[00:00:00] Speaker 04: We have four arguments this morning, beginning with case number 23-1882, Global Tubing Against Tenaris Coiled Tubes. [00:00:11] Speaker 00: Thank you, Judge Toronto, and may it please the court, John O'Quinn on behalf of Tenaris. [00:00:15] Speaker 00: The district court granted summary judgment of an equitable conduct against Tenaris by resolving disputed fact issues on each of specific intent, platform materiality, and cumulativeness, for each of which global has the burden of proof. [00:00:28] Speaker 00: And so doing, the district court applied the wrong legal standards while fundamentally misreading the two key documents on which it relied. [00:00:35] Speaker 00: At the same time, it failed to acknowledge other evidence on materiality and cumulativeness, like the grandchildren patent applications and the expert analysis of former Commissioner Robert Stoll. [00:00:45] Speaker 00: For its part, global tubing doesn't really even attempt to defend--" Can I just ask you? [00:00:50] Speaker 04: So on inequitable conduct. [00:00:54] Speaker 04: Oh, all the focus is on Mr. Valdez, right? [00:00:57] Speaker 02: That's correct. [00:00:58] Speaker 04: Is that because, is there precedent saying that for inequitable conduct, the challenger has to specify which human beings committed it and Mr. Valdez is the only human being that is pled as the inequitable actor? [00:01:16] Speaker 00: So Judge Toronto, you're right. [00:01:18] Speaker 00: Inequitable conduct has to be by an individual. [00:01:21] Speaker 04: What cases? [00:01:23] Speaker 00: Exergen. [00:01:24] Speaker 00: There's a footnote in exergen. [00:01:25] Speaker 00: It refers specifically to the PTO rule on which this doctrine relies. [00:01:31] Speaker 00: And so it's well established that it has to be by an individual. [00:01:35] Speaker 00: So in fairness to the global, Dr. Valdez is not the only individual that they identified, but that is the only individual that the district court identified. [00:01:46] Speaker 04: So if the case were to go back, it's at least a potential question whether other people, like some of the lawyers involved, might have made inequitable judgments, to use an improper term. [00:02:03] Speaker 00: I think that's a fair assessment, Judge Taranto. [00:02:08] Speaker 00: As the case comes to you, the district court seems to have identified Dr. Valdez as the person who committed iniquitable conduct and then for purposes of the 07 [00:02:17] Speaker 00: And that's with respect to the 256 patent. [00:02:20] Speaker 00: And then for purposes of the 074 and the 075 patents, the district court relied on the concept of infectious unenforceability. [00:02:28] Speaker 00: Then going back to the purported inequitable conduct by Dr. Valdes. [00:02:33] Speaker 04: I have another question to divert you from what you want to talk about. [00:02:36] Speaker 00: It's quite all right. [00:02:36] Speaker 00: I'm here to answer your questions. [00:02:39] Speaker 04: The premise of this question is that both inequitable conduct and Section 2 go back for trial. [00:02:46] Speaker 04: What will be the procedure? [00:02:47] Speaker 04: Has that been settled? [00:02:50] Speaker 04: Is it determined? [00:02:52] Speaker 04: How is it affected by, you know, the beacon theaters, Dairy Queen, Bowles, and all of that? [00:02:57] Speaker 00: So a couple of points. [00:02:58] Speaker 00: I think both issues, if they were to go back, both issues, and certainly the issue of Section 2 attempted monopolization, would be subject to further summary judgment motion, or further consideration for summary judgment. [00:03:13] Speaker 00: For example, the district court didn't reach [00:03:15] Speaker 00: of the issue of actually defining the market. [00:03:18] Speaker 00: The district court, I think, assumed, as we did for purposes of argument, the markets assumed their market. [00:03:24] Speaker 00: So there are a number of issues that I think the district court would have before it. [00:03:27] Speaker 00: But getting where you're going with your question, if there was ultimately to be a trial, then the issues that underlie inequitable conduct would be, I think, tried to a jury because of Beacon Theaters and the Seventh Amendment issue, because [00:03:43] Speaker 04: because the inequitable conduct issue overlaps so extensively with the Walker process bad conduct. [00:03:55] Speaker 00: It is the basis for the first element of a Walker process claim. [00:03:58] Speaker 04: I don't remember that either side here or our case law says they're identical, but they're [00:04:05] Speaker 00: In a post-theresence world, there's a lot of pre-theresence. [00:04:09] Speaker 00: I think there were some significant differences. [00:04:11] Speaker 00: I think there are some differences, and so there may be some daylight between the two. [00:04:17] Speaker 00: Obviously, for Walker Process, in addition to proving the anti-competitive conduct, [00:04:21] Speaker 00: that is the predicate for it, you then have to prove all of the other factors. [00:04:26] Speaker 04: In your view, if Section 2 got to trial, there would be a trial, two adjudicators, one presentation of evidence, with the jury having to adjudicate the common issues, and then the judge would be bound by those. [00:04:42] Speaker 00: That's right. [00:04:43] Speaker 00: Let me put it this way, Judge Toronto. [00:04:45] Speaker 00: I think that was the party's understanding of the case. [00:04:49] Speaker 04: Circumstances may have changed. [00:04:51] Speaker 00: It is possible that circumstances would change for one reason or another, so I don't want to say that that is definitively what would happen, but it is certainly within the realm of distinct possibility on remand. [00:05:04] Speaker 02: If we vacate summary judgment of an actual conduct and send it back and take it, you would agree that because the district court did not reach the affirmative egregious misconduct allegations, that you would still potentially have to confront those on summary judgment on remand? [00:05:22] Speaker 00: I think that's right, Judge Stark. [00:05:23] Speaker 00: I mean, obviously, this court could, as a theoretical matter, decide. [00:05:28] Speaker 02: This is if we vacate and remand. [00:05:30] Speaker 00: Right. [00:05:31] Speaker 02: You did move for summary judgment. [00:05:33] Speaker 00: We did. [00:05:34] Speaker 02: before us as well? [00:05:36] Speaker 00: So it is, but it isn't complete. [00:05:40] Speaker 00: And what I mean by that is we move for summary judgment of no inequitable conduct on two grounds. [00:05:45] Speaker 00: One had to deal with an issue related to inventorship. [00:05:48] Speaker 00: That issue the district court did not decide and decided presented disputed issues a fact. [00:05:52] Speaker 00: So at a minimum that would remain. [00:05:54] Speaker 00: The issues of intent [00:05:56] Speaker 02: materiality and and no agree affirmative egregious misconduct or things that we did move for summary judgment for and so you you could as a few materiality yes at minimum there's a genuine dispute a material fact about materiality yes that's right how can that be it seemed like this I max brochure [00:06:19] Speaker 02: and your patent, the 256 patent at least, that the ranges overlap. [00:06:26] Speaker 02: How could we say that there's even a fact dispute on whether it's but for material? [00:06:33] Speaker 00: Yeah, so Judge Stark, a couple of points. [00:06:35] Speaker 00: First of all, with respect to, let me start on the concept of cumulativeness and then I'll move into before materiality specifically because there [00:06:46] Speaker 00: They are interrelated. [00:06:47] Speaker 00: This court's decision in Larson is very clear that on the question of buff form materiality and whether or not a prior reference is cumulative, the question is, a question is, is it less relevant? [00:07:00] Speaker 00: Is it less relevant than information that's already been considered by the examiner? [00:07:04] Speaker 00: If there is disclosed prior, the quote, more completely describes [00:07:08] Speaker 00: the limitations at issue than the omitted ones, end quote, which makes the disclosed prior more material than it would be cumulative or not, but for material. [00:07:18] Speaker 00: That is the undisclosed art. [00:07:19] Speaker 00: And that's exactly what you have here with the Chippwood reference. [00:07:23] Speaker 00: and the 4100 series, and for that matter as well, the Valdez 2010 or Valdez 363 reference. [00:07:31] Speaker 00: The Chitwood reference and the 4100 series that it incorporates by the reference or that a skilled artisan would appreciate as my [00:07:39] Speaker 00: a friend on the other side's client argued below that you would get that directly from Chitwood, it more completely overlaps with the claims. [00:07:48] Speaker 00: I mean, you are right that even though Dr. Valdez did not think that the carbon was covered by the claims, he thought that it was lower than their carbon. [00:07:59] Speaker 00: And that was a point that they were consistent of in the emails in 2013. [00:08:01] Speaker 04: It would be enough not to be. [00:08:04] Speaker 04: cumulative if there was even one element or one basis for disputing obviousness or novelty that was not in Chitwood, but is in Symax. [00:08:19] Speaker 00: I think that as a general proposition, that's right. [00:08:21] Speaker 04: But the issue of the overlapping chemistry here, at least in this court, very much, I think this is fair to say, global tubing. [00:08:34] Speaker 04: places almost no emphasis on the carbon element, much greater emphasis on other aspects of Symax. [00:08:42] Speaker 00: Correct. [00:08:42] Speaker 00: And two points about that. [00:08:43] Speaker 00: Number one, there's at least a disputed fact issue as to