[00:00:00] Speaker 02:
Our first case for today is 23-1035, real-time adaptive streaming versus Sling TV.

[00:00:07] Speaker 02:
Mr. Wang, please proceed.

[00:00:11] Speaker 03:
Good morning, Chief Judge Moran.

[00:00:13] Speaker 03:
May it please the court?

[00:00:16] Speaker 03:
Real Time's Section 101 position was not objectively baseless in January 2021.

[00:00:23] Speaker 03:
And there is a significant disconnect from the court's subsequent exceptionality finding and the facts and record, the contemporaneous facts and record that existed in the case.

[00:00:36] Speaker 02:
OK, well, I'm just going to kind of cut to the chase.

[00:00:40] Speaker 02:
So the district court came up with a number of what he referred to as red flags that ought to have alerted your client to the notion that they shouldn't have proceeded.

[00:00:50] Speaker 02:
I have problems with lots of them.

[00:00:52] Speaker 02:
I probably don't need to spend my time talking about that with you.

[00:00:55] Speaker 02:
I'll talk about that with the opposing counsel.

[00:00:57] Speaker 02:
But my problem for you is one of them seems quite legitimate and very strong.

[00:01:02] Speaker 02:
And that's the first one.

[00:01:03] Speaker 02:
He discusses it on appendix page four and appendix page five.

[00:01:07] Speaker 02:
And that's the fact that you shouldn't realize

[00:01:10] Speaker 02:
by the time this day was lifted, that claim one of the 610 patent and claim 15 of the 535 patent are so similar as to be substantially the same.

[00:01:21] Speaker 02:
And he pointed to a claim chart that compared the two.

[00:01:23] Speaker 02:
That claim chart's the same thing that appears at page 28 of the right group.

[00:01:28] Speaker 02:
The claims are identical, but for the tiny little portion that talks about throughput of the communication channel.

[00:01:35] Speaker 02:
So why isn't that standing alone without anything more

[00:01:40] Speaker 02:
a sufficient basis to affirm the district court.

[00:01:44] Speaker 03:
Thank you, Chief Judge Moore.

[00:01:46] Speaker 03:
There's a significant difference in that claim because the core of the claim, highly simplified, describes, of the 610 patent, describes compressing, selecting a compression algorithm based on throughput and a data parameter.

[00:02:05] Speaker 03:
And claim 15

[00:02:07] Speaker 03:
of the 535 pattern doesn't have any concept of throughput.

[00:02:12] Speaker 03:
It just has a data parameter.

[00:02:16] Speaker 03:
And this is a material difference, because the claimed invention of the 610 patent is the one that's described in the abstract of the patent that talks about the problem of bottlenecks, detecting and alleviating bottlenecks.

[00:02:32] Speaker 03:
It's the embodiment described in figure 2 of the 610 patent, and also in columns 11 through 14 of the specification.

[00:02:40] Speaker 00:
When you look at the claim, it's determining a parameter,

[00:02:46] Speaker 00:
algorithms, and then compressing data.

[00:02:53] Speaker 00:
The throughput is of the same nature, isn't it?

[00:02:57] Speaker 00:
These are abstract ideas.

[00:03:00] Speaker 00:
And why shouldn't we defer to the district judge?

[00:03:04] Speaker 00:
After all, that was his discretion.

[00:03:07] Speaker 00:
He had reasonable basis for his decision.

[00:03:12] Speaker 03:
Thank you, Judge Lurie.

[00:03:13] Speaker 03:
If I could give two responses to that question.

[00:03:16] Speaker 03:
It is materially different because the data parameter is something that's determined by looking at the data block, whereas the throughput

[00:03:27] Speaker 03:
parameter is a varying parameter of the system, a detected feature of the system.

[00:03:34] Speaker 03:
And that's what makes it similar to visual memory.

[00:03:37] Speaker 03:
As the central district found, when it likened Realtime's other related patents, where it talked about the system being able to detect an operating parameter and increase the flexibility and performance of the system.

[00:03:51] Speaker 01:
I think the point.

[00:03:53] Speaker 01:
Both judges have tried to ask, and I'll ask it one more time, is how is the additional language that was put in any less indefinite?

[00:04:04] Speaker 01:
How did it make it any less indefinite?

[00:04:07] Speaker 03:
Well, the court here construed the throughput limitation to not just be throughput, but to be a specific narrow construction of the number of pending requests of the communication channel.

[00:04:20] Speaker 03:
But it relates to Section 101, Judge Albright, because you can see from the way that we argued it in our summary judgment opposition and even in our pre-notice letter, it was all about

[00:04:34] Speaker 03:
the difference, right?

[00:04:35] Speaker 03:
All of our arguments, it could not have been made for claim 15 in a way that it was made, it could be made, and was in fact made about the claims of the 610 patent.

[00:04:45] Speaker 03:
That's how you know that I'm not drawing an

[00:04:49] Speaker 03:
a distinction after the fact.

[00:04:50] Speaker 03:
This is how we argued it.

[00:04:53] Speaker 03:
And it relates to 101 because it shows it's a technical problem, a problem of bottlenecks, a specific solution with the order combination of using two or more compression algorithms, at least one asymmetric algorithm, and selecting an algorithm both on a determined data parameter from the data blocks and the pending number of transmission requests.

[00:05:18] Speaker 00:
Counsel, it isn't just the 535 pattern.

[00:05:22] Speaker 00:
There have been so many of these 101 cases going back to Alice.

[00:05:31] Speaker 00:
So just manipulating data electronically has been held in so many cases to be abstract ideas.

[00:05:41] Speaker 03:
Sure, Your Honor.

[00:05:42] Speaker 03:
I'm not here to re-argue the patent eligibility.

