[00:00:00] Speaker 00:
Our next case is Trusted or Trust ID Incorporated versus Next Caller.

[00:00:08] Speaker 00:
Next argument, in fact.

[00:00:10] Speaker 00:
2022-1433.

[00:00:12] Speaker 00:
We're reading when you are, Mr. Milliken.

[00:00:17] Speaker 01:
Thank you, Your Honor.

[00:00:18] Speaker 01:
May it please the court.

[00:00:20] Speaker 01:
The district court should not have taken the extraordinary step of overturning the jury's verdict on Trusted's false advertising claim.

[00:00:28] Speaker 01:
That claim centers on something called IVR containment, which is a measure of a call center's ability to resolve calls with an automated system instead of them having to go to a live agent.

[00:00:40] Speaker 01:
The evidence showed that IVR containment is vitally important for call centers.

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And the reason is simple.

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As Next Caller's CEO agreed, it saves them lots of money.

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A small increase in containment can save a call center millions.

[00:00:55] Speaker 01:
and Next Caller's own customers testified at trial that IVR containment was an important factor in their purchasing decisions.

[00:01:03] Speaker 02:
What if we were to read the customer testimony as saying as a general matter IVR containment success rates are important for purposes of IVR containment but that's not why we bought Next Caller's

[00:01:23] Speaker 02:
barricole.

[00:01:24] Speaker 02:
We bought it purely for authentication purposes.

[00:01:28] Speaker 02:
So what if we were to read that testimony in that way from people like BBVA and Comcast?

[00:01:36] Speaker 02:
Then there would be an issue with respect to materiality, the materiality element for your claim because

[00:01:45] Speaker 02:
there would be an absence of evidence that any customer actually relied on this containment false statement because at least the testimony that you got from the customers that you

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deposed, they were just looking at the defendant's product for authentication purposes only.

[00:02:07] Speaker 01:
So your honor, I disagree that that would be an issue for us on materiality.

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And the reason is because the case law is very explicit that when it comes to materiality, all you need to show is that the factor is something that is likely to influence purchasing decisions.

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you don't have to show that it actually did influence purchasing decisions.

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And the cashmere decision is based on that.

[00:02:29] Speaker 02:
Is that a Third Circuit case?

[00:02:30] Speaker 01:
No, that's a First Circuit case.

[00:02:31] Speaker 02:
And we're dealing with Third Circuit law, right?

[00:02:33] Speaker 02:
Correct, but the Third Circuit... So what about the Parkway Baking case?

[00:02:37] Speaker 02:
Has that case ever been overturned?

[00:02:39] Speaker 01:
Parkway Baking has not been overturned.

[00:02:41] Speaker 02:
So Parkway Baking is still good law?

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1958 Third Circuit opinion?

[00:02:45] Speaker 01:
Yes, Parkway Baking is still good law.

[00:02:46] Speaker 02:
And then if I read Parkway Baking as requiring some evidence

[00:02:51] Speaker 02:
from the plaintiff to sustain this kind of a claim, to have actual consumer reliance, then isn't that consistent with the questions that I'm asking about the absence of any evidence that anybody, whether it's BBVA or Comcast, actually relied on this false statement as a contributing factor in its choice in buying?

[00:03:13] Speaker 02:
Is it their call thing?

[00:03:16] Speaker 01:
If you read parkway banking to

[00:03:19] Speaker 01:
require actual consumer reliance, I would submit we still win for two reasons.

[00:03:25] Speaker 01:
The first reason is because we submitted circumstantial evidence that customers did rely on the statement.

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The reason that Nextcaller wanted to include this made-up figure in their marketing materials is because Nextcaller thought it was a very important factor for the customers in their purchasing decisions.

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The customers confirmed that was the case.

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Next caller sent this statement directly to one of its potential customers Comcast as part of a sales pitch and a PowerPoint presentation.

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And Comcast thereafter started purchasing Veracall.

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So we'd submit that that's sufficient circumstantial evidence of actual reliance and injury.

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However, even if you disagree with me about that, we have an independent theory of why the jury's verdict was supported.

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And that's a profit disgorgement theory.

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Under the Third Circuit's William Sendicki case, which actually precedes Parkway Baking and is still good law,

[00:04:20] Speaker 01:
If a plaintiff shows a willful violation of the Lanham Act, which we did here and the jury found as much, then the plaintiff is entitled to obtain disgorgement of the defendant's profits.