whether or not those other aspects of Symax are disclosed in the Chitwood reference, which was the public published version, as Dr. Valdez called it in Appendix 7793, of the Symax process. [00:09:02] Speaker 00: And number two, you have the rest of the CYMAX. [00:09:05] Speaker 00: The only thing that was not disclosed in the prosecution of the 074 and the 075 was the chemistry specification, the difference in the carbon. [00:09:14] Speaker 04: The chemistry specification, there are a bunch of, is there no... It's four pages out of it. [00:09:19] Speaker 04: No, I know, but there are many chemicals that are listed in that chart, not just... There are, and with respect to CYMAX, [00:09:28] Speaker 00: The carbon one abuts at the low end, silicon abuts at the high end, and I don't recall that the others overlap, but regardless, it doesn't disclose aluminum, for example. [00:09:43] Speaker 00: I think some of the others do overlap. [00:09:46] Speaker 04: My recollection is most do, not everyone. [00:09:48] Speaker 00: I think that's right, Judge Toronto. [00:09:51] Speaker 00: My modest point on this is that if you look at the 4100 series, or frankly, if you look at Valdez 2010, they all overlap. [00:09:59] Speaker 04: What do you make of the point, I think was asserted, that the SIMAC said something like, we have a special 4100, not one of the ones that [00:10:12] Speaker 04: is listed in whatever the standard association. [00:10:14] Speaker 00: Yeah, I think all that does is go to identifying the specific chemistry. [00:10:20] Speaker 00: In other words, that's showing you the specific chemistry. [00:10:22] Speaker 00: The 4100 series shows you a broader range of chemistries, a frankly more relevant range of chemistries, because if you take carbon, for example, it more completely overlaps. [00:10:32] Speaker 00: with the range and so if the idea is just like Valdez 2010 disclosed a carbon, disclosed a silicon that was in the heartland of the range, whereas what you have here is something that only disclosed, to the extent that it wasn't disclosed, the only thing that wasn't disclosed [00:10:50] Speaker 00: in the prosecution of the 07-4 and the 07-5 is the chemistry. [00:10:54] Speaker 00: And I would say that that is entirely cumulative with the chemistries that are disclosed both by Valdes 2020, but also Chitwood. [00:11:03] Speaker 00: And the reason it matters in terms of the 07-4, 07-5 disclosure, that goes to but for materiality. [00:11:08] Speaker 00: Everything else in CIMAX was disclosed for the 07-4, 07-5, and the 07-4, 07-5 issued, notwithstanding that that was the case. [00:11:17] Speaker 00: And in fact, then only were they disclosed what specifically brought [00:11:20] Speaker 00: to the prosecutor's retention. [00:11:21] Speaker 00: In appendix 66, 64, and 66, 65, you can see where not only the CIMAX documents, other than chemistry specification, which wasn't disclosed at that point, but Chitwood itself was brought specifically to the prosecutor's retention. [00:11:38] Speaker 00: And then you have the grandchildren patents. [00:11:39] Speaker 02: One more materiality question. [00:11:40] Speaker 02: It seems like in the red brief, the theory of materiality of the CIMAX brochure [00:11:46] Speaker 02: was completely different than what the district court found and held against you. [00:11:51] Speaker 02: Am I wrong about that? [00:11:52] Speaker 00: You are correct. [00:11:53] Speaker 02: And how do I make of that, if that's the case? [00:11:55] Speaker 00: I think what you make of that is that certainly the district court's basis for granting summary judgment should not be affirmed. [00:12:02] Speaker 00: And for starters, the district court didn't apply the buffer materiality standard. [00:12:06] Speaker 02: But we could reach and affirm on the grounds that's argued in the red brief. [00:12:09] Speaker 00: You theoretically could. [00:12:11] Speaker 00: We're here on summary judgment. [00:12:13] Speaker 00: The court reviews de novo. [00:12:14] Speaker 00: These issues are fairly before the court. [00:12:17] Speaker 00: They were fairly before the district court. [00:12:19] Speaker 00: But my simple point is everything that they then argue, they're sort of aware with themselves. [00:12:26] Speaker 00: On the one hand, they want to make a big deal about the fact that it wasn't entirely disclosed. [00:12:31] Speaker 00: On the other hand, the only thing that was not disclosed was the chemistry specification. [00:12:36] Speaker 00: they don't talk about the chemistry specification because it doesn't matter and the reason it doesn't matter is because that was otherwise disclosed. [00:12:44] Speaker 04: I realize I've completely blown through the time that I... I assume you plan to do your section two argument and your second... I do. [00:12:52] Speaker 00: So I'm happy to answer additional questions. [00:12:55] Speaker 03: We've spent all our time talking about materiality but I think what the district court found troubling, what I found troubling is [00:13:01] Speaker 03: this statement, and you know what I'm talking about. [00:13:03] Speaker 03: I do. [00:13:04] Speaker 03: The bubble statement. [00:13:05] Speaker 03: Can you help me before we get to the last sentence of that bubble statement with the preceding sentences and how you think, because I understand the theory is, well, this is just commenting on why this doesn't provide secondary consideration. [00:13:19] Speaker 03: Great. [00:13:21] Speaker 03: So I have a hard time following all the technical aspects of this [00:13:25] Speaker 03: prior three sentences. [00:13:26] Speaker 03: I mean, I get the gist of it. [00:13:28] Speaker 03: My problem is that what he's explaining in those prior three sentences doesn't match up with that last sentence in my mind. [00:13:35] Speaker 03: And so I'm trying to figure out why that last sentence, which has [00:13:39] Speaker 03: I don't think it's a good idea to disclose this is not evidence of intent. [00:13:43] Speaker 00: Yeah, so Judge Hughes, just to take a step back, and I do think the words here matter in particular because you're dealing with somebody whose English is not their first language. [00:13:52] Speaker 00: He specifically says, I'm not sure it's a good idea to disclose this document. [00:13:56] Speaker 00: And let me give the wind up to that because [00:13:59] Speaker 00: He says in his deposition at Appendix 7799 that his point was he was asking the attorney about whether this would be helpful or not, that he wasn't sure whether it was. [00:14:12] Speaker 00: In the context for it, if we take two steps back, if you first look at the basis for the rejection, [00:14:17] Speaker 00: The basis for the rejection was that you did have something that actually disclosed this chemistry spot on, Valdez 2010. [00:14:26] Speaker 00: And then there was the question of, do you have secondary considerations? [00:14:30] Speaker 00: The prosecuting attorney then specifically instructs, and this is an appendix 7710, [00:14:38] Speaker 00: that we need to, quote, make sure the evidence in our declaration is tied directly into our claims. [00:14:44] Speaker 00: That's the words from the prosecuting attorney. [00:14:46] Speaker 00: Tied directly into our claims, end quote. [00:14:48] Speaker 00: So in response, and knowing that he wants evidence of failure or secondary considerations, he voluntarily discloses. [00:14:56] Speaker 00: I mean, if he was intending to deceive, he didn't have to even acknowledge the existence of the sign language document. [00:15:02] Speaker 04: voluntarily disclosed to his own lawyer. [00:15:04] Speaker 00: To his attorney, right? [00:15:05] Speaker 00: Not to the PTO. [00:15:06] Speaker 00: Not to the PTO, if that's right, but to his attorney. [00:15:09] Speaker 00: I mean, if he wanted to act like it doesn't exist, he didn't even have to acknowledge that it exists, much less send it to his attorney. [00:15:16] Speaker 03: I'm not sure that matters much to me. [00:15:17] Speaker 03: I mean, whether he's lying to his attorney or lying to the PTO, I mean, that's a hypothetical. [00:15:21] Speaker 03: I understand. [00:15:22] Speaker 03: It doesn't make any difference to me. [00:15:24] Speaker 03: Maybe he's telling his attorney, we've got this thing, but I don't think we should send it out. [00:15:28] Speaker 00: Yeah, and I don't think that that's a fair reading, Judge Hughes, because what he's then saying, he then is telling the attorney for the first time about the failed attempt called Symax. [00:15:38] Speaker 00: And when he says that it is outside of our carbon range, now I understand that that was wrong, but he believed it. [00:15:46] Speaker 00: If you look at the email in 2013 where he was told about this in the first place, [00:15:52] Speaker 00: says essentially the same thing that this is not our chemistry is not about or this is our chemistry is in 2013 is not about the claim steel it's about their prior art steel it's about their convention and then when he is sorry I don't mean to interrupt no no I appreciate the question the problem with [00:16:11] Speaker 03: your explanation for why [00:16:27] Speaker 03: I understand because he's popped this up as a bubble to the secondary considerations that you want us to draw that inference. [00:16:34] Speaker 03: But the comment doesn't seem related to that at all. [00:16:36] Speaker 03: And I mean, we all know how we edit documents sometimes and make comments. [00:16:40] Speaker 03: Sometimes we think of a comment, and there's no place to actually put it in. [00:16:45] Speaker 03: And you pop it in here. [00:16:47] Speaker 03: Now, maybe that's why this is not a summary judgment question. [00:16:52] Speaker 03: I find the phrase, I'm not sure it is a good idea to disclose this, it's pretty tenuous to me to say what