[00:05:47] Speaker 03:
We recognize that we lost on that issue.

[00:05:50] Speaker 00:
But that's the basis for his discretionary decision, right?

[00:05:56] Speaker 03:
That's not clear, Your Honor.

[00:05:58] Speaker 03:
I think it was pretty clear the judge has identified these couple of red flags or a few red flags.

[00:06:05] Speaker 03:
And to the extent the court relied on the body of 101 decisions, the court denied Dish's earlier motion to dismiss in the case.

[00:06:16] Speaker 01:
Let me go.

[00:06:17] Speaker 01:
Yeah, I'm not interrupting.

[00:06:20] Speaker 01:
OK.

[00:06:21] Speaker 01:
After the motion of dismissal was denied, and you have the markup hearing that you asked for, down the road, did the competing experts on validity address specifically the issues we're taking up about whether or not the additional language helped prevent it from being invalid under Section 101?

[00:06:46] Speaker 03:
There were competing expert opinions at the summary judgment stage.

[00:06:52] Speaker 03:
And so there was some opinion from their expert that the throughput limitation didn't make a difference.

[00:07:00] Speaker 03:
But another issue we have there, and with what the district court did, was this idea of stripping out the throughput limitation, this thing that comes right in the middle of the claim, not tacked on in a where in clause, but right in the middle of the claim and say, this in itself is an abstract.

[00:07:16] Speaker 03:
idea.

[00:07:17] Speaker 03:
And I think that both the district court and their expert did that.

[00:07:22] Speaker 03:
And we don't think that's consistent with 101 or what's proper for the analysis.

[00:07:36] Speaker 01:
I don't mean to take up everyone's time, but if we were to give you a minute or two to explain why you believe that the court

[00:07:44] Speaker 01:
District Court abused his discretion by finding this an extraordinary case.

[00:07:53] Speaker 01:
I'd like to hear why that, why, I haven't as a district judge, my own thing is I'd like to hear what you think as to why you don't think it was within the field of discretion to say this was an extraordinary case.

[00:08:07] Speaker 03:
Thank you, Judge Albright.

[00:08:09] Speaker 03:
So one is it was inconsistent with the district court's own prior rulings.

[00:08:14] Speaker 03:
And I have to bring this page to your honor's attention.

[00:08:19] Speaker 03:
This is appendix 1237.

[00:08:22] Speaker 03:
And this was the hearing on whether to lift this day and continue litigation on the 610 patent.

[00:08:31] Speaker 03:
And in that hearing, the district court said to Dish that they've done everything they could to put off the day of reckoning as to the 610 patent.

[00:08:41] Speaker 03:
But a few lines down on that same page, on 1237, the court

[00:08:46] Speaker 03:
remembered back on its own to Dish's earlier motion to dismiss, and it said, it told Dish, since I've already denied the motion to dismiss, the chances that I'm going to grant a dispositive motion are poor, to say the least, and you should be prepared to try your case and get it done in the next few months.

[00:09:04] Speaker 03:
And that is all that real time did in reliance on the court's orders.

[00:09:10] Speaker 03:
And so I think that that, Your Honor, Judge Albright, is one fact that wasn't taken into account by the district court judge.

[00:09:20] Speaker 03:
And also, if we look at the red flags that he relied on, Judge Moore did mention the first issue with claim 15.

[00:09:31] Speaker 03:
As I tried to explain, that involves stripping out the throughput limitation and not considering our arguments about the claimed advance, all of the arguments in our opposition brief, and additional red flags.

[00:09:43] Speaker 02:
Just after you asked me, I generally pride myself on reading the grace and the record pretty well.

[00:09:49] Speaker 02:
And I don't remember you ever citing this page 1, 2, 3, 7 to me before.

[00:09:54] Speaker 02:
Did you cite it in your brief clause?

[00:09:56] Speaker 03:
It was cited, Your Honor.

[00:09:58] Speaker 03:
I can get you the pin site.

[00:10:01] Speaker 03:
I know at least it was in a footnote in our reply brief.

[00:10:05] Speaker 03:
And it's also in our statement of the case.

[00:10:09] Speaker 03:
But that page was cited.

[00:10:10] Speaker 03:
And that's why it appears in the Joint Appendix.

[00:10:15] Speaker 03:
sure if i could make one one one last point uh... so that the second red flag that the district court relies on is uh... at the adaptive streaming case i'm not going to go into that much detail but one striking thing i noticed when i was uh... reviewing the briefing in the case is that real-time we cited the visual memory case twelve times

[00:10:41] Speaker 03:
in our opposition to summary judgment and in the fee motion.

[00:10:46] Speaker 03:
And Dish submitted four briefs in those two motions, and the district court issued two orders.

[00:10:52] Speaker 03:
In those six orders, visual memory is mentioned exactly once.

[00:10:57] Speaker 03:
in a footnote, in a meaningless way.

[00:11:00] Speaker 03:
So we are in the position where we, in good faith, distinguish a non-precedential federal circuit case.

[00:11:07] Speaker 03:
We spent a paragraph or more on it.

[00:11:10] Speaker 03:
And from our point of view, neither DISS nor the district court distinguished this presidential case that we relied on at length.

[00:11:18] Speaker 03:
And so how can our Section 101 position be objectively baseless in view of that?

[00:11:28] Speaker 02:
Mr. Scharzer, please proceed.

[00:11:37] Speaker 04:
Good morning, Your Honors.

[00:11:39] Speaker 04:
Adam Scharzer, Officer Richardson on behalf of the Appellees today and may it please the Court.

