[00:00:00] Speaker 01:
Our next case is number 24, 2089, Imcom IP versus City Bank of Florida.

[00:00:08] Speaker 01:
Okay, Mr. Ramey?

[00:00:10] Speaker 00:
Yes, sir. Bill Ramey for the plaintiff Imcom IP LLC. If it pleases the court, may I begin?

[00:00:16] Speaker 00:
Your Honor, this case was dismissed not because the complaint failed to give notice, but because the district court required proof. It required proof of both infringement and validity at the pleading stage. This is not Rule 8, what it requires. It's not what this court's case law requires.

[00:00:32] Speaker 00:
As under Twombly, Iqbal, Baudet, and Dis disease, this complaint was more than sufficient. The dismissal and the sanctions that followed cannot stand on the record before this court.

[00:00:43] Speaker 02:
So can I focus on, I'd like to focus for a minute at least on the validity piece of it. So it seems to me the district court quite plainly, I would say, did hold claim 17 as well as the other three claims that are no longer, that you're not pressing here on appeal to be invalid.

[00:01:10] Speaker 02:
It did so not on the 101 ground, which was separately placed before the court in the defendant's motion to dismiss, but rather on obviousness on the ground that these four claims were not patentably distinct from what had already been held unpatentable by the board.

[00:01:37] Speaker 02:
I think, tell me if I'm wrong, that your only argument about validity in the blue brief is that the district court did not hold Claim 17 invalid. You don't otherwise say, if it did, here's why it was wrong.

[00:02:02] Speaker 00:
We did, in fact, say that the standard for holding a claim invalid was clear and convincing.

[00:02:09] Speaker 01:
I'm a little confused.

[00:02:19] Speaker 01:
Was there any briefing on obviousness, or did that arise only in connection with the attorney's face?

[00:02:26] Speaker 00:
That, in my belief, arrived only in connection with the attorney's fees. It wasn't clear to us that there was a proper validity challenge to that. I'm sorry.

[00:02:34] Speaker 02:
Their motion to dismiss has six or seven pages on 103, why these claims are not patently distinct from the claims held, canceled in the IPR.

[00:02:47] Speaker 00:
Right, and that becomes a clear and convincing statement. That's evidentiary.

[00:02:52] Speaker 02:
Judge Dyck asked if this came up only in attorney's fees or in the 12b-6 motion. It was part of the 12b-6 motion.

[00:03:00] Speaker 01:
Yes, Your Honor, pardon me, I misunderstood the question. He didn't rule in the 12b-6 motion on obviousness, right?

[00:03:12] Speaker 00:
Your Honor, that was somewhat confusing to me. What he held is not direct to patentable subject matter. He held in his order on the 12B set.

[00:03:21] Speaker 02:
Right, and he was using that phrase, which we tend to use a variant of it in talking about 101, about eligible subject matter, but that phrase was used throughout the six or seven pages of the 103 discussion in the motion to dismiss to refer specifically to obviousness, that is. The subject matter of the claims are not patentable because they are obvious. The reason they're obvious is that they're not patentably distinct from the subject matter of the claims canceled.

[00:03:56] Speaker 00:
Yes, Your Honor. We would say that there was a...

[00:03:59] Speaker 00:
That's a factual question. If you get into what's obvious or not, that's a factual question. I'm sorry. I'm still confused.

[00:04:05] Speaker 01:
I understand that there was briefing on the obviousness question, but I didn't understand, maybe I'm wrong about this, that this report on the 12b-6 motion on the merits rendered an obvious misdecision. I saw him only as addressing the obviousness question in connection with the attorney's visa. Am I mistaken about that?

[00:04:30] Speaker 00:
I think the court did on the 12B6 say that the claims weren't addressed to patentable subject matter, but it didn't do it. It's hard for me to tell whether it was a declaration of invalidity, and that what it found is it found that the pleading was not sufficient, and it dismissed the pleading on 12B6. So there wasn't, in our mind, that wasn't a challenging validity to the patent. That's why we briefed it as we did. However, in the motion for attorney's fees, the report and recommendation did go into that and say that the invalidation at the PTAB of the other independent claims is what made the case exceptional.

[00:05:10] Speaker 00:
And we think that that was a core misunderstanding of the district court.

[00:05:17] Speaker 00:
But to go...

