[00:00:09] Speaker 02:
Thank you your honors and may it please this court.

[00:00:19] Speaker 06:
The University of South Florida filed suit in 2015 seeking to recover fees for a license taken by the government under USF's 094 patent directed to the treatment of Alzheimer's disease.

[00:00:34] Speaker 06:
To shield the government from that liability

[00:00:37] Speaker 06:
The Court of Federal Claims created an implied-impact agreement between USF and Mayo Foundation, Mayo, an entity that provided no evidence whatsoever.

[00:00:52] Speaker 06:
And with respect to whose conduct concerning this implied-impact agreement, we have no information at all.

[00:01:00] Speaker 04:
Can I just ask, how did this litigation proceed without either side getting information from Mayo?

[00:01:08] Speaker 06:
Your honor, it was not the burden of the USF to present Mayo's evidence.

[00:01:14] Speaker 04:
It is the burden of the government to present that.

[00:01:17] Speaker 04:
Neither side asked for set depositions of Mayo subcontracting officials or the like?

[00:01:29] Speaker 06:
What I inquired, your honor, was who could speak to that issue, and the events

[00:01:35] Speaker 06:
happened so far back in the past, you'll notice that even the name of the entity transitioned from Mayo Foundation to Mayo Clinic to Mayo Clinic Rochester.

[00:01:47] Speaker 06:
I asked, but nobody was available to answer that question.

[00:01:52] Speaker 06:
We submit, Your Honors, that this implied and fact agreement is contrary to the facts of this case.

[00:01:59] Speaker 06:
It's contrary to the law governing implied-in-fact agreements.

[00:02:03] Speaker 04:
And critically.

[00:02:05] Speaker 04:
Does affirmance here require an affirmance of the finding that an implied-in-fact contract existed?

[00:02:15] Speaker 04:
Why isn't it enough if, as I think the evidence does make clear, that money

[00:02:26] Speaker 04:
went to USF after the November 2017 express contract in part to pay for pre-contract work that included this April 1997 actual reduction to practice.

[00:02:48] Speaker 06:
i'm going to hold on to the one part of that that is the money went to pay for that i'm not sure that there's complete agreement on that but whether it did or did not you're under that according to statute according to the by dole act the money has to go to u.s.f.

[00:03:07] Speaker 04:
before the actual reduction to practice it is time to do that where do you get the before i think you're focusing on exactly what to me is a statutory question but i'm not sure why

[00:03:22] Speaker 04:
to receive the work?

[00:03:25] Speaker 06:
Well, it's funding for that work.

[00:03:27] Speaker 06:
If the work has been done, Your Honor, and the, for instance, the grantee, in this case Mayo, decided to withdraw that funding, there was no obligation at the time, who then owns the invention?

[00:03:43] Speaker 06:
That's why the statute specifies not intent, not declaration,

[00:03:49] Speaker 06:
not the filing of a patent application, although those are all elements of 35 USC 202, the statute specifies the timing because it's reliable and indicative.

[00:04:01] Speaker 06:
It's not what you plan for, Your Honor.

[00:04:04] Speaker 06:
It's what happens.

[00:04:05] Speaker 06:
And what happened in this case is there was no money paid.

[00:04:12] Speaker 06:
USF had ownership of the

[00:04:18] Speaker 06:
patent rights long before the grant was ever signed.

[00:04:22] Speaker 06:
And USF proceeded with that work through the actual reduction to practice on April 25.

[00:04:29] Speaker 01:
That seems contrary to the finding of the claims court below, which found that money was provided.

[00:04:41] Speaker 01:
to from Mayo to USF for the work done prior to the reduction to practice.

[00:04:48] Speaker 06:
The court's finding is explicitly contrary to the facts.

[00:04:52] Speaker 06:
Four different witnesses testified identically at trial before any money could go to USF.

[00:05:02] Speaker 06:
There had to be a contract, a subcontract, actually signed

[00:05:09] Speaker 06:
by the two parties.

[00:05:10] Speaker 06:
As your honors have observed, one was signed, but not until well after the actual reduction of practice back in April.

[00:05:19] Speaker 01:
I hear what you're saying.

[00:05:20] Speaker 01:
I think it's a timing issue maybe that you're focusing on, and I see the finding as saying that

[00:05:29] Speaker 06:
work was money was provided funds from NIH were uh... supported were used towards the work performed but it might have been retroactive no your honor money was provided but who provided that money USF provided that money the testimony of David Morgan who was the responsible principal investigator for contract for section five of the grant

[00:05:59] Speaker 06:
specifically testify, not that he remembered doing it, but that's what he would have done because it was so critical to have continuous benefit.

