[00:00:00] Speaker 05: We have one case this morning, which is number 22, 2059, Sherwood Williams Company versus PPG. [00:00:08] Speaker 05: Mr. Costantes. [00:00:14] Speaker 03: Thank you, Your Honor. [00:00:16] Speaker 03: Good morning, and may it please the Court. [00:00:19] Speaker 03: I want to start this morning with our arguments for judgment as a matter of law, and then turn to our alternative arguments for a new trial. [00:00:29] Speaker 03: Our case for judgment as a matter of law is straightforward. [00:00:32] Speaker 03: No reasonable jury could have found Sherwin's asserted claims invalid. [00:00:38] Speaker 03: PPG's invalidity case violated this court's cardinal rule that expert testimony inconsistent with the record must be disregarded. [00:00:47] Speaker 03: That's reflected in cases from this court such as Homeland Housewares, Motorola, and Cripples, among others that are cited in our briefs. [00:00:57] Speaker 03: For anticipation, PPG's expert witnesses read things into the Perez patent that are simply not there, including, most importantly, organic solution polymerization. [00:01:11] Speaker 00: And you had the ability to cross-examine those witnesses. [00:01:14] Speaker 03: We did, Your Honor. [00:01:15] Speaker 03: That's absolutely the case. [00:01:17] Speaker 03: For single reference obviousness, its witnesses presented the epitome of unreasoned conclusions as reflected at page 38 of our blue brief. [00:01:28] Speaker 03: And PPG's Perez plus Ranca obviousness combination theory blinkered the reality that Perez on its face says that the polymeric surfactant of, and I quote, the present invention is polymerized in water. [00:01:44] Speaker 02: If we uphold the anticipation judgment, we don't have to reach obviousness. [00:01:48] Speaker 02: Is that right? [00:01:50] Speaker 03: I think that if you uphold the anticipation judgment, then the judgment is upheld. [00:01:55] Speaker 03: But I don't think this court can uphold the obviousness judgment for exactly the reason that I'm talking about right now. [00:02:03] Speaker 03: Take a look at Peretz. [00:02:05] Speaker 03: At column two, lines 16 and 17, it describes the polymeric surfactant of the present invention as polymerized in water. [00:02:15] Speaker 03: It then describes Rankin. [00:02:18] Speaker 03: the prior art that's cited in the background section as an acrylic polymer made by organic solution polymerization. [00:02:26] Speaker 02: We don't have any clean construction or anything that required as a matter of law limiting Perez to just the water-based polymerization. [00:02:36] Speaker 03: I'm sorry, I heard limiting, but I didn't hear what the word was after that. [00:02:40] Speaker 02: To the water-based polymerization. [00:02:43] Speaker 02: It's not, there's no claim construction that is the expert, you don't argue the expert gave testimony inconsistent with the binding claim construction about what is disclosed in Perez. [00:02:57] Speaker 03: There was no claim construction of the prior art, but the prior art very clearly says [00:03:03] Speaker 03: that Perez's present invention. [00:03:05] Speaker 03: This is simple. [00:03:07] Speaker 02: It was a fact dispute, and both sides presented their evidence as to what Perez disclosed, right? [00:03:11] Speaker 03: But the expert contradicted what is on the face on Perez. [00:03:16] Speaker 00: The problem, it seems to me, there are two problems, and they're related but different, is that Perez does call out Ranga in the background. [00:03:26] Speaker 00: And we've got some case law supporting this. [00:03:28] Speaker 00: And there's also some disclosure in Perez. [00:03:32] Speaker 00: I guess it's at column five, line 45, et cetera, where it does disclose that the present invention doesn't preclude small amounts of organic solvents from being included for purposes known in the art if desired. [00:03:49] Speaker 00: So you've got two disclosures in the specification that reference this organic solution, go beyond the water. [00:03:57] Speaker 00: So we had expert testimony as to the import of those disclosures, and it seems a little hard to get around to jury conclusion. [00:04:07] Speaker 03: No, I don't think it's hard at all, because that column five disclosure, Your Honor, is talking about small amounts of organic material that's added after polymerization. [00:04:17] Speaker 03: It's not the organic solution polymerization itself. [00:04:21] Speaker 03: It's adding a little bit after polymerization. [00:04:24] Speaker 03: But keep in mind what the whole import of Perez is. [00:04:28] Speaker 03: It's to avoid VOCs, volatile organic content. [00:04:34] Speaker 00: Yeah, but isn't there sufficient basis to conclude that Perez is teaching that organic solvents, small amounts, are OK? [00:04:43] Speaker 00: It doesn't say Perez doesn't preclude the using of organic solvents. [00:04:47] Speaker 00: And there are these references in the spec and in the background section to organic solvents. [00:04:53] Speaker 00: So the jury listened to the experts, and they drew that conclusion. [00:04:59] Speaker 03: Judge Proch, let me distinguish here. [00:05:01] Speaker 03: Organic solvents added after polymerization is a fundamentally different thing than polymerization in organic solutions. [00:05:11] Speaker 03: That's really important here. [00:05:13] Speaker 03: That's the difference between Perez and Rankin when you're polymerizing in organic solutions. [00:05:20] Speaker 00: And did you put that argument before the jury to be an expert or be a cross-examination? [00:05:24] Speaker 03: Those arguments were absolutely made within [00:05:28] Speaker 03: within the jury trial, cross-examined the experts. [00:05:32] Speaker 03: But that's why we're here on JMOL. [00:05:34] Speaker 03: That's exactly what JMOL is here for, as this court has held repeatedly, again, homeland housewares, which Judge Dyke wrote for the court in which you joined. [00:05:46] Speaker 03: The court does not allow experts to contradict the record, particularly when the record here per res is so clear in this regard. [00:05:55] Speaker 03: First of all, look at Perez, not just the disclosure of the organic solution polymerization as not the invention, but also look at the fact that all 18 examples disclose only water polymerization. [00:06:13] Speaker 03: Look at the fact that all of the claims disclose only that. [00:06:17] Speaker 03: Then, on top of that, even if you don't accept that, the strict identity [00:06:23] Speaker 03: requirement of anticipation law requires that the elements also be arranged as in the claim. [00:06:35] Speaker 03: Just to complete the thought, I'm sorry, Your Honor. [00:06:37] Speaker 03: Just to complete the thought, there's nothing in Perez that shows organic solution polymerization arranged in the way that the Sherwin claims teach and claim organic solution polymerization. [00:06:51] Speaker 05: Can we turn to the judicial estoppel issue relating to Perez? [00:06:58] Speaker 05: Sure. [00:06:58] Speaker 05: Just a couple of preliminary questions. [00:07:01] Speaker 05: If there is a judicial estoppel, you agree that it's binding, that you can't introduce testimony to refute it, right? [00:07:09] Speaker 03: No, I don't agree with that at all. [00:07:11] Speaker 05: Our whole point is that we can... What case says that you can refute a judicial estoppel by testimony? [00:07:18] Speaker 03: Well, estoppel... [00:07:21] Speaker 03: Well, first, let me back up here. [00:07:23] Speaker 03: OK, so I don't know that I have a particular case, but we have a case cited in our brief that says that with regard to a judicial admission, [00:07:36] Speaker 05: No, no, we're not talking, we're talking about judicial estoppel and our decision in trustees in bankruptcy of North America says specifically that you're precluded from arguing the contrary if it's a judicial estoppel and you're not able to cite a contrary case. [00:07:53] Speaker 05: I take it. [00:07:55] Speaker 05: well i think if we are usually a stop that we are stopped but our argument is that we are not so you agree that there's no you can't refute it if it isn't a stop all that we are stopped our point is that we are not a stop because you know we're getting home we'll get to our sense of this the second question is the board uh... was influenced to reach a decision [00:08:19] Speaker 05: And there's judicial estoppel, the fact that the board decision was vacated later doesn't make any difference, right? [00:08:29] Speaker 03: Well, I think it does make a difference in a whole lot of ways here, because first of all... It doesn't weigh back the judicial estoppel, right? [00:08:40] Speaker 03: well i didn't see that you are i didn't see it either and i don't know that we've argued that but the i don't know that we've argued that in so many terms of the problem so [00:08:50] Speaker 03: with the whole estoppel argument is we don't even know what kind of estoppel was applied to us. [00:08:55] Speaker 05: Okay, but we'll get there. [00:08:57] Speaker 05: Okay. [00:08:57] Speaker 05: But if it's a judicial estoppel, the fact that it was vacated doesn't make any difference. [00:09:02] Speaker 03: It may