[00:11:44] Speaker 04:
Your Honors, we see a shift from the blue brief to the gray brief because in the intervening time, this Court had determined with a Rule 36 judgment that Judge Jackson's judgment on

[00:11:56] Speaker 04:
Well, 101 in eligibility at summary judgment was correct and adopted his order.

[00:12:02] Speaker 04:
So we see real-time shift in its grade brief to a different focus of its arguments, that special words don't appear in the district court's order, words like baseless or frivolous.

[00:12:16] Speaker 02:
Well, I mean, I don't find this very persuasive.

[00:12:18] Speaker 02:
So why don't we just go to page seven and eight of the district court opinion.

[00:12:23] Speaker 02:
This is where I'm troubled.

[00:12:25] Speaker 02:
I'm troubled on page seven and eight, because honestly, I don't think there's anything on page seven or eight that makes any darn sense to me in terms of supporting a finding of exceptional case or extraordinary behavior.

[00:12:38] Speaker 02:
So page seven, when the district court says, on February 11, in a letter to real kind counsel, the defendants have reiterated their inability to petition and said, you should dismiss.

[00:12:47] Speaker 02:
OK, well, that is every case.

[00:12:49] Speaker 02:
That's every single case.

[00:12:51] Speaker 02:
I've never seen a patent case.

[00:12:53] Speaker 02:
where the defendants don't send a letter to the plaintiff at some point in time saying, you've got a bad case you should dismiss.

[00:12:58] Speaker 02:
There's nothing else there.

[00:12:59] Speaker 02:
There's no other statement in there by the district court.

[00:13:02] Speaker 02:
I don't see how that constitutes a red flag.

[00:13:05] Speaker 02:
The district court doesn't say that letter laid out with clarity, a particular thing, a patent you shouldn't be aware of.

[00:13:12] Speaker 02:
It is just the fact of a letter.

[00:13:15] Speaker 04:
So in this particular circumstance, we sent the letter, which is in the appendix at 2146.

[00:13:20] Speaker 04:
And in that letter, we laid out

[00:13:26] Speaker 04:
The orders that Your Honor, Chief Judge, mentioned with respect to the orders in the Google case from the Central District of California and the Netflix case in the District of Delaware.

[00:13:37] Speaker 04:
We also laid out this court's decision in the adaptive streaming case.

[00:13:42] Speaker 04:
And of course, adaptive streaming, when read, cites a number of precedential cases of Recognacorp, 2A Media, Voigt Technologies, and others.

[00:13:53] Speaker 04:
uh... which hold that claims uh... much like the claims uh... that real-time pressed uh... all the way through summary judgment into the eve of trial claims regarding compression manipulation of data.

[00:14:06] Speaker 02:
Okay, I review the district court's fact findings for clear error, correct?

[00:14:11] Speaker 04:
uh... in this case you're you're reviewing, right, for clearly erroneous fact findings.

[00:14:18] Speaker 02:
Right.

[00:14:18] Speaker 02:
So, um, but I review the fact findings the district court made on the basis of

[00:14:22] Speaker 02:
how he made them.

[00:14:23] Speaker 02:
She made them, but it's a he in this case.

[00:14:26] Speaker 02:
So I don't look, unlike a jury verdict where I actually have to scour the entire record to see if there's substantial evidence to support sort of a black box verdict, we don't do that with district courts.

[00:14:37] Speaker 02:
We hold them to their actual opinion, and then we look at their fact findings and determine if there's clear error.

[00:14:44] Speaker 02:
And with regard to the letter, this district court just seems to think the fact of a letter is a red flag.

[00:14:51] Speaker 02:
I don't see any analysis in the district court's opinion itself about the qualitative merits of the letter or the strength of the letter or the details in the letter that ought to have put the patentee unnoticed.

[00:15:05] Speaker 02:
Am I missing something in his actual opinion?

[00:15:08] Speaker 04:
In the actual opinion, no, I don't think you're missing anything.

[00:15:12] Speaker 04:
The court does cite the fact that the letter was sent putting real-time on notice of the concerns with respect to Section 101.

[00:15:20] Speaker 04:
And ultimately, the letter also states that we would seek fees on the basis of these prior decisions, Netflix and Google.

[00:15:29] Speaker 02:
That's what the letter says, actually, but not if the district court's opinion says anything about that.

[00:15:33] Speaker 04:
It does not.

[00:15:34] Speaker 02:
You're correct, Your Honor.

[00:15:35] Speaker 02:
Let's move on to the next one, because I can only review opinions and the bases and the opinions.

[00:15:39] Speaker 02:
I don't scour the record for additional bases that might have supported it that the district court didn't rely on.

[00:15:45] Speaker 04:
Well, respectfully, Your Honor, this court does review judgments, not opinions, from stratiflex, I think all the way back to 83.

[00:15:54] Speaker 04:
So when we're looking at this record from the abusive discretion standard, there is plenty in this record that supports the judgment.

[00:16:03] Speaker 02:
Is it your view I look at the record for abusive discretion, or is it your view that I look at the decision from the district court for abusive discretion?

[00:16:10] Speaker 04:
You are looking at the district court's decision.

[00:16:12] Speaker 02:
That's what I understood, too.

[00:16:13] Speaker 04:
Correct.

[00:16:15] Speaker 04:
And we're still looking at the judgment, and we're ensuring that the judgment is supported by the opinion itself.

[00:16:20] Speaker 04:
And the opinion itself does support the judgment here, because we have the opinion that focuses on the Netflix and Google decisions.

[00:16:27] Speaker 02:
Well, let's go back to what I want to do, which is on page 7.

[00:16:31] Speaker 02:
Can we go to the next red flag that he articulated on page 7?

