[00:00:00] Speaker 03:
Our next case for argument today is 22-1753.

[00:00:05] Speaker 03:
Miller Mandela versus the City of Hanna, Texas.

[00:00:10] Speaker 03:
Mr. Vylender, whenever you're ready.

[00:00:12] Speaker 01:
Yes, Your Honors, thank you.

[00:00:13] Speaker 01:
May it please the Court.

[00:00:14] Speaker 01:
Last time I was in front of this Court was in 2008 in the City of Corbett, DC.

[00:00:19] Speaker 01:
We're going to be addressing two issues on our appeal.

[00:00:22] Speaker 01:
One is a very tough and very intellectually interesting issue, which the court is well aware of, and the other is a very straightforward, unremarkable issue.

[00:00:31] Speaker 01:
The question is, where would we be here today?

[00:00:34] Speaker 01:
Where would we be today if the lower court had followed rule 12-D?

[00:00:39] Speaker 01:
We would not be here.

[00:00:41] Speaker 01:
The Fifth Circuit reads

[00:00:43] Speaker 01:
12-D just as plainly as it said, which is if... Let's just say I agree with you.

[00:00:49] Speaker 01:
Okay.

[00:00:49] Speaker 03:
Okay, I know where you're going to go, but your problem is that the judge in this case actually stated that he would reach the same conclusion and result both when it does and when it does not consider declarations or exhibits.

[00:01:04] Speaker 03:
So the problem you have is this judge reached in the alternative a conclusion

[00:01:11] Speaker 03:
where he excluded all of the declarations and exhibits, and therefore, why isn't it at most harmless error for him to have decided the case without giving you an opportunity to cross-examine or present evidence?

[00:01:25] Speaker 01:
Because in the Fifth Circuit, Your Honor, and in 12D, that is not an option the Court has.

[00:01:29] Speaker 01:
It either excludes it or it goes under Rule 56.

[00:01:33] Speaker 01:
It did not do either.

[00:01:35] Speaker 01:
That is not a discretion that the Rules or the Fifth Circuit gives this Court.

[00:01:41] Speaker 03:
What happened?

[00:01:41] Speaker 03:
Do you have a case that says that?

[00:01:44] Speaker 03:
Because why wouldn't it just be under 12C?

[00:01:48] Speaker 01:
Your Honor, in the St.

[00:01:49] Speaker 01:
Paul insurance case versus a FIA worldwide... Do you understand what I'm saying about 12C, though?

[00:01:54] Speaker 03:
Why wouldn't it just, I mean, couldn't it be under 12C?

[00:01:58] Speaker 01:
Your Honor, I certainly understand the question, which is, okay, why can't we just disregard the affidavit entirely and then just proceed forward as if that affidavit had never been presented?

[00:02:09] Speaker 01:
There's two issues with that.

[00:02:10] Speaker 01:
One, again, that is not what the rule allows.

[00:02:13] Speaker 01:
The rule says you either exclude it

[00:02:15] Speaker 01:
or you pursued under Rule 56 and the Fifth Circuit treats it the exact same way.

[00:02:19] Speaker 01:
That is the rule.

[00:02:20] Speaker 01:
The second thing is, obviously, the Court did not consider it the alternative because the Court took information from that affidavit and put it in its order.

[00:02:28] Speaker 01:
So obviously that was important to the Court.

[00:02:30] Speaker 01:
Only in the background.

[00:02:31] Speaker 03:
The Court only mentioned the information, unless I'm mistaken, and please correct me if I am, but the information from that declaration in the background section

[00:02:38] Speaker 03:
Not at all in the analysis section, which resolves the dispute.

[00:02:43] Speaker 01:
Ooh, Your Honor, I believe that that was mentioned.

[00:02:46] Speaker 03:
Show me where then, please.

[00:03:01] Speaker 01:
I believe it was in 16, which may have been discussing the claims in the discussion section, Your Honor, at Joint Appendix, page 16.

[00:03:09] Speaker 04:
Where are you on page 16?

[00:03:11] Speaker 01:
I'm in the very first paragraph where it actually quotes and addresses the stuff from the city.

[00:03:21] Speaker 01:
And that's in the discussion section.

[00:03:23] Speaker 01:
And to go further to your point, Your Honor, without that affidavit, there's actually nothing in the record from which a court could find that the patent was invalid under Alice step one or step two.

[00:03:35] Speaker 01:
Why?

[00:03:36] Speaker 04:
Why?

[00:03:36] Speaker 04:
I mean, you know, what if, regardless of whether something's conventional or not or whether it's been done before, I mean, it's a situation of do it on a computer and therefore it's an abstract idea?

[00:03:52] Speaker 01:
Well, Your Honor,

[00:03:53] Speaker 01:
The Pellant does not believe abstract idea means that.

[00:03:56] Speaker 04:
So what we would- Why do you need to have declarations to prove that a claim is directed to an abstract idea under Section 101 of the Patent Code anyway?

[00:04:07] Speaker 01:
Well, Your Honor, we didn't put a declaration in because- I- I- Because we didn't need- thought we needed it under 12C.

[00:04:12] Speaker 01:
But we would have put one in if we were going under 12- under Rule 56 because they had put in a declaration.

[00:04:19] Speaker 01:
And we would have put in a declaration saying this was not well understood, routine, and conventional to a skill level.

[00:04:25] Speaker 04:
I was just responding to your comment.

[00:04:26] Speaker 04:
I think you said that there was nothing in the record that the judge could have relied on to find that the claims were directed to an abstract idea without those declarations.

[00:04:35] Speaker 04:
And I was saying, why do you need to have declarations to make a determination, which is a legal determination, I think.

[00:04:42] Speaker 04:
as to whether claims are directed to an abstract idea?

[00:04:45] Speaker 01:
Very good question, Your Honor.

[00:04:47] Speaker 01:
And the answer to that in an appellate position is because Alice's step one is very difficult to apply, and frankly it's confusing.

[00:04:54] Speaker 01:
And I don't believe I'm, as my opposing counsel suggested, engaging in litigation misconduct by pointing out this court.

[00:05:00] Speaker 01:
what I think every member of the court has said at some point or the other, that this needs to be resolved.