not. [00:09:03] Speaker 03: I agree with that. [00:09:05] Speaker 05: Okay. [00:09:05] Speaker 05: All right. [00:09:05] Speaker 05: So let's talk about the estoppel here. [00:09:08] Speaker 05: So the board rejected Perez because it wasn't sufficiently flexible [00:09:15] Speaker 05: to be a coding based on the Breckenridge testimony and testing, right? [00:09:21] Speaker 05: Correct, right? [00:09:22] Speaker 05: And so Breckenridge said, here's Perez, I've tested it, and it's not sufficiently flexible. [00:09:31] Speaker 05: But he did not include in what he tested the BPA epoxy. [00:09:42] Speaker 05: and in fact said that Perez was BPA free. [00:09:49] Speaker 05: Now you come in here and you want to refute [00:09:53] Speaker 05: what Breckenridge said and what the board said by testimony by Short. [00:10:02] Speaker 05: But Short is not using the same version of Perez as Breckenridge, right? [00:10:07] Speaker 05: Because he's adding this BPA epoxy based on the lab notebooks, correct? [00:10:16] Speaker 03: I think that's right, if my recollection is correct, yes. [00:10:20] Speaker 05: Okay, but tell me [00:10:22] Speaker 05: how it is that in light of judicial estoppel, you can tell the board about one version of Perez, which Breckenridge relies on, which doesn't have PPA, doesn't have an epoxy. [00:10:38] Speaker 05: And then later on, say, well, we're going to use a different version of Perez, which does have an epoxy and therefore has PPA. [00:10:49] Speaker 05: That seems to me not consistent. [00:10:51] Speaker 05: and to be the exact sort of thing that the judicial estoppel is designed to prevent. [00:10:56] Speaker 03: So of course, that's not the judicial estoppel that was applied to us. [00:10:59] Speaker 03: The judicial estoppel that was applied to us was very simply that we were not allowed to challenge at all the fact that Perez was actually not BPA free. [00:11:13] Speaker 05: OK. [00:11:13] Speaker 05: I think it's similar, but let's put aside that. [00:11:18] Speaker ?: OK. [00:11:19] Speaker 03: The estoppel, whatever kind it was that was applied to us, was much less surgical than the one that you're describing. [00:11:26] Speaker 03: It was a much broader brush. [00:11:27] Speaker 03: What's wrong with the hypothesis that I just articulated? [00:11:33] Speaker 03: Well, what's wrong with it is it's not the ruling that we're appealing here. [00:11:38] Speaker 03: And what I want to get across here first is that [00:11:41] Speaker 03: what what what the ruling that was applied to us was a statement that was made in a parenthetical before the board uh... sure would not have to address the merits of what i just said well but what i will i will address the merits of what you said by saying that it could be because of course the stoppable is equitable all types of stop or equitable and takes into account the very sensitive [00:12:08] Speaker 03: accounting of the facts and circumstances of the case. [00:12:13] Speaker 03: And the problem with addressing what you've said is that everything you've said may very well be true, but what it also doesn't take into account is the fact that the parenthetical, which contains the stopping statement, was made in response to a PPG statement, which said that [00:12:37] Speaker 03: Perez was BPA-free, a statement that was made in 2012 when PPG had made in 1992. [00:12:47] Speaker 02: I don't think that's a fair characterization. [00:12:50] Speaker 02: This is your argument that you only assumed arguendo for purposes of the re-exam that Perez disclosed a BPA-free coding, right? [00:12:59] Speaker 03: Well, it was an agreement with what [00:13:02] Speaker 03: PPG has asserted. [00:13:04] Speaker 02: Well, you say in your briefing that you agreed arduendo. [00:13:08] Speaker 02: You simply agreed for the sake of argument. [00:13:11] Speaker 02: Is there anywhere in the record you can point to to indicate that you were doing this only arduendo and you weren't in fact agreeing that Perra has disclosed a PPA-free coding? [00:13:21] Speaker 03: Were I writing that I would have preferred to have used the word arguendo? [00:13:25] Speaker 03: The lawyers who wrote it did not use the word arguendo. [00:13:27] Speaker 02: When you're litigating to re-examine, you would have said arguendo. [00:13:31] Speaker 03: I would have said it more clearly. [00:13:33] Speaker 03: But if you look at the full context of what was said before the board, it was, we agree with what PPG and the examiner have said, and then we're going to explain why [00:13:44] Speaker 02: uh... this is a lousy camcorder is there's not one place in the re-exam where you indicate what we don't really know it's their patent or reserving our rights there may be district court litigation there's nothing like that there is nothing like that but here's what we do know after the fact and i i just do want to point the court to one other thing and then [00:14:06] Speaker 02: I'm well into my rebuttal time already. [00:14:10] Speaker 05: No, we'll give you rebuttal time. [00:14:12] Speaker 02: I think it's worse than what we've already suggested, you and me, in this back and forth. [00:14:18] Speaker 02: You affirmatively try to use the fact, which you seem to have conceded in the re-exam, that a BPA-free coding is disclosed in Perez by urging the examiner and the board, and I think even this court in Balspar 1, [00:14:35] Speaker 02: to find that Peres was not flexible enough to be used for cans precisely because, at least in part, it was BPA-free. [00:14:44] Speaker 02: Isn't that, in fact, the fairest reading of what happened in the re-exam? [00:14:47] Speaker 03: That, actually, I'm going to disagree with you, Judge Stark, because once you get past the parenthetical where the lawyers before the board for Valspar say, we agree with the examiner in this regard, [00:15:02] Speaker 03: Everything that follows, describing the inflexibility, the cracking, the insuitability of the coating for a can, there's no reference there whatsoever to the BPA-free nature. [00:15:16] Speaker 00: What am I missing? [00:15:17] Speaker 00: I mean, I think I went through the record pretty carefully. [00:15:20] Speaker 00: Appendix 12816, which is, I think, your submission to the board pretty early on, [00:15:27] Speaker 00: A, under A, where you make a lot of arguments, the very first argument says, because of its use of apopsies, Christiansen's coding contains BPA. [00:15:36] Speaker 00: Perez, on the other hand, is a BPA-free coding. [00:15:41] Speaker 00: I guess, and then you've got the office action statements, where the argument you were making seems quite clear. [00:15:48] Speaker 00: You had to establish flexibility, and Perez was not flexible because it was BPA free. [00:15:56] Speaker 00: It wasn't that. [00:15:56] Speaker 03: It's the because part that I think is where I'm disagreeing with Judge Stark. [00:16:01] Speaker 03: Because you have, I'm looking at 12-8-16, along with you, [00:16:07] Speaker 03: And you can see Perez, on the other hand, is a BPA-free coding. [00:16:10] Speaker 03: And then there's the parenthetical, which I was referring to. [00:16:13] Speaker 03: Valspar agrees with the office's finding in this regard. [00:16:16] Speaker 03: And then there's however, which is a change in subject. [00:16:21] Speaker 03: However, Perez contains absolutely no indication that it could meet the stringent requirements of a CAN interior coding. [00:16:27] Speaker 03: Because it's BPA-free. [00:16:28] Speaker 03: That's not how it indicates. [00:16:31] Speaker 05: It doesn't meet the flexibility requirement because it doesn't have an epoxy in it, right? [00:16:38] Speaker 03: If that's what, I think you can read starting at 12-8-17, starting with B, Perez provides no teachings that would have led a person of ordinary skill to choose it as the basis for a canned interior coating. [00:16:49] Speaker 03: And it talks about all the demanding requirements. [00:16:52] Speaker 05: But there are a lot of references to no epoxy, right? [00:16:58] Speaker 03: There are references to no epoxy. [00:17:00] Speaker 05: There are references to... That seems to me to be a reference to BPA-free, because the epoxy is what brings the BPA into it, as Short himself said. [00:17:11] Speaker 00: And as you said in the oral argument. [00:17:18] Speaker 03: So let me just point out the form. [00:17:22] Speaker 02: Haven't we also repeatedly emphasized the public notice function of the whole prosecution process to include re-exams? [00:17:31] Speaker 02: We don't want, I don't think, the public to have to parse through with this level of inspection the patentee statements during a re-exam. [00:17:43] Speaker 03: Judge Stark, let me. [00:17:44] Speaker 03: Let me make one point in this regard with regard to the fundamental unfairness of the estoppel, because remember that treating this as an estoppel traces back to an agreement with an assertion made by PPG in the first instance, an assertion that was made based on the logical [00:18:06] Speaker 03: one might say a fallacy that the absence of evidence is evidence of absence, which is Perez doesn't mention BPA, therefore it's BPA free. [00:18:16] Speaker 03: And there was evidence