[00:00:00] Speaker 04: Well, you all have a special treat today. [00:00:01] Speaker 04: We are super excited and very pleased to have a visiting judge with us. [00:00:08] Speaker 04: This is a program that we haven't had in a while. [00:00:11] Speaker 04: And should word get out, it's going to be happening regularly. [00:00:15] Speaker 04: So you will be seeing some fun new faces on the bench here joining us from the district court. [00:00:24] Speaker 04: OK, let's get on with our first case. [00:00:26] Speaker 04: We have an interesting slide of cases [00:00:37] Speaker 05: Thank you, Your Honors, and may it please the Court, Lauren Dreyer, counsel for Dish, arguing on behalf of Appellants today. [00:00:43] Speaker 05: This case is about the scope of a broadly worded fee-shifting statute, one in which the Supreme Court in Octane Fitness has instructed us that it imposes one and only one constraint on a district court's discretion, and that is for the case to be exceptional. [00:00:58] Speaker 05: There are two statutory interpretation issues of 285 presented today, joint and several liability, and the recovery of IPR fees, and I'd like to begin with the first. [00:01:08] Speaker 05: Two Supreme Court cases have spoken to Section 285. [00:01:11] Speaker 05: Octane Fitness, which explained that the statute is generally unencumbered. [00:01:19] Speaker 05: Yes. [00:01:20] Speaker 05: So Octane Fitness explained that the statute is generally unencumbered. [00:01:22] Speaker 05: But it doesn't talk about joint and several liabilities. [00:01:24] Speaker 02: Oh, I'm sorry. [00:01:24] Speaker 05: I didn't hear your question accurately. [00:01:26] Speaker 05: No, it doesn't talk about joint and several liability. [00:01:28] Speaker 05: But it does analyze the plain text of the statute. [00:01:30] Speaker 02: And it said that- They're not for purposes of joint and several liabilities. [00:01:33] Speaker 05: Correct, Your Honor. [00:01:34] Speaker 05: And it looked also to the legislative history. [00:01:36] Speaker 05: And in looking at the plain text of the statute and the legislative history, it said the statute is unencumbered. [00:01:42] Speaker 05: It includes no constraints on a district court's discretion. [00:01:45] Speaker 05: It only calls on the case to be exceptional and consistent with the legislative history of Section 285 and the need for deterrence of frivolous lawsuits such as this one here. [00:01:54] Speaker 05: It left it to district. [00:01:56] Speaker 03: I'm sorry, but I know that's for you on the start. [00:01:58] Speaker 03: But before we even reach the questions of what could be recovered under an exceptional case, shouldn't we first be considering whether the district judge appropriately found there was a disavowal that led [00:02:11] Speaker 03: to the exceptional case finding? [00:02:13] Speaker 05: Yes, Your Honor. [00:02:14] Speaker 05: I'm happy to address that now. [00:02:15] Speaker 05: I was going to address that in my rebuttal time pursuant to the cross appeal, but I'm happy to address that now if you'd like. [00:02:21] Speaker 05: So the district court did not abuse its discretion in determining that this case stood apart from others with respect to the substantive strength of Dragon's litigating position. [00:02:31] Speaker 05: That was the district court's determination. [00:02:34] Speaker 05: It made that determination on the basis of, [00:02:37] Speaker 05: five separate findings. [00:02:39] Speaker 05: Those are summarized on A29, Appendix 29. [00:02:42] Speaker 05: That included six years of prosecution history disclaimer, including, as the court stated, this is the second clearest case of prosecution history disclaimer that the court had ever seen in his time on the bench. [00:02:57] Speaker 02: It also found that there were those repeated instances of disclaimer. [00:03:12] Speaker 05: I would begin with Appendix 7067. [00:03:15] Speaker 05: That's the 1994 response in which the applicant said, Claim 1 has been further amended to recite how the structure of the infant invention begins a recording upon a first actuation of the record key, referring to its claim amendment, which is also on Appendix 7067. [00:03:33] Speaker 05: And then the applicant went on and said, accordingly, the instant invention is further distinguished from the structure of the SATA reference wherein recording in SATA is continuous and never initiated or stopped. [00:03:49] Speaker 05: I would also look to appendix 7069 and 7070 in which the applicant says, it is not clear by any means that SATA even intends [00:03:59] Speaker 05: to provide any control at all over the point at which recording or playback begins and ends. [00:04:05] Speaker 05: The PriorArt device at best is continually recording and playing back. [00:04:10] Speaker 05: And importantly, Your Honor, the plain language of this claim requires actuation [00:04:15] Speaker 05: after the amendment requires actuation of a record key to begin recording. [00:04:20] Speaker 05: And so in view of this plain claim language and the six years of repeated prosecution history disclaimer in which the applicant said, look, this claim is different than SATA. [00:04:30] Speaker 05: SATA continually records. [00:04:32] Speaker 05: But the plain claim language, now that we've amended it, says you have to press a record key to begin recording. [00:04:39] Speaker 02: I understand. [00:04:41] Speaker 02: Dragon's argument to be, we were only just trying to not having a record key, or that we were just focusing on the examiner's statement that there was a lack of a record key. [00:04:52] Speaker 02: But I think that your view is, well, that might be something you're focusing on as well. [00:04:57] Speaker 02: But they were also talking about a continuous recording and how that was not something that would fall within the scope of the claims. [00:05:05] Speaker 02: Your Honor, are you standing up? [00:05:06] Speaker 05: I agree with you, Your Honor. [00:05:07] Speaker 05: I think that they were trying to distinguish the prior art on multiple bases, one of which was the presence of a record key or a playback key. [00:05:17] Speaker 05: Importantly, though, [00:05:20] Speaker 05: They reiterated multiple times throughout the life of the prosecution history that the claimed invention is different from a continuous recording device. [00:05:29] Speaker 05: And that reiteration merely confirms the disclaimer here when the disclaiming statements are made over and over again, as they were in this case. [00:05:41] Speaker 05: And the district court was well within its discretion to look at that disclaimer. [00:05:45] Speaker 05: and look at the plain claim language that says, actuate a record key to begin a recording, and then also evaluate the publicly available information to Dragon, which was available before the filing of the lawsuit, which would have confirmed that the accused devices here are continuous recording devices. [00:06:02] Speaker 05: They do not begin recording upon actuation of a record key. [00:06:07] Speaker 05: The DISH report was well within its discretion in looking at that publicly available material. [00:06:12] Speaker 05: And then as well, another fact that supported the finding of exceptionality is that the DISH report considered DISH and Sirius's early notice letters to Dragon, in which they put Dragon on notice, that these devices are continuous recording devices. [00:06:25] Speaker 05: They do not begin recording by actuating a record key. [00:06:29] Speaker 05: So I think the DISH report was well within its discretion to consider the totality of the circumstances here. [00:06:37] Speaker 05: find that this case stood apart from the others with respect to the substantive strength of Dragon's litigating position. [00:06:46] Speaker 04: Yes, Your Honor. [00:06:48] Speaker 05: Turning back to joint and several liability. [00:06:51] Speaker 05: Importantly, in addition to octane fitness, almost 25 years ago in Nelson v. Adams, the Supreme Court said, although a non-party does need due process under 285, they are, quote, surely not insulated from liability under 285. [00:07:06] Speaker 02: Is that case dealing with somebody where it was more of a pierce the corporate veil situation? [00:07:12] Speaker 05: That case did deal with a corporate officer, Your Honor, yes. [00:07:15] Speaker 05: But importantly here, the court has a long history of finding non-parties liable for Section 285-V awards, consistent with this court's interpretation of- And not attorneys, except for one non-prec that didn't discuss the issue and where it wasn't appealed. [00:07:30] Speaker 05: Yes, your honor. [00:07:30] Speaker 05: This is an issue of first impression in which this case, this issue has been squarely presented. [00:07:36] Speaker 04: I don't know what to do. [00:07:37] Speaker 04: The statute here is silent as to whose pockets you can reach into and take the money from. [00:07:42] Speaker 04: But other statutes are not. [00:07:43] Speaker 04: 1927 is not. [00:07:44] Speaker 04: 11 is not. [00:07:47] Speaker 04: It seems to me not obvious that when attorney fees should be shifted, that they would always be entitled. [00:07:58] Speaker 04: to get them jointly and separately from the party or the attorney. [00:08:02] Speaker 04: Do you agree with that? [00:08:03] Speaker 04: Do you agree that there isn't some pre-existing presumption that absent statement to the contrary in a statute, both attorneys and their parties are jointly and separately liable for any attorney's fees? [00:08:17] Speaker 05: I don't agree that they would always be liable. [00:08:20] Speaker 