[00:00:11] Speaker 00:
The next case for argument is 22-1630 Brumfield versus IBG.

[00:00:42] Speaker 01:
That is a really nice place.

[00:01:29] Speaker 00:
We're ready whenever you are, sir.

[00:01:43] Speaker 02:
Please proceed.

[00:01:44] Speaker 02:
Thank you, your honor.

[00:01:45] Speaker 02:
May it please the court.

[00:01:46] Speaker 02:
On the 101 issue, there's no dispute that a technological invention, one that solves a technical problem with a technical solution, cannot be abstract under ALIS.

[00:01:57] Speaker 02:
We cited multiple cases in our brief, including Anacor, a case that said, hey, if the patent office finds that it's a technological invention that's highly relevant to the eligibility question, we have yet to find a case that has found a technological invention to be abstract under ALPS step one.

[00:02:16] Speaker 01:
I don't have, was it section 18 of the 2011 act that contained the CBM thing?

[00:02:25] Speaker 01:
Does it say that it has to solve a problem or that it is for solving a problem?

[00:02:32] Speaker 02:
The statute says it has to be a technological invention, a non-obvious technological invention that solves a technical problem with a technical solution.

[00:02:47] Speaker 02:
That's what the test is for CBM.

[00:02:50] Speaker 01:
And so would that then automatically mean that every

[00:02:56] Speaker 01:
CBM is of a eligible claim?

[00:03:00] Speaker 02:
I don't think so.

[00:03:01] Speaker 02:
I think you could have something that is a CBM, a CBM patent that may be patent eligible.

[00:03:08] Speaker 02:
I don't think Alice meant to exclude all business method type patents.

[00:03:14] Speaker 02:
So I think there could be, to answer your question Judge Toronto, I think there could be cases where a patent would be eligible even though it's a CBM.

[00:03:21] Speaker 02:
But I think if you look at it the other way,

[00:03:24] Speaker 02:
If there's a finding that a patent solves a technical problem with a technical solution, this court has been clear in many cases, and again, including in the Anacor case, that that's highly relevant.

[00:03:39] Speaker 02:
We think it's determinative on the 101 issue, based on a litany of cases from this court, that if you're solving a technical problem with a technical solution, you cannot be abstract under step one.

[00:03:52] Speaker 02:
This court, in what we call IBG 1, it's the February 13th opinion, analyzed the same patents that issue here, the 411 and the 996 patent claims, and specifically found that these claims are directed to a technological invention.

[00:04:07] Speaker 02:
They solve a technical problem with a technical solution.

[00:04:11] Speaker 02:
That decision was a final judgment from this court.

[00:04:15] Speaker 02:
It was the exact same parties arguing whether these two patents solve a technological problem

[00:04:21] Speaker 02:
Again, same patent, same claims, same issue.

[00:04:24] Speaker 02:
Is it a technological invention?

[00:04:26] Speaker 00:
It's a non-precedential opinion.

[00:04:28] Speaker 00:
What consequence do you think that is to how we have to treat it?

[00:04:33] Speaker 02:
I think it's of no consequence here, Your Honor, because it's a decision from this court analyzing these particular claims.

[00:04:43] Speaker 02:
And the district court decision was puzzling, because the district court said in her opinion

[00:04:50] Speaker 02:
Non-precedential cases should and should be, can be, and should be followed for the same patents to ensure uniform treatment of those patents.

[00:05:01] Speaker 02:
That's what the district court said.

[00:05:03] Speaker 03:
I mean, you're very careful to say that a determination of whether something is technological under CBM is relevant, but not necessarily binding on the technological prong of Alice.

[00:05:15] Speaker 03:
Why isn't the fact that this is non-PREC and we have multiple presidential decisions going towards very, very similar patents saying it isn't patent eligible enough to show that although it may be relevant, it's not conclusive here?

[00:05:31] Speaker 02:
Your Honor, I think you're referring to the two TT presidential cases, which we call IBG 2 and IBG 3.

[00:05:40] Speaker 02:
Those cases are precedential cases, but they just don't apply.

[00:05:43] Speaker 02:
They're distinguishable.

[00:05:45] Speaker 02:
And the reason why is in those cases, this court found in those precedential opinions that those particular claims don't solve any technical problem with a technical solution.

[00:05:55] Speaker 02:
In particular, they don't solve the accuracy problem that was in the prior art with respect to the patent.

[00:06:04] Speaker 02:
So again, getting back to what the district court said, the district court said

[00:06:08] Speaker 02:
You know what, if it's a non-precedential opinion, you should follow it, especially if it's the same patent.

[00:06:13] Speaker 02:
So when the court looked at the 132 and 304 patent from the CQG case, the court said, I'm going to follow that decision, even though it's non-precedential because it's the same patents.

[00:06:23] Speaker 02:
IB challenged those patents below, but then dropped their cross-appeal on those two patents.

[00:06:30] Speaker 03:
Because there was an actual specific decision that it was eligible under ALICE, not that it was technological under a separate statutory provision.

[00:06:39] Speaker 02:
And so in IBG 1, this court found that the patents solved the accuracy problem with figure 2.

[00:06:45] Speaker 03:
Okay, but that argument only is prevailing if we determine that something that is technological to exclude it from CDM automatically means it's technological to make it

[00:06:59] Speaker 03:
eligible under Alice.

[00:07:00] Speaker 03:
You're not making that argument, are you?

[00:07:02] Speaker 02:
I'm making this argument, Your Honor.

[00:07:04] Speaker 03:
Well, let me ask, can you answer that, though?

[00:07:06] Speaker 03:
You're not making that broad argument that if we said something is sufficiently technological to preclude it from CBM review, that automatically means it's eligible under Alice, too.

