[00:00:00] Speaker 00:
The first argued case this morning is Wash World versus Bellinger et al.

[00:00:08] Speaker 00:
2023, 1841, Mr. Gannon.

[00:00:13] Speaker 00:
Good morning.

[00:00:14] Speaker 03:
May it please the court.

[00:00:16] Speaker 03:
With respect to outer cushioning sleeve, the intrinsic record could not be more clear.

[00:00:22] Speaker 03:
The intrinsic record repeatedly and consistently refers to the cushioning sleeve.

[00:00:27] Speaker 02:
I'm concerned with whether you made the argument to the district court.

[00:00:31] Speaker 02:
I didn't find anywhere where you even referenced resilient to the district court as part of what you wanted your construction of outer cushioning to be.

[00:00:41] Speaker 02:
Can you point me to where on the record you did that?

[00:00:43] Speaker 03:
Sure.

[00:00:43] Speaker 03:
Appendix 2118, which was from our Markman report.

[00:00:49] Speaker 02:
Is that where you cite to the patent specification?

[00:00:52] Speaker 02:
That's correct.

[00:00:53] Speaker 02:
And actually- But you highlight soft

[00:00:56] Speaker 02:
and you don't highlight resilient and you don't ask for a construction that includes resilient.

[00:01:02] Speaker 02:
Shouldn't the district court have understood you didn't care about resilient?

[00:01:05] Speaker 03:
I think it was clear from the markman briefing that we were asking for an understanding of cushioning sleeve that is soft and resilient.

[00:01:19] Speaker 04:
Yeah, but the problem is that, I'm sorry, but the problem on appeal

[00:01:23] Speaker 04:
What you're advocating is a construction that says not just outer sleeve is soft and resilient, but i.e.

[00:01:31] Speaker 04:
it can be compressed and spring back into shape like a cushion.

[00:01:36] Speaker 04:
We did a search of yours.

[00:01:37] Speaker 04:
There's no mention of compression or springing back in any of the prior requests for claim construction.

[00:01:45] Speaker 04:
Am I right about that?

[00:01:46] Speaker 03:
So when the summary of the invention says that the spray arm has to be soft or resilient,

[00:01:53] Speaker 03:
The ordinary meaning of resilient is something that's compressible, something that you can compress and that will spring back.

[00:02:00] Speaker 02:
But you never asked for a construction that said resilient or spring back.

[00:02:06] Speaker 03:
So I think what you're referring to, Your Honor, is the actual words of the construction.

[00:02:11] Speaker 03:
And I think the Ventura case is right on point on that particular issue, where

[00:02:18] Speaker 03:
The Ventura court looked to see what was the essence of what the parties were arguing.

[00:02:23] Speaker 03:
It wasn't looking at the precise wording of the construction.

[00:02:26] Speaker 02:
So in the Ventura case... The essence of what you were arguing for was thick sleeve of extruded foam plastic that acts as a protective cushion to prevent damage.

[00:02:38] Speaker 02:
I don't see how we could say that essence

[00:02:41] Speaker 02:
is spring and bounce back or even resilient.

[00:02:45] Speaker 03:
So just as in the Vectora case, Your Honor, in that case, there was a construction given by the court.

[00:02:52] Speaker 03:
And on appeal, the construction was, I believe, high milling, which was not in the stated construction.

[00:03:01] Speaker 03:
And the Federal Circuit found in the Ventura case, you know, the precise wording of the construction isn't what's relevant.

[00:03:09] Speaker 03:
What's relevant is was the court and the parties on notice of the argument that was being made.

[00:03:17] Speaker 02:
Is there any point after claim construction that you contend you gave the district court notice?

[00:03:23] Speaker 02:
that you thought there was still a dispute over the meaning of outer cushioning in that the jury needed to be told it had to be resilient and it had to be able to spring back after being compressed.

[00:03:36] Speaker 03:
Right.

[00:03:36] Speaker 03:
So in the Markman, I just referenced appendix 2117 to 2118.

[00:03:41] Speaker 03:
That's the Markman briefing where it was very clear we were telling

[00:03:45] Speaker 03:
the court that there's a dispute about cushion.

[00:03:48] Speaker 03:
We cited to the EON case saying, if there's no construction, there's going to be a problem.

[00:03:53] Speaker 03:
Because we believe that cushioning sleeve is what the specification repeatedly shows as something that's soft and resilient.

[00:04:01] Speaker 03:
And then the court said, no, I'm not going to construe the claim.

[00:04:05] Speaker 03:
On summary judgment, we said in Appendix 2911, quote, the hard plastic cover

[00:04:13] Speaker 03:
which is the blue cover of the spray arm, which I believe you have, is not cushioning and is not intended to perform a cushioning function.

[00:04:24] Speaker 02:
But how was the district court supposed to know that was a claimed construction argument as opposed to a factual application of the construction it had already done?

[00:04:33] Speaker 03:
Because the parties were, there was no dispute about the actual spray arm itself, the blue

[00:04:39] Speaker 03:
piece, and I invite you to take a look at the blue piece.

[00:04:43] Speaker 03:
We submitted its appendix 8266, exhibit 71.

[00:04:50] Speaker 03:
There was no dispute about that material.

[00:04:52] Speaker 03:
Bellinger's experts said it was like a kayak, and the judge understood that was a hard plastic.