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And in obtaining disgorgement, all the plaintiff must show

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and the statute section 1117 is very clear about this, all the plaintiff must show is the defendant's revenues from the product in question.

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We did that here to the tune of over $15 million.

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The burden then under the statute shifts to the defendant to show that they have any applicable costs that should be deducted from that revenue figure

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or that the revenue was not actually derived from the false statements at issue.

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And the jury could reasonably found that Nextcaller did not meet its burden to show that all $15 million of its revenue was not actually profit as a result of the false statement, because the only testimony they offered on this point was their CEO's self-serving testimony that, oh, we never made a profit because of all the litigation expenses associated with this case.

[00:05:27] Speaker 01:
So I think that the disgorgement theory is sort of a particularly straightforward way to affirm the jury's verdict because Nextcaller really has no response to the Williamson-Dickey line of authority.

[00:05:43] Speaker 01:
If you look at their red brief, and this is at pages 44 to 45, they spend one sentence on Williamson-Dickey and they make two points.

[00:05:50] Speaker 01:
The first point is that William Sendicki had to do with trademark infringement as opposed to false advertising.

[00:05:56] Speaker 01:
That's true, but that's not a distinction because it's the same statute that applies to both causes of action and the same damages provision that applies to both causes of action that explicitly provides for a discouragement remedy upon a plaintiff's showing of the defendant's revenues.

[00:06:10] Speaker 01:
The second thing they say is, oh, well, there can't be a disgorgement of profits without proof of profits.

[00:06:16] Speaker 01:
But again, this ignores the explicit burden shifting framework set forth in the statute under which our only burden is to induce evidence of revenues and then the onus to show applicable costs for deductions or that the revenues weren't actually derived from the false statement then falls to them.

[00:06:35] Speaker 01:
So I think that if this court is sort of not inclined to

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get into the dispute about what Parkway baking means, then I think Williamson-Dickey and disgorgement is a straightforward way to resolve the false advertising claim.

[00:06:51] Speaker 02:
What did the district court say about this?

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The district court's view was that Trusted had failed to show actual consumer reliance on the allegedly false statements and

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In the court's view, that was required under Parkway Baking.

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And then the court essentially said, well, that necessarily frustrates your ability to show materiality and damages as well, because you haven't shown any consumer reliance.

[00:07:25] Speaker 01:
I think that that was sort of a separate error, that the court kind of collapsed all three of those elements into one.

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But again, I don't think if you decide on the disgorgement rationale, I don't think that's an issue that this court has to get into.

[00:07:39] Speaker 04:
And this Williamson-Dickey case that you rely on for disgorgement, wasn't that a trademark infringement case that analyzed disgorgement after finding the infringement?

[00:07:48] Speaker 04:
And isn't that a basis for saying it wouldn't be applicable under certain circumstances?

[00:07:52] Speaker 01:
I'm sorry, could you repeat the last part of your question?

[00:07:54] Speaker 04:
Wasn't it a case that was a trademark case?

[00:07:56] Speaker 01:
It was a trademark case.

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To decide to analyze engorgement only after finding an infringement.

[00:08:01] Speaker 04:
Correct, but here... And isn't that a basis for saying that that would not necessarily be applicable?

[00:08:06] Speaker 01:
I disagree, Your Honor, because here we have a finding of a willfully, literally false statement, which is also a violation of the Lanham Act because it prohibits both trademark infringement and false advertising.

[00:08:20] Speaker 01:
And so I think this case is on all fours with Williams and Dickey in that respect.

[00:08:25] Speaker 02:
Getting back to Parkway Baking, I mean, when this disgorgement theory goes to the amount of damages, but isn't there still a threshold question before you can get to this damages question, first showing a right to damages, and then that puts you back in the same place of having to establish reliance?

[00:08:49] Speaker 01:
I don't think so, your honor, because the point of, so Williams and Dickey is applying 1117, which is the damages provision of the Lanham Act.

[00:08:59] Speaker 01:
The Lanham Act sets forth in the alternative different measures of damages that a plaintiff can obtain.

[00:09:07] Speaker 01:
You can get diverted profits, you can get loss of goodwill, or you can get the defendant's profits.