[00:06:09] Speaker 04:
We may be talking past each other.

[00:06:12] Speaker 04:
I am prepared to assume right now that the evidence does not permit a reasonable finding that money under this contract flowed to USF before the November 2017 contract.

[00:06:27] Speaker 04:
Let's assume that.

[00:06:30] Speaker 04:
I think we've both been asking about this, certainly just speaking for myself.

[00:06:36] Speaker 04:
That doesn't mean that money didn't flow from Mayo to USF, the flowing starting in November 2017 for the April, not 2017, 1997, for the April 1997 actual reduction to practice work.

[00:06:59] Speaker 06:
We can talk.

[00:07:00] Speaker 06:
That's two steps, Your Honor, and I would like to talk about both of them briefly.

[00:07:05] Speaker 06:
The first step is, can you pay it back later?

[00:07:10] Speaker 06:
Can you pay because you wanted to, but the government or the contractor didn't act quickly enough?

[00:07:19] Speaker 06:
The answer to that, Your Honor, as far as research has shown to us,

[00:07:23] Speaker 06:
The answer is no.

[00:07:25] Speaker 06:
The statute is very clear.

[00:07:27] Speaker 06:
The statute is very specific, because it's necessary to be clear to answer or to promote the goals of the Bayh-Dole Act, to promote that transfer.

[00:07:39] Speaker 06:
Because what would happen, Your Honors, if the University of South Florida relied on that promise, and then Mayo or the university

[00:07:51] Speaker 06:
failed to go forward.

[00:07:52] Speaker 01:
I hear your policy argument, but what language are you relying on specifically in the statute?

[00:07:58] Speaker 06:
The language of the statute is 202.

[00:08:01] Speaker 06:
It's got to have on 201, I'm sorry.

[00:08:04] Speaker 06:
It's got to happen before the actual reduction to practice.

[00:08:10] Speaker 01:
So this is the section 201, the definitions.

[00:08:13] Speaker 06:
The definition of subject invention.

[00:08:19] Speaker 06:
before the conception.

[00:08:21] Speaker 01:
I'm sorry.

[00:08:22] Speaker 01:
I see.

[00:08:22] Speaker 01:
What precise part of section 201 are you relying on?

[00:08:28] Speaker 01:
There's a definition, for example, of the funding agreement.

[00:08:32] Speaker 01:
What exactly are you relying on?

[00:08:35] Speaker 06:
The definition of funding agreement is definitely part of our argument, Your Honor.

[00:08:41] Speaker 06:
The definition of funding agreement, according to statute, requires

[00:08:46] Speaker 06:
In Section 202C, which was the point of reliance of the Court of Federal Claims, it requires that the funding agreement include eight different provisions designed to achieve the goals of the Buy Dole Act.

[00:09:07] Speaker 06:
Eight different provisions.

[00:09:08] Speaker 06:
The Court of Federal Claims gave one provision

[00:09:13] Speaker 06:
the license provision, which is the fourth provision.

[00:09:17] Speaker 06:
But that's why there can never be an implied... Aren't we talking about the subcontract here?

[00:09:25] Speaker 01:
No, you're wrong.

[00:09:26] Speaker 01:
We're talking about any contract.

[00:09:28] Speaker 01:
Isn't the agreement between Mayo and USF the subcontract?

[00:09:33] Speaker 01:
Well, as defined in the funding agreement term, which includes a funding agreement between the US government and Mayo, which includes a subcontract which is between Mayo and USF.

[00:09:45] Speaker 06:
Your Honor, I have to disagree.

[00:09:47] Speaker 06:
The funding agreement, the overrun

[00:09:51] Speaker 06:
is between the government and mail.

[00:09:55] Speaker 06:
USF doesn't get any rights of any kind under that funding agreement.

[00:10:00] Speaker 06:
It's only when the subcontract is entered into.

[00:10:04] Speaker 01:
So time is critical.

[00:10:05] Speaker 01:
I'm just trying to make sure I'm following your statutory argument.

[00:10:09] Speaker 01:
You were saying the funding agreement has to have all these eight sections in it.

[00:10:13] Speaker 01:
But I don't see how that relates to the issue that you're talking about now, because we're talking about the subcontract between Mayo and USF.

[00:10:20] Speaker 06:
Because no implied and fact agreement could possibly... I am sorry, Your Honor.