[00:05:01] Speaker 03:
So on somebody's judgment, that wasn't the issue about how the arm actually was constructed.

[00:05:07] Speaker 03:
The issue was, on summary judgment, what does cushioning sleeve mean?

[00:05:12] Speaker 04:
Well, it seems to me that even if you preserve the construction you're pressing here on appeal, even if that's so, you need to put on a case of that.

[00:05:23] Speaker 04:
They had an expert.

[00:05:24] Speaker 04:
You did cross-examine the expert, but I'm not sure you got a lot out of it to support your position.

[00:05:30] Speaker 04:
And your expert was a no-show.

[00:05:32] Speaker 04:
So the jury had the stuff in front of them.

[00:05:36] Speaker 04:
They had an expert from the other side describing it.

[00:05:39] Speaker 04:
And on a JMAW with a jury verdict, it's kind of difficult for us under the correct standard to overturn that, right?

[00:05:48] Speaker 03:
The problem, Your Honor, is the construction that was given by Ballinger's expert at trial was just anything that encloses or protects.

[00:05:57] Speaker 03:
The expert was reading cushioning out of the claim.

[00:06:01] Speaker 03:
And so, again, the question is, what is a cushioning sleeve?

[00:06:06] Speaker 03:
Is it something that has to be soft and resilient?

[00:06:09] Speaker 03:
Which, again, is the only thing that's described in the intrinsic evidence.

[00:06:14] Speaker 03:
And on the intrinsic evidence, let me just state this just so it's clear.

[00:06:19] Speaker 03:
In the file history, the file history is crystal clear that a cushioning sleeve is something that

[00:06:25] Speaker 03:
is just a protective plastic sleeve, which is what Bellinger's expert was saying at trial.

[00:06:30] Speaker 03:
Bellinger's expert was reading cushioning out of the claim.

[00:06:34] Speaker 03:
And that was the problem.

[00:06:35] Speaker 03:
And that's what we were telling the court during Markman.

[00:06:38] Speaker 03:
It's soft and resilient.

[00:06:40] Speaker 04:
Well, then why didn't your initial claim construction in your Markman brief say that?

[00:06:45] Speaker 04:
As Judge Stark pointed out, you said a thick sleeve of extruded foam plastic that acts as a protective cushion to prevent damage.

[00:06:53] Speaker 04:
You didn't use the word soft or resilient.

[00:06:57] Speaker 03:
Well, so again, Your Honor, at the Markman, if you look at our briefing, it was actually in several spots in our briefing at appendix 2117, 2118,

[00:07:09] Speaker 03:
We said three different times it's something that has to soften or lessen the impact.

[00:07:14] Speaker 03:
It has to be soft or resilient structures, which again is how the summary of the invention described cushioning sleeves.

[00:07:21] Speaker 04:
But am I incorrect that what you proposed as the construction was what I read a minute ago?

[00:07:28] Speaker 03:
The precise wording of the construction, I believe, is consistent with that.

[00:07:32] Speaker 03:
It was a thick sleeve of extruded foam plastic that acts as a protective cushion.

[00:07:38] Speaker 03:
In the construction, we were saying it has to be a protective cushion.

[00:07:43] Speaker 03:
And then the briefing was very clear, soft or resilient.

[00:07:47] Speaker 03:
And Bellinger doesn't dispute that resilient means something that can be compressed.

[00:07:52] Speaker 03:
You keep saying it's very clear.

[00:07:54] Speaker 02:
Soft is bold and italicized, or resilient, not even highlighted.

[00:07:58] Speaker 02:
So if I was the district court, I wouldn't understand that this dispute was about resilient.

[00:08:03] Speaker 02:
But could I ask about damages?

[00:08:07] Speaker 02:
Sure.

[00:08:09] Speaker 02:
You're asking us, well first, are you asking us to do remittitor of the supposed convoy sales portion of the damages?

[00:08:19] Speaker 02:
Is that what you're asking for, is your relief on the damages issue?

[00:08:23] Speaker 03:
Relief with respect to convoy sales, correct.

[00:08:25] Speaker 02:
Meaning you want us to do the subtraction, the 2.6 million or so.

[00:08:29] Speaker 02:
Correct.

[00:08:29] Speaker 02:
Where did you ask the district court to do that?

[00:08:32] Speaker 03:
We asked to do that during the

[00:08:38] Speaker 03:
So where we asked the court to do that, Your Honor, was in the Daubert.

[00:08:43] Speaker 02:
You can't have a remittent request for a jury damages award in a Daubert motion that's filed before trial.

[00:08:50] Speaker 03:
Well, what we said during Daubert was that the expert should be excluded because the expert did not provide any testimony about the functional relationship between the dryers.

[00:09:02] Speaker 03:
in the car wash system.

[00:09:03] Speaker 02:
Got it.

[00:09:04] Speaker 02:
You didn't want him to be able to testify to convoyed sales.

[00:09:06] Speaker 02:
You lost on that.

[00:09:07] Speaker 02:
So he does testify to some extent.

[00:09:10] Speaker 02:
At least he puts the number in his damages award.

[00:09:13] Speaker 02:
And then you request in a post trial motion that I guess you would, as I understand it, you renew your doubter.

[00:09:22] Speaker 02:
You say he never should have been able to testify.