[00:16:36] Speaker 02:
This has to do with the PTO examiner conducting an ex parte

[00:16:40] Speaker 02:
re-exam on the 610 patent, why in the world would a re-examination that is directed to obviousness have any strong implications for whether a patent is ineligible, such that they should not have continued to pursue their patent in that case?

[00:16:58] Speaker 04:
So in this particular case, there were a number of arguments made with respect to Alice step two.

[00:17:06] Speaker 04:
And at least preliminarily, the examiner had twice determined that the 610 patent was not novel.

[00:17:14] Speaker 04:
And so there was no unconventional solution necessarily with the claims.

[00:17:21] Speaker 04:
They were going to support the claims at step two when we know that when you're doing a step one analysis under Alice, these claims clearly cover abstract concepts in and of themselves.

[00:17:35] Speaker 04:
So were they going to be able to survive step two, this court was cognizant of the full and complete Alice analysis.

[00:17:43] Speaker 04:
And I believe that's why the court cited here the examiner's findings.

[00:17:49] Speaker 02:
Well, were these different claims, the claims that were rendered invalid under the re-exam, were they different claims than the claims that were asserted in addition to this case?

[00:18:00] Speaker 04:
They were the same claims.

[00:18:01] Speaker 02:
The same claims?

[00:18:02] Speaker 04:
Yes.

[00:18:03] Speaker 02:
And they were held ultimately to be invalid under the re-exam, is that right?

[00:18:10] Speaker 04:
Yes, Your Honor, that's correct.

[00:18:12] Speaker 02:
So I'm just a tiny bit confused.

[00:18:15] Speaker 02:
I thought the district court here held them ineligible.

[00:18:18] Speaker 02:
The district court did hold the claims ineligible correct.

[00:18:28] Speaker 04:
Well, so in the order of operations here, the district court first issued the 101 finding summary judgment that the patent claims were ineligible.

[00:18:43] Speaker 04:
And then as the appeals from that summary judgment determination proceeded, there was an ex parte re-examination that continued on at the patent office.

[00:18:55] Speaker 04:
And ultimately, the examiners

[00:18:58] Speaker 04:
Determination was appealed up to the board and the board affirmed the examiner's determination during the pendency of the briefing in these appeals that the 610 patent was invalid for prior art reasons.

[00:19:13] Speaker 04:
103 was the primary basis for invalidity of the 610 patent claims.

[00:19:20] Speaker 04:
at the Patent Office.

[00:19:21] Speaker 02:
Okay, so the PTO re-exam continued even after the District Court rendered these claims ineligible?

[00:19:27] Speaker 04:
That's correct, Chief Judge.

[00:19:28] Speaker 02:
Is that normal?

[00:19:29] Speaker 02:
I mean, does the PTO not state once proceedings have been killed somewhere else or once a patent's been killed, they don't state proceedings that keep going?

[00:19:37] Speaker 04:
They don't.

[00:19:37] Speaker 04:
They typically keep going independently.

[00:19:40] Speaker 04:
We are under obligations to inform the PTO of things that go on at the district courts.

[00:19:46] Speaker 04:
And so we do that.

[00:19:48] Speaker 04:
But the Patent Office is not required to stop its reexamination once it picks it up.

[00:19:55] Speaker 00:
Is that because theoretically the district court decision could be reversed?

[00:19:59] Speaker 04:
Absolutely, Judge Laurie.

[00:20:00] Speaker 04:
This court could have reversed Judge Jackson's summary judgment decision on 101, but did not in this case.

[00:20:09] Speaker 04:
Chief Judge, I want to make sure I've answered all of your questions with respect to pages seven and eight.

[00:20:15] Speaker 02:
OK, so what about the expert?

[00:20:16] Speaker 02:
Why should, I mean, every single case, you have an expert, they have an expert.

[00:20:20] Speaker 02:
There's always experts on both sides.

[00:20:21] Speaker 02:
Right.

[00:20:22] Speaker 02:
Why should the fact that an expert testified, which is true in every single case,

[00:20:27] Speaker 02:
Necessarily, my concern with this is, I'll tell you what, I think they should have known and I think they should have stopped.

[00:20:35] Speaker 02:
So there you go, right there.

[00:20:36] Speaker 02:
I think the litigation shouldn't have stopped.

[00:20:38] Speaker 02:
I think they were on notice.

[00:20:40] Speaker 02:
But my problem is I have a district court opinion that points out a lot of stuff that is present in every single case and not specific to this case.

[00:20:47] Speaker 02:
And I don't think in every single case these kinds of things that this district court pointed to, this district court pointed to, would justify attorney's heat.

[00:20:56] Speaker 02:
In fact, there's always an expert on both sides.

[00:20:59] Speaker 02:
And so I don't think the fact that there was an expert on both sides carries any water.

[00:21:03] Speaker 02:
So that's my concern.

[00:21:05] Speaker 02:
My concern is I think they not only have bad claims that are ineligible, I think they have bad claims they should have known were ineligible, at least as of the time the 535.

[00:21:14] Speaker 02:
But then I have this district court opinion that makes that one of these bases.

[00:21:19] Speaker 02:
But he has all these other bases that are present in every single case that I don't think would support an exceptional case finding.

[00:21:25] Speaker 02:
And the worst part for me is that on page eight, he expressly and unequivocally says, it's taking all of these things together that result in this exceptional case finding.

[00:21:34] Speaker 02:
He says it's a fatality of the circumstances.

[00:21:37] Speaker 02:
And he says, my point is, by carrying on despite these numerous danger signals, I find this case exceptional.

[00:21:43] Speaker 02:
So my problem is, one of them I agree 100% on.

[00:21:47] Speaker 02:
And I think it alone would have justified what he did here.

[00:21:50] Speaker 02:
But that isn't the fact finding this district court made.