[00:05:05] Speaker 06:
The question is, how do you formulate... Do you agree that we're obviously bound by Alice?

[00:05:09] Speaker 01:
Yes, I understand that, and I'm not suggesting it be overruled, Your Honor.

[00:05:13] Speaker 01:
What I am suggesting is the one thing this court can do is it can flesh out Alice step one.

[00:05:19] Speaker 01:
Right now, ALICE Step 2, under the Berkheimer decision, seems very well flexed out.

[00:05:23] Speaker 01:
Patent attorneys, patent litigators such as myself, we can use ALICE Step 2, the Berkheimer standard.

[00:05:28] Speaker 01:
We can work with that.

[00:05:29] Speaker 01:
That's something we can consult our clients on, make decisions on.

[00:05:32] Speaker 01:
ALICE Step 1 does not afford that opportunity.

[00:05:35] Speaker 04:
We have a lot of students in the courtroom today.

[00:05:38] Speaker 04:
And so I was wondering if you could tell them, generally, what your claim is directed to.

[00:05:43] Speaker 04:
This is a patent case, and the question is whether your client would be eligible for a patent.

[00:05:48] Speaker 04:
Yes, Your Honor.

[00:05:49] Speaker 04:
The Supreme Court has announced in recent years that there are certain inventions, claimed inventions, that will not be eligible for a patent.

[00:05:57] Speaker 01:
Well, Your Honor, this invention is directed, as claimed

[00:06:03] Speaker 01:
as claimed in Claim 1, to a not only just automation of the background investigation process, but the additional feature of taking that application and generating reference lists which were not available and was not done prior to this invention.

[00:06:21] Speaker 04:
Okay.

[00:06:21] Speaker 04:
So it's directed to a system memory to assist the investigator in conducting a background investigation.

[00:06:28] Speaker 04:
And thank you for that description.

[00:06:30] Speaker 01:
with the additional feature as I indicated, Your Honor.

[00:06:34] Speaker 01:
Had I had the opportunity to put anything in evidence, I would have put exhibits I have from law enforcement officers saying we could not do this before.

[00:06:41] Speaker 01:
I would have put that in the record.

[00:06:42] Speaker 01:
But to your question, Judge, oh sorry.

[00:06:45] Speaker 01:
To your question, why might you need a declaration under Alice Step 1?

[00:06:51] Speaker 01:
Perhaps you don't need it in every case, but I think when a factual issue is raised for Alice Step 1, as in what is this directed to, or more importantly, whether it's an abstract idea, because one of the questions that comes up when you talk about whether it's an abstract idea or not, which is an undefined term,

[00:07:08] Speaker 01:
is can this be done by hand?

[00:07:10] Speaker 01:
Well, that's certainly a factual question.

[00:07:12] Speaker 01:
Now, the opposing counsel and the judge, based on nothing in the record that I can see, says this is no different than finding something on a map.

[00:07:18] Speaker 06:
Can I circle back on a point you made before?

[00:07:20] Speaker 06:
Yes, Judge.

[00:07:20] Speaker 06:
And you started to get to a case.

[00:07:21] Speaker 06:
I want to make sure I have all of my information down here appropriately.

[00:07:26] Speaker 06:
When you were talking with Chief Judge Moore about, for example, I think it's Appendix 28, Footnote 4, and she was talking about the fact that the court had made clear

[00:07:35] Speaker 06:
that it would reach the same conclusion with or without the declarations or exhibits.

[00:07:40] Speaker 06:
And then you guys had a conversation about at most harmless error.

[00:07:45] Speaker 06:
You seem to be implying that you didn't think a harmless error analysis would be applicable here.

[00:07:51] Speaker 06:
Can you expand on that?

[00:07:52] Speaker 06:
Is that what you were saying, or maybe I misheard your argument?

[00:07:55] Speaker 01:
That is not exactly what I'm saying, Your Honor.

[00:07:56] Speaker 01:
I'm not suggesting you make her abate.

[00:07:58] Speaker 01:
Perhaps I'm not as articulate as I think I am.

[00:08:00] Speaker 01:
In the Fifth Circuit,

[00:08:03] Speaker 01:
Once matters outside the pleadings are presented, and not excluded, it automatically becomes a Rule 56 matter.

[00:08:09] Speaker 01:
Automatically.

[00:08:10] Speaker 01:
Not maybe it does, automatically.

[00:08:12] Speaker 01:
Now, are there decisions that says, well, if it doesn't really matter in the long run, it's harmless.

[00:08:17] Speaker 01:
But it does matter in the long run, because if we're under Rule 56, which is automatic in the Fifth Circuit,

[00:08:23] Speaker 01:
then the denial of the opportunity to present evidence is prejudicial, and it's harmful.

[00:08:27] Speaker 01:
And as I said, we would have put declarations in on these subjects.

[00:08:30] Speaker 01:
And to your point, Judge, we would have put a declaration on that point that it cannot be done by hand.

[00:08:35] Speaker 04:
So is it your view that the, of course, whether something can be done by hand isn't the only test for whether something's abstract.

[00:08:43] Speaker 04:
We have a lot of cases out there that flesh out what an abstract idea is.

[00:08:49] Speaker 04:
But my question for you is,

[00:08:52] Speaker 04:
It's your view that under Fifth Circuit law, the district court judge can't say, well, I'm going to decide this under 12C and ignore the declarations that were presented?

[00:09:03] Speaker 01:
No.

[00:09:04] Speaker 01:
Absolutely.

[00:09:05] Speaker 01:
I do not believe they can do that.

[00:09:07] Speaker 01:
The case in St.

[00:09:08] Speaker 01:
Paul v. Bel Air says once matters outside the proceeding are presented, it necessarily becomes a summary judgment proceeding.

[00:09:17] Speaker 04:
In that case, did the judge rely on those submissions?

[00:09:23] Speaker 01:
I think they did.

[00:09:27] Speaker 01:
I think that makes a difference.

[00:09:40] Speaker 01:
The lower court did rule on it.

[00:09:42] Speaker 01:
It was a statement of insurance.

[00:09:44] Speaker 01:
I don't recall the case now.

[00:09:45] Speaker 01:
It was a statement of orange, and the court may have not have thought it was relying on additional evidence, but it was in fact, and the court said, OK, no, this is under Rule 56 now.

