[00:00:00] Speaker 00:
The next case for argument is 22-1599, Aleksan versus Sigmund.

[00:00:20] Speaker 04:
I can wait a moment.

[00:00:55] Speaker 04:
May I begin?

[00:00:57] Speaker 04:
May I begin?

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

[00:01:00] Speaker 00:
The other side settled?

[00:01:03] Speaker 00:
Yes, please proceed.

[00:01:03] Speaker 04:
May it please the court?

[00:01:04] Speaker 04:
I believe we've requested six minutes for rebuttal.

[00:01:09] Speaker 04:
We're going to be covering some of the same ground discussed a few minutes ago in the companion case number 22-1598.

[00:01:16] Speaker 04:
Alex M. maintains the same position on those overlapping issues here as we did there.

[00:01:22] Speaker 04:
For efficiency, I will try not to repeat those arguments unless necessary or the court would like me to.

[00:01:28] Speaker 04:
In this appeal, the District Court for the Eastern District of Texas erred when it found that the claim term unmodified point of sale device had been construed in IDT to require Alexam to prove whether any POS terminal had been modified at all, not whether the terminals used in the accused system were solely modified for the purpose of being used in the card system.

[00:01:50] Speaker 04:
The magistrate's finding is not supported by this court's holding in Alexam v. IDT and is irreconcilable with the disclosures, teachings, and comments made by the inventor in the specification and in the prosecution history.

[00:02:03] Speaker 04:
First, the holding in IDT clearly states at page 1342 that Alexam had failed to present substantial evidence in that case that the POS devices in the accused systems had not been

[00:02:16] Speaker 04:
reprogrammed, customized, or otherwise altered with respect to their software for use in the card system.

[00:02:24] Speaker 03:
Can I just cut a little bit of this out?

[00:02:27] Speaker 03:
If the district court met any kind of modifications, including those modifications we were talking about from a swipe to an insert to a tap, then maybe you have some argument there.

[00:02:44] Speaker 03:
But that's not what this keyed on, right?

[00:02:46] Speaker 03:
That's not the modifications that we're talking about.

[00:02:49] Speaker 03:
We're talking about the same kind of modifications.

[00:02:52] Speaker 03:
Were there modifications required to specifically use Cigna cards?

[00:02:58] Speaker 03:
And I don't know the, you know, I can't remember the facts of this one specifically.

[00:03:01] Speaker 03:
Your friend will tell me.

[00:03:03] Speaker 03:
Were there specific modifications required to use Cigna cards or not?

[00:03:08] Speaker 04:
The answer to your question is no.

[00:03:10] Speaker 04:
At all.

[00:03:11] Speaker 04:
It's a debit card.

[00:03:12] Speaker 04:
There's no modifications.

[00:03:13] Speaker 04:
You just swipe it at your debit card, credit card term.

[00:03:16] Speaker 01:
And related to that, correct me if I'm wrong, my recollection is that a difference between the case we just heard argument in and this one is that in this one the defendants have not identified any modifications that they have made.

[00:03:35] Speaker 01:
So we have a, we do not know what's on the target to be thinking about concretely.

[00:03:41] Speaker 01:
Is that?

[00:03:42] Speaker 03:
That is a fair statement.

[00:03:43] Speaker 03:
Did you identify, I mean, so the problem for you all in IDT was you just posited, well, these are just Visa cards or whatever they said there, so they work without modification.

[00:03:54] Speaker 03:
Did you go beyond that and have specific expert testimony saying something different than that?

[00:04:00] Speaker 04:
Yes, we did.

[00:04:01] Speaker 04:
So the defects that were identified in IDT was a lack of foundation, that is they didn't look at what was going on in the system, a lack of expertise by the purported experts there,

[00:04:11] Speaker 04:
and failing to reach the ultimate question about whether there was actually an unmodified POS used.

[00:04:17] Speaker 04:
In our case, we've solved all three of those, but with a specific response to your question, we did, we talked to an important witness to this, which is the intermediary, which is identified in IDT as having been missing there.

[00:04:33] Speaker 04:
The intermediary here is a company named Allegious, and they are the company that's responsible for receiving the card data and the transactions involving the card data.

[00:04:43] Speaker 04:
And what's important here also is that claim 32 looks to what was received from the POS device.

[00:04:51] Speaker 04:
It directs us at 32B, paragraph 32B,

[00:04:55] Speaker 04:
It directs us to a transaction processor that's receiving from the POS device.

[00:05:01] Speaker 04:
So when we look to and we depose Mr. Holmes, who worked with Allegious, we are talking to the company that is receiving the card data.

[00:05:12] Speaker 00:
And he tells us... Well, before we get into what he tells us, can I ask you a process question?

[00:05:17] Speaker 00:
Where is the transcript in the appendix?

[00:05:20] Speaker 00:
You cite to Mr. Holmes' testimony and you cite to pages in the transcript that I can't find in the appendix.

[00:05:30] Speaker 04:
Your Honor, I apologize.