[00:07:19] Speaker 02:
If your question is, if the exception applies, if the patent solves a technical problem with a technical solution, then yes, it has to meet 101.

[00:07:27] Speaker 02:
How could it not meet 101?

[00:07:32] Speaker 02:
In fact, the judge, this was the other puzzling thing with the district court's decision.

[00:07:37] Speaker 01:
Is this an issue preclusion argument?

[00:07:43] Speaker 01:
I guess I keep hearing this as there is an issue that's precluded between the parties from the earlier decision.

[00:07:49] Speaker 01:
That issue is the resolution of the CBN technological solution.

[00:07:55] Speaker 01:
And once you have that, there is no possibility that that implies eligibility.

[00:08:03] Speaker 02:
Thank you for that, Judge Charato.

[00:08:05] Speaker 02:
I think that's exactly right.

[00:08:06] Speaker 02:
We didn't use the word collateral to stop all the buzzwords in our brief, but that's exactly what happened here.

[00:08:12] Speaker 02:
We were here five years ago talking about these same two patents, the 411 and the 996 patents.

[00:08:18] Speaker 03:
But how could it be issue preclusion?

[00:08:20] Speaker 03:
It's whether something is technological under one legal standard versus another.

[00:08:24] Speaker 03:
Clearly, the ones that we already said were eligible in our non-prec case, that would be issue preclusion.

[00:08:31] Speaker 03:
But this is, at best, kind of relevant precedent.

[00:08:34] Speaker 03:
But we still have to look at whether this is technological.

[00:08:38] Speaker 03:
Do you have a case that says technological under CBM is on all fours with technical logical?

[00:08:45] Speaker 03:
under Alice, because I thought you kept saying we had said it was irrelevant, but not binding.

[00:08:50] Speaker 02:
So we cited cases in our brief, the Anacor case, a PTAPS technological invention conclusion as persuasive under step one, Alice, the CX loyalty case, finding the claims not abstract because they're not corrected

[00:09:07] Speaker 02:
to a technological solution.

[00:09:08] Speaker 03:
That's not really answering my question.

[00:09:10] Speaker 03:
Is there specific precedent from us in a presidential decision that says a determination that something is technological under CBM also means it's eligible under ALIS?

[00:09:23] Speaker 02:
I think implicitly there are.

[00:09:25] Speaker 02:
There are cases like core wireless, like data engine, that say if you're solving a technical problem, for example, with a front end GUI,

[00:09:32] Speaker 02:
you're solving a technical problem with a technical solution you meet 101.

[00:09:36] Speaker 02:
So are those exact words?

[00:09:38] Speaker 02:
Have I seen that in a case?

[00:09:40] Speaker 02:
I think that's form over substance, because again, this court's precedential cases have been very clear.

[00:09:47] Speaker 02:
You're solving a technical problem with a technical solution with a graphical user interface.

[00:09:52] Speaker 02:
You meet section 101.

[00:09:54] Speaker 00:
What was the case?

[00:09:55] Speaker 00:
A few minutes ago, you cited something, I don't know if it was a P-10 opinion, and you used the word persuasive, which is something other than we're bound by it.

[00:10:03] Speaker 00:
Persuasive is kind of like the relevant term the judge used.

[00:10:08] Speaker 02:
That's correct.

[00:10:09] Speaker 00:
It wasn't.

[00:10:09] Speaker 00:
So persuasive is something other than we are compelled to follow.

[00:10:13] Speaker 02:
The case didn't technically say we're compelled to find that.

[00:10:18] Speaker 02:
But again, if you look at the presidential 101 cases that talk about graphical user interfaces and are you solving a technical problem with a technical solution, it's the same issue.

[00:10:30] Speaker 02:
So Judge Serrano, back to your point, in IBG 1,

[00:10:36] Speaker 02:
issue of whether these two patents are solving the problem.

[00:10:40] Speaker 02:
It was litigated by IB.

[00:10:42] Speaker 02:
It actually, IB filed a petition for rehearing and rehearing en banc, and the court invited us to file a response brief.

[00:10:51] Speaker 02:
And what was in that brief was a whole discussion of whether these two patents are technological.

[00:10:56] Speaker 02:
And this court issued an opinion denying that motion for hearing en banc

[00:11:04] Speaker 02:
It's an order, isn't it?

[00:11:06] Speaker 02:
Correct.

[00:11:06] Speaker 02:
It's an order.

[00:11:08] Speaker 02:
But in the briefing, that was front and center in the briefing.

[00:11:12] Speaker 02:
Are these patents?

[00:11:13] Speaker 02:
Do they solve the technical problem?

[00:11:18] Speaker 00:
Before we run out of time, I wanted to move to the extraterritorial question.

[00:11:23] Speaker 00:
And I really want to understand what your theory is, what the alleged act of domestic infringement

[00:11:33] Speaker 00:
that you think approximately caused the foreign damages under the Western GECO line of cases?

[00:11:40] Speaker 02:
Thank you, Your Honor.

[00:11:41] Speaker 02:
So Judge Stark, in power integration, I think said it best.

[00:11:47] Speaker 02:
Judge Stark, your colleague, looked at Western GECO and said, this is a 271 F2 case that's making a component in the US to be put in a machine overseas.

[00:12:00] Speaker 02:
And Judge Stark,

[00:12:01] Speaker 02:
Analyze Western GCO.

[00:12:03] Speaker 00:
OK, can you just answer my question, because we're short of time in terms of this case?

[00:12:07] Speaker 00:
What is the alleged act of domestic infringement?

[00:12:13] Speaker 00:
Now, assuming it's other than the two other theories that you've got to present.