you're saying, Hemit, which is this is not relevant. [00:17:04] Speaker 00: No, I do appreciate the question, Judge Hughes. [00:17:07] Speaker 03: Particularly because none of this comment bubble to me seems to be talking about secondary considerations. [00:17:12] Speaker 00: Well, again, I think it's arising in the content, and he spells this out, if you look at Appendix 7799, that's his deposition, and of course deposition's just cross-examination, it's not direct, but what he [00:17:25] Speaker 00: He says, I've been asked about people struggling. [00:17:28] Speaker 00: And he says, quote, but I thought maybe it's not a good idea because it will not be aligned. [00:17:33] Speaker 00: This is his word, not be aligned with the claimed coil tubing. [00:17:37] Speaker 00: So it would be confusing. [00:17:38] Speaker 00: It was a different product than the one we were claiming. [00:17:41] Speaker 00: So I thought it's not a good idea. [00:17:43] Speaker 00: But I thought, I'm not sure. [00:17:44] Speaker 00: I also left it for his opinion. [00:17:47] Speaker 00: That's why I included it referring to the attachment for him to have a look at the document. [00:17:51] Speaker 00: That's all from Appendix 7799. [00:17:53] Speaker 00: So this is arising in the context in which it's been rejected over the claimed chemistry. [00:17:59] Speaker 00: He's been asked for evidence of secondary considerations, quote, tied directly to the claim. [00:18:04] Speaker 00: And he then says, I have this as an example of a failure, but it isn't our chemistry. [00:18:10] Speaker 00: It isn't our carbon. [00:18:11] Speaker 00: And by the way, that is what the prosecuting attorney [00:18:14] Speaker 00: took from that. [00:18:15] Speaker 00: If you look at Appendix 7788, the prosecuting attorney then wrote in the same comment bubble, quote, project did not work outside of our club, an end quote. [00:18:25] Speaker 00: Now look, at that point, should the prosecuting attorney have actually looked at the document? [00:18:30] Speaker 00: There's nothing in the record that suggests that they did or didn't one way or the other. [00:18:34] Speaker 00: And then had a discussion about whether or not it was confidential, whether or not it should be disclosed. [00:18:39] Speaker 03: If he thinks this isn't his chemistry, so it isn't prior art, why wouldn't he have disclosed it? [00:18:46] Speaker 00: Honestly, that counsels for patentability. [00:18:52] Speaker 03: Look, somebody was operating in the same field. [00:18:56] Speaker 03: They tried something very similar. [00:18:58] Speaker 03: It didn't work. [00:18:59] Speaker 03: We've made a change. [00:19:03] Speaker 00: see how ours is an innovation. [00:19:22] Speaker 00: and he gives the attorney the document that says it doesn't match, it's not our carbon, I'm not sure it's a good idea to disclose this document. [00:19:31] Speaker 00: I think it's a fact. [00:19:32] Speaker 04: I don't remember seeing reliance on your part [00:19:37] Speaker 04: on the fact that Dr. Valdez doesn't have English as his first language. [00:19:46] Speaker 00: I think we identified it. [00:19:49] Speaker 00: But I think it goes to how the district court. [00:19:51] Speaker 00: I mean, I know we identified it in the briefing. [00:19:53] Speaker 02: Is there evidence for that? [00:19:55] Speaker 00: I don't think there's any dispute that English is not his first language. [00:20:00] Speaker 03: I'm not saying that he isn't speaking English well. [00:20:04] Speaker 03: Even just on this page, it doesn't suggest to me that he doesn't have a grasp of English. [00:20:11] Speaker 00: Oh, and I don't mean to suggest that he does. [00:20:14] Speaker 00: But I do think that when you have someone who isn't speaking English as their first language, they're going to use words in a way that might be different. [00:20:20] Speaker 00: And they're not going to convey subtleties that you and I might convey. [00:20:24] Speaker 00: And at a bare minimum, if you have a trial, the district court [00:20:28] Speaker 02: can assess Dr. Valdez's credibility. [00:20:38] Speaker 00: I don't know off the top of my head whether there's something specific about that in it or not. [00:20:43] Speaker 00: And I'm only providing contact if you're essentially asking the question, what difference would it make to have a trial? [00:20:48] Speaker 03: Can you set aside that he's not a native speaker? [00:20:50] Speaker 03: Sure. [00:20:51] Speaker 03: I don't know that that really arguably lowers the basis. [00:20:55] Speaker 03: If we assume that he has a native English speaker, what's your response then? [00:21:03] Speaker 03: I'm asking you one more time. [00:21:04] Speaker 03: I find it completely implausible to read, it's not a good idea to disclose this as anything other than telling the prosecuting attorney, don't disclose this document. [00:21:15] Speaker 03: If that's the case, that's intent, isn't it? [00:21:18] Speaker 03: I know you disagree. [00:21:19] Speaker 03: I'm not asking you to continue your case. [00:21:21] Speaker 03: But if the only way to read this is, I don't think it's a good idea to disclose this document means this is potentially problematic for us, don't disclose it, that would show intent. [00:21:32] Speaker 00: Well, it would then turn on whether or not he believed that it was a public document, whether or not he believed that it was otherwise relevant to the prosecution. [00:21:44] Speaker 00: Certainly, if you read it that way, it means he intended for it not to be disclosed. [00:21:48] Speaker 00: The question then would be, does that have the necessary intent to deceive, given those other issues as well? [00:21:56] Speaker 00: And the only other point that I would make on this is if you kind of look at the back and forth, [00:21:59] Speaker 00: I mean, there's nothing from his attorney that suggests that his takeaway was, oh, I should not disclose this document. [00:22:06] Speaker 00: I mean, again, the common bubble from the attorney back is did not work. [00:22:11] Speaker 04: His attorney is your attorney? [00:22:12] Speaker 00: I'm sorry. [00:22:13] Speaker 00: So Dr. Valdez is the attorney who was doing the prosecuting at that point in time in 2017, the prosecuting attorney who represents Tenaris at that point in time. [00:22:27] Speaker 00: He says his comment back is not to disclose. [00:22:33] Speaker 00: It did not work outside of our carbon. [00:22:37] Speaker 00: And then was specifically asked about this document two years later by the later prosecuting attorneys. [00:22:44] Speaker 00: So there's a different set of prosecuting attorneys in 2019 was specifically asked about it. [00:22:50] Speaker 00: You can see it appendix 8003. [00:22:52] Speaker 00: And the former prosecuting attorney did not even recall the brochure. [00:22:58] Speaker 00: They don't remember any kind of discussion involving the CIMAX documents. [00:23:01] Speaker 00: Now, you can say, well, maybe that's convenient. [00:23:04] Speaker 00: But this is one attorney for Tenaris who had done the prosecution in 2017 telling another attorney for Tenaris who's doing the prosecution in 2019. [00:23:13] Speaker 03: So if we're looking at subsequent actions, then other attorneys later on said, we better turn this over, or you're going to be committing an equitable conduct. [00:23:21] Speaker 00: And they did, with the exception of the chemistry specification, they did. [00:23:26] Speaker 03: I don't know when you want, well that's a problem for me, but I don't know whether you want us to confine it to just looking at this bubble to look at intent, or if we can look at the pattern of conduct [00:23:37] Speaker 03: in relation to the cimex document and this bubble is troubling enough to me but if you look at the pattern of conduct and the way they resisted turning it over and then initially ultimately did but not as one document I mean it's really troubling. [00:23:52] Speaker 00: So Judge Hughes for purposes of advocates comes to you on summary judgment. [00:23:55] Speaker 00: which was entirely based on Dr. Valdez purportedly having committed iniquitable conduct as a matter of law. [00:24:03] Speaker 00: The subsequent actions in terms of how the SIMACS document was later disclosed, Dr. Valdez is not alleged to have been involved with that. [00:24:12] Speaker 00: And the district court certainly didn't suggest that he was. [00:24:14] Speaker 00: And so I don't think that you can attribute that for purposes of deciding iniquitable conduct. [00:24:18] Speaker 00: I don't think that you can attribute that to Dr. Valdez. [00:24:22] Speaker 00: And again, it was all on but four materiality, all ultimately disclosed, and the grandchildren of Patton weren't discussed. [00:24:28] Speaker 00: Thank you for your indulgence, Judge Taranta. [00:24:54] Speaker 04: He will not necessarily be restricted to 12 minutes, so let's see how things work. [00:25:00] Speaker 01: Thank you, and may it please the court. [00:25:02] Speaker 01: In my not-needs-to-say 12 minutes, I'd like to start with inequitable conduct and then turn to the antitrust cross-appeal and the exclusionary power of the patent. [00:25:14] Speaker 01: With respect to intent, under settle law, intent to deceive can, in rare circumstances, be subject to summary judgment. [00:25:23] Speaker 01: It has to be reasonably disputed if the excuses are completely insupportable, contradicted, conflicting, specious. [00:25:32] Speaker 01: This is language from Paragon Podiatry. [00:25:35] Speaker 01: then a district court can grant summary judgment as a matter of law. [00:25:38] Speaker 02: But that's the only limited circumstance. [00:25:40] Speaker 02: We need to find that basically no reasonable person could find any plausibility at all in what Mr. Valdez has explained in his deposition, even taking all