[00:05:31] Speaker 04:
I meant to say earlier, there is an error that we intend to correct.

[00:05:39] Speaker 04:
That is to provide some missing pages that due to a compilation error, some pages were inserted instead of some of the key pages.

[00:05:47] Speaker 04:
all of the key evidence is quoted in our brief, and it's not challenged as being inaccurate in any way, and we'd like to correct the record so that you can have those missing three pages.

[00:05:57] Speaker 04:
And when I say missing three pages, it's a panel of compressed pages.

[00:06:02] Speaker 00:
Well, you're required to have it.

[00:06:03] Speaker 00:
I mean, it's not whether you'd like it or not.

[00:06:05] Speaker 00:
It's not discretionary.

[00:06:06] Speaker 00:
If you're going to cite transfer pages in the briefs, you're supposed to include those in the appendix.

[00:06:11] Speaker 00:
There's no discretionary act.

[00:06:13] Speaker 04:
We intend to move to substitute those pages.

[00:06:16] Speaker 04:
immediately after the hearing.

[00:06:18] Speaker 04:
And I apologize, however, the content of those pages is faithfully dictated in the brief, particularly with respect to the gray brief that I can provide citations to.

[00:06:32] Speaker 04:
But fundamentally, Judge Hughes, to answer your question, these are debit cards.

[00:06:38] Speaker 04:
You use them at a debit card terminal, at your doctor's office,

[00:06:43] Speaker 04:
CVS storage or pharmacy, whatever it is, there isn't any modifications that's required.

[00:06:48] Speaker 04:
It uses standard ISO standard, which are international standards, organization standards, 7813, which relates to the card that contains the information, the bin, and 8583, which is the messaging standard for financial transactions.

[00:07:08] Speaker 04:
And all of this evidence is presented here.

[00:07:12] Speaker 04:
and was not presented at all in IDT, but more importantly, it addresses the issues that IDT spotted with respect to, as I said, lack of foundation, a lack of expertise, and a failure to reach the ultimate question.

[00:07:27] Speaker 04:
So in this case, we have a very different circumstance, but respectfully, I also believe that the magistrate judge below actually did find that any modifications, in fact, this language he used,

[00:07:42] Speaker 04:
that any modifications would cause the devices to fall outside the claims and that he employed that misunderstanding to the facts of that case.

[00:07:50] Speaker 04:
And that's why summary judgment should be reversed and the matter remanded there is that he erroneously believed by reading the factual recital that that was the holding of the court when the holding of the court actually did not dispense with the language for use in the card system.

[00:08:09] Speaker 04:
And I'm confident that Mr. Bonilla agrees with all of us that not any modifications are disqualifying.

[00:08:20] Speaker 00:
But he stated the correct standard elsewhere, right?

[00:08:24] Speaker 00:
You know, why can't we, I don't know what the right word is, but why can't we kind of ignore that and say it was just short-term?

[00:08:34] Speaker 04:
reciting it and applying it differ wildly here at page 12 which is appendix 0 1 1 2 which is volume 1 mr. the magistrate judge says at no point did mr. Zatkovich's report or mr. Holmes

[00:08:59] Speaker 04:
deposition, did either one offer any evidence, quote, whether modifications have in fact been made for any reason, close quote, to the POS terminals.

[00:09:10] Speaker 04:
So he may have occasionally, at points rather, recited, but he did not understand or apply the correct claim construction.

[00:09:20] Speaker 04:
And that's the fundamental issue with the Cigna case.

[00:09:25] Speaker 04:
The evidence is clear that this is the generic debit card.

[00:09:30] Speaker 04:
This is not anything that requires anything special, and the evidence establishes that.

[00:09:34] Speaker 04:
But equally important, the construction that was adopted by the magistrate is incorrect, but it was done without notice as well.

[00:09:47] Speaker 04:
And that does run afoul of this court's precedent.

[00:09:49] Speaker 04:
that this was done sui sponte, it was not an issue, these were not arguments that were advanced by the parties during briefing, although their contrasting understandings were set out.

[00:10:00] Speaker 04:
The claim construction issues were not briefed, they were not argued, and they were decided by the judge himself.

[00:10:07] Speaker 04:
And again, it just doesn't comport with the intrinsic evidence.

[00:10:13] Speaker 04:
This is important for both companion cases.

[00:10:16] Speaker 00:
Well, can I ask you about that?

[00:10:17] Speaker 00:
Just you mentioned the expert, Zakovich?

[00:10:21] Speaker 04:
Zakovich.

[00:10:21] Speaker 00:
Okay.

[00:10:22] Speaker 00:
He said, I read his testimony as being kind of analogous to what went down in IDT and why the testimony was found inadequate, because he kind of said it doesn't need to be modified, but that doesn't really answer the question about whether, in fact, it was modified.

[00:10:39] Speaker 00:
So, and that sort of rings a little similar to what we said in IDT.

[00:10:44] Speaker 04:
Well, the issue of needing to be modified goes more to Judge Hsu's question about the generics of it, and it certainly is relevant.