[00:09:16] Speaker 01:
And William Sendicki says explicitly, even if you don't have enough evidence to show actual confusion, which is the standard when you're talking about the trademark infringement prong of the Lanham Act, even if you're not able to show actual confusion,

[00:09:29] Speaker 01:
That's not going to defeat an accounting, which is what Williams and Dickey called the disgorgement remedy.

[00:09:35] Speaker 01:
And so, no, I don't think that we get back into that problem with Parkway baking.

[00:09:40] Speaker 01:
If we show willful false advertising under the Lanham Act, that's sufficient under Williams and Dickey to

[00:09:47] Speaker 01:
allow us to recover the defendant's profits upon a showing of the defendant's revenues, which we made.

[00:09:55] Speaker 04:
And it's not incumbent upon you to show that the gains were somehow attributable to the false statements?

[00:10:01] Speaker 04:
You say that is?

[00:10:03] Speaker 01:
That is their burden to show that the profits were not attributable to the false statement.

[00:10:08] Speaker 01:
And again, the statute says this explicitly.

[00:10:12] Speaker 00:
You want to spend a minute or two on infringement?

[00:10:14] Speaker 01:
Certainly, Your Honor.

[00:10:17] Speaker 01:
I'll start, and given the time, likely end with the before the incoming call is answered issue because that is common to both patents.

[00:10:26] Speaker 01:
Next caller's non-infringement arguments on this limitation transparently add a limitation to the claim.

[00:10:34] Speaker 01:
The claims require that the analysis be done before the incoming call is answered.

[00:10:40] Speaker 01:
Next caller reads them to say, before the incoming call is answered by the IVR.

[00:10:46] Speaker 01:
If next caller wanted to construe the claim that narrowly, then the time to do so was before the district court at claim construction.

[00:10:55] Speaker 01:
But instead, next caller agreed to the broad constructions of call, meaning any connection over a telecommunications or information services network, and is answered, actually, or virtually goes off the hook, that the district court adopted.

[00:11:09] Speaker 01:
But then it argued to the jury that it doesn't infringe because Veracruz doesn't meet a limitation that these claims simply don't require.

[00:11:20] Speaker 01:
I think this case is on all fours with the MOBA case that we cited in our brief.

[00:11:25] Speaker 01:
The accused infringer's non-infringement position depends on adding a limitation to the claim construction that simply is not there.

[00:11:34] Speaker 01:
And we're entitled to protect the original breadth of that claim construction from post facto imposition of an additional limitation.

[00:11:41] Speaker 01:
What about the word incoming?

[00:11:42] Speaker 02:
Was the word incoming ever construed?

[00:11:44] Speaker 01:
The word incoming was not construed.

[00:11:46] Speaker 02:
So I guess that's kind of the real rub here is trying to figure out whether the so-called second call can still constitute an incoming call.

[00:11:58] Speaker 01:
Certainly.

[00:11:58] Speaker 01:
So if you look at the patent, Judge Chen, the patent consistently frames the call from the perspective of... What I'm wondering is, isn't that a fact question for the jury to then decide here, okay,

[00:12:13] Speaker 02:
We all know that when the call comes into the computer, that's an incoming call.

[00:12:21] Speaker 02:
But then when the call gets routed to a human agent, is it still an incoming call or is it a different call?

[00:12:31] Speaker 01:
I would say, Your Honor, that that's not a fact question.

[00:12:34] Speaker 01:
That's a question about the scope of the claims.

[00:12:36] Speaker 01:
And I'll explain why using Next Caller's own arguments.

[00:12:40] Speaker 01:
If you take a look at appendix 4002, this is the summary judgment briefing on this patent.

[00:12:46] Speaker 01:
Next Caller explicitly framed this dispute as a dispute about claim construction.

[00:12:51] Speaker 01:
They said, the court should resolve the claim construction dispute, finding that the claims require the analysis

[00:12:58] Speaker 01:
occur before the call is first answered.

[00:13:02] Speaker 01:
Then a little bit later, they say, properly construed, the claims require the analysis to be performed before the first instance where the call goes off the hook.

[00:13:11] Speaker 01:
Next caller itself has consistently framed this dispute about whether subsequent calls after the initial one count as an incoming call is a dispute of claim construction

[00:13:21] Speaker 01:
We agree it's a claim construction issue, and we think that we have the better of the argument.

[00:13:25] Speaker 01:
And if that claim construction is applied to the undisputed facts, then a finding of infringement necessarily.

