really at the heart of this are reflected in the draft settlement agreements that the parties exchanged.

[00:15:29] Speaker 05:
And the key terms that were not in the agreement that were most important to B.I.

[00:15:35] Speaker 05:
science may be found at page 1487.

[00:15:38] Speaker 05:
summarized by bright data.

[00:15:40] Speaker 05:
And the most important one, which is the primary reason why BI Science refused to sign the mediator's proposal proper to it on February 25, two days after the purported agreement, the key is term 12.

[00:15:58] Speaker 05:
And that contradicts term 10.

[00:16:01] Speaker 06:
Although those are those two paragraphs about the patent.

[00:16:04] Speaker 06:
That is correct your honor.

[00:16:06] Speaker 06:
The reason that he didn't sign it in the email exchange is the one that seems quite relevant to this.

[00:16:16] Speaker 06:
I'm sorry, I'm probably not going to be able to find it.

[00:16:18] Speaker 07:
Is it the one relating to approval?

[00:16:20] Speaker 06:
where the mediator set out very carefully.

[00:16:24] Speaker 06:
I'm going to go tell the Chief Judge Gail Strapp that we've got a settlement.

[00:16:30] Speaker 06:
I don't think he says in principle.

[00:16:31] Speaker 06:
I think he says that we've settled this case, yes or no.

[00:16:34] Speaker 06:
And your response was?

[00:16:37] Speaker 06:
Thank you for all your hard work, Bill.

[00:16:39] Speaker 06:
Yeah.

[00:16:40] Speaker 06:
I mean, you think if there was something important

[00:16:43] Speaker 06:
if he disagreed with anything that was in that email.

[00:16:45] Speaker 06:
It was kind of a notice by the media.

[00:16:47] Speaker 06:
This is what I'm going to do.

[00:16:49] Speaker 06:
This is what I'm going to tell the chief judge.

[00:16:51] Speaker 06:
I don't think that email says settlement of principal.

[00:16:54] Speaker 06:
I think it says settlement.

[00:16:55] Speaker 07:
Didn't there seem to be some confusion or discussions about the provision with respect to a 37.5% payment for former BI

[00:17:10] Speaker 07:
clients or proxies, and a question of whether when they were folded in, bright data would unreasonably refuse to accept them.

[00:17:22] Speaker 07:
That seemed to me to be a major issue in these discussions that took place after February 20th or 23rd, whatever it was.

[00:17:31] Speaker 05:
You're correct, Judge Hall, and those issues also appear at page 1487.

[00:17:36] Speaker 05:
But to get back to your point Judge Post, we think what appears at page 1501, which is the email your honor is referring to, is critical because there is no list of terms attached.

[00:17:50] Speaker 05:
This is what this case boils down to in our view.

[00:17:53] Speaker 05:
What mediator Cornelius writes in this email is that the parties have reached a settlement based on the mediator's proposal

[00:18:03] Speaker 05:
which incorporates the list of terms from Ron that I shared with Eric, although some of those terms are modified in some respects by the mediator's proposal.

[00:18:16] Speaker 05:
No one could make heads or tails of that, Your Honor.

[00:18:19] Speaker 06:
You can tell me no attorney argument.

[00:18:22] Speaker 06:
No one could make heads or tails of this.

[00:18:24] Speaker 06:
But he says, unless you object, he says something

[00:18:29] Speaker 06:
like what you're saying.

[00:18:30] Speaker 06:
And then he says, unless you object, I will notify Judge Gilstrap of the settlement and request you cancel the hearing.

[00:18:37] Speaker 06:
I will tell him emotions stay as forthcoming, blah, blah, blah.

[00:18:42] Speaker 06:
Congrats to you for all getting this resolved.

[00:18:47] Speaker 06:
See, if there was a problem with that,

[00:18:51] Speaker 06:
Forget what the first paragraph says, but if the first paragraph is what you would like us to construe it as, wouldn't they have said, wouldn't your client have said something other than thanks for all your hard work, Bill?

[00:19:06] Speaker 06:
Wouldn't he have said, wait a minute, maybe you ought to not tell Chief Judge Fieldstrap that we have a settlement.

[00:19:11] Speaker 06:
There's still some questions I have.

[00:19:13] Speaker 06:
Here are the questions.

[00:19:17] Speaker 05:
I would say really your honor and we have numerous cases that I think are very persuasive.

[00:19:22] Speaker 05:
The same exact thing happened in the Northern District of Texas case called UMB versus Fallujah.

[00:19:30] Speaker 05:
The parties were working with a mediator.

[00:19:34] Speaker 05:
UMB wrote that it approved both the monetary amount and the settlement and the general terms thereof.

[00:19:40] Speaker 05:
The mediator sends an offer, and the response is almost word for word what we have in our case.

[00:19:45] Speaker 05:
Thank you for all your work on this case.

[00:19:48] Speaker 05:
UMB is agreeable to the terms and principle, et cetera.

[00:19:51] Speaker 06:
Yeah, no, but that's different.

[00:19:53] Speaker 06:
I mean, that's terms and principle, which is what you emphasize.

[00:19:56] Speaker 06:
This says of the settlement, right?

[00:19:59] Speaker 05:
I mean, there's a difference between those words.

[00:20:02] Speaker 05:
There is a difference, Your Honor, but the law requires unequivocal, unambiguous, positive, absolute acceptance of a set of terms.

[00:20:13] Speaker 05:
That is not what 1501 contains, and that is not contained anywhere in the record at no time.

[00:20:21] Speaker 05:
Whereas BI Science presented with 17 terms and say, we agree to those terms.

[00:20:27] Speaker 05:
Every case on concocted.

[00:20:30] Speaker 06:
Yes, Your Honor.

[00:20:30] Speaker 06:
Sorry.

[00:20:30] Speaker 06:
Let me ask you one.