[00:10:52] Speaker 04:
It's not dispositive, and he doesn't rely solely on that fact.

[00:10:56] Speaker 04:
He relies on the foundational facts, those probative facts that were missing in IDT, and that's what was actually happening in the system.

[00:11:04] Speaker 04:
And he says, based on that,

[00:11:06] Speaker 04:
That is, those probative facts that were absent from IDT, that that was sufficient for him to be able to determine that the POS device was unmodified for use in the card system.

[00:11:17] Speaker 04:
And the primary argument here, I think, misapprehends the full scope of IDT when its recitals are being used as holdings of the court.

[00:11:26] Speaker 04:
The key, one of the key points that I'd like to not let me miss before we get too far along in the IDT case has to do with some of the language that is being used here in several... Did he specifically identify any unmodified terminals that use the signal cards?

[00:11:50] Speaker 04:
All terminals that were received, the data for which Allegious received data, so all terminals that Allegious received data from were unmodified.

[00:12:03] Speaker 00:
Is that a yes or a no to Judge Hughes' question?

[00:12:06] Speaker 04:
I believe that's a yes.

[00:12:07] Speaker 04:
That is correct.

[00:12:09] Speaker 04:
You are correct.

[00:12:09] Speaker 04:
He did.

[00:12:10] Speaker 03:
I mean, what about the quotation from him on page 113 of the appendix and the matter of judge's decisions?

[00:12:20] Speaker 03:
I mean, the answer is do I approve if any of the thousands of cards and hundreds of thousands of transactions that occurred actually occurred at an unmodified standard retail point of sale device?

[00:12:30] Speaker 03:
No, I have no personal knowledge of that.

[00:12:33] Speaker 04:
Yes, Your Honor.

[00:12:34] Speaker 04:
That is taken out of context.

[00:12:37] Speaker 04:
The full context would have you focus on the exact language that was the questions and the answers that preceded that.

[00:12:46] Speaker 01:
I guess I sort of understood him to be making a standard expert point.

[00:12:53] Speaker 01:
Experts under rule 701, 702, 703 are allowed to testify.

[00:13:00] Speaker 01:
not on the basis of anything they have personal knowledge of.

[00:13:04] Speaker 01:
Matters of personal knowledge are under rule 601, 602, et cetera.

[00:13:08] Speaker 01:
The point of having a whole separate section in the rules of evidence is that the requirement of personal knowledge is not required.

[00:13:17] Speaker 01:
So of course the expert would say, I don't have any personal knowledge.

[00:13:20] Speaker 04:
That's correct.

[00:13:20] Speaker 01:
I didn't see it with my own eyes.

[00:13:22] Speaker 04:
That's correct.

[00:13:23] Speaker 04:
And then the passage is preceding that to amplify on that.

[00:13:28] Speaker 04:
He actually identifies the evidence that he's relying on in the case.

[00:13:32] Speaker 04:
He makes the distinction in that passage that exactly, that he doesn't have personal knowledge.

[00:13:38] Speaker 01:
Can I ask this?

[00:13:38] Speaker 01:
And this is not going to be a well-formed question at all.

[00:13:43] Speaker 01:
Sure.

[00:13:44] Speaker 01:
I'm trying to understand how much of your current, your argument in this case depends on or might differ from in terms of what you need in order to win.

[00:13:57] Speaker 01:
the claim construction dispute that we were just arguing about in the previous case.

[00:14:02] Speaker 01:
Now suppose I disagreed with you that this unmodified language is a reference to going outside the overall system that's being used from point of sale up through various processing stations.

[00:14:25] Speaker 01:
And suppose I was thinking that what matters is whether the software or the hardware at the store has been modified so as to enable the card to be read, never mind what happens to the information sucked off it when it is read.

[00:14:49] Speaker 01:
Is your argument here about what should have happened on summary judgment

[00:14:55] Speaker 01:
Do you lose here without your outside the system?

[00:15:03] Speaker 01:
I'm using that as a shorthand.

[00:15:04] Speaker 01:
I hope you understand.

[00:15:05] Speaker 01:
I understand your point.

[00:15:07] Speaker 01:
Your outside the system construction.

[00:15:09] Speaker 01:
Or might you prevail here on a narrower view having to do with the readability at the point of sale?

[00:15:20] Speaker 04:
The answer is let's ignore the off the system.

[00:15:25] Speaker 04:
element.

[00:15:25] Speaker 04:
Let's look at the focus on the for-use and the card system.

[00:15:30] Speaker 04:
Here, there are no modifications alleged.

[00:15:34] Speaker 04:
It occurs over the banking network.

[00:15:35] Speaker 04:
We win here if you determine that the proper construction is not any modification.

[00:15:44] Speaker 04:
And we win here if you decide that if it treats it like a generic card, that that infringes or that it meets the limitations.

[00:15:53] Speaker 04:
We win there.

[00:15:55] Speaker 04:
The issue in the companion case, I wish I had been more articulate in explaining what the issue is.

