[00:00:00] Speaker 06: 351580 International Medical Devices versus Cornell. [00:00:05] Speaker 06: OK, Mr. Post, how are you dividing your time? [00:00:09] Speaker 03: Your Honor, I am going to take the first nine minutes of the opening. [00:00:13] Speaker 06: No, I understand, but in terms of issues. [00:00:16] Speaker 03: Your Honor, I'm here for the court. [00:00:17] Speaker 03: I intend to address the common issues that affect trade secrecy for all the appellants, but also the individual liability issues that affect Mr. Finger uniquely [00:00:28] Speaker 03: and the exemplary damages issues, which intersect both common and unique issues. [00:00:35] Speaker 03: May it please the court, as I said, Russell Post as counsel for the appellant Richard Finger. [00:00:39] Speaker 03: There are multiple paths to reversal here. [00:00:42] Speaker 03: As to Mr. Finger, who is a businessman who invested $300,000 in what he understood to be a new startup, there's no evidence of misappropriation. [00:00:51] Speaker 03: It's certainly not evidence of malicious conduct that would support exemplary damages. [00:00:56] Speaker 03: and over $20 million of personal liability. [00:00:59] Speaker 03: As to all the appellants, all these trade secrets are borrowed by prior patent disclosures, an issue that the district court never even addressed in the post-judgment motion. [00:01:09] Speaker 03: The exemplary damages were abandoned by the pretrial order, and there is no jury finding as required to support them. [00:01:15] Speaker 03: And the royalties here are tainted [00:01:18] Speaker 03: by a failure to apportion in violation of a number of this court's precedents. [00:01:22] Speaker 03: And so reversal is required on numerous grounds. [00:01:26] Speaker 03: I'm happy to address whatever question the court wishes to address. [00:01:29] Speaker 03: Otherwise, I'll begin with the common point that the patent disclosures foreclose trade secrecy as a matter of law. [00:01:36] Speaker 03: And I want to call your attention to page 31 of the appendix, which is where the district court's order on the post-judgment motions addresses trade secrecy. [00:01:45] Speaker 02: Why don't you talk about the actual? [00:01:47] Speaker 02: evidence on the four trade secrets. [00:01:49] Speaker 02: I'd be happy to, Your Honor. [00:01:50] Speaker 02: There's the instruments and then the other three things, and I guess my impression was the instruments kind of a separate category. [00:01:58] Speaker 02: Correct. [00:01:58] Speaker 02: There's, you know, everybody knows what the instruments are, and I want to put that aside for now. [00:02:03] Speaker 02: But the other three, the distal tabs, the use of absorbable sutures, and the internal pockets. [00:02:14] Speaker 02: And the internal pockets. [00:02:16] Speaker 02: I guess my impression coming in here is that the prior art documents that you cite, a couple of patents and the PCT application, get close but not all the way there, and that might [00:02:32] Speaker 02: might not be decisive in an obviousness case, but it's not clear to me why it's not decisive in a trade secret case where the issue of what's in the public domain and whatnot is basically a factual question. [00:02:49] Speaker 03: It is not a factual question to the extent that the secret is disclosed in the patents. [00:02:53] Speaker 03: And I'll call the court's attention to your decision in Ultimax Cement, which was also a California Trade Secrets Act case. [00:03:00] Speaker 02: But it all depends on whether it's disclosed. [00:03:03] Speaker 02: Whether it's actually disclosed. [00:03:04] Speaker 03: Correct. [00:03:05] Speaker 03: And so I want to speak to the factual question that you posed. [00:03:07] Speaker 03: And in particular, I want to call attention [00:03:10] Speaker 03: to the internal voids secret, because that is the one that is unequivocally disclosed. [00:03:17] Speaker 03: If you look at 16600-01... It's based on Sabrina 477? [00:03:22] Speaker 03: That's right, Sabrina 477. [00:03:24] Speaker 03: It discloses a penile implant with cavities to adjust the hardness of silicone. [00:03:29] Speaker 03: That is precisely the internal pocket secret that's alleged here. [00:03:33] Speaker 03: And it represents more than 50% of the total value of the judgment. [00:03:37] Speaker 03: It is squarely foreclosed by the Subrini patent. [00:03:40] Speaker 03: And if you look at page 14, 557 to 58, you will see the expert testimony upon which the plaintiffs rely. [00:03:48] Speaker 03: And it fails to deal with Subrini. [00:03:49] Speaker 03: I apologize, Your Honor. [00:03:50] Speaker 02: No, no, no, no. [00:03:51] Speaker 02: Where in Subrini do you want me to look to find it? [00:03:56] Speaker 03: At 16601. [00:03:58] Speaker 02: A new column and line number. [00:04:00] Speaker 03: Of course, Your Honor. [00:04:01] Speaker 03: Let me call that out. [00:04:11] Speaker 03: Look at column four, beginning at line three. [00:04:16] Speaker 03: It states that it should be noted that the presence of cavities go on down to the end of line four. [00:04:24] Speaker 03: It makes it possible to give it a hardness less than that which it would have if it were formed of a solid and homogenous body. [00:04:31] Speaker 03: And if you look one page prior, or pardon me, two pages prior, 16598, you see the illustrations. [00:04:39] Speaker 03: And the illustrations, of course, bring this to life, because they show the internal cavities embedded in the implant. [00:04:48] Speaker 03: That is precisely what Dr. Elost alleged was his trade suit. [00:04:54] Speaker 02: This might not be quite the point, but I thought I was remembering from the papers here that it was rather important whether the cavities are fully enclosed or merely indented in. [00:05:13] Speaker 02: And one could use the word cavity for either thing. [00:05:16] Speaker 03: There was a dispute about that that related to the way the Augmenta product was ultimately designed, because it wasn't fully embedded cavities. [00:05:26] Speaker 03: But the point here is what Dr. Ehlers said was his trade secret was cavities fully enclosed in the device. [00:05:33] Speaker 03: And that is precisely what Super 8477 discloses. [00:05:37] Speaker 03: And as a matter of law, that should foreclose that trade secret claim. [00:05:41] Speaker 06: I think we have a jury instruction which defines the trade secret. [00:05:46] Speaker 03: There was a jury instruction which defined the trade secret. [00:05:49] Speaker 03: The court did not permit a jury instruction about the principle that disclosure in a patent forecloses a fine. [00:05:55] Speaker 06: I understand. [00:05:56] Speaker 06: But I'm saying in terms of comparing the prior patents to the trade secret, we can take the jury instruction as defining the trade secret. [00:06:05] Speaker 03: Yes, that's correct. [00:06:07] Speaker 03: That's right. [00:06:07] Speaker 03: The jury instruction defined the claim trade secrets. [00:06:11] Speaker 03: I want to shift gears because I do want to address Mr. Finger's individual responsibility. [00:06:17] Speaker 06: No, let's stick with this question of what was disclosed in the patent. [00:06:22] Speaker 03: Of course. [00:06:22] Speaker 06: I'm happy to draw it. [00:06:23] Speaker 06: The second one is the mesh. [00:06:28] Speaker 03: That's right. [00:06:29] Speaker 03: And there it's the Finney patent. [00:06:30] Speaker 03: That's right. [00:06:31] Speaker 03: It's the Finney patent which disclosed a penile implant with suturing strips of mesh. [00:06:37] Speaker 03: And Dacron is what's referenced in Finney. [00:06:39] Speaker 03: And that is a form of mesh. [00:06:41] Speaker 02: But not at the distal end. [00:06:43] Speaker 03: Not at the distal end. [00:06:44] Speaker 03: But then the ELIST International Patent Application, which incorporated Finney, disclosed the use of these types of suturing strips at the distal end. [00:06:54] Speaker 02: Well, I thought, I thought. [00:06:56] Speaker 02: And you correct me. [00:06:58] Speaker 02: I thought that what the PCT application disclosed were silicone strips, and that there is evidence that whatever else silicone strips are, they don't encourage tissue growth. [00:07:13] Speaker 03: But that's where, Your Honor, you have to account for the fact that that application was incorporating Finney. [00:07:21] Speaker 03: referred to the use of these distal end tabs in a mesh. [00:07:27] Speaker 03: And so the point is that when you account for the incorporation of Finney into the ELIST application, you have all the components of this alleged secret. [00:07:37] Speaker 03: It's right there in the public eye. [00:07:38] Speaker 02: And the best spot in Finney is? [00:07:41] Speaker 03: Your Honor, I would look at 16607 to 10. [00:07:47] Speaker 02: Right. [00:07:48] Speaker 02: I mean, Finney's a tiny, tiny patent. [00:07:53] Speaker 06: The language of the trade secret is in or around the distal end, whereas some of the witnesses seem to assume that it had to protrude from the distal end, which is not part of the trade secret. [00:08:08] Speaker 