[00:09:24] Speaker 02:
But

[00:09:26] Speaker 02:
The relief you want, at least they're asking us for, is to subtract the amount that you think was applicable or a result of the convoy sales.

[00:09:36] Speaker 02:
And I'm just asking, where did you ask the district court for that relief, the subtraction?

[00:09:41] Speaker 03:
At Appendix 7556.

[00:09:45] Speaker 03:
And Wash World said quote, the court must either reduce fellinger's damages by $14,000, $164 per unit, or order a new trial.

[00:10:00] Speaker 03:
This is in your post trial motion, right?

[00:10:03] Speaker 03:
That's correct.

[00:10:06] Speaker 04:
Wait a minute.

[00:10:07] Speaker 04:
756 and us is marked.

[00:10:09] Speaker 04:
I thought that was 7556.

[00:10:10] Speaker 03:
7556, correct.

[00:10:14] Speaker 03:
And the court, in the post trial motion at Appendix 44, the court said at Appendix 44, the court rejected the argument that Bellinger's expert included non-patented components such as the dryers and additional components and overinflated the lost profits by $14,164 per unit.

[00:10:37] Speaker 02:
The court must either reduce bounders damages by $14,164 per unit or order a new trial on damages.

[00:10:43] Speaker 02:
Is that the request you're renewing in front of us?

[00:10:46] Speaker 02:
It could be either or?

[00:10:47] Speaker 03:
I think, well, the request is to just take the amount of the lost profits from the dryers and the additional features and just lop them off.

[00:10:56] Speaker 02:
Right.

[00:10:56] Speaker 02:
Do you want any alternative for us to think about a new trial on damages?

[00:11:00] Speaker 03:
I don't think there's one needed because it was clear what the jury found

[00:11:05] Speaker 03:
in terms of the number?

[00:11:06] Speaker 02:
If we're not persuaded to do a remittitor, should we consider a new trial damages or should we just defer?

[00:11:11] Speaker 03:
Yes, if you're not going to remit, then a new trial.

[00:11:14] Speaker 04:
Well, what do you envision a new trial would be?

[00:11:17] Speaker 04:
I mean, I guess I'm sympathetic to the way we remitted her here.

[00:11:21] Speaker 04:
Because the new trial, would that, in your view, just exclude all of the expert testimony about convoyed sales?

[00:11:31] Speaker 04:
So you would just have a new trial

[00:11:33] Speaker 04:
a repeat of the old trial on the same infringing matters?

[00:11:39] Speaker 03:
I think we would have a new trial, a completely new trial on lost profits in general.

[00:11:45] Speaker 02:
With the possibility that the jury comes back with a number bigger than the $10 million?

[00:11:50] Speaker 03:
Possibly.

[00:11:51] Speaker 03:
But again, I don't think the evidence supports that.

[00:11:54] Speaker 03:
And again, we think the remittitor is the way to go.

[00:11:57] Speaker 04:
Well, I didn't see, on questions of preservation,

[00:12:01] Speaker 04:
I didn't see, I think you preserved your remitted argument in the blue brief, but I didn't see really any request for a new trial other than some footnote that said, we don't need a new trial.

[00:12:13] Speaker 04:
I think that's right.

[00:12:15] Speaker 04:
That's our position.

[00:12:18] Speaker 04:
So is that in your view, did you preserve the request for a new trial?

[00:12:22] Speaker 03:
I believe so, Your Honor, by, again, by our Daubert motion and what we filed post trial.

[00:12:31] Speaker 02:
There's a couple of seventh circuit cases cited in the red brief, which I take to mean, or at least this is how Bellinger wants us to read them, that there is a possibility that that $9.8 million figure was not affected by convoyed sales at all.

[00:12:51] Speaker 02:
The question, I know you don't believe that's possible, but just for the purpose of the question, assume it's possible that the jury got to 9.8 without any dollars for convoyed sales.

[00:13:05] Speaker 02:
Would we then have to affirm consistent with this Kessinger and Kosman decision that's cited in the red brief?

[00:13:14] Speaker 02:
I didn't see any response to that in the gray brief.

[00:13:17] Speaker 03:
Your Honor, what's the... Sure.

[00:13:20] Speaker 02:
Kessinger and Kossman are cited in the red brief again for this point that basically if the jury verdict could be sustained on any basis, even though one basis might be an improper one, we're supposed to affirm.

[00:13:39] Speaker 02:
Because you don't have any special interrogatories, you don't have any breakdown in the verdict sheet.

[00:13:47] Speaker 03:
Your Honor, I don't think so because, again, the problem is, at trial, Bellinger's expert was able to talk about lost profits and provide opinion testimony with respect to that.

[00:13:59] Speaker 03:
So I think that the damage was done at trial by the district court allowing that testimony in.

[00:14:06] Speaker 00:
Counsel, you're almost through all of your time.

[00:14:09] Speaker 00:
So why don't we hear from the other side, and we'll give you two minutes for a bottle.

[00:14:15] Speaker 03:
OK, thank you, Your Honor.

[00:14:37] Speaker 00:
Mr. Dillon.

[00:14:39] Speaker 01:
Good morning, your honor.

[00:14:39] Speaker 01:
May it please the court.

[00:14:41] Speaker 01:
Christopher Dillon for Bellinger, Inc.

[00:14:44] Speaker 00:
Mr. Dillon, the court has obviously been interested in damages.