[00:16:01] Speaker 04:
The issue there is whether the modifications are for use in the card system or whether they are for use of the system.

[00:16:10] Speaker 04:
So, for example, if I have to use, I think I'm out of time.

[00:16:14] Speaker 04:
May I finish my?

[00:16:15] Speaker 01:
You may even be out of case.

[00:16:19] Speaker 04:
Well, I hope that's certainly not true.

[00:16:21] Speaker 04:
But if I could go to my reserve time, thank you, Your Honor.

[00:16:45] Speaker 02:
May it please the Court?

[00:16:48] Speaker 02:
Federal Circuit decisions have consequences.

[00:16:51] Speaker 02:
I heard Mr. Hoffman say that.

[00:16:52] Speaker 02:
So too do a litigant's actions.

[00:16:54] Speaker 03:
Let me just get to this claim construction.

[00:16:56] Speaker 03:
I think you were here for the last one.

[00:16:57] Speaker 03:
You heard what we were talking about.

[00:16:58] Speaker 03:
Do you think the district court went further here than the distinction between what I'm calling probably and precisely generic versus tailored modifications?

[00:17:09] Speaker 03:
Or do you believe that he really was just focusing on tailored modifications and they still didn't prove

[00:17:15] Speaker 03:
that there were no tailored modifications.

[00:17:17] Speaker 02:
It's the latter, your honor.

[00:17:19] Speaker 02:
And we know that because we can take a look, for example, in the gray brief at page seven, they cite to appendix page 109, where Judge Payne says, therefore, any modification to the software or hardware that impacts how the POS device would be used in the card system would fall outside the scope of the claims.

[00:17:40] Speaker 02:
So he understood that what we were talking about is use in the card system.

[00:17:43] Speaker 02:
And if I could use an analogy, I think it would help.

[00:17:46] Speaker 03:
This is also imprecise because we keep using the word in the card system.

[00:17:50] Speaker 03:
And I'm not sure that we understand if in the card system means the specific card system for these specific branded cards or the general card system we all use to implement every kind of card.

[00:18:05] Speaker 03:
And I don't know if I'm being precise enough about that.

[00:18:07] Speaker 03:
I can't say it any more clearly than I have.

[00:18:09] Speaker 03:
but the example that I was trying to use about switching from a swipe to a insert to a tap, that's not implicated by unmodified, right?

[00:18:20] Speaker 03:
With those, okay, it looks like you're gonna say a different thing, which is where you're gonna start to worry me, because those are not modifications that were designed specifically to implement a tailored

[00:18:34] Speaker 03:
the specific card you have, they're just modifications that have been made in every type of POS device, whether it was for this card system or not.

[00:18:44] Speaker 03:
So in your view, do those modifications bring it outside the patent?

[00:18:48] Speaker 02:
They do, but not because of the modified portion of the construction.

[00:18:52] Speaker 02:
Remember, there's two things this construction has.

[00:18:55] Speaker 02:
It has to be POS devices of the type in use as of July 10th, 1997,

[00:19:01] Speaker 02:
and not modified with respect to its software or hardware.

[00:19:05] Speaker 02:
And so if we're talking about upgrades or updates, that's not of the type as of 1997.

[00:19:10] Speaker 03:
Now on the modification- Has that really ever been an issue?

[00:19:15] Speaker 03:
It has.

[00:19:16] Speaker 03:
I mean, I thought that of the type just meant these are the kind of POS systems they have, not any kind of slight or even major technological development brings them out.

[00:19:27] Speaker 03:
I mean, who would write a patent that says, we only infringe on some in this kind of field that something that happened in 1997, knowing that things are going to change and get better?

[00:19:39] Speaker 03:
Because what they're trying to patent is not the terminal.

[00:19:43] Speaker 03:
They're trying to patent

[00:19:44] Speaker 03:
the idea of using a multi-function card without any specialized programming.

[00:19:53] Speaker 02:
But the plain language says unmodified existing standard.

[00:19:56] Speaker 03:
I don't want to talk about that.

[00:19:57] Speaker 03:
I mean, I don't think that's how the district court decided this case.

[00:20:01] Speaker 03:
And if he did, I think he might be wrong.

[00:20:04] Speaker 00:
Can I move you to the Zatkovich, which you talked about, Little, and Holmes?

[00:20:12] Speaker 00:
What was missing in what these two experts found?

[00:20:17] Speaker 02:
So Zatkovich was the plaintiff's expert, and Mr. Holmes is the allegious representative.

[00:20:22] Speaker 01:
And Holmes was a fact witness.

[00:20:24] Speaker 02:
Correct, Your Honor.

[00:20:25] Speaker 01:
And Zatkovich was not.

[00:20:26] Speaker 02:
Correct, Your Honor.

[00:20:27] Speaker 02:
And Holmes was asked if any modifications were required to point-of-sale devices before Allegious could process data received from those devices.

[00:20:36] Speaker 02:
And he said, no, there's no modifications required.