03: Your Honor, I think the testimony [00:08:11] Speaker 03: was that this idea of mesh tabs was that tabs that extend from the distal end. [00:08:17] Speaker 06: The way in which the trade... What I'm saying is that some of that testimony is not relevant because... Because of the definition. [00:08:23] Speaker 06: It doesn't say extending from the distal end. [00:08:25] Speaker 06: It says in and around the distal end. [00:08:29] Speaker 03: That may be correct, Your Honor. [00:08:30] Speaker 03: I mean, I'm trying to harmonize the instruction with the testimony that was given and just to acknowledge that [00:08:37] Speaker 03: If you accept the plaintiff's testimony as being a fair application of that instruction, it's fully disclosed by Finney and the ELIST International application. [00:08:48] Speaker 06: Unless you have other questions. [00:08:51] Speaker 02: I guess I'd be more specific in Finney. [00:08:54] Speaker 03: Yes. [00:08:55] Speaker 03: In Finney, Your Honor, I would. [00:09:03] Speaker 02: This kind of thing really does make a difference. [00:09:05] Speaker 03: Of course it does. [00:09:05] Speaker 03: Absolutely. [00:09:08] Speaker 03: I would point to, let's look at the abstract. [00:09:15] Speaker 03: Midway through the abstract, it makes clear that the sleeve includes suturing strips on the inside wall that facilitate the suturing of the sheet. [00:09:23] Speaker 03: And at the bottom, the last two lines, it states that the suturing strips are of Dacron fabric, which Dacron is mesh. [00:09:30] Speaker 03: And if you look in the next two pages, [00:09:36] Speaker 03: you can see the discussion of these suturing strips. [00:09:39] Speaker 03: And for example, I think a good illustration here would be at 16609, column 2, lines 33 to 37, which allude to the illustrations and point out that you can see the suturing strips that are attached [00:10:01] Speaker 03: to the sleeve. [00:10:02] Speaker 02: I don't think you've identified something unless I've missed it about the tabs at the end. [00:10:12] Speaker 03: The distal line. [00:10:13] Speaker 03: And that, Your Honor, is because Finney is incorporated then into... Carson testified that Finney showed at the distal line. [00:10:20] Speaker 03: Yes, that's exactly right, Your Honor. [00:10:21] Speaker 03: Carson conceded that Finney showed this. [00:10:24] Speaker 03: That's at 14, 653 to 64. [00:10:27] Speaker 03: That's plaintiff's expert conceding that point. [00:10:30] Speaker 03: 14653 to 64 your honor or pardon me six 14653 to 54 and the point judge Toronto that I was making in response to your question was it's the elist international application that then incorporates Vinny and Applies it to the distal end and so that discloses the entire secret as a matter of law I Want to make certain that I have an opportunity to emphasize that [00:11:00] Speaker 03: The lack of proof with respect to Mr. Finger individually. [00:11:02] Speaker 06: We'll get there. [00:11:03] Speaker 03: OK. [00:11:03] Speaker 03: Very good, Your Honor. [00:11:04] Speaker 06: I apologize. [00:11:05] Speaker 06: Can we move on to number three now? [00:11:06] Speaker 06: Yes, of course. [00:11:07] Speaker 06: So number three is this combination of absorbable sutures in the mesh, right? [00:11:17] Speaker 03: Right. [00:11:18] Speaker 03: And so that is disclosed by the Kim patent. [00:11:22] Speaker 03: And that appears at 17-080 of the appendix. [00:11:32] Speaker 03: And it appears specifically in column 3 at line 30. [00:11:37] Speaker 03: 080. [00:11:37] Speaker 03: 17080. [00:11:40] Speaker 03: Correct, Your Honor. [00:11:44] Speaker 03: Column 3, line 30. [00:11:47] Speaker 03: The multiple slits implant is then applied to the space and fixed on the back's buxofascia with an absorbable future. [00:11:56] Speaker 03: And the multiple slips implant is itself a mesh structure. [00:12:01] Speaker 03: And so I call your attention in column 4 to line 40, where this is explained further. [00:12:08] Speaker 03: The patent says it is fixed to buxofascia using an absorbable suture. [00:12:13] Speaker 03: then the dermis tissue is incised to form a mesh structure of multiple slits. [00:12:19] Speaker 03: So it's absorbable sutures with a mesh structure. [00:12:22] Speaker 03: The only argument the plaintiffs make is that that mesh structure in this patent is natural tissue as opposed to mesh. [00:12:30] Speaker 03: But that makes no difference to the idea that is disclosed, which is the use of absorbable sutures with mesh. [00:12:37] Speaker 03: And so that definitively forecloses all of the trade secrets. [00:12:40] Speaker 03: I see that our opening time is expired. [00:12:43] Speaker 03: I'm happy to answer questions about the other issues. [00:12:48] Speaker 06: I want to go on to number four. [00:12:49] Speaker 03: I appreciate it, Your Honor, absolutely. [00:12:51] Speaker 03: It's a privilege. [00:12:52] Speaker 06: And with respect to number four, I take it your contention is that this was a failure, not only that it was generally known, but there was a failure to keep it confidential. [00:13:06] Speaker 03: Your Honor, there's three points. [00:13:07] Speaker 03: I think that the answer. [00:13:09] Speaker 02: Is there an online video? [00:13:10] Speaker 03: There is an online video that reveals [00:13:12] Speaker 03: the use of most of the instruments, the instrument list itself is not anything unique or distinctive. [00:13:20] Speaker 03: The instruments are common knowledge. [00:13:23] Speaker 03: They were not protected by any confidentiality. [00:13:26] Speaker 03: And I would point out the simplest way to deal with this is that a trade secret must derive independent economic value from its secrecy. [00:13:36] Speaker 03: If you look at the pages of the brief where the plaintiffs argue independent economic value, [00:13:40] Speaker 03: They never even refer to the instrument list. [00:13:43] Speaker 03: And no surprise, because no one could credibly say that the instrument list creates independent economic value. [00:13:48] Speaker 03: So it's an easy way to decide that trade secret claim without even getting into the question of whether it's confidential. [00:13:55] Speaker 05: OK, unless there are further questions. [00:13:58] Speaker 05: Wasn't there some evidence that there were several instruments on the instrument list that are generally just not used at all in this type of surgery? [00:14:11] Speaker 03: Your Honor, the evidence is that all of the instruments on the list are regularly available and regularly used in surgical procedures. [00:14:21] Speaker 03: Not all of them are used commonly in standard urological procedures, but there's no instrument on this list that is special and unique. [00:14:29] Speaker 03: And in fact, on the contrary, Dr. Elist has promoted his procedure by saying any surgeon can do it with conventional surgical instruments. [00:14:38] Speaker 02: Why do you think it's enough that say some instrument that has never been used for urological work and has been used, I don't know, in heart surgery or something, why would there not be an eligible trade secret, or at least a possible eligible trade secret, putting aside whether it's been disclosed, the other reasons? [00:15:07] Speaker 03: What, Your Honor? [00:15:10] Speaker 02: This is, I think, a different version of the judge's question. [00:15:13] Speaker 03: And I certainly want to make sure that I'm engaging with this question fairly. [00:15:17] Speaker 03: I think the point would be that if all of the instruments are conventional surgical instruments, which I believe it's undisputed is the case, and there's no distinct value [00:15:29] Speaker 03: that derives from the particular list of those instruments in this case. [00:15:33] Speaker 02: That's a different point, I think. [00:15:35] Speaker 03: That is, I think, a fair point, Your Honor. [00:15:37] Speaker 03: And I would say, again, I think that's the simple way to decide this alleged secrecy claim without needing to worry about whether there's a particular magic instrument that's included in this list, which I think the evidence indicates that's not the case. [00:15:50] Speaker 06: But the list was sent by email. [00:15:52] Speaker 03: The list was communicated. [00:15:53] Speaker 03: That's right. [00:15:54] Speaker 03: Without confidentiality. [00:15:55] Speaker 03: That's right. [00:15:58] Speaker 05: All right. [00:15:59] Speaker 05: Or separately? [00:16:01] Speaker 03: Separately to Dr. Cornell. [00:16:03] Speaker 03: And to a third party, too. [00:16:05] Speaker 03: That's correct. [00:16:06] Speaker 03: That's correct. [00:16:09] Speaker 03: Judge Zeig has answered the question for me correctly. [00:16:13] Speaker 06: Unless there are further questions on these traces, there's going to be a couple of minutes to talk about Mr. Finger. [00:16:19] Speaker 03: Good. [00:16:20] Speaker 03: I'll take advantage of that freedom to make two points. [00:16:24] Speaker 03: First, there is no evidence in this record [00:16:26] Speaker 03: that Mr. Finger, who was an individual investor, had knowledge