[00:09:53] Speaker 04:
And why doesn't that difference in facts in that case, where the district court actually chose to rely on the additional evidence presented, why isn't that case inapplicable to this case, where the judge said, alternatively, I'm not even going to consider those declarations because they don't impact my analysis?

[00:10:14] Speaker 01:
Well, again, Your Honor, I'll say that the Court may have said that, but in its actual analysis, it did not exclude that evidence.

[00:10:25] Speaker 01:
It actually used that evidence.

[00:10:26] Speaker 04:
But that was an alternative.

[00:10:28] Speaker 04:
You don't agree that it was an alternative analysis?

[00:10:31] Speaker 01:
Because, Your Honor, they didn't provide an alternative analysis.

[00:10:33] Speaker 01:
There was no analysis for this Court to look at in the alternative.

[00:10:37] Speaker 01:
They only provided the analysis that included that.

[00:10:39] Speaker 03:
Council, you're relying on a case, and you call it, I think St.

[00:10:43] Speaker 03:
Paul versus, is it Bel Air?

[00:10:44] Speaker 03:
I tried to write it down.

[00:10:45] Speaker 01:
Yes, Bel Air, Texas.

[00:10:46] Speaker 03:
You don't cite it in any of your briefs before this Court.

[00:10:49] Speaker 03:
And what troubles me about that is, you know, we have a mechanism.

[00:10:53] Speaker 03:
If you find a case later in the process that's important, that you think the Court should be prepared to speak to or understand or discuss,

[00:11:02] Speaker 03:
Are you going to tell me on page 13?

[00:11:04] Speaker 01:
I'm going to tell you that it was set on page 13.

[00:11:07] Speaker 03:
That's called St.

[00:11:08] Speaker 03:
Paul versus AFIA Worldwide Insurance.

[00:11:11] Speaker 03:
That's why I just asked you whether or not you're referring to some case called St.

[00:11:16] Speaker 01:
Paul versus Bel Air.

[00:11:19] Speaker 01:
Perhaps I just spoke at St.

[00:11:20] Speaker 01:
Paul Insurance Company out in Bel Air, Texas versus Afia Worldwide Insurance.

[00:11:24] Speaker 03:
Okay.

[00:11:24] Speaker 03:
Now on page 13, please note that all you mentioned is the district court is confined to the pleading and you actually cite Great Plains and then hit a parenthetical saying, citing St.

[00:11:35] Speaker 03:
Paul.

[00:11:36] Speaker 03:
So to suggest that you really didn't rely on this case would kind of be an understatement.

[00:11:40] Speaker 03:
And now you're standing here and you've cited it back to us three times.

[00:11:43] Speaker 03:
How was I supposed to understand from your briefs that this is in fact the critical case

[00:11:48] Speaker 03:
that definitively comes out in your favor or should cause me to come out of your favor.

[00:11:53] Speaker 03:
Because I'll be honest, I got a whole bunch of cases here that have been culled from your briefs about what's important.

[00:11:59] Speaker 03:
And that's not one of the ones I have here.

[00:12:00] Speaker 03:
And perhaps it's because it was only in a tiny parenthetical citing St.

[00:12:05] Speaker 03:
Paul and never mentioned in your reply or anywhere else in the blue brief.

[00:12:08] Speaker 03:
So it would really help the court.

[00:12:10] Speaker 03:
If you have a case that you think is really strong on your point, then you brief it.

[00:12:15] Speaker 03:
And you didn't hear.

[00:12:16] Speaker 03:
So I'm, quite frankly, with all due respect, at a loss.

[00:12:19] Speaker 03:
I don't know how Judge Stoll could talk to you about what the facts of that case were, because I didn't know them.

[00:12:23] Speaker 03:
I mean, because I don't know how I would have known them, because they're not anywhere in your brief.

[00:12:27] Speaker 01:
Well, Your Honor, we did cite a number of Fifth Circuit cases, including the Villarreal case, which, of course, is a district court opinion.

[00:12:32] Speaker 01:
But the court there did exactly what you're supposed to do in the Rule 12D.

[00:12:35] Speaker 01:
Once it was presented with matters outside the pleadings, it said, OK, I'm going to execute this.

[00:12:39] Speaker 01:
I'm going to treat this under Rule 56, and that properties are given an opportunity to present their materials.

[00:12:47] Speaker 06:
One other question I want to at least pose to you is about, you were talking a little bit about step two of that.

[00:12:53] Speaker 04:
Yes.

[00:12:54] Speaker 06:
And I want to know what specific sort of factual findings do you contend that the district court needed to make here?

[00:13:03] Speaker 06:
It seems like you were contending that there was some type of factual dispute there that really needed to be addressed that wasn't properly addressed by district court.

[00:13:12] Speaker 01:
There's two parts to that.

[00:13:14] Speaker 01:
One, the district court didn't actually use the correct Berkheimer standard.

[00:13:17] Speaker 01:
The district court cited Berkheimer and Natrix for the idea that

[00:13:20] Speaker 01:
to be an inventive concept, it has to be something that was not well understood, routine, and conventional.

[00:13:25] Speaker 01:
Period.

[00:13:26] Speaker 01:
The court didn't add the important part, which is what patent attorneys poke their head up at, which is to a skilled artisan at the time of the bill in the field.

[00:13:33] Speaker 01:
The court didn't mention the skilled artisan at all.

[00:13:35] Speaker 01:
The court didn't mention the time of the patent at all, which is prior to the date of 2011.

[00:13:39] Speaker 01:
Those were not mentioned by this court, nor did this court tie any findings to the skilled artisan or to the time of the invention.

[00:13:45] Speaker 01:
And in fact, when asked on reconsideration to make such determinations, at the very least under Rule 54, for ease of appellate review, the district court declined to do so.

[00:13:54] Speaker 01:
So there are no findings about what is well-understood, routine, and conventional to a skilled artisan at the time of the invention.

[00:14:01] Speaker 01:
It's absolutely devoid of that.

[00:14:04] Speaker 03:
All right, counsel, why don't we save a little bit of time for you, because there is a cross appeal, and I want to make sure you have a chance on rebuttal to address that.