[00:12:18] Speaker 00:
So what act other than the two theories you presented is at issue here?

[00:12:22] Speaker 02:
It's the act of making the software in the United States.

[00:12:26] Speaker 01:
That phrase can mean two different things.

[00:12:29] Speaker 01:
One is designing the software.

[00:12:32] Speaker 01:
One is making a physical thing called a copy of the software.

[00:12:37] Speaker 01:
The first is not infringement under 271A.

[00:12:41] Speaker 01:
271A is assuming the other requirements that comes within the claim.

[00:12:49] Speaker 02:
Well, so to the extent IB, when they make a

[00:12:52] Speaker 02:
a physical example when they make a GUI, a prototype in the unit.

[00:12:58] Speaker 01:
Well, that's making one.

[00:13:00] Speaker 02:
That's right.

[00:13:00] Speaker 01:
Right.

[00:13:01] Speaker 01:
That's not what can possibly be at issue in Ms.

[00:13:07] Speaker 01:
Lawton's fourth theory.

[00:13:09] Speaker 01:
She says making, but the making of the copies, if that was domestic, that you were allowed to present to the jury.

[00:13:18] Speaker 01:
So this has to be something different from that.

[00:13:21] Speaker 01:
and making the software in the sense of writing it down once.

[00:13:28] Speaker 01:
And then that particular copy is not being used.

[00:13:33] Speaker 01:
If it was being used, that would already be covered.

[00:13:35] Speaker 01:
So you're arguing about something that was excluded.

[00:13:38] Speaker 01:
It sounds like you're arguing about the design of the thing.

[00:13:41] Speaker 02:
So what we argued to the jury was that no matter where you are in the country,

[00:13:48] Speaker 02:
a specific copy of book trader was made office server in the united states you were allowed to go to the jury yes correct okay the theory that was excluded from this one was

[00:14:03] Speaker 02:
under 271A, they are designing, they're making Book Trader in Connecticut.

[00:14:10] Speaker 01:
Right.

[00:14:12] Speaker 01:
The problem here, I think we're just talking about the same thing.

[00:14:15] Speaker 01:
When you say, this is endemic to usage in patent law, making an invention can mean two different things.

[00:14:23] Speaker 01:
It can mean creating the complete idea

[00:14:27] Speaker 01:
And it can mean making one of the things listed in 101, making a specific concrete embodiment of it.

[00:14:38] Speaker 01:
The latter is what constitutes, is what's within the coverage of 271A, not the former.

[00:14:46] Speaker 02:
OK.

[00:14:47] Speaker 02:
So again, under what Ms.

[00:14:50] Speaker 02:
Lawton, what her testimony was,

[00:14:54] Speaker 02:
The entire structure of IB, their developers, their engineers, the locus of what was going on with respect to their software was in Connecticut.

[00:15:06] Speaker 02:
And that it was foreseeable, it was foreseeable that that technology would end up overseas because IB is a global company, they were intending on customers overseas to get the software.

[00:15:23] Speaker 02:
And that particular theory was excluded.

[00:15:28] Speaker 02:
And I have a site for it.

[00:15:33] Speaker 02:
The excluded portion of our report is at appendix 94594 to 94552.

[00:15:38] Speaker 03:
Are you saying that you should get per unit royalties for products manufactured outside of the United States as long as the original version was made in the United States?

[00:15:55] Speaker 02:
We're saying that as long as the activity is overseas, in other words, the distribution of the software, was a foreseeable consequence of IB's activity.

[00:16:07] Speaker 03:
We live in a global economy.

[00:16:09] Speaker 03:
Is it every product potentially exportable overseas?

[00:16:14] Speaker 03:
Let's say I design a car in Detroit, and I make the prototype in Detroit.

[00:16:21] Speaker 03:
But everybody knows how the auto manufacturing world works.

[00:16:26] Speaker 03:
They make those cars all over the place.

[00:16:28] Speaker 03:
Are cars that are made in Turkey or cargo vans that are made in Turkey for Ford and never sold back into the United States, nonetheless, foreseeable damages from the design of the original prototype in Detroit.

[00:16:46] Speaker 02:
I think under the reasoning of Western GECO, and we're bound by Western GECO, the Supreme Court said, you look at the act of infringement.

[00:16:57] Speaker 02:
And in the case of Western GECO, it was making the component in the US.

[00:17:01] Speaker 03:
And the Supreme Court has said- It's making one component in the US, but it didn't

[00:17:07] Speaker 03:
Well, open up damages for every component.

[00:17:10] Speaker 03:
I mean, if this is your interpretation, this blows up the presumption against extraterritoriality.

[00:17:18] Speaker 02:
So I disagree with that, Your Honor, just because if you read Western GECO as Judge Stark read that case, the 271F is the act of infringement is making components in the United States.

[00:17:33] Speaker 03:
So I think your question is- So the truck made entirely in Turkey and sold outside of the United States wouldn't infringe, even if the original prototype was designed, developed, and made in the United States.

[00:17:47] Speaker 03:
So if a component for that truck, if a component, let's say- I'm not talking about F. Let's not talk about F. Let's just assume we're talking about the making prong of 271A.

[00:17:58] Speaker 03:
So an item that is made exclusively outside the country and sold exclusively outside the country, but nonetheless made based upon a design that was developed

[00:18:11] Speaker 03:
and made into a prototype in the US, is that something that's foreseeable under 271A?

[00:18:18] Speaker 02:
If the conduct overseas was a foreseeable consequence of the making in the US, yes, that's what Western GECO says, as Judge Stark understood.

[00:18:29] Speaker 01:
Just to be clear, the infringing act in Western GECO was not

[00:18:35] Speaker 01:
the making in the United States.