[00:05:19] Speaker 00:
that the sanctions under the report and recommendation, and I'll focus on the report and recommendation mainly because Judge Scola actually adopted the report and recommendation in its entirety. So that's where I think the majority we can do. But there wasn't anything, we would say, there was anything exceptional in this case that we had a pleading.

[00:05:42] Speaker 01:
Could I ask that? Is there any argument that's any different between this case and the previous case insofar as we're talking about the adequacy of the pleading for infringement?

[00:05:54] Speaker 01:
Because we're talking now about attorney's fees. Is that the only... Your Honor, we... Different between the two cases?

[00:06:03] Speaker 00:
We think that we... We think all of our cases, we approach... to provide the best claim charts that we can. So, of course... Answer my question.

[00:06:15] Speaker 01:
I mean, we started talking about attorney's fees.

[00:06:19] Speaker 01:
Insofar as the pleading of infringement is concerned, is this case the same as the previous case?

[00:06:25] Speaker 00:
Different facts, different reasonable inference we try to draw, but yes. But the big difference is that the sanctions bolted onto the end that we think were improper. But if we go down to the pleading standard, here we did tie into more of a common point of control, tried to give more detail, which we always try to do because we had more available from City National's website. Where is that? Yes, Your Honor. So if you go, it starts on Appendix Page 308.

[00:06:52] Speaker 00:
And actually, it starts on Page 306, Your Honor. But we talk about the preamble on 308 explaining how the unified banking system of City National works.

[00:07:03] Speaker 00:
And then we continue on through providing examples of what these different terms might mean to one of ordinary skill in the arts. And then examples from the patent of what we're referring to to specifically allege. We always are trying to improve our claim charts across cases.

[00:07:21] Speaker 00:
But if you get down to the common point of control for Claim 17, after taking in the building of the unified banking platform from Appendix 304 down to...

[00:07:33] Speaker 00:
Appendix 327.

[00:07:33] Speaker 02:
I'm sorry, but just on the claim 17, common control point, that's page 329?

[00:07:42] Speaker 00:
328 and 329, Your Honor. Yes, Your Honor.

[00:07:46] Speaker 02:
Right. And in what way do you think that that is more concrete or whatever the right term is than counterpart pages as to HSBC?

[00:07:59] Speaker 00:
Well, because we contend that the system of city and national provides a common point of control.

[00:08:04] Speaker 00:
So here, if we didn't do it before, and I think maybe the court might have indicated that we didn't make the allegation that there was a common point of control, and with reference to claim 17, here specifically, at appendix page...

[00:08:19] Speaker 00:
329, Your Honor, we do right up there in the explanation to the, down below the claim element. The claim element's up top and then right below there, we explain a common point of functionality. And then we explain how we define that and where we get that from. And then we provide examples from the URLs from City Nationals direct banking. So we do provide this detail here. So we specifically allege common point of control in this one.

[00:08:44] Speaker 00:
And then, again, we provided Appendix 331, Judge Albright's opinion, to show the court, you know, to provide what some other courts had ruled on these claims about the common point of control.

[00:09:05] Speaker 00:
But here we go back to, if we go to switch briefly to the sanctions issues, I think are very important for this case.

[00:09:12] Speaker 00:
The report and recommendation actually relied solely on the dismissal under 12B6 as a supporting exceptionality, the PTAB invalidation of other claims, and generalized litigation history. But it didn't actually perform any analysis on the actual strength of Claim 17 or litigation conduct in this case. We would say that octane fitness is a totality of the circumstances, but the totality of the circumstances is In this case, we'd suggest that the R&R was too generalized, that it didn't provide that sufficient evidence for this court's appropriate appellate review.

[00:09:45] Speaker 00:
We'd ask for the court to reverse on that ground alone.

[00:09:52] Speaker 00:
Losing on a motion to desist doesn't automatically make a case exceptional, but that's what the R&R treated it as. Otherwise, every dismissed patent case would be automatically exceptional under 285.

[00:10:05] Speaker 00:
The RNA specifically actually states that one of the reasons for exception is we failed to satisfy Rule 12b6, and therefore the case is exceptional. We think that that's just wrong on the law. It's not a penalty for losing. That's in the case law everywhere from this court and others.

[00:10:22] Speaker 00:
But there was no finding, no proper finding, that the case was objectively unreasonable or that there was an inadequate pre-suit investigation.

[00:10:33] Speaker 02:
What about on the license aspect?