that had we been able to put it in to the record in this case, would have been devastating to PPG's case. [00:18:26] Speaker 03: And it's fundamentally the issue that deprived us of a fair trial. [00:18:30] Speaker 00: But didn't it help you? [00:18:31] Speaker 00: I mean, wasn't the BPA-free status of Perez useful and relied on to establish its lack of flexibility [00:18:43] Speaker 00: which dealt with the whole motivation issue, which was before the board of the exam. [00:18:48] Speaker 00: I mean, it was an argument that helped you, right? [00:18:50] Speaker 00: You used it to establish the lack of flexibility, which is ultimately what you use to establish the absence of motivation. [00:18:58] Speaker 03: Judge Prost, I appreciate what you and Judge Dyke have said here, but I think if you look at the pages that follow the parenthetical and then the word however, [00:19:08] Speaker 03: All of the pages that follow do not rely on the absence of BPA. [00:19:13] Speaker 05: They rely on the absence of an epoxy, which is where the BPA is. [00:19:19] Speaker 00: Which you said at oral argument. [00:19:21] Speaker 00: I mean, you know about the oral argument statement. [00:19:24] Speaker 00: I mean, it was establishing they don't use BPA. [00:19:27] Speaker 00: They don't get the flexibility advantage from using the epoxy constituents with BPA, for example. [00:19:33] Speaker 03: But the point that I want to make here with regard to why this was a problem, with regard to the fairness of the trial, I just want to point the court to pages 19412 through 19419. [00:19:50] Speaker 03: And these are pages that are under the protective order, so I'm going to describe them only generally here in open court. [00:19:57] Speaker 03: This is Dr. Schorck's expert report. [00:20:01] Speaker 03: And this is from discovery that was taken in which volume this is And I will take you particularly to the page And I appreciate the force patients with us here One nine three eight zero one nine four one two is where we start and [00:20:32] Speaker 03: And you'll see that these pages are highlighted here. [00:20:36] Speaker 03: So it's designated highly confidential, attorney's eyes only. [00:20:42] Speaker 03: And the page in particular that I'd like to take you to is 19417, which is the carryover paragraph 115 from the previous page. [00:21:01] Speaker 03: I'm sorry, give me...19416 and 19417. [00:21:10] Speaker 03: And you'll see that 19416 is the reproduction of a page out of a lab notebook. [00:21:18] Speaker 03: And 19417 contains some of the doctor's written testimony. [00:21:26] Speaker 05: And he says on that very page, he says, I did something different. [00:21:30] Speaker 05: I added an epoxy which contains BPA. [00:21:35] Speaker 05: And that's how he got to the point of saying that Perez has BPA in it, which is a step that is absent from Breckenridge. [00:21:47] Speaker 03: Right, but what I also want to get across here is that this is reporting on a lab notebook from 1992 on PPG's own creation of a coding according to example 18 of Perez. [00:22:05] Speaker 05: But the fact that that was the commercial embodiment, that that's what they did doesn't make it part of the Perez patent, right? [00:22:13] Speaker 03: This would have shown the jury [00:22:16] Speaker 03: that a coding prepared according to Perez had substantial. [00:22:22] Speaker 05: I don't know if I can answer my question. [00:22:23] Speaker 05: The fact that to make a commercial embodiment, they did a particular thing, doesn't make that a patent requirement. [00:22:30] Speaker 03: It might not. [00:22:32] Speaker 03: But it would have been devastating evidence. [00:22:34] Speaker 03: And it would have defeated the proposition that Perez was beat free. [00:22:38] Speaker 05: It might have been useful evidence, but not proper evidence. [00:22:42] Speaker 03: Well, it deprived us of the ability to put PPG to its proofs that Perez was BPA-free. [00:22:52] Speaker 03: Instead, they didn't have to prove that as part of the case. [00:22:56] Speaker 03: We didn't get a fair trial on that. [00:22:58] Speaker 03: They didn't have to prove an essential element of their case because of this estoppel ruling. [00:23:02] Speaker 05: And we didn't get to put this evidence in. [00:23:04] Speaker 05: Well, let me just shift over well over time. [00:23:08] Speaker 05: There's one other issue I wanted to talk about. [00:23:10] Speaker 05: Yes. [00:23:11] Speaker 05: You say that this report made an error in excluding some of the PPG patents. [00:23:19] Speaker 05: And you argue that the federal dimension, Perez, in those patents shows that this invention is not attributable to Perez and that there's language. [00:23:33] Speaker 05: in those post patents that support the notion that this was something new which is inconsistent with an invention of price. [00:23:48] Speaker 05: You make that argument. [00:23:49] Speaker 05: We do. [00:23:50] Speaker 05: I look back [00:23:52] Speaker 05: to the papers in the district court, I do not see that argument being made there. [00:23:56] Speaker 05: I see a different argument being made by your expert. [00:24:02] Speaker 05: I don't know whether you're familiar with the filing that was made at that time, but it does seem to me it's quite a different argument than the one you're making now. [00:24:16] Speaker 05: Maybe you don't remember what happened. [00:24:18] Speaker 03: I don't remember that. [00:24:18] Speaker 03: And we certainly have not been subject to a charge that this argument wasn't made in the trial court. [00:24:24] Speaker 03: So this would be a new point to me. [00:24:27] Speaker 03: It certainly has been the case that the Perez patent has not been a particularly relevant patent to them, in fact. [00:24:42] Speaker 03: PPG used the Sherwin patents to try to come up with their novel coding. [00:24:50] Speaker 03: despite the fact that they now claim that Perez was the Rosetta Stone for their invention, for their new product. [00:25:01] Speaker 05: Okay, I think for the moment we're out of time, unless there are questions. [00:25:04] Speaker 05: We'll give you five minutes for rebuttal, which we'll include. [00:25:09] Speaker 03: I would just add that with regard to the other anticipation arguments, I don't want to let the fact that the anticipation [00:25:15] Speaker 03: I don't want to let the fact that we didn't mention them mean that we don't think there are substantial issues with regard to the failure of their expert to follow. [00:25:27] Speaker 03: We're out of time. [00:25:27] Speaker 03: Thank you. [00:25:28] Speaker 05: Ms. [00:25:29] Speaker 05: Stetson. [00:25:34] Speaker 01: Good morning, Your Honors, and may it please the Court. [00:25:36] Speaker 01: My name is Kate Stetson. [00:25:37] Speaker 01: I represent PPG. [00:25:39] Speaker 01: Judge Stark, I want to start with a couple of process questions that you asked earlier. [00:25:43] Speaker 01: The answer to your question about [00:25:45] Speaker 01: If you conclude that Perez anticipates, do you need to reach obviousness? [00:25:49] Speaker 01: The answer is no, you don't need to go on to reach those questions. [00:25:53] Speaker 01: The jury had three separate bases for its finding, anticipation and two types of obviousness. [00:26:00] Speaker 01: You also asked about whether this is, at bottom, a fact dispute. [00:26:04] Speaker 01: And I just want to emphasize, because I think sometimes it gets lost when we return to what sounds like closing argument in the district court, anticipation is a fact question. [00:26:15] Speaker 01: whether or not a prior argument. [00:26:18] Speaker 04: I think we're over at that. [00:26:19] Speaker 01: OK, yes. [00:26:20] Speaker 01: So I just underline all of these issues are facts questions, disclosure, motivation, and design. [00:26:26] Speaker 05: No, some of the admissibility questions are not fact questions. [00:26:29] Speaker 01: No, they're abusive discretion questions. [00:26:31] Speaker 01: Yes, with respect to new trial, that's exactly right. [00:26:34] Speaker 01: But with respect to anticipation, my point is that at bottom, this is a jury issue. [00:26:39] Speaker 01: And Judge Prost, as you said, there was ample evidence in front of the jury [00:26:45] Speaker 01: on anticipation. [00:26:46] Speaker 01: We cite in our briefs as to each of the four charges. [00:26:50] Speaker 00: Why is the other side not correct that with regard to Estoppel the fact that they didn't have the opportunity for discovery and apparently there were disclosures in the interim [00:27:03] Speaker 00: whether rightly or wrongly, not getting into the substance of what the expert did, but that the expert, because of discovery, the new expert, was able to rely on disclosures that were not available before the PTAB. [00:27:18] Speaker 00: Why doesn't this make a different case? [00:27:21] Speaker 00: And why shouldn't that be an exception under our case law, which is a little back and forth on certain issues? [00:27:27] Speaker 00: But why shouldn't that be the case with regard to at least the conclusion of binding and mission? [00:27:32] Speaker 01: Judge Prost, I think I'd like to answer your question in a couple of