05: I think that that is. [00:08:21] Speaker 05: There's too many words in that. [00:08:23] Speaker 05: Sorry, Your Honor. [00:08:23] Speaker 05: I think that it would be within the district court's discretion. [00:08:26] Speaker 05: In all instances. [00:08:27] Speaker 05: In all instances, considering the totality of the circumstances, who is the person responsible? [00:08:32] Speaker 04: On May 285, I mean all attorneys fees statutes that exist in the world. [00:08:38] Speaker 04: You think that in all of those, if the statute itself is silent as to whose pockets the money can come from, [00:08:46] Speaker 04: that it's always the case they can come from either the attorney or the party. [00:08:50] Speaker 05: No, I wouldn't agree with that, Your Honor. [00:08:52] Speaker 05: And I think that's because Section 285 is unique. [00:08:55] Speaker 05: It's unique in because it has the language of exceptionality. [00:08:58] Speaker 04: But I guess what I'm trying to understand is, is there a general rule? [00:09:01] Speaker 04: You reject the general rule that they've articulated. [00:09:04] Speaker 04: They claim that there's a two-step American rule. [00:09:07] Speaker 04: I don't know about the two-step. [00:09:08] Speaker 04: But they claim there's a two-step American rule. [00:09:10] Speaker 04: Step one is attorneys [00:09:12] Speaker 04: fees do not automatically shift to a prevailing party. [00:09:14] Speaker 04: That's what I've always understood the Americans about. [00:09:16] Speaker 04: Then they claim step two, which I think comes largely from this Crescent case, is that also attorneys can't be on the hook for attorney's fees unless the statute expressly says so. [00:09:26] Speaker 04: I'm not sure about that two-step. [00:09:28] Speaker 04: But what I'm trying to understand for you is there's a million of attorney's fees provisions in the world. [00:09:33] Speaker 04: Patent law is not unique. [00:09:36] Speaker 04: What is the general rule about who is liable for attorney's fees [00:09:41] Speaker 04: when you consider all of those many statutes, there has to be a starting point. [00:09:46] Speaker 04: And the starting point's either both are potentially liable or only the party is potentially liable. [00:09:53] Speaker 04: So what do you think ground zero is for the million attorney fee statutes which exist that don't actually specify from whose pockets the money's coming? [00:10:02] Speaker 05: I don't know that there is one, Your Honor. [00:10:05] Speaker 05: Having read all of these cases, I'm not aware of there being a presumption other than the American rule. [00:10:10] Speaker 05: And the presumption of the American rule, as you just said, is parties bear their own fees unless there's a fee-shifting statute. [00:10:15] Speaker 05: And here we have a fee-shifting statute. [00:10:17] Speaker 05: So we know from this court's decision in Roman Haas that we're in the land of exception to the American rule. [00:10:23] Speaker 05: And in that land of there being an exception to the American rule where we have a fee shifting statute, I'm not aware of there being a presumption that only parties would bear those legal fees. [00:10:34] Speaker 04: Why do you think in 1927 and in rule 11 they had to expressly indicate that attorneys could also be held jointly and severally liable? [00:10:42] Speaker 05: 1927 and rule 11 are [00:10:47] Speaker 05: different creatures. [00:10:48] Speaker 05: I think that rule 11, they had to specify that only attorneys could be liable because rule 11 applies to certain parts of a case. [00:10:54] Speaker 05: They applied to pleadings and motions and things where an attorney is responsible for that filing. [00:11:01] Speaker 05: Attorney is always responsible for the filings before a court. [00:11:04] Speaker 05: And that's very similar here to 285, the way that Octane Fitness describes it, where you're considering the frivolousness of a party's position. [00:11:12] Speaker 05: You're considering the unreasonable manner in which a case is litigated. [00:11:15] Speaker 05: It's very similar to the acts that an attorney would take under Rule 11. [00:11:21] Speaker 05: But Rule 11 specifies an attorney because it's limited to pleadings and filings, whereas some of the corporate officers that have been discussed in the case law might not be responsible for the filings. [00:11:34] Speaker 02: What about 1927? [00:11:36] Speaker 02: Yeah. [00:11:36] Speaker 02: That's talking about so [00:11:39] Speaker 02: and he multiplies the vexatiousness of the litigation or something like this. [00:11:45] Speaker 02: I don't remember exactly what the word is. [00:11:46] Speaker 02: But it's not talking about pleadings exclusively. [00:11:50] Speaker 05: It's not, but it is talking about, it's not talking about filings exclusively, Your Honor, but it's talking about multiplying the proceedings. [00:11:57] Speaker 05: And for example, the district court in this case said that the council couldn't be liable here because by virtue of its claim construction positions, it didn't render a second [00:12:09] Speaker 02: claim construction proceeding. [00:12:23] Speaker 05: I'm sorry. [00:12:24] Speaker 02: Can you repeat your question? [00:12:24] Speaker 02: Judge Andrews, I understood that there was a motion to have counsel liable under Section 1927. [00:12:31] Speaker 02: Judge Andrews denied that. [00:12:33] Speaker 05: He denied that, yes, Your Honor. [00:12:34] Speaker 05: And that's not on appeal. [00:12:35] Speaker 05: Is that being raised on appeal? [00:12:36] Speaker 05: No, Your Honor. [00:12:37] Speaker 05: That's not separately appealed. [00:12:38] Speaker 03: So in the context of this case, if the court were to determine that, that 285 does not preclude reaching out to an attorney in an appropriate circumstance where the attorney is actually acting like a party, [00:12:50] Speaker 03: But because Judge Andrews already determined that the attorney in this case did not needlessly exacerbate the litigation, and so he wouldn't have held the attorney responsible, isn't that sufficient to just close the door then? [00:13:07] Speaker 05: I don't think it is, Your Honor, because in multiple instances in the record, Judge Andrews noted that there was [00:13:14] Speaker 05: behavior he might have sanctioned under 285 of counsel. [00:13:18] Speaker 05: That's at Appendix 3624. [00:13:20] Speaker 05: Again, the magistrate judge and Judge Andrews reiterated the counsel's activity that they found potentially sanctionable at Appendix 37, in which Magistrate Judge Hall said she expressed legitimate concern about holding attorneys [00:13:35] Speaker 05: accountable where they have engaged in blameworthy conduct. [00:13:39] Speaker 05: And Dish raised this in its prior fee motion. [00:13:43] Speaker 05: It raised for the district court. [00:13:44] Speaker 04: What is that conduct tied, though, to this disclaimer stuff? [00:13:48] Speaker 04: Why was this case found to be exceptional? [00:13:50] Speaker 05: The case was found to be exceptional based on five independent grounds, disclaimer being a predominant one. [00:13:56] Speaker 04: Right. [00:13:56] Speaker 04: So was the poor attorney behavior tied to the disclaimer such that [00:14:02] Speaker 04: the attorney is responsible for the reason this was exceptional. [00:14:06] Speaker 05: We would argue that it is. [00:14:07] Speaker 05: I don't see that. [00:14:08] Speaker 05: Because an attorney is responsible for objectively evaluating the claim construction positions they're taking and the prosecution history before filing a lawsuit. [00:14:17] Speaker 05: But in addition to that, Dish raised other grounds that are completely within counsel's responsibility in its fee motion. [00:14:25] Speaker 05: And those are things that the district court here [00:14:27] Speaker 05: based on its erroneous statutory interpretation did not reach. [00:14:30] Speaker 02: I don't think our argument is limited to the pleadings, Your Honor, because we pointed out in our briefing below that [00:14:50] Speaker 02: Dragon and Freda said you were just talking about having an objective basis for filing a lawsuit. [00:14:55] Speaker 04: I'm with Judge Stowell. [00:14:56] Speaker 04: We were just talking about the fact that they basically did an inadequate precinct investigation, which is one of those grounds that you argued. [00:15:02] Speaker 04: Rule 11 is the perfect vehicle and the vehicle that you're supposed to use for exactly that kind of problem. [00:15:09] Speaker 04: And it does expressly permit you to get fees from the attorney and themselves. [00:15:13] Speaker 05: I don't think Rule 11 here, because there are overlapping avenues to relief, I don't think that that precludes us from using 285 in lieu of Rule 11. [00:15:24] Speaker 05: Indeed, Congress chose a patent-specific remedy in Section 285. [00:15:28] Speaker 02: Congress chose not to put the word attorneys in there either in 285. [00:15:32] Speaker 02: It doesn't say that attorneys are going to be liable for those fees. [00:15:38] Speaker 05: But absent provisions can't be supplied by the courts. [00:15:41] Speaker 05: And Congress has chosen to make a fee-shifting statute only assessed against a party. [00:15:46] Speaker 05: For example, in the Copyright Act, when it says shift fees against a party, and Congress chose [00:15:51] Speaker 05: not to include such a restriction in Section 285. [00:15:54] Speaker 05: It left the interpretation broad, and it left it to the discretion of the district courts to control the frivolousness and the unreasonable manner in which a case is