[00:10:27] Speaker 06:
No implied and fact agreement could possibly satisfy the standard of those very specific and clearly stated requirements of 202C.

[00:10:39] Speaker 01:
You cannot... In your view, the subcontract has to have those requirements.

[00:10:43] Speaker 06:
The statute is indifferent to whether it's a subcontract or a contract, a government grant.

[00:10:53] Speaker 06:
It's indifferent to that.

[00:10:55] Speaker 06:
You cannot say, oh, I'll fill it in later.

[00:10:59] Speaker 06:
There are two funding agreements.

[00:11:03] Speaker 06:
One is an agreement, a grant between USF and mail.

[00:11:09] Speaker 06:
There is a second agreement, a grant, with

[00:11:15] Speaker 06:
mail and USF that does not have any of those provisions other than the license.

[00:11:22] Speaker 01:
I understand what you're saying.

[00:11:24] Speaker 01:
So your argument is based on the definition of the funding agreement as well as section 202, which has specific things that have to be in the agreement.

[00:11:35] Speaker 01:
Is there anything else that I should look to for your view that it can't be that there would be a subcontract that

[00:11:44] Speaker 01:
refers to payments made for earlier work.

[00:11:48] Speaker 06:
Only that this subcontract does not refer to payments earlier made, Your Honor.

[00:11:52] Speaker 06:
If that was permitted under the law, and we do not agree that that's permitted, but if that was permitted, if there could be a look back, David Morgan called them advances, if you could have that, you'd have to reference it.

[00:12:08] Speaker 06:
Marsha Gordon testified at trial that there was no earlier provision of any kind.

[00:12:14] Speaker 06:
So you can't conjure up the future by altering the past, Your Honor.

[00:12:21] Speaker 04:
Did you argue to the court of federal claims that one reason there could not have been and implied a legally sufficient implied in fact agreement was the absence of

[00:12:33] Speaker 04:
provisions that comport with the 202c list?

[00:12:38] Speaker 06:
We did, Your Honor.

[00:12:40] Speaker 06:
We did.

[00:12:41] Speaker 04:
Do we have something in the appendix?

[00:12:44] Speaker 06:
I do not have, we don't have that appendix.

[00:12:47] Speaker 04:
I thought that the government's forfeiture section of its brief said you did not.

[00:12:54] Speaker 06:
Because we presented it at summary judgment, Your Honor.

[00:12:57] Speaker 06:
And the court denied that summary judgment.

[00:13:01] Speaker 06:
Once you've preserved it in some government's briefs, suggest that summary judgment does not preserve the issue.

[00:13:07] Speaker 06:
We disagree.

[00:13:08] Speaker 02:
Before you sit down, I have a question.

[00:13:11] Speaker 02:
You mentioned there was two agreements at play here, one between USF and NAO and the other between

[00:13:19] Speaker 02:
mail and the government, is that correct?

[00:13:22] Speaker 06:
That is correct, Your Honor.

[00:13:24] Speaker 02:
And do both of those agreements touch on the same subject matter?

[00:13:29] Speaker 06:
Yes, Your Honor, they are both directed to the same subject matter at different points in time.

[00:13:33] Speaker 02:
Right, but it's the same subject matter.

[00:13:41] Speaker 06:
For all intents and purposes, yes, Your Honor, except for whatever happened in that intervening year and three months.

[00:13:50] Speaker 06:
Some action may have occurred with respect to Mayo and the U.S.

[00:13:57] Speaker 06:
with respect to Project 5 that did not involve the mice of the 094 pack.

[00:14:04] Speaker 02:
I'm not focused so much on the conduct and when it occurred.

[00:14:09] Speaker 06:
The general subject matter is the same in both, yes.

[00:14:12] Speaker 06:
OK.

[00:14:14] Speaker 02:
OK.

[00:14:14] Speaker 02:
We will restore your time.

[00:14:17] Speaker 06:
Thank you, Your Honor.

[00:14:29] Speaker 02:
Mr. Brown, let me ask you a question so that you can start off.

[00:14:34] Speaker 02:
Is it possible to have an implied, in fact, agreement and an express agreement that deal with the same subject matter?

[00:14:45] Speaker 05:
Not at the same time, Your Honor.

[00:14:47] Speaker 05:
Had there, you know, the issue here is what was going on in the fiscal year 1996, October 1st, 96 through September 97.

[00:14:56] Speaker 05:
That's the relevant time period.