different ways. [00:27:36] Speaker 01: The first is, with respect to this new trial issue, this is an abuse of discretion standard. [00:27:41] Speaker 01: And as Mr. Castanhas conceded, this is, at bottom, an equitable estoppel issue, or an estoppel issue, whatever label you put on it. [00:27:47] Speaker 05: No, no, no. [00:27:48] Speaker 05: You've got to address the merits of it. [00:27:49] Speaker 00: OK. [00:27:49] Speaker 00: Yeah, we're on the merits. [00:27:50] Speaker 00: I'm going on case law and what's allowed. [00:27:52] Speaker 00: I mean, this is of some consequence going forward. [00:27:55] Speaker 05: They didn't have the lab notebooks at the time of the re-exam proceeding, right? [00:28:01] Speaker 01: They did not have the lab notebooks at the time of the re-exam. [00:28:04] Speaker 01: But the issue, I think, with what Mr. Kostanios is arguing here is the issue that you pointed out, Judge Dyke, which is just because a lab notebook shows that with respect to one embodiment of Perez, when you add epoxy, you get BPA, doesn't mean that Perez does not disclose a BPA-free [00:28:23] Speaker 02: But that's a sort of merits dispute. [00:28:26] Speaker 02: Why doesn't all this mean they get a chance to at least fight that battle out in the district court? [00:28:32] Speaker 01: Because I think Judge Stark, one of the consequences among other things of letting Sherwin fight that battle out in the district court is that PPG would have been permitted to bring in all of the evidence about the re-exam proceeding also. [00:28:47] Speaker 01: I'm sure one says in its brief that there's no evidence of some kind of a discovery trade-off. [00:28:53] Speaker 01: This case is replete with that evidence. [00:28:56] Speaker 00: OK, but that doesn't answer Judge Stark's question. [00:29:00] Speaker 00: So what? [00:29:01] Speaker 00: So his question, I think, is the right one, which is, why isn't this a question, therefore, of context? [00:29:09] Speaker 00: And both sides should have an opportunity to put in that. [00:29:12] Speaker 00: And maybe you would have prevailed. [00:29:13] Speaker 00: Maybe the jury would have been persuaded that no. [00:29:18] Speaker 00: But why isn't that something that should have gone to the jury? [00:29:20] Speaker 01: I think, Judge Prost, again, there are a couple of different responses. [00:29:24] Speaker 01: The first is it is within the district court's discretion to conclude. [00:29:28] Speaker 05: No, the answer is that judicial estoppel is not a jury question. [00:29:32] Speaker 01: That's quite right. [00:29:33] Speaker 05: Yes. [00:29:34] Speaker 05: But what they are saying, as I understand it, is that judicial estoppel should not be applied here because they did not have, at the time that they made the original representation to the board, [00:29:47] Speaker 05: access to the lab notebooks, and that they would, if they had had access to the lab notebooks, have made a different argument before the board. [00:29:56] Speaker 05: That's what I understand what you're saying. [00:29:59] Speaker 01: But just to play out that thread a little bit, and to go back to the questions that you were asking Mr. Costanius, Judge Dyke, the consequence of that would have been that they would have put on evidence, call this judicial estoppel, a judicial admission equitable estoppel, whatever label you want to put on it, [00:30:16] Speaker 01: evidence that directly contradicts everything that they said, not just the parenthetical before the examiner, but a statement to the board, statements to this court. [00:30:27] Speaker 00: Well, let's assume hypothetically that it is they discovered something in discovery that completely, virtually unquestionably, diminished, explained their reliance on one and why now their reliance has changed. [00:30:45] Speaker 00: Why shouldn't that be relevant, whether it's calling a binding relevant to determining whether or not this should be a binding admission or the judicial stop or whatever label could put on it? [00:30:56] Speaker 01: I think with respect to relevance, there's that series of additional questions that a district judge would have to ask herself. [00:31:03] Speaker 01: One of them is, is this probative of the issues that are in front of this jury [00:31:07] Speaker 01: Is this going to confuse the jury? [00:31:09] Speaker 01: Are we going to have, as the district judge said at some point, a sideshow about the re-exam proceedings? [00:31:14] Speaker 01: Is PPG going to come in and talk about the examiner finding what it did? [00:31:18] Speaker 01: So relevance is just part of the inquiry. [00:31:21] Speaker 01: That said, I'm not even willing to concede that this is relevant for the reason that I mentioned a couple of minutes ago. [00:31:30] Speaker 01: When you're talking about a lab notebook that says, with respect to this one embodiment, I've tested it, added epoxy, and out came BPA, that is not at all relevant to the fundamental question in this case, which is whether Perez discloses a BPA-free coding. [00:31:46] Speaker 02: And on that front- Exactly which you've listed a bunch. [00:31:48] Speaker 02: Which legal rule or type of estoppel do you read the district court is having relied on, and which one do you think is established here? [00:31:58] Speaker 01: I think that judicial estoppel is probably one of the closest fits. [00:32:02] Speaker 02: The other thing that I would point you to is a judicial- Does the Third Circuit require bad faith for judicial estoppel? [00:32:07] Speaker 01: It does not. [00:32:08] Speaker 01: Under Third Circuit principles, a change in a statement of fact does not require bad faith. [00:32:13] Speaker 02: Does the board clearly rely on what they said about Perez? [00:32:19] Speaker 01: I think absolutely it did for the reason that Judge Dykeport pointed out, which is the entire basis of their re-exam argument, all the way up to and including this court, is that Perez disclosed a BPA-free coding and that BPA-free codings were not flexible enough. [00:32:36] Speaker 01: Just because the re-exam briefs didn't include the phrase or acronym BPA, it included epoxy over and over and over again. [00:32:45] Speaker 01: So this absolutely was fundamental to their discussion there. [00:32:49] Speaker 01: The other point that I would make, too, is when we're talking about the district judge's discretion to admit or exclude evidence based on a weighing of relevance versus prejudice and probative value and confusion, the other thing to point out is that the Third Circuit, in a case I don't think Mr. Costanius refutes, talks about the nature of a judicial admission. [00:33:09] Speaker 01: This was a judicial admission, and it was made at three different points. [00:33:12] Speaker 02: So it's a judicial estoppel and judicial admission? [00:33:14] Speaker 01: Yes, that's what I would say. [00:33:16] Speaker 00: Well, yeah, and they're a little different. [00:33:18] Speaker 00: And we have to consider that the district court, even calling out, it didn't explicitly reject judicial estoppel, but it called out that's the argument. [00:33:26] Speaker 00: And they didn't rely on judicial estoppel. [00:33:29] Speaker 00: They chose to rely on binding admissions. [00:33:32] Speaker 00: And the differences Judge Stark was getting into, judicial estoppel requires reliance by the board, which is you can put it together. [00:33:42] Speaker 00: But it's not quite as clear. [00:33:44] Speaker 00: Finding admissions is a little different. [00:33:46] Speaker 00: So which do you lean more heavily on? [00:33:52] Speaker 00: And is it a problem if your answer is judicial estoppel, because that's not what the district court relied on? [00:34:02] Speaker 01: So let me work backwards from that last part. [00:34:04] Speaker 01: It's not a problem, because as the court well knows, this court can affirm, particularly on equitable ruling on any basis that was available to the district court. [00:34:13] Speaker 01: And the parties briefed all of the possible gables below. [00:34:16] Speaker 00: Except we've got this case called BioRad, which the other side relies on, which seems to announce that and then says, but. [00:34:27] Speaker 00: not so fast, and it rejects the ability based on the abuse of discretion. [00:34:32] Speaker 00: A very discretionary issue, then. [00:34:34] Speaker 00: It was prejudgment interest or something, saying, no, no, no, no. [00:34:38] Speaker 00: We can't do it over on our own because it's such a disparate. [00:34:41] Speaker 00: So why doesn't that affect our analysis here on being able to go forward on judicial stuff? [00:34:46] Speaker 01: I think the way maybe to work through this is to start with the standard abuse of discretion review. [00:34:52] Speaker 01: Admit or exclude evidence. [00:34:54] Speaker 01: proceed to the question about the nature of the admission. [00:34:59] Speaker 01: This was not a tossed-off statement. [00:35:01] Speaker 01: This was not just a parenthetical. [00:35:03] Speaker 01: This was a repeated tactical strategic choice precisely to advocate for the ultimate result that the board found, which was this Perez patent didn't produce a coding flexible enough. [00:35:15] Speaker 