[00:20:32] Speaker 06:
One other question which is related to this, which is on the question of Texas rules, which, as I said, is something that you rely on extensively in your brief to support your legal rationale for why there was no settlement agreement.

[00:20:51] Speaker 06:
Is there a waiver problem with respect to that issue, given that you never raised that below with Chief Judge Gilstrap?

[00:20:58] Speaker 06:
Two points in response your honor number one it was raised with chief judge gilstrap in eight state briefs in which it was a briefed extensive the state briefs wait Judge gilstrap has an oral hearing and he makes a decision When do those state briefs come in like after work after after all right, right?

[00:21:19] Speaker 06:
So I'm talking about what what preceded his decision

[00:21:23] Speaker 06:
Yeah, you could have sent him a letter yesterday saying that.

[00:21:26] Speaker 06:
It doesn't matter.

[00:21:27] Speaker 06:
It doesn't get you out of waiver.

[00:21:28] Speaker 05:
Right.

[00:21:28] Speaker 05:
So I'll tell you what gets us out of waiver.

[00:21:30] Speaker 05:
The United States Supreme Court.

[00:21:32] Speaker 05:
Yee versus Escondido, 1996.

[00:21:35] Speaker 05:
Pfizer v. Lee from this court.

[00:21:37] Speaker 05:
Interactive gift from this court in 2001.

[00:21:40] Speaker 05:
This court, as the court said, an interactive gift, reviews decisions, not arguments.

[00:21:45] Speaker 05:
If the issue is preserved and the issue of the validity of the settlement agreement, and specifically whether it contained a binding signature and material terms, was presented and was preserved, as I mentioned, page 1676, that issue is now before this court.

[00:22:00] Speaker 06:
Well, don't you think this court would benefit even if we block

[00:22:04] Speaker 06:
Wouldn't that, at best, be a remand for you?

[00:22:07] Speaker 06:
I mean, don't you think this court, if it was going to entertain a major argument about Texas rule, we would benefit from the advice or the determination by the chief judge of the district court before we ruled on that, in terms of him dealing with the issue and how he construes the applicability of the issue?

[00:22:30] Speaker 06:
So even if you were right on a waiver, don't you think

[00:22:34] Speaker 06:
A remand would be in order here.

[00:22:37] Speaker 05:
I think, Your Honor, that it is a legal issue, which would be reviewable de novo.

[00:22:43] Speaker 05:
I don't mean it in any sense to discount value that Chief Judge Gilstrap would add, but I do believe that it is a legal issue.

[00:22:51] Speaker 05:
And I will add, if I may very briefly, that some of the cases like Clarence Energy versus Leasing Ventures, which is almost the same tax as we have here, deal in principle.

[00:23:01] Speaker 05:
We're settled.

[00:23:02] Speaker 05:
We're settled.

[00:23:02] Speaker 05:
Yeah, we're settled.

[00:23:03] Speaker 05:
Let's tell the court we're settled.

[00:23:04] Speaker 05:
But then no settlement.

[00:23:06] Speaker 05:
Court of Appeals reversing the district court.

[00:23:09] Speaker 05:
Clarence Energy says, this is a Texas Rule 11 case.

[00:23:12] Speaker 05:
But you know what?

[00:23:12] Speaker 05:
We're going to analyze it under contract principles, because it's basically the same.

[00:23:17] Speaker 05:
So either way, under Texas Rule 11 or under general contract principles, putting aside Texas Rule 11, as I mentioned a few minutes ago, the court needs to find evidence that BIScience says, yes, we agree to these 17 terms.

[00:23:36] Speaker 06:
you have demonstrated that you're probably better versed in the record than I. I would hope so.

[00:23:43] Speaker 04:
For my sake, Your Honor.

[00:23:45] Speaker 06:
It's my job.

[00:23:45] Speaker 06:
Where does Mr. Finley make the argument that there is no signature?

[00:23:51] Speaker 06:
Where does he say anything about the lack of a signature in the agreement?

[00:23:54] Speaker 05:
I don't recall offhand Mr. Finley saying it.

[00:23:56] Speaker 05:
I do recall Judge Gilstrap saying it at page 1676.

[00:24:00] Speaker 05:
Let's see if I'm right.

[00:24:05] Speaker 06:
Your family doesn't say that.

[00:24:08] Speaker 06:
I mean, I'm talking about the representation of the lawyer who's making the argument that there was not a valid agreement.

[00:24:15] Speaker 06:
And he doesn't make the argument, OK, so we've got that he doesn't make any of the legal arguments.

[00:24:20] Speaker 06:
And you're telling me that's OK, because we can do questions of law de novo.

[00:24:26] Speaker 06:
But you're telling me this is a factual representation, right?

[00:24:31] Speaker 06:
And he doesn't make the argument.

[00:24:33] Speaker 05:
He doesn't seem to have been focused on Texas Rule 11, Your Honor, and the signature requirement.

[00:24:38] Speaker 05:
OK, the signature.

[00:24:39] Speaker 06:
Thank you very much.

[00:24:40] Speaker 06:
Thank you, Your Honor.

[00:24:46] Speaker 06:
We do get to personal jurisdiction.

[00:24:49] Speaker 06:
Sorry about that, but we've got the briefing.

[00:24:52] Speaker 06:
Mr. Hartman.

[00:24:54] Speaker 02:
May it please the Court?

[00:24:56] Speaker 02:
In addition, I've tried to listen carefully to what Your Honors have asked about,

[00:25:01] Speaker 02:
can form my argument and not tread old ground.

[00:25:04] Speaker 02:
In addition to the brief where they said, by science cannot perform as contemplated under the mediated settlement, which is pointed out in 1549, we have supplemented the record in a way that we thought was relevant, and that came in yesterday.

[00:25:22] Speaker 02:
Because that brief actually does more.

[00:25:25] Speaker 02:
It cites to an exhibit, which is a declaration from the CEO of the company.