of these secrets as required to impose trade secret liability, or had any reason to know that they had been wrongfully possessed. [00:16:41] Speaker 03: At the most, what he knew is that Dr. Cornell had attended a training session. [00:16:46] Speaker 03: Dr. Cornell said that very little was discussed. [00:16:50] Speaker 03: There was no discussion of these design concepts. [00:16:55] Speaker 03: Dr. Cornell represented in the PPM that he had independently developed the product. [00:17:00] Speaker 03: That is no evidence upon which a jury can draw a reasonable inference of misappropriation. [00:17:05] Speaker 03: And I call your attention to two cases from the California courts. [00:17:09] Speaker 03: One is the Silvaco case in 2007 that held that [00:17:12] Speaker 03: mere knowledge that a party might claim misappropriation of a trade secret when there's a dispute is not itself a basis to charge an inference of seantor. [00:17:22] Speaker 03: The second case is the Hook Media case from the California Court of Appeals in 2020. [00:17:26] Speaker 03: That's a case where a new employer [00:17:29] Speaker 03: had engaged employees who had confidential information. [00:17:33] Speaker 03: There was some evidence that the employees had used that confidential information. [00:17:37] Speaker 03: But the Court of Appeals held that was no evidence to impute knowledge of that to the employer. [00:17:42] Speaker 03: Mr. Finger is in this situation exactly. [00:17:45] Speaker 03: Whatever Mr. Cornell did or did not do with respect to Dr. Elis, [00:17:49] Speaker 03: Mr. Finger had no reason to know he was lying if he was lying. [00:17:52] Speaker 03: And so Mr. Finger can't be liable. [00:17:54] Speaker 03: And that brings me to the last point that I would make is the exemplary damages here depend on a finding by the court, which is highly irregular and I say waived by the pretrial order. [00:18:04] Speaker 03: but a finding of malice. [00:18:06] Speaker 03: California law requires proof of both willful conduct and malice. [00:18:10] Speaker 03: And in the applied medical case in 2024 and the champion systems case in 2024, the California court said, malice is different. [00:18:20] Speaker 03: It requires proof of intent to cause harm. [00:18:22] Speaker 03: or despicable criminal conduct, the plaintiffs here have not cited any evidence of malice by Mr. Finger. [00:18:30] Speaker 03: At most, they've cited evidence that they say would go to willfulness. [00:18:33] Speaker 03: That's an easy issue. [00:18:34] Speaker 06: OK, I think we're out of time. [00:18:35] Speaker 03: I appreciate the time. [00:18:36] Speaker 06: Thank you, Your Honor. [00:18:38] Speaker 06: We'll give you two minutes for rebuttal. [00:18:39] Speaker 06: And we have Ms. [00:18:40] Speaker 06: White. [00:18:49] Speaker 01: Thank you, Your Honors. [00:18:50] Speaker 01: May it please the Court? [00:18:51] Speaker 01: Subject to the Court's questions, I'll spend a brief amount of time talking about the royalty award and the problems with the royalty award. [00:18:58] Speaker 01: There are several, and the Court should remand at minimum on the royalty award. [00:19:04] Speaker 01: As this Court knows, there's a requirement to apportion between the aspects of the product or the profits here, the projected profits, [00:19:12] Speaker 01: that relate to the product protected idea, the trade secrets and those that don't. [00:19:17] Speaker 01: That did not happen at all. [00:19:19] Speaker 02: What are some of those aspects? [00:19:21] Speaker 01: So this gets a little complicated because the trade secrets, it's undisputed or not actually in the augmented product. [00:19:31] Speaker 01: So when we're looking at apportioning, you can actually apportion with the product. [00:19:38] Speaker 01: So at most, what they could have done is said, we need to apportion the projections that Augment had put together, what they thought they could earn with the trade secrets versus without. [00:19:51] Speaker 02: With a product that would incorporate the trade secrets. [00:19:55] Speaker 02: Correct. [00:19:55] Speaker 02: So what else would be of value in said product? [00:20:03] Speaker 02: in the not yet made augmented product that incorporates the trade secrets. [00:20:08] Speaker 01: It would be everything that is not the improvements. [00:20:12] Speaker 02: What is the everything? [00:20:14] Speaker 01: That would be the penuma. [00:20:15] Speaker 01: The implant, there was already a commercially available implant, the penuma. [00:20:21] Speaker 01: The trade secrets are supposedly an improvement on the penuma. [00:20:24] Speaker 01: So if you took the projections that Cornell had back then, the thing that we have in the record that they could have been based on that weren't the improvements is the penuma. [00:20:37] Speaker 01: The penuma had, the year before the hypothetical negotiation would have been occurring, did not even have a million in profits. [00:20:46] Speaker 01: So if you look at the actual product, the one thing we know doesn't have the trade secrets in it. [00:20:52] Speaker 01: It's nowhere near the base. [00:20:54] Speaker 01: that ARST used. [00:20:57] Speaker 02: And ARST- Would I be right? [00:21:00] Speaker 02: So it seems to me, I guess, two thoughts are coming in a row. [00:21:03] Speaker 02: One is, OK, there's improvements on an existing product, so the existing product might have some value. [00:21:10] Speaker 02: Second thing is, you're telling me that existing product had really, really, really small value compared to the rest. [00:21:16] Speaker 02: So if you're going to subtract something, you might not be subtracting very much. [00:21:21] Speaker 02: Nobody wants it. [00:21:23] Speaker 02: I'm exaggerating. [00:21:24] Speaker 02: Nobody wants the Panuma without the improvements. [00:21:27] Speaker 02: Not nobody compared to what they projected. [00:21:30] Speaker 01: The problem is that the Augmenta also doesn't have the improvements. [00:21:36] Speaker 02: Well, it doesn't now, but aren't you measuring against the what-if Augmenta product that included the trade secrets? [00:21:45] Speaker 02: I may be misunderstanding. [00:21:47] Speaker 02: I don't understand why you keep talking about how the current augmenta doesn't have them. [00:21:53] Speaker 01: Because, and I'm sorry, Your Honor, I'm trying to understand your question as well. [00:21:58] Speaker 01: So, and if I'm understanding it now, the question is that the penuma as it existed had very little profits, so the projections must be just because of the trade secrets. [00:22:07] Speaker 01: Is that what you're testing? [00:22:10] Speaker 01: Yeah. [00:22:13] Speaker 01: That could be the case, but that analysis was never done. [00:22:16] Speaker 01: Ars did not do that. [00:22:17] Speaker 01: What Ars did is said, I'm assuming the augmenta, everything about the projected profits for the augmenta, those are coextensive. [00:22:26] Speaker 01: So you are correct that maybe that is the analysis that needs to be done. [00:22:30] Speaker 01: It was not done here. [00:22:31] Speaker 01: And that's the problem. [00:22:32] Speaker 01: So at minimum, we need a remand for that. [00:22:35] Speaker 01: There are also problems with the royalty rate. [00:22:38] Speaker 01: It has to be sufficiently tied to the facts of the case and the two comparable transactions that are used. [00:22:46] Speaker 01: Did you have a question? [00:22:47] Speaker 02: No. [00:22:47] Speaker 02: I wanted to ask one thing about the [00:22:52] Speaker 02: the exemplary damages. [00:22:55] Speaker 02: I don't see how there was a waiver in the pretrial order. [00:23:01] Speaker 02: The pretrial order says, we're going to try damages, full stop. [00:23:06] Speaker 02: It doesn't distinguish among different types of damages. [00:23:10] Speaker 02: And then, what, two weeks later, there's a stipulation that says all the yet undetermined damages, all of them, are going to be for the judge, not the jury. [00:23:21] Speaker 02: Um, at that point, why wasn't it your obligation to say, um, all the damages are in the case. [00:23:31] Speaker 02: We've all just agreed they're going to the judge. [00:23:35] Speaker 02: I have to assume as I think the district court ultimately said she did assume, um, that that meant all the issues that go into the damages. [00:23:47] Speaker 02: including the exemplary damages, are going to be tried by the court. [00:23:51] Speaker 02: And if you disagreed and said, no, we would like that one to go to the jury, it was your obligation to ask. [00:23:58] Speaker 01: The answer to your question, Your Honor, is that the characterization of the stipulation that you're operating under is incorrect. [00:24:04] Speaker 01: So the stipulation was that after liability, the court would determine whether to award a reasonable royalty. [00:24:10] Speaker 02: But it seems to me you've made two different points. [00:24:13] Speaker 02: Your main point has been the pre-trial order waived it. [00:24:18] Speaker 02: That happened, what, May 24th, 2023. [00:24:22] Speaker 02: No stipulation until