[00:14:49] Speaker 00:
Why wasn't the court incorrect?

[00:14:53] Speaker 00:
A number of years ago, we decided right height.

[00:14:58] Speaker 00:
which held that convoy damages must have, goods must have had a functional relationship to what's claimed.

[00:15:06] Speaker 00:
And here, the court only said they were sold together.

[00:15:10] Speaker 00:
So why doesn't it either have to go back or be subject to or remitted to it?

[00:15:17] Speaker 01:
Your Honor, Wright Height talked about three aspects of being able to get convoyed sales.

[00:15:22] Speaker 01:
He said that it must be either a single assembly, excuse me,

[00:15:26] Speaker 01:
considered a single assembly or parts of a complete machine, or they together constitute a functional unit.

[00:15:32] Speaker 01:
Our position was that what they called convoy sails were features of one machine or assembly.

[00:15:39] Speaker 01:
This is a car wash system.

[00:15:41] Speaker 01:
One of the components they complain about is the rocker washer, the thing that washes the rocker panels or the wheels.

[00:15:46] Speaker 01:
In our view, that's part of the car wash.

[00:15:48] Speaker 01:
The decals are put onto the car wash.

[00:15:51] Speaker 01:
The heater is to heat the water used in the car wash.

[00:15:54] Speaker 01:
The pump systems are for it.

[00:15:56] Speaker 00:
Are they in the claims?

[00:15:58] Speaker 01:
No, but they are part of the same assembly or the same machine.

[00:16:02] Speaker 04:
All your experts said about that was they're often sold together.

[00:16:07] Speaker 04:
And you, in fact, differentiate it.

[00:16:08] Speaker 04:
Sometimes this is sold with this.

[00:16:10] Speaker 04:
Sometimes this is sold with the higher.

[00:16:13] Speaker 04:
And he didn't make, show me if I'm wrong, but I don't see where he said they all work the same, what you're telling us this morning.

[00:16:23] Speaker 01:
So as part of the supplemental request for the record, the court requested the entire expert report.

[00:16:29] Speaker 01:
And that was put in.

[00:16:30] Speaker 01:
If I could turn your attention to paragraphs 39 and 40.

[00:16:33] Speaker 01:
And I'm happy for you to do that.

[00:16:36] Speaker 01:
But by the way, the expert report wasn't in front of the jury, was it?

[00:16:39] Speaker 01:
No, no, no.

[00:16:40] Speaker 01:
I will talk about the experts separately at trial testimony.

[00:16:43] Speaker 01:
But the question was, they had pointed to sold with at the Dalbert stage.

[00:16:48] Speaker 01:
And they pointed to a later paragraph.

[00:16:50] Speaker 01:
In our view, with in that sense was ambiguous as to whether it's sold alongside or it's sold with as it's part of.

[00:16:57] Speaker 01:
But this ambiguity is cleared up earlier in the expert report.

[00:17:01] Speaker 01:
When in paragraph 39, where the expert says, and this is the last sentence, when including additional equipment that is sold on most packages.

[00:17:11] Speaker 01:
And that's the key.

[00:17:13] Speaker 01:
These are components of the car wash.

[00:17:15] Speaker 01:
This isn't like a vacuum cleaner or some other piece of equipment that's sold with the car wash system.

[00:17:22] Speaker 01:
These are optional features of the car wash system.

[00:17:25] Speaker 01:
And Your Honor, you asked where at trial.

[00:17:27] Speaker 01:
If I could turn you to... Well, can I turn you to page 70?

[00:17:31] Speaker 04:
I think this may be...

[00:17:33] Speaker 04:
the Daubert Report of the expert.

[00:17:35] Speaker 04:
So are you talking about something different?

[00:17:37] Speaker 04:
Because at 70, he says, this value includes the amount of profit that they earn, base car wash, incorporating the patent lighting system, as well as additional components that are sold with the average car wash system, such as details, PubSub.

[00:17:52] Speaker 04:
But Molly says they're sold with it.

[00:17:54] Speaker 01:
But they're sold with in the same sense as your car is sold with certain standard equipment and certain optional features.

[00:18:01] Speaker 01:
These are the optional features that are sold on a car wash system.

[00:18:05] Speaker 01:
They're integrated parts of a car wash system.

[00:18:08] Speaker 01:
They're not something that's sold alongside for business convenience.

[00:18:11] Speaker 01:
These are

[00:18:13] Speaker 01:
Optional features such as, for example, the rocker washers.

[00:18:16] Speaker 01:
As you drive in, those wash the wheels of the car.

[00:18:19] Speaker 04:
They're add-ons.

[00:18:20] Speaker 04:
They're discretionary add-ons.

[00:18:22] Speaker 04:
And how do they satisfy the right height test?

[00:18:25] Speaker 01:
Because they're part of the same assembly.

[00:18:27] Speaker 01:
When someone gets their car washed, they drive into the wash bay.

[00:18:31] Speaker 01:
The rocker washers wash the wheel.

[00:18:33] Speaker 01:
The spray arms wash around the sides.

[00:18:36] Speaker 01:
The dryers return the car to the state that the car was in at the beginning.

[00:18:40] Speaker 01:
They're all controlled by the same control system.

[00:18:42] Speaker 01:
It's all part of the same assembly.

[00:18:45] Speaker 01:
In many ways, this is a lot like the paper package.