[00:25:30] Speaker 02:
And it has got Mr. Kefir Moyle's wet signature at 1625.

[00:25:35] Speaker 02:
And in the declaration, Mr. Kefir Moyle at appendix 1624 says, on February 22 and 23, when we agreed to the framework proposed by mediator Bill Cornelius as a way to hopefully resolve this case by science intended to replace its revenue stream generated by the sale of proxy services by going to private investors.

[00:25:58] Speaker 02:
Then he says later,

[00:25:59] Speaker 02:
I believe it is financially impossible for Byscience to implement the settlement term.

[00:26:05] Speaker 06:
I think there's already flavor of that in the documents we had before.

[00:26:08] Speaker 06:
So let me ask you.

[00:26:09] Speaker 02:
Yes.

[00:26:10] Speaker 06:
I found kind of your need of your brief a little confusing.

[00:26:16] Speaker 06:
OK.

[00:26:16] Speaker 06:
So I see like you are arguing kind of at the same time what this appeal is about and whether it's a, and you mentioned the district court, but you seem to embrace the arbitration

[00:26:29] Speaker 02:
Correct.

[00:26:30] Speaker 06:
As if you're saying that the arbitrator had the authority inside whether there was an agreement in the first instance.

[00:26:37] Speaker 06:
And he did that.

[00:26:39] Speaker 06:
So we're kind of reviewing that alongside the district court.

[00:26:43] Speaker 06:
I just think you're wrong about that.

[00:26:45] Speaker 06:
I don't understand how when we're reviewing the district court's decision with regard to this, the arbitrator doesn't have a face containing the arbitrator?

[00:26:54] Speaker 06:
Is the one that has the authority to say, yes, there was no agreement, and no, there wasn't?

[00:27:00] Speaker 06:
I mean, the mediator could give testimony.

[00:27:02] Speaker 06:
I mean, the arbitrator says even his role is to resolve by binding arbitration disputes regarding the terms and provisions of the settlement, not to say whether or not there's a settlement.

[00:27:13] Speaker 06:
So is it in your view that what's on appeal here is the arbitrator's decision that there was a settlement?

[00:27:20] Speaker 02:
Thank you, Your Honor.

[00:27:22] Speaker 02:
We have worked under both premises here.

[00:27:28] Speaker 02:
we think there is an agreement.

[00:27:30] Speaker 02:
But Your Honor is correct.

[00:27:31] Speaker 02:
We do think, in fact, that the definitive determination here is based on the US Supreme Court decision in Preston v. Farrer, which we cited at 552 US 346 at 353.

[00:27:44] Speaker 02:
And that is discussed in our brief.

[00:27:46] Speaker 02:
And that cites another US Supreme Court case, Prima Paint Corp, at 388 US 395.

[00:27:54] Speaker 02:
And what that decision says is,

[00:27:57] Speaker 02:
If you have an agreement, and it contains an arbitration clause, that is a form selection clause in the contract.

[00:28:05] Speaker 01:
But the premise for that is, if you have an agreement, first, the district court has to determine there's an agreement.

[00:28:13] Speaker 01:
And that's where Preston made that determination.

[00:28:17] Speaker 01:
And that's what we're reviewing, isn't it?

[00:28:19] Speaker 02:
So what Preston versus Ferrer says is, quote, a tax on the validity of an entire contract

[00:28:26] Speaker 02:
as distinct from attacks aimed at the arbitration clause are within the arbitrators' ken.

[00:28:34] Speaker 02:
That is, the district court needs to find if the parties agreed to the arbitration clause independently.

[00:28:42] Speaker 02:
And the reason for that is Federal Arbitration Act Section 4 says exactly that.

[00:28:47] Speaker 02:
Not that you have an agreement on the whole, but that you have an agreement to arbitrate.

[00:28:52] Speaker 01:
That's what the... Wait, so your point is, if there's a question about the validity of the actual underlying agreement, if the party's agreed to arbitrate, then the arbitrator gets to decide that.

[00:29:03] Speaker 01:
But that's not what happened here, is it?

[00:29:06] Speaker 01:
Judge Gilstrap didn't find that there was a separate agreement to arbitrate whether this was a valid settlement agreement.

[00:29:12] Speaker 01:
He found that there was a valid settlement agreement and then sent it to the arbitrator to enforce it.

[00:29:18] Speaker 02:
He did.

[00:29:20] Speaker 02:
He did.

[00:29:20] Speaker 02:
He found that the whole agreement was valid, and he found that the arbitration is at a minimum.

[00:29:24] Speaker 02:
As part of the agreement.

[00:29:25] Speaker 02:
Yes, that's correct.

[00:29:27] Speaker 02:
So what we need to do on appeal under Fifth Circuit authority and under the Supreme Court authority is break that finding into the two pieces.

[00:29:33] Speaker 02:
One is, is the whole agreement valid?

[00:29:36] Speaker 02:
And the other is, was his finding that at least the party who said that they were going to arbitrate this agreement is valid.

[00:29:42] Speaker 01:
And under... But if there's no agreement, then what are they going to arbitrate?

[00:29:47] Speaker 02:
So this is where Preston versus Farrer and the PrimaPaint case go to exactly, I was asked, so this is exactly Supreme Court authority.

[00:29:54] Speaker 02:
You look at whether the parties ever challenged the arbitration provision separately.

[00:30:00] Speaker 02:
And if they'd never challenged the arbitration provision separately, and it says that we're going, that the arbitrator, the forum... Well, I never challenged it separately.

[00:30:08] Speaker 06:
If they're challenging the existence

[00:30:10] Speaker 06:
of the agreement and of itself, of course they're challenging everything about whether there was an agreement of itself.

[00:30:17] Speaker 01:
That is not what the Supreme Court says.