[00:13:30] Speaker 02:
Was there some kind of O2 micro issue here?

[00:13:34] Speaker 01:
I don't believe there's an O2 micro issue because neither party argued that additional construct, well, next caller argued here that additional construction was necessary, but then later said, no, we're fine with the construction you've already entered district court.

[00:13:49] Speaker 01:
We were also fine with the construction that the district court entered because we think it's A, correct, and B, resolves the dispute in our favor as a matter of law.

[00:13:58] Speaker 01:
So I think that makes it a little bit different from O2 micro in that regard where the

[00:14:03] Speaker 01:
One of the parties asked for additional claim construction, but was denied it by the district court.

[00:14:09] Speaker 00:
Counsel, your time has mostly expired.

[00:14:11] Speaker 00:
We'll give you three minutes for the bottle.

[00:14:14] Speaker 01:
Thank you.

[00:14:16] Speaker 00:
Ms.

[00:14:16] Speaker 00:
Columbia.

[00:14:18] Speaker 03:
Good morning.

[00:14:18] Speaker 03:
May it please the court?

[00:14:22] Speaker 03:
Your Honors, if appropriate, I'll start with the patent issues that we finished with, and then move on to the false advertising.

[00:14:28] Speaker 03:
The issue is not an issue of claim construction.

[00:14:34] Speaker 03:
Both parties stipulated to the constructions of is answered and call.

[00:14:39] Speaker 03:
The court invited them at the summary judgment stage to offer more claim construction if they wanted it.

[00:14:46] Speaker 03:
Both parties said no.

[00:14:48] Speaker 03:
It's important to note that summary judgment was next caller's summary judgment motion for a finding of non-infringement based on the

[00:14:57] Speaker 03:
plain language of the term.

[00:14:59] Speaker 03:
Next caller made that same motion at the motion to eliminate stage.

[00:15:03] Speaker 03:
The court again said it was not an issue of claim construction, but rather an issue of fact to be put to the jury.

[00:15:09] Speaker 03:
The term incoming was never construed and therefore was subject to an amenable plain and ordinary meaning.

[00:15:18] Speaker 03:
which the jury is presumed to have applied and to have found no infringement.

[00:15:22] Speaker 03:
In that regard, it is not like the MOBA v. Diamond case cited by my brethren, but rather like the E plus versus Lawson case in which the claim determined in that case had not been construed and the court found that the jury was free to apply a plain and ordinary meaning of a plain and ordinary term.

[00:15:42] Speaker 03:
So based on that and based on hearing competing testimony, the jury

[00:15:45] Speaker 03:
is presumed to have found that the incoming call was the call into the computer IVR system, which is answered before the next caller system engages in its analysis.

[00:16:01] Speaker 03:
If there are no questions on that, I'll turn to false advertising.

[00:16:05] Speaker 03:
On false advertising, the court found in her finding of Jamal

[00:16:14] Speaker 03:
three separate and independent reasons why the jury's verdict should be overturned.

[00:16:19] Speaker 03:
First was the fifth.

[00:16:20] Speaker 04:
Can you just, because time is short, can you just go to what your friend spent most of his time on, which is the disgorgement and his analysis of Third Circuit case law, which would require that they don't have to make a showing of causal connection or reliance showing.

[00:16:36] Speaker 03:
Yes, Your Honor.

[00:16:37] Speaker 03:
That reading would read the words out of the Lanham Act.

[00:16:41] Speaker 03:
That is, the harm must be attributable to the false statement.

[00:16:45] Speaker 04:
And what about Williamson-Dickey?

[00:16:47] Speaker 03:
Williamson-Dickey is a trademark infringement case.

[00:16:50] Speaker 03:
Williamson-Dickey itself, if I could just have a moment, Your Honor, refers to and cites back to the sentry distilling case, which cites back to the Mishawaka rubber case, which is some of our oldest trademark infringement law, which explains the policy rationale for disgorgement in a trademark infringement case where the

[00:17:10] Speaker 03:
trademark infringer is presumed to be trading on the goodwill and the value built up by the competitor.

[00:17:18] Speaker 03:
Here we have a false advertising claim where the Lanham Act clearly requires proof in the Third Circuit of actual deception as well as harm attributable to the false statement.

[00:17:31] Speaker 03:
And here the lower court

[00:17:34] Speaker 03:
according to her footnote, scrubbed the record herself and found no evidence of actual deception, either circumstantial or otherwise.