the evidence in the light most favorable to Tenaris, right? [00:25:56] Speaker 01: I think that's right. [00:25:57] Speaker 01: I think that the court would have to conclude [00:25:59] Speaker 01: the soft factors of live witness examination, sort of demeanor, tone, that type of thing, couldn't change the result on the objective facts, because the objective facts speak so loudly that, as the district court said, look, before the magistrate, they came up with excuses. [00:26:16] Speaker 02: As at 4046, the magistrate said... There was no fact-finding in front of the magistrate, right? [00:26:22] Speaker 02: She was dealing with the discovery dispute. [00:26:24] Speaker 01: Exactly the district court's point. [00:26:25] Speaker 01: The magistrate rejected it as completely unsupported, said that it has no support in the record. [00:26:30] Speaker 01: And then two years later, and this is page eight of the appendix, the district court says, and it's now two years later, and they still don't have anything that supports it. [00:26:38] Speaker 02: It struck me as a very odd framing of it. [00:26:40] Speaker 02: You take a magistrate judge's thorough discovery analysis, which expressly makes no findings of facts, says there'll be a trial later, probably. [00:26:48] Speaker 02: And then you say, as the district judge, [00:26:52] Speaker 02: No new evidence has come to light. [00:26:54] Speaker 02: So I can find on this record, without looking at a witness, without even establishing, by the way, what the entire record is in front of me, that this person is definitely lying. [00:27:07] Speaker 02: And so I don't even have to have a trial and watch and testify. [00:27:11] Speaker 01: Certainly that the explanations just don't make sense. [00:27:14] Speaker 01: And they so don't make sense that they don't have to have live witnesses. [00:27:18] Speaker 01: And so maybe just start with the first look. [00:27:20] Speaker 01: is the declaration, the comment bubble on the declaration itself Judge Hughes pointed to. [00:27:25] Speaker 01: I mean, that is telling it in and of itself. [00:27:27] Speaker 01: It's not, gee, it's cumulative. [00:27:31] Speaker 01: Chitwood might tell us this. [00:27:32] Speaker 01: It's not. [00:27:33] Speaker 02: You would have to acknowledge, I think, in his deposition, he gives a, I'm going to put a quote, innocent explanation. [00:27:41] Speaker 02: Now, maybe he's lying in his deposition, but how do we know [00:27:45] Speaker 02: that he's lying in his deposition without calling him in and putting him on the stand and subjecting him to cross-examination in front of the faculty. [00:27:53] Speaker 01: I think there's two key things about that supposedly innocent expectation. [00:27:57] Speaker 01: First, it doesn't really make sense given what he was asked for and against a whole trajectory of conduct frankly, but he was being asked for evidence of failure of others [00:28:06] Speaker 01: to achieve the claim to invention. [00:28:07] Speaker 01: This would be great evidence of failure to others if he thought they just were close to it, but they were missing one piece. [00:28:13] Speaker 01: And second, it's also flatly conflicting because remember when it came to the range, Valdez testified that you could actually go, you're not at .17, you can actually go below .17 and still be within the patent because he claimed it was about. [00:28:31] Speaker 01: And they actually obtained, if you look at docket 140 at five, [00:28:35] Speaker 01: They obtained a claim construction based on that testimony that went below 1.17. [00:28:39] Speaker 01: So it's not, gee, oh, I thought it was outside the range. [00:28:42] Speaker 01: I thought it was outside the range, but actually, I'm going to testify the range is broader. [00:28:45] Speaker 02: I get all that. [00:28:45] Speaker 02: Maybe you prove inequitable conduct at trial. [00:28:49] Speaker 02: But we're talking about a guy who's not a patent lawyer. [00:28:52] Speaker 02: who's asked a question on a document years earlier and writes a statement that could be entirely damning, but maybe not entirely and plausibly could be viewed the other way. [00:29:04] Speaker 02: I don't understand how there's not a fact dispute, and the fact finder at least has to give the guy a chance to explain himself and decide if he's lying or not. [00:29:14] Speaker 01: I think, especially if the district court were the one who's the fact finder, the district court could say, this is simply not persuasive. [00:29:20] Speaker 01: And this is not just some guy on the street. [00:29:22] Speaker 02: How is that consistent with Rule 56? [00:29:24] Speaker 02: It's a different task to sit there as the fact finder judge when there are clear, convincing burden. [00:29:34] Speaker 02: But you decide what the facts are based on all the evidence in front of you versus at Rule 56. [00:29:43] Speaker 02: I think the law is clear. [00:29:44] Speaker 02: The judge has to ask himself, not me, not do I think he's lying, but could any reasonable fact finder sitting at that trial, that bench trial, taking the evidence in the light most favorable to Mr. Valdez's side possibly believe him? [00:29:59] Speaker 02: Those are two different things. [00:30:01] Speaker 02: There's no indication here that the judge went through that analysis. [00:30:04] Speaker 01: So it shouldn't matter for the outcome here, right? [00:30:06] Speaker 01: Because especially if the Section 2 case comes back, [00:30:09] Speaker 01: we're going to have a jury trial where there may be common issues. [00:30:14] Speaker 01: The jury would have to go first, the judge second. [00:30:16] Speaker 01: But the Fifth Circuit's actually explained its rationale, why it makes a difference in the case of Nunez, and it's just what constitutes a genuine dispute changes depending on the fact finder. [00:30:26] Speaker 01: And the judge can understand, you know what? [00:30:28] Speaker 01: It doesn't really matter those soft factors. [00:30:31] Speaker 01: I just can't be persuaded on this. [00:30:32] Speaker 01: But this is not just an ordinary witness. [00:30:34] Speaker 04: He's a Carnegie Mellon PhD with seven patents. [00:30:37] Speaker 04: It might be a different district court judge at the summary judgment stage in the trial. [00:30:44] Speaker 01: Yes. [00:30:44] Speaker 01: If that had been the case, then that might be something you would look at. [00:30:49] Speaker 01: But the Fifth Circuit law is when you're going to have the same judge. [00:30:53] Speaker 01: that's the answer. [00:30:54] Speaker 04: You never know you're going to have the same judge. [00:30:56] Speaker 01: Fair enough. [00:30:58] Speaker 01: Life is, but it is the Fifth Circuit law and that's what this court is bound by. [00:31:04] Speaker 03: Sorry, can I just reduce it to where I am in my mind? [00:31:08] Speaker 03: If we look at what this bubble comment says, the other relevant facts in this deposition testimony, and I'm convinced that [00:31:18] Speaker 03: I don't care how honest and trustworthy he seems if he testifies. [00:31:24] Speaker 03: I find this so implausible. [00:31:26] Speaker 03: his explanation, then there's no need for a trial on this, right? [00:31:32] Speaker 01: Yes. [00:31:32] Speaker 01: That is the Paragon case from this court, and that is the Chauvin case from the Seventh Circuit, which is the unusual circumstance. [00:31:38] Speaker 03: What I'm struggling with is how do we, is it just basically a judgment call? [00:31:42] Speaker 03: Because he's come in in his deposition testimony and comes forward with the answer that it seems kind of reasonable on its face, maybe out of context. [00:31:56] Speaker 03: Yeah, and so do we need a prior fact to test those two allegations, or do we get a look at it and say, well, he said this. [00:32:05] Speaker 03: And if you looked at it on its face, maybe and construe it as true, then it's OK and enough for a tribal issue. [00:32:14] Speaker 03: But if you look at it in comparison with what's going here and find it a completely implausible explanation for this not a good idea to close this sentence, then [00:32:26] Speaker 01: Yes, I think the answer is... The line is you look at the record as a whole, because you're presuming that everything is going to come in. [00:32:33] Speaker 01: And if, as the record as a whole, the trier of fact cannot credit these implausible, wholly implausible excuses, conflicting excuses, and there's a line of excuses here. [00:32:43] Speaker 01: You know, first it's non-erotic in chemistry, then it's we didn't know it was public, that's what he tells the lawyer. [00:32:48] Speaker 01: And then it's, oh, it's Chitwood is cumulative with it. [00:32:53] Speaker 01: If you can't credit that, as a whole, no reasonable trial or fact would, you don't really need to have a trial. [00:32:58] Speaker 03: Can I ask you about what came out earlier, which is about who's going to decide this factual issue if it goes back to the antitrust case? [00:33:05] Speaker 03: Is it true that this is going to get submitted to, this intent question is going to go to a jury? [00:33:10] Speaker 01: So I'm not sure that the intent issue itself precisely that would go to the jury. [00:33:14] Speaker 01: But there's sufficient overlapping facts that you would try this to the jury first. [00:33:19] Speaker 01: And when the jury makes determinations and you can tell the jury made a determination, [00:33:23] Speaker 01: that determination would bind the judge. [00:33:25] Speaker 01: And that's just the standard Seventh Amendment protection that you don't have your equitable proceeding first and then have the judge somehow bind the jury. [00:33:32] Speaker 01: If I could turn for a minute then to perhaps Chitwood, because I think the notion that Chitwood somehow is as cumulative in the lives of