[00:14:57] Speaker 05:
There was no express agreement, written agreement, that's ever been brought forth.

[00:15:02] Speaker 05:
Had there been one, one would presume

[00:15:04] Speaker 05:
under normal contract law, that agreement would supersede an implied agreement.

[00:15:09] Speaker 05:
Where we disagree with USF is they're saying the written agreements for the later year two or year three of the grant, which is not in the relevant time period, somehow govern the first time period in that there was no agreement whatsoever.

[00:15:24] Speaker 05:
So yeah, to answer your question, yes.

[00:15:26] Speaker 05:
The next press agreement would govern that time period if there were one.

[00:15:31] Speaker 05:
What the trial court said,

[00:15:33] Speaker 05:
Going to this point, I should say, is trial court noted in terms of what you would imply in the agreement, one of the reasons you would imply these 202 requirements when this issue came up in summary judgment is you would likely imply the same terms that you see.

[00:15:49] Speaker 05:
in the express agreement in year two and three to the grant, the consortium agreement that's discussed in our brief.

[00:15:54] Speaker 05:
And what the court said at that stage when it was raised was you would likely have these terms because the parties recognized them a year later that they existed.

[00:16:03] Speaker 05:
So hopefully I answered your question.

[00:16:10] Speaker 04:
need to find, to approve the finding of an implied impact agreement in order for us to get from here?

[00:16:20] Speaker 05:
I don't think so, Your Honor, and this goes to a live report of our brief.

[00:16:24] Speaker 05:
We do think that contractually you could find an implied effect contract and that the court's actions were proper.

[00:16:32] Speaker 05:
So you may not have to reach what I'm about to say, but we don't think an implied effect contract was necessary.

[00:16:38] Speaker 05:
When you look at the baby case, the court there said that when you look at

[00:16:42] Speaker 05:
the nature of the Buy Bill Act and the sort of automatic license provision that was intended, you have both the statutory license that's automatically provided by statute and then by telling parties to put this in the contract, you have a contractual requirement.

[00:16:58] Speaker 05:
So to answer your question briefly, no.

[00:17:01] Speaker 04:
I don't think I understood your explanation.

[00:17:04] Speaker 04:
Sure.

[00:17:05] Speaker 04:
So I was trying to suggest in my questions with Mr. Kelberg that the statute seems to permit saying that work paid for by a contract

[00:17:28] Speaker 04:
formed at time two can be under that agreement even if it preceded time two as long as the payment, as long as that contract provided for payment for that pre-contractual work.

[00:17:49] Speaker 05:
So you're suggesting that the year two contract, if money came in technically under that contract, but paid for it.

[00:17:56] Speaker 04:
I'm actually quite confused about the whole year two business.

[00:17:59] Speaker 04:
I'm not interested in the NIH contract.

[00:18:03] Speaker 04:
I'm interested only in the Mayo-USF relationship.

[00:18:09] Speaker 04:
I'm interested if you want to say forget about that relationship, but not now.

[00:18:13] Speaker 05:
I think I understand your question.

[00:18:15] Speaker 05:
If money ultimately flowed

[00:18:18] Speaker 05:
from the time period, the actual reduction to practice, from Mayo to USF.

[00:18:24] Speaker 04:
But that started flowing after it was in November 1st, effective date of the 20th.

[00:18:31] Speaker 05:
That makes no difference in our view, Ron, in this sort of retroactive payment.

[00:18:35] Speaker 05:
And again, I think to your point, the statute's very clear.

[00:18:39] Speaker 05:
The goal of the statute is, did this money fund this work?

[00:18:44] Speaker 05:
What is conception?

[00:18:45] Speaker 05:
What is the actual deduction practice?

[00:18:47] Speaker 04:
And would you consider that to be work done under the agreement on the assumption that the agreement was not in existence at the time of the work?

[00:18:56] Speaker 05:
I think one could view it that way.

[00:18:58] Speaker 05:
I mean, there's different ways.

[00:18:59] Speaker 05:
Obviously, the court took a different structure to it.

[00:19:02] Speaker 05:
But I think you could view it that way, yes.

[00:19:07] Speaker 05:
And again, I think another point on this retroactive pavement.

[00:19:11] Speaker 02:
Are you saying that work that was performed prior to the express agreement is nonetheless still covered by the express agreement?

[00:19:22] Speaker 05:
Well, that's obviously not what the trial court said.

[00:19:25] Speaker 05:
Depending on what he was talking the abstract about a later written agreement that I was not talking in the abstract I was talking about this case.