01: Once you add the standard of review together with the nature of these admissions, then you get to the question, Judge Prost, that you alluded to earlier, which is [00:35:24] Speaker 01: Both sides can cite cases talking about where Estafel, whether it be judicial, equitable, or admission, or other, comes into play or doesn't come into play. [00:35:33] Speaker 01: It's a little messy. [00:35:35] Speaker 01: Where it's a little messy, that means to me that the district court didn't have any kind of legal North Star pointing her to a conclusion that she had to reach. [00:35:47] Speaker 01: She was entitled to, in her equitable discretion, [00:35:50] Speaker 01: exclude this evidence because of the nature of the repeated admission below, an admission that was made obviously for strategic and tactical reasons. [00:36:00] Speaker 01: And in the end, again, this is a new trial motion we're talking about. [00:36:04] Speaker 01: Under Third Circuit principles, new trial motions are granted when there is an outrageous result below. [00:36:11] Speaker 01: They are granted in extraordinary circumstances. [00:36:15] Speaker 01: The standard is very high. [00:36:16] Speaker 01: And as was pointed out to Mr. Kostanis a little while ago, when we're in a case that talks not about a claim construction, but about issues in front of the jury, all fact questions, and a new trial motion based on the exclusion of evidence, we all know that that's an uncomfortable place to be for an appellant. [00:36:37] Speaker 01: And that's where we are. [00:36:40] Speaker 00: And they're not really all fact questions, because it seems to me this question of the admissibility of this evidence, I mean, even if you decided to give it to the jury, the jury would fairly ask, well, what is the legal relevance of what was said before the board, and what is the legal relevance? [00:37:01] Speaker 00: So this issue is really hard for me. [00:37:03] Speaker 00: partly because I can't buy into the fact that it's exclusively a factual question. [00:37:08] Speaker 00: I think a predicate to this are all the legal issues and what our case law says about what abiding admission is and what judicial estoppel is. [00:37:17] Speaker 00: And there seems to be legal issues hanging out there that are necessary to resolve. [00:37:22] Speaker 01: I think there is maybe a difference, Judge Proce, between the legal issues discussed in the cases and the equitable authority of a court to admit or exclude evidence based on an estoppel or an admission. [00:37:35] Speaker 01: And I want to make one other thing clear. [00:37:39] Speaker 05: When the district court initially instructed- I don't see how there could be discretion to exclude something if the requirements of judicial estoppel aren't satisfied. [00:37:48] Speaker 05: I mean, that's a key predicate to our affirming the district court, is that there has to be a legal basis for finding judicial estoppel. [00:37:59] Speaker 05: And we've talked about that. [00:38:00] Speaker 05: But you can't dismiss that as sort of saying, oh, it's discretionary. [00:38:05] Speaker 05: It's not discretionary if there's a legal error there. [00:38:09] Speaker 01: If you conclude that it was error to follow the judicial estoppel principles, Judge Dyke, [00:38:16] Speaker 01: You would also have to conclude, in order even to get to this question about whether a new trial is warranted, and I want to put a pin in that for a minute, you would also have to conclude that all of the other equitable arguments that were available to the district court and preserved in this court also don't apply. [00:38:31] Speaker 01: So that would be the path that you would have to take. [00:38:34] Speaker 01: But as to that last point, is this worthy of granting a new trial? [00:38:38] Speaker 01: Remember that what we're talking about is an instruction at the beginning of the case that says Perez teaches BPA free. [00:38:46] Speaker 01: And what you had throughout this case is statements from the experts on direct and on cross making that exact point. [00:38:57] Speaker 02: If you look at appendix. [00:38:59] Speaker 02: I'm unclear on whether you're pressing an alternative argument under Rule 403. [00:39:03] Speaker 02: that their evidence that parents does not disclose a BPA-free coding should be excluded or was excluded under Rule 403. [00:39:13] Speaker 02: I didn't see any explicit ruling to that effect from the district court. [00:39:16] Speaker 02: But is that an alternative grounds? [00:39:18] Speaker 01: It is an alternative ground, Judge Stark. [00:39:20] Speaker 01: And I'm conscious. [00:39:22] Speaker 01: feeding into my rebuttal time as well. [00:39:24] Speaker 01: So I hope you'll indulge me. [00:39:25] Speaker 01: But it is an alternative ground. [00:39:28] Speaker 01: And there are plenty of bases for making the conclusion that that is inappropriate. [00:39:34] Speaker 02: I certainly see the arguments that it be confusing and misleading and take time. [00:39:39] Speaker 02: But on the probative weight, it would seem to me if we reach this alternative grounds, it's because we were not persuaded there was a judicial admission, et cetera. [00:39:50] Speaker 02: And I would think their evidence in that light has a lot of probative value to issues in dispute at trial. [00:39:56] Speaker 02: Would you agree with that? [00:39:58] Speaker 02: And I guess just relatedly, can we do the balancing ourselves, or would we remand that? [00:40:04] Speaker 01: I think the answer is for the reasons that we've already discussed. [00:40:07] Speaker 01: I don't see this as having probative value as to the question in this case, which is did Perez disclose BPA-3? [00:40:15] Speaker 01: What you have in the lab notebook [00:40:17] Speaker 01: is not devastating evidence. [00:40:19] Speaker 01: It is an example of one test to which epoxy was added and produced BPA. [00:40:24] Speaker 01: That does not drive to the question about whether the Perez patent teaches BPA 3. [00:40:29] Speaker 01: So number one, not probative. [00:40:31] Speaker 00: Number two, as you know, once- But the district court didn't do that. [00:40:34] Speaker 00: The district court just relied on the fact that this was a binding admission, full stop. [00:40:39] Speaker 00: And I think that's why it didn't think 403 was the appropriate reliance here, because they said there is no probative value. [00:40:47] Speaker 00: So if it went back on remand on the 403, [00:40:51] Speaker 00: And we said, well, there's at least some probative value. [00:40:55] Speaker 00: I mean, they've already made some findings in there. [00:40:59] Speaker 00: in their opinion with respect to the prejudice and the confusion of the jury. [00:41:03] Speaker 00: So they're presumably going to find that and then just have to reweigh on the question of probative value. [00:41:09] Speaker 00: So what's wrong with that? [00:41:10] Speaker 01: I think what's wrong with that, Your Honor, is if this panel intends to rewind the entire jury verdict and granting new trial on the ground at the district court. [00:41:20] Speaker 00: No, I'm talking about a remand for the district court to do an analysis under 403. [00:41:24] Speaker 01: Well, then that's. [00:41:26] Speaker 00: We don't know what would turn from that, whether they would reach the same conclusion, or whether the district court itself would say we need a new trial. [00:41:36] Speaker 01: We do know, Your Honor. [00:41:37] Speaker 01: And this is something I can point you to, and we can submit some supplemental appendix pages, because they are in the record but not in the filed appendices. [00:41:45] Speaker 01: We were not able to respond to the replies' suggestion that this wasn't a 403 balancing test. [00:41:53] Speaker 01: throughout the pretrial conference, you'll find multiple references to the district court saying, it's a balancing that I'm doing here. [00:42:01] Speaker 01: This is at page 39005 to 07. [00:42:04] Speaker 01: No, no, no. [00:42:06] Speaker 00: But you're eliminating what Judge Stark and I were talking about, because they clearly concluded there was no probative value, because this was a binding admission. [00:42:16] Speaker 00: So that kind of comes into that bucket. [00:42:19] Speaker 00: So whatever weighing they did, even if in their mind it was 403, hypothetically, if we were to conclude that that was not right, then it would have to be a do-over, right? [00:42:34] Speaker 01: If you conclude at the end of all of this, and I want to make a couple points about the balancing still, if I could. [00:42:39] Speaker 01: But if you conclude at the end of all of this that a narrow remand to the district court is warranted for her to perform a 403 balancing test, I think what you would find at the end of the day is that that test has already been done. [00:42:53] Speaker 01: It's already in the record. [00:42:55] Speaker 01: The notion that this decision on the admission was made in a vacuum is simply not accurate. [00:43:02] Speaker 01: At the time that the district court [00:43:04] Speaker 01: held that this was a binding admission, given that it was made at three different stages of the re-exam proceeding. [00:43:09] Speaker 