[00:10:37] Speaker 00:
Yes, Your Honor. So the license aspect is something very important to the case. If we went to appendix page 749 and 750, this is what they produced as evidence of the license.

[00:10:51] Speaker 02:
Just to be clear, this was… a license you granted, so you should have had that license.

[00:10:58] Speaker 00:
No, Your Honor.

[00:10:59] Speaker 02:
If you look at 749 to 750, appendix phase... I forget what's secret here, but this is a license from you to... You want to say it, or should I? It's NCR, but it's MCOM to NCR.

[00:11:12] Speaker 00:
So it's your license. How could you not have...

[00:11:16] Speaker 00:
NCR, we sued City National. We didn't sue NCR. We begged them to provide us anything with a license. We wrote to NCR to ask for it. NCR wouldn't communicate with us about whether they had a license with City National. You can go to Appendix page 675 through 688.

[00:11:31] Speaker 02:
I'm sorry, there would be two steps, right? You had a license with NCR and then...

[00:11:37] Speaker 02:
So you could presumably read it and figure out whether, for example, it provided a license to NCR's customers. Now, NCR, you would not have a customer list necessarily between the NCR, a list of NCR's customers to see if it included City National, but you would have the license.

[00:12:05] Speaker 00:
Well, We did have the license. What we requested of City National was to contact NCR. We had done this with a couple of the defendants, had them send us a letter to say that they were licensed by NCR. No letter ever came. In fact, City National supposedly issued a subpoena to NCR, but no license was ever produced from it except for our license, MCOM's license with NCR. There was no adjudication of whether or not it was a license, right? Right. Yes. And we were trying. We tried everything we could to work with the opposing side. We actually don't want to pursue lawsuits to someone's license because it wasted everyone time.

[00:12:40] Speaker 00:
So we we tried. And but what they produced as an evidence of license is seven forty nine seven fifty is a.

[00:12:48] Speaker 00:
is a redacted quote page that was never accepted. The terms were never accepted, so we don't even know that they purchased NCR. If you go to Appendix page 675 through 688, that's the declaration of Perry Landers, one of our technical experts. He searched the code of the City Nationals Bank on what was facing us and couldn't find NCR referenced anywhere, which is contrary to what normally happens when the NCR has a licensed person. So we went out of our way to try to To prove that they had a license also, but we couldn't, and we asked them to produce one, and there was never adjudication on that.

[00:13:21] Speaker 02:
Just to be clear about the terminology, when you say you asked them, being Citi, to produce a license, you don't mean the license that you provided to NCR. You mean the second stage, a license that NCR provided to Citi.

[00:13:41] Speaker 00:
And even just limit it, Your Honor, to a letter from NCR saying, hey, these people are our customers for the system that you accuse of infringing their license under this. And that never came.

[00:13:51] Speaker 00:
We begged them for that.

[00:13:54] Speaker 00:
Now, I'm in my time. Unless the Court has something more, I'd like to reserve the final.

[00:13:59] Speaker 01:
We'll give you two minutes for a bottle.

[00:14:01] Speaker 01:
Thank you, Your Honor. Mr. Santich.

[00:14:09] Speaker 03:
Good morning, May Police Court. Michael Santucci from 500 Live. Sal Fazio with me from my firm as well. We represent City National Bank of Florida.

[00:14:19] Speaker 01:
I have some real problems with the attorney's fees imposition here because I'm not sure that the record supports some of the grounds that the district court adopted for imposing attorney's fees. Let's take For example, the efforts to coerce low-value settlements. I've looked at our cases on that. I just don't see the proof here that that was what was going on here.

[00:14:51] Speaker 01:
So help me on that. And again, with respect to the license, I mean, I don't understand how they're supposed to conduct an investigation of an affirmative defense. I mean, if they knew that the affirmative defense existed, that would be one thing. But I don't know why they're supposed to investigate an affirmative defense before bringing suit. Those are a couple of examples. There are other issues here also.

[00:15:16] Speaker 01:
So help me understand why some of these considerations weren't inappropriate.

[00:15:22] Speaker 03:
I'll work backwards, Your Honor. With regard to the license, it was in a settlement agreement, yes, between NCR and – We didn't even sit here today.

[00:15:32] Speaker 01:
We didn't even know whether it was a license or not to your client, right? Well, the court in its – No, answer the question. We don't know one way or the other whether it was a license for your client.

[00:15:46] Speaker 01:
That's correct, Your Honor, because... How can you impose sanctions for failing to investigate something where we don't even know what the investigation would have produced?