[00:18:37] Speaker 01:
It was the exporting, or in the language of F2, supplying or causing to be supplied.

[00:18:43] Speaker 02:
Supplying the component, you're right.

[00:18:46] Speaker 01:
But again, supplying the component, I think the question is... And supplying the concrete component, the concrete individual token of the type.

[00:18:54] Speaker 02:
That's right.

[00:18:55] Speaker 02:
And I think, Judge Hughes, your question is, well, OK, so that component then makes its way into a machine overseas.

[00:19:02] Speaker 02:
And then let's say that party is competing and taking away sales from the plaintiff.

[00:19:06] Speaker 02:
That's not possible, right, because it's extraterritorial.

[00:19:10] Speaker 02:
But what the Supreme Court said in that particular case is the focus of the infringement, 271F, is in the US.

[00:19:17] Speaker 02:
The conduct relevant to that focus is Judge Toronto supplying the component.

[00:19:21] Speaker 01:
But I think Judge Proce started with that.

[00:19:26] Speaker 01:
And at least this is what I'm thinking.

[00:19:30] Speaker 01:
You have to start with an act of infringement.

[00:19:34] Speaker 01:
In Western GECO, it was causing to be supplied a concrete thing.

[00:19:39] Speaker 01:
And then as Western GECO says, you have to have a proximate cause to whatever is being covered.

[00:19:47] Speaker 01:
The acts under 271A are even more domestic than the F2 Act.

[00:19:53] Speaker 01:
They don't even straddle the border, right?

[00:19:55] Speaker 01:
They're making in the United States.

[00:19:57] Speaker 01:
But then you need proximate cause to what happened

[00:20:00] Speaker 01:
abroad and when the act, and so you need to identify the act, the making of a single resident copy on a hard drive in Connecticut.

[00:20:14] Speaker 01:
I think the question is how do you get to a theory of proximate causation to whatever was going on in, you know, abroad, you know, users in, I don't know, in Hong Kong or something who are trading.

[00:20:31] Speaker 01:
That's right, and that's... I'm not sure where that is in Lawton's... I think that's the question.

[00:20:36] Speaker 02:
Well, I can point you to her report where she has a whole section.

[00:20:39] Speaker 01:
Yeah, give the paragraph number because the relevant portions are in two different places in the appendix and I'm using one and you're using the other.

[00:20:45] Speaker 02:
Are you using the one that starts with eight or nine?

[00:20:47] Speaker 02:
Eight.

[00:20:49] Speaker 01:
It's easy enough, paragraph numbers.

[00:20:56] Speaker 01:
Oh, I guess it's not as easy as I thought.

[00:20:57] Speaker 02:
Well, it's page 87, 851 to 87, 854.

[00:21:02] Speaker 01:
OK, yeah, that's what I was looking at, right?

[00:21:04] Speaker 01:
Yeah.

[00:21:04] Speaker 01:
I've got 764 on file.

[00:21:05] Speaker 02:
Right.

[00:21:06] Speaker 02:
And so the issue I think you're getting at is, well, would TT or Mr. Brumfield be able to establish the foreseeability at trial?

[00:21:16] Speaker 02:
The problem is the district court judge said,

[00:21:20] Speaker 02:
Nope, I'm going to cut you off.

[00:21:21] Speaker 02:
I'm not going to let you present any evidence of foreseeability at all based on this court's power integration decision, again, which was overruled by Western GECO.

[00:21:32] Speaker 01:
But if one then insists on paying attention to the distinction between coming up with a design, making in that sense, which is a common English usage, and say, that's not even an actionable act under 271A, then we're done.

[00:21:51] Speaker 01:
I didn't see Lawton saying what I think might be foreseeable is some kind of foreign consequence of a single copy made in the United States.

[00:22:08] Speaker 01:
Other than the kind of things Judge Hughes is talking about, which is, well, people copy it.

[00:22:14] Speaker 02:
Well, it's not just that they copy it.

[00:22:16] Speaker 02:
I'd be intended on their audience, their intended audience, and their customers are all over the world.

[00:22:23] Speaker 02:
And it was foreseeable.

[00:22:24] Speaker 01:
It would be the same as the automobile that I think Judge Hughes was discussing.

[00:22:29] Speaker 02:
I think the point of the Western GECO case is that I think they're following the law for damages.

[00:22:38] Speaker 02:
If you're harmed for a tort, in this case, it's an act of infringement under 271A.

[00:22:46] Speaker 02:
You're entitled to get any damages that are foreseeable that flow from that, period.

[00:22:52] Speaker 02:
And I think that's what Western GECO is saying.

[00:22:55] Speaker 02:
It was limited to 271F, but it has to apply to A. Because as you say, A is even more domestic than 271F.

[00:23:05] Speaker 00:
OK, we're way beyond time.

[00:23:10] Speaker 00:
Let's hear from the other side.

[00:23:13] Speaker 02:
Thank you, Your Honor.

[00:23:29] Speaker 04:
Thank you, Your Honor, and may it please the Court.

[00:23:32] Speaker 04:
I'd like to begin with a statement that my friend Mr. Gannon made in IBG 1.

[00:23:37] Speaker 04:
In response to the question from this Court, is the technological feature here the static price index?

[00:23:44] Speaker 04:
And I quote, it's the combination of static plus single action plus relative movement of the indicators.

[00:23:51] Speaker 04:
It's the combination of elements that provide the solution.

[00:23:56] Speaker 04:
It's the combination

[00:23:57] Speaker 04:
of elements that provide improved accuracy, visualization, which this court found in e-speed and in CQG, and improvements in speed.

[00:24:07] Speaker 04:
It's the combination.