01: The court also had in front of it motions in limine asking the question whether all of the other issues in the re-exam proceeding should come in. [00:43:19] Speaker 01: And of course, if you pull the thread and you say, all right, the testimony from Sherwin's expert can come in about this lab notebook talking about claim 18 and the other stuff they added in BPA, [00:43:32] Speaker 01: you would get, as the district court expressly recognized before and during trial, an entire sideshow about all the rest of the things that were said in the re-exam proceeding, confusing the jury and prejudicing the case. [00:43:45] Speaker 02: In fact, you wanted to introduce an expert on re-exam proceedings, and you weren't allowed to. [00:43:49] Speaker 01: That is correct. [00:43:49] Speaker 01: And we made that point over and over again. [00:43:51] Speaker 01: Whenever Sherwin got kind of close to this line, we said, you know, we weren't permitted to introduce this expert. [00:43:57] Speaker 01: This expert was excluded. [00:43:58] Speaker 01: precisely because the re-exam proceeding was not going to enter into this because it was such a sideshow. [00:44:03] Speaker 05: Okay, but I'm a little confused here because we're talking about 403, we're talking about possible prejudice. [00:44:09] Speaker 05: I understand the idea of prejudice by bringing in the whole re-exam proceeding, but I think they have a narrower argument, which is that what they want to bring in is Dr. Shork's testimony as to what Perez supposedly discloses. [00:44:27] Speaker 05: How does 403 bear on that? [00:44:32] Speaker 01: Oh, it bears on that because that's a third example, I think, of Sherwin wanting to eat its cake and have a two. [00:44:39] Speaker 01: Sherwin made the choices it did in re-exam. [00:44:42] Speaker 01: It now wants to back away from those choices, introduce the labinal without. [00:44:47] Speaker 05: What's the prejudice? [00:44:50] Speaker 05: Short comes in and says, I think Perez shows something different because I read lab notebooks and somebody did a Perez compound and included BPA in it. [00:45:07] Speaker 05: Where's the prejudice from admitting that piece of testimony? [00:45:12] Speaker 01: My point, Judge Dyke, was that it would prejudice the conduct of the trial. [00:45:16] Speaker 01: That was my response to Judge Crost. [00:45:18] Speaker 01: because it would introduce an entire sideshow about the re-exam proceedings. [00:45:23] Speaker 01: If that evidence comes in, PPG would have been entitled to introduce its expert to put on evidence about exactly what Sherwin said in front of the examiner, in front of the board, in front of the district court, what the board held. [00:45:36] Speaker 01: And then you get into the questions that you were asking about whether or not it's vacated or not vacated and how that plays in front of the jury. [00:45:44] Speaker 01: underlying theme here. [00:45:46] Speaker 02: Did Sherwin ever take the position that they should be able to introduce just Dr. Schork in the lab notebook and keep out even this cross-examination or as in your affirmative case, everything that happened in the re-exam? [00:46:00] Speaker 01: I think that's exactly what they were hoping for. [00:46:02] Speaker 01: I mean it was eating the cake and having it too and then eating the cake again. [00:46:06] Speaker 01: They were hoping to just get Dr. Schork in [00:46:08] Speaker 01: But to X out everything else that happened. [00:46:10] Speaker 02: I thought their argument to us was that they were fine with all of the re-exam coming in, and it would be a fact dispute for the jury to decide whether they made a binding admission or not. [00:46:21] Speaker 02: Can you tell me that's not what they asked for? [00:46:23] Speaker 01: I think below, they were advocating both to have the re-exam excluded and to have short-admitted. [00:46:28] Speaker 01: But even if they were willing to accept that broader aperture, I think that just poses the fundamental question that the district court repeatedly addressed, which is, [00:46:38] Speaker 01: This is a balancing 39005 to 07. [00:46:42] Speaker 01: All of this re-exam stuff is not coming in. [00:46:46] Speaker 00: I'm a little confused by your answer to Judge Dyke's question about prejudice. [00:46:50] Speaker 00: Because rightly or wrongly, I think at least in a footnote, the district court did address prejudice. [00:46:56] Speaker 00: And what the district court said is not what you said. [00:46:59] Speaker 00: They concluded PBG would be prejudiced simply by having to litigate an issue that was resolved by Sherman's admission before the USPTO in a rebuttal expert report, having prepared for trial and all of this stuff. [00:47:13] Speaker 00: based on an assumption. [00:47:15] Speaker 00: Is that not your understanding of the prejudice? [00:47:17] Speaker 01: That is absolutely correct, Judge Prost. [00:47:19] Speaker 01: I think my point was that that goes to the question of an estoppel ruling. [00:47:23] Speaker 01: If we're talking also about a simple evidentiary ruling under 403, there's the different balancing analysis that was done. [00:47:31] Speaker 01: And my point is the district court also correctly concluded that it was not going to permit some kind of second ring of the circus to talk about all of the re-exam proceeding because it would prejudice the conduct of the case. [00:47:42] Speaker 01: I'm using prejudice in two different ways. [00:47:45] Speaker 01: Your reading is exactly right. [00:47:47] Speaker 01: The district court concluded that this would prejudice PPG precisely because that's not how PPG had prepared for this case. [00:47:54] Speaker 01: How could it have when Sherwin had been very clear all along that the whole theme of its approach [00:48:00] Speaker 01: in the re-exam proceedings. [00:48:01] Speaker 00: But isn't their answer to this, at least part of their answer to this, I don't know how things went down in sequence, but the fact that this was in a rebuttal expert report, are they going to be able to tell me, well, their discovery only produced the lab notebooks after the first expert report and before the rebuttal, and that's what necessitated the rebuttal expert? [00:48:26] Speaker 01: I think, depending on the timing of when these surfaced, that well could be their argument. [00:48:32] Speaker 01: I'm not sure I saw that in the brief. [00:48:34] Speaker 01: But then the rebuttal to the rebuttal is, in those circumstances, what Sherwin would be entitled to do is to come in and say, OK, you have your lab report with example 18 and adding the epoxy and all of the above. [00:48:48] Speaker 01: Still, Perez doesn't teach BPA-free. [00:48:50] Speaker 01: And if you're going to talk about your lab report, we're going to bring in all of this. [00:48:54] Speaker 01: That's what would have happened. [00:48:56] Speaker 01: And that's where the district court was perfectly correct in landing. [00:48:59] Speaker 01: So in order to remand this case, in order to make that finding, you would have to conclude. [00:49:05] Speaker 01: And I'm not hearing you suggest that a new trial is warranted. [00:49:08] Speaker 01: Again, I think I heard you say, Judge Prost, a remand for this finding. [00:49:12] Speaker 01: It is evident. [00:49:13] Speaker 00: Well, I'm just asking questions. [00:49:14] Speaker 00: Yes. [00:49:15] Speaker 01: But if you were to remand just for that finding, I think you would conclude we're happy to submit some additional appendix pages to make it easier for you. [00:49:23] Speaker 01: that this balance and this discussion happened over and over again. [00:49:26] Speaker 01: If it would be helpful, I think both parties could submit a short letter explaining where those sites are or are not, if you're Sherwin's counsel. [00:49:35] Speaker 01: But we'd be happy to do that. [00:49:37] Speaker 02: I'm a little concerned about if we were to affirm the district court that this is a judicial admission or judicial estoppel, that it might disrupt proceedings in the patent office. [00:49:51] Speaker 02: It might make it such that, I don't know, patentees are always going to be saying, I'm reserving my rights. [00:49:58] Speaker 02: I don't want to make this admission. [00:50:01] Speaker 02: you know, maybe fighting issues that they otherwise wouldn't have to fight. [00:50:05] Speaker 02: Should I have that concern that this case potentially could disrupt how proceedings will go in the patent office? [00:50:12] Speaker 01: I don't think you should for a couple of different reasons. [00:50:15] Speaker 01: The first is what you could conclude here is that it was within the district court's equitable discretion to do what she did. [00:50:22] Speaker 01: But second, most importantly, as to the patent proceedings, what is remarkable about this case and the way that the opinion could be written narrowly [00:50:31] Speaker 01: is not that a party said in front of the patent examiner some throwaway statement, or even made an assumption. [00:50:37] Speaker 01: There is no assuming arguendo here. [00:50:39] Speaker 02: Would the case be different if they had said, we're doing this arguendo. [00:50:43] Speaker 02: It's their