[00:14:12] Speaker 03:
So I'll restore some of your rebuttal time.

[00:14:15] Speaker 03:
Thank you, Your Honor.

[00:14:18] Speaker 03:
Good afternoon, Your Honors.

[00:14:23] Speaker 02:
My name is Evan Talley.

[00:14:25] Speaker 02:
I'm here on behalf of the appellee, cross-appellant, City of Anna, Texas, in this case.

[00:14:31] Speaker 02:
As Your Honor mentioned, we are, there is a cross-appell at issue here as well, and I'll be addressing

[00:14:36] Speaker 02:
several issues today.

[00:14:38] Speaker 03:
So do you agree that the judge below aired under 12D by allowing in the declarations without giving opposing counsel an opportunity to put in their own declarations?

[00:14:51] Speaker 02:
I don't believe that the judge aired, Your Honor.

[00:14:54] Speaker 03:
Do you believe it was error if what he did is what I just said, which is allow in declarations that he used, let's say,

[00:15:03] Speaker 03:
You can tell me that's not what the facts of this case are, but accept my hypothetical.

[00:15:07] Speaker 03:
Allowed in declarations which he used in assessing this case under 12D without giving them an opportunity to present any contrary affidavits or declaration.

[00:15:17] Speaker 03:
Would that be an error?

[00:15:18] Speaker 02:
I do agree with you.

[00:15:19] Speaker 02:
If the judge explicitly relied on the declaration, it would be an error.

[00:15:23] Speaker 02:
Okay.

[00:15:23] Speaker 02:
I do.

[00:15:24] Speaker 02:
And I want that was going to be my first point to address that the Villa Rail case that Mr. Rylander cited near the end of his argument, a 2010 district court case,

[00:15:33] Speaker 02:
Cites to a case called Fernandez-Montez v. Allied Pilots Association, which is the Fifth Circuit case from 1993 and cited in Appellee's brief.

[00:15:42] Speaker 02:
This stands for that exact proposition that only if the judge explicitly relied on the outside evidence was it improper.

[00:15:51] Speaker 06:
Well, can you talk to me about Appendix Page 28, Flipnote 4?

[00:15:56] Speaker 06:
Because I was thinking that was very helpful to maybe your side of the argument and what I'm expecting you to argue with respect to 12C.

[00:16:03] Speaker 02:
Absolutely, Your Honor.

[00:16:05] Speaker 02:
Footnote at the bottom of page 28 where Judge Gilchrist says that he would have reached the same conclusion or result both when it does and does not consider the declarations and exhibits attached to the city's motion.

[00:16:17] Speaker 02:
That's one mention of it and absolutely that is the crux of our argument because the judge made clear that although

[00:16:24] Speaker 02:
Obviously, the declaration was submitted and it is cited in the district court order.

[00:16:30] Speaker 02:
He did not rely on it in making that decision.

[00:16:32] Speaker 02:
He completely disregarded and reached the same conclusion.

[00:16:35] Speaker 02:
Similar language, because this is the order on the motion for reconsideration that appellants filed after the order invalidating the patent came down, but there's similar language at appendix 16 and 17 of the order on the invalidation order, what I would call the original order invalidating the 188 patent.

[00:16:54] Speaker 02:
It's footnote four again there, it says, Miller-Mindell also argues that the city's motion go well beyond the pleadings allowed under Rule 12C.

[00:17:02] Speaker 02:
The city contends that the court can determine that the 188 patent is directed to ineligible subject matter without reference to any of the declarations or exhibits attached to its motion.

[00:17:11] Speaker 06:
What was your response to opposing counsel's argument when he was having a discussion with Chief Judge Moore that there was some reliance on those declarations, almost implying that this footnote is somehow inaccurate?

[00:17:22] Speaker 02:
There is there a citation to the declaration and I think there is a discussion of the material that was included, but it all comes to expand upon what was in the 188 patent.

[00:17:33] Speaker 02:
And I want to go back to another site that stands for the same proposition, the appendix.

[00:17:37] Speaker 02:
It's at appendix page 30.

[00:17:39] Speaker 02:
And this again is in the order on denying appellants motion for reconsideration.

[00:17:45] Speaker 02:
It says the court did not rely on evidence outside of the 188 patent to find it was directed to

[00:17:49] Speaker 02:
an abstract idea because the language intrinsic to the 188 patent itself demands such a conclusion.

[00:17:54] Speaker 03:
So I agree.

[00:17:55] Speaker 03:
That's on page 30.

[00:17:56] Speaker 03:
There's no doubt that Judge Gilstrap made it clear that he was not relying on any evidence outside 188 on the abstract idea.

[00:18:05] Speaker 03:
But that's problem one of a two-part test.

[00:18:08] Speaker 03:
And what your opposing counsel pointed us to is on page 16, where there is some reliance or reference to that evidence.

[00:18:16] Speaker 03:
And page 14 is the header for this section.

[00:18:19] Speaker 03:
And that is, the claims of the 188 patent do not recite any inventive concept.

[00:18:24] Speaker 03:
Now, I think, unless I'm mistaken, that that's Alice prom 2, not prom 1.

[00:18:30] Speaker 03:
So later in the opinion, he says, I didn't look at outside evidence for prom 1.

[00:18:33] Speaker 03:
Done.

[00:18:34] Speaker 03:
Agree.

[00:18:35] Speaker 03:
We're there.

[00:18:35] Speaker 03:
But here, for prom 2, he seems to be mentioning the outside evidence.

[00:18:40] Speaker 03:
Is there any statement in this opinion that would suggest he didn't rely on that evidence and the concept of deciding prom 2 of this test?

[00:18:47] Speaker 02:
There is not a statement directly regarding prom 2, not explicitly saying it was not considered.

[00:18:54] Speaker 02:
But it also is not saying explicitly that it was only considered for prom 1.

[00:18:58] Speaker 02:
There is an analysis under prompt two that the idea of generating a list or a reference list, as Mr. Rylander described the invention of the, or the inventive concept of the 188 patent, that that is not well understood, routine, and conventional.

[00:19:10] Speaker 02:
The Skilled Survey case were relied upon, and British Telecom were relied upon to come to that conclusion, completely outside the Bidinger Declaration.

[00:19:19] Speaker 03:
Okay, I'm confused.