[00:17:42] Speaker 04:
I don't want to focus on the actual deception because the confusion makes me crazy.

[00:17:48] Speaker 04:
So let's focus on reliance, as Judge Chen said at the beginning.

[00:17:52] Speaker 04:
On reliance, why

[00:17:56] Speaker 04:
Do you read likelihood into the reliant standard?

[00:17:59] Speaker 04:
And if not, why shouldn't we read likelihood?

[00:18:02] Speaker 04:
Because it doesn't seem that the district court read likelihood into the standard, right?

[00:18:06] Speaker 03:
That's correct.

[00:18:07] Speaker 03:
Because under Parkway Baking, where the only remedy sought is damages for past activity, the likelihood is not the question.

[00:18:16] Speaker 03:
The question is, did it actually

[00:18:18] Speaker 03:
deceive anyone.

[00:18:19] Speaker 03:
Did they actually rely on this false statement?

[00:18:22] Speaker 04:
Well, does it matter that in the context here we had all the players as witnesses and everybody was saying what they did?

[00:18:27] Speaker 04:
I mean, it seems like the vast majority of the seals in the relevant period were made by the cast of characters whose analysis was given to the jury, right?

[00:18:40] Speaker 03:
Correct.

[00:18:40] Speaker 03:
Correct, Your Honor.

[00:18:41] Speaker 03:
We have a somewhat unusual case, and I think it's very important to the

[00:18:44] Speaker 03:
to the judge's decision and her decision to overturn the jury verdict.

[00:18:48] Speaker 03:
We had exactly four customers.

[00:18:50] Speaker 03:
In each instance, the jury heard evidence

[00:18:53] Speaker 03:
that the IVR statement heard no evidence that the IVR statement influenced their decision.

[00:18:59] Speaker 03:
Zero evidence in that direction.

[00:19:01] Speaker 03:
And in the other direction, we have Capital One who signed their contract months before the statement was ever made.

[00:19:08] Speaker 03:
So obviously, they didn't rely on it.

[00:19:10] Speaker 03:
We have Comcast who testified to the jury that they don't use Nextcaller in the IVR.

[00:19:16] Speaker 03:
We have BBVA, which testified they don't use Nextcaller in the IVR.

[00:19:21] Speaker 03:
And we have Dish Network.

[00:19:23] Speaker 03:
which was the only customer actually asked about these marketing materials.

[00:19:27] Speaker 03:
And that witness said, we don't really pay attention to marketing materials.

[00:19:30] Speaker 03:
We pay attention to actual data.

[00:19:32] Speaker 03:
We run our own tests.

[00:19:33] Speaker 04:
Yeah, but the other side relies on, and I think fairly, the one statement that they made, that BBVA made, about how absolutely that someone might, it might be something that BBVA would consider when selecting a vendor.

[00:19:51] Speaker 04:
And the answer was absolutely.

[00:19:53] Speaker 03:
I understood, Your Honor.

[00:19:55] Speaker 03:
It may be something that in general is of interest.

[00:19:58] Speaker 03:
But in these particular instances, there's no evidence that BBVA actually used it in the IVR.

[00:20:04] Speaker 03:
There's no evidence that it relied on the statement.

[00:20:06] Speaker 03:
And for the other three, there's affirmative testimony from two of them that they didn't use it in the IVR.

[00:20:12] Speaker 03:
And there's evidence from the third that it signed its contract months before the statement was ever made.

[00:20:17] Speaker 03:
So it would be like me saying that

[00:20:22] Speaker 03:
Gas mileage is important to me as a general mom and apple pie, but I might choose to buy my car having nothing to do with the gas mileage of the car.

[00:20:32] Speaker 03:
That's probably a poor analogy, and I shouldn't do analogies on my feet.

[00:20:36] Speaker 03:
But the fact that something might be of general interest doesn't

[00:20:42] Speaker 03:
change that we don't need circumstantial evidence.

[00:20:46] Speaker 03:
We have actual evidence from these customers that they did not rely on the IVR statement in making their purchases.

[00:20:54] Speaker 03:
And interestingly, they weren't asked in their depositions.

[00:21:00] Speaker 03:
So there was every opportunity to put the statements in front of them and ask them, did this influence your decision making?

[00:21:07] Speaker 03:
Those questions were not asked.