litigated. [00:16:05] Speaker 05: And that's perfectly within the district court's discretion here to do so. [00:16:09] Speaker 05: I just want to, I know I'm out of time, Your Honor. [00:16:11] Speaker 05: I'd love to answer a question about what Dish raised below briefly. [00:16:16] Speaker 05: And that's just that Dish raised the need for deterrence, the personal attacks that counsel made, and the unnecessary and frivolous motions made in this case by counsel below as additional indicia that would support a finding of exceptionality. [00:16:31] Speaker 05: And we would ask that the court consider that on weekend. [00:16:34] Speaker 04: But the court didn't, that's not what the Dish report relied on. [00:16:36] Speaker 05: No, the district court did not rely on that. [00:16:37] Speaker 04: So you want us to make a fact finding, which is what this is, that the district court did not make, that then would lead to you being able to get fees from the attorneys. [00:16:48] Speaker 04: It seems like what you're asking for right now is exactly the predicate that you would have needed. [00:16:52] Speaker 04: Had you been able to get the district court to rule on that front, you would have had a much better chance under 1927 of persuading the district court. [00:17:00] Speaker 04: But he didn't agree with you and make that ruling. [00:17:03] Speaker 04: So you now want us to make a fact finding that he did not make? [00:17:07] Speaker 05: I think there's adequate support in the record. [00:17:09] Speaker 04: For us to make a fact finding? [00:17:10] Speaker 04: We are not the district court. [00:17:11] Speaker 04: We did not prevail over this entire proceeding from start to finish. [00:17:16] Speaker 04: And that is what is necessary to make the kind of nuanced assessment that you're seeking. [00:17:22] Speaker 05: And to be clear, Your Honor, I think that what we've asked for in our papers is that after this court corrects the erroneous statutory interpretation of 285 and remands it back to the district court, which we request it to do, that the district court be asked to consider the additional indicia of exceptionality that Dish raised in its brief that would support a finding of joint and several liability here. [00:17:46] Speaker 05: We think the record supports it. [00:17:47] Speaker 04: But the problem is he did that exactly as [00:17:51] Speaker 04: the 1927 he already looked at this and under 1927 said. [00:18:01] Speaker 04: that there was no reason to consider fees against the attorneys, right? [00:18:07] Speaker 05: We briefed 1927 and Section 285 separately. [00:18:10] Speaker 05: And I think the additional, and at a different time period, where the case had materially developed farther by the time we re-briefed 285. [00:18:18] Speaker 05: And some of the conduct that we pointed to that would establish exceptionality, including personal attacks made against Dish Council and the pattern of litigation here, [00:18:30] Speaker 05: might be appropriately evaluated under the totality of the circumstances under section 285 rather than 1927 because I don't believe that those things would unreasonably and vexatiously multiply the proceedings, which is the standard in 1927. [00:18:44] Speaker 05: And 1927 also requires a showing of bad faith, which is something that Octane Fitness has done away with. [00:18:51] Speaker 03: I mean, basically, you have a hollow victory here if you win because the Plane of Dragon is a shell, an empty shell. [00:19:00] Speaker 03: You get zero. [00:19:01] Speaker 03: They're judgment-proof. [00:19:02] Speaker 03: So we're reaching out to the attorney because [00:19:06] Speaker 03: I know you made a policy argument that this sort of relationship where the plaintiff is really an entity that only has a patent, the patent's now been invalidated, there's no property interest there. [00:19:17] Speaker 03: There's nothing there. [00:19:19] Speaker 03: The attorney's on a contingency, he's got a motivation to litigate this case, maybe egregiously because he's looking to recover or she. [00:19:31] Speaker 03: there's no breaks on that behavior because they're insulated from recovery because the plaintiff, there is no plaintiff really in this case. [00:19:40] Speaker 03: So in that circumstance, a judge should have discretion to reach out to the attorney. [00:19:46] Speaker 05: I would agree with that, Your Honor. [00:19:48] Speaker 05: This results in a paradox here where an under-capitalized party can file a non-frivolous case and collect fees as the prevailing party for nefarious conduct of a defendant. [00:20:00] Speaker 05: But a defendant who prevails in a meritless case as this one cannot collect fees from the under-capitalized party. [00:20:08] Speaker 05: And that's surely contrary to Congress's intent. [00:20:10] Speaker 02: The problem I'm having is that you're looking at the attorney. [00:20:15] Speaker 02: The attorney might be providing the same representation in both cases. [00:20:21] Speaker 02: In both cases, Your Honor? [00:20:22] Speaker 02: Well, in your example where there is an underfunded company versus where there's a funding company. [00:20:27] Speaker 02: what if the attorney's behavior is the same? [00:20:29] Speaker 02: And I don't see any intent from Congress on how I'm supposed to deal with that scenario. [00:20:33] Speaker 05: I think in both scenarios, an attorney could be liable if they were personally responsible for the conduct. [00:20:38] Speaker 05: That's been the standard set in the incitiform case in this court's jurisdiction, whether a person. [00:20:44] Speaker 02: So we're supposed to determine whether the attorney was personally liable. [00:20:49] Speaker 05: That's the argument that we have made below, is that the attorney here was personally liable and responsible for the conduct that led to the exceptionality. [00:20:56] Speaker 04: Here's one thing I just want clarification on. [00:20:59] Speaker 04: I mean, Judge Fancy-Mango made an excellent point about Dragon being judgment proof and how under those circumstances you could imagine perhaps there is a reason to want to use Section 285 to reach attorneys [00:21:13] Speaker 04: But all of what you discussed with her is not in this record. [00:21:17] Speaker 04: You attempted to supplement this record with the deposition that would have brought to light all of those points. [00:21:24] Speaker 04: They are not before this court, are they? [00:21:26] Speaker 05: They are not before this court, Your Honor. [00:21:28] Speaker 04: So we can't rely on any of that in rendering our decision, because that is not in the record before us, correct? [00:21:33] Speaker 05: That's not in the record, Your Honor. [00:21:35] Speaker 05: Yes. [00:21:37] Speaker 05: I know I'm out of time, and I'm happy to address other issues now if there are with respect to the second statutory interpretation, but understand that I'm out of time now. [00:21:45] Speaker 04: No, we'll hear from opposing counsel. [00:21:47] Speaker 05: Thank you, Your Honors. [00:21:56] Speaker 00: Good morning, Your Honors. [00:21:57] Speaker 00: May it please the court? [00:22:01] Speaker 00: Given the lack of time and the number of issues, I'm going to focus on a couple of points that I'd like to make here. [00:22:10] Speaker 00: The first one is that I think, as was brought up a minute ago, I think the disclaimer was not so clear and unambiguous. [00:22:20] Speaker 00: as the court found. [00:22:22] Speaker 00: And even if it was, I think that it certainly didn't rise to the level of being frivolous or having no support in the record whatsoever. [00:22:31] Speaker 00: I believe reasonable minds could interpret the statements in the prosecution history differently. [00:22:39] Speaker 04: OK, well, let's just start from the premise that is most likely, which is I completely disagree with everything you just said. [00:22:44] Speaker 04: So move on to your next argument. [00:22:48] Speaker 00: You would like me to move on from the prosecution history disclaimer argument altogether? [00:22:53] Speaker 04: I don't agree with what you just said, which is reasonable minds could disagree about whether or not there was a disclaimer. [00:23:06] Speaker ?: OK. [00:23:07] Speaker 04: So move on. [00:23:08] Speaker 04: Is there something, is that all you're here to talk about? [00:23:11] Speaker 04: Because if that's all you're here to talk about, that's fine. [00:23:13] Speaker 04: But I'm just saying if you have other points that you'd like to make, those would probably be more useful. [00:23:18] Speaker 00: Thank you. [00:23:19] Speaker 00: Thank you, Your Honor. [00:23:21] Speaker 00: So I do. [00:23:22] Speaker 00: I think the issue that I'd like to discuss secondarily is, [00:23:28] Speaker 00: that we believe that the district court did not conduct an adequate inquiry into the totality of the circumstances when concluding that this was an exceptional case. [00:23:39] Speaker 00: As we heard a few minutes ago, the magistrate judge went through essentially five different points in coming to her conclusion, which was then accepted by the district court. [00:23:52] Speaker 03: And when the district court found there was a disclaimer that didn't [00:23:57] Speaker 03: cover continuous recording devices. [00:23:59] Speaker 03: You guys immediately rolled over and allowed for summary judgment because you acknowledged that the accused devices were continuous recording devices and therefore could not be covered by this patent. [00:24:09] Speaker 03: So if it was that obvious that you just [00:24:14] Speaker 03: throw in the towel at that point and didn't even try