Chitwood, it's simply not plausible. [00:33:43] Speaker 01: And it's clearly material in that sense. [00:33:45] Speaker 01: And if the court were to turn to page 14 of their brief. [00:33:48] Speaker 04: Can I just ask one straight thought along the lines of [00:33:53] Speaker 04: Would it matter to the application of the Fifth Circuit line of cases about sometimes the judge, if there's going to be a bench trial, getting a little bit more wiggle room on summary judgment, does it matter that in that case there is a overlapping jury issue, which means that the jury is actually going to be making key decisions? [00:34:21] Speaker 01: And the answer is yes. [00:34:22] Speaker 01: The district court was able to do it in this case because the Section 2 claim had come out by the time it came to an act of oral conduct. [00:34:29] Speaker 01: But if the Section 2 claim comes back in, we don't get that extra wiggle room. [00:34:33] Speaker 01: We're down to no reasonable twirer of fact. [00:34:35] Speaker 01: But that isn't any different than Chauvin or Paragon. [00:34:38] Speaker 01: It's just the standard no reasonable fact on the whole record. [00:34:42] Speaker 01: I'm looking the guy in the eye, no matter how persuasive and genuine I think he might be, how good an actor he is. [00:34:47] Speaker 01: I will not be able to credit. [00:34:49] Speaker 01: Nobody could credit that. [00:34:50] Speaker 01: Were you about to turn to materiality? [00:34:51] Speaker 01: I was about to turn to materiality. [00:34:53] Speaker 01: So it would be page 15 of their brief, which is the steel specification, the 4100, and page 33 of our brief. [00:35:01] Speaker 01: And I think this is how you can see how clearly material it is. [00:35:06] Speaker 01: So to start there, just looking at, for example, start with phosphate, P. [00:35:12] Speaker 01: So phosphate for the chemistry, 0.25. [00:35:15] Speaker 04: I'm sorry, just direct me again to the pages you have. [00:35:18] Speaker 01: 15 of their brief. [00:35:19] Speaker 04: Of blue? [00:35:20] Speaker 01: Yes. [00:35:21] Speaker 01: And mind you- And 33 of red. [00:35:22] Speaker 01: 33 of the red brief, correct. [00:35:24] Speaker 01: You want us to compare. [00:35:25] Speaker 01: Yes, we're going to walk right through it if that's okay. [00:35:28] Speaker 01: And that is that, mind you, this PL specification isn't actually in Chitwood. [00:35:33] Speaker 01: It's behind a paywall. [00:35:34] Speaker 01: You're going to have to go look for it, and that's what's not disclosed. [00:35:36] Speaker 01: But even if we assume that the examiner goes to the paywall and gets this, [00:35:41] Speaker 01: Look at the phosphate, .025 max. [00:35:44] Speaker 01: Look at phosphorus, rather not phosphate. [00:35:47] Speaker 01: For the 256, much lower, .015. [00:35:50] Speaker 01: And Cymax tells you, .025, that you're going to need that lower phosphate. [00:35:55] Speaker 01: Sulfur, much lower, .005. [00:36:01] Speaker 01: And this for ours, it's 0.01 and 0.005 for Sun. [00:36:05] Speaker 02: This whole theory, this is not the theory that the district court went off on to find platform materialities. [00:36:11] Speaker 01: The district court was more focused on carbon because the overlapping carbon range, but even for carbon. [00:36:15] Speaker 02: You mean to ask that this is not the theory of the district court that you won on, right? [00:36:18] Speaker 01: Yes, so even for, I'm sorry, actually you know what, I have gone around pages, page 14, that's my mistake. [00:36:25] Speaker 01: But yes, he was more focused on carbon, but even carbon's relevant, because remember, the patent 256 includes .17, so they recognize you can go lower. [00:36:34] Speaker 02: You told the district court that you wanted summary judgment just on your affirmative egregious misconduct theory, and that you didn't even have to worry about but for materiality or intent. [00:36:45] Speaker 02: and yet his opinion is all about platform materiality intent, and he doesn't even reach affirmative egregious misconduct. [00:36:51] Speaker 02: Am I wrong about that? [00:36:52] Speaker 01: No, Your Honor. [00:36:53] Speaker 01: I think we actually sought judgment across the board that you had intent. [00:36:58] Speaker 02: especially at the hearing did you tell him you only need to address our affirmative misconduct theory? [00:37:06] Speaker 01: Yes, we did tell him that that would be a shortcut through it, but the district court in his judgment said that he doesn't have to reach but for materiality because the intent was so clear that there's no reason to try to find otherwise, and the materiality was so clear. [00:37:19] Speaker 02: It seems like these theories that there's [00:37:23] Speaker 02: contradictions between what the applicant told the patent office and what the Simon's documents shows, and therefore its material. [00:37:38] Speaker 02: That seems like a should-have-known standard, a materialized standard more like the PTO standard, less than what Therasense says is required to show, but for materiality under inequitable conduct. [00:37:51] Speaker 02: And I think that argument was well set out in the Blue Bridge. [00:37:53] Speaker 02: I didn't see any response to it. [00:37:55] Speaker 02: Could you tell me? [00:37:56] Speaker 01: So if I understand correctly, the district court clearly did apply a but-for-materiality standard because the district court said on page 15, it's not going to address the extreme misconduct standard because defining a but-for-materiality makes that irrelevant. [00:38:12] Speaker 01: And the district court walks through and explains that, look, it's just not the same to have to say Chitwood is the same. [00:38:19] Speaker 01: as it was here. [00:38:20] Speaker 01: And the district court also was very clear. [00:38:22] Speaker 01: We're talking about an affidavit that's trying to overcome a rejection. [00:38:25] Speaker 01: And how do you overcome the rejection? [00:38:27] Speaker 01: Six times the affidavit says, our specific chemistry, our critical chemistry, our important chemistry, is chemistry, chemistry, chemistry. [00:38:34] Speaker 01: And what gets withheld [00:38:36] Speaker 01: The documents that show that this chemistry was already there in a single product that was already on the market, Cymax. [00:38:44] Speaker 01: It's hard not to think that's material, and it's especially clear when you look at the chemistries on page 14. [00:38:49] Speaker 04: Can I just ask, were any other elements of just chemistry missing from Chitwood? [00:38:56] Speaker 01: So any other elements other than chemistry? [00:38:58] Speaker 04: No, any other elements besides carbon of the chemistry. [00:39:02] Speaker 01: Oh no, absolutely. [00:39:04] Speaker 01: So Chitwood just says series 4100 steel. [00:39:06] Speaker 01: It doesn't actually give you the chemistry. [00:39:08] Speaker 01: So you have to go from Chitwood, behind a paywall, get the 4100 chemistry on page 14. [00:39:13] Speaker 04: And then would you get all of the chemistry in overlapping with the 256 claim or not all of it? [00:39:19] Speaker 01: No, you're going to get overlapping, but different ranges where the 4100 isn't going to produce the necessary hardenability, but the specific chemistry, the 90% night martensite, [00:39:32] Speaker 01: but the specific chemistry of the modified 4100 that's disclosed in Simax will. [00:39:39] Speaker 01: And that's actually one of the things that their own head of R&D said is, hey, there's a document in here, I think that's 7222, where it is asked by the lawyer, Simax versus Chitwood. [00:39:49] Speaker 01: And he says, you know what? [00:39:50] Speaker 01: 4100 isn't going to get you to 90% martensite. [00:39:55] Speaker 01: The more specific chemistry in Cymax is going to get you to 90% martensite, which is an element of the claim. [00:40:01] Speaker 01: So that is disclosed by the chemistry in Cymax. [00:40:05] Speaker 01: That's page 7222 or 7227. [00:40:06] Speaker 01: It's one of the two. [00:40:09] Speaker 01: But it's not disclosed by Chitwood. [00:40:11] Speaker 01: And Chitwood's very important, because if you take a look, the 4100 chemistry, it's the standard phosphate or phosphorus, 0.035. [00:40:19] Speaker 01: But what does this require? [00:40:20] Speaker 01: 0.015. [00:40:21] Speaker 01: You have to have much less phosphorus. [00:40:24] Speaker 01: CIMAX also warns you, you need lower phosphorus. [00:40:27] Speaker 02: So far, same thing. [00:40:29] Speaker 02: I may not have asked the question correctly, but I don't understand the answer. [00:40:33] Speaker 02: So let me try again. [00:40:34] Speaker 02: It seems like a lot of what you're arguing on materiality is that a mere contradiction between what is said to the PTO and what the internal CIMAX documents showed makes the internal CIMAX documents material in an equitable conduct sense. [00:40:52] Speaker 02: Is that part of your argument? [00:40:53] Speaker 01: No, it wouldn't just, a mere contradiction by itself wouldn't show but for causation. [00:40:58] Speaker 01: You have to look at a lot more. [00:41:00] Speaker 02: But remember, we're at a point where they... So what more, say, you know, like for phosphorus, for instance, what more do you think you've shown than just a mere contradiction? [00:41:09] Speaker 01: So I think there's three things. [00:41:10] Speaker 01: First, remember the context is you're looking, you're seeking to overcome a rejection. [00:41:15] Speaker 01: So it already stands rejected. [00:41:17] Speaker 01: And so you're going to have to be able to say something to move the examiner off the rejection. [00:41:21] Speaker 01: And if you, and when you use [00:41:23] Speaker 01: the specific chemistry to move them off the rejection, and then don't disclose something with a specific chemistry, that's going to