[00:15:56] Speaker 03:
Because this is what the district court reasoned.

[00:15:59] Speaker 03:
It was brought up in the context of the attorney's fees motion. There was no finding on an affirmative defense of a license or a settlement of a claim that is absolutely true, Your Honor. But how this arose is we started a request to produce... on MCOM, asked for documents which would have included such a settlement agreement or license. Nothing was produced. We served a subpoenaed deuces tecum on our vendor, NCR, and they finally produced it. We learned that it was Mr. Ramey's firm that negotiated it.

[00:16:32] Speaker 01:
How is it appropriate to sanction somebody for failing to investigate an affirmative defense when there's been no finding that such an investigation would have shown that the lawsuit was without merit.

[00:16:49] Speaker 03:
I think in the report and recommendation, the magistrate judge was aware of the procedural history of the case and knew that this came from a subpoena deuces tecum from our vendor, which... I'm not hearing an answer to my question. I'm sorry, Your Honor. Then let me...

[00:17:11] Speaker 03:
Please have the opportunity.

[00:17:12] Speaker 01:
How is it you can sanction somebody for not making an investigation when you don't know that the investigation would have shown that the lawsuit was meritless?

[00:17:21] Speaker 01:
It wasn't a...

[00:17:23] Speaker 03:
What I think the court reasoned is that upon learning and receiving a copy of the document that was in his own files, they should have put the brakes on this case and not then started making more settlement demands. They could have taken a voluntary dismissal without prejudice.

[00:17:42] Speaker 03:
They could have taken time to review this. Instead, we're meeting deadlines and spending money, meeting deadlines and spending money. The case went on for months more. So this was brought up in the context of the sanctions, not— Let's turn to the coercion of low-value settlements.

[00:17:56] Speaker 01:
Where's the proof of that? They sued a lot of people. Where's the low-value settlements?

[00:18:02] Speaker 03:
Yes. The court took the representations of the parties that there were low-value settlements, and the court looked at other cases in which— What representations?

[00:18:11] Speaker 01:
I'm sorry.

[00:18:14] Speaker 03:
The representations of the parties in their briefs, but the courts did. Where?

[00:18:21] Speaker 03:
In the briefing below. Where? In the motion.

[00:18:27] Speaker 01:
Did they represent that they coerced low-value settlements? I doubt it. Is that what you're saying?

[00:18:32] Speaker 03:
They responded to our allegations. Where's the proof?

[00:18:38] Speaker 03:
Well, the actual settlement offers are not in the record, Your Honor. That is correct.

[00:18:42] Speaker 01:
But the court did look at— They concede that they were slow-value settlements?

[00:18:47] Speaker 03:
What they said is they argued back that coursing or asking for low-value settlements is not in and of itself bad faith. It's not in and of itself sanctionable. But the district court did look to other cases of HSBC and of the firm that represents them as to their litigation tactics. It was brought up in that.

[00:19:09] Speaker 01:
Where's the evidence that they got low-value settlements in these other cases?

[00:19:13] Speaker 03:
Okay.

[00:19:15] Speaker 03:
There was a case cited in which I believe Mr. Ramey was sanctioned previously, and it was recited in that. It's not in the – the settlement offers are not in the record of our case. That is absolutely correct, Your Honor.

[00:19:33] Speaker 03:
So what I would like to do is answer a question I think of – It was Judge Toronto, which I believe, Judge Dyke, you also touched upon. This case is...

[00:19:52] Speaker 03:
materially similar to the HSBC case in two respects. We also have this same common point of control problem in the pleading. We also have the problem of pleading an infringing system that the financial institution employs in a plausible way. Those two cases are the same, but we don't even have to get to that in our case because the first reason the court dismissed this complaint with prejudice, and the first time it struck it for this reason, is because the 11th Circuit despises shotgun pleadings.

[00:20:28] Speaker 03:
We have very tough case law in our 11th Circuit.

[00:20:31] Speaker 02:
What's the definition of shotgun pleading?

[00:20:34] Speaker 03:
There are four that were set forth in the case law that we agree upon.

[00:20:39] Speaker 02:
I think this is a case from... No, no, you don't need to tell me what the authority is. Tell me what it means.

[00:20:46] Speaker 03:
Yes. The shotgun pleading in this case was this type of shotgun pleading. Oh.