and make some sort of distinguishing argument as to the case devices. [00:24:21] Speaker 03: Where is the abusive discretion in finding that you should have recognized that from the get-go? [00:24:28] Speaker 00: I think if we had have done that, I mean, we recognized from the outset. [00:24:31] Speaker 00: Again, I wasn't personally involved in the district court action. [00:24:35] Speaker 00: But what happened once the prosecution disclaimer was found, [00:24:43] Speaker 00: I think the plaintiff knew that the accused devices were continuous recording devices. [00:24:47] Speaker 00: I think going in the face of a prosecution industry disclaimer saying that we disclaimed continuous recording devices would have got us into an issue with frivolous further litigation that might have multiplied the proceedings going forward. [00:25:03] Speaker 00: I think what the plaintiff did was reasonable in taking its licks, finding it lost on the issue that it thought it could win on. [00:25:10] Speaker 00: It thought reasonably it could win on. [00:25:12] Speaker 00: and then stipulating to a judgment of non-infringement and attempting to take it up to this court to get further input on whether the disclaimer finding was correct. [00:25:24] Speaker 00: Of course, that never happened because of the mutinous issue. [00:25:28] Speaker 00: And Judge Andrews eventually vacated the judgment of non-infringement. [00:25:33] Speaker 00: And I think the issue we have here is that now we are up on an appeal that has treated effectively this prosecution history disclaimer issue as one that is fully resolved. [00:25:47] Speaker 00: And some statements that Judge Andrews made associated with the disclaimer being that this was the second most clear case of disavowal he had seen was taken as gospel and used as the basis for finding that there are 285. [00:26:05] Speaker 02: There's a long footnote, in her opinion, where she actually says, I agree with Judge Miller. [00:26:11] Speaker 02: And so to the extent you're concerned that this court is going to say, oh, because Judge Andrews said it's the second closest we've ever seen, we're not going to look at it, please be assured we've looked at the prosecution history. [00:26:25] Speaker 00: Yeah, so I think, first of all, it was done in a footnote, right? [00:26:29] Speaker 02: But it's a long footnote. [00:26:30] Speaker 00: It is long. [00:26:30] Speaker 02: It's on a whole page. [00:26:32] Speaker 02: So in some ways, it's longer than a regular opinion, because it's single space. [00:26:37] Speaker 00: I think what it's telling here is that the magistrate judge said, I am not going to review Judge Andrew's finding of disavowal. [00:26:46] Speaker 03: Can you guys briefed it extensively, whether or not there was a disavowal? [00:26:50] Speaker 03: It's here. [00:26:51] Speaker 03: understand de novo, we've looked at it, we'll make our decision on it. [00:26:56] Speaker 03: And I actually want to reach the IPR issue on the fees if we could move to that. [00:27:02] Speaker 03: Do you want to address that? [00:27:05] Speaker 03: Their request to recover their IPR keys as part of the exceptional case? [00:27:09] Speaker 00: Sure. [00:27:09] Speaker 00: I think under at least Webb versus Board of Education, I think that case precludes because IPR proceedings are in fact something that a party does out of choice. [00:27:23] Speaker 00: In fact, especially the case with the AIA and the creation of IPRs, the whole system was created to have a supposedly cheaper means to move forward with trying to invalidate a patent that wouldn't incur all the costs associated with other district court litigation, like discovery and things of this nature. [00:27:44] Speaker 00: And I think to then [00:27:49] Speaker 00: After the defendant or party has made the choice to pursue IPRs, and especially given that the IPR schema does have some allowance for attorney's fees and certain provisions, I think to take fees that were voluntarily undertook in a separate administrative court [00:28:09] Speaker 00: and to try to recoup those in a district court when the purpose of going to that other administrative court was to save on fees. [00:28:19] Speaker 03: Just trying to really voluntarily undertake their affirmative defenses of invalidity. [00:28:24] Speaker 03: I mean, your client sued them in district court. [00:28:27] Speaker 03: They have, if they don't assert their invalidity defenses, they're going to waive them. [00:28:31] Speaker 03: They asserted them, but then took the avenue provided to them under the AIA to have that litigated [00:28:37] Speaker 03: in the patent office. [00:28:40] Speaker 03: And there are a lot of reasons, not just necessarily expense saving, but time and expertise and not having a jury deciding invalidity issues. [00:28:49] Speaker 03: And the court gets benefit in the underlying litigation by having that decided. [00:28:55] Speaker 03: With outcomes that parties are bound by, it's inextricably intertwined with the ongoing litigation. [00:29:04] Speaker 03: And in this case, you made them a prevailing party. [00:29:08] Speaker 03: So why not let them recover those fees as part of this litigation, as a subset? [00:29:14] Speaker 03: They didn't go there voluntarily before the case was filed and challenge this patent. [00:29:21] Speaker 03: That might be a different set of circumstances. [00:29:24] Speaker 03: But they went there as an alternative, a binding alternative on the outcome in this litigation. [00:29:31] Speaker 03: It's part of the litigation. [00:29:33] Speaker 00: See, I guess that's where I disagree. [00:29:36] Speaker 00: I don't think it's part of the litigation at all, because they do have the ability to put forth their affirmative defenses of invalidity and, in fact, counterclaims of invalidity if they want to before the district court. [00:29:47] Speaker 00: And they chose to pursue a different route, which under Webb versus Board of Education, making that choice, I think, is the difference. [00:29:55] Speaker 00: Now, there are cases like the PPG case, which says, [00:29:58] Speaker 00: when something is not voluntary, like reissue proceedings, for instance, then it's a different consideration. [00:30:06] Speaker 00: But here, I think that the defendants certainly have the choice to. [00:30:10] Speaker 00: And in fact, other parties, like Apple in this case, initiated IPR proceedings. [00:30:16] Speaker 00: So these are proceedings that are separate and apart from the district court litigation altogether, and were not necessary. [00:30:24] Speaker 02: What about the Amniel case? [00:30:25] Speaker 02: That's a presidential opinion in this court. [00:30:28] Speaker 02: Do you think that that resolves this issue? [00:30:31] Speaker 02: I'm sorry, which case? [00:30:31] Speaker 02: The Amniel case. [00:30:33] Speaker 00: Amniel case. [00:30:37] Speaker 02: That's an opinion holding that Section 285 doesn't allow the award fees for work done in an IPR. [00:30:45] Speaker 02: It was in a particular context. [00:30:48] Speaker 00: Yeah, so we looked at that case, and I do think it's consistent with what we're asking in the court to do, is to say that those are not recoverable. [00:30:57] Speaker 00: In this case, I think it's a little different, of course, because IPR proceedings are separate and, I would say, voluntary. [00:31:08] Speaker 00: I don't want to underplay [00:31:11] Speaker 00: the importance of the fact that all of the available remedies at the PTAB are also available at the district court. [00:31:21] Speaker 00: And there was a choice made to go to the PTAB, which, as I think is commonly understood, may be an easier route for defendants to invalidate a patent, which once they made that choice, I believe they should not be allowed to come back and recoup those fees at the district court level. [00:31:44] Speaker 03: And your opinion is that to be just a per se black line, just a firm rule, never get IPR fees in any case, regardless of the circumstances. [00:31:56] Speaker 00: Well, I think it should be a firm rule until Congress says otherwise. [00:32:00] Speaker 02: What about your emphasis on the voluntary nature? [00:32:03] Speaker 02: I thought you were actually saying [00:32:05] Speaker 02: i misunderstood i think sometimes there could be circumstances where attorney fees could be awarded for ipr work but not in this case because the choice to go to the p tap is voluntary am i misunderstanding your argument? [00:32:19] Speaker 00: i think those are one and the same i think that going to the ipr is not the same because what if it was involuntary? [00:32:25] Speaker 04: it would never be involuntary sure it is the patentee goes to the pto involuntarily they're dragged there and then they win why can't they get exceptional case fees? [00:32:33] Speaker 00: i'm sorry in what situation was this paid? [00:32:35] Speaker 03: where the plaintiff decided to go to... The patent holder says, you know what? [00:32:40] Speaker 03: While my case is pending in the district court, I'm going to file for IPR and stay my case in the district court. [00:32:47] Speaker 04: Oh, no. [00:32:48] Speaker 04: Forget filing. [00:32:49] Speaker 04: Sorry. [00:32:49] Speaker 04: But suppose the patent is supposed to end this case. [00:32:52] Speaker 04: The patentee is dragged into an IPR and wins. [00:32:56] Speaker 04: Supposed the patentee won. [00:32:57] Speaker 04: They didn't lose. [00:33:00] Speaker 04: They were involuntarily dragged into an IPR against their will. [00:33:04] Speaker 04: Are you saying they can't go back to the district court and then ask for exceptional