[00:30:19] Speaker 01:
The Supreme Court says... Is there any focus at all on this argument to get Judge Gilstrop that where you say, well, even if there's a dispute about the validity of this agreement, you should send that dispute to the arbitrator?

[00:30:32] Speaker 01:
Extensively.

[00:30:33] Speaker 02:
Extensively.

[00:30:33] Speaker 02:
If you look at the transcript from April 13th, I was the one arguing the motion, and I said,

[00:30:38] Speaker 02:
We think primarily- Give us a page sign.

[00:30:40] Speaker 02:
Okay.

[00:30:41] Speaker 02:
Excuse me.

[00:30:41] Speaker 02:
Let me make sure I have the- I want to make sure I have the- Okay.

[00:30:46] Speaker 02:
So we're at 1652.

[00:30:47] Speaker 02:
1652 is the transcript from April 13th here.

[00:30:54] Speaker 02:
And let me just find the place where I'm starting to talk.

[00:31:00] Speaker 02:
OK, at 1657, Mr. Harkin starts it.

[00:31:04] Speaker 02:
That's me, at line 15.

[00:31:06] Speaker 02:
Your Honor, I think there's potentially two ways of looking at it, but essentially I think you are correct.

[00:31:12] Speaker 02:
We're looking for a declaration as to the fact that Exhibit A is the settlement agreement and that constitutes a complete and binding settlement agreement between the parties, and there is an arbitration provision in that that should be enforced.

[00:31:24] Speaker 02:
Other disputes about the agreement can then proceed to the arbitration.

[00:31:27] Speaker 06:
That's exactly right.

[00:31:32] Speaker 06:
agreement, that's the first question, and that constitutes a complete and binding settlement agreement between the parties.

[00:31:41] Speaker 06:
That's what we're all agreeing with, and that there is an arbitration provision in that that should be enforced.

[00:31:49] Speaker 06:
Absolutely.

[00:31:50] Speaker 06:
I have no qualms about that.

[00:31:53] Speaker 06:
Any other disputes about the agreement can then proceed to arbitration.

[00:31:58] Speaker 06:
That's exactly the way I see it.

[00:32:01] Speaker 02:
Can we complete the sentence that I argued to the court, which is, which based on the court's declaration enforcement of the at least arbitration provision of the agreement will allow us to work out any further problems that the parties have with each other that I was saying if you at least find that the parties agreed to arbitrate.

[00:32:19] Speaker 01:
That's not what that means.

[00:32:21] Speaker 01:
That means if you have further disputes about the settlement agreement you just found valid, the arbitrator can work them out.

[00:32:28] Speaker 01:
Well, I think you're wasting your time.

[00:32:30] Speaker 01:
OK.

[00:32:30] Speaker 02:
I certainly understand that I am fighting an uphill battle on this point.

[00:32:34] Speaker 02:
OK.

[00:32:35] Speaker 06:
So let me go to a couple other points that we've raised with your friend.

[00:32:38] Speaker 06:
Yep.

[00:32:38] Speaker 06:
One is, do you think there's a waiver of the Rule 11 argument?

[00:32:44] Speaker 02:
We do think there is a waiver of the Rule 11 argument.

[00:32:46] Speaker 06:
Why doesn't he write that it's a legal question and there are arguments that are made here that weren't necessarily made for no different reason?

[00:32:56] Speaker 06:
different legal arguments thrown in on appeal.

[00:32:59] Speaker 06:
Why is he not right that he didn't have to preserve his rights?

[00:33:04] Speaker 02:
I apologize, Ronan.

[00:33:06] Speaker 02:
Who is the he in your question?

[00:33:09] Speaker 06:
We're saying that he waived his right to raise on appeal.

[00:33:13] Speaker 06:
the rule of your colleague on the other side.

[00:33:16] Speaker 02:
I see.

[00:33:18] Speaker 02:
And could you ask me one more time?

[00:33:21] Speaker 06:
I was not following the- All right.

[00:33:22] Speaker 06:
What I asked him was, he makes a big deal here in terms of making his legal argument as to whether or not there's a settlement of a Vulcan Texas rule of limitations.

[00:33:33] Speaker 00:
Correct.

[00:33:33] Speaker 06:
Now, you disagree with him on the merits.

[00:33:36] Speaker 03:
Correct.

[00:33:36] Speaker 06:
I think there are arguments on both sides.

[00:33:38] Speaker 06:
But if we were to agree with him on the merits, is there an argument to be made

[00:33:43] Speaker 06:
that he can't present that argument to us on appeal.

[00:33:47] Speaker 06:
because that was not an argument made to Judge Gilstrap.

[00:33:50] Speaker 02:
Right.

[00:33:51] Speaker 02:
So Judge Gilstrap made the decision to send this to arbitration.

[00:33:55] Speaker 02:
And then the arbitration was participated in.

[00:33:57] Speaker 02:
And there was an award that came out of the arbitration.

[00:33:59] Speaker 02:
And up through that point, no rule 11 Texas argument or signature argument had been made.

[00:34:05] Speaker 02:
Then a judgment was entered in this case.

[00:34:07] Speaker 02:
And up through that point, no argument was made to the court that there needed to be this signature requirement or Texas rule 11, only

[00:34:15] Speaker 02:
after the appeal was first noticed in this case, and there was a motion to stay the enforcement.

[00:34:19] Speaker 06:
I know the scenario of the facts.

[00:34:21] Speaker 06:
My question is, what is the legal impact of that in terms of whether or not there's a waiver?

[00:34:26] Speaker 02:
I believe there is a waiver as a result of that.

[00:34:28] Speaker 02:
Why?

[00:34:28] Speaker 01:
Because it wasn't presented to the district court in a way that... But it's a legal argument in support of a position they preserved.

[00:34:35] Speaker 01:
Let's just assume, I don't want to get in a fight with you about whether they preserved it or not.