[00:18:49] Speaker 01:
Did your expert ever say they're all part of the same assembly?

[00:18:52] Speaker 01:
Yes, our expert and the head of the business line said, this is the unit.

[00:18:58] Speaker 01:
And there's several pieces of testimony I think are useful to look on this point at trial.

[00:19:03] Speaker 01:
But first of all, I'd like to start with the brochure, because the brochure indicates that these are optional features.

[00:19:19] Speaker 04:
Does it optional features hurt you rather than help you?

[00:19:22] Speaker 04:
Because if they're optional, that means the system that you're purchasing can function with the without them.

[00:19:27] Speaker 04:
But you know, you might want something a little fancier or whatever, or a little add on to do something other than the basic function of the machine.

[00:19:35] Speaker 04:
Isn't that a problem for you?

[00:19:37] Speaker 01:
It is not, your honor, because the question in this scenario is in this case, an infringing sale of a car wash system was made.

[00:19:48] Speaker 01:
If that infringing sale had not occurred, what would Bellinger have sold instead?

[00:19:53] Speaker 01:
And we looked at the average car wash system that Bellinger would have sold.

[00:19:58] Speaker 01:
The average car wash system is not the one that's stripped down

[00:20:01] Speaker 01:
It's not the one with all of the options checked.

[00:20:04] Speaker 01:
It's the one that most customers choose.

[00:20:07] Speaker 01:
Most customers choose to have the rocker washers, to have the pumps, and to have the dryers.

[00:20:12] Speaker 01:
In fact, the dryers are standard on one of the two, and they're optional on the other one.

[00:20:19] Speaker 01:
And that option is taken by 75% of the customers.

[00:20:22] Speaker 01:
And so in that scenario, we only took credit for 75% because not all customers would buy that.

[00:20:29] Speaker 01:
What our expert and our business person provided to the jury at trial was testimony about what is the profit.

[00:20:38] Speaker 01:
for the average unit that we sell.

[00:20:42] Speaker 01:
And the average unit that we sell includes these components.

[00:20:46] Speaker 01:
These are not additional items.

[00:20:48] Speaker 01:
It's like if you buy a car.

[00:20:50] Speaker 01:
Some cars come with certain features.

[00:20:52] Speaker 02:
We said if these components have independent functions outside of the patented system, then you don't get them as part of convoy sales.

[00:21:01] Speaker 01:
They don't have independent functions in the sense that these are part of our system.

[00:21:05] Speaker 04:
You just said they're not additional components.

[00:21:08] Speaker 04:
That's precisely what your expert said on paragraph 7.

[00:21:14] Speaker 04:
He called them additional components.

[00:21:40] Speaker 01:
All right.

[00:21:41] Speaker 01:
If I could turn your attention to Appendix 6576.

[00:21:43] Speaker 01:
This is the cross-examination of our expert at trial.

[00:21:48] Speaker 01:
6576?

[00:21:59] Speaker 01:
Yes.

[00:22:03] Speaker 01:
And at line two, the question, and so, what you've done as far as this particular lost profits calculation

[00:22:10] Speaker 01:
is you've included an amount of profit for an entire car wash machine that would have been sold by Bellinger.

[00:22:17] Speaker 01:
Answer, yes, because that's what Bellinger is selling.

[00:22:22] Speaker 01:
And if I also could turn your attention to the testimony of Dave Doherty.

[00:22:26] Speaker 01:
He talked about this at Appendix Site 6303.

[00:22:47] Speaker 01:
He, again, is the business manager.

[00:22:49] Speaker 01:
So this is an independent piece of information and evidence that was before the jury, beyond what our expert testified.

[00:22:56] Speaker 01:
He was asked, all right, what is, and this is at line seven of 6303, what is Bellinger's gross profit for the sale of the saber?

[00:23:06] Speaker 01:
Answer, a saber is $57,700.

[00:23:10] Speaker 01:
Question, and what is Bellinger's gross profit for the sale of a condor?

[00:23:14] Speaker 01:
Answer, $49,900.

[00:23:17] Speaker 01:
And when I say gross profit, there are other costs and taxes you still have to pay.

[00:23:21] Speaker 01:
Is that correct?

[00:23:22] Speaker 01:
Yeah.

[00:23:23] Speaker 01:
Those would be like the typical package that we sell, yes, for those pieces of equipment.

[00:23:29] Speaker 02:
If we think that you needed evidence that the dryers and these other items have no independent function outside of the patented system, do you acknowledge you did not prove that?

[00:23:40] Speaker 02:
I don't believe we had that requirement.

[00:23:42] Speaker 02:
I think we had to show.

[00:23:43] Speaker 02:
If we have that requirement, do you acknowledge that there's not substantial evidence to support that in front of the jury?

[00:23:51] Speaker 01:
I think the jury had evidence of the videos that showed the operation of the system where they saw that these were integrated.

[00:23:58] Speaker 01:
Did your experts say anything about whether the dryers have an independent function?

[00:24:02] Speaker 01:
Our inventor, Barry Turner, talked about how our dryers have a light system that's integrated into the light system in our Condor system.

[00:24:13] Speaker 01:
So it's an integrated part.

[00:24:15] Speaker 01:
He didn't say that lights can't function independently of the patented system, did he?

[00:24:21] Speaker 02:
He did not say that, Your Honor.