[00:20:51] Speaker 02:
You keep... Assuming that I know what the word shotgun in the phrase shotgun pleading means, that's what I'm asking you. I don't.

[00:20:59] Speaker 03:
Tell me what it means. Understood. Okay. It means it's not specific, that it –

[00:21:10] Speaker 01:
The original problem was shotgun pleading because they were, in a single count, alleging direct infringement and induced infringement, things like that, right?

[00:21:18] Speaker 03:
That is the type that is in our case.

[00:21:20] Speaker 01:
And they stripped that out of the amended complaints. So where's the shotgun pleading in the amended complaints?

[00:21:25] Speaker 03:
Well, in the amended complaint, they pled three theories of liability, which they refer to as causes of action, direct infringement, indirect, contributory, and in one count. And in the 11th Circuit case law, that is not permitted. If you have different theories of liability, you must... Did they separate them into different counts? No, they did not. There were three paragraphs. They're separate paragraphs, but they're in the same single infringement count.

[00:21:53] Speaker 01:
Where is this?

[00:21:55] Speaker 01:
Where in the record?

[00:21:59] Speaker 03:
It is at... It's at page... Can I have the amendment complaint?

[00:22:17] Speaker 03:
It's in the infringement count, Your Honor.

[00:22:22] Speaker 03:
And it refers to various types of infringement in the one counter. Okay. It's appendix 270 to 286, Your Honor. 270.

[00:22:50] Speaker 03:
270 to 286 is the first amended complaint.

[00:22:53] Speaker 01:
Yeah, but where's the shotgun pleading aspect?

[00:22:56] Speaker 03:
In the specific count section.

[00:22:58] Speaker 02:
There's only one count, is that right? Correct. That runs from 271 to 284?

[00:23:06] Speaker 03:
Correct. And there are references to three distinct theories of liability in that one count.

[00:23:16] Speaker 01:
Okay, and you're saying that that Putting it in a single count, even if they're separated into separate theories of liability, not in the same paragraphs of the complaint, that's a shotgun pleading?

[00:23:28] Speaker 03:
Under 11th Circuit law, yes. And the procedure... What case tells us that? Okay. That is... One case is Vibe Micro Inc. v. Chabonets at 878 Fed 3rd, 1291...

[00:23:48] Speaker 03:
It's an 11th Circuit case, and it says that the court must first, which it did, sua sponte, give one chance to re-plead in a way that does not constitute a shotgun pleading. After that opportunity, if the party still neither filed a complaint pleading it.

[00:24:07] Speaker 02:
Just to be clear, I don't think the question was about how many opportunities. At least the question I'm interested in an answer to is, What case law says that this kind of single count that within it clearly delineates several different highly related wrongs, but clearly delineates them, would constitute an impermissible so-called shotgun pleading?

[00:24:42] Speaker 03:
There's more than one case that were cited, Your Honor, by us. It's the Vibe Micro case is one of them.

[00:24:49] Speaker 03:
And the other is right at page one and two of MCOM's reply, where it discusses the four different types of pleadings the 11th Circuit calls shotgun pleadings. which includes a description of that kind.

[00:25:14] Speaker 01:
What case says putting them under a single count is impermissible if they're separated into different paragraphs with distinct theories?

[00:25:25] Speaker 03:
Your Honor, it's the Whelan case. Whelan v. Palm Beach City Sheriff's Office, 792 Fed 3rd, 1313 11th Circuit.

[00:25:39] Speaker 03:
And it defines four different categories of shotgun pleadings, the third of which is complaints that fail to separate each cause of action into a different count. And that was cited by MCOM in their reply, page one and two.

[00:26:05] Speaker 02:
What would be the harm that would flow from that?

[00:26:10] Speaker 03:
because different theories of infringement require different factual allegations to support them.

[00:26:17] Speaker 03:
One might require knowledge. One does not. And this case law applies, obviously, not just to patent law, but in our case, that's why it would make a difference.

[00:26:31] Speaker 01:
This seems to be saying that the deficiency is not labeling them separate counts. As opposed to not separating them into discrete paragraphs of the complaint, which they did.

[00:26:45] Speaker 03:
Right. The sin here is not… Labeling them separate counts. Correct. Not separating them into separate counts with separate facts supporting each different theory of liability.

[00:26:59] Speaker 03:
And the district court gave them one opportunity. They did the same thing the second time. And they were warned under threat of sanction if they were to fail to comply with the order striking.