[00:21:09] Speaker 03:
for whatever reasons, but the evidence the jury had was the absence of any reliance and the affirmative evidence that they did not use this device in the IVR.

[00:21:21] Speaker 02:
Let me get back to the Williamson-Dickey angle.

[00:21:28] Speaker 02:
I'm hearing the other side say they don't have to prove the lines.

[00:21:32] Speaker 02:
They don't have to prove materiality.

[00:21:34] Speaker 02:
All they have to prove is that number one, the statement was false.

[00:21:39] Speaker 02:
And number two, it was willfully made.

[00:21:43] Speaker 02:
And that's enough to entitle them to disgorgement.

[00:21:51] Speaker 02:
So is that your understanding of the law?

[00:21:55] Speaker 02:
of that, you don't have to prove all the classic requirements of either trademark infringement or deceptive marketing.

[00:22:06] Speaker 03:
No, Your Honor.

[00:22:07] Speaker 03:
There's one sentence in Williamson Dickey which says,

[00:22:10] Speaker 03:
the absence of customer confusion in very much a consumer-customer market does not preclude an accounting.

[00:22:17] Speaker 03:
That's the extent of the statement in Williams and Dickey.

[00:22:20] Speaker 03:
It was decided in the same year as Parkway Baking within a few months.

[00:22:24] Speaker 02:
So what does that mean if it says, well, in a trademark infringement case, you don't have to worry about confusion.

[00:22:33] Speaker 02:
You don't have to prove the likelihood of confusion element.

[00:22:36] Speaker 03:
Yeah, Your Honor, the case goes back and relies on sentry distilling and then on the Michikawa case.

[00:22:44] Speaker 03:
Those were both in our brief.

[00:22:46] Speaker 03:
It ties back into the policy of trademark infringement law and the presumption that if you're trading on someone else's trademark, you're engaged in the type of behavior for which an accounting may be required.

[00:23:03] Speaker 03:
Here we have same statute, I concede that, but a different act, a false advertising act that caused no harm to trusted whatsoever.

[00:23:14] Speaker 03:
And as Parkway Baking pointed out, the Lanham Act was not entitled to be a windfall for competitors.

[00:23:20] Speaker 03:
It's intended to protect consumers and customers.

[00:23:24] Speaker 03:
And obviously, if in making a false statement you harm your competitor, then there's a right to recover.

[00:23:30] Speaker 03:
But to say you just get disgorgement in this situation, where there's no causation, no reliance, and no harm, would be to read those elements out of the Lanham Act for false advertising.

[00:23:43] Speaker 03:
If there are no other questions, you're on.

[00:23:45] Speaker 03:
Sit down.

[00:23:46] Speaker 00:
Thank you, counsel.

[00:23:49] Speaker 00:
No one ever loses points by surrendering time.

[00:23:55] Speaker 00:
Mr. Millican has three minutes for rebuttal.

[00:23:59] Speaker 01:
Thank you, Your Honor.

[00:24:00] Speaker 01:
I'd like to make three brief points in rebuttal, two on false advertising, one on infringement.

[00:24:06] Speaker 01:
First, as to the disforgment theory of false advertising, Williamson-Dickey is extremely clear, and I'd like to read from the case here.

[00:24:15] Speaker 01:
This is at 251F2nd, 924 at 927, and the court says,

[00:24:23] Speaker 01:
The mere fact that there is no showing by the plaintiff of actual confusion of source will not defeat an accounting.

[00:24:31] Speaker 01:
And then it goes on to say that the burden shifts to the defendant to show that the profits were not actually made as a result of the infringement.

[00:24:40] Speaker 01:
That is exactly analogous to the situation that we have here.

[00:24:44] Speaker 01:
And one thing, Judge Tin, that you said that I just wanted to clarify, we do agree that we need to show materiality no matter what.

[00:24:52] Speaker 01:
But the evidence of materiality here is overwhelming.

[00:24:56] Speaker 01:
And you can go, for example, to Appendix 6531, the testimony of the BBVA representative.

[00:25:03] Speaker 01:
The question was, if one vendor has better IVR containment metric, that might be something BBVA

[00:25:09] Speaker 01:
BBVA would consider when selecting a vendor?

[00:25:12] Speaker 01:
Answer, absolutely.

[00:25:14] Speaker 01:
At appendix 6540, the Comcast represented... But there's another part of that colloquy, right?