be very much likely but for a causation. [00:41:32] Speaker 01: Second, remember this is an element that's 90% martensite, but he's saying we're not going to achieve the invention with just the 4100 of Chitwood. [00:41:41] Speaker 01: Their own documents say you can achieve it with the Symax which is more specific, so there's a limitation missing, an unachieved limitation. [00:41:49] Speaker 01: If you look only at the 4100, [00:41:51] Speaker 01: if compared to whether you look at the CYMAX document. [00:41:54] Speaker 01: And also, it's a big difference between trying to piece together different pieces from different places, well, this from 4100, that from there, versus the CYMAX document where it overlaps, overlaps, overlaps, and is much more constrained and precise and matching to the requirements, particularly with respect to sulfur, particularly with respect to phosphorus, [00:42:13] Speaker 01: And even carbon, that you can have a lower carbon version, down at 0.17, where the standard is 0.18, that's Simax. [00:42:19] Speaker 02: If I could ask you one more materiality question, it goes to the commission of Stull test report. [00:42:25] Speaker 02: If I understand the record correctly, the magistrate judge excluded that testimony, but they objected to that order. [00:42:34] Speaker 02: And the district court never resolved that objection. [00:42:37] Speaker 02: So I don't know whether the stole testimony is in the record for purposes of summary judgment or not in the record. [00:42:44] Speaker 02: And if it's in the record, then I think it has to be taken in the light most favorable to Tenaris on the materiality issue. [00:42:51] Speaker 01: So what do I do with that? [00:42:54] Speaker 01: Judge Stark, you're referring to the stole testimony with respect to the grandchildren patents? [00:42:58] Speaker 02: Because that was the piece that was at issue. [00:43:00] Speaker 02: It goes to materiality. [00:43:01] Speaker 01: Yeah, if that goes to materiality and that is not resolved. [00:43:04] Speaker 01: I don't think that can make a difference because the grandchildren patents were rejected and only survived. [00:43:11] Speaker 01: They only became accepted when they added additional limitations [00:43:16] Speaker 01: like an austenization cycle, like particular temperatures. [00:43:18] Speaker 02: And so it really just doesn't go anywhere. [00:43:20] Speaker 02: What I take from that is the district judge should have assumed, and I should assume, that the stole testimony is in the record, takes it in the light most favorable to the non-moving party. [00:43:30] Speaker 02: It just doesn't make a difference. [00:43:31] Speaker 01: I think that's a precise summary of what I was saying. [00:43:33] Speaker 01: Thank you. [00:43:34] Speaker 01: If I could turn prickly to the cross appeal and whatever time doesn't remain to me. [00:43:40] Speaker 01: The district court there committed two basic mistakes. [00:43:43] Speaker 01: The first is, in evaluating dangerous probability of success, it failed to examine the patent's exclusionary power, and it looked to market share alone. [00:43:51] Speaker 01: And when you have a barrier to entry like a patent, you've got to look at its exclusionary power in the Supreme Court cases, spectrums, sports alike, that say exactly that. [00:43:59] Speaker 01: And second, in looking at market share, [00:44:01] Speaker 01: It violated controlling the Fifth Circuit precedent by failing to examine market share at the time of the attempt, which starts here in 2017. [00:44:08] Speaker 01: And in 2017, the market was dominated by Tenaris, not us. [00:44:12] Speaker 01: It just simply makes no sense to look in an attempted monopolization case to look two years later or five years later at the time of summary judgment and say, yes, since you didn't succeed, you now have a small market share. [00:44:23] Speaker 01: Get out of jail free. [00:44:24] Speaker 01: The whole point of an attempted monopolization case is that things change on the ground and the monopolization might fail. [00:44:31] Speaker 01: especially if you have somebody who stands up for their rights and files a lawsuit and uncovers the inequitable conduct. [00:44:37] Speaker 01: But that failure doesn't mean you get out of jail free for that attempted monopolization. [00:44:44] Speaker 02: There are sites cases that Section 2 is directed at persistent market power, and that there needs to be some at least minimal durability. [00:44:53] Speaker 02: And I think they suggest two years would not be enough. [00:44:56] Speaker 02: What's your response? [00:44:57] Speaker 01: Well, I think there's two responses. [00:44:58] Speaker 01: First, two years is ample enough to raise an issue of fact for the jury. [00:45:02] Speaker 01: And there's two cases that say that. [00:45:05] Speaker 01: One is Pharmatech. [00:45:06] Speaker 01: That's the second case from 2004, which is a 15-month period. [00:45:10] Speaker 01: and quality markets also second circuit which is a two-year dominant position. [00:45:14] Speaker 01: So two years is amply enough and letting someone be the dominant player for two years able to charge super competitive prices by having excluded the one potential entry they know about [00:45:25] Speaker 01: us global, that's too much for the antitrust laws. [00:45:28] Speaker 04: But even apart from the two years... Is the temporal period for this purpose the same as or different from the temporal piece of SNIP? [00:45:42] Speaker 01: So I think when you're talking about durability, I think the durability is basically the SNIP. [00:45:48] Speaker 01: The durability is the non-transitory. [00:45:50] Speaker 01: Can you raise your price without prompting immediate entry and make a sufficient profit on it that it makes sense to the anti-wealth trust laws to hold people liable? [00:45:57] Speaker 04: Is there a case law on that, whether two years is too transitory? [00:46:03] Speaker 01: So the two cases I gave you say that two years is not too transitory. [00:46:06] Speaker 04: Well, for market power or for monopoly power? [00:46:10] Speaker 01: For, I don't know if they distinguish market versus monopoly power, but certainly enough market power to raise prices for a non-transitory period, that would be enough. [00:46:19] Speaker 01: And it's certainly on summary judgment. [00:46:21] Speaker 01: If they want to show a competent economist that there's no way we could have raised prices, let's see that. [00:46:26] Speaker 01: But I think that's going to probably go to a jury. [00:46:28] Speaker 01: But setting that aside. [00:46:29] Speaker 04: In this kind of analysis, who has a burden on question of entry barriers? [00:46:38] Speaker 01: So initially, we would have the burden on entry barriers. [00:46:42] Speaker 01: But I think we amply meet that burden. [00:46:44] Speaker 01: And I'm going to point to four particular things that address that. [00:46:48] Speaker 01: The first is out of their own mouths. [00:46:52] Speaker 01: The interrogatory response on 11,302, we asked, what are the non-competing, the non-infringing alternatives to your quench and toil tubing? [00:47:02] Speaker 01: And the answer was conventional tubing. [00:47:04] Speaker 01: And this is years after quality interrogation. [00:47:06] Speaker 04: Is that the one where first they didn't give a response and then later they did a response and it's the second [00:47:13] Speaker 01: In the second the second time they actually just referred to a number of different conventional tubing things Well know that they actually that you use the word conventional tubing they say such a thought Yeah, and that but they don't mention and they specifically don't mention qualities in the market at the time they answer [00:47:29] Speaker 01: They don't say quality is quench and temper tubing. [00:47:31] Speaker 01: But second, they also go and analyze quality-specific chemical specification to see how it fits in their patent. [00:47:38] Speaker 01: And it says 11,482. [00:47:38] Speaker 01: They don't give the results to us. [00:47:42] Speaker 01: But if you took charge page appendix 9946, the very last line, and this is under seal, so I'm going to be very careful. [00:47:49] Speaker 01: but this is Council 9946 but the Council is very clear that the 256 patent covers global quality products so that's covering quality too. [00:48:00] Speaker 01: Third, quality specifications are in the record. [00:48:04] Speaker 01: If you look at page 11496 [00:48:06] Speaker 01: And you want to line those up right next to the specifications for the patent. [00:48:11] Speaker 01: You're going to see a sufficient alignment to know that the assertion of the patent has a dangerous probability of excluding anybody with those specs. [00:48:19] Speaker 01: And that's particularly true given the position they took, which was it doesn't have to be precisely within the ranges. [00:48:25] Speaker 01: Approximate is good enough. [00:48:26] Speaker 01: And they got a ruling from the district court that approximate is good enough for infringement. [00:48:35] Speaker 02: Can you put any weight on their representation to the court if they have no intention of suing? [00:48:41] Speaker 01: I think actually it points exactly the other way, because it was such a wonderfully careful representation that they have no present tense intent to sue Pauli. [00:48:49] Speaker 01: But they won't say we didn't have that intention. [00:48:51] Speaker 04: It's like running for president. [00:48:52] Speaker 04: I have no plans. [00:48:53] Speaker 01: I have no current plans. [00:48:54] Speaker 01: Or I have no current plans, but I might have had plans in the past and I haven't denied it. [00:48:58] Speaker 01: If the court has no further questions, I'll reserve whatever remains for rebuttal. [00:49:01] Speaker 01: Thank