[00:20:39] Speaker 02:
But that's exactly the evidence they provided in IT that this court rejected.

[00:20:43] Speaker 02:
So to continue to say, the reason we know the devices were unmodified is because we receive existing standard data.

[00:20:54] Speaker 02:
Standard data being the data required by the ISO standards.

[00:20:57] Speaker 02:
That tells us the device was not modified.

[00:21:00] Speaker 02:
The IDT court already rejected that.

[00:21:03] Speaker 02:
This court already rejected that.

[00:21:05] Speaker 02:
And so the analogy I want to give, specifically to you Judge Hughes, because I know that you've been kind of going over this issue, is what is a modification for the card use in the card system and what is not.

[00:21:14] Speaker 02:
So the analogy I'll use is if you're going to Walgreens, for example.

[00:21:17] Speaker 02:
You go to Walgreens to use a Cigna CDHP card, which you can only use for medical purchases.

[00:21:23] Speaker 02:
So it is limited.

[00:21:24] Speaker 02:
It's not multifunctional.

[00:21:26] Speaker 02:
You can only use it that way.

[00:21:28] Speaker 02:
You go to Walgreens, and when you come up to the point sale device and you swipe it or stick it in or tap it, whatever it is, it may have a sticker on it that says Walgreens.

[00:21:39] Speaker 02:
You've now modified the hardware.

[00:21:40] Speaker 02:
You put a sticker on it.

[00:21:42] Speaker 02:
It may be branded Walgreens in the user interface.

[00:21:45] Speaker 02:
you've modified the software.

[00:21:47] Speaker 02:
But that's not for use in the card system.

[00:21:48] Speaker 02:
That doesn't change anything.

[00:21:50] Speaker 02:
That said, when you swipe that card, if you have a Walgreens account, you can type in your phone number.

[00:21:55] Speaker 02:
And it may apply rewards.

[00:21:57] Speaker 02:
It may change the purchase price.

[00:21:59] Speaker 02:
It may change the information that is sent from the point of sale device.

[00:22:02] Speaker 02:
That's a modification that would arguably be for use in the card system.

[00:22:07] Speaker 02:
The problem in the Signet case, in this case, is nobody knows where these cards were used.

[00:22:12] Speaker 02:
There is Mr. Zatkovich.

[00:22:15] Speaker 02:
And I like Sam.

[00:22:16] Speaker 03:
So you're basically saying it's the same failure proof that was in IDT despite what your friend says is the additional evidence from the processor.

[00:22:27] Speaker 03:
Because we don't know if there is other functions that it may have been some of these functions were the same, but all these other functions that make it a multi-function card might have required modifications.

[00:22:38] Speaker 03:
But you don't like

[00:22:40] Speaker 03:
in the last case have specific examples of modifications that actually were necessary.

[00:22:45] Speaker 03:
I understand it's not your burden so you don't have to come up with them, but those are the kind of modifications about how you had to do these specific steps to activate a gift card that seemed like modifications for use in the card system.

[00:22:59] Speaker 03:
You're saying theoretically that's possible here and they didn't disprove those.

[00:23:03] Speaker 02:
That's right.

[00:23:04] Speaker 00:
I guess with going back to the Holmes testimony where he testifies the devices and the Q system transmit standardized fields and data, but your view would I be that's insufficient because that doesn't establish they were entirely unmodified for use in the card system.

[00:23:25] Speaker 02:
Correct, Your Honor.

[00:23:26] Speaker 02:
And that's what this court told him was in IDT.

[00:23:29] Speaker 02:
And we know that Alexa knows that, too.

[00:23:31] Speaker 02:
Because when we first made our motion for summary judgment, their response isn't what you've heard today, isn't what was in the briefing.

[00:23:37] Speaker 02:
Their response was the IDT court was wrong.

[00:23:40] Speaker 02:
They said the IDT court at the Federal Circuit... But they fixed that up eventually before they... Eventually they walked that back.

[00:23:49] Speaker 02:
They did walk that back.

[00:23:51] Speaker 02:
But why was that their initial response?

[00:23:53] Speaker 02:
Because they know that if IDT applies, they lose.

[00:23:57] Speaker 02:
They have the same evidence.

[00:23:59] Speaker 01:
Are we supposed to decide the case on the basis of an inference about what they must know?

[00:24:04] Speaker 02:
No, Your Honor, of course not.

[00:24:06] Speaker 01:
This court can decide the case by simply... Either they had insufficient evidence

[00:24:13] Speaker 01:
of the non-existence of modifications for use in the system, or we didn't.

[00:24:22] Speaker 01:
And this is a case unlike the last, where the defendant, you, identified not a single modification for them to say, here's why that isn't enough or something.

[00:24:35] Speaker 02:
No, Your Honor, we did not identify modifications because, as has been mentioned, it wasn't our burden.

[00:24:40] Speaker 02:
But also, they didn't identify any proof of non-modification.