[00:24:08] Speaker 04:
You'll find that at minute 38 of the oral argument recording in that case.

[00:24:14] Speaker 04:
You no longer have the combination.

[00:24:17] Speaker 04:
You no longer have a technological solution.

[00:24:20] Speaker 04:
And this is very clear from the record here, because it claimed construction at TT's own behest,

[00:24:27] Speaker 04:
They said, these claims are not limited to static price axes.

[00:24:33] Speaker 04:
You'll find this conceded at page 38 of their opening brief at page 28.

[00:24:38] Speaker 04:
of their opening brief, you will.

[00:24:40] Speaker 01:
Just so I think what I'm hearing you saying is that the CBM threshold jurisdictional, if you want to call it, ruling was based on language that had not yet been construed.

[00:24:55] Speaker 01:
It has now been construed.

[00:24:56] Speaker 01:
It has, therefore, a different meaning.

[00:24:58] Speaker 04:
That's correct as to the 996, Your Honor.

[00:25:01] Speaker 04:
It's also, of course, a non-precedential decision.

[00:25:04] Speaker 04:
Put that aside.

[00:25:05] Speaker 04:
And to respond to the very first question that you asked, Your Honor, about the difference between Section 18A and of the AIA and Section 101 of the Patent Act.

[00:25:16] Speaker 04:
There is certainly no indication that Congress, in adopting Section 18A and establishing a processes before the Patent Office, intended to supplant or collapse the Section 101 inquiry into this more abbreviated analysis.

[00:25:33] Speaker 04:
As you yourself noted, the statute refers to a claim for a technological invention.

[00:25:39] Speaker 04:
It doesn't even say solution.

[00:25:41] Speaker 00:
Can you go back to what you were talking about before?

[00:25:42] Speaker 00:
So you said in one of the two patents, the static

[00:25:46] Speaker 00:
resolves this.

[00:25:48] Speaker 04:
So what about the other one?

[00:25:50] Speaker 04:
The 996 is the only one that refers to a static, and I would encourage you not to let them wiggle away from their concessions in their briefs, page 28 and 38, and in the district court at claim construction as to the 996.

[00:26:04] Speaker 04:
We're just dealing with claims that go to non-static stuff.

[00:26:10] Speaker 04:
But the 411, it says nothing whatsoever about holding a price.

[00:26:16] Speaker 04:
It's simply about movement and repositioning.

[00:26:19] Speaker 04:
You look at the terms, receive, display, select.

[00:26:22] Speaker 04:
This is quintessentially what this court called in Zillow, do it on a computer patenting.

[00:26:28] Speaker 04:
All you've got there is the display of market information and receiving information.

[00:26:32] Speaker 04:
It's even weaker.

[00:26:33] Speaker 04:
The 996 would be their stronger claim, but they have conceded that it's not about static price axes.

[00:26:43] Speaker 04:
So I would also direct the court to this court's precedential discussion in eSpeed.

[00:26:48] Speaker 04:
You'll find this at page 1354, and I quote,

[00:26:52] Speaker 04:
allowing the price axis to automatically change positions would defy the invention's goal to ensure fast and accurate execution of trades.

[00:27:04] Speaker 04:
The invention would present the same problem as the prior inventions if the price axis moved automatically even in rare instances.

[00:27:13] Speaker 04:
the static display of prices could automatically re-center just as the trader was getting ready to execute a trade, causing the trader to miss the intended price."

[00:27:24] Speaker 04:
End quote.

[00:27:24] Speaker 04:
Court goes on to say, after noting that the accused product there only automatically re-centered once or twice per trading day, it says, this is at page 1356, the difference between a price axis that moves only in response to the trader's instruction and a price axis that adjusts itself without prompting is not subtle.

[00:27:42] Speaker 04:
rather as discussed above.

[00:27:44] Speaker 04:
This difference lies at the heart of the advantages of the patent and invention over the prior art.

[00:27:50] Speaker 04:
In IBG 2, at pages 1091 and 1095, this court said, precedential decision, claims do not solve the missing the price problem if they don't specify what happens immediately after the price changes to keep the prices from moving on the user's screen.

[00:28:08] Speaker 04:
You will search these patents in vain for anything that does that.

[00:28:12] Speaker 04:
So even assuming you've got reasoning that you needed to abide by, it doesn't apply to this case.

[00:28:18] Speaker 04:
But of course, it's non-precedential.

[00:28:20] Speaker 04:
And you've issued several precedential decisions, both in the specific context of electronic trading patents, and more generally, that say these sorts of patents are directed to abstract ideas, and they have no inventive concepts.

[00:28:35] Speaker 04:
If I may then turn to the extraterritoriality issue, Judge Hughes, your comment that this would

[00:28:42] Speaker 04:
blow up the presumption against extraterritorial is exactly right.

[00:28:47] Speaker 04:
The district court was clearly correct that Western GECO did not overrule power integrations.

[00:28:53] Speaker 04:
Remember what was before the court in Western GECO.

[00:28:55] Speaker 03:
271F2, a statute at the intersection of the... Are you saying that Western GECO doesn't apply to 271A at all?

[00:29:04] Speaker 03:
I don't believe it does, Your Honor, because section 271... You don't need to win that argument to win this case, though, do you?

[00:29:10] Speaker 03:
Well, I mean, 271A, to the extent what we're looking at in Western GECO, you argue your case any way you want to, but if that's your point, that seems like a loser.

[00:29:23] Speaker 03:
Western GECO says you look at the act of infringement, and if it's domestic, you look at the reasonably foreseeable damages.

[00:29:29] Speaker 03:
Well, 271A is all domestic infringement.

[00:29:33] Speaker 03:
And so it turns into what was the act of infringement and what's foreseeable, not whether power integration remains good law for all purposes.