you. [00:49:16] Speaker 04: Oh, no, you had 82, around 10. [00:49:20] Speaker 00: Thank you, Judge Toronto. [00:49:21] Speaker 00: I'll start wherever the court would like me to, but perhaps it makes sense to start with the antitrust issues here for a number of reasons. [00:49:29] Speaker 00: First of all, on my colleague's last point, it was not a careful, no present intention statement below. [00:49:35] Speaker 00: I'll say it unequivocally. [00:49:38] Speaker 00: The patents that we're talking about here are not going to be asserted against quality, period, full stop. [00:49:44] Speaker 00: for the products that were at issue at the time that we're talking about. [00:49:49] Speaker 00: Period. [00:49:49] Speaker 00: There's no hedge there with respect to the quality products. [00:49:55] Speaker 03: That's not equivocal for the products at the time we're talking about. [00:49:59] Speaker 00: I don't know about some future product they might make. [00:50:02] Speaker 00: I'm not giving that away. [00:50:04] Speaker 00: I don't know what I don't know. [00:50:05] Speaker 00: But for the product, for example, the specification that you pointed to, [00:50:10] Speaker 03: If you take that quality product and that quality... Honestly, I don't want you to spend too much time on this because I think it's not very useful to me. [00:50:18] Speaker 03: I mean, I think the theory they have that the reason you didn't go after them was because somebody was about to discover the inequitable conduct and the ability of the patent, so you didn't want to add to the possibility of being [00:50:29] Speaker 03: exposed to walker process antitrust ability, but we don't need to get into it. [00:50:34] Speaker 00: No, with respect to the district court's grant summary judgment, it really turns on two things. [00:50:40] Speaker 00: One is that even if they succeeded, this isn't a hindsight issue. [00:50:44] Speaker 00: This is their own exports looking backward and then looking forward. [00:50:48] Speaker 00: If you succeeded, [00:50:49] Speaker 00: what would you achieve? [00:50:51] Speaker 00: You would achieve 29% of the market. [00:50:53] Speaker 00: As a matter of law, that is not enough. [00:50:55] Speaker 00: And then in order to try to rehabilitate that, their theory, they try... And I'm sorry. [00:51:00] Speaker 04: And the 29% just comes from basically taking them out of the market and distributing their share proportionately to the other two players. [00:51:09] Speaker 00: That's... It's the analysis that their expert did. [00:51:12] Speaker 04: I think that's more or less what they're... I agree with that, but it works out to... [00:51:15] Speaker 00: basically it's it's the analysis the expert did that said if if if you succeed in eliminating global and global is all they ever alleged that any any you know any trust any any [00:51:26] Speaker 00: Antitrust Scheme included, their complaint doesn't ever, even though Quality was already on the market at the time of their second amended complaint, they make no allegations about Quality. [00:51:35] Speaker 00: And of course, you know, the complaint is limiting. [00:51:37] Speaker 00: You look at the Supreme Court's decision in De Beers versus United States, 325 U.S. [00:51:42] Speaker 00: at 220. [00:51:43] Speaker 00: It's a Sherman Act case. [00:51:45] Speaker 00: But in all events, in order to try to get around that, they then argue to the district court, well, never mind our expert. [00:51:51] Speaker 00: We'll just claim higher expert. [00:51:52] Speaker 00: they also have a dangerous probability of excluding quality. [00:51:57] Speaker 00: And the problem for them is they have no evidence. [00:52:00] Speaker 00: None. [00:52:00] Speaker 00: If you look at their grade brief pages seven and eight, those are the two places that they cite all of the evidence that they've got with respect to the issue over whether the patent itself could be asserted against quality. [00:52:13] Speaker 00: They have no document, not one, that says that Tenaris thinks that quality infringes. [00:52:19] Speaker 00: They took no discovery from quality. [00:52:21] Speaker 02: the light most favorable to them. [00:52:23] Speaker 02: You have a patent. [00:52:26] Speaker 02: There's nothing to say that you're not going to assert it on this record against the entire industry, including quality. [00:52:34] Speaker 02: And therefore, there's a dangerous probability, regardless of what your market share is today, there's a dangerous probability a reasonable fact finder might find. [00:52:43] Speaker 02: that you could attain at least market power. [00:52:46] Speaker 00: Well, the district court asked them questions about this in two places. [00:52:51] Speaker 00: First, with respect to the scope of the patent, at appendix 31,141, their response was, and this is at 31,150, [00:53:01] Speaker 00: that they haven't looked at the issue closely on whether it would be more difficult to design around the patents. [00:53:06] Speaker 00: And then if you look at appendix 11,480, that is the quality specification. [00:53:11] Speaker 00: You will see it does not read on the silicon requirement. [00:53:15] Speaker 00: And most importantly, 11,480, that is the quality specification. [00:53:22] Speaker 00: that is in the record. [00:53:24] Speaker 00: It does not read on the claim silicon content, number one. [00:53:28] Speaker 00: And number two, it also does not read on the critical issue of yield strength. [00:53:32] Speaker 00: Every one of the patents requires a yield strength of more than 80,000 psi. [00:53:38] Speaker 00: And you will see, if you look at their own specification, both in terms of the minimum and the aim, it doesn't get there. [00:53:44] Speaker 00: Number one. [00:53:45] Speaker 00: Number two, the district court asked, what was the evidence that there was a plan to assert against equality? [00:53:50] Speaker 00: And he repeatedly asked about this at a part appendix 31,134. [00:53:53] Speaker 00: 31,184 said, how can we just assume that that's what it comes down to, an assumption that they're going to sue [00:54:01] Speaker 00: And the evidence that they were, quote, flexing their monopolistic market was conjecture, end quote, at 31,188. [00:54:09] Speaker 00: You can see what their responses were. [00:54:11] Speaker 00: It is what they cite to at page eight of the great brief. [00:54:15] Speaker 00: And we respectfully submit that that is not enough. [00:54:17] Speaker 00: It's exactly what the district court said it was, which was, quote, piling speculation on top of speculation, as he said, at 31,000. [00:54:23] Speaker 04: How does that deal with the two-year period from 2017 to 19? [00:54:28] Speaker 00: So two points on that. [00:54:30] Speaker 00: First of all, he did also ask them about what did they have to show that there was evidence that there would be persistent market power. [00:54:37] Speaker 00: You can see at 31,127. [00:54:38] Speaker 00: And they didn't cite any evidence. [00:54:43] Speaker 00: Other than just to say that, you know. [00:54:45] Speaker 04: Do you think two years is persistent enough or not? [00:54:48] Speaker 00: So certainly, Judge Toronto, there are examples where it's not. [00:54:52] Speaker 00: And the examples that they've cited too, where it is. [00:54:58] Speaker 04: Is it a matter of law? [00:54:59] Speaker 00: There are cases that have found it's insufficient as a matter of law. [00:55:03] Speaker 00: I think we cite those in our brief. [00:55:05] Speaker 00: The case that they cite, the Geneva versus Barr case, is where there was no dispute that the API that was necessary to make the generic drug, there was an exclusive agreement. [00:55:16] Speaker 00: Nobody else could make the drug. [00:55:19] Speaker 00: And the market had been defined as being that generic drug. [00:55:23] Speaker 00: And so in that circumstance, the court said that there was at least a fact issue as to whether or not there would have been a persistent market power, or at least that the market power during those 15 months wouldn't be tempered by the fact that nobody could have possibly entered the market. [00:55:38] Speaker 00: It was no dispute that somebody possibly could have entered the market here. [00:55:41] Speaker 02: They, in fact, did. [00:55:43] Speaker 00: If you think that they have actually presented any evidence whatsoever to show that the fact that quality could enter the market had no effect or did not have an effect on pricing and therefore that you know we would have had persistent market power when there is no evidence on this because they didn't seek any evidence from [00:56:02] Speaker 00: from quality. [00:56:03] Speaker 00: They didn't have their experts opine on this. [00:56:05] Speaker 00: This wasn't the theory in their complaint. [00:56:07] Speaker 00: They flat out disclaimed it in opposing a motion to dismiss. [00:56:12] Speaker 00: I think flat out waived it. [00:56:14] Speaker 00: If you look at appendix 12,410, [00:56:16] Speaker 00: They said, quote, the Walker process fraud claim is not based on Tenaris's assertion of the 256 patent. [00:56:22] Speaker 00: It is based on the events that followed. [00:56:24] Speaker 00: It is the assertion of the children patents, not the 256 that gives rise to Global's monopolization claims, end quote. [00:56:30] Speaker 00: And that matters because quality was on the market by the time that that occurred. [00:56:37] Speaker 00: Again, that's appendix 12,410. [00:56:40] Speaker 00: and is citing specific parts of the complaint. [00:56:43] Speaker 00: They waived the assertion of the 256, which means they waived the time period from 2017 to 2019 that they're now trying to rely on. [00:56:52] Speaker 04: Can I just ask, the two children patents [00:56:59] Speaker 04: don't have the full chemical breakdown that's