[00:19:19] Speaker 03:
What was relied upon to come to the conclusion that it's not

[00:19:22] Speaker 03:
that it is, I think you said not conventional, I think you mean it is conventional, right?

[00:19:28] Speaker 02:
Because I'm trying to track what you're saying.

[00:19:30] Speaker 02:
The idea is well understood, routine and conventional.

[00:19:32] Speaker 02:
Sorry for misspeaking that.

[00:19:33] Speaker 04:
Can I ask you, what is, could you describe, because we've got a lot of students and people here, what in your view is the claim limitation for the generating the reference list?

[00:19:46] Speaker 04:
What is that?

[00:19:47] Speaker 02:
Just describe it in my own words, or describe it as the patent states?

[00:19:51] Speaker 04:
As the patent states.

[00:19:53] Speaker 02:
So the idea is that the method claim will perform certain steps, exchange of information between a job applicant and a background investigator to compile information, references, say addresses where they live.

[00:20:07] Speaker 02:
And then at the end of that process, it takes the addresses and it generates a list of law enforcement agencies in an area based on the addresses in the application.

[00:20:18] Speaker 02:
That is what is described as the inventive concept.

[00:20:20] Speaker 04:
And so the dispute here for an inventive concept, because we reviewed these things de novo, could be twofold.

[00:20:26] Speaker 04:
It could be a question of whether it's well-understood conventional routine.

[00:20:30] Speaker 04:
But it also could be whether that itself is an abstract idea.

[00:20:34] Speaker 02:
Right?

[00:20:34] Speaker 02:
Sure.

[00:20:34] Speaker 02:
And there's always been kind of some conflation of what occurs at step one, determining whether something is an abstract idea.

[00:20:42] Speaker 02:
But some of the same analysis goes into step two as well.

[00:20:45] Speaker 04:
Well, what I was suggesting was that the Supreme Court has a number of decisions where they've said, hey,

[00:20:50] Speaker 04:
invention can be amazing, it can be new, but if nonetheless it's directed to an knowledgeable subject matter, which an abstract idea is, then that can't be the inventive step that makes the claim eligible for intersectionality.

[00:21:04] Speaker 02:
Absolutely.

[00:21:05] Speaker 02:
And I do think that the claim of invention is the abstract idea.

[00:21:09] Speaker 02:
If I wanted to, on pen and paper, I could go out and generate a list.

[00:21:14] Speaker 02:
I could get on a map, I could take an address of a job applicant,

[00:21:18] Speaker 02:
I could go pull an atlas or a collection of maps that may have the Atlanta PD on it.

[00:21:24] Speaker 02:
And I say, well, this is within 15 miles.

[00:21:26] Speaker 02:
Because in practice, that's what these programs are doing.

[00:21:29] Speaker 02:
And that's what Appellants claim that the EQ software reads on.

[00:21:34] Speaker 02:
It is the ability to do that.

[00:21:37] Speaker 02:
And it makes it quicker.

[00:21:38] Speaker 02:
It makes it more efficient to do it through an automated process.

[00:21:42] Speaker 02:
But that's exactly what 101 is designed to defend against.

[00:21:50] Speaker 03:
Do you want to address your cross appeal?

[00:21:52] Speaker 02:
Absolutely, Your Honor.

[00:21:54] Speaker 02:
There's two issues on cross appeal here today.

[00:21:56] Speaker 02:
The first of which is that the district court found that it did not have jurisdiction at the time it issued its invalidation order on claim nine of the 188 patent.

[00:22:09] Speaker 02:
We believe that the district court aired their

[00:22:12] Speaker 02:
The totality of the circumstances at the time the motion for judgment on the pleadings was filed leads to the conclusion that all independent claims of the 188 patent were asserted.

[00:22:23] Speaker 06:
Can you confirm whether there was just an affirmative defense or also counterclaims of invalidity?

[00:22:28] Speaker 06:
Can you just answer that aspect?

[00:22:29] Speaker 02:
There was an affirmative defense for invalidity of the entirety of the 188 patent.

[00:22:34] Speaker 02:
There was no counterclaim to do so.

[00:22:36] Speaker 03:
So if there's no counterclaim, you've got a complaint that says claims, then you have infringement contentions just two weeks later that identify specifically only one, five, and 15.

[00:22:48] Speaker 03:
And you only filed an affirmative defense, not a counterclaim.

[00:22:51] Speaker 03:
What makes it ever for the court to have concluded that claim nine, a different claim upon which no infringement contentions were filed, is now suddenly some part of the case or controversy?

[00:23:03] Speaker 02:
So the standard is that the court should look at the totality of the circumstances.

[00:23:07] Speaker 03:
But what did I just miss?

[00:23:09] Speaker 03:
I just gave you all the circumstances.

[00:23:11] Speaker 02:
What you missed are some materials that were submitted with the briefings in the Eastern District of Texas case that were also submitted in a companion Western District of Oklahoma case.

[00:23:22] Speaker 03:
Those are not this case?

[00:23:23] Speaker 02:
It's not this case, but the parties have taken materials from that case to inform the allegations regarding the 188 patent.

[00:23:33] Speaker 03:
I don't understand.

[00:23:35] Speaker 03:
The fact that he may have sued or they may have sued somebody else on Claim Nine in a different court, how does that have any bearing on what's at issue in your case?

[00:23:44] Speaker 02:
Because it is the same plaintiff, the same patent, and an indemnity of this common indemnitor or guardian alliance technology in the case.

[00:23:53] Speaker 06:
Why didn't you just have your infringement contentions cover Claim Nine?

[00:23:57] Speaker 02:
Well, it was Appellant who

[00:23:59] Speaker 02:
submitted infringement contentious.

[00:24:01] Speaker 02:
No worries.

[00:24:03] Speaker 02:
And that was two weeks after we filed the motion for judgment on the pleadings.

[00:24:07] Speaker 06:
Let me ask a better question.

[00:24:07] Speaker 06:
I'm going to give you a better one.

[00:24:08] Speaker 06:
Sure.

[00:24:09] Speaker 06:
Why do you have a counterclaim?

[00:24:10] Speaker 06:
Yes, that's a good question.

[00:24:12] Speaker 02:
Great question, Your Honor.