[00:21:53] Speaker 02:
his fact-finding was the collection of all of them, some of which I don't think are legitimate, support the conclusion.

[00:22:00] Speaker 02:
So I don't know what to do.

[00:22:01] Speaker 02:
Mr. Sharzad, you've been before me before.

[00:22:03] Speaker 02:
You know I just put it all out there.

[00:22:04] Speaker 02:
This is your chance.

[00:22:06] Speaker 02:
Tell me what to do about that, and then he'll have the opportunity to tell me what to do about that.

[00:22:09] Speaker 02:
That's exactly where I stand.

[00:22:10] Speaker 04:
Thank you, Your Honor.

[00:22:12] Speaker 04:
I appreciate the candor.

[00:22:15] Speaker 04:
In this particular circumstance, this judge took the idea of the totality of the circumstances test, which is what we take from octane now in 285, and ran with it and looked at the totality of the circumstances.

[00:22:29] Speaker 04:
I would stand here today.

[00:22:31] Speaker 01:
What do we do if

[00:22:35] Speaker 01:
So the question is, if there's one of the six, and I may not be as far as the other judges in feeling one way or the other about what the plaintiff's done, but if we believe that one of the six or more

[00:22:54] Speaker 01:
that was a valid reason, but many of them were not valid.

[00:22:56] Speaker 01:
And I share, if I had a dollar for every time I had a Daubert on an expert, I would be wealthy.

[00:23:05] Speaker 01:
And in this case, the court denied the Daubert.

[00:23:10] Speaker 01:
I think, as my understanding, to their validity, invalidity expert

[00:23:16] Speaker 01:
They respond, you doubt that expert and the court denies the doubt.

[00:23:22] Speaker 01:
So, and then, but it's one of the factors.

[00:23:25] Speaker 01:
Dr. Bovich is one of the factors that he says is a reason this was extraordinary.

[00:23:31] Speaker 01:
And so what do we do when the district judges said, I'm, I find this case extraordinary.

[00:23:38] Speaker 01:
for these six reasons, and it seems pretty clear to me it's the totality.

[00:23:43] Speaker 01:
You're right, it's the totality of all six, but if on many of them, at least I don't think that they would rise to the level of meriting an extraordinary case.

[00:23:54] Speaker 01:
What do we do now?

[00:23:56] Speaker 04:
Well here, Your Honor, what we do is

[00:24:00] Speaker 04:
We turn to the extreme discretion that is owed to district court in these types of fee determinations.

[00:24:07] Speaker 04:
As the Supreme Court has told us.

[00:24:09] Speaker 02:
No, no.

[00:24:09] Speaker 02:
We're reviewing for clear error fact findings.

[00:24:12] Speaker 02:
You made a fact finding about Dr. Lovick being the red flag.

[00:24:18] Speaker 02:
I don't agree with that.

[00:24:20] Speaker 02:
So what do we do when that's the case?

[00:24:23] Speaker 02:
When he has made fact findings that I think are wrong, and those fact findings contributed

[00:24:28] Speaker 02:
to his conclusion, which is also a question of fact about whether this is an exceptional case or not.

[00:24:33] Speaker 04:
Right.

[00:24:33] Speaker 04:
Standing alone, I think that the expert's opinion standing alone is not enough to support a 285 fee award.

[00:24:43] Speaker 04:
You're correct, Chief Judge.

[00:24:44] Speaker 04:
In every case, there are competing expert opinions.

[00:24:48] Speaker 04:
They go both ways.

[00:24:50] Speaker 04:
And so has the district judge here said this factor standing alone is sufficient to sustain a fees award?

[00:24:57] Speaker 04:
I think that would probably be problematic.

[00:24:59] Speaker 04:
But that's not this record, and that's not this opinion.

[00:25:03] Speaker 04:
This opinion and the judgment that this is an exceptional case can be sustained on the basis of the Netflix and Google decisions coming earlier, and this court's adaptive streaming decision coming earlier.

[00:25:16] Speaker 04:
And we have seen this court affirm cases

[00:25:20] Speaker 04:
in similar postures.

[00:25:22] Speaker 04:
So the inventor Holdings case is one of those cases where this court affirmed the decision to award fees because the claims that were at issue were very close to the claims that were held patent ineligible under Alice.

[00:25:39] Speaker 04:
And there were a number of other circumstances, for example,

[00:25:43] Speaker 04:
District court had not endorsed the patent eligibility of the claims at the Rule 12 stage.

[00:25:49] Speaker 02:
Just out of curiosity, he gave you fees going back to what point?

[00:25:53] Speaker 02:
Because he didn't do double period.

[00:25:55] Speaker 02:
He said, am I remembering right?

[00:25:57] Speaker 02:
He didn't give you fees from pre-stay.

[00:25:59] Speaker 02:
It was only post-stay?

[00:26:00] Speaker 04:
You're correct, Chief Judge.

[00:26:01] Speaker 02:
So what is the timing of the fees?

[00:26:03] Speaker 04:
The timing of the fees are from the lifting of the stay in January.

[00:26:07] Speaker 04:
Let me make sure I get the date right.

[00:26:09] Speaker 04:
I believe it was 2021.

[00:26:12] Speaker 04:
But it's essentially January through July, I believe it was, of when this case was proceeding.

[00:26:22] Speaker 02:
When is it you think they should have known they should dismiss and not proceed?

[00:26:29] Speaker 04:
It would have been immediately after the Google and Netflix decisions.

[00:26:34] Speaker 04:
I don't recall which one came earlier, but it would have been after those district court decisions holding the 5-3-5 patent, claim 15 ineligible.

[00:26:43] Speaker 02:
Do you remember when those occurred?

[00:26:46] Speaker 04:
It was during the stay in this case.