June 5th, I think it was, 2023. [00:24:27] Speaker 02: I don't see how you can say, and literally I do not see how you can say the pre-trial order waived a claim to exemplary damages. [00:24:37] Speaker 02: It said damages is what we want. [00:24:39] Speaker 02: That's going to be tried. [00:24:43] Speaker 01: Now, I understand your Honor's point now. [00:24:47] Speaker 01: The pretrial order, the reason we say it waived it was that willful and malicious misappropriation had been pled as a separate thing. [00:24:57] Speaker 01: You are right that exemplary damages is part of damages. [00:25:01] Speaker 01: What was not identified in the pretrial order is that they were going to be pushing for the predicate liability finding of willful and malicious misappropriation, which has its own elements. [00:25:11] Speaker 02: When you say willful and malicious misappropriation was separately pled, what do you mean? [00:25:19] Speaker 01: I mean that in their petition they had said you have misappropriated trade secrets and you have also done so willfully and maliciously and that is what entitles us to exemplary damages. [00:25:28] Speaker 01: Our point about the waiver and the joint pretrial order is that there's a special liability finding for exemplary damages and that's not identified as something at issue anymore. [00:25:41] Speaker 01: For the defendants to know that that's being tried, we have no way of knowing that. [00:25:46] Speaker 01: It's not in the joint pretrial order. [00:25:48] Speaker 01: And the exemplary damages follow from that liability finding. [00:25:51] Speaker 01: It's the liability finding that they waived by not including in the pretrial order. [00:25:57] Speaker 01: I mean, the predicate liability finding to exemplary. [00:25:59] Speaker 02: You're referring to something in the operative complaint? [00:26:04] Speaker 01: Yes, what I am referring to is that in their willful and malicious misappropriation. [00:26:09] Speaker 01: Oh, I'm sorry. [00:26:10] Speaker 01: I'm sorry. [00:26:10] Speaker 01: I'm in complaint. [00:26:11] Speaker 01: I'm sorry. [00:26:11] Speaker 01: I missed that. [00:26:14] Speaker 01: In the complaint, willful and malicious misappropriation is set out as the basis that they will use to seek exemplary damages, because they can't just get exemplaries based on a liability finding misappropriation. [00:26:27] Speaker 01: They need an extra finding. [00:26:30] Speaker 01: And our point about waiver is that in the joint pre-trial order, they do not identify that as a factual issue that's going to be determined whether the misappropriation was willful and malicious. [00:26:42] Speaker 06: OK, I think we're out of time. [00:26:45] Speaker 06: Thank you, Mr. Maimon. [00:27:01] Speaker 04: May it please the court, Nathan Ammon on behalf of the plaintiffs. [00:27:06] Speaker 04: I'll start wherever your honors want, but I'll start, since the question began with the trade secrets, I'd like to address those questions first. [00:27:13] Speaker 04: And the first thing I'd like to point out is I think a critical thing that was alighted over [00:27:19] Speaker 04: with these trade secrets is what they actually are. [00:27:22] Speaker 04: The context of these trade secrets, if you look at the trade secrets in the jury instructions, they're in a cosmetic penile implant. [00:27:29] Speaker 04: That's a requirement for the three structural trade secrets. [00:27:33] Speaker 04: They all have to be in a cosmetic penile implant. [00:27:36] Speaker 04: Sabrina is not a cosmetic penile implant. [00:27:39] Speaker 04: It's a therapeutic implant. [00:27:40] Speaker 04: That's a different type of implant. [00:27:42] Speaker 04: There's testimony in the record that the jury, in making its factual finding, was able to hear and figure out. [00:27:48] Speaker 06: So where is the testimony that it, for a purpose, let's take these trade secrets one by one, that with respect to this first trade secret about the pockets, that it made a difference whether it was a cosmetic or functional implant? [00:28:02] Speaker 04: Yes, so the testimony you could find at appendix 14557 in... 14557? [00:28:11] Speaker 04: Yes, that's plaintiff's expert Drury. [00:28:16] Speaker 04: He was a technical expert, and then there's another expert, Dr. Carson, that I'll refer to. [00:28:21] Speaker 04: And the way the trial was... Wait, wait, wait. [00:28:22] Speaker 06: I'm sorry. [00:28:23] Speaker 06: 14557. [00:28:23] Speaker 04: 14557. [00:28:27] Speaker 06: Okay, so where's the testimony here about the poxazine difference for cosmetic and functional implants? [00:28:38] Speaker 04: So there's a few different places, Your Honor, that I may have to point you to, but 14557, there's the discussion of Sabrina, and I think it's important to note that the way this art was presented, [00:28:52] Speaker 06: Below the defendants threw up a lot of prior art and so he's addressing the art as a show me where Your witness says that it's a difference whether it's from the point of view this first trade secret It's a cosmetic for a functional implant [00:29:08] Speaker 04: So the cosmetic point, I will have to look back at what Drury said. [00:29:14] Speaker 04: I'll point you for the cosmetic distinction if you look at 14.636, which is Dr. Carson, who's also an expert. [00:29:24] Speaker 06: 636. [00:29:33] Speaker 06: Yeah, here. [00:29:35] Speaker 04: So the context again, as I said, there was art that was presented together, including the small carrion prior art and Sabrina. [00:29:43] Speaker 04: And he's discussing how these two references aren't the same. [00:29:47] Speaker 04: And Dr. Carson here explains the therapeutic implant. [00:29:53] Speaker 04: Well, it's, if you look at starting on line one, where he started on a small carrion implant, and then you also see down below, he ties it in at line 19 with Sobrini. [00:30:05] Speaker 04: Sobrini says it's a therapeutic penile implant. [00:30:09] Speaker 04: It's designed, a therapeutic implant goes in. [00:30:11] Speaker 06: Okay, but where does he say it makes a difference from the point of view of the trade secrets? [00:30:16] Speaker 04: Well, it makes a difference from the point of view of the trade secrets, because the trade secrets are limited to cosmetic pinot implants. [00:30:21] Speaker 04: I mean, it's not the same. [00:30:22] Speaker 04: OK, but look. [00:30:24] Speaker 06: There's a Ninth Circuit case about the California trade secrets counselor versus Kawasaki, which is sort of interesting in relation to this, because there was a trade secret that claimed that having bubbles under the hull of a jet ski [00:30:46] Speaker 06: made it operate better. [00:30:47] Speaker 06: And the court said, no, that's not. [00:30:50] Speaker 06: That's well known because while there's no evidence that it was known for jet skis, it was known for boats generally. [00:30:56] Speaker 06: And there's no difference between boats and jet skis. [00:30:58] Speaker 06: They're kind of both. [00:31:00] Speaker 06: So quickly, you know. [00:31:04] Speaker 06: What I'm asking you, is there some testimony here that from the point of view of this particular trade secret, the voids trade secret, makes a difference whether it's a cosmetic implant or a functional implant? [00:31:16] Speaker 06: And so far you haven't shown me any testimony that addresses that. [00:31:20] Speaker 04: Your Honor, I respectfully think we're switching it to say, well, what's this trade secret versus or what's the particular feature versus talking about the trade secret is a cosmetic implant. [00:31:31] Speaker 04: The only cosmetic implant that was ever on the market is MyQuiet. [00:31:35] Speaker 04: And these are additional improvements to that. [00:31:38] Speaker 04: And so I think it does matter that it's in the context of the cosmetic peanut implant that no one else, he would have his own improvements to the product that he developed. [00:31:48] Speaker 06: Would it be fair to say then there's no testimony that relates the trade secret to the type of implant, but you're saying it's just a different kind of implant because [00:31:56] Speaker 06: inherently cosmetic and functional implants are different. [00:32:00] Speaker 04: You know, I don't think it would be fair to say that. [00:32:02] Speaker 04: I mean, we discussed, you know, I have a lot of try to be detailed with the record in the opening brief talking about what the testimony was and about how even Dr. Cornell acknowledged differences between cosmetic implants and therapeutic implants that go in different parts of the body. [00:32:20] Speaker 04: I mean, I think, again, these are fact issues for the jury to decide of whether a prior art [00:32:27] Speaker 04: glossing something in a therapeutic implant, whether that is, you know, we're even meshing terms here. [00:32:34] Speaker 04: This is trade secrets. [00:32:34] Speaker 04: This is not patent law. [00:32:35] Speaker 04: We're not talking about obviousness. [00:32:38] Speaker 06: Trade secret as... So as far as this first trade secret is concerned, the difference is you say it's about a