in the 256, right? [00:57:05] Speaker 00: So the 074 and 075 independent claims do not have the same chemical composition requirements. [00:57:11] Speaker 00: There are deepening claims. [00:57:12] Speaker 00: Right. [00:57:12] Speaker 04: So in thinking about the prospect of keeping the power of your patents collectively now to keep [00:57:26] Speaker 04: quality out of the market, it's not a sufficient answer to say that at least one chemical element of the 256 might be something quality doesn't practice. [00:57:39] Speaker 00: No, I agree with that, Judge Taranto. [00:57:41] Speaker 00: Two points that are critical in response. [00:57:43] Speaker 00: One is the issue of the time period. [00:57:45] Speaker 00: From 2017 to 2019, the 256, which had the chemical requirement, was the only patent. [00:57:51] Speaker 00: These other patents only emerged in 2019 after Quality had entered the market, number one. [00:57:58] Speaker 04: At least one of them was published in 2017? [00:58:02] Speaker 00: I believe the 074 and 075 I think had been published in 2017, but they didn't issue. [00:58:11] Speaker 04: Don't you think that might have a deterrent effect on somebody deciding whether to enter? [00:58:15] Speaker 00: Well, that goes to my second point, which is even to the extent that it would, the claims specifically require 80,000 PSI or greater. [00:58:23] Speaker 00: And if you look at the quality specification, [00:58:25] Speaker 00: that doesn't read on that. [00:58:27] Speaker 00: And that is in the independent claims, separate apart from the chemistry, is the PSI requirement. [00:58:34] Speaker 00: And so the district court held them to whether they had evidence to show that there was a dangerous probability of monopolizing, and the short version is that there was not. [00:58:45] Speaker 00: And the district court is right about that. [00:58:47] Speaker 00: And then with respect, very briefly on rebuttal, [00:58:52] Speaker 00: You know, my colleague said that the Chippwood reference doesn't disclose hardenability or the martensite feature. [00:58:59] Speaker 00: That's inconsistent with their own invalidity contention, as you can see at appendix 6801. [00:59:04] Speaker 00: And what you have is, as I, you know, I'll end as I began, which is there are fact questions as to intent. [00:59:11] Speaker 00: And Judge Hughes, I understand that the comment bubble [00:59:14] Speaker 00: I understand your questions about the comment bubble. [00:59:18] Speaker 00: I would just note this court has never affirmed a grant of summary judgment of inequitable conduct on anything other than an outright falsehood with a representation about somebody being impartial when they were in fact a partial declarant. [00:59:33] Speaker 00: And so I think there are fact questions here. [00:59:36] Speaker 00: vis-a-vis intent, some of which Judge Stark, you were getting at. [00:59:39] Speaker 00: There are certainly fact issues as to cumulativeness involving, you know, Commissioner Stoll's testimony involving the grandchildren patent about, you know, I think this is just like digital control in that there are fact questions about how you compare what is disclosed from Chip Wood versus what you disclose for infidelity. [00:59:57] Speaker 00: And there's certainly with the grandchildren patent, you know, evidence that goes to perform a materiality that at most presents fact questions, I thank the court for its time. [01:00:05] Speaker 00: Thank you, Judge Tarantino. [01:00:15] Speaker 04: Do you think you can do it in three? [01:00:18] Speaker 01: I'll try. [01:00:18] Speaker 01: I'll do my best. [01:00:19] Speaker 01: And if the court asks me to stop, I will stop. [01:00:22] Speaker 01: So I think we can all agree that Tenderance's assertion today that it's not going to sue quality is not meaningful. [01:00:29] Speaker 01: The question is, what was the state of the world at 2017 when there were only two competitors? [01:00:34] Speaker 01: And that one of the competitors was us, a potential entrant, and the plan was to exclude us, and they had this ill-gotten patent to that end. [01:00:42] Speaker 01: In terms of, and we do have evidence, frankly, in the event that quality, they understood the qualities, the patents, qualities, product, infringed also, [01:00:49] Speaker 01: because Appendix 9946 makes that clear. [01:00:53] Speaker 01: But we don't have to prove that they actually would be liable for infringement. [01:00:58] Speaker 01: Because if you look at TransWeb, TransWeb tells you that the threat is good enough. [01:01:03] Speaker 01: Because in TransWeb, there was inequitable conduct and a Walker Process claim and damages for Walker Process. [01:01:09] Speaker 01: But the jury found that there was no infringement. [01:01:11] Speaker 01: And that makes sense. [01:01:13] Speaker 01: because it is the threat to exclude that gives you market power, not a final perfect infringement verdict that gives you that market power through the patent. [01:01:23] Speaker 04: Why shouldn't you have had the obligation to get the information about quality's product and show that at least a threat of infringement was a plausible one? [01:01:41] Speaker 04: as opposed to 80 pounds per square inch or something that was mentioned. [01:01:49] Speaker 04: Maybe they are so far away from that that there just could not possibly be, it would not be a genuine threat. [01:01:59] Speaker 01: Right, and I think the answer is we actually did invoke [01:02:04] Speaker 01: that specification below and say this is close enough that quality would be threatened. [01:02:10] Speaker 01: And one of the things that's particularly important with respect to that is the claim construction that Valdez has to afford for and they got at docket 140 at five, which is these numbers don't mean the numbers. [01:02:21] Speaker 01: It's an about. [01:02:22] Speaker 01: And so if the statement is silicon seems to be out of range, if it's about, and I think the language they used when they got the about was that if it's close and has the same effect [01:02:34] Speaker 01: that's good enough then that's going to be a threat and I think if they're going to say no we couldn't have excluded quality it was impossible there's actually lots of ways around our patent that's a response to them for summary judgment for summary judgment the fact that they tried to exclude their only competitor in 2017 they [01:02:53] Speaker 01: were going to go after and they evaluated and they had language about quality later on that's all good enough and if the court doesn't really want to get into all that all the court would have to do is say the district court made two mistakes wrong time frame wrong market power analysis [01:03:08] Speaker 02: But the district court assumed that the market was what you wanted it to be, so I don't think that helps you. [01:03:14] Speaker 01: I'm not sure it does, because it's small by other any means. [01:03:18] Speaker 01: If you looked at the full global market or looked at all coiled tubing, the numbers are still small. [01:03:23] Speaker 01: I just don't know what it is. [01:03:24] Speaker 02: Sorry, I asked you the wrong question. [01:03:26] Speaker 02: Could you respond? [01:03:27] Speaker 02: They say that these theories [01:03:35] Speaker 02: worrying about them because you've kind of waived these theories. [01:03:38] Speaker 01: Yeah. [01:03:39] Speaker 01: And so I think that's just doubly wrong. [01:03:40] Speaker 01: The first is, is it in the complaint? [01:03:43] Speaker 01: If the court looks at appendix 2058 to 4059, it alleges the Walker process fraud based on Tenerife's prosecution and enforcement of, quote, the asserted patents. [01:03:54] Speaker 01: When that second amended complaint came out, that patent had been asserted against us. [01:03:58] Speaker 01: And if you look at paragraph 54, 2015, it talks about the 256 patent. [01:04:03] Speaker 01: which is asserted in this case. [01:04:05] Speaker 01: I don't think it's mistakeable. [01:04:06] Speaker 02: What about the statement that was read to us, I guess, from a hearing, where counsel said, that's not our theory? [01:04:14] Speaker 01: So it's not from a hearing. [01:04:15] Speaker 01: It's one of three points made in opposition to a motion to dismiss. [01:04:19] Speaker 01: And the first two points were they have market power in the relevant time because of market share. [01:04:24] Speaker 01: The second point was exclusionary power. [01:04:27] Speaker 01: And that second point in the document specifically relies on the exclusionary power of the 256. [01:04:32] Speaker 01: So that's a third alternative argument. [01:04:34] Speaker 01: But that wouldn't only matter. [01:04:36] Speaker 01: The fact that the language seems to say, oh, that's not really our theory, would only matter for judicial estoppel if the district court relied on it. [01:04:43] Speaker 01: Well, if the district director relied on it, he would have dismissed part of our complaint. [01:04:46] Speaker 01: If the district director relied on it, he would have said, you know what? [01:04:49] Speaker 01: I relied on that. [01:04:49] Speaker 01: You tricked me. [01:04:50] Speaker 01: I'm going to judicially stop you from making a claim now. [01:04:52] Speaker 01: But none of that happened. [01:04:54] Speaker 01: The district director simply went on and looked at the merits. [01:04:56] Speaker 01: And four months before this, frankly, we answered an interrogatory and told them flat out, 256 is the court. [01:05:03] Speaker 01: You've got the 256. [01:05:04] Speaker 01: You're coming after the 256. [01:05:05] Speaker 01: And they never objected to that. [01:05:07] Speaker 01: If there's no further questions, I see Judge Toronto looking around. [01:05:10] Speaker 01: Thank the court for its time, and we ask the court to defer and reverse.