[00:26:49] Speaker 04:
I apologize.

[00:26:50] Speaker 04:
I see that I'm out of time.

[00:26:51] Speaker 04:
May I complete my answer?

[00:26:52] Speaker 04:
Yes.

[00:26:53] Speaker 04:
Yeah, it was during the stay of this case.

[00:26:55] Speaker 02:
So during this day, you believe that at that point, they should have known that coming out of this day, they should dismiss?

[00:27:03] Speaker 04:
Correct.

[00:27:04] Speaker 04:
They should.

[00:27:05] Speaker 02:
OK.

[00:27:05] Speaker 02:
So then why, just out of curiosity, I mean, if you have a district court that denied the 1226, but of course, that was before the Google and Netflix cases, right?

[00:27:14] Speaker 02:
Then you have to do Google and Netflix cases.

[00:27:16] Speaker 02:
Then you have this hearing, the status conference, on January 15, 2021, which is what he referred to on page 1237,

[00:27:25] Speaker 02:
which honestly I missed.

[00:27:27] Speaker 02:
My clerk just said to me, excited and putting up one of the great briefs, but I had missed it.

[00:27:31] Speaker 02:
But so come hang out after this day in the status conference, he is signaling to both parties.

[00:27:39] Speaker 02:
Not only did he deny the 12 B six, but he is also likely to deny any dispositive motions.

[00:27:47] Speaker 02:
I don't know at that point, if I were young, why would I immediately, but oh, you know what?

[00:27:50] Speaker 02:
I'm going to dismiss.

[00:27:52] Speaker 02:
So,

[00:27:53] Speaker 02:
The district court is telling them, on page 1237, that the chances that he's going to grant your dispositive motion on 101 is, quote, poor.

[00:28:03] Speaker 02:
You have a poor chance.

[00:28:04] Speaker 02:
Now, of course, it turns out that's not true.

[00:28:07] Speaker 02:
But so as of that date, why do you think they should dismiss when they've got a district court judge telling them, I denied your 12B6 on 101, and the chances that I'm going to grant a summary judgment motion on the same thing are very poor?

[00:28:21] Speaker 02:
I don't know.

[00:28:22] Speaker 02:
Mr. Sharzar, if you're in your shoes at that point, you're walking out feeling pretty good, aren't you, about continuing that litigation?

[00:28:28] Speaker 02:
Why would you dismiss when the district court judge you're in front of just told you that?

[00:28:34] Speaker 04:
Well, this district court judge, Judge Jackson, did not have the benefit of having read the Google decision or the Netflix decision or this court's decision in adaptive streaming at that point in time.

[00:28:46] Speaker 04:
And so this district judge, I think, was speaking off the cuff at the moment.

[00:28:51] Speaker 04:
without a full record of what had occurred earlier and before.

[00:28:58] Speaker 04:
We'd put real-time on notice of that record, but they simply chose not to dismiss.

[00:29:03] Speaker 04:
And this court, Judge Jackson, in a similar vein, had put

[00:29:06] Speaker 04:
real-time on notice of the fees that could be accrued in this case.

[00:29:14] Speaker 04:
That was at the scheduling conference when the district judge decided to also hold the 101 hearing on the motions to dismiss.

[00:29:21] Speaker 04:
This is in your appendix.

[00:29:22] Speaker 02:
When did you make the judge aware of the Google and the Netflix cases?

[00:29:28] Speaker 04:
We would have first made the judge aware of those cases in

[00:29:35] Speaker 04:
It would have been a notice.

[00:29:37] Speaker 04:
I believe it would have been a notice of intent to file a summary judgment motion on 101.

[00:29:44] Speaker 04:
That probably would have been the first briefing before the court.

[00:29:46] Speaker 02:
You wouldn't have made him aware of those cases during the stay when they came out.

[00:29:49] Speaker 02:
You wouldn't have sort of, is there equivalent of what you have here when you file a notice of new cases, notice of new evidence, notice of new information?

[00:29:59] Speaker 02:
You wouldn't have made him aware of them during that time.

[00:30:01] Speaker 04:
We did not.

[00:30:04] Speaker 04:
I guess parties file notices all the time in the district courts for various reasons, but there wasn't necessarily a procedural mechanism to do so.

[00:30:14] Speaker 04:
I hesitate to call it ex parte contact.

[00:30:17] Speaker 04:
I mean, it's sort of hypothetical.

[00:30:19] Speaker 04:
But it's certainly not something that we would typically do.

[00:30:24] Speaker 02:
So at the time of this January 2021 status conference, when he made this comment about not likely granting summer judgment, he had not been made aware by you all of the Netflix or Google decisions yet as of that time.

[00:30:41] Speaker 02:
So when I scoured this record,

[00:30:43] Speaker 02:
I'm going to find out that you did not make him aware prior to that date of those decisions.

[00:30:48] Speaker 02:
Is that correct?

[00:30:50] Speaker 04:
That's correct.

[00:30:51] Speaker 04:
We did not tell the judge that there was a Google decision adverse to real time and that there was a Netflix decision adverse to real time.

[00:31:03] Speaker 02:
And I'm asking you because you're saying when he made that statement it was off the cuff and he didn't have

[00:31:09] Speaker 02:
benefit of Google and Netflix and I just want to make sure that turns out to be true in this record.

[00:31:15] Speaker 04:
Yes.

[00:31:16] Speaker 02:
If you're uncertain, you can say you don't know.

[00:31:19] Speaker 02:
It's only normal you lose credit.

[00:31:22] Speaker 04:
Well, I'm certain about what we filed, but I'm not certain about what Realtime said.