functional implant, not a cosmetic implant, right? [00:32:49] Speaker 04: Well, and specifically because it's an implant that goes into corpus cavernosa. [00:32:54] Speaker 04: It's not a cosmetic implant that goes in a different part of the body. [00:32:59] Speaker 04: And the jury heard evidence, the defendants presented evidence about what they said, Subrini disclosed. [00:33:06] Speaker 04: The jury heard expert testimony from both sides. [00:33:09] Speaker 04: And the jury found, as a matter of fact, [00:33:11] Speaker 04: that that Subrini did not disagree with the trade secret. [00:33:14] Speaker 06: Let's put it this way. [00:33:15] Speaker 06: Let's suppose we were to conclude that there is no material difference between a cosmetic and a functional implant. [00:33:23] Speaker 06: Let's assume that. [00:33:24] Speaker 06: I don't agree with that, and you argue to the contrary. [00:33:26] Speaker 06: But let's assume that. [00:33:27] Speaker 06: Is there any other difference between Subrini and this trade secret? [00:33:34] Speaker 04: Understand or resist your hypothetical, but taking that, on the art itself, [00:33:39] Speaker 04: I mean, if you're assuming that Sabrina is essentially a cosmetic implant, you know, there's other, you know, not necessarily a testament I could think of to point you to about Sabrina. [00:33:49] Speaker 04: I think the testimony is relevant that Sabrina is not ever something that's ever been commercialized. [00:33:54] Speaker 04: It goes to the point of whether this was known. [00:33:58] Speaker 04: And that goes to the point of traceable. [00:33:59] Speaker 06: OK, but whether that's been commercialized or not under the cases is not something that's relevant. [00:34:06] Speaker 02: If it's in the data. [00:34:07] Speaker 02: Does one but not the other have fully enclosed cavities, or does the fully enclosed cavities appear in Sabrina's therapeutic insert? [00:34:17] Speaker 04: My understanding is it is an enclosed cavity. [00:34:21] Speaker 02: My understanding is that. [00:34:22] Speaker 02: So it really comes down to this, the different kind of implant which goes in different parts of the anatomy to serve different functions, whether it's like the boats for jet skis, no material difference. [00:34:39] Speaker 02: I think the question that Judge Dyches has been asking you is, [00:34:44] Speaker 02: What specific evidence says, here's why the fully enclosed cavities would make some difference because of the different locations and functions of the two different kinds of implants? [00:35:01] Speaker 02: Well, I think we're... I'm not asking you to concede that that's the decisive issue, but what is the evidence? [00:35:10] Speaker 04: Again, I point to, in the testimony I know we cited in the briefs, but Dr. Elis explained the differences between what he has as a cosmetic implant and a therapeutic. [00:35:19] Speaker 04: Dr. Carson, the expert, talking about that, that when you're designing the cosmetic implant, you're taking different things into consideration. [00:35:26] Speaker 04: So yes, we may be talking about similar, you know, [00:35:30] Speaker 04: screws are used in a lot of different components, right? [00:35:32] Speaker 04: But it doesn't mean that you might have one aspect of use of that part or that feature that may be a training secret. [00:35:40] Speaker 02: Was there testimony, I think there was testimony that having the cavities can make it lighter, right? [00:35:46] Speaker 02: It makes it lighter, makes it more natural feeling, more... And is there some testimony that that matters more for the kind of wraparound cosmetic thing than for the more internal therapeutic thing? [00:35:58] Speaker 04: I don't know specifically, certainly there's testimony about it being important for the wraparound and for the natural feeling that it creates for the wraparound. [00:36:09] Speaker 04: I don't know if I can point you to testimony that says, and that distinguishes from therapeutic because the testimony on therapeutic was we're talking about [00:36:16] Speaker 04: different purpose. [00:36:17] Speaker 04: The purpose of why you use a therapeutic is totally different than the purpose of this cosmetic. [00:36:23] Speaker 04: Again, I don't want to be a broken record, but it's important. [00:36:26] Speaker 04: I like to counter what my friend said, that none of the prior art [00:36:33] Speaker 04: want to use the term on all fours with the with the trade secrets none of it discloses exactly what this claim is a trade secret and that becomes a fact question then for the jury to determine of okay [00:36:46] Speaker 04: we hear what you're saying pointing to prior art, here's what we've been instructed the trade secrets are, does this prior art actually disclose the trade secrets? [00:36:55] Speaker 04: And the jury found no. [00:36:57] Speaker 06: Can we go on to trade secret number two? [00:37:00] Speaker 06: It's the same argument you're making with respect to trade secret number two, that it's a cosmetic implant rather than a functional one. [00:37:11] Speaker 04: With trade secret number two, the point of appendix 14336, this is Drury talking about that the mesh patches that run the length of Finney aren't like the patches that are at or around the tip. [00:37:27] Speaker 04: And the purpose of the patches at the tip in a cosmetic implant, again, are different because the cosmetic implant is going to move in different ways and design to move for different reasons. [00:37:38] Speaker 06: But Carl Carson conceded that [00:37:40] Speaker 06: Finney has tabs at the distal, and yes, that's to promote tissue growth. [00:37:46] Speaker 04: He gave that answer in cross-examination, but he gave other testimony as well that the match tabs weren't there at 14-6-23. [00:37:59] Speaker 04: And the jury could reconcile that expert in both what he said in one place and then cross-examine a quick examination question. [00:38:07] Speaker 06: What did he say at 14-6-23? [00:38:10] Speaker 04: that the mesh tabs were not used for functional, sorry, I'll go through it myself. [00:38:29] Speaker 02: Lines 21 and 22. [00:38:31] Speaker 02: I'm sorry? [00:38:31] Speaker 02: Lines 21 and 22. [00:38:32] Speaker 04: Thank you, Your Honor, yes. [00:38:36] Speaker 04: You're taking these implants, the reason why you wouldn't take the Finney teaching is because [00:38:42] Speaker 04: they're not used in the same way. [00:38:44] Speaker 04: Again, the importance of this being a cosmetic implant versus being a therapeutic implant matter to the trade secrets and what was being done. [00:38:52] Speaker 06: Okay, but so that's the difference again with respect to trade secret number two. [00:38:56] Speaker 04: Well, that's a different point. [00:38:57] Speaker 04: I mean, I don't want to wave that, you know, the things are important. [00:39:01] Speaker 06: I'm waving it, but we're here to try to figure out what's going on. [00:39:05] Speaker 06: If there's some other reason that Finney [00:39:08] Speaker 06: doesn't disclose this trade secret, other than the difference between functional and cosmetic, show it to us. [00:39:15] Speaker 04: Yeah, so 14336 through 339, Mr. Drury is discussing Finney. [00:39:19] Speaker 04: He explains that those Finney mesh patches that are discussed aren't like the mesh tabs at the distal end. [00:39:25] Speaker 04: And that's his testimony. [00:39:27] Speaker 04: What is he saying? [00:39:29] Speaker 04: What are you talking about? [00:39:30] Speaker 04: 14336. [00:39:32] Speaker 04: 14336. [00:39:33] Speaker 04: 14336. [00:39:38] Speaker 04: 14-3. [00:39:39] Speaker 04: You're right. [00:39:43] Speaker 04: Sorry, Your Honor. [00:39:45] Speaker 04: This is 6-3. [00:39:48] Speaker 04: Lost my notes. [00:39:48] Speaker 04: Where am I? [00:39:49] Speaker 04: 3-3-6. [00:39:49] Speaker 00: 14-3-3-6. [00:39:50] Speaker 04: This is jewelry. [00:39:52] Speaker 04: Yes, jewelry is what I'm at, Your Honor. [00:39:54] Speaker 04: Our technical expert. [00:39:58] Speaker 04: He discusses, I mean, carrying on through 14337, 338. [00:40:02] Speaker 06: He says on line 15, he says the trade secrets are mesh tabs extending from the distal end, but that's not the definition that the district court gave to the trade secret that the parties agreed on. [00:40:15] Speaker 04: Again, I mean, he gave that testimony, yes, but the jury was instructed in the trade secrets, and they were able to take that. [00:40:22] Speaker 06: I mean, his testimony was not excluded. [00:40:23] Speaker 06: He's defining the trade secretly differently than the district court did. [00:40:27] Speaker 04: I think, you know, at most, perhaps it's not precise language that he should have used, but I don't think it's different. [00:40:33] Speaker 06: And again, this is... Extending from and in and around seemed to be different. [00:40:38] Speaker 04: When the jury heard that testimony and they were instructed, we presume the jury follows its instructions on determining what was the trade secrets that they have to determine was there. [00:40:46] Speaker 04: And if you look at 338, he talks about how