[00:24:46] Speaker 02:
Their whole argument, just like it was in IDT, is that these devices follow the standards.

[00:24:52] Speaker 02:
And because they follow the standards, the point-of-sale device doesn't have to be modified.

[00:24:56] Speaker 02:
Mr. Zakovich didn't say it in this case.

[00:24:57] Speaker 02:
But in the Simon case, he said, I don't have to look at the point-of-sale device.

[00:25:02] Speaker 02:
I don't have to review it.

[00:25:05] Speaker 02:
because it doesn't matter as long as it provides standard data.

[00:25:07] Speaker 03:
Is this back to the same kind of IDT stuff that because it uses a standard system that means it's hypothetically possible of operating without modification but we don't know if there's actually any specific operation without modification?

[00:25:25] Speaker 02:
Yeah, we don't know.

[00:25:26] Speaker 03:
There is no evidence to... And all he has said is because it uses these standard things

[00:25:32] Speaker 03:
It can operate, but not that it does operate.

[00:25:35] Speaker 02:
Yes, and that in his opinion, that it did operate in that way.

[00:25:40] Speaker 02:
But when I asked him, and this is the quote that we went to discuss.

[00:25:43] Speaker 00:
Are you talking about Holmes or Zakovich?

[00:25:45] Speaker 02:
Zakovich.

[00:25:45] Speaker 02:
Mr. Holmes, the only thing he said was that Allegious expects to receive standard data.

[00:25:50] Speaker 02:
Not that it actually did.

[00:25:51] Speaker 02:
There is not a single piece of evidence about any of the transactions over the relevant period 2014 to 2017 showing that any of Cigna's cards were ever used at a point of sale device that was in fact unmodified.

[00:26:08] Speaker 01:
That's a different thing.

[00:26:12] Speaker 01:
Do I understand it right that Mr. Holmes, he's on the receiving end and he's getting working data from working cards on a regular basis, right?

[00:26:22] Speaker 01:
And it must be standard data.

[00:26:24] Speaker 02:
It is standard data, correct, Your Honor, for it to be processed.

[00:26:26] Speaker 01:
So there's plenty of evidence of that, plenty meaning sufficient.

[00:26:30] Speaker 01:
It's from the recipient.

[00:26:31] Speaker 01:
The only question is whether there's simply a lack of evidence of something additional having been changed down at the Walgreens, in the device at the Walgreens.

[00:26:45] Speaker 02:
Correct, Your Honor.

[00:26:46] Speaker 02:
But that's what this court addressed in IDT.

[00:26:50] Speaker 02:
In that case, their expert's name was Baker.

[00:26:53] Speaker 02:
And Mr. Baker said, well,

[00:26:54] Speaker 02:
these devices operate using standards, these ISO standards, they receive standardized data, and because they receive standardized data, then the point of sale devices are not modified.

[00:27:06] Speaker 02:
And this court said, no, that's insufficient.

[00:27:09] Speaker 02:
You have to actually show both things, that the point of sale devices were of the type in use as of July of 1997, and unmodified.

[00:27:18] Speaker 01:
I assume there was discovery preceding the summary judgment.

[00:27:23] Speaker 02:
Yes, Your Honor.

[00:27:23] Speaker 01:
And was a question put to you all, please identify any modifications that were made in point of sale devices being used in the use of these cards?

[00:27:38] Speaker 02:
Yes, Your Honor.

[00:27:38] Speaker 01:
And you answered?

[00:27:40] Speaker 02:
We answered that we don't know because Cigna doesn't actually process these cards or build or maintain point of sale devices.

[00:27:46] Speaker 02:
Who would know that?

[00:27:48] Speaker 02:
the manufacturers of point-of-sale devices or the retail stores themselves.

[00:27:52] Speaker 02:
Even Allegis doesn't know because, again, it doesn't care whether the devices are modified or not.

[00:27:57] Speaker 02:
It just cares whether the data is standardized.

[00:28:00] Speaker 02:
So Allegis wouldn't even know what happens at the point-of-sale device.

[00:28:04] Speaker 01:
So there is someone, I don't mean a human being, but including a human being, I certainly mean, that might have known and could have been discovered in discovery.

[00:28:16] Speaker 02:
That certainly exists, yes, John.

[00:28:19] Speaker 02:
There's somebody who could have said it, but they didn't reach for that information.

[00:28:23] Speaker 02:
All they did was they went to Allegiance and said, do you require modifications to point of sale devices?

[00:28:28] Speaker 02:
No, we don't require them and I said that's enough could modify point-of-sale devices still deliver this standard information absolutely Yeah, because they have to operate within the standards if you're going to present information to a payment processor You have to use these ISO standards so it knows what to get your point is the fact that their witnesses are

[00:28:50] Speaker 03:
And the allegious people say we've received standard information doesn't inexorably lead to the conclusion that all the devices or some of them were unmodified, that that's just a different question.

[00:29:01] Speaker 02:
That's right, Your Honor.