[00:31:26] Speaker 04:
Realtime did drop its 5-3-5 patent, I believe, concurrently with requesting that the district court lift the stay.

[00:31:35] Speaker 04:
But for obvious reasons, Realtime did not highlight for the judge that there was the Google and Netflix decision or the adaptive streaming decisions.

[00:31:43] Speaker 01:
May I ask one more?

[00:31:44] Speaker ?:
Yes.

[00:31:44] Speaker 01:
So, again, going back to the fact that there are six issues here.

[00:31:52] Speaker 01:
When we leave, which of the six was the off-ramp?

[00:32:01] Speaker 01:
What exactly happened of the six that at that point the plaintiff should have known to drop the case and otherwise you would be entitled to this being an extraordinary case?

[00:32:17] Speaker 01:
We have the judge

[00:32:20] Speaker 01:
I occasionally am told, say, off the cuff things.

[00:32:22] Speaker 01:
Maybe I'll be more careful in the future.

[00:32:24] Speaker 01:
But we have this evidence in the record.

[00:32:31] Speaker 01:
Give us the bright exit ramp of the six that is the time when the plaintiff should have known to drop the case, or they would be subject to the possibility of extraordinary fees.

[00:32:42] Speaker 04:
I'll give you three red flags, Judge Albright.

[00:32:46] Speaker 04:
The Google decision and Netflix decision, that's one red flag.

[00:32:51] Speaker 01:
So you ask, as of the time, those are just published.

[00:32:54] Speaker 01:
They should have said, OK, and you may be, but we're out.

[00:32:58] Speaker 01:
I mean, we have these opinions.

[00:32:59] Speaker 01:
We look at the, I think, is it the 535?

[00:33:02] Speaker 01:
We should quit now.

[00:33:05] Speaker 01:
They should have known from those opinions to quit at that point.

[00:33:09] Speaker 04:
Yes, Your Honor, that's a fair characterization.

[00:33:12] Speaker 04:
Taurus IP requires patentees to continually assess the viability of the claims and the ongoing claims in their case.

[00:33:21] Speaker 04:
And Taurus IP related to the infringement claims in that case, but Taurus IP was specifically extended by inventor holdings, this court's decision, inventor's holdings, where this court cited Taurus IP stating that in the patent eligibility context under Section 101,

[00:33:38] Speaker 04:
you must continually assess the viability of your claims.

[00:33:43] Speaker 04:
So at that point in time, those earliest Netflix and Google decisions would be the earliest point in time.

[00:33:48] Speaker 04:
Then there would be the adaptive streaming decision from this case, I believe, from this court.

[00:33:53] Speaker 02:
I believe that was circa 2019, which was the... I hate to belabor this argument because it's gone on too long already, but why do you think... I was not very persuaded by the adaptive streaming.

[00:34:04] Speaker 02:
It's a non-precedential decision

[00:34:06] Speaker 02:
not even on data compression technology.

[00:34:08] Speaker 02:
What is it about that decision?

[00:34:10] Speaker 02:
I didn't go back and read your arguments to the district court, but I didn't see anything particularly persuasive in your arguments to us about why that decision should have somehow put real-time on notice that it's unrelated patents directed to a different kind of technology ought to be dismissed.

[00:34:31] Speaker 04:
Claims at issue in adaptive streaming relate to data compression.

[00:34:36] Speaker 04:
This court refers to it, in its opinion, as format conversion, where you're taking data that's in one format and converting it to another format, which ultimately results in a format that requires less bits.

[00:34:46] Speaker 04:
So at the end of the day, it still is data compression.

[00:34:50] Speaker 02:
Is it your view that all data compression?

[00:34:52] Speaker 02:
What about DDR?

[00:34:54] Speaker 02:
Is it your view that all data compression patents are ineligible and people should know not to assert them?

[00:34:59] Speaker 04:
No, no, that's not my view.

[00:35:01] Speaker 02:
Well, you didn't do some sort of side by side analysis of adaptive streaming in the claims there.

[00:35:06] Speaker 02:
and the claim in this case to show that they're virtually identical.

[00:35:09] Speaker 02:
And therefore, people should have not pursued it, did you?

[00:35:13] Speaker 04:
Well, that would be real time as a burden under Taurus IP.

[00:35:16] Speaker 04:
As soon as we put them on notice of adaptive streaming, they need to take a look at adaptive streaming and understand the implications for the claims that they continue to assert.

[00:35:24] Speaker 04:
Adaptive streaming also cites other cases as well.

[00:35:27] Speaker 04:
The Voight technology case would just.

[00:35:31] Speaker 02:
All right.

[00:35:31] Speaker 02:
Well, your time is definitely up.

[00:35:33] Speaker 02:
Let's let Mr. Wang have some rebuttal time.

[00:35:36] Speaker 02:
We went way over with Mr. Chartard.

[00:35:38] Speaker 02:
If you need a little extra, Mr. Wayne can have it.

[00:35:46] Speaker 03:
Thank you, Your Honor.

[00:35:49] Speaker 03:
Various points in no particular order.

[00:35:51] Speaker 03:
Adaptive streaming is very different.

[00:35:54] Speaker 03:
If you look at the specification in that case, it talks about prior art methods of yelling and banging drums as a fundamental communication practice.

[00:36:04] Speaker 03:
So it had a different claim to advance.

[00:36:06] Speaker 03:
It was very distinguishable.

[00:36:10] Speaker 03:
When Dish sent us that letter, they didn't do anything during the whole time the case was stayed, about two years, and they didn't file any motion or raise the patent eligibility issue before the court until the time of summary judgment.

[00:36:27] Speaker 03:
And so that's part of the facts and circumstances of this case that undermines their hindsight assertion that we were so doomed we needed to grant a motion to dismiss against ourselves that was not filed or pending.