[00:24:13] Speaker 03:
I mean, that's like a sentence in your answer.

[00:24:17] Speaker 03:
It's like maybe two sentences.

[00:24:18] Speaker 02:
Sure.

[00:24:19] Speaker 03:
Really not hard to do.

[00:24:20] Speaker 02:
Sure.

[00:24:21] Speaker 02:
It is.

[00:24:21] Speaker 02:
We have the affirmative defense for all claims, right, for

[00:24:24] Speaker 02:
For the declaratory judgment of invalidity of claim nine of the 188 patent, that's a whole other cause of action, and in another companion case, there is a counterclaim on that.

[00:24:34] Speaker 03:
So you knew how to do it?

[00:24:35] Speaker 02:
Why did you do it here?

[00:24:37] Speaker 02:
We knew how to do it, and we do regret not doing it.

[00:24:41] Speaker 02:
That would have made clear.

[00:24:42] Speaker 04:
We can't save you from yourself.

[00:24:43] Speaker 02:
Sure, understood.

[00:24:44] Speaker 04:
If you are in a situation where you

[00:24:47] Speaker 04:
have an affirmance of Judge Gilstrap's decision on Claims 1, 5, and 15.

[00:24:55] Speaker 04:
What will you do then?

[00:24:56] Speaker 04:
You'll take it to the other court where Claim 9 is pending and resolve that issue that way, right?

[00:25:02] Speaker 02:
I think that that's to be sorted out because of all the different cases involving this.

[00:25:06] Speaker 02:
The case where there is a counterclaim on invalidity is a case in the Eastern District of California that's currently staying pending this appeal.

[00:25:12] Speaker 04:
That is one venue where... But also that claim is being asserted.

[00:25:15] Speaker 04:
That claim is, well... Is there a case where claim nine is being asserted?

[00:25:20] Speaker 02:
The Western District of Oklahoma is currently being asserted, and that case is also state as well.

[00:25:25] Speaker 02:
This court does have the jurisdiction to find that claim one is representative of claim nine as well.

[00:25:35] Speaker 04:
How in the world can we find that?

[00:25:37] Speaker 04:
Why do we have jurisdiction if the district court didn't have jurisdiction?

[00:25:41] Speaker 02:
Well, you have de novo review of the invalidation order.

[00:25:44] Speaker 03:
And so you think we can go beyond it and just invalidate anything we want?

[00:25:50] Speaker 04:
Maybe with instructions to the district court.

[00:25:54] Speaker 04:
I guess you can, Your Honors.

[00:26:06] Speaker 02:
Sure, absolutely.

[00:26:08] Speaker 02:
Our position in this case, and this is related to all of the other cases that have been filed against Guardian Alliance Technologies clients, and the lead up and protracted litigation history coming into when the 188 patent was invalidated in the Eastern District of Texas.

[00:26:24] Speaker 02:
Octane Fitness, that kind of changed the standard for attorneys to use under 285, to more totality of the circumstances with two prongs.

[00:26:32] Speaker 02:
The litigation position of the plaintiff, or of the party,

[00:26:37] Speaker 02:
and also the manner in which the litigation was conducted.

[00:26:41] Speaker 02:
We think the district court erred or used its discretion in misapplying that standard.

[00:26:46] Speaker 02:
It went to kind of an, if both elements of that are not present under AstraZeneca, then there can be no, we cannot find an exceptional case under 25.

[00:26:57] Speaker 03:
You're using a lot of words, but make this simple for me.

[00:26:59] Speaker 03:
Sure.

[00:27:00] Speaker 03:
What did they do wrong, so wrong, to make this case exceptional that should result in you getting your attorney's fees?

[00:27:07] Speaker 03:
Was it the fact that they contested 101 under Alice?

[00:27:11] Speaker 03:
Is that the argument that you're going to rely on?

[00:27:13] Speaker 03:
Or did they behave badly in litigation?

[00:27:15] Speaker 03:
Tell me specifically what they did so wrong that I should overturn on a clear error standard a determination that this case was not exceptional by a district court judge that's probably seen 1,000 of these cases.

[00:27:30] Speaker 03:
This is not a friendly question.

[00:27:31] Speaker 02:
Please continue.

[00:27:32] Speaker 02:
Understood.

[00:27:34] Speaker 02:
And I picked that up.

[00:27:37] Speaker 02:
There are multiple different things that we think make this case exceptional.

[00:27:40] Speaker 02:
Obviously, I've alluded to the multiple other proceedings.

[00:27:43] Speaker 02:
We were litigating in the Western District of Oklahoma.

[00:27:45] Speaker 03:
So that's litigation conduct.

[00:27:46] Speaker 03:
So you're focusing not on specific arguments made in this case that you think are so weak

[00:27:51] Speaker 03:
that your attorney's fees, but rather an overall pattern of litigation.

[00:27:54] Speaker 03:
Is that giving your best?

[00:27:56] Speaker 02:
We think at the at the time that plaintiff initiated this lawsuit in the Eastern District of Texas, it should have recognized that it's coming from baseless under one.

[00:28:04] Speaker 02:
And we think that it should have recognized that it's claimant.

[00:28:06] Speaker 02:
Why?

[00:28:06] Speaker 03:
None of the other courts have gotten to that yet.

[00:28:08] Speaker 03:
They're all state, right?

[00:28:09] Speaker 03:
So it's not like in those other cases that was already pretty far along that those claims were likely ineligible.

[00:28:15] Speaker 02:
There were multiple instances prior to filing suit in the Eastern District of Texas where plaintiffs should have recognized that the claim was invalid.

[00:28:22] Speaker 02:
This is a party who, and this is in the record, in pre-litigation correspondence between Miller, Mendel, and Guardian,

[00:28:33] Speaker 06:
Can you tell us the page it looks like?

[00:28:35] Speaker 02:
Absolutely.

[00:28:36] Speaker 02:
Pinnix page 856.

[00:28:41] Speaker 02:
And this is in 2018 before the City of Oklahoma City case was ever filed.

[00:28:45] Speaker 03:
I'm sorry, 8 something?

[00:28:47] Speaker 02:
856, Your Honor.

[00:28:47] Speaker 03:
Thank you.