[00:34:40] Speaker 01:
Let's just assume they preserved the argument that this isn't a binding settlement agreement because there's no signature and there's material terms absent.

[00:34:48] Speaker 01:
There's at least reference to signature by Judge Gilstrap.

[00:34:51] Speaker 01:
I don't know if that came out of the blue or if it was argued somewhere in the transcript that we didn't see.

[00:34:58] Speaker 01:
But let's just assume that that was their argument.

[00:35:01] Speaker 01:
This is not a binding agreement.

[00:35:03] Speaker 01:
because there's no signature from them and there's material terms missing.

[00:35:08] Speaker 01:
If on appeal they can come up with additional legal support for why the no signature is relevant to contract formation, why can't they offer that as additional legal support?

[00:35:20] Speaker 01:
judge still strapped ordered this to an arbitration based on the arguments that were presented so you know what this arbitration nonsense is not answering the questions well i don't care about the arbitration because what we're trying to determine is if there's a valid settlement agreement in the first place what happened to enforce an arbitration is not what i'm trying to ask about so if the argument is there is no doubt valid settlement agreement because there's no signature

[00:35:49] Speaker 01:
and there's no material terms which was preserved below, why on appeal can't they argue that Texas Rule 11 requires a valid signature?

[00:36:00] Speaker 02:
uh... the reason i've been bringing up the arbitration is because the position changed at that point so i don't think that you know that it wasn't i understand this answer your answer so i my understanding is that there was an argument presented to the judge that he has certain set of arguments that he worked off of that he reached a decision on and that had his decision was that it's a valid contract uh... so presumably determined that the signature requirement

[00:36:26] Speaker 01:
binding on him, and that there were no material terms missing, because if there was a balancing internal requirement, and there are mandatory terms missing, then there's no contract, right?

[00:36:36] Speaker 02:
Well, I would disagree with that, Your Honor, because... No, no, no, no, no.

[00:36:39] Speaker 01:
Let me ask you this hypothetically, not on the facts of this case.

[00:36:41] Speaker 01:
Yes.

[00:36:43] Speaker 01:
If this agreement, we call it the agreement, it's like assuming there's a settlement,

[00:36:48] Speaker 01:
was required to have two signatures, and was required to have all mandatory terms, but it's not disputed that there are mandatory terms missing, then that's not a valid settlement agreement, right?

[00:36:59] Speaker 01:
That's true.

[00:36:59] Speaker 02:
If there are mandatory terms that you needed in the agreement that are missing, whether or not there's a signature, even if they're signed,

[00:37:06] Speaker 01:
but there's a there's something that absolutely means the parties didn't reach a conclusion on material terms that absolutely would mean that you don't have an agreement under texas law there's a signature requirement there's a signature that it's not a valid contract so under texas will let me know answer my hypothetical i don't want to get into state debate about it if you can you can move on to that if you want if texas law requires it as soon as does that would be a valid signature there is no valid signature that is not a contract

[00:37:34] Speaker 02:
If it requires it, and there is no something that rule 11 would consider meets the signature requirement, that is a debate that we have.

[00:37:41] Speaker 02:
But that you can have other affirmances, including, by the way, Mr. Moyle's signature that he did on March 25 saying that he had agreed to the framework from Mr. Courtney.

[00:37:52] Speaker 06:
Let me move on to one of the other arguments your friend makes is that there were material issues that were unresolved.

[00:38:00] Speaker 06:
One of those are the arguably theoretically conflicting paragraphs about the 044 patent, and I forget.

[00:38:12] Speaker 06:
So why don't you address the main

[00:38:15] Speaker 06:
his main arguments about the material provisions that weren't resolved?

[00:38:21] Speaker 02:
So what we will say is that argument was never raised in the first instance about there being some conflict between terms 10 and 12.

[00:38:29] Speaker 02:
What are we raised in what first instance?

[00:38:33] Speaker 02:
When we said we're going to move to enforce the settlement agreement, they never said we didn't agree.

[00:38:38] Speaker 02:
We think there's a conflict between 10 and 12.

[00:38:40] Speaker 02:
This is an appellate type argument.

[00:38:42] Speaker 02:
This wasn't an argument.

[00:38:43] Speaker 02:
This was raised, I think, for the first time

[00:38:45] Speaker 02:
after the judgment was entered.

[00:38:47] Speaker 02:
The only thing they argued in the first instance, or Mr. Finley did at the 13th in what was briefed, was this idea that not all the dates were put in.

[00:38:56] Speaker 02:
There was no discussion about the conflict of the patent provisions.

[00:39:00] Speaker 02:
And there's no conflict of the patent provisions because one says, we're not going to start challenging the patent.

[00:39:06] Speaker 02:
And the other one says, you're going to assign the patent to us.

[00:39:09] Speaker 02:
those that's a belt suspenders type of a situation i mean that that's that's not a contradiction you can do both those things we can not challenge the patent they can then assign the patent to us so ten and twelve are not inherently contradictory terms

[00:39:24] Speaker 02:
In fact, what they have said, by the way, subsequently, is what we, later in August, they said, what we really meant to do, we didn't tell anybody this earlier, but what we really meant to do is give you a license to the patents.

[00:39:37] Speaker 02:
We didn't, we weren't going to transfer them to you.

[00:39:39] Speaker 02:
We're going to give you a license to the patents.

[00:39:40] Speaker 06:
Where did that argument come up?

[00:39:42] Speaker 02:
This is in the, this is what they, their explanation for what they, why they didn't agree to Term 12.

[00:39:46] Speaker 02:
They started to talk about it in August.

[00:39:48] Speaker 06:
This was not raised in the arbitration or originally in the gilstrap support.

[00:39:58] Speaker 02:
This was an explanation that was filed in August of 2020.

[00:40:02] Speaker 07:
Do we have it in the appendix here?

[00:40:05] Speaker 02:
Yeah, this would be just one second, please.