[00:29:01] Speaker 02:
I'm sure that if Mr. Hoffman were back up here and you were to ask him about these modifications made for activation, could those devices also receive payment if you're at a

[00:29:10] Speaker 02:
Nordstrom rack or something.

[00:29:12] Speaker 02:
Could they also receive payment in addition to activating gift cards?

[00:29:15] Speaker 02:
Sure, because they would send standard data.

[00:29:18] Speaker 02:
But the fact that they send standard data, or more accurately, that Allegious receives standard data is insufficient.

[00:29:25] Speaker 01:
And again, that comes... I was asking you a minute ago about discovery questions or interrogatories or whatever the form was to you about... Well, you know, is any of that in the Joint Appendix that we have?

[00:29:38] Speaker 02:
It is, Your Honor.

[00:29:39] Speaker 02:
I don't have it off the top of my head.

[00:29:40] Speaker 02:
But I can tell you that if you look in the red brief, excuse me, the blue brief, that Alex Sam mentions our interrogatory responses and how in May of 2021, we responded to an interrogatory asking us for our bases for non-infringement.

[00:29:55] Speaker 02:
And in that response, we explained that under the IDT holding, they had a lack of evidence.

[00:30:01] Speaker 02:
This was close to the end of discovery.

[00:30:03] Speaker 02:
So if you give me a moment, I can actually point you to where that is.

[00:30:07] Speaker 01:
That's not actually the point I'm interested in.

[00:30:09] Speaker 01:
It may be the document I'm interested in.

[00:30:12] Speaker 01:
It makes a big difference intuitively to me whether

[00:30:17] Speaker 01:
What to make of the fact that you didn't identify a single modification of the point of sales device makes a big difference intuitively whether that's knowledge you would have or wouldn't have.

[00:30:28] Speaker 01:
If you would have it and you didn't identify it, you're not in as good a position as you might be in if you said, I'm not identifying anything because how would we know?

[00:30:40] Speaker 01:
That's the distinction.

[00:30:42] Speaker 01:
I'm interested.

[00:30:42] Speaker 02:
Yeah, and your honor I'll tell you if if we had that information and could have provided I mean it would have been very helpful for our case certainly, but we didn't

[00:30:49] Speaker 02:
Cigna doesn't process these cards.

[00:30:52] Speaker 00:
What they provide... Judge Toronto is asking if in any of your responses in the discovery process you indicated that to either the court or the other side.

[00:31:00] Speaker 02:
So we did in our interrogatory response.

[00:31:02] Speaker 02:
There is a request for an explanation of any modifications and we said we don't know that information because we don't maintain these devices.

[00:31:10] Speaker 02:
We don't maintain these processes.

[00:31:13] Speaker 02:
We hire Allegious to provide this information, and they ask Allegious, and all Allegious can say is, we expect to receive standard data.

[00:31:21] Speaker 02:
That is what we process.

[00:31:25] Speaker 02:
So, Your Honor, for these reasons, as Mr. Hoffman said, and I will reiterate, Federal Circuit opinions have consequences.

[00:31:32] Speaker 02:
The IDT holding in this case applies, and applying that holding means that this case should be affirmed.

[00:31:40] Speaker 02:
Thank you.

[00:31:50] Speaker 00:
You exhausted all of your rebuttal time.

[00:31:52] Speaker 00:
We'll restore three minutes.

[00:31:54] Speaker 04:
Thank you, Your Honor.

[00:31:55] Speaker 04:
Just to answer a couple of questions.

[00:31:58] Speaker 04:
One, I believe at least the third supplemental objections and responses to Alex Ham's first set of interrogatories is found at 1389.

[00:32:07] Speaker 04:
This is in volume two.

[00:32:13] Speaker 00:
With your friend is saying that you were

[00:32:20] Speaker 04:
your honor they would have had access to that information of course because if their products actually required something special they would need to be telling the retailers that and they would be aware of that and they do not and they were not able to identify any modifications because there were not any this treated the card which is a multifunction card because it is a debit medical services card

[00:32:46] Speaker 04:
and by virtue of its use of the dual or two databases that are set forth in Paragraph 32D of the independent claim, that does satisfy obviously the multifunction card element.

[00:33:01] Speaker 04:
With respect to the sufficiency of the evidence, I entirely disagree with the characterization of the evidence.

[00:33:06] Speaker 04:
It is not simply

[00:33:08] Speaker 04:
that the same recycled evidence from IDT, we have an IDT, we had no expert, we have an expert here, and yet the foundation and the tenu is an expert.

[00:33:18] Speaker 00:
Yeah, but I'm going to just what Mr. Holmes argued.

[00:33:21] Speaker 00:
He was arguing about the acute system transmits standardized fields and data.

[00:33:26] Speaker 00:
And what's the link between that observation and the conclusion that therefore they're entirely unmodified?

[00:33:33] Speaker 04:
Because if this is the unique versus generic argument, the question is, are there any changes that are made in order to allow the processor, think of the processor as allegious, or actually think of it as Mr. Dorff.