[00:27:15] Speaker 03:
And that was one of the bases for the sanctions order under 1927.

[00:27:25] Speaker 02:
If some of the bases cited by the district court for finding the case exceptional, if we were to conclude that the ones that we've talked about are unsupported, what would we do?

[00:27:45] Speaker 03:
I think there's enough overlap. I don't know. Sometimes it's been referred to six different reasons. Some called it eight different reasons in this case.

[00:27:54] Speaker 03:
There was plenty of support for each award. So I don't think anyone...

[00:28:08] Speaker 01:
We're asking – If the district court relied on impermissible grounds, we can't just affirm, right?

[00:28:15] Speaker 03:
Well, Your Honor, you can because there are other reasons.

[00:28:20] Speaker 03:
There's a variety of reasons that the court – The court looked at it in the totality of the circumstances. Okay.

[00:28:31] Speaker 01:
So if part of the circumstances were not right, we have to send it back to have them reconsider the totality of the circumstances using the right circumstances?

[00:28:41] Speaker 03:
Well, certainly not. Yes or no?

[00:28:45] Speaker 03:
As to 1927, as to 285, as to the award of fees under exceptional, I would also say no because there is enough there. Even if the court ignores whether or not there was the license applied to our client or not, even if the court ignores ignores the pre-suit investigation.

[00:29:19] Speaker 03:
There was an admission at the fee hearing by counsel of record for MCOM that she did fail to independently investigate this case and relied completely upon Mr. Ramey, who was not of record and not admitted in the case, but was acting in a lead counsel capacity. The report and recommendation makes it very clear that that was somewhat shocking to the court, that the attorney below would... What's the basis for your... I think you answered Judge Dyke's question by saying, first, 1927 is one thing,

[00:30:03] Speaker 02:
285 is another. 285 has this totality of the circumstances. What's the basis for your separating out 1927? In this case, what's the basis if we were to conclude that the 285 exceptional case determination had to be vacated and with a remand for reconsideration?

[00:30:26] Speaker 03:
Because in the order adopting the report and recommendation on that part of it, the court stated that these factors... Okay, where are you reading from?

[00:30:44] Speaker 03:
It is appendix... First of all, the order is appendix 1 through 4.

[00:30:51] Speaker 02:
That's the district court's own order rejecting the objections to the report and recommendations.

[00:30:56] Speaker 03:
Yes, Your Honor.

[00:30:58] Speaker 03:
And adopting the report and recommendation.

[00:31:05] Speaker 03:
So it is at the bottom of Appendix 3, where the Court said, caused vexation and unnecessary litigation, thus warranting 1927 sanctions. The analysis seems in this section that the court believed that each one of these alleged violations that it mentions was itself sanctionable and the court limited.

[00:31:38] Speaker 02:
This paragraph talks about, at least in part, failing to investigate whether the MCOM license to NCR carried forward to your client.

[00:31:57] Speaker 02:
And I thought earlier in the argument you stated in response to Judge Dyke's question that we still do not know whether your client in fact had coverage from NCR. So how could one possibly say the failure to investigate that caused unnecessary litigation with reference to the license?

[00:32:25] Speaker 03:
I respectfully disagree with the premise of your question, Your Honor, and here's why.

[00:32:30] Speaker 03:
At this time, the court was operating— It was Your Honor who asked Mr. Ramey to clarify today as to whether he's arguing that there is no license, because that is what it sounds like throughout this whole case, or whether or not there was a license and the real issue is whether or not it applies to our client city national bank. He just clarified that here, but that is not evident from his arguments. So at the hearing on the sanctions, the court finally ordered us to file under seal this confidential settlement and license agreement, because up until that time... Between MCOM and NCR?

[00:33:12] Speaker 03:
Yes.

[00:33:12] Speaker 02:
Okay.

[00:33:13] Speaker 03:
Yes, so I think what's underlying a lot of this... And is your invocation of that...

[00:33:23] Speaker 02:
that his client gave NCR a license to practice the patent. When they sold you something, then even without anything but a sale under exhaustion doctrine, you're free and clear?

[00:33:36] Speaker 03:
No, it's because of the specific release language in the settlement agreement that it applies to NCR's customers.

[00:33:43] Speaker 02:
Okay, but it was not proven? This is part of what I'm confused about. Is there still an unadjudicated question whether your client was a customer subject to that language in this case?

[00:34:03] Speaker 03:
Yes, Your Honor, because we never got that before. Yes.