[00:40:10] Speaker 02:
I think this is subsequent to the entry of the judgment when there was an appeal.

[00:40:16] Speaker 02:
There was a motion.

[00:40:18] Speaker 02:
to state uh... that was filed by by science and i think that's the first time there's an explanation of uh... of where they were saying actually intended to license this instead of just trying to find the

[00:40:35] Speaker 02:
without she does just the number of events took place after the u rights so it's okay for my purposes on saying is there was no argument ever made before the judgment that said we did we did not agree that week week that these were contradictory terms that that that's the mister moyle did a declaration in march of twenty five of twenty twenty a month after the settlement happened presently agreed to the framework

[00:41:01] Speaker 02:
He just, we agreed to Mr. They had in the 17 terms and he just said, we agreed to the mediators framework, just like he tested.

[00:41:09] Speaker 01:
Do you think the framework is the same thing as the settlement?

[00:41:13] Speaker 02:
At that time in March, he, they called it a framework and then he also called it settlement terms.

[00:41:18] Speaker 02:
He refers to it both ways.

[00:41:20] Speaker 02:
Okay.

[00:41:20] Speaker 02:
In the declaration and in the brief on April 13th, they start to pivot and saying, well, what we mean by framework is there's too many details to work out.

[00:41:30] Speaker 02:
And the argument at that time, Mr. Finley starts to argue is, in that transcript, is that the fact that there are dates to work out mean maybe that we never really reached an agreement.

[00:41:39] Speaker 02:
You will see nothing in that transcript about a contradiction of terms 10 and 12.

[00:41:43] Speaker 06:
OK.

[00:41:44] Speaker 06:
We're over time, but we spent a lot of time on the other side, too.

[00:41:48] Speaker 06:
So why don't you keep on watching?

[00:41:51] Speaker 06:
It's up to you if you want to turn to your cross appeal.

[00:41:53] Speaker 02:
Thank you.

[00:41:54] Speaker 02:
So in the cross appeal on this case, there was just an error made in the finding of indefiniteness

[00:42:00] Speaker 02:
And it's claim 108 of the 044 pattern.

[00:42:03] Speaker 02:
And it has a preamble that sets out four components that are the architecture of a system about proxies.

[00:42:11] Speaker 02:
And what that says is there's a customer's, quote, first device.

[00:42:15] Speaker 02:
Then there is a network server called a first server.

[00:42:19] Speaker 02:
Then there is a tunnel or proxy device called the second device.

[00:42:24] Speaker 02:
And then there's the second server, which is a web server.

[00:42:27] Speaker 02:
And that's all set out in the preamble.

[00:42:29] Speaker 02:
And what the preamble says is it's a method by the first device.

[00:42:32] Speaker 06:
And there's no dispute that the preamble is limiting in this case, right?

[00:42:36] Speaker 02:
Correct.

[00:42:36] Speaker 06:
Correct.

[00:42:37] Speaker 06:
Nobody's disputing that.

[00:42:37] Speaker 02:
Nobody's disputing that.

[00:42:38] Speaker 06:
All right.

[00:42:38] Speaker 06:
So Chief Judge Gilstrop had a problem with this via a second device identified.

[00:42:45] Speaker 06:
Right.

[00:42:46] Speaker 06:
And the other side, kind of a variation of that argument, or more

[00:42:50] Speaker 06:
is also, as I understand it, and if you correct me, that there's no reference to what the first device is doing here.

[00:43:02] Speaker 06:
I've read this 20 times, these words over.

[00:43:06] Speaker 06:
Tell me why Judge Gilstrap was right.

[00:43:09] Speaker 06:
What is the meaning of the second device?

[00:43:12] Speaker 06:
And what is the first device doing in the limitations A through E?

[00:43:16] Speaker 02:
So the way this works is that all of the steps of claim 108A through E are method steps via the second device.

[00:43:27] Speaker 02:
None of those steps are being performed by the first device.

[00:43:30] Speaker 02:
In fact, two of those steps talk about an interaction between

[00:43:33] Speaker 02:
the method performing element and the first device.

[00:43:37] Speaker 02:
So if you look at 108B, it says receiving a second request from the first device.

[00:43:42] Speaker 02:
So you know it's not the first device that's performing the method steps because that's the one that is providing the request.

[00:43:49] Speaker 06:
So where is the via the second device?

[00:43:51] Speaker 06:
Not in A. A just sends sending the second device identifier to the first server.

[00:43:56] Speaker 06:
It's not B, as you say.

[00:43:58] Speaker 06:
Where is

[00:44:00] Speaker 06:
Where is the work being done by via a second device?

[00:44:04] Speaker 02:
So what happens is it's the preamble that sets it out that says it's a method for fetching and then you have to read into the claim and where you see it says via a second device but that's the method is via a second device is in the preamble and then what we've what we've showed

[00:44:20] Speaker 02:
Yes.

[00:44:21] Speaker 02:
And so then what we showed in the brief is that when you look at the specification and you look at how it's laid out, all of those steps, the only way that the claim makes sense, it doesn't say sending via second device, receiving via second device, but they all line up with the second device.

[00:44:39] Speaker 02:
They are all method steps that are being performed by that second device.

[00:44:43] Speaker 06:
How do we know?

[00:44:43] Speaker 06:
Can we just look at the claim for a minute?

[00:44:45] Speaker 06:
Tell me, point to me something in the claim that says what you're saying.

[00:44:50] Speaker 02:
Well, so what the claim itself just says that it's a method for fetching and it says via a second device.

[00:44:57] Speaker 02:
And then when you look at the steps, you do have to understand it in the context of the patent as a whole.

[00:45:03] Speaker 02:
Like you go to the patent and you find out, well, what is it that would be sending the second identifier?