[00:33:46] Speaker 04:
Are there any changes that have been made to allow me to receive that, that is, for use in my card system?

[00:33:52] Speaker 04:
And the answer is no, if I'm receiving this bin-directed communication that is an addressing scheme.

[00:34:00] Speaker 04:
with the standard financial transaction information packets, which is the 85-83 standard, if I'm using both of those and I have received it, it is unmodified to reach me.

[00:34:15] Speaker 04:
It is therefore unmodified for use in the card system.

[00:34:18] Speaker 01:
One way that I guess I was translating or understanding Mr. Bonilla's account of that testimony is that all of that may be

[00:34:31] Speaker 01:
quite right as a description of what Allegious receives, but that doesn't preclude Allegious from receiving something additional.

[00:34:41] Speaker 01:
The additional reflecting a modification at the point of sale end.

[00:34:48] Speaker 01:
And that Holmes didn't say, we don't receive anything additional.

[00:34:52] Speaker 01:
What's wrong with that translation?

[00:34:54] Speaker 04:
Yes.

[00:34:56] Speaker 04:
They may receive something additional.

[00:34:59] Speaker 04:
It doesn't matter because the use of the card system is to process these claim transactions and that we know that information is in these standardized formats.

[00:35:09] Speaker 04:
So it is not that there may be other modifications for other purposes is irrelevant to the claim.

[00:35:15] Speaker 04:
It doesn't matter.

[00:35:16] Speaker 00:
All that matters is a... Wouldn't any modified... They could have a modified SIS device that would transmit different fields and different data, no?

[00:35:28] Speaker 04:
If you're using a... Correct.

[00:35:30] Speaker 04:
If you're using a bin though, which is what the patent teaches and it's over the banking network and it includes the data that we've been talking about, it's unmodified to reach Mr. Dorff's system.

[00:35:43] Speaker 04:
That's what we're talking about.

[00:35:45] Speaker 04:
Are there modifications?

[00:35:46] Speaker 03:
So at least part of the information is unmodified, but isn't that still the problem, the same IDT problem, that that part of it is sufficient to show that it is capable of receiving information from an unmodified system, but it doesn't say that there are the parts of the system that are modified or not, and whether that impacts it.

[00:36:12] Speaker 03:
I mean, it's not all or nothing, right?

[00:36:15] Speaker 03:
You could have a modified system that still transmits standard information.

[00:36:20] Speaker 04:
If you're transmitting standard information, it is not modified for the purposes of the 608 patent.

[00:36:27] Speaker 00:
But there could be different data.

[00:36:29] Speaker 04:
There could be other modifications.

[00:36:31] Speaker 00:
Rather than standardized.

[00:36:33] Speaker 00:
And we don't know that.

[00:36:34] Speaker 00:
Nothing that Mr. Holmes told us rules that out.

[00:36:38] Speaker 04:
But it's not relevant to the use in the card system, which is what are you relying on to direct your system?

[00:36:43] Speaker 03:
Playing the card system with this specific transmission of information, not the multifunction card system, which could have transmission applications and all other kinds of things too.

[00:36:56] Speaker 04:
Let me see if I can understand your point.

[00:37:00] Speaker 04:
I want to go back to your generic versus unique.

[00:37:02] Speaker 04:
If you are processing this via a generic transaction where you swipe the card and it's directed to the processor, you are practicing the patent.

[00:37:12] Speaker 04:
If there's some modification to that so that you're not using the bin and you're not... Even if the card also has other functionality,

[00:37:21] Speaker 03:
And the point-of-sale device has been modified to use so that it can have that other multi-card functionality.

[00:37:27] Speaker 03:
Exactly.

[00:37:28] Speaker 03:
So think of, for example, if you have... But it doesn't sound like it's consistent with your claim construction.

[00:37:31] Speaker 04:
Well, it is, because it's not for use in the card system.

[00:37:34] Speaker 04:
For use in the card system is to, in this case, there's no activation.

[00:37:38] Speaker 03:
You mean the card system is just transmitting information to the payment processors?

[00:37:42] Speaker 04:
So the card system is the totality of the POS device through the transaction processor to the processing hub with its two databases.

[00:37:51] Speaker 04:
And the purpose here in claim 32 is very different than the other claims in the companion case, only requires you to be able to use that debit multifunction card and basically to have those transactions processed.

[00:38:09] Speaker 04:
Therefore, these are very different issues for use in the card system here is only to process a payment transaction.

[00:38:17] Speaker 04:
And to do that, all they need is the bin over the banking network.

[00:38:21] Speaker 04:
And rather than just, I know I'm running out of time again, and I appreciate that.

[00:38:24] Speaker 00:
You're way out of time, so please.

[00:38:25] Speaker 04:
If I could direct you just to pages 19 to 22 of our gray brief.

[00:38:32] Speaker 04:
I disagree with my colleague with respect to the nature of the testimony that's been induced, and I think that you can see that there.

[00:38:38] Speaker 04:
But I'm grateful for your time.