those, and Finney is not the same thing as the trade secrets in this case. [00:40:56] Speaker 04: There's reference to ELIS as well. [00:40:58] Speaker 04: And ELIS, I think, Dr. Schroner, you noted. [00:41:02] Speaker 04: The PCT application? [00:41:03] Speaker 04: It's a PCT application, yes. [00:41:05] Speaker 04: The PCT was a silicone tab that wasn't a mesh. [00:41:09] Speaker 04: And so again, it's not doing the same, it's not even existing for the same purpose of allowing tissue in. [00:41:15] Speaker 04: Do I remember right the language of silicone netting? [00:41:19] Speaker 04: I'm not going to challenge your honor. [00:41:20] Speaker 04: I mean, I think, but I think it was silicone. [00:41:22] Speaker 04: The testimony was it's a silicone [00:41:25] Speaker 04: It's not open in the sense that tissue could ingrow as with the mesh concepts here, which the trade secret requires, that it allows tissue in growth. [00:41:39] Speaker 04: The absorbable suture point, the reference on Kim, my friend pointed to Kim and said, well, Kim shows slits. [00:41:49] Speaker 04: Kim's not a, what would I say, [00:41:53] Speaker 04: It's fat. [00:41:55] Speaker 04: It's taking fat from the buttock and using that as an implant. [00:41:57] Speaker 04: I mean, it's not even talking about a silicone implant or cosmetic implant of that style at all. [00:42:02] Speaker 04: It's a different... We're not disputing absorbable sutures are known. [00:42:06] Speaker 04: I mean, there's testimony on that. [00:42:07] Speaker 04: It's the use of absorbable sutures in this application with a silicone, cosmetic silicone implant. [00:42:16] Speaker 06: I don't understand what's the trade secret about it. [00:42:19] Speaker 06: Absorbable sutures are used in all kinds of surgery for decades, right? [00:42:24] Speaker 06: And that testimony establishes that. [00:42:27] Speaker 04: They were used in all kinds of surgery. [00:42:28] Speaker 04: They'd never been used in a cosmetic penile implant surgery. [00:42:32] Speaker 04: And there's testimony. [00:42:32] Speaker 06: I mean, that's clear. [00:42:33] Speaker 06: So Finney discloses mesh with sutures, but it doesn't say they're absorbable, right? [00:42:42] Speaker 04: I don't believe Finney discusses absorbing, no. [00:42:46] Speaker 06: So that's the difference? [00:42:48] Speaker 06: I'm sorry, about Phenny? [00:42:51] Speaker 06: Phenny shows mesh in sutures, but it doesn't say that the sutures are absorbable, correct? [00:43:00] Speaker 04: It doesn't say that the sutures are absorbable and Finney doesn't disclose using, as we talked about with the second trade secret, using the mesh taps. [00:43:07] Speaker 04: They're not the same mesh taps. [00:43:08] Speaker 04: Your Honor may dispute that. [00:43:11] Speaker 04: But I think it's part of trade secret three is the mesh tap. [00:43:15] Speaker 06: So it's a trade secret to use absorbable sutures with [00:43:19] Speaker 06: particular mesh and a particular implant. [00:43:21] Speaker 06: I mean, that seems to get back to this Ninth Circuit case. [00:43:25] Speaker 04: I mean, I think it's very secret law protects a broad amount of subject matter. [00:43:30] Speaker 04: It's not patent law. [00:43:31] Speaker 04: I know we approach this and we think of this as how we approach patents, but these aren't the same. [00:43:38] Speaker 02: Why we're focusing on some of the very specific [00:43:43] Speaker 02: issues is, for example, I could imagine, but it's just my imagining, that there might be a difference in whether you use absorbable or not absorbable according to how fast they dissolve, how fast the tissue grows, the place and how much wear and tear that place is going to get. [00:44:05] Speaker 02: Is there any testimony about that sort of thing? [00:44:13] Speaker 04: I don't, I'm standing here, I don't recall. [00:44:15] Speaker 04: Again, I don't want to, you know, I laid out a lot of, there's a lot of issues in this case and I've laid out the facts in the brief, but I don't recall specifically, as I understand your honor's question, I think there's testimony about using absorbable sutures and using in this context, which again, [00:44:32] Speaker 04: trade secrets allows protection of context or new uses here. [00:44:36] Speaker 02: Right, but I guess we've been trying to, I think the questions have been trying to think about is this like or unlike the Kawasaki case that was described where [00:44:50] Speaker 02: A very strong kind of layperson's first intuition is there's no difference between these things. [00:44:57] Speaker 02: And so you really want to have some evidence saying it, saying that here's why there is a difference. [00:45:03] Speaker 02: And the question is, at least in my mind, is there evidence about why it's plausible [00:45:11] Speaker 02: that there is a difference here so that it really would become a jury question as opposed to, we just don't see a reasonable basis for saying there's any difference. [00:45:21] Speaker 04: Well, again, if you go back to the beginning of Dr. Eli's testimony, talking about the difference in what he does in surgeries with therapeutic versus cosmetic, how he developed this, the reason he developed these technologies. [00:45:34] Speaker 04: I mean, he walked through that. [00:45:36] Speaker 04: Dr. Cornell, in his testimony, omitted the differences between therapeutic. [00:45:39] Speaker 06: But he didn't relate it to the trade secrets as to why it would make a difference, for example, to use non-absorbable sutures for [00:45:48] Speaker 06: Functional doesn't is different from using it for cosmetic. [00:45:52] Speaker 06: I mean on the face of it. [00:45:53] Speaker 04: It's a seems a little Unusual there would be a difference, but there's no testimony saying there is right Well, I think again the jury's allowed to take this evidence and put it together in a way, you know And this court is reviewing for substantial evidence here [00:46:09] Speaker 04: And what the jury hears about the importance of differences between these two types of implants, why Dr. Elis developed and was contemplating and developing the potential way of using mesh tabs for a cosmetic implant, why the defendants in the documents that discuss taking this idea and how they're going to distinguish penuma, they're talking about the advantage of these things. [00:46:32] Speaker 04: I mean, these are all things that are for the jury to determine that [00:46:37] Speaker 04: What did Dr. Ullis have? [00:46:38] Speaker 04: How did the FEMS develop this technology? [00:46:40] Speaker 04: They weren't looking at the prior art. [00:46:42] Speaker 06: Let's go on to number four. [00:46:44] Speaker 06: Yeah. [00:46:45] Speaker 06: Where you have this video and you have the emails. [00:46:51] Speaker 06: And there's the question of whether it satisfies the confidentiality requirement. [00:46:57] Speaker 04: Well, I don't believe. [00:46:58] Speaker 04: I'm not aware of any challenge that the email somehow wasn't confidential. [00:47:02] Speaker 04: I mean, it was from a IMD agent. [00:47:05] Speaker 04: who was requested, and at this time, Dr. Cornell had signed an NDA. [00:47:08] Speaker 06: Well, the burden was on you, and there's no evidence that was confidential, right? [00:47:15] Speaker 04: I disagree. [00:47:16] Speaker 04: I think there was evidence. [00:47:18] Speaker 04: Dr. Cornell had attended the surgery. [00:47:20] Speaker 04: After the surgery, he asked for this information. [00:47:23] Speaker 04: He gets it. [00:47:24] Speaker 04: As far as the actual information, I think even the defendants aren't arguing that you can see everything in the videos. [00:47:32] Speaker 06: But it was sent to a third party, also. [00:47:34] Speaker 04: The third party, it was sent by an agent of, I'm not aware of a testimony saying that it was sent to anyone other than people subject to the duty of... No, no, there's testimony that it was sent to a third party and there's no evidence that third party was under obligation of confidentiality. [00:47:52] Speaker 04: That's not my recollection of the fact, Your Honor, but I think that it was sent by, at least Dr. Cornell got this evidence or got the list from an IMD sales agent. [00:48:08] Speaker 04: What about the online journal publications that included a video? [00:48:12] Speaker 04: Yes, so the video doesn't disclose all the... It's not a comprehensive instrument list. [00:48:17] Speaker 04: The testimony was that what you could see some instruments used. [00:48:20] Speaker 04: but not all of them. [00:48:22] Speaker 04: And Dr. Carson, who's a practicing urologist, talked about the instrument list. [00:48:26] Speaker 04: And you can find this at appendix 14643. [00:48:31] Speaker 04: He's talking about why the instrument list matters. [00:48:34] Speaker 04: And what he explains is that when you're in surgery, you have an operating room [00:48:38] Speaker 04: you're paying for the operating room, your patient's under anesthesia, under surgery, time matters in this context, right? [00:48:44] Speaker 04: And you even heard my friends acknowledge that, well, you