[00:45:08] Speaker 02:
And we showed you figure five B for instance, where you can actually line up

[00:45:13] Speaker 02:
all of this all of the parts of the claim with that tunnel device that's the second device and that's what we had expert testimony about it we say look when you look at the specification under Phillips you're supposed to do that and you can find out that well what what makes sense to do ABCD&E that's listed in the preamble because the method has to be set out as

[00:45:35] Speaker 02:
in the preamble and there's only two choices.

[00:45:38] Speaker 02:
It's via first device and via a second device and we know this isn't by the first device because it says it's interacting with the first device.

[00:45:46] Speaker 02:
So the only other choice about what's performing the method is via the second device.

[00:45:50] Speaker 06:
Where does it say interacting with the first device?

[00:45:54] Speaker 02:
Method step B, receiving a second request from the first device.

[00:45:58] Speaker 02:
So it's not the first device.

[00:46:00] Speaker 02:
And then step C, in response to receiving the first content, sending the first content to the first device.

[00:46:06] Speaker 02:
And so this is something that's sending back and forth to the first device.

[00:46:10] Speaker 06:
Your argument, as I recall, that leads very strongly with presumption of validity, yada da, Phillips, you should try to preserve the validity of the patent, that's not really

[00:46:26] Speaker 06:
Supreme Court told us about in Nautilus.

[00:46:31] Speaker 06:
So you're not suggesting that we don't understand it, but we should put big thumb on the scale or foot on the scale because we're here to preserve validity?

[00:46:41] Speaker 02:
No.

[00:46:43] Speaker 02:
We're not advocating.

[00:46:45] Speaker 02:
Your honors deal with this all the time.

[00:46:46] Speaker 02:
I'm absolutely not advocating that we depart from the Nautilus footnote 10 that talks about

[00:46:52] Speaker 02:
It talks about how you determine section 112.

[00:46:55] Speaker 02:
We're not advocating for that.

[00:46:56] Speaker 02:
We are just saying, which is true, that in a challenge that's brought to your honor after the patent's issued, even Nautilus says it in that same footnote 10, we still are entitled to a presumption of validity.

[00:47:08] Speaker 02:
It is still the challenger's burden to prove that there's not definiteness here.

[00:47:13] Speaker 02:
And the district court's ruling is reviewed de novo.

[00:47:16] Speaker 02:
I mean, those are all correct assessments.

[00:47:19] Speaker 06:
The point is, if... Except, what are we to make of it?

[00:47:22] Speaker 06:
This is yet another can of worms, but de novo, what about most of the argument, as I understood it from reading the record below, was that most of your points were coming through your expert testimony, not through pointing at the claims and not through pointing at the specifications.

[00:47:41] Speaker 06:
So and Judge Galstrap rejected your expert's testimony.

[00:47:46] Speaker 06:
What do we do with that in terms of standard of review?

[00:47:50] Speaker 02:
Yeah.

[00:47:51] Speaker 02:
So we certainly had an expert who testified to this.

[00:47:54] Speaker 02:
And this is a form of extrinsic evidence.

[00:47:56] Speaker 02:
So there would be a deference about the decision to accept or deny that.

[00:48:01] Speaker 02:
Where I would disagree with Your Honor is that we did not just rely on the expert.

[00:48:04] Speaker 02:
The expert did set out that.

[00:48:06] Speaker 03:
No, I understand that.

[00:48:07] Speaker 02:
I understand.

[00:48:07] Speaker 02:
I didn't mean to say that.

[00:48:08] Speaker 02:
We pointed out, in the original briefing, we looked at figure 5B.

[00:48:13] Speaker 02:
We looked at how different claims line up with each other.

[00:48:15] Speaker 02:
We did all the things you do in the intrinsic record to show that you really do have a reasonably certain understanding of this.

[00:48:22] Speaker 02:
There's only two choices in the claim, Your Honor, which is, it's a method by the first device, or it's a method via the second device.

[00:48:28] Speaker 02:
And once we can show it's not the first device, we think that's reasonably clear at that point.

[00:48:33] Speaker 02:
How could it be otherwise?

[00:48:34] Speaker 06:
All right.

[00:48:34] Speaker 06:
If you want to reserve your two minutes, please.

[00:48:36] Speaker 02:
Thank you.

[00:48:44] Speaker 06:
All right, yeah, we're gonna give you back some time.

[00:48:47] Speaker 06:
I'm trying to keep it even I'm not sure how good in that regard, but why don't you give me four minutes for rebuttal?

[00:48:54] Speaker 05:
Let me just focus on the point about the assignment of BI Sciences prized 244 patent which is a

[00:49:07] Speaker 05:
not related to the GeoSurf residential proxy network, but relates to its advertising intelligence line of business and is the heart and soul of that business, which would be lost if the mediator's proposal was affirmed as a valid and binding agreement.

[00:49:25] Speaker 05:
And your honors wanted to know when this issue was first raised.

[00:49:30] Speaker 05:
And it was raised in that very page that I cited your honors to on 1487,

[00:49:35] Speaker 05:
That's where the negotiation history is reflected.

[00:49:40] Speaker 05:
And Bright Data, in its motion to enforce the settlement agreement, is talking about all of these terms that BI Science was advocating for in the context of the negotiations, one of which is what BI Science had in mind all along.

[00:49:56] Speaker 05:
And that is that BI Science is to provide to Bright Data, here at Luminati, a perpetual royalty-free license to the 244 package.

[00:50:05] Speaker 05:
That is what BI Science thought it was agreeing to within this framework.

[00:50:09] Speaker 05:
And then two days after they agreed to the framework, they got the document, the mediator's proposal, which didn't say royalty-free license, but said that this patent, which is its crown jewel, would be assigned, which was not a term to which it could agree.

[00:50:25] Speaker 05:
That would destroy the business.

[00:50:27] Speaker 05:
We do believe that terms 10 and term 12 are not belt and suspenders.