[00:29:42] Speaker 04:
And that's why you have to remember that it's a necessary but not sufficient condition to conclude there's some domestic conduct.

[00:29:49] Speaker 04:
As this court said in Power Integrations and as the Supreme Court said in Abitron, that the presumption against extraterritoriality would be a craven watchdog.

[00:29:56] Speaker 04:
if you could just point to some domestic conduct and avoid the whole problem.

[00:30:00] Speaker 04:
This is like a Jedi mind trick on their part.

[00:30:03] Speaker 04:
Oh, look, it's all about domestic conduct.

[00:30:05] Speaker 04:
Therefore, you get foreign damages.

[00:30:07] Speaker 04:
That's not how the Supreme Court has treated presumption against extraterritoriality.

[00:30:12] Speaker 01:
So I guess underscore the point.

[00:30:14] Speaker 01:
I'm genuinely unsure what the argument for this case about whether the excluded theory has to do with extraterritoriality at all.

[00:30:28] Speaker 04:
Sure.

[00:30:29] Speaker 01:
And so let me- The logic of Western GECO seems absolutely clear.

[00:30:34] Speaker 01:
Identify the act that's infringing.

[00:30:36] Speaker 01:
There might've been a little bit of doubt about it in F2, but there's no doubt at all about it in 271A.

[00:30:43] Speaker 01:
And now you get approximately caused damages as long as that act is actually infringing.

[00:30:51] Speaker 01:
I don't see why, I mean, just tell me where does extraterritoriality come in at that point?

[00:30:58] Speaker 04:
Well, two things, Your Honor.

[00:30:59] Speaker 04:
First of all, remember that the court in Western GECO was faced with whether to apply the presumption in its exhortatory tailgating.

[00:31:05] Speaker 04:
It says, we're not going to go there.

[00:31:08] Speaker 04:
We're going to rule more narrowly because this statute is focused on the act of exporting.

[00:31:13] Speaker 04:
And note, very clearly in Justice Thomas's opinion, he says, you have to look at both section 284 and the underlying infringement statute.

[00:31:23] Speaker 01:
Enforciare 271A.

[00:31:25] Speaker 04:
OK, but if you take it out of the context and you say, all you have to do to get foreign damages is to conclude that there's domestic conduct, when the statute under which you get infringement has an express territorial limitation, you blow up the statute.

[00:31:42] Speaker 04:
Section 271A could not be clearer.

[00:31:44] Speaker 04:
Neither could section 154A1.

[00:31:47] Speaker 04:
You've got a right to exclude in the United States.

[00:31:49] Speaker 01:
271A is clear that a domestic

[00:31:54] Speaker 01:
act, completely domestic act that, let's say for purposes of this hypothetical, indisputably causes some sort of foreign harm that 271A says you don't get damages for that?

[00:32:10] Speaker 04:
I think that's correct, Your Honor.

[00:32:12] Speaker 01:
OK, put that argument aside.

[00:32:13] Speaker 01:
What else do you have?

[00:32:15] Speaker 04:
So first of all, you don't even need to reach this issue because of what was presented to the jury here.

[00:32:23] Speaker 04:
Ms.

[00:32:24] Speaker 01:
Lawton.

[00:32:25] Speaker 01:
I mean as I think you understand it is along some lines like that that at least I was trying to explore and I think we were all trying to explore the making in the relevant paragraphs of Ms.

[00:32:42] Speaker 01:
Lawton's submission on this.

[00:32:46] Speaker 01:
Sounds like it's not even a 271

[00:32:50] Speaker 01:
act because, the covered act, because it is merely the design.

[00:32:56] Speaker 01:
The design would not be enough, but I'm interested in the different view of what is being said there.

[00:33:02] Speaker 01:
Namely, let's suppose she was saying the making of a specific copy, one copy sitting in Connecticut, made in Connecticut, sitting in Connecticut, has an effect on something abroad, the traders in Asia or something.

[00:33:20] Speaker 01:
What's the objection to that theory?

[00:33:23] Speaker 04:
The objection is that the foreign effect is use.

[00:33:26] Speaker 04:
And use is an independent category of infringement under Section 271A.

[00:33:30] Speaker 04:
And it is equally subject to the territorial limitation.

[00:33:33] Speaker 04:
Let me tell you what she presented.

[00:33:35] Speaker 04:
So her first theory was that foreign.

[00:33:37] Speaker 01:
I'm sorry.

[00:33:37] Speaker 01:
Your damages theory was based on measuring use.

[00:33:42] Speaker 01:
TT's damages.

[00:33:44] Speaker 01:
No, it was not.

[00:33:45] Speaker 01:
It was based on a slice of a sale, the sale being a monthly license to use.

[00:33:51] Speaker 04:
User months, your honor.

[00:33:52] Speaker 01:
That's right.

[00:33:52] Speaker 04:
Fifty dollars per user month.

[00:33:54] Speaker 01:
That's a slice of the sale.

[00:33:57] Speaker 01:
They were not metering the use.

[00:33:59] Speaker 01:
You were metering the use.

[00:34:01] Speaker 01:
Walton's theory was not.

[00:34:03] Speaker 04:
I disagree, but I would note, Your Honor, that all of her theories, all four, including the domestic one, they all ended the same damage number.

[00:34:12] Speaker 04:
The only question was, how broad of a base do you get?

[00:34:16] Speaker 04:
Now, she had two ways that she was allowed to present, that the court allowed.

[00:34:19] Speaker 04:
We don't think this was right, but I'll explain in a minute why it's a bridge too far to go even further.