may not have for common neurology surgery, you may not have all those instruments. [00:48:51] Speaker 04: That's the point. [00:48:52] Speaker 06: So the video is for the whole surgery? [00:48:54] Speaker 04: I'm sorry? [00:48:55] Speaker 06: The video is of the whole surgery? [00:48:57] Speaker 04: You know, I don't call it the whole surgery, but I think it's undisputed. [00:49:00] Speaker 04: I didn't just show all the instruments being used. [00:49:02] Speaker 04: Undisputed? [00:49:03] Speaker 06: I don't think that's undisputed. [00:49:05] Speaker 04: I thought today that they acknowledged it doesn't show everything. [00:49:10] Speaker 06: I think there's testimony that it showed everything and I think there's some offhand remark that maybe it didn't, that one snapshot, that is one picture didn't show everything. [00:49:22] Speaker 04: My recollection of the record, Judge Icke, is that it actually doesn't show everything. [00:49:25] Speaker 04: I don't think the defendants argued it doesn't show everything. [00:49:27] Speaker 04: But at the very least, Your Honor, this is a fact question for the jury. [00:49:30] Speaker 04: It's why we have juries as fact-finders. [00:49:33] Speaker 04: And yeah, they could present evidence that showed everything. [00:49:35] Speaker 04: We present evidence that didn't. [00:49:36] Speaker 04: This is for the jury to decide those factual questions. [00:49:38] Speaker 04: And they decided those here. [00:49:40] Speaker 06: And so I hope so, unless there are further questions about this aspect. [00:49:44] Speaker 06: I'll give you a couple of minutes to go into other things which you want to talk about. [00:49:49] Speaker 04: Yes, thank you. [00:49:50] Speaker 04: I'm happy to go to whatever issue, if there is one. [00:49:56] Speaker 04: Attention, let me address Mr. Finger, I guess. [00:49:59] Speaker 04: I think this evidence that my friend said that there was no indication that he had any involvement is just not true on the record. [00:50:06] Speaker 04: And I could give you, if you'll indulge me, he knew before he ever invested in this [00:50:12] Speaker 04: with Dr. Cornell that Cornell had attended this and had an NDA. [00:50:16] Speaker 04: He knew that he attended the training. [00:50:19] Speaker 04: Finger received Cornell's drawings from Michie and the description of the advantages. [00:50:25] Speaker 04: He received those, and I think it was August of 2018, and forwarded those on to Tuck Medical for design. [00:50:33] Speaker 04: If you look at the... Do we have those drawings in the record? [00:50:36] Speaker 04: They are. [00:50:38] Speaker 04: I think the appendix 16067 is the email that he forwarded from Mr. Cornell. [00:50:45] Speaker 02: How many of the trade secrets are shown in those drawings? [00:50:49] Speaker 04: The drawings show the discussion in the email that he forwarded discloses the mesh tabs, discloses absorbable sutures. [00:51:06] Speaker 04: So those are there. [00:51:08] Speaker 04: And then he attended, Finger attended a meeting, and I believe it was September of 2018, which was, that's an appendix, testament is an appendix 13974, and appendix 14189 is where it starts, where Finger shared his notes, and shared with what he learned from E-list, and that, those notes are in the record as well. [00:51:31] Speaker 04: And there's a lot of testimony, there are testimony in the record, there's a lot of mention of E-list in this reading. [00:51:36] Speaker 04: And that's where the honeycomb design came mentioned as well. [00:51:41] Speaker 04: And I think that the important thing to also sort of note with fingers involvement, if you look at appendix 16.3.12, that was the personal placement or [00:51:51] Speaker 04: product placement memorandum, the investment memorandum that Finger admitted he helped draft. [00:51:57] Speaker 04: He's identified as being the CFO of Augmenta and says that he will provide financial management and oversight for Augmenta and assist Dr. Cornell in overseeing the development work being performed by Huck Medical Technologies. [00:52:11] Speaker 04: And then if you look at, he acknowledged he wrote part of the provision talking about the risk of a loss from ELIS. [00:52:18] Speaker 04: That's 1613. [00:52:19] Speaker 04: He, 1654, is updating investors about the development work that's being done, the test, and... Can I just ask you to go back for a minute? [00:52:30] Speaker 02: Yes, sir. [00:52:30] Speaker 02: You pointed, I think, us before to 1603. [00:52:35] Speaker 02: 67 is an email, and there are some notes at 16069 to 71, and then some other notes, handwritten notes, at 16100 to 102. [00:52:49] Speaker 02: Which of those were seen by Mr. Finger? [00:52:56] Speaker 02: What are they of? [00:53:02] Speaker 04: The notes on, I'm sorry, 16069, is that your question? [00:53:08] Speaker 04: That's one of them. [00:53:09] Speaker 02: That's September 25th, 2018. [00:53:11] Speaker 02: Yes, that's the notes of the meeting. [00:53:13] Speaker 02: Okay, and then the next one, I guess the 16100 is March 8th, 2017. [00:53:20] Speaker 02: Was that one involving Mr. Finger or not? [00:53:27] Speaker 04: I'm missing that date, I'm sorry. [00:53:28] Speaker 04: Which page, Your Honor? [00:53:29] Speaker 04: Oh, that, no, those, sorry, those notes, I see them at 16100. [00:53:33] Speaker 04: Those are... I'm asking because that one says, mesh at distal tip. [00:53:38] Speaker 04: No, those are notes of meetings that Dr. Elist had, my client had, with the engineering firm that was helping him devolve the trade seat. [00:53:48] Speaker 02: Okay, so you said the notes 16069 to 71, and you think that they say something about these trade secrets? [00:53:57] Speaker 04: Yeah, if I could turn you back a page of 16067. [00:54:01] Speaker 04: At the bottom of that page, this is again an email that Cornell sends to Finger to begin with, and the top of his finger then sends it on. [00:54:11] Speaker 04: Cornell sends this to Finger in July of 2018. [00:54:14] Speaker 04: and says, the implant comprises of soft germ, gerometer, silicone with embedded mesh tabs that extend from the distal, dorsal, lateral, proximal, and ventral margins and permit tissue ingress over the buck's fascia. [00:54:28] Speaker 04: And then it says, allowing absorbable sutures. [00:54:31] Speaker 04: I mean, that's the trade secrets right there. [00:54:38] Speaker 04: And so I think there's a reference to a California case. [00:54:42] Speaker 04: I think the case that I think is really important to address in this context was we cite three different iterations of it. [00:54:50] Speaker 04: It was the Ajaxo versus E-Trade case, where the California appellate court had different opinions dealing with trade secret law. [00:54:59] Speaker 04: The 2005 decision, that's 135 California to Paulette 4th at 21, that actually talks about this type of scenario exactly, where [00:55:11] Speaker 04: The person being found to have been a willful misappropriator wasn't the one who actually received the trade secrets at the time. [00:55:17] Speaker 04: He received it from the person who actually did take the trade secrets. [00:55:20] Speaker 04: And that company was called EveryPath. [00:55:24] Speaker 04: And the courts affirmed a judgment of willful misappropriation saying that the EveryPath manager must have known [00:55:33] Speaker 04: The technologies engineers developed came about in too short of a time for independent development, yet they failed to investigate why. [00:55:40] Speaker 04: In short, they best turned a blind eye to what was happening. [00:55:44] Speaker 04: And that court found that that was enough for willful and malicious misappropriation. [00:55:47] Speaker 04: That same thing here is applied. [00:55:49] Speaker 04: Mr. Singer knew all along what was going on. [00:55:52] Speaker 04: He was involved in the development, and I don't think it's an accurate record of the [00:55:57] Speaker 04: of the record below, recitation, to say that somehow he was just this passive investor. [00:56:04] Speaker 06: Okay. [00:56:05] Speaker 06: I think unless we have other questions, we're out of time. [00:56:07] Speaker 04: I didn't address, read the roll with me, but if you don't have any questions, I'm happy to address that, Your Honor. [00:56:13] Speaker 06: I think we're done. [00:56:14] Speaker 06: Thank you. [00:56:29] Speaker 03: I think it's apparent from the questioning that there really should be no trade secrets in this case. [00:56:34] Speaker 03: And so we shouldn't have to dwell much on Mr. Finger's evidence. [00:56:37] Speaker 03: But I do want to speak directly to those questions very briefly. [00:56:40] Speaker 03: The record citations that counsel provided to the court, you will notice, never make any reference to the internal pockets idea, one side or another. [00:56:49] Speaker 02: I mean, why would that matter? [00:56:52] Speaker 02: Why is it one enough? [00:56:53] Speaker 03: Because your honor, they submitted four distinct trade secret questions, finding liability on four distinct alleged secrets. [00:56:59] Speaker 03: Oh, I