[00:24:23] Speaker 04:
We're looking at this a little differently than I've been looking at it because I thought this was a dollar issue.

[00:24:29] Speaker 04:
And the question was that the judge should have granted the motion to exclude based on Daubert.

[00:24:37] Speaker 04:
So I don't know what to do with these other pieces of evidence that you put in in convoyed sales.

[00:24:42] Speaker 04:
But I think one of the questions before Russ is whether or not the judge sort of struck the expert.

[00:24:47] Speaker 04:
So if we confine ourselves to what the expert said about convoyed sales,

[00:24:53] Speaker 04:
I take your point about some of the other testimony, but there's part of the cross-examination of Dr. Duck, and that also included additional components and additions of the car machine, right?

[00:25:10] Speaker 04:
Answer, it did.

[00:25:11] Speaker 04:
As I testify, it includes a typical set of components that are sold with the balance.

[00:25:15] Speaker 04:
Sold with.

[00:25:17] Speaker 04:
Okay, why don't you list for me all the additional components that you include

[00:25:20] Speaker 04:
to come in this incremental profit.

[00:25:22] Speaker 04:
I mean, I think it's an unreasonable question.

[00:25:25] Speaker 04:
There are many components, but Bellinger provided data on those components.

[00:25:29] Speaker 04:
He's talking about being sold with.

[00:25:32] Speaker 04:
Your expert didn't make the case, did he, that there's some functional need for this in the system?

[00:25:37] Speaker 01:
He did not independently say, with regards to these components, they were individually functionally related.

[00:25:44] Speaker 01:
I admit that.

[00:25:45] Speaker 04:
So how is that appropriate to allow that testimony under Daubert for him to testify that this is the amount of damages that should accrue for lost profits?

[00:25:55] Speaker 01:
Because the right height test says that if it is a single machine, a single assembly, or functionally related,

[00:26:03] Speaker 01:
Our argument at trial was that this is a single machine or a single assembly.

[00:26:07] Speaker 01:
The profit we calculated was for an average Condor machine, an average Sabre machine that had certain features for components, certain options.

[00:26:18] Speaker 04:
Can I just move you to just a procedural question about a new trial versus a remitter?

[00:26:24] Speaker 04:
You've got a lot of waiver arguments in your brief.

[00:26:28] Speaker 04:
Is it your argument, let's start with remitter.

[00:26:33] Speaker 04:
I think they preserved it.

[00:26:36] Speaker 04:
Let's start with hypothetically.

[00:26:38] Speaker 04:
I think they preserved it all along, including in the blue brief.

[00:26:41] Speaker 01:
Do you take issue with that?

[00:26:42] Speaker 01:
I do.

[00:26:44] Speaker 01:
What you recorded was the reply brief that they raised in the J-Mall.

[00:26:48] Speaker 01:
And although they identify the amount per unit, there is no special interrogatory that would tell us the number of units.

[00:26:56] Speaker 01:
So they never asked the court to remit 2.6 million.

[00:26:59] Speaker 01:
Arguably, they asked it to remit 14,000 per unit.

[00:27:03] Speaker 01:
But there was no evidence in the record from which the trial judge would have been able to determine the number of units.

[00:27:09] Speaker 01:
And in fact, in their other remitted requests, where they asked for pre-notice sales to be remitted, the district court said,

[00:27:17] Speaker 01:
I can't do that because you didn't ask for a special interrogatory that would break out.

[00:27:21] Speaker 04:
That's a different issue about whether they were required to have a special interrogatory.

[00:27:26] Speaker 04:
But in Blue Grief, I think I'm seeing it in Blue Grief, page 37, page 69, page 70.

[00:27:39] Speaker 04:
They're challenging the refusal to reduce damages awards with respect to convoyed sale.

[00:27:45] Speaker 04:
Is that not a preservation?

[00:27:46] Speaker 01:
No, I believe it's in their blue brief, Your Honor.

[00:27:48] Speaker 01:
Oh, so you do think they do?

[00:27:49] Speaker 01:
I don't believe it was fairly presented to the district court on J-Mall.

[00:27:54] Speaker 01:
Actually, there was no J-Mall at the district on damages.

[00:27:57] Speaker 01:
I don't believe it was presented as a remitted or

[00:28:00] Speaker 01:
a remitted argument to the district court.

[00:28:02] Speaker 02:
Because they never say $2.6 million and they only even say reduce damages by the $14,000 per unit in the reply brief, not in the opening brief to the district court.

[00:28:14] Speaker 01:
And the $14,000 number was never before the jury either.

[00:28:17] Speaker 01:
So the jury never made a finding as to both the number of units and there was never a finding with regards to... They didn't make a finding, but Dr. McDuff did opine to the $14,000, didn't he?

[00:28:28] Speaker 01:
And only in his expert report, he did not testify about that.

[00:28:32] Speaker 04:
Well, they say in their J-Mall, not only is there no evidence in the record before the jury, but there's also no evidence in Dr. McDuff's report to support such inflated numbers.

[00:28:44] Speaker 04:
Raised in Washwood's drawback motion, they refer back to their drawback motion about the inadequacy of his statement.

[00:28:51] Speaker 04:
So why isn't that sufficient?

[00:28:55] Speaker 01:
Again, there was no evidence at trial as to the amount of sales to be deducted from the verdict.