case attorney's fees for having been forced to litigate this in the IPR? [00:33:14] Speaker 00: So I don't think I'd go that far in the scenario you just presented. [00:33:17] Speaker 00: I agree. [00:33:18] Speaker 00: If they're dragged in involuntarily. [00:33:20] Speaker 03: So it's not that it's a different forum. [00:33:22] Speaker 03: It's whether you're there voluntarily or involuntarily that decides whether or not it can be incorporated into an exceptional case finding. [00:33:30] Speaker 00: So I think the PPG case has already decided that if it's not voluntary, if it's involuntary, it could be appropriate to award fees. [00:33:39] Speaker 00: I don't think that's the case here. [00:33:41] Speaker 00: And so I'm not trying to say that that case was wrong. [00:33:44] Speaker 00: So there are certainly circumstances where it's involuntary. [00:33:48] Speaker 00: And I just, quite frankly, didn't think of the situation you just brought up. [00:33:52] Speaker 00: I understand what you're saying. [00:33:54] Speaker 00: And if they're dragged in against their will, directly as a result of the district court litigation due to the patentee's own acts, I- But that's exactly what happened in PPG, that the whole reason that we allowed attorney's fees in that reissue case. [00:34:08] Speaker 04: was because their participation was mandatory. [00:34:12] Speaker 04: So I don't know why you wouldn't have thought of it, because it's actually already been decided that way. [00:34:17] Speaker 00: No, the specific scenario of a patent. [00:34:19] Speaker 00: I've never heard of a patentee initiating an IPR proceeding in my 20 years of practice. [00:34:24] Speaker 04: And her hypothetical wasn't about a patent. [00:34:25] Speaker 03: No, yeah. [00:34:26] Speaker 03: I'm sorry. [00:34:26] Speaker 03: That was mine. [00:34:27] Speaker 03: That was hers. [00:34:28] Speaker 03: I was just saying that in this case, Dish took them to IPR. [00:34:31] Speaker 03: If Dragon had won in the IPR, not Dish, [00:34:35] Speaker 03: And also, ultimately not an exceptional case finding, you would be arguing that they could get their IPR fees as well for defeating the invalidity findings in the IPR as part of the overall case. [00:34:49] Speaker 03: Because they had to go there involuntarily, although if you roll the clock all the way back they started the whole thing and so it's all voluntary on their part. [00:35:00] Speaker 00: Yeah, I understood. [00:35:02] Speaker 00: I can't say that I would necessarily do that, but I can see a scenario where that would happen. [00:35:07] Speaker 00: And I think you'd have to be considered on the merits at the time, given the facts and circumstances. [00:35:12] Speaker 04: OK. [00:35:12] Speaker 04: I think your time is up. [00:35:13] Speaker 04: Thank you. [00:35:14] Speaker 04: Thank you. [00:35:14] Speaker 04: We'll move on here from the other writer now. [00:35:29] Speaker 01: May it please the court. [00:35:31] Speaker 01: Chief Judge Moore asked a question about whether there's a ground zero and how lawyer liability for attorney's fees fits in across the broad range of fee-shifting statutes. [00:35:45] Speaker 01: There is a ground zero. [00:35:46] Speaker 01: There's an established presumption that when lawyers aren't mentioned, lawyers aren't in. [00:35:51] Speaker 04: Where does that come from? [00:35:52] Speaker 01: It comes from roadway. [00:35:53] Speaker 01: It comes from cases such as Crescent City and the other cases that we've cited. [00:35:58] Speaker 04: But that's just one regional circuit case and a couple of district court cases. [00:36:02] Speaker 01: Well, it's more than that, Your Honor. [00:36:04] Speaker 01: We've cited several cases. [00:36:06] Speaker 01: But when you were speaking earlier, Chief Judge Moore, you made reference to a two-step American rule. [00:36:13] Speaker 01: In Crescent City, that's how the court explained it. [00:36:16] Speaker 04: I know, but I've never heard anybody other than that one four-circuit case explain it that way. [00:36:20] Speaker 04: And I don't count the district courts. [00:36:22] Speaker 04: Well, first of all, I just mean the American rule is so ingrained. [00:36:37] Speaker 04: It's been referred to by the Supreme Court many times. [00:36:40] Speaker 04: It's been referred to in many treatises. [00:36:42] Speaker 04: It's a well-known concept. [00:36:45] Speaker 04: You suddenly turn it into a Texas two-step, or maybe Crescent City did. [00:36:50] Speaker 04: But that's one circuit court. [00:36:52] Speaker 04: that has turned what I've understood the American rule to be into a two-step, which I never understood it to be. [00:36:59] Speaker 04: So the fact that some district courts have followed on to what Preston City has said doesn't suddenly take a concept that is well engraved in our legal jurisprudence for decades, if not centuries, and turn it into a two-step. [00:37:13] Speaker 01: Your Honor, there's more to it than the idea of a two-step. [00:37:17] Speaker 01: there's a presumption that when lawyers are not in explicitly, they're out. [00:37:23] Speaker 02: So we're simply not in that. [00:37:25] Speaker 02: Do you have a Supreme Court case? [00:37:27] Speaker 02: I understand what you're saying, but we're just looking for what is the best support for that, since it is a strong argument in your favor. [00:37:36] Speaker 01: It starts with roadway, and it goes through all of the other cases. [00:37:41] Speaker 02: I understand. [00:37:41] Speaker 02: You've got roadway in Crescent City. [00:37:43] Speaker 02: Do you have anything beyond that? [00:37:45] Speaker 02: So is there anything else besides Roadway and Crescent City? [00:37:51] Speaker 01: The other cases that we cited. [00:37:53] Speaker 02: I mean, that are either the Supreme Court or something showing congressional intent. [00:38:00] Speaker 01: I don't think there's another Supreme Court case that makes the point about the presumption. [00:38:05] Speaker 01: But neither do I think that the presumption is in doubt. [00:38:08] Speaker 01: I'm sorry, Chief Judge Moran. [00:38:09] Speaker 04: When you say another, what is the first Supreme Court? [00:38:11] Speaker 01: Roadway. [00:38:12] Speaker 04: And Roadway says what exactly that leads you to conclude that there is a presumption about attorneys and whether they're in or out. [00:38:49] Speaker 01: In Roadway, on page 762, 763, the court was discussing the problems that were associated with the construction that was presented by the party seeking fees in that case. [00:39:07] Speaker 01: And what the court said is, [00:39:11] Speaker 01: Under Roadway's view of Section 1927, lawyers in cases brought under those statutes would face stiffer penalties for prolonging lawyers, for prolonging litigation than with other attorneys. [00:39:23] Speaker 01: There's no persuasive justification for subjecting lawyers in different areas of practice to differing sanctions for dilatory conduct. [00:39:31] Speaker 01: A court's processes may be abused in a commercial case, as in a civil rights action, without an express indication of congressional intent [00:39:41] Speaker 01: We must hesitate to reach the imaginative outcome urged by roadway, particularly when a more plausible construction flows from the original enactments. [00:39:52] Speaker 04: But that case was a 1927 and a Federal Rule of Civil Procedure 37 case, correct? [00:39:58] Speaker 01: Yes, Your Honor. [00:39:59] Speaker 04: Both of them expressly say lawyers can be held jointly and severely liable. [00:40:04] Speaker 04: So the fact that the Supreme Court came along [00:40:06] Speaker 04: in a Federal Rule 37 case, which expressly says lawyers can be held liable for the conduct and concluded it wouldn't deviate from the rule that was at issue in the case and say lawyers couldn't be held liable, does not mean it stands for a presumption that lawyers can, in all circumstances, when we're not in 1927, when we're not under Rule 37, automatically incorporate into the American rule the idea that lawyers can or could not. [00:40:35] Speaker 01: Your Honor, we cite it. [00:40:36] Speaker 01: the peer case from the 11th Circuit 2021, the Taharo case from the Fifth Circuit. [00:40:43] Speaker 04: And by the way, I just want to point out this giant presumption that you said flowed from roadway preceded the Crescent City case. [00:40:53] Speaker 04: And the Crescent City case never mentions roadway anywhere in it. [00:40:57] Speaker 04: Crescent City was the first case to do this. [00:40:59] Speaker 04: And if [00:41:00] Speaker 04: roadway from the Supreme Court was so clear that there exists a pre-existing presumption. [00:41:07] Speaker 04: Don't you think the Fourth Circuit would have mentioned it as opposed to sort of creating this out of whole cloth on their own? [00:41:13] Speaker 01: Well, by the time these things are being addressed, Your Honor, there's different things that are going on. [00:41:17] Speaker 01: But we cited the Eleventh Circuit, the Fifth Circuit, the Eleventh Circuit again, the Tenth Circuit, the Ninth Circuit. [00:41:24] Speaker 03: Can we focus on 285 because [00:41:28] Speaker 03: 285 is pretty broad and it's plain language. [00:41:32] Speaker 03: The veiling party can recover fees in an exceptional case. [00:41:35] Speaker 03: It doesn't say against who. [00:41:37] Speaker 03: It just blanketly. [00:41:38] Speaker 03: You're saying there's a presumption it doesn't include lawyers. [00:41:42] Speaker 03: And most presumptions are rebuttable. [00:41:44] Speaker 03: So the things that a district judge is supposed to look at in