[00:19:33] Speaker 04:
I think in this case I think that the testimony is quite clear that money eventually flowed and the finding is clear that a money eventually flowed by eventually I mean after the November 1997 contract was adopted to pay in part

[00:19:52] Speaker 04:
for the earlier April 1997 work because USF was fronting the money and USF was getting the money back.

[00:20:00] Speaker 05:
When you look at the record, Dr. Morgan testified that he was absolutely certain that money flowed.

[00:20:05] Speaker 04:
I want to put that aside because I'm assuming what I in fact believe is that the record does not support that, that money ever flowed

[00:20:17] Speaker 04:
pre-November 1997.

[00:20:20] Speaker 04:
So just assume that for a minute.

[00:20:23] Speaker 04:
But I think the record is quite clear that money flowed starting in November 1997 for work done earlier.

[00:20:31] Speaker 04:
And hence my question, why isn't that enough?

[00:20:38] Speaker 05:
Well, I think it would be enough if you are, again, if

[00:20:43] Speaker 05:
whatever structure you adopt, either implying a contract or looking at it as being subject to the later written agreement.

[00:20:51] Speaker 05:
The point of the statute is that

[00:20:54] Speaker 05:
does money pay for the first actual reduction of practice?

[00:20:58] Speaker 05:
And under your view of the facts, even if it's different from mine, that's still the same.

[00:21:03] Speaker 05:
It's still paid for that.

[00:21:05] Speaker 05:
And the reason I think that should suffice under an implied contract we think is the best theory or another theory, the reason that should suffice is otherwise, with regard to a USF-Mail agreement where the government's not a party,

[00:21:21] Speaker 05:
their motivations, either inadvertently or purposely, to just basically put off the flow of actual money until after the date of the first actual reduction to practice.

[00:21:32] Speaker 05:
And that's not the intent of the statute.

[00:21:34] Speaker 05:
I think that would provide insufficient protection of government rights in the subcontract that they're not a party to.

[00:21:44] Speaker 04:
Is it right to say that the argument for the analysis of why the government had these rights that I've just been sketching is not an analysis you pressed in this case?

[00:22:00] Speaker 05:
I think we pressed it with different terminology in discussing the Mady case, to basically say there's a statutory license.

[00:22:06] Speaker 05:
So even if you're struggling to put an agreement in place,

[00:22:12] Speaker 05:
that has a government license provision, whether it's implied or expressed, maybe said that it's sort of nonetheless, you would statutorily, more of an implied law theory, I guess, you would have a statutory license in addition to one that's provided by contract.

[00:22:32] Speaker 05:
So I think that would be my answer to your question in terms of where we touched upon these concepts in our brief.

[00:22:41] Speaker 05:
It maybe isn't just a court decision, but they made a clear distinction between what would be in a contract and instances where it may be an express agreement that's totally missing.

[00:22:51] Speaker 05:
Obviously here, the second year contract, when there was an express contract article, I believe 17 of the agreement.

[00:22:57] Speaker 04:
I'm sorry, what are you referring to by the second year contract now?

[00:23:01] Speaker 05:
The November 97 agreement you've been referencing, obviously we haven't mentioned this, but it obviously has those provisions.

[00:23:07] Speaker 04:
I'm sorry, you're calling that a second year contract because why?

[00:23:11] Speaker 04:
It's the first contract, first actual contract that existed between Mayo and USC.

[00:23:16] Speaker 05:
First express written contract, that's right.

[00:23:18] Speaker 04:
And this is because it's the second year of the NIH grant.

[00:23:21] Speaker 04:
Is that why you're calling it that?

[00:23:22] Speaker 04:
Correct.

[00:23:24] Speaker 05:
Correct.

[00:23:25] Speaker 05:
And it was enacted during that second year of the NIH grant.

[00:23:32] Speaker 05:
I also want to touch on a couple of things that were raised in your questions to Mr. Kelber.

[00:23:42] Speaker 05:
First of all, regarding his arguments that all of the requirements of 202C, all eight requirements were not brought up at trial.

[00:23:53] Speaker 05:
Again, I think his answer is correct.

[00:23:56] Speaker 05:
These were arguments that were addressed at summary judgment.

[00:24:01] Speaker 05:
Court highlighted the fact that at trial there were factual issues to be determined regarding 202C-4 in particular.

[00:24:08] Speaker 05:
that these arguments regarding the specific elements of implied contract and the specific 202 requirements were never addressed in their pre-trial contentions, the week-long trial, or in their post-trial arguments.