[00:34:24] Speaker 04:
Theory number one, when you make a copy, if the foreign buyer

[00:34:30] Speaker 04:
downloads it from a US server, then that's making a copy within the United States.

[00:34:36] Speaker 04:
Okay?

[00:34:37] Speaker 04:
The jury rejected that.

[00:34:39] Speaker 01:
And that was permitted.

[00:34:41] Speaker 04:
that they were allowed to present it, but the jury rejected it.

[00:34:45] Speaker 04:
And Judge Kendall explains in her post-trial opinion that damages were based not on a lump sum, but on a royalty rate, and that they chose the $6.6 million figure choosing United States users.

[00:35:01] Speaker 04:
So they rejected that theory.

[00:35:02] Speaker 04:
They rejected the other theory as well.

[00:35:04] Speaker 01:
This is one of the things I guess I didn't understand.

[00:35:09] Speaker 01:
I'm going to ask you first in a forum that needs modification.

[00:35:13] Speaker 01:
On what basis did the jury reject it?

[00:35:15] Speaker 01:
Obviously, you don't know, but you can maybe infer from what did you argue, what evidence was there against the adoption of that theory?

[00:35:25] Speaker 04:
It's basic math, Your Honor.

[00:35:26] Speaker 04:
We argued for, we said, look, we think it should be a 5 cent royalty or a 2 cent royalty.

[00:35:31] Speaker 01:
At most, a 10 cent royalty.

[00:35:32] Speaker 01:
I'm sorry, you measured 5 cent per what?

[00:35:35] Speaker 04:
Per trade.

[00:35:36] Speaker 04:
Okay.

[00:35:37] Speaker 01:
Trade.

[00:35:37] Speaker 01:
Yeah, and we said 10 cents is the most it should be based on... I'm sorry, and on that theory was Lawton using a per trade measure or again a per monthly user measure?

[00:35:53] Speaker 04:
She was arguing for a $50 per month based on users and it was, you know, I view that as a user analogy, but what the jury decided

[00:36:03] Speaker 04:
uh... was you get six point six million six hundred ten thousand ninety five dollars that is ten cents times the u.s.

[00:36:11] Speaker 04:
user base so the jury there was they had basically speculative evidence that foreign users were adopting uh... uh... term copying the software by downloading it from the u.s.

[00:36:23] Speaker 04:
service of the jury didn't buy that they said you get your six million ten cents times the u.s.

[00:36:28] Speaker 04:
user base

[00:36:29] Speaker 01:
They had a separate... So the jury might have rejected it on the idea that there just wasn't domestic copy.

[00:36:36] Speaker 01:
Oh, okay, but that... Which is why... Which is not inconsistent as a logical matter with Lawton theory number four.

[00:36:45] Speaker 04:
And which is why they rejected the factual predicate for Lawton's theory.

[00:36:49] Speaker 04:
Because her factual predicate was the incidental result, the foreseeable result of the domestic activity is foreign use.

[00:36:58] Speaker 04:
Now, I say that that's an independent category of infringement that's also subject to the territorial limitation, but the jury said, we don't buy that the foreign users didn't go to foreign servers.

[00:37:09] Speaker 04:
Now, she had one other theory, and that was the theory that they

[00:37:15] Speaker 04:
entered into a sales agreement by entering a customer agreement with IBG LLC, which is a U.S.

[00:37:21] Speaker 04:
entity.

[00:37:22] Speaker 04:
The jury rejected that as well.

[00:37:23] Speaker 04:
And you'll see at pages A26, Appendix 26, and Appendix 42, and Note 4, the district court specifically explains how this is what the jury did.

[00:37:33] Speaker 04:
The math is precise, but she explains this is what the jury did.

[00:37:38] Speaker 04:
If you don't, you can hold either that Western GCO and power integrations are not clearly irreconcilable.

[00:37:47] Speaker 04:
We think that that would flip the presumption against extraterritorial on its head and ignore the territorial limitation.

[00:37:53] Speaker 04:
Or you may hold that there's harmless error because they were allowed to present their foreign theories to the jury.

[00:38:02] Speaker 04:
If there are further questions, I'm happy to answer them.

[00:38:04] Speaker 04:
Otherwise, we urge the court to affirm.

[00:38:10] Speaker 04:
Thank you, Your Honors.

[00:38:30] Speaker 00:
Well, we saw you away beyond.

[00:38:32] Speaker 00:
So I'll give you three minutes of rebuttal.

[00:38:34] Speaker 00:
But let me ask you a standard timer lunch time.

[00:38:37] Speaker 00:
Thank you.

[00:38:38] Speaker 00:
Three minutes.

[00:38:40] Speaker 00:
There's a chart on page 15 of the red read, just to clarify Judge Toronto's point, which I may be misunderstanding completely.

[00:38:48] Speaker 00:
But the other side presented the domestic sales, and then forget the other $50 per month.

[00:38:56] Speaker 00:
Look at the $0.10 per unit.

[00:38:59] Speaker 00:
And they did a worldwide calculation.

[00:39:02] Speaker 00:
Would those include the products and the uses that you're alleging oversees under this Western Gecko theory that was rejected by the district court?

[00:39:17] Speaker 02:
So Judge Toronto is right.

[00:39:20] Speaker 02:
IB's theory was $0.10 per trade.

[00:39:23] Speaker 02:
Right.

[00:39:24] Speaker 02:
TT's theory is,

[00:39:26] Speaker 00:
I know.

[00:39:27] Speaker 02:
$50 per month.

[00:39:29] Speaker 00:
OK.

[00:39:29] Speaker 00:
But I'm just saying, and they were allowed, the jury was allowed to consider two theories for foreign sales or foreign uses.

[00:39:38] Speaker 00:
And they presented the number of $19.5 million for worldwide sales.