[00:29:01] Speaker 01:
And the jury was not asked to determine either an amount that should be deducted for convoy sales or the number of units.

[00:29:09] Speaker 01:
And from our perspective, our entire presentation of evidence was based on the entire machine.

[00:29:14] Speaker 01:
And there were three different numbers given.

[00:29:16] Speaker 01:
There was the $53,000 number given by our expert.

[00:29:21] Speaker 01:
And then there were separate numbers given by Dave Doherty.

[00:29:24] Speaker 01:
where you provided the profit number for our total condor.

[00:29:27] Speaker 04:
Wasn't that $14,000 number associated with those additional sales all over the place, including explicitly in a chart at 3433?

[00:29:38] Speaker 04:
It was all over the place, was it not?

[00:29:40] Speaker 04:
It was your number.

[00:29:41] Speaker 04:
The other side didn't come up with that number, right?

[00:29:44] Speaker 01:
It was the number in our expert report, but that number was never used at trial.

[00:29:50] Speaker 02:
Didn't you admit to the district court that the jury accepted Dr. McDuff's damages calculation at 70-30, 74-55?

[00:30:00] Speaker 02:
That is, you defended expressly the $9.8 million overall award as basically being that the jury accepted the calculations of your expert, which would therefore include the convoy's sales.

[00:30:15] Speaker 01:
May I have the page number again?

[00:30:17] Speaker 02:
Yes, trial 7030.

[00:30:18] Speaker 02:
7030.

[00:30:20] Speaker 02:
It's you all writing, I think in opposition to their post trial motion, the jury accepted his damages calculation.

[00:30:32] Speaker 01:
I'm sorry, 7030.

[00:30:33] Speaker 01:
7030, I believe.

[00:30:42] Speaker 02:
towards the end of the first paragraph, the carryover paragraph at the top?

[00:30:49] Speaker ?:
Right.

[00:30:50] Speaker 01:
The jury accepted his damages calculation and wearing damages within a stated range.

[00:30:54] Speaker 01:
He had a range, and this was within the range.

[00:30:57] Speaker 01:
I don't know how they got to it.

[00:30:58] Speaker 02:
But the 9.8 was only the bottom point of the range because it had a $2.6 million convoyed sales embedded in it.

[00:31:05] Speaker 02:
So the point is, how can you argue to us, we don't know if the jury awarded $2.6 million of convoyed sales when you told the district court, the jury, we know it, accepted his calculation.

[00:31:17] Speaker 01:
Well, I think we meant they accepted within the range of what he provided.

[00:31:20] Speaker 01:
And therefore, there was a basis for it.

[00:31:22] Speaker 01:
But there are other ways you could get to it, which is there were three profit numbers, two provided by Dave Doherty and one provided by our expert.

[00:31:29] Speaker 01:
There was a dispute as to units.

[00:31:32] Speaker 01:
And they did raise concerns about whether the dryer should be included.

[00:31:36] Speaker 04:
Well, the main thing was this chart.

[00:31:38] Speaker 04:
And as the district court assumed, even said, it wasn't excessive because the jury picked this line on the chart.

[00:31:46] Speaker 04:
And that line was $9.8 million.

[00:31:49] Speaker 04:
And that line, exactly what they, it was your chart,

[00:31:52] Speaker 04:
That's exactly what the jury awarded, and that $9.8 million consisted of, included, under everything your expert said, $14,164 in ancillary profits from these additional components.

[00:32:09] Speaker 04:
Nobody knows 1000%, but I don't understand.

[00:32:11] Speaker 04:
They picked $9.8.

[00:32:14] Speaker 04:
And the judge understood that to be the obvious, which is they picked that line.

[00:32:20] Speaker 04:
And that line includes the convoyed sales for which they are asking remitter at this point.

[00:32:24] Speaker 04:
Your Honor, I agree.

[00:32:27] Speaker 01:
We argued it that way.

[00:32:28] Speaker 01:
I expect that's the way.

[00:32:29] Speaker 01:
But as we pointed out, in the Seventh Circuit, the standard review is, is there an alternative way you could get there?

[00:32:34] Speaker 01:
And there is, because both the number of units and the amount of profit were issues at trial.

[00:32:39] Speaker 01:
And this could fall within the range other ways.

[00:32:42] Speaker 01:
I expect that the jury accepted our argument on that.

[00:32:45] Speaker 01:
But because the jury was never asked to make findings as to the number of units or the amount of convoyed sales or to the amount of profit, there's no way to know.

[00:32:54] Speaker 01:
And that's why, although I believe that's how the jury came to it, I'm not compelled to do that.

[00:33:01] Speaker 01:
And the standard in the Seventh Circuit, if there's an alternative way that you can support the verdict,

[00:33:05] Speaker 01:
Then you have to do that.

[00:33:06] Speaker 02:
I think I interrupted Judge Post earlier.

[00:33:09] Speaker 02:
New trial on damages, do you contend that they preserved or do you acknowledge that they preserved that request and are asking for it here?

[00:33:17] Speaker 01:
They did not ask for a new trial in their briefs.

[00:33:20] Speaker 01:
Here or below or both?

[00:33:23] Speaker 01:
They asked for a new trial at J-Mall, yes.

[00:33:26] Speaker 01:
They did not ask for it in their briefs here.

[00:33:28] Speaker 01:
One quick last thing.