finding a case exceptional is based on their experience with cases. [00:41:53] Speaker 03: Is this case exceptional? [00:41:55] Speaker 03: So we're not just fee shifting because you won. [00:41:58] Speaker 03: There has to be even a higher threshold for that. [00:42:01] Speaker 03: And among the things they can look at are the meritlessness, the frivolousness of the filing, as well as the way it was litigated. [00:42:09] Speaker 03: And the way it was litigated really falls on the shoulders of council, for the most part, because isn't it council's responsibility if their clients say, do something [00:42:20] Speaker 03: that gets chalk on your toes, is crossing the line, you're supposed to say, no, I have ethical responsibilities not to do that. [00:42:28] Speaker 03: So if the behavior of counsel can be grounds for finding a case exceptional, then why would it necessarily preclude reaching out to counsel for recovery in every instance? [00:42:41] Speaker 03: This case may not be that instance because the judge made some of those conclusions and found [00:42:48] Speaker 03: that there weren't violations under 1927. [00:42:52] Speaker 03: But in every case, you could never reach out and say, counsel's behavior here also made the case exceptional, so counsel should have some responsibility for the recovery of costs and fees. [00:43:04] Speaker 01: There's two different issues there, Your Honor. [00:43:06] Speaker 01: The first one is the question of who's subject to the statute. [00:43:10] Speaker 01: And that doesn't vary with the facts. [00:43:13] Speaker 01: So the point Your Honor is making about the specifics [00:43:16] Speaker 01: of what triggered exceptionality isn't relevant to the underlying statutory question. [00:43:23] Speaker 04: Here's the problem. [00:43:25] Speaker 04: I think, like Judge Brins and Vingo, I see this statute as silent. [00:43:28] Speaker 04: The copyright statute says one thing with regard to attorneys. [00:43:33] Speaker 04: The 1927 says another thing with regard to attorneys. [00:43:38] Speaker 04: What's the other one? [00:43:40] Speaker 04: Rule 11. [00:43:41] Speaker 04: That's attorneys, right? [00:43:42] Speaker 04: That was the other one I was thinking of. [00:43:43] Speaker 04: Even Rule 37 talks about attorneys, but a little civil procedure. [00:43:47] Speaker 04: So there are lots of statutes and or rules that discuss whether it's parties only, parties plus attorneys, attorneys only, whatever. [00:43:55] Speaker 04: There are lots of rules that discuss it. [00:43:56] Speaker 04: Here we have a rule that is dead silent. [00:44:01] Speaker 04: Why don't we interpret that rule as saying that it's dealer's choice with the judge? [00:44:06] Speaker 04: The judge gets to decide [00:44:08] Speaker 04: Who is responsible for the case being exceptional? [00:44:12] Speaker 01: There are several reasons why not. [00:44:16] Speaker 01: We begin with the presumption, but let's move away from that. [00:44:19] Speaker 01: We also take a look at the statutory history here. [00:44:29] Speaker 01: We recounted it in our brief. [00:44:31] Speaker 01: Judge Hall relied on it in her analysis. [00:44:34] Speaker 01: When the portion of the statute addressing attorney's fees was enacted, it was part of the broader statute that allowed the recovery of damages. [00:44:46] Speaker 01: And by the way, Your Honor, there are lots of statutes that talk about recovery of damages, including Section 281, that don't say lawyers are out. [00:44:57] Speaker 01: So if we're going to say that the absence of lawyers [00:45:00] Speaker 01: supports an inference that they're in, we've got much bigger problems to address. [00:45:04] Speaker 04: I'm sorry, 281. [00:45:05] Speaker 04: What's 281? [00:45:05] Speaker 04: I don't know what you're talking about. [00:45:07] Speaker 01: The infringement statute. [00:45:08] Speaker 04: That's 271, right? [00:45:09] Speaker 04: Am I crazy? [00:45:10] Speaker 01: No, you're right. [00:45:11] Speaker 01: All right, 271. [00:45:13] Speaker 04: Excuse me, Your Honor. [00:45:15] Speaker 01: My mistake. [00:45:16] Speaker 01: But let's go back to the history here. [00:45:19] Speaker 01: When the statute was originally written. [00:45:21] Speaker 04: But that's damages. [00:45:23] Speaker 04: 271 infringement is damages. [00:45:24] Speaker 01: Your Honor, I'm talking about something different. [00:45:27] Speaker 04: Why would attorneys be liable for the damages that they're [00:45:30] Speaker 01: Indeed, Your Honor, when this statute was enacted, there was no separation between attorney's fees and damages. [00:45:39] Speaker 01: As you point out, Chief Judge Moore, lawyers wouldn't be liable for damages when attorney's fees was included in the original statute. [00:45:48] Speaker 01: It was included with damages, as Judge Hall explained. [00:45:52] Speaker 01: That made it clear. [00:45:53] Speaker 01: that lawyers weren't subject to liability for fees. [00:45:56] Speaker 01: The subsequent developments of the statutory history show that no change was made. [00:46:03] Speaker 01: The original enactment did not cover lawyers, and nothing was changed. [00:46:08] Speaker 01: Octane says so. [00:46:09] Speaker 01: Octane says when Section 285 was codified in 1952, there was no change. [00:46:18] Speaker 01: to its substantive reach. [00:46:20] Speaker 02: But it was changed to where it was located. [00:46:22] Speaker 01: Pardon me, Your Honor? [00:46:23] Speaker 02: It was changed to where it was located within the statute. [00:46:26] Speaker 01: That's all that happened. [00:46:27] Speaker 01: That's correct. [00:46:28] Speaker 01: So we had a statute that awarded damages and fees. [00:46:31] Speaker 01: It didn't apply to lawyers. [00:46:33] Speaker 01: One chunk was cut out. [00:46:35] Speaker 01: It was put somewhere else. [00:46:36] Speaker 01: Judge Hall went through this analysis. [00:46:40] Speaker 01: And she explained that the history doesn't support a conclusion that there was a change. [00:46:45] Speaker 01: Indeed, in this case, [00:46:48] Speaker 01: dish was asked, is there something in the legislative history to which you can point? [00:46:55] Speaker 04: The answer was no. [00:47:09] Speaker 05: Thank you, Your Honor. [00:47:10] Speaker 05: Please don't use it all. [00:47:12] Speaker 05: I won't use it all. [00:47:12] Speaker 05: I just had a few things to say. [00:47:13] Speaker 05: I wanted to correct something I misstated earlier, which is that there's no record evidence that Dragon is an under-capitalized entity. [00:47:21] Speaker 05: And I misspoke because we raised this in our B motion to the district court. [00:47:25] Speaker 05: This is that Appendix 3980 through 84. [00:47:28] Speaker 05: The record was not as developed as it is. [00:47:31] Speaker 04: Okay, got it. [00:47:32] Speaker 04: Move on. [00:47:33] Speaker 04: I want you to respond to what we were just talking about. [00:47:35] Speaker 04: I want you to pick up where we left off. [00:47:37] Speaker 04: I'm trying to figure out whether 285 applies to and can, in some instances, by the district court, depending on the basis for which a case is deemed exceptional. [00:47:50] Speaker 04: attorneys jointly and severely liable. [00:47:52] Speaker 04: Pick up where that is. [00:47:52] Speaker 05: Yes, I would agree with that because that's what the Fifth Circuit did in Alliance for Good Government in interpreting the parallel, the nearly identical, I'm sorry, no, the identical fee-shifting statute in the Lanham Act. [00:48:04] Speaker 02: But in that case, I just want to make sure I understand. [00:48:07] Speaker 02: In that case, I read it as that lawyer might have been to file signing papers, but was also found to be a principal. [00:48:17] Speaker 02: That's correct, Your Honor. [00:48:17] Speaker 02: So isn't that a very important difference [00:48:19] Speaker 05: I don't think it is an important difference because the Fifth Circuit majority opinion acknowledged that it was her actions taken in her representation as the party's attorney in signing and filing a... [00:48:33] Speaker 05: Under general tort-feasor principles, yes, the Fifth Circuit did emphasize that. [00:48:38] Speaker 05: It was a part of the dispute raised by the dissent in that case as well. [00:48:42] Speaker 05: But certainly, joint tort-feasor principles rely on whether someone is individually responsible for the tortious conduct here. [00:48:49] Speaker 05: And that's the position that Dish has maintained all along, that Dragon's counsel here has been individually responsible for many of the indicia that lead to a finding of exceptionality, and the statute is [00:49:01] Speaker 05: broad and permits the district court's discretion to consider that. [00:49:05] Speaker 05: I also wanted to briefly address the discussion about IPR fees and just note that... [00:49:16] Speaker 02: I wanted to ask you about that. [00:49:19] Speaker 04: What is your view? [00:49:20] Speaker 04: Go ahead, but I really want to hear more because what I'm struggling with is joint and several liability the most. [00:49:26] Speaker 04: But go ahead, talk. [00:49:26] Speaker 04: Yes, Your Honor. [00:49:27] Speaker 04: I'll make it brief, which is just- I'll let you use all six minutes. [00:49:29] Speaker 04: I'm going to give you more minutes. [00:49:32] Speaker 05: Yes, I'll be brief. [00:49:33] Speaker 02: I have a question. [00:49:35] Speaker 02: Here, you did have a choice. [00:49:37] Speaker 02: It was voluntary for you to go and seek the IPR petition, right? [00:49:42] Speaker 02: You agree with that, right? [00:49:43] Speaker 05: I agree that