[00:28:55] Speaker 02:
And this is a letter in response to some pre-legation cease and desist correspondence.

[00:29:02] Speaker 02:
Miller-Mindell's attorneys say, we recently defeated an alice motion and are very familiar with the current case law and the rigorous test required.

[00:29:11] Speaker 02:
At that time, the skill survey case upon which the Eastern District of Texas based its decision had already been issued and affirmed in this court.

[00:29:21] Speaker 02:
Our position is that the appellant, Miller-Mindell, should have recognized before it ever filed this case that it had no reasonable litigation position going forward.

[00:29:34] Speaker 03:
I know.

[00:29:35] Speaker 03:
I'm just going to say, look, it's really hard.

[00:29:37] Speaker 03:
101 is a hot mess.

[00:29:40] Speaker 03:
There's just no other way to look at it.

[00:29:41] Speaker 03:
So it's really hard for you to come up with an amazing jurist who's done 1,000 of these cases and said, this one's not exceptional in the scheme of my vast experience, and for you to try and get me to overturn that on a clear error standard.

[00:29:53] Speaker 03:
That was aggressive.

[00:29:58] Speaker 02:
Well, we needed to advocate for our client, because I don't think this is the end of the road for these parties.

[00:30:05] Speaker 03:
I think you did a very nice job.

[00:30:09] Speaker 03:
Thank you, Your Honors.

[00:30:10] Speaker 03:
I'm going to give you all five minutes of your time.

[00:30:12] Speaker 03:
Did you ask for three minutes?

[00:30:13] Speaker 03:
I asked for three.

[00:30:14] Speaker 03:
I'll give you five minutes.

[00:30:15] Speaker 03:
I'm feeling generous.

[00:30:16] Speaker 03:
Come on up.

[00:30:17] Speaker 03:
You may not want all five minutes.

[00:30:19] Speaker 03:
You may not feel like that's a generous offer at all, but go right ahead.

[00:30:25] Speaker 01:
That's fine, Your Honor.

[00:30:26] Speaker 01:
I had previously not addressed, and I don't really intend to address the cross appeals at all,

[00:30:30] Speaker 04:
I have a question for you on the cross appeal.

[00:30:34] Speaker 04:
I'd like to know what the difference is between claims one and nine.

[00:30:40] Speaker 01:
I don't have them in front of me, Your Honor.

[00:30:42] Speaker 01:
Could you put them on?

[00:30:43] Speaker 01:
Certainly.

[00:31:00] Speaker 01:
It's the type of claim owner.

[00:31:05] Speaker 01:
This is a computing device claim as opposed to a method claim owner.

[00:31:11] Speaker 01:
Claim 9 is a computing device claim and claim 1 is a method claim owner.

[00:31:15] Speaker 04:
Otherwise the body of the claim is very similar.

[00:31:25] Speaker 01:
First off, Your Honor, the city has indicated that Claim 9 was at issue, or is at issue.

[00:31:31] Speaker 01:
That case is not going anywhere.

[00:31:32] Speaker 01:
It's not a state.

[00:31:33] Speaker 01:
It's just not going anywhere in the Western District of Oklahoma.

[00:31:36] Speaker 05:
I asked him about the state.

[00:31:38] Speaker 05:
Why wasn't 9 in the French contingent?

[00:31:40] Speaker 05:
I just want to get some answers here.

[00:31:42] Speaker 01:
Do you have anything on that?

[00:31:43] Speaker 01:
It's a slightly different claim because it's communicated by claim, Your Honor.

[00:31:45] Speaker 01:
And we believed, going into our own deliberations, that it was a harder claim to prove.

[00:31:53] Speaker 01:
But claim nine is not, for the same reason, in front of the Western District of Oklahoma.

[00:31:58] Speaker 01:
If the court looks at the appendix of page 293, that is Mila Mandel's joint claim construction brief before the Western District of Oklahoma.

[00:32:06] Speaker 01:
And in the very first paragraph, the court will see what claims we are asserting in the Western District of Oklahoma, claim one, claim five, and claim 15.

[00:32:14] Speaker 01:
293?

[00:32:14] Speaker 03:
293, Your Honor, yes.

[00:32:21] Speaker 06:
Are there counterclaims in this case?

[00:32:22] Speaker 06:
I believe there is a counterclaim in that case, Your Honor.

[00:32:27] Speaker 01:
I don't believe it's in the record.

[00:32:28] Speaker 01:
I believe there is a counterclaim in that case.

[00:32:29] Speaker 01:
But again, we're not asserting claim nine in the Western District of Oklahoma.

[00:32:32] Speaker 01:
That's just simply not a true statement.

[00:32:36] Speaker 01:
The letter that my esteemed deposing counsel presented to this court, which was a pre-litigation letter saying we diligently looked at Alice, which is certainly true,

[00:32:46] Speaker 01:
was dealing with a completely different patent.

[00:32:48] Speaker 01:
It was dealing with the 098 patent.

[00:32:49] Speaker 01:
It wasn't dealing with the 188 patent.

[00:32:51] Speaker 01:
If you look at the letter, it literally says that right in its reference line.

[00:32:54] Speaker 01:
And one page earlier in the appendix is the letter from Guardian's attorney dealing with the 098 patent, not the 188 patent.

[00:33:02] Speaker 01:
So I don't even know why they raised that.

[00:33:05] Speaker 01:
Now, going back to something that was brought up earlier,

[00:33:10] Speaker 01:
Because I want to address this because I think this is a unique issue.

[00:33:13] Speaker 01:
First of all, in that issue about what the court relied on and relying on that affidavit, as I indicated to the court, the court did in fact take the information from that affidavit and put it in its Alice Step 2 analysis.

[00:33:25] Speaker 01:
And if you go on at the very end of that decision, appendix page 19,

[00:33:42] Speaker 01:
Near the very bottom, it says, the generation of such lists has long been well-understood, routine, and conventional, as explained above.

[00:33:52] Speaker 01:
Now, I want to make two points with that.

[00:33:53] Speaker 01:
Again, not tying it to a skilled artisan and not tying it to the time of the invention.

[00:33:58] Speaker 01:
And two, that is explained above.

[00:34:00] Speaker 01:
Now, if I read up, the only facts that the court actually has about that are the ones that come from that affidavit.