[00:24:21] Speaker 05:
So the court didn't address it in detail in its trial decision.

[00:24:24] Speaker 05:
And I think that's not surprising.

[00:24:26] Speaker 05:
With regard to the factual findings,

[00:24:29] Speaker 05:
Again, and we've touched on this already, USF has ignored the trial court's extensive factual findings that NIH grant funds flowed from the Mayo Clinic to USF beginning in October 1996.

[00:24:41] Speaker 05:
That's what the court found.

[00:24:43] Speaker 04:
Where is that?

[00:24:47] Speaker 05:
When you look at the court's opinion and the first portion of the opinion, she talks about... I'm sorry.

[00:24:53] Speaker 04:
Give me a page of a particular document, please.

[00:24:56] Speaker 05:
Sure.

[00:25:08] Speaker 05:
This would be page, appendix page 10.

[00:25:21] Speaker 05:
And in particular, I mean, there's a mountain of evidence.

[00:25:24] Speaker 05:
There's a lot of documents.

[00:25:25] Speaker 05:
But in particular, she talked about, in her opinion on the last paragraph on appendix page 10, that Dr. Gordon's testimony agreed with Dr. Gordon that her employment contract was for that time period.

[00:25:39] Speaker 05:
She goes on further to say that Dr. Morgan concluded that because they were working on that project, and that was the first year of the grant, starting in September of 1996, because there was an account number that stated it was paying her for that salary, it made sense that Dr. Gordon was paid under the mayor's subcontract.

[00:25:56] Speaker 05:
It goes on to say that his recollection

[00:25:59] Speaker 04:
If you can bear in mind what at least I think is pretty important to keep separate, I don't think there's the slightest doubt that there were USF accounts to which certain expenses, including salaries, were charged, that they had a name of those accounts that indicated USF fully expected the money to come to reimburse them.

[00:26:30] Speaker 04:
retroactive something.

[00:26:35] Speaker 04:
But almost no evidence that money actually flowed from Mayo to USF during this period.

[00:26:45] Speaker 04:
The best I think you have is that at one point

[00:26:50] Speaker 04:
Dr. Morgan said, yeah, that happened.

[00:26:53] Speaker 04:
And then when pressed, he said, you know, this is like 20 years ago.

[00:26:56] Speaker 04:
I don't actually remember.

[00:26:57] Speaker 04:
The way it ordinarily would have happened is that USF advanced the funds.

[00:27:02] Speaker 04:
We eventually got them back.

[00:27:04] Speaker 04:
And everybody understood that, which struck me as, I guess, leaving without adequate support.

[00:27:12] Speaker 04:
any finding, and I'm not sure there really is a finding, that money flowed pre-November 1997 to USF for mail.

[00:27:22] Speaker 05:
He said a few things to this.

[00:27:24] Speaker 05:
I do agree with you.

[00:27:25] Speaker 05:
Our alliance would be primarily on Dr. Morgan's testimony.

[00:27:29] Speaker 04:
And then Dr. Gordon's employment contracts, which it seems to me don't really distinguish between where the money eventually is going to come from to pay for her salary and when the money comes.

[00:27:43] Speaker 04:
That's why it didn't seem to me enough.

[00:27:44] Speaker 04:
And I remember, those are the two things in the relevant section of your brief, not the factual section later, that you point to

[00:27:51] Speaker 04:
to support this proposition.

[00:27:53] Speaker 04:
They don't strike me as enough.

[00:27:54] Speaker 05:
To your question, I would point to Dr. Morgan's testimony.

[00:27:57] Speaker 05:
He was the person in charge of this money.

[00:28:01] Speaker 05:
He's the most knowledgeable fact witness in the absence of documents.

[00:28:05] Speaker 05:
Again, government never had these documents.

[00:28:08] Speaker 05:
By the way, we did go to Mayo.

[00:28:11] Speaker 05:
I got the same answer as apparently Mr. Kilberg got when I proposed the subpoena.

[00:28:16] Speaker 05:
They said they had absolutely no records of this grant.

[00:28:20] Speaker 05:
which has raised the issue of a subcontract to how the government preserves rights.

[00:28:26] Speaker 05:
But to your point about when the money flowed, Dr. Morgan testified that he was, best of his recollection is, it started by December 1996.

[00:28:36] Speaker 04:
He also stated- And then he modified that.

[00:28:40] Speaker 05:
He said that was speculation.