[00:33:29] Speaker 02:
On infringement, you cite in your brief to certain discovery responses as being supportive of an infringement finding.

[00:33:38] Speaker 02:
Were those discovery responses in front of the jury?

[00:33:41] Speaker 01:
They were admitted as evidence in the jury.

[00:33:43] Speaker 01:
So they are exhibits in front of the jury?

[00:33:44] Speaker 01:
They're exhibits.

[00:33:44] Speaker 01:
They're trial exhibits that the jury was... And your expert talked about them?

[00:33:48] Speaker 01:
Yes.

[00:33:48] Speaker 01:
Okay.

[00:33:49] Speaker 02:
Thank you.

[00:33:50] Speaker 00:
Thank you, counsel.

[00:33:51] Speaker 00:
Your time has obviously expired.

[00:33:54] Speaker 00:
Mr. Gannon, we will give you your three minutes for a bottle if needed.

[00:34:01] Speaker 03:
Thank you, Your Honor.

[00:34:02] Speaker 03:
Just to follow up on a question, Judge Stark, about the discovery.

[00:34:10] Speaker 03:
That, I believe, has to do with the term predefined wash area.

[00:34:15] Speaker 03:
The predefined wash area, just real quickly,

[00:34:19] Speaker 03:
The problem there was the fellinger argued that to the jury that the wash area is everything.

[00:34:25] Speaker 03:
It includes all the equipment.

[00:34:27] Speaker 03:
And if you include all the equipment, of course, that's predefined.

[00:34:30] Speaker 03:
That's not correct because the intrinsic evidence clear the wash area is a subset of the wash bay and when you look at the right construction of wash area and you see it's defined by where the washing is going on by the arms, that is not predefined in the accused system because the wash area changes with every vehicle.

[00:34:52] Speaker 03:
With respect to the cushioning sleeve, Judge Stuck, to your point about did the judge know what we were arguing about soft and resilient, I'd like to point you to appendix 0014, where in the opinion, the Markman opinion, the court very clearly understood that we were arguing cushioning sleeve requires soft or resilient material for the cushioning sleeve.

[00:35:16] Speaker 03:
So clearly the court was on notice of that.

[00:35:21] Speaker 03:
With respect to Waver, with respect to the Ventura case, I just wanted to point out what the stated construction was.

[00:35:29] Speaker 03:
It was, quote, a single particulate made up of a particle of active material to which one or more particles of additive material are fixed.

[00:35:39] Speaker 03:
And then it continues.

[00:35:41] Speaker 03:
That was the stated construction in that case.

[00:35:43] Speaker 03:
And the construction that was brought on appeal was

[00:35:47] Speaker 03:
They deleted all that language and they added high-energy milling process.

[00:35:52] Speaker 03:
And the Federal Circuit in that case said,

[00:35:56] Speaker 03:
You know what?

[00:35:57] Speaker 03:
The wording's different, but it doesn't matter.

[00:35:59] Speaker 03:
Everybody was on notice.

[00:36:01] Speaker 03:
Everybody understood that high-energy milling was the thing that was being argued in the Markman, and so there was no waiver.

[00:36:09] Speaker 03:
And that's exactly what we have here with cushioning sleep.

[00:36:12] Speaker 03:
Everybody knew.

[00:36:13] Speaker 03:
Does it have to be soft or resilient, either one?

[00:36:18] Speaker 03:
Or can it cover something that is a hard plastic?

[00:36:22] Speaker 03:
That was the dispute.

[00:36:24] Speaker 03:
That was the dispute at Markman that the district court just didn't resolve.

[00:36:28] Speaker 03:
With respect to damages,

[00:36:32] Speaker 03:
I think it's pretty clear Mr. Dillon cited to all sorts of different testimony, some that's not in the briefs from other witnesses.

[00:36:41] Speaker 03:
There is not a single bit of testimony from anyone talking about the functional relationship of the dryers versus the car wash, zero.

[00:36:50] Speaker 03:
It's not even in his expert report.

[00:36:52] Speaker 03:
It's not in his expert report, which is why we move for Daubert, and it's why that should have been excluded.

[00:36:57] Speaker 02:
And no other... You couldn't ask for the remittance error, the $14,000 per unit, until your reply brief on the post-trial motion.

[00:37:05] Speaker 02:
That's too late, correct?

[00:37:06] Speaker 03:
So let me just... To that point, that was going to be my last point, Your Honor.

[00:37:10] Speaker 03:
I'm going to point you to Appendix 7-222, which is our post-trial... Do you agree that a reply would be too late if I don't find it in your opening brief?

[00:37:20] Speaker 03:
It's actually... Let me just be very clear.

[00:37:23] Speaker 03:
At Appendix 7-222,

[00:37:27] Speaker 03:
It's laid out chapter and verse in the motion, not the reply.

[00:37:32] Speaker 03:
Motion for a new trial, $2.6 million, and then there's a footnote explaining where the $2.6 million came from.

[00:37:39] Speaker 02:
But all you ask for at the end of that is that the court must overturn the jury's damages award at 7225.

[00:37:45] Speaker 02:
I understand the argument, but if I don't see the specific request for remittitor until the reply brief, do you agree that would be too late?

[00:37:54] Speaker 02:
Yes.

[00:37:57] Speaker 00:
Thank you to both counsels, the case is submitted.