it's voluntary. [00:49:44] Speaker 05: I don't agree that IPRs neatly fit into this mandatory versus voluntary distinction. [00:49:50] Speaker 05: And there is Supreme Court precedent in Delaware Valley, which is cited in Sullivan, for which the Supreme Court has affirmed a fee award for a completely optional [00:50:01] Speaker 05: administrative proceeding. [00:50:03] Speaker 05: The Third Circuit did that as well in Kenan versus Philadelphia. [00:50:06] Speaker 05: That was an optional arbitration proceeding. [00:50:08] Speaker 05: How do you distinguish Amniel? [00:50:11] Speaker 05: Amniel involved an IPR that was filed first. [00:50:17] Speaker 05: and then a district court litigation that occurred after that. [00:50:21] Speaker 02: There's a lot of other discussion in that case, though, that pertains to the question of whether you should ever recover attorney fees for IPRs, right? [00:50:30] Speaker 05: Yes, but Amule discussed Sullivan, for example, and the standard articulated in Sullivan, and said that Sullivan and PPG. [00:50:36] Speaker 04: Well, Congressman, for you to be able to get attorney's fees, our precedent already existed with regard to attorney's fees prior to the IPR scheme. [00:50:45] Speaker 04: If Congress wanted you to get attorney's fees in these kinds of circumstances where it is, in fact, felony, and we did solve a question about that, then they could have added an attorney fee provision to the IPR scheme. [00:50:58] Speaker 04: They could have added it right there. [00:51:00] Speaker 04: They could have allowed you to get them and say, or they could have said you get them if it's in conjunction with the district court litigation if you've been preceded, or they could have just allowed them in all IPR contexts. [00:51:10] Speaker 04: Congress could have done this. [00:51:11] Speaker 04: They were legislating against the backdrop of the knowledge that we did not allow recovery of fees in situations that were voluntary. [00:51:20] Speaker 05: Disagree, Your Honor, because when Congress enacted Section 285 in 1952, it also had Section 23 of the Patent Act in 1952. [00:51:30] Speaker 05: And that referred to cases. [00:51:31] Speaker 05: It referred to cases at the Patent Office. [00:51:34] Speaker 05: So it used that language broadly. [00:51:36] Speaker 05: And so it didn't need to enact a new fee-shifting statute for cases at the PTAB, because consistent with PPG, the Court had long interpreted that fee-shifting awards could be permitted. [00:51:48] Speaker 04: Yes. [00:51:49] Speaker 04: How about what we said? [00:51:50] Speaker 04: only when it's involuntary in the re-exam case. [00:51:54] Speaker 04: I agree. [00:51:54] Speaker 04: The word cases is not the basis upon which you may lose on this point. [00:51:59] Speaker 04: If you lose, it's the voluntary, involuntary nature of the proceeding. [00:52:04] Speaker 05: I think in PPG, Your Honor, what the district court had said is that the reissue was not voluntary. [00:52:09] Speaker 05: I think the quote that used was in the strictest, or not mandatory voluntary, in the strictest sense. [00:52:15] Speaker 05: And PPG acknowledged that the reissue was [00:52:19] Speaker 05: that the reissue fell into that sort of category. [00:52:22] Speaker 05: But what it analyzed was whether the reissue replaced the district court proceeding, whether the parties would be bound, whether the same type of work would have been performed had the case proceeded to trial. [00:52:33] Speaker 05: And those are the same distinctions that this court in Amniel recognized in talking about PPG and talking about that narrow class of cases that Sullivan, the Supreme Court Sullivan decision discussed, in which fees can be recovered. [00:52:45] Speaker 05: And so we think that this case falls within the PPG [00:52:48] Speaker 05: and Sullivan line of cases in which an optional proceeding under a district court's discretion could be committed. [00:52:55] Speaker 02: One concern I have is a practical one. [00:52:57] Speaker 02: So Octane also emphasizes that the district court is in the best position to determine whether something is exceptional or not because they're in the day-to-day running of the case. [00:53:06] Speaker 02: That's not so with an IPR. [00:53:08] Speaker 02: The district court knows nothing about what happened at the IPR. [00:53:12] Speaker 02: How is the district court supposed to know whether the behavior or the litigation during the IPR was accepted? [00:53:22] Speaker 05: Here, Your Honor, we raised in our fee motion that there were inconsistent positions taken on claim construction between the district court and the IPR. [00:53:30] Speaker 05: And the district court had the record of the IPR before it. [00:53:33] Speaker 04: Yeah, but what you're asking us to do, OK, so just to be clear, every [00:53:36] Speaker 04: single patent litigation has that companion IPR in it, all of them. [00:53:41] Speaker 04: Do you agree that that is probably likely very close to true? [00:53:46] Speaker 05: Yes, Your Honor. [00:53:47] Speaker 04: OK. [00:53:48] Speaker 04: So what you're now asking for is every time we're thinking about attorney's fees, any time an IPR is successful, you're going to have the district court being put in what Judge Stoll was just articulating, the very awkward position of trying to evaluate the exceptionality [00:54:04] Speaker 04: of what was argued and decided not in his or her forum, but in an administrative forum. [00:54:12] Speaker 04: It sounds like I'm creating an effing nightmare. [00:54:16] Speaker 05: I think 285 is the exception. [00:54:19] Speaker 05: It's not the rule, and it only occurs in the rare cases in which there's frivolousness and an unreasonable manner of litigating. [00:54:27] Speaker 04: With all due respect, every time you guys win, that's what you claim. [00:54:32] Speaker 03: Okay, but let's look at the circumstances in this case. [00:54:35] Speaker 03: Exceptional case finding isn't based on what happened in the IPR. [00:54:39] Speaker 03: It's based, primarily, it's based on the initiation of a lawsuit from the get-go. [00:54:45] Speaker 03: And so everything that flows from that [00:54:48] Speaker 03: whether it's defending, it's claiming construction, it's taking your invalidity case to the patent office in lieu of doing it in the district court. [00:54:57] Speaker 03: So when the judge is determining that the case is exceptional in this context because the case was filed when there was apparently no merit because of this disavowal, [00:55:09] Speaker 03: How much should you recover, whether you sweep the IPR in as well, where they prevailed? [00:55:15] Speaker 03: So there's at least grounds for saying, yes, it wasn't a waste of time. [00:55:18] Speaker 03: You didn't lose there. [00:55:19] Speaker 03: It doesn't have to find it exceptional. [00:55:21] Speaker 03: They are just part of the overall litigation. [00:55:24] Speaker 03: The context, I think, that Chief Judge Morris is talking about is, what if the only thing that happens is the IPR, the defense wins there and wants the district judge to find the case exceptional based on what happened in the IPR, and unless it's [00:55:38] Speaker 03: really obvious, like somebody lied on their application, you're not going to make that finding as a district judge because you weren't there. [00:55:45] Speaker 03: So maybe in that context, you're not going to get fees. [00:55:49] Speaker 03: But a bright line rule that you can never recover just seems to [00:55:55] Speaker 05: for me a little too. [00:56:12] Speaker 05: I don't agree. [00:56:12] Speaker 05: I think that there were five facts that supported the finding of exceptionality. [00:56:16] Speaker 04: What was it about other than the disavowal? [00:56:17] Speaker 05: The publicly available material. [00:56:19] Speaker 05: This is summarized on Appendix 29 of the court's opinion, but the publicly available materials that confirmed that the products operated as continuous order. [00:56:27] Speaker 03: But that ties to the disavowal. [00:56:29] Speaker 03: You said we don't cover continuous recording. [00:56:31] Speaker 03: You had to know we were continuous recording. [00:56:34] Speaker 05: It's tied to the disavowal. [00:56:36] Speaker 04: All of the arguments are tied to the disavowal. [00:56:38] Speaker 04: The PTO decided there was a disavowal, correct? [00:56:41] Speaker 05: No, Your Honor, the PTO decided obviousness of the claims. [00:56:48] Speaker 04: Well, one other thing related to this, another concern I have with this notion that IPR fees should be recoverable is the IPR process is not an exact substitute for what you would have done in the district court. [00:57:04] Speaker 04: There are advantages, are there not, of you going to the PTO rather than litigating this in the district court, the biggest one of which is the burden of proof. [00:57:14] Speaker 04: In the PTO, you get to go from a preponderance of the evidence standard. [00:57:18] Speaker 04: How do we know that in the district court you would have prevailed and been a prevailing party in a district court litigation on validity under the clear and convincing standards? [00:57:29] Speaker 05: In this case, Your Honor, we prevailed in the IPR, and we were a prevailing party under 285 by virtue of prevailing in the IPR. [00:57:37] Speaker 04: But for exceptionality, how do we know that the decision that was reached in the PTO, which was under a preponderance of the evidence standard, which is way lower than the clear and convincing evidence standard, shows that your same arguments would have been deemed exceptional