[00:28:42] Speaker 04:
He fundamentally said he didn't remember.

[00:28:44] Speaker 04:
He remembered the way this sort of thing always happened.

[00:28:46] Speaker 05:
Right.

[00:28:46] Speaker 05:
At one point, I asked him how certain argued that money was flowing by April 25, 1997, the date of the Coppola facsimile.

[00:28:54] Speaker 05:
And he said he was 95% certain it would have been flowing by that date.

[00:28:58] Speaker 01:
Mr. Brown, one of the problems I'm having with this review here is that I don't read the court's opinion as finding what you said the court has found.

[00:29:10] Speaker 01:
I see the court's finding on page 813

[00:29:15] Speaker 01:
It's the last paragraph above the heading C. And it says, the court finds the testimony of Dr. Morgan and Dr. Ford incredible.

[00:29:26] Speaker 01:
And it says, the court concludes that the evidence establishes that Plaintiff's work on the mice and the 094 patent was performed using funds from NIH grant, blah, blah, blah, as early as October 1996.

[00:29:38] Speaker 01:
That doesn't mean the money was flowing.

[00:29:40] Speaker 01:
in October 1996.

[00:29:42] Speaker 01:
It means she found that that money did, you know, that money was paid for that work.

[00:29:48] Speaker 00:
But that's different.

[00:29:49] Speaker 01:
I don't think, I don't see where she made a finding that you're saying here today that about, that the money flowed prior to the reduction of crack.

[00:30:00] Speaker 01:
I don't know that she needed to for the reasons we've discussed, but I don't see it.

[00:30:04] Speaker 01:
I think on page 810 that you cited earlier, she's only talking about what the testimony was.

[00:30:12] Speaker 05:
And to be clear, I would agree with you.

[00:30:14] Speaker 05:
Her opinion doesn't depend on that distinction.

[00:30:17] Speaker 05:
And I think she ruled that it wouldn't be a distinction with meaning.

[00:30:21] Speaker 05:
But she did find Dr. Morgan, as you said, credible.

[00:30:25] Speaker 05:
And Dr. Gordon was credible.

[00:30:26] Speaker 05:
And specifically, again, Dr. Morgan testified his best recollection, the best evidence we have at this point.

[00:30:33] Speaker 05:
And she notes that his recollection was that they had funds by 1996.

[00:30:37] Speaker 05:
So there is a factual finding to that point at A10.

[00:30:42] Speaker 05:
And specifically, I'm looking at the bottom portion of the last paragraph there.

[00:30:47] Speaker 05:
His recollection without documentation was that plaintiffs had funds by December 1996 that we were using in order to pay for the mouse costs and the reagents we used and people's salaries as well.

[00:30:57] Speaker 04:
And he goes on.

[00:30:59] Speaker 04:
That's true, but it doesn't say whose funds they made.

[00:31:02] Speaker 05:
No, he goes on to say they were very financially dependent on the grant in this passage.

[00:31:07] Speaker 01:
Right, but there was, as I understand it, there were some, you know, there were some accounts that were made and they were initially funded by USF, right, to be paid eventually by the government, by the NIH funds.

[00:31:21] Speaker 01:
It was a placeholder.

[00:31:23] Speaker 05:
for a period of time.

[00:31:24] Speaker 05:
But he's saying that typically the placeholder would only be the three or six months.

[00:31:28] Speaker 05:
And even if you go to the typical six months, that's still a month before the reduction to prime desk.

[00:31:34] Speaker 05:
And he made it very clear that they were very financially dependent, specifically on this grant money.

[00:31:41] Speaker 05:
So in terms of USF floating the money, that was only temporary.

[00:31:46] Speaker 05:
And you look at the bulk of the testimony, it was very temporary.

[00:31:49] Speaker 02:
OK, Kelsey.

[00:32:01] Speaker 02:
Thank you, Your Honor.

[00:32:07] Speaker 06:
What inventions are subject to the provisions of the Bi-Dual Act, 200 through 212?

[00:32:18] Speaker 06:
Those subject inventions are the inventions made under the agreement.

[00:32:24] Speaker 06:
That's the language of the statute.

[00:32:28] Speaker 06:
The statute refers to the terms of the agreement later on.

[00:32:32] Speaker 06:
What agreement is being referred to?

[00:32:35] Speaker 06:
Can it be any agreement?

[00:32:38] Speaker 06:
We submit that it cannot, Your Honors.