[00:34:08] Speaker 01:
Now, my esteemed deposing counsel has suggested

[00:34:10] Speaker 01:
Well, the court can use as evidence for Rule 56 the British Telecom District Court decision for a different district.

[00:34:17] Speaker 01:
However, the claims there are not the same, but more importantly, I am not aware of any decision by this court.

[00:34:23] Speaker 01:
Now, I'm aware that in Enfish, the court said you can look at comparable claims for Alice Step 1 in cases.

[00:34:28] Speaker 01:
I believe they're talking about appellate cases, which are precedent, but more importantly, that's for Alice Step 1.

[00:34:33] Speaker 01:
I'm unaware of any decision.

[00:34:35] Speaker 06:
Can I just ask you on this?

[00:34:36] Speaker 06:
Yes, Your Honor.

[00:34:37] Speaker 06:
When you said read above, I don't know that I'm seeing the explicit sites to the declaration.

[00:34:41] Speaker 06:
Are you just saying that there's a codified?

[00:34:44] Speaker 06:
Or maybe I'm missing it.

[00:34:45] Speaker 01:
Well, Your Honor, the only thing I can see where it says as explained above, the only thing I can see where there's any facts at all on that goes all the way back to where they rely on the affidavit.

[00:34:58] Speaker 01:
I'm not seeing where they're talking about any other facts that justify this as explained above.

[00:35:03] Speaker 04:
Council, what about the discussion above that?

[00:35:07] Speaker 04:
There is a discussion a few sentences above the discussion about, you know, the intentionality.

[00:35:13] Speaker 04:
And it says, the same is true for the limitation about the reference list.

[00:35:20] Speaker 04:
And he says, this is no different than finding an applicant's address on a map and locating the closest law enforcement agencies on that map.

[00:35:29] Speaker 04:
The claim method simply performs this step on a computer using the internet.

[00:35:33] Speaker 04:
stating an abstract idea while adding the words apply it is not enough for patent eligibility, which goes to the question that I asked your adversary, which was if the judge found that

[00:35:46] Speaker 04:
The thing that you're asserting to be the inventive concept is, in fact, abstract.

[00:35:51] Speaker 04:
Without relying on any declarations or anything else, why isn't that enough to satisfy step two?

[00:35:59] Speaker 04:
In other words, if the claim is directed to the claimed inventor, the asserted inventive concept is itself an abstract idea.

[00:36:08] Speaker 04:
The Supreme Court has said that that's not enough to make a claim eligible.

[00:36:15] Speaker 01:
I don't read it that way.

[00:36:18] Speaker 01:
In fact, when the court says this is the same as finding on the map, that's the court saying it's not abstract.

[00:36:24] Speaker 01:
That's actually a concrete thing.

[00:36:26] Speaker 01:
It's not the way the word abstract idea is ever understood in its ordinary meaning.

[00:36:30] Speaker 01:
And more importantly, that's a factual statement.

[00:36:33] Speaker 01:
Where did the court get that fact?

[00:36:35] Speaker 01:
I've asserted to this court before, and I'll assert again, we would have declarations saying it cannot be done.

[00:36:40] Speaker 01:
There's not a map.

[00:36:42] Speaker 01:
Like, if you look at the National Grid, he mentioned the World Atlas.

[00:36:45] Speaker 01:
It certainly has all 50 states, and in most of those, they have all the counties.

[00:36:49] Speaker 01:
It does not call out the law enforcement agencies.

[00:36:52] Speaker 01:
Applicants can come from all over.

[00:36:53] Speaker 01:
They're just not going to come from Lubbock, Texas, to Anna, Texas.

[00:36:55] Speaker 01:
They come from Maine.

[00:36:56] Speaker 01:
They come from Alaska.

[00:36:57] Speaker 01:
They come from Minnesota.

[00:36:58] Speaker 01:
I can tell you right now, if I give a pen and paper and an atlas to the esteemed deposing council, and I said the address 406 West 12th, Vancouver, Washington, which is my firm, as the applicant,

[00:37:09] Speaker 01:
He would not be able to get back to you today with a list using only those three things.

[00:37:13] Speaker 01:
It was not done before.

[00:37:14] Speaker 04:
It was not done on a computer before.

[00:37:17] Speaker 04:
It wasn't automated before.

[00:37:21] Speaker 04:
That's what you're saying, right?

[00:37:27] Speaker 01:
I actually believe it couldn't be done before, Your Honor.

[00:37:30] Speaker 01:
I don't believe any background investigator in ANA could look up and find, say within a 75-mile radius, it's not 15-mile radius, it's a 75-mile standard, wouldn't be able to find all the law enforcement agencies on a map because they're not on a map.

[00:37:43] Speaker 04:
What do you think the judge meant when he said stating an abstract idea while adding the words appliance is not enough for patent eligibility?

[00:37:52] Speaker 01:
Well, no, that's a true statement.

[00:37:53] Speaker 01:
If you just say, if you say an abstract idea, for example.

[00:37:58] Speaker 04:
So what I meant by that was he says that in the context of step two analysis.

[00:38:06] Speaker 04:
So why isn't that saying that what you've alleged to be the inventive concept is in fact in itself an abstract idea?

[00:38:15] Speaker 04:
But that's an idea.

[00:38:16] Speaker 04:
Do it on a computer.

[00:38:17] Speaker 04:
Hey, let's have the computer do this.

[00:38:19] Speaker 04:
Let's have it figure out a bunch of lists of references.

[00:38:23] Speaker 04:
And then we're going to have the computer do it because it's so fast.

[00:38:25] Speaker 04:
And it can do it so quickly, so much more quickly than an investigator.

[00:38:28] Speaker 04:
Why isn't that an abstract idea?

[00:38:30] Speaker 01:
Because, Your Honor, if it couldn't be done before and it's a direct implementation of something that has concrete world-world application, it's not an abstract idea, as that term is plain and ordinary.

[00:38:40] Speaker 03:
I wish that what you just said were the law.

[00:38:44] Speaker 03:
All right, thanks, counsel.

[00:38:46] Speaker 01:
Thank you.

[00:38:48] Speaker 03:
Thank both counsel cases taken under submission.