patent. [00:50:45] Speaker 02: We don't actually know, but we're not going to fight about it? [00:50:47] Speaker 01: I think it might be different. [00:50:49] Speaker 01: I think it might be different. [00:50:50] Speaker 01: But what the entire strategy was, not just in front of the examiner, but doubling down in front of the board, tripling down in front of this court, [00:50:58] Speaker 01: quadrupling down at oral argument is that BPA-free meant not flexible enough. [00:51:04] Speaker 01: That was the entire point, and I think it is absolutely fair as an equitable matter to hold someone to that strategic admission. [00:51:12] Speaker 01: If in the end it means that patentees are protecting themselves by dropping a footnote and saying, you know, we don't mean this to be an admission in any other proceeding, [00:51:21] Speaker 01: That seems like a light lift compared to permitting Sherwin to go back on its quadrupling down on the statement that they're now trying to contest. [00:51:30] Speaker 05: OK. [00:51:31] Speaker 05: We'll give you two minutes on the cross-appeal. [00:51:35] Speaker 01: Thank you, Your Honor. [00:51:35] Speaker 01: I appreciate it. [00:51:37] Speaker 01: No, go ahead. [00:51:39] Speaker 01: Oh, thank you. [00:51:40] Speaker 01: I thought you meant rebuttal. [00:51:41] Speaker 01: Thank you. [00:51:42] Speaker 01: So on the cross-appeal, just a couple points. [00:51:46] Speaker 01: The point of our cross-appeal is that when this court held [00:51:51] Speaker 01: finding Valspar 1 moot, that the covenant not to sue covered the subject matter of the patent. [00:52:02] Speaker 01: That was an implicit license that covers and constitutes reason to affirm on a broader ground. [00:52:11] Speaker 02: Since it's a unilateral covenant not to sue, should we only care about their unilateral intent in making it? [00:52:18] Speaker 01: No, I think quite the opposite. [00:52:20] Speaker 02: Can you point to any case that would say we should be concerned with anything other than their intent when interpreting a unilateral covenant? [00:52:28] Speaker 01: I can't, but it's for a simple reason, Judge Stark. [00:52:30] Speaker 01: I don't see anyone as having really pulled this kind of stunt before, where you've got a unilateral covenant not to sue that this court says covers the subject matter. [00:52:39] Speaker 05: I don't think characterizing this as a stunt is useful. [00:52:42] Speaker 01: OK, let me rephrase. [00:52:45] Speaker 01: No one has ever tried to submit in order to find a case moot, a covenant not to sue, followed it up by putting in the mail to headquarters of their opposing party a letter that says, by the way, this is [00:53:00] Speaker 01: not valuable at all. [00:53:01] Speaker 01: We're not giving anything away. [00:53:02] Speaker 02: You had several opportunities to complain about that to this court, didn't you? [00:53:05] Speaker 01: Well, we did. [00:53:06] Speaker 01: But I think that's a kind of sauce for the goose sauce for the gander problem. [00:53:09] Speaker 05: We knew about the other proceeding involving the other patents, right? [00:53:14] Speaker 01: We absolutely did, yes. [00:53:16] Speaker 01: And I think that's important in bearing on when this court said entire subject matter of the patent. [00:53:21] Speaker 01: It's not for this court to say, and by the way, this means the Minnesota proceeding is kaput. [00:53:26] Speaker 01: What this court said and what Sherwin never sought rehearing on, and I think this is important, when this court said in February 9 that this covers the entire subject matter of the patent, PPG went to the Minnesota court on February 28 and said, we have an implied license because of that language. [00:53:45] Speaker 01: There were still almost two weeks left for Sherwin to come back into this court and say, that language was too broad. [00:53:52] Speaker 01: We didn't mean to convey a license to the entire subject matter. [00:53:56] Speaker 01: We were trying just to get this particular appeal kit. [00:53:59] Speaker 01: But of course, they didn't do that. [00:54:01] Speaker 01: They didn't seek rehearing or a narrowing of the opinion because the opinion would have unraveled. [00:54:06] Speaker 01: The only way that this court could have found the issue moot is precisely because they construed the covenant not to sue to cover the subject matter of the patent. [00:54:15] Speaker 05: Wait a moment. [00:54:18] Speaker 05: What case involves a situation where we've continued to review a re-exam because there's a continuation patent? [00:54:26] Speaker 01: I think there are a number of cases that stand for the principle that when you have a question about mootness, you take into account the continuation patterns. [00:54:40] Speaker 01: So ARCMA is one. [00:54:42] Speaker 01: ABS Global would be another. [00:54:45] Speaker 05: Can that be one of those cases involved? [00:54:47] Speaker 01: ARCMA involved a controversy that this court found a sufficient controversy existed, and I'm quoting now where [00:54:54] Speaker 01: not yet, where the patentee had accused the same party of infringement over, quote, the same technology in related litigation, close quote. [00:55:01] Speaker 05: That was enough? [00:55:03] Speaker 01: Same patents are different patents. [00:55:04] Speaker 01: I don't know the answer to that. [00:55:06] Speaker 01: But in any event, the only way that this [00:55:11] Speaker 01: if you put that together with all of your cases that talk about that. [00:55:14] Speaker 05: I'm not aware of a case. [00:55:15] Speaker 05: And I take it you're not able to cite me one where a review had proceeded in a re-examine or IPOR because even though the patent issue was canceled or there was a covenant not to sue, they'll believe it patents pending somewhere else. [00:55:34] Speaker 05: I'm not sure that there is such a case. [00:55:37] Speaker 01: Well, I think [00:55:39] Speaker 01: Two answers. [00:55:40] Speaker 01: The first is that there may not be such a case because this is such a wildly unusual fact pattern where you have a decision that knocks the legs out from an appeal and then continuing infringement on continuation patents. [00:55:52] Speaker 01: What you do have are two cases, one of which, Chita Ammi, says that a covenant not to sue on the parent patents confers an implied license unless the parties mutually agree to the contrary as to continuation patents. [00:56:04] Speaker 01: So you have that out there. [00:56:06] Speaker 01: Then you have the ABS and ARCMA line of cases, which says there is still a sufficient case or controversy for this court to continue on with an appeal in circumstances where there is litigation as to related patents on the same technology. [00:56:23] Speaker 01: And here, of course, you have litigation. [00:56:25] Speaker 01: as to continuation patents on exactly the same product. [00:56:29] Speaker 00: But maybe it was in a little bit of a different context. [00:56:31] Speaker 00: But didn't we say, granted it was a non-PREC but was in Valspar 2, that it was clear that this court's intent in Valspar 1 was to nullify the entire interparties re-exam without any collateral effect on other litigation? [00:56:48] Speaker 01: I think you can read that together as we explain in our reply brief with the statement in vows bar one about the entire subject matter of the patent. [00:56:59] Speaker 01: It was neither the first panel's intent [00:57:03] Speaker 01: nor within its purview to say, as I said earlier, by the way, this means the Minnesota litigation can't go forward. [00:57:10] Speaker 01: That couldn't have been its intent, because all that was in front of it was whether or not this case was moot. [00:57:16] Speaker 01: And the reason the panel found this case moot was precisely because of the broad covenant not to sue that they interpreted and Sherwin never challenged, never came back and said, [00:57:26] Speaker 01: This is causing us problems now in Minnesota. [00:57:28] Speaker 01: We need to seek panel rehearing to get a narrower construction of our covenant not to sue. [00:57:33] Speaker 01: That was not done. [00:57:35] Speaker 04: OK. [00:57:35] Speaker 04: I think we're out of time. [00:57:36] Speaker 04: Thank you, Your Honor. [00:57:37] Speaker 04: Mr. Costanis, you have five minutes. [00:57:48] Speaker 03: Thank you, Your Honor. [00:57:51] Speaker 03: With regard to the invalidity issues, we continue to believe that this case should be reversed as a matter of law on the anticipation and obviousness issues. [00:58:00] Speaker 03: I don't think I'll use my rebuttal to belabor those issues. [00:58:03] Speaker 03: We don't think that Perez [00:58:05] Speaker 03: either alone or in combination discloses the elements of Sherwin's claims not Organic solution polymerization not a can coating not the testing limitations and not the oxirane limitation either [00:58:25] Speaker 03: With regard to the new trial issue, this is not just an evidentiary issue. [00:58:31] Speaker 03: It is not a balancing issue. [00:58:34] Speaker 03: We, in effect, had a verdict directed against us. [00:58:38] Speaker 03: Look at appendix 38992. [00:58:41] Speaker 03: The instruction that was given