[00:32:41] Speaker 06:
We submit that the statute is referring to the agreement that brings funding from the United States, in this case to a not-for-profit entity, Mayo.

[00:32:56] Speaker 06:
And thereafter, if money goes to a third party, another not-for-profit entity, that agreement is not the agreement referenced initially as the subject inventions.

[00:33:12] Speaker 06:
You cannot put someone in a time machine and say, I know you wanted to make this invention.

[00:33:20] Speaker 06:
And I know you did make the invention.

[00:33:22] Speaker 06:
But we're now going to transport you back in time

[00:33:26] Speaker 06:
and take away your rights.

[00:33:28] Speaker 06:
That would be contrary to the very provisions the Bayh-Dole Act was intended to provide, which was some reliability and predictability about how funded inventions

[00:33:44] Speaker 06:
would go forth.

[00:33:45] Speaker 04:
USF in, say, October of 1997, when it's negotiating the terms of the November agreement that eventually got signed, could have said, we do not want a penny for any work we have already done.

[00:34:02] Speaker 06:
Well, you couldn't get a penny for any work you've already done, because that's the accounting procedure.

[00:34:09] Speaker 06:
They could have said, for instance, Your Honor,

[00:34:13] Speaker 06:
We don't want ownership of the inventions that have already been made.

[00:34:19] Speaker 06:
Because that's what we're doing.

[00:34:21] Speaker 04:
But the ownership is between USF and Duff and Hardy.

[00:34:26] Speaker 04:
And that was done in October of 1996.

[00:34:29] Speaker 06:
Election, Your Honor.

[00:34:31] Speaker 06:
That's a provision of the statute.

[00:34:34] Speaker 06:
Of the eight, three of them precede.

[00:34:37] Speaker 03:
You can't elect them all.

[00:34:46] Speaker 06:
You can't resurrect those.

[00:34:49] Speaker 06:
You've got to decide them when the statute says you decide them.

[00:34:55] Speaker 06:
Because what would happen, Your Honors,

[00:34:59] Speaker 06:
We had the opposite situation.

[00:35:02] Speaker 06:
If the parties had planned on funding the mice of the 094 pattern, certainly Hardy and Duff had conceived of that.

[00:35:15] Speaker 06:
And they intended it to be part of that grant.

[00:35:19] Speaker 06:
And like so many inventions, it failed.

[00:35:23] Speaker 06:
Is the government

[00:35:25] Speaker 06:
in what is year two of the grant, with the first year of the contract between USF and Mayo.

[00:35:33] Speaker 06:
Is the government now going to pay USF for that failed experiment, knowing that it's a failure?

[00:35:43] Speaker 06:
Not if Mayo is going to go forward and negotiate that.

[00:35:50] Speaker 06:
Why would that?

[00:35:51] Speaker 06:
Why would USF?

[00:35:54] Speaker 06:
considered that a reasonable approach.

[00:35:59] Speaker 06:
It's the inventions to come that are to be funded under the agreement, the inventions to come that are to be funded under agreements where the United States is providing funding to not-for-profit entities for research.

[00:36:20] Speaker 06:
There is

[00:36:23] Speaker 06:
a lot of discussion in the court's opinion and at trial about the difference between Project 5 and Project 4.

[00:36:37] Speaker 06:
Project 5, which was part of David Morgan and Marsha Gordon's project, they were responsible for that.

[00:36:46] Speaker 06:
That wasn't finished by November of 1997.

[00:36:52] Speaker 06:
If an invention came from that, and they had hoped there would be, it would belong to the government under license.

[00:37:02] Speaker 06:
But the government cannot move the time back simply because of the intention.

[00:37:08] Speaker 06:
With regard to one other issue, is there better evidence

[00:37:14] Speaker 06:
than David Morgan's intent.

[00:37:17] Speaker 06:
Of course there is, Your Honor.

[00:37:19] Speaker 06:
Marsha Gordon testified that there had been no license before the November 1994.

[00:37:26] Speaker 06:
No agreement.

[00:37:26] Speaker 02:
Sir, you're out of time.

[00:37:28] Speaker 02:
Do you want to conclude?

[00:37:31] Speaker 06:
I appreciate the time, Your Honor.

[00:37:34] Speaker 06:
The focus has been

[00:37:36] Speaker 06:
which agreement we submit that the statute does not permit looking forward and saying you can have the invention that the parties did not, did not fund at the time.

[00:37:51] Speaker 06:
Thank you, Your Honors.

[00:37:53] Speaker 02:
We thank the parties for their