and that you would have prevailed on them under the clear and convincing standard? [00:57:59] Speaker 05: I think that might be mistaking the arguments that you need to prevail to create a material change in the relationship between the legal parties, such as invalidity, and the arguments that you need to establish to show that the case is exceptional. [00:58:13] Speaker 05: And preponderance of the evidence is the standard needed to show a case is exceptional. [00:58:17] Speaker 05: It can include filing a frivolous lawsuit. [00:58:20] Speaker 05: It can include unprofessional behavior. [00:58:23] Speaker 04: But that's not what the basis was here. [00:58:27] Speaker 04: The basis here [00:58:28] Speaker 04: has to do with exactly why you prevailed in the IPR. [00:58:34] Speaker 04: But what if you wouldn't have prevailed in the district court given the different burden that you had there? [00:58:41] Speaker 04: Why should you get exceptional case fees out of a district court judge? [00:58:45] Speaker 04: And worse yet, why should the district court judge have to second guess whether the outcome would or would not have been the same under the different burden had he or she had to decide the issue or a jury decide the issue? [00:58:59] Speaker 04: The PTO was meant to create a more expeditious and easy way for you to go after potentially bad patents. [00:59:06] Speaker 04: And they opened the door to allowing you to do it under a much lower burden. [00:59:10] Speaker 04: Why is success there a proxy for even victory in the district court, much less exceptionality? [00:59:19] Speaker 05: But I think that this is what makes it difficult to create a bright line rule, because we prevailed twice in two different ways. [00:59:26] Speaker 05: We prevailed by invalidating the patent at the Patent Office. [00:59:29] Speaker 05: We also prevailed by a stipulation of non-infringement based on the disclaimer, based on the plain language of the claim. [00:59:36] Speaker 04: Yeah, but the district were just notable about all of that, right? [00:59:40] Speaker 05: Correct, Your Honor. [00:59:41] Speaker 05: And the district court focused its analysis on the disclaimer that the standard for establishing infringement is preponderance of the evidence. [00:59:49] Speaker 04: But you've got exceptionality for all of the stuff related to the district court. [00:59:53] Speaker 05: Correct, Your Honor. [00:59:54] Speaker 05: We got exceptionality under preponderance of the evidence standard. [00:59:57] Speaker 05: But it would have been the same standard had we litigated infringement in that district court. [01:00:03] Speaker 04: You may have even won in the district court. [01:00:04] Speaker 04: may not have prevailed on invalidity that's correct your honor that's correct why should you get these on something and and in your answer might be well the district court should re litigate or reconsider all the things we want under the promise standard under clear convincing to decide it would still be a prevalent party under that and then also decide whether it was [01:00:29] Speaker 05: I agree that's unworkable, and I don't think that that's consistent with this court's case law. [01:00:33] Speaker 05: For example, in the SFA Newegg decision, the court said, district court need not be correct on an underlying issue of law in order to find the case exceptional. [01:00:47] Speaker 05: And in the Thermal Life case, we need not litigate an issue to final judge. [01:00:50] Speaker 04: You know what we've said over and over again with these attorney's fees cases is we're going to give an enormous amount of discretion to the district court judges. [01:00:56] Speaker 04: Because they're the ones that hear it. [01:00:58] Speaker 04: They're in the trenches. [01:00:59] Speaker 04: They're doing it. [01:01:00] Speaker 04: They're living it. [01:01:02] Speaker 04: I'll be honest. [01:01:03] Speaker 04: I don't know how many exceptional case findings that have been appealed to me that I've ever overturned. [01:01:09] Speaker 04: I'm sure there's some law professor out there that'll soon let us all know on Pat Leo what that number is. [01:01:15] Speaker 04: But I doubt that there's very many. [01:01:17] Speaker 04: And that is because of the super duper discretionary nature of it all. [01:01:21] Speaker 04: But now, it feels like in a lot of these exceptional case findings, what really bothers me is you all come and you complain that the district court should have done some sort of redo of all the things it didn't do in order to conclude that the originally asserted positions should have been deemed exceptional. [01:01:38] Speaker 04: But I feel like this is much the same. [01:01:40] Speaker 04: You're asking us to adopt a rule in which district court judges are now going to have to evaluate conduct behavior and an outcome in a proceeding they had no involvement with. [01:01:51] Speaker 04: and determine whether a fee should be awarded for that in their forum, which would have evaluated the same exact issues under an entirely different burden of proof. [01:02:06] Speaker 05: I think there shouldn't be a bright line rule. [01:02:09] Speaker 05: Oh, that's good. [01:02:10] Speaker 05: I think it should be within the court's discretion to determine whether there is a find, an inconsistency between the arguments made at the PTAB and the arguments made at district court. [01:02:19] Speaker 05: And there may be other instances in which there is conduct that happens at the PTAB that would support a recovery of those fees as reasonable. [01:02:27] Speaker 04: If I do what you're asking for, floodgates will open, as you agreed with me. [01:02:31] Speaker 04: Every case has an IPR. [01:02:33] Speaker 04: Floodgates are going to open. [01:02:35] Speaker 04: District court judges are going to have to somehow dig in and reassess whatever happened at the PTO in the context of their cases. [01:02:43] Speaker 05: District courts have been doing that, Your Honor, in the context of covered business method reviews and inter-parties reviews already. [01:02:49] Speaker 05: There's different district court decisions that we signed in our papers. [01:02:52] Speaker 03: Those are minimal. [01:02:54] Speaker 05: taken that out. [01:02:55] Speaker 05: IPRs are all allegations. [01:02:57] Speaker 03: Almost all. [01:02:59] Speaker 03: I have some that they didn't file IPRs in. [01:03:02] Speaker 03: But in the context of whether or not the judge should be able to consider whether the IPR fees should be included [01:03:12] Speaker 03: would you suggest factors that we could say, well, these are things you might evaluate as a district judge to determine whether IPR fees should be recoverable in this case. [01:03:24] Speaker 03: Was it a district court litigation that had already been initiated and therefore you opted? [01:03:29] Speaker 03: Did the judge stay the case so you could do the IPR in the expectation it was going to substitute for taking up time and effort and judicial resources? [01:03:39] Speaker 03: Did the IPR result have, you know, really contradictory claim construction issues that are so blatantly, you know, just opposite of arguments that were made in the district court that you would say it was a bad thing? [01:03:53] Speaker 03: Was there a determination in the IPR that they lied in getting the patent and therefore it was a bad thing? [01:03:59] Speaker 03: There are so many moving parts here, and yes, it does create work, but to just say, no, you don't get them at all may not be the right answer. [01:04:08] Speaker 05: Once again, Your Honor, you're arguing it better than I can. [01:04:11] Speaker 05: I appreciate that. [01:04:12] Speaker 05: Which is that I think factors would be helpful. [01:04:15] Speaker 04: Just out of curiosity, did you make any of those arguments? [01:04:19] Speaker 05: Yes, Your Honor, we did. [01:04:20] Speaker 04: Really? [01:04:21] Speaker 04: I would love to see on what page in your brief. [01:04:23] Speaker 04: Would you like me to have Mike read back all of the arguments and they go, just make, because I didn't see any of those. [01:04:29] Speaker 05: Our argument for an articulation of factors that the district court should consider? [01:04:32] Speaker 05: No. [01:04:33] Speaker 05: We erase below. [01:04:34] Speaker 05: Or any of the factors that she articulated. [01:04:36] Speaker 05: In our fee motion? [01:04:37] Speaker 04: I think the answer is no, I didn't make those arguments. [01:04:40] Speaker 05: Well, we point, I'm sorry, I'm going to make sure I answered the question correctly. [01:04:43] Speaker 05: We didn't argue for that this court should articulate factors. [01:04:47] Speaker 05: We looked at the PPG case and the Amniel case and we argued to the district court below that there was an inconsistency between the PTAB proceeding and the district court proceeding that the court should consider. [01:04:57] Speaker 04: Did you argue to us on appeal any of what that judge just said? [01:05:02] Speaker 05: I think we did, consistent with what I was just describing. [01:05:08] Speaker 05: Let me get you a... You know what? [01:05:10] Speaker 04: We're way beyond our time. [01:05:12] Speaker 04: Fine, Your Honor. [01:05:12] Speaker 04: I'll pick it up later. [01:05:13] Speaker 04: Thank you, Your Honor. [01:05:14] Speaker 05: I'll be clear. [01:05:14] Speaker 05: You didn't want to do anything. [01:05:16] Speaker 05: Okay. [01:05:16] Speaker 05: If I'm mistaken, I apologize for that, Your Honor. [01:05:19] Speaker 04: Okay. [01:05:19] Speaker 04: Case is over. [01:05:20] Speaker 04: Case is under submission.