[00:50:32] Speaker 05:
Term 10 refers to the 244 patent, not only as BI scientists pass it.

[00:50:38] Speaker 06:
And where did you first raise this?

[00:50:41] Speaker 05:
This contradiction argument, Your Honor.

[00:50:43] Speaker 05:
This contradiction argument, Mr. Harkins is correct, was raised only after the judgment, after the initial judgment on July 2nd of 2020.

[00:50:54] Speaker 05:
But we believe that under Padilla be la France these are two terms that can't be reconciled extrinsic evidence would be required if the court looks at a document and says is this a contract and you can't figure out how to apply it then the law says it's not a contract in my remaining time your honor your honors I would like to

[00:51:16] Speaker 05:
revert to the issue, which clearly is on your honor's minds.

[00:51:19] Speaker 05:
And that's about, what was BI Sciences' position at the time, February, March, 2020?

[00:51:25] Speaker 05:
Did it believe there was a settlement or not?

[00:51:28] Speaker 05:
And I submit, your honors, that the clearest, most impactful assessment of what BI Sciences' position was comes from bright data.

[00:51:39] Speaker 05:
And what I'd like to do in the time remaining is to read to you what bright data told Judge Gilstrop over and over

[00:51:45] Speaker 05:
about what B.I.

[00:51:46] Speaker 05:
Science's position was.

[00:51:48] Speaker 05:
B.I.

[00:51:48] Speaker 05:
Science steadfastly refuses... You note.

[00:51:53] Speaker 06:
Give us this page size.

[00:51:54] Speaker 05:
Absolutely, Your Honor.

[00:51:55] Speaker 05:
1482.

[00:52:02] Speaker 05:
And so this is from what?

[00:52:05] Speaker 05:
This is the very motion to enforce.

[00:52:08] Speaker 05:
1482.

[00:52:12] Speaker 05:
Yes.

[00:52:14] Speaker 05:
I'm going to try to find exactly where on the page.

[00:52:17] Speaker 05:
And as the clock winds down, hang on, it would be the second to last line.

[00:52:27] Speaker 05:
BI Science steadfastly refuses to confirm the agreement.

[00:52:35] Speaker 05:
And I think elsewhere on 1482 as well.

[00:52:38] Speaker 05:
But I'd like to move on to my next citation.

[00:52:41] Speaker 05:
And that is page 1851.

[00:52:50] Speaker 05:
I see, though, that I'm out of time, Your Honors.

[00:52:52] Speaker 05:
Well, just make the point.

[00:52:55] Speaker 05:
Tell us what you want us to look at here.

[00:52:59] Speaker 05:
If I may, I think it would be hard for me in any reasonable amount of time to find, on the pages, what I would like to do, if given the opportunity, would be just to read some quotes and tell the court where to find it.

[00:53:10] Speaker 03:
OK, sure.

[00:53:10] Speaker 05:
All right.

[00:53:11] Speaker 05:
Thank you, Your Honor.

[00:53:13] Speaker 05:
BISI steadfastly refused to perform under the agreement or even acknowledge its validity.

[00:53:19] Speaker 05:
That's 1851.

[00:53:20] Speaker 05:
1719, BI Science refused to perform under the settlement agreement or even acknowledge its validity.

[00:53:28] Speaker 05:
1719.

[00:53:29] Speaker 05:
1721, BI Science refused to confirm validity of settlement agreement.

[00:53:36] Speaker 05:
1729, BI Science refused to admit the validity of that agreement.

[00:53:43] Speaker 05:
1827, BI Science will continue denying.

[00:53:46] Speaker 05:
Is this all coming out of your motion?

[00:53:48] Speaker 05:
It is out of their motion to enforce and then they filed two more motions to enforce and a motion to sanction BI science.

[00:53:58] Speaker 05:
They were so incensed.

[00:54:03] Speaker 05:
One motion to enforce before and then two more motions to enforce and the sanctions motion.

[00:54:11] Speaker 05:
They told Judge Gilstrap over and over again.

[00:54:14] Speaker 06:
Two more motions to enforce, but this was after the oral argument before Judge Gilstrap?

[00:54:19] Speaker 06:
Correct, Judge.

[00:54:20] Speaker 06:
Well, yeah.

[00:54:21] Speaker 06:
Well, the cat was out of the bag in the motion before Judge Gilstrap, where they did raise the issue of we are not agreeing that there's a settlement, right?

[00:54:31] Speaker 06:
So what happened afterwards was they heard what you heard, and there's no dispute about the point that Mr. Fidley was making if people would cheat Judge Gilstrap, right?

[00:54:41] Speaker 05:
I understand your point, Your Honor.

[00:54:43] Speaker 05:
1482 is their original motion to enforce.

[00:54:46] Speaker 05:
I take that.

[00:54:47] Speaker 06:
I take that.

[00:54:49] Speaker 06:
OK.

[00:54:49] Speaker 05:
And then I think the way the other citations read is that at no time did BI sign it.

[00:54:56] Speaker 06:
But you take my point.

[00:54:58] Speaker 06:
I do.

[00:54:58] Speaker 06:
OK.

[00:54:59] Speaker 06:
All right.

[00:55:09] Speaker 06:
All right.

[00:55:10] Speaker 06:
Well, I just understand if you raise it then he's going to have two minutes of rebuttal, but that's fine if you want to argue.

[00:55:19] Speaker 06:
This is one of the reasons we don't like to split our views here.

[00:55:23] Speaker 00:
May it please the court, your honors, if you have questions on the indefiniteness issue, I'm happy to address them.

[00:55:28] Speaker 00:
Otherwise, I'd be pleased to rest on briefs.

[00:55:32] Speaker 00:
Thank you.

[00:55:39] Speaker 06:
Thank you, parties, very much.

[00:55:41] Speaker 06:
This was a helpful argument.

[00:55:43] Speaker 06:
Thank you, and the case is submitted.