[00:25:20] Speaker 02:
Which said, we're not using this Veracoll for containment purposes.

[00:25:25] Speaker 02:
We're just using it for authentication.

[00:25:27] Speaker 01:
That they ultimately decided not to use it to drive IDR authentication.

[00:25:32] Speaker 01:
But that does not prevent the jury from making the common sense inference that

[00:25:37] Speaker 01:
given that this was something that was really important to them, that could well have been a major factor in BBBA purchasing the product in the first instance.

[00:25:47] Speaker 01:
And I think my friend's gas mileage analogy is... Well, nobody said it was really important to them.

[00:25:53] Speaker 04:
It said that might be something that BBBA would consider when selecting a

[00:25:58] Speaker 01:
And the answer was absolutely.

[00:26:00] Speaker 01:
And then the Comcast representative testified similarly that IVR containment was, quote, absolutely something that Comcast, quote, wants to increase or maximize because it saves phone calls to agents that are more expensive.

[00:26:13] Speaker 02:
The question is were these people in the market for

[00:26:19] Speaker 02:
doing something on containment or were they doing something on authentication?

[00:26:23] Speaker 02:
And it appears quite clearly from their testimony that these two parties were looking for an authentication service and that's what Veracall does.

[00:26:32] Speaker 02:
It's verifying whether the caller is real or spoofing.

[00:26:36] Speaker 01:
Well, correct.

[00:26:36] Speaker 01:
But the point, your honor, is that authentication technologies can be used to drive IVR containment.

[00:26:43] Speaker 01:
That's exactly what Nextcaller was trying to convey when it said, I want to jack that stat or make up a number like 8% to compete with Trusted.

[00:26:51] Speaker 01:
The point was, we want to show customers that they can use our authentication technology in order to increase their IVR containment.

[00:27:00] Speaker 01:
That's exactly, and they did it to try to compete better with Trusted.

[00:27:03] Speaker 01:
That's exactly the kind of conduct that the Lanham Act is supposed to prevent.

[00:27:07] Speaker 02:
Do we have any evidence from any customers that were using Veracol in the context of IVR containment?

[00:27:17] Speaker 01:
The testimony from the customers who testified at trial was that they didn't end up using Veracol to drive IVR containment.

[00:27:25] Speaker 01:
However, they also testified very clearly that IVR containment was something they would consider in making purchasing decisions.

[00:27:32] Speaker 01:
And the case law is clear that that's all you need for the materiality showing.

[00:27:36] Speaker 01:
You just have to show that it's something that is likely to influence purchasing.

[00:27:40] Speaker 01:
Go ahead.

[00:27:41] Speaker 04:
Even when we have the sales or the revenue figures to demonstrate that these were the principal, vast majority of revenue would derive from the people we heard from.

[00:27:53] Speaker 04:
That's correct, Your Honor.

[00:27:55] Speaker 04:
So I don't understand where likelihood works.

[00:27:58] Speaker 04:
And if they've testified, they didn't rely on it.

[00:28:02] Speaker 01:
But they testified that it was something that would have been important to their purchasing decisions.

[00:28:08] Speaker 01:
And that is all we need to show to meet our burden on the materiality element.

[00:28:15] Speaker 04:
There is a separate question about- Isn't there a reliance component to the materiality?

[00:28:19] Speaker 04:
And wasn't it clear that they did not rely on this deception with regard to their purchasing decisions?

[00:28:28] Speaker 01:
No, Your Honor.

[00:28:28] Speaker 01:
The way that the case law has evolved with this five-factor test for false advertising, the extent of the reliance goes to the deception element.

[00:28:38] Speaker 01:
That's, my friend on the other side's position, is that in showing actual deception, you have to show that customers actually relied on the false statement.

[00:28:48] Speaker 01:
We disagree with that, but even if they're right, then we still have our entitlement to a disgorgement remedy because

[00:28:56] Speaker 01:
There, all we have to show is a willfully false statement of material fact, which we did.

[00:29:01] Speaker 01:
And then we have to present evidence of their revenues, which we also did.

[00:29:06] Speaker 00:
Thank you, counsel.

[00:29:07] Speaker 00:
We have both arguments and the case is submitted.

[00:29:10] Speaker 01:
Thank you, Your Honor.

[00:29:11] Speaker 03:
Thank you, Your Honor.