[00:34:05] Speaker 02:
Oh, we'll ask.

[00:34:08] Speaker 03:
It is unadjudicated. You are correct, because we never got that far. But the court was operating under the question, was trying to determine the question of whether there was even a license, because it wasn't part of the record, because we respected the confidentiality of the document. And then it took us all the way to the hearing on the sanctions before the court said, okay, go ahead and file it under seal.

[00:34:33] Speaker 03:
All along, MCOM is arguing that there is no license, which is somewhat – it required clarification, let's just say that, of just Toronto at that point. But each one of these – back to my point – each one of these grounds was itself worthy of sanction. And the court did limit its award to only those fees that were incurred from the first amended complaint forward to the dismissal.

[00:35:06] Speaker 03:
And I am out of time, Your Honor, so if there are no more questions.

[00:35:10] Speaker 01:
Okay, thank you.

[00:35:11] Speaker 03:
We're asking for the court to affirm both orders, the order of dismissal and the order of fees and sanctions.

[00:35:19] Speaker 01:
Okay, Mr. Ramey.

[00:35:23] Speaker 00:
Two minutes, Your Honor. Thank you.

[00:35:27] Speaker 00:
Briefly to address, if I might, the shotgun pleading issue. If you go to our appendix page, 271 and 272, we don't put in one count. We, in fact, have a section titled infringement of the 508 patent. Then we list in separate paragraphs the allegations for direct infringement. That's appendix 271, 272. Induced infringement, appendix 273, separate paragraph, so different facts. And then contributory infringement, 273 to 274, again, different facts. We don't rely on facts from a previous part of the pleading.

[00:35:59] Speaker 00:
So we do think we didn't do a shotgun pleading, even under 11th Circuit standards in this one, but definitely not under Rule 8 and what this court requires for pleading standards. I lastly wanted to, if I might, Your Honor, spend a little bit of time. On my local council, on the section 1927, they must fail as a matter of law. Because the R&R doesn't satisfy the three required elements. There's no unreasonable vexatious conduct that's established by the report and recommendation, nor by the district court's adoption of that order.

[00:36:30] Speaker 00:
There's no multiplication of the proceedings. As we've talked about in great detail, we tried to get to the bottom of what the district court appeared, the license issue, whether or not there was a license that would, in fact, in order to NCR's benefit. We went out of our way, and we're always open to it. And then there's no casual link to the excess cost. The First Amendment complaint doesn't automatically delineate when something became unreasonable, and there was no finding by the district court or the district court that that's when it became unreasonable.

[00:37:02] Speaker 00:
What the record actually shows, Your Honors, is a single complaint. Then the judge given us permission to file an amended complaint to instruct us on what he wanted to see differently. We went back. We substantially modified that complaint, tried to address everything the district court brought up in his word of dismissing the case, then presented a first amendment complaint.

[00:37:22] Speaker 02:
Does the Wayland case that your friend on the other side presented, cited from page, which is from page two of your gray brief, say, as I think he says, it says that what's required is putting different causes of action into separate counts, not just into separate paragraphs.

[00:37:46] Speaker 00:
What it says is you can't file and have within the same count rely back on evidence from the previous ones. Here we didn't do that. You can't incorporate by reference. Pardon me, I was having a slight issue. But you can't incorporate by reference preceding information from other paragraphs. And we specifically didn't do that here. I'm looking at the case right now. It's my quick read. This is one we cited back in our responsive briefing as well. But what it's saying is you can't try to incorporate by reference preceding paragraphs. That's what's making it shotgun pleading in essence.

[00:38:17] Speaker 00:
And there are four listed. But here we went out of our way to put each of ours in separate counts, if you would. They're just separate paragraphs, not delineated as counts. We don't delineate any particular paragraph as a count.

[00:38:31] Speaker 00:
More fundamentally, I'm out of time, but if I could get to spend just three more seconds. There was no bad faith that would be subject to 1927, and the report and recommendation didn't find it. So we'd ask that this court either allow the case to go to trial, finding the complaint sufficient, or allow us the chance to amend, because we did a good faith amendment, and then two, to vacate the sanctions under 285 and the sanctions under 1927 in 1927.

[00:38:59] Speaker 00:
If there are any inherent power of the court, we'd ask the court to reverse those. Thank you very much, Your Honor. Thank you. Thank both counsel.

[00:39:04] Speaker 01:
The case is submitted.