[00:36:46] Speaker 03:
It is true that sometimes a Panty needs to assess the viability of its case, but not when there's red flags in other or unrelated cases.

[00:36:58] Speaker 03:
We didn't have a chance, if we disagreed with adaptive streaming or how they're applying it, we can't appeal that case.

[00:37:05] Speaker 03:
Likewise, for infringement, if there is a claim construction that weakens your infringement case, you have the ability to stipulate to non-infringement and appeal the claim construction.

[00:37:15] Speaker 02:
Hey, but after Google and Netflix, what about that?

[00:37:17] Speaker 02:
I mean, after Google and Netflix, where virtually identical claims in your 535 patent were found to be ineligible, why wasn't that enough to put you on notice that you ought to dismiss as to the 610?

[00:37:33] Speaker 03:
Your Honor, if you look at the Google order and if you look at it in full, any fair characterization, any fair reading of that order is not something that would cause a reasonable litigant to feel like they were doomed.

[00:37:49] Speaker 03:
It denied the motion for dismiss, for

[00:37:52] Speaker 03:
three related patents and all claims of the 046 and the 477 patents.

[00:37:58] Speaker 03:
We relied on the Google order at length in our summary judgment opposition and in our pre-notice letter.

[00:38:07] Speaker 02:
I get it.

[00:38:07] Speaker 02:
I appreciate the argument you've made that related patents, each claim is directed to a different invention.

[00:38:15] Speaker 02:
But the problem for me is that claim one of the 610 and claim 15 of the 535 are virtually identical.

[00:38:20] Speaker 02:
uh... but but they're not your honor with respect to the truth but the truth of the nation input to selecting the algorithm that's just another piece of data that's all it is you're instead of you're just manipulating data and you've just added one additional piece of data

[00:38:35] Speaker 03:
Judge Moore, again, I would relate it to the claimed advance.

[00:38:40] Speaker 03:
It was a key part of our step one analysis.

[00:38:43] Speaker 03:
It was a factual dispute we raised for step two.

[00:38:47] Speaker 03:
I'm not making this up after the fact.

[00:38:49] Speaker 03:
You could look at our briefing to see our good faith argument there.

[00:38:52] Speaker 03:
I'm not here to convince the court that we were right.

[00:38:55] Speaker 03:
We were wrong.

[00:38:56] Speaker 03:
But we made very credible arguments that were supported by the facts, that were supported by the court's contemporaneous rulings.

[00:39:05] Speaker 03:
We relied on the court's claim constructions as we said we were before.

[00:39:09] Speaker 03:
We lost, but that doesn't make this case exceptional.

[00:39:13] Speaker 03:
The court in the end found Dish's arguments and cases more persuasive than ours.

[00:39:20] Speaker 03:
But that just makes it like any other case where we lost.

[00:39:25] Speaker 03:
And there's no bad faith.

[00:39:27] Speaker 03:
I don't think either Dish or the district court have ever identified a single argument that we made that was frivolous, right?

[00:39:34] Speaker 03:
That we're presenting an invalid argument or we misrepresent any facts.

[00:39:38] Speaker 03:
We did not do that.

[00:39:40] Speaker 03:
uh... and just more you asked several questions about the six ten re-exam just a few points there on it was not even a re-exam decision it was uh... a non-final

[00:39:53] Speaker 03:
office action rejection that had occurred before the district court's fee order.

[00:39:59] Speaker 03:
And the sixth patent was under a different claim construction standard and a completely different interpretation, claim construction of the throughput term.

[00:40:09] Speaker 03:
That was way broader than what the district court had here.

[00:40:13] Speaker 03:
I think I can't do it better than we did in the briefing.

[00:40:16] Speaker 03:
We went through each of the red flags and we showed how

[00:40:20] Speaker 03:
They were either not legally relevant to the patent eligibility determination for the 610 patent or were a clear error in the way that the district court relied on them.

[00:40:34] Speaker 03:
And Judge Albright, you were right.

[00:40:37] Speaker 03:
The court just says that

[00:40:39] Speaker 03:
Here, in my totality of the circumstances of these five or six reasons, I conclude that this is an exceptional case.

[00:40:46] Speaker 03:
So I think there would be quite a bit of mischief if there were an affirmance that said that you can just send opposing counsel a five-page letter, and in two paragraphs on the very last page, you can assert something, or you can hire an expert, and that puts them on notice.

[00:41:03] Speaker 01:
And maybe I'm just not following either, but it seems like the

[00:41:08] Speaker 01:
The decision with respect to the re-examination was out of order in terms of the conduct that the court found would support it being an extraordinary case.

[00:41:18] Speaker 01:
It occurred after.

[00:41:20] Speaker 01:
I mean, he brings it in to support it post.

[00:41:24] Speaker 01:
It seems like it was post the conduct that would have gone to support it being an extraordinary case.

[00:41:32] Speaker 03:
Yes, it was post.

[00:41:33] Speaker 03:
And that's another reason we have an abuse of discretion here.

[00:41:36] Speaker 03:
The court, multiple times in its orders, said it was not considering this re-exam.

[00:41:41] Speaker 03:
On page 1237 that I mentioned before, the court said, I don't care about the re-exam.

[00:41:46] Speaker 03:
I don't know who put the PTO up to this.

[00:41:49] Speaker 03:
I don't care.

[00:41:50] Speaker 03:
And then to turn around after the fact and to mention this as a basis for a $4 million fee award, we think is just beyond the pale.

[00:42:01] Speaker 02:
Okay.

[00:42:02] Speaker 02:
Thank you, Mr. Wang.

[00:42:03] Speaker 02:
I think the Council's case is taking another submission.