to this jury was Perez discloses a BPA-free coding. [00:58:50] Speaker 03: That was, in effect, a directed verdict with regard to an essential element of one element of every single one of Sherwin's five asserted claims. [00:59:02] Speaker 03: It was their burden to prove, by clear and convincing evidence, [00:59:08] Speaker 03: that each of our asserted claims was invalid. [00:59:11] Speaker 03: They were relieved of that burden by this instruction. [00:59:15] Speaker 03: With regard to the judicial estoppel issue that each of you has had a dialogue with my friend about, the Third Circuit requires, as an essential element of judicial estoppel, bad faith. [00:59:28] Speaker 03: My friend said [00:59:29] Speaker 03: The bad faith isn't required. [00:59:31] Speaker 05: Well, how should Third Circuit law apply when we're talking about the effect of a PTHC proceeding over which we have exclusive jurisdiction? [00:59:40] Speaker 05: I'm not aware that we said that in those circumstances that we apply regional circuit. [00:59:45] Speaker 03: I'm not sure that you have, but I'm not sure why you wouldn't look to the general rule of other circuits as well here. [00:59:54] Speaker 03: And bad faith is a general requirement of the application of judicial estoppel. [00:59:59] Speaker 03: Not in other circuits. [01:00:02] Speaker 03: Well, in most circuits it is. [01:00:04] Speaker 03: And here there is no bad faith. [01:00:06] Speaker 03: We are in the world of equity, Judge Dyke, and it would be enormously inequitable to find judicial estoppel in this case when, of course, we were agreeing with an assertion that they made in the first instance. [01:00:22] Speaker 03: and that at least with regard to a coding. [01:00:26] Speaker 03: And by the way, again, go back and look at that instruction. [01:00:29] Speaker 03: The instruction was that Perez discloses a BPA-free coating, not an intermediate, which is actually what the patent is principally directed to, but a BPA-free coating. [01:00:39] Speaker 03: And of course, the notebook would have proven that a coating made according to Perez was not BPA-free. [01:00:48] Speaker 05: The alternative balancing... I'm having trouble understanding [01:00:51] Speaker 05: how a notebook is binding as to what the patent discloses. [01:00:56] Speaker 05: It's not binding, but it's evidence. [01:00:57] Speaker 05: There's even evidence of what the patent discloses. [01:00:59] Speaker 05: I mean, you know, the fact that you make a compound according to the patent and add something that's not in the patent, how does that show that that added thing is in the patent itself? [01:01:12] Speaker 03: If it would have been a coding according to Perez, it would have been proof that Perez does not disclose a BPA-free coding. [01:01:18] Speaker 03: And I think that would have been powerful evidence that Perez is not what they said it was. [01:01:25] Speaker 05: Because you choose to add BPA, that means that's a requirement of the patent? [01:01:31] Speaker 03: It doesn't say that it's a requirement of the patent, but that a coding made according to the patent would be BPA. [01:01:36] Speaker 03: But while we're talking about equity here, I also want to point out that I think I either may have misspoken or may have been incompletely informed when I was talking to you earlier about whether we said that we were [01:01:58] Speaker 03: We shouldn't be held to our statement earlier because of the vacatur of the prior decision. [01:02:07] Speaker 03: And in fact, if you look at the judge's decision at appendix 75, we in fact did say to the court that the vacatur wiped the slate. [01:02:16] Speaker 00: There's no question you said it to the district court. [01:02:18] Speaker 00: I just didn't see it in your briefing here. [01:02:19] Speaker 00: uh... well yet we might not have highlighted it to the court here but yes there's a different highlighting it and saying it. [01:02:27] Speaker 00: Can you show me what you said in blue? [01:02:29] Speaker 03: No, I can't right here, but I just wanted to make sure to say that that was part of what we argued to the district court here. [01:02:35] Speaker 03: Fair enough, but that doesn't mean that it's here on appeal. [01:02:41] Speaker 03: But again, Judge Stark, you asked my friend about alternative grounds under Rule 403. [01:02:46] Speaker 03: This court can't do balancing with regard to Rule 403. [01:02:52] Speaker 02: uh... was that a question of third-circuit law? [01:02:55] Speaker 03: I think that's got to be a question of third-circuit law. [01:02:58] Speaker 03: It's an evidentiary ruling with regard to the conduct of a trial that took place. [01:03:01] Speaker 02: Any comment on the idea that maybe we would remand for the district court to explicitly do that balancing and decide thereafter whether the trial is necessary? [01:03:12] Speaker 03: Well, I think the problem with doing that there is that this is not, as I pointed out earlier, this isn't just a question of an evidentiary admission because this is [01:03:22] Speaker 03: This was effectively the direction of a verdict with regard to not holding them to their proof with regard to this element. [01:03:29] Speaker 03: Just one element. [01:03:30] Speaker 02: Can I ask, across the field, Valspar 1 does use this broad language, absolving PPG of any possible infringement of the subject matter. [01:03:40] Speaker 02: Why does that language not mean what they're saying, or at least raise an issue that you could have come back to this court to get your consideration of? [01:03:49] Speaker 03: So I think if you look at the non-prec in that case, the non-presidential opinion in that case in Valspar 1, the first reference to the Covenant makes very clear that the Covenant was, quote, [01:04:04] Speaker 03: with respect to the two patents that are the subject of the PTAP decisions, and then the later references subject matter. [01:04:12] Speaker 03: So I don't think there was any ambiguity in that decision that the later reference to subject matter was a reference to the earlier, quote, two patents that are the subject of the PTAP decisions. [01:04:25] Speaker 03: And of course, I don't think that later reference to subject matter was an effort to interpret [01:04:32] Speaker 03: the clear language of the covenant. [01:04:34] Speaker 02: Is there anything that they could have done after receiving the unilateral covenant to keep their appeal alive or was that unilateral covenant? [01:04:43] Speaker 02: They were just out of luck at that point based on your unilateral action. [01:04:46] Speaker 02: They just could not press the appeal any longer. [01:04:50] Speaker 03: Well, I don't think there was, I don't think there's anything that they could have done. [01:04:53] Speaker 03: I mean, they did argue, of course, that in fact they went to the court and said, [01:05:01] Speaker 03: We need vacatur because otherwise Sherwin will argue in Minnesota, where the case was pending at the time, Sherwin will use the decision of the board in the Minnesota case and use the statements in that case in their favor. [01:05:18] Speaker 03: So we need vacatur. [01:05:20] Speaker 03: So they clearly knew the case was going to continue. [01:05:24] Speaker 03: That's, in fact, the very reason that they gave for seeking vacatur in that case. [01:05:28] Speaker 03: So I think everybody understood. [01:05:30] Speaker 03: that this litigation was going to continue. [01:05:34] Speaker 03: Okay, I think we're out of time. [01:05:36] Speaker 03: Thank you. [01:05:36] Speaker 03: With regard to the cross-appeal, we'd ask you to defer. [01:05:39] Speaker 03: Thank you. [01:05:41] Speaker 05: We'll give you one minute, since Mr. Costani has briefly discussed the cross-appeal. [01:05:45] Speaker 05: Give me one minute. [01:05:48] Speaker 01: Thank you, Judge Dyke. [01:05:49] Speaker 01: Just a couple points. [01:05:50] Speaker 01: The first is the [01:05:52] Speaker 01: The distinction that Mr. Kastanious is making now between the earlier statement of Vals Farouan about with regard to the two patents and the later statement about no infringement as to the subject matter of the patents, I think, proves our point. [01:06:04] Speaker 01: The subject matter of the patents includes the continuation of patents that issue from it. [01:06:09] Speaker 01: And just to be very clear, the Minnesota litigation was precisely the reason that PPG offered at Appendix 1770 as the reason why this case would not be moved. [01:06:21] Speaker 01: even after the covenant not to sue was submitted. [01:06:24] Speaker 01: It was available to Sherwin to come back and ask for narrowing language. [01:06:28] Speaker 01: They didn't do that because they understood, as we did, that doing that would mean that the case would no longer, the appeal would no longer be moot. [01:06:37] Speaker 01: They made their bed. [01:06:38] Speaker 01: The Federal Circuit, this court, decided that it absolved PPG of infringement of the subject matter of the patent [01:06:46] Speaker 01: And this is the consequence if there are no further questions. [01:06:50] Speaker 04: Thank you. [01:06:50] Speaker 01: Thank you. [01:06:51] Speaker 05: Thank both counsels for the case.