see. [00:57:00] Speaker 02: And the pockets are the big dollars. [00:57:02] Speaker 03: That's right. [00:57:02] Speaker 03: The pockets are more than 50%. [00:57:04] Speaker 03: And nothing that they've cited makes any reference to the pockets. [00:57:07] Speaker 03: And the only document he pointed to you that relates to the mesh tabs and the absorbable sutures is [00:57:13] Speaker 03: Mr. Finger forwarding a description authored by Dr. Cornell. [00:57:18] Speaker 03: Mr. Finger had no reason to doubt that Dr. Cornell had independently designed the product as he represented. [00:57:24] Speaker 03: That's not evidence of cyanter. [00:57:26] Speaker 03: It simply does not support a verdict as to Mr. Finger. [00:57:29] Speaker 03: But it frankly shouldn't matter, because the exchange with counsel makes clear that none of these are protected secrets. [00:57:35] Speaker 03: All of the arguments that you've heard come down to one distinction, which is that somehow the context in which the idea is applied changes the effect of the patent disclosure. [00:57:44] Speaker 03: And that is fundamentally wrong. [00:57:46] Speaker 03: The essence of the patent bargain is when you place the idea in the patent, you place it in the public domain. [00:57:52] Speaker 02: I mean, just at that level, the idea here [00:57:56] Speaker 02: to take the first straight secret is pockets in a cosmetic implant. [00:58:03] Speaker 02: That's not in the prior art. [00:58:05] Speaker 03: Your Honor, the distinction between a cosmetic and a therapeutic implant? [00:58:09] Speaker 02: No, no, that's a factual question. [00:58:11] Speaker 02: And the question is, what evidence is there that that difference matters or that it doesn't matter? [00:58:19] Speaker 03: And there is no evidence that it matters. [00:58:21] Speaker 02: And it's the plainest of- I guess my starting intuition is to think, boy, it really may matter. [00:58:28] Speaker 02: So now I want to hear from you why it doesn't matter. [00:58:31] Speaker 03: Your Honor, because- [00:58:32] Speaker 02: The idea of- They really are in different parts of the body. [00:58:35] Speaker 02: One is closer to the skin, skin than the other, for serving different functions. [00:58:43] Speaker 02: Why would one assume it doesn't matter? [00:58:46] Speaker 03: I want to take this question very sincerely on face value. [00:58:51] Speaker 03: The idea of, for example, using internal pockets to soften silicon does not matter between cosmetic or [00:58:58] Speaker 03: therapeutic implants. [00:58:59] Speaker 03: It has the same physical consequence either way. [00:59:02] Speaker 03: The Goosler decision, to which the court has alluded, said that ideas dictated by well-known principles of physics are not protected by trade secrets. [00:59:10] Speaker 03: And that's what you have here. [00:59:12] Speaker 03: So the fact is that the idea of using cavities to soften silicone was disclosed by the prior art. [00:59:20] Speaker 03: How that might be applied in commercial applications makes no difference to whether it's a secret. [00:59:24] Speaker 03: And the Ultimax concrete decision from the Ninth Circuit, I think, [00:59:28] Speaker 03: squarely establishes that point. [00:59:29] Speaker 02: Did you have evidence essentially saying what you just said? [00:59:34] Speaker 02: Cases that don't involve this particular thing. [00:59:37] Speaker 02: We did. [00:59:37] Speaker 02: Establish a general principle. [00:59:38] Speaker 02: We did, Your Honor. [00:59:39] Speaker 03: And to the extent the court would care to take a look at it, I would point to, for example, at pages, I think, 149, 86 to 88, you would see the defense expert testimony on the issue of internal voids. [00:59:53] Speaker 02: This is from Dr. Mulcahy. [00:59:54] Speaker 03: That's from Dr. Mulcahy. [00:59:56] Speaker 03: And I haven't dwelt on that since we didn't have the burden of proof. [00:59:59] Speaker 03: But the point is that when the court presses the plaintiffs to establish some basis to differentiate their supposed trade secrets from the patent disclosures, their only argument is that somehow the context matters. [01:00:12] Speaker 03: the way trade secrecy law works with respect to patents. [01:00:16] Speaker 03: Once the idea is in the public domain, it is no longer a secret, regardless of its application. [01:00:23] Speaker 02: works with respect to patents. [01:00:25] Speaker 02: You mean with respect to patent law or with respect to what a patent discloses? [01:00:30] Speaker 02: Because there's a big difference, right? [01:00:32] Speaker 02: The obviousness standard is the standard in patent law. [01:00:36] Speaker 02: It's not the standard in trade secret. [01:00:39] Speaker 02: One possible difference is that patents are not supposed to protect against independent discovery by an ordinary skilled partisan. [01:00:51] Speaker 02: That trade secret does protect only against the miscreant appropriator. [01:00:59] Speaker 03: But the point is that when you place the idea in the public domain, you sacrifice the ability to claim trade secrecy in exchange for the limited monopoly of patent law. [01:01:09] Speaker 02: But the term public domain is a tricky one, right? [01:01:12] Speaker 02: We sometimes have used that to cover what's obvious. [01:01:16] Speaker 02: That cannot possibly be the meaning in trade secret law. [01:01:20] Speaker 03: call your attention, your honor, to this court's decision in ultimate cement. [01:01:24] Speaker 03: And I'm going to just quote, because it speaks directly to the point you just made. [01:01:28] Speaker 02: It uses the term obvious or something like that, but not with a focus on this. [01:01:33] Speaker 03: It is focused on trade secrecy protection under the California statute. [01:01:38] Speaker 03: And this court said it is well established that disclosure of a trade secret in a patent places the information comprising the secret into the public domain [01:01:48] Speaker 02: Once the information is in the public domain... I'm sorry, that's of course true. [01:01:53] Speaker 02: Yes. [01:01:53] Speaker 02: What is anticipated is in a public domain, in the public domain, in a way that would suffice for trade secret. [01:02:01] Speaker 02: What is in the public domain, only because it's obvious from what was put in a published document, does not necessarily imply protection as a trade secret. [01:02:14] Speaker 03: Well, Your Honor, I think what these cases establish and what [01:02:18] Speaker 03: the Gussler case from the Ninth Circuit likewise establishes, is once the idea is placed in the public domain, the protection of trade secrecy is gone. [01:02:27] Speaker 03: And you can't differentiate the way in which the idea might be used to claim that it somehow becomes a secret. [01:02:34] Speaker 06: The problem is, I mean, these are important questions. [01:02:38] Speaker 06: There just is not a lot of law about it. [01:02:40] Speaker 06: I mean, I think everybody agrees that the obviousness standard is not [01:02:45] Speaker 06: standard of trade secret law. [01:02:49] Speaker 06: At the same time, it doesn't have to be exactly the same context. [01:02:54] Speaker 06: That's correct. [01:02:56] Speaker 06: And the question is, what does this record tell us about whether the context matters or not? [01:03:04] Speaker 03: And I think the point would be the ideas are all squarely disclosed and nothing in this record provides any evidentiary support for the idea that the unique context here matters. [01:03:17] Speaker 03: It was the plaintiff's burden to prove a trade secret. [01:03:20] Speaker 03: You asked pointed questions about each of these alleged secrets. [01:03:24] Speaker 03: Council could not cite any evidence that actually established any meaningful distinction for the context. [01:03:29] Speaker 05: How would you define context? [01:03:31] Speaker 05: Is it the same field, the same industry sector? [01:03:37] Speaker 03: Well, the plaintiffs are trying to suggest that different commercial applications within the field of medical devices, and in fact, implants, and in fact, even [01:03:50] Speaker 03: Penile implants is somehow a sufficiently different context to create an opportunity for trade secrecy when ideas that are disclosed in that field with respect to these specific design features are disclosed in patents. [01:04:05] Speaker 03: Wherever you draw the line, that's no lie. [01:04:08] Speaker 03: This is in the medical device industry. [01:04:10] Speaker 03: It's dealing with penile implants. [01:04:12] Speaker 03: It's disclosing these very ideas. [01:04:14] Speaker 03: They're simply saying, well, because it's therapeutic versus cosmetic, there's a difference. [01:04:19] Speaker 03: And there is no evidence that establishes that there is any difference. [01:04:22] Speaker 03: And for that reason, the court should reverse and render a judgment against all these trade secret claims. [01:04:28] Speaker 06: I appreciate the court's patience. [01:04:29] Speaker 06: OK, thank you. [01:04:29] Speaker 06: Thank both counsel. [01:04:31] Speaker 06: The case is submitted.