[00:39:43] Speaker 00:
or the number per unit?

[00:39:45] Speaker 00:
I know you disagree with that.

[00:39:47] Speaker 00:
But are the units there?

[00:39:48] Speaker 00:
Is that overlapping with what you're saying should be damages under the Western GECO theory, or is this the same thing?

[00:39:57] Speaker 02:
I think it's different because this theory, IB's theory, was based on that the jury

[00:40:07] Speaker 02:
agreeing with TT that every time they selected a book trader, a copy was made in the US.

[00:40:15] Speaker 02:
Every copy was made in the US and then distributed to all of these worldwide users.

[00:40:24] Speaker 02:
So in other words, Ms.

[00:40:25] Speaker 02:
Lawton never testified about foreign use, foreign users using the software.

[00:40:33] Speaker 02:
She testified about, and our expert, our technical expert talked about,

[00:40:37] Speaker 02:
Everybody all over the world having a copy, a copy is made in the US.

[00:40:43] Speaker 02:
That apparently was rejected by the jury.

[00:40:45] Speaker 02:
And so the theory that was excluded was the foreseeability theory, the making in the US under 271A, and that TT is entitled to all damages that are foreseeable from that.

[00:41:03] Speaker 01:
What were the acts?

[00:41:05] Speaker 01:
that were foreseeable in the theory.

[00:41:08] Speaker 02:
So you mentioned, Judge Sorano, the issue of designing.

[00:41:11] Speaker 02:
It's not?

[00:41:13] Speaker 01:
No, no, no, no.

[00:41:13] Speaker 01:
I'm trying to ask, I think, the same question.

[00:41:16] Speaker 01:
I understand, Judge Price.

[00:41:18] Speaker 01:
You said that the theory, fourth theory of Lawton, is something or other that caused harm was foreseeable.

[00:41:28] Speaker 01:
What is the something or other that was the harm, not that caused it?

[00:41:35] Speaker 01:
I'm going to put that aside, whether it's the design or the single copy in Connecticut.

[00:41:40] Speaker 02:
OK.

[00:41:41] Speaker 01:
How did the harm abroad arise?

[00:41:44] Speaker 02:
How did the harm?

[00:41:46] Speaker 02:
Right.

[00:41:47] Speaker 02:
How were the activities?

[00:41:49] Speaker 01:
A causes harm, B. That's right.

[00:41:52] Speaker 02:
What's B?

[00:41:53] Speaker 02:
So that's the subject of Ms.

[00:41:55] Speaker 02:
Lawton's report.

[00:41:56] Speaker 02:
The harm that resulted from Ivy making Book Trader under 271A

[00:42:03] Speaker 02:
The harm that resulted from that was that their worldwide customers were getting access to the infringing product.

[00:42:15] Speaker 02:
That's the foreseeable, that is the harm that was caused by the act of making under 271.

[00:42:21] Speaker 01:
How did it harm you?

[00:42:23] Speaker 02:
How did it harm?

[00:42:24] Speaker 02:
You, your client.

[00:42:27] Speaker 02:
because our client has a patent in the US that IB was infringing based on their making of a book trader in the United States.

[00:42:40] Speaker 02:
And so TT's theory, again, the whole theory that got excluded, and again, Ms.

[00:42:46] Speaker 02:
Lawton is very clear.

[00:42:47] Speaker 03:
She talks about... This has been very imprecise about what the harm is.

[00:42:54] Speaker 03:
You're calculating the harm based upon what?

[00:42:57] Speaker 03:
A flat monthly user rate abroad?

[00:43:02] Speaker 03:
So the harm is people using this abroad?

[00:43:07] Speaker 03:
The harm is you would have been able to sell this, your product, or even if you're not making a product, is that this product being used abroad is infringing.

[00:43:22] Speaker 02:
That, it's not infringing over, the act occurred here, the infringing act occurred here.

[00:43:29] Speaker 03:
So how did that act of making one copy here, what's the harm directly relatable to your client?

[00:43:44] Speaker 02:
The harm is that TT has licenses where we license the product for $50 per screen.

[00:43:53] Speaker 03:
And so you are being deprived of foreign license fees because of the infringement here.

[00:44:01] Speaker 02:
TT's license fee, $50 per screen, is what TT was the testimony from Ms.

[00:44:11] Speaker 02:
Lawton at trial.

[00:44:12] Speaker 02:
That's the fee to be able to use this particular tool, $50 per screen.

[00:44:22] Speaker 01:
So never mind.

[00:44:28] Speaker 02:
Just one thing on the 101 issue.

[00:44:31] Speaker 00:
One thing, because we're way out of time.

[00:44:33] Speaker 02:
OK, so what I heard a lot from my friend here is a lot of the same things that we heard in IBG 1 that was argued.

[00:44:44] Speaker 02:
It was brought up at the hearing, whether or not the 411 and the 996, because it has this different claim scope, whether it's

[00:44:52] Speaker 02:
whether it's still solving the problem.

[00:44:54] Speaker 02:
It was addressed in the briefs.

[00:44:55] Speaker 02:
It was addressed at oral argument.

[00:44:57] Speaker 02:
It was addressed in the petition for rehearing on bot and on our response.

[00:45:01] Speaker 02:
It's the same issue.

[00:45:02] Speaker 02:
And again, this court found that it's no different than the 132 and 304.

[00:45:07] Speaker 02:
All four are solving a technical problem with a technical solution.

[00:45:11] Speaker 02:
And if you don't have any further questions.

[00:45:14] Speaker 00:
Thank you.

[00:45:14] Speaker 00:
Thank you.

[00:45:16] Speaker 00:
We thank both sides and the cases together.