[00:00:00] Speaker 03:
Our next case for argument is 24-1924, Upstream Holdings v. Breckenridge.

[00:00:10] Speaker 01:
Good morning, Your Honors. My name is James Bachman. I represent the appellants in the case at hand. I truly believe this is an honor to be in front of you on this matter.

[00:00:22] Speaker 01:
In the case at hand, the parties formed a commercial partnership to manufacture and market a patented gutter cover. the roll former that was commissioned and built for one purpose, to build a patented part. Every part that came out of the machine was commercial by design. There was no engineering definition of testing that encompasses producing thousands of feet, boxing, and then getting ready to market these products. That is straight from Mady v. Duke University.

[00:00:54] Speaker 01:
which teaches that there's no minimus or testing defense where the conduct is commercial. And in this case, the conduct was clearly commercial. That is the first error that we have in the case at hand. The second error is that summary judgment was granted prior to discovery ending. And this is very important. We found a case from this circuit, which is Barron Services, Inc., V Media Weather Innovations, LLC.

[00:01:25] Speaker 01:
The site is 717 F3D 907. Again, that's 717 F3D 907. And in that case, the district court was reversed. This court found that it was an abuse of discretion to end discovery before the discovery had ended. And this is exactly what happened in this case at hand. In fact, this case is more onerous than the case in Barron. And the reason for that is if discovery had been permitted to continue, we would have clearly found violations of 35 U.S.C.

[00:02:04] UNKNOWN:
271.

[00:02:06] Speaker 01:
And as a result, the court abused its discretion as a matter of law when it granted the the defendant's motion for summary judgment.

[00:02:15] Speaker 01:
At a minimum, the record creates a genuine dispute, a material fact, which is based strictly upon the defendant's own testimony, which they changed numerous times, as well as undisputed video evidence.

[00:02:29] Speaker 02:
What evidence is there that Apple Leafs made the rain gutters?

[00:02:33] Speaker 01:
I'm sorry, you're not able to hear.

[00:02:35] Speaker 02:
What evidence is there that Apple Leafs made the rain gutters?

[00:02:39] Speaker 01:
I'm sorry, the ring?

[00:02:41] Speaker 02:
The ring gutters.

[00:02:43] Speaker 01:
No, these are gutter covers, Your Honor. And it's clear that there is clear evidence in the record where they were producing a patented gutter cover. Please remember that the minute that that gutter cover... is extruded from the roll former, it is subject to a patent because there is a design as well as utility patent concerning the design.

[00:03:06] Speaker 02:
What was the evidence of who was producing the coats?

[00:03:10] Speaker 01:
Well, there was one video and there are pictures of Steve Breconich, who was the defendant in this case, catching the product as it is extruded from the roll former. That is well within the evidence.

[00:03:25] Speaker 03:
Counsel, it's not well within the record.

[00:03:28] Speaker 03:
That was evidence, if I understand it, that was uncovered after summary judgment. Is that correct?

[00:03:34] Speaker 01:
That's correct, Your Honor.

[00:03:35] Speaker 03:
Who stole the video equipment?

[00:03:36] Speaker 01:
Pardon?

[00:03:36] Speaker 03:
Who stole the video equipment?

[00:03:38] Speaker 01:
No one stole the video equipment. Somebody stole the video equipment. No, no one stole the video equipment. I think the broker stole the video equipment. No, excuse me. My son did not steal video equipment. He took partnership property to determine whether or not a violation had occurred.

[00:03:51] Speaker 03:
You had the video equipment for how long?

[00:03:53] Speaker 01:
We had the video equipment for nine months, and we could not break into, we could not get the code.

[00:03:58] Speaker 03:
Did you seek discovery of the password?

[00:04:00] Speaker 01:
Yes, we did, and that was refused.

[00:04:03] Speaker 03:
When did you seek discovery of the password?

[00:04:05] Speaker 01:
Immediately upon filing of our first discovery documents.

[00:04:12] Speaker 01:
We also sought video. We also requested from the Appalachians video evidence that they had within their possession, which was refused. They said that it was too burdensome. It was a boilerplate objection, Your Honor. They said it was too burdensome to produce the video evidence. which ended up proving that they had, in fact, violated, infringed on the patent.

[00:04:39] Speaker 02:
So after the granting of summary judgment, you produced the video?

[00:04:43] Speaker 01:
We were able to get the video.

[00:04:46] Speaker 02:
When did you get it?

[00:04:47] Speaker 01:
We got it within two or three weeks after the summary judgment was granted. And then we filed a motion for reconsideration. And we kept filing motions for reconsideration because they kept changing their testimonies.

[00:05:01] Speaker 01:
And that is very important here. They repeatedly changed their testimony to take into account the most recent video that we had uncovered. And I will say that this was a monumental task, Your Honor. We had to review more than 1,000 hours of video in order to make sure what we were looking at.

[00:05:25] Speaker 01:
And the statements that they made in this case, Your Honor, The most obvious material misrepresentation that they made was that they testified that they were too afraid to operate the machinery. However, the video clearly shows them operating it, producing the patented product, packaging it for distribution, and then celebrating after they had a production run.

[00:05:51] Speaker 02:
When you say clearly, was the video actually that clear?

[00:05:55] Speaker 01:
Well, we have pictures. Yes.

[00:05:59] Speaker 02:
Was it that clear that you saw faces and things like that?

[00:06:02] Speaker 01:
Yes, and we have put in front of the court and into the record of the people that we saw.

[00:06:10] Speaker 01:
It's in the affidavit evidence of the people that we saw who were producing or, if you will, catching the product that was being extruded from the roll former or someone carrying a product away to be packaged.

[00:06:22] Speaker 02:
How did you obtain the video?

[00:06:25] Speaker 01:
We took, when my son gained access to the manufacturing facility, which was a partnership asset, we decided to take the video because we knew that people had been producing the product.

[00:06:41] Speaker 01:
And that's why we wanted to find out who it was. We had no idea who was producing the product, whether it could have been the Appalachians or a third party. We had no idea who was doing that. We wanted to find out who had produced the product in violation of 35 U.S.C.

[00:06:54] UNKNOWN:
271.

[00:06:54] Speaker 03:
The court in this case held, and we have to give deference to fact findings, on page 64 of the appendix, this court held that you never sought discovery regarding the password It also said that you were able to query the video system and learn the appropriate passwords and access the video, and that you never provided any explanation why you could not access the video footage at any time in the prior two years in which you held it.

[00:07:25] Speaker 03:
So regardless of what that video shows, this court says you lacked diligence in uncovering or seeking the discovery necessary to bring that video footage to light, and that that's why it did not rely upon it or allow you to reopen the decided summary judgment motion. So what argument do you have in response to these fact-findings that the court made?

[00:07:46] Speaker 01:
Well, first of all, I believe that the court abused its discretion because we put into evidence that we could not gain access to the video. That's number one. Number two, the discovery... I'm sorry.

[00:08:01] Speaker 03:
Where is this evidence? Show me the evidence.

[00:08:03] Speaker 01:
Well, I'd have to go to the – I'd have to look in what we have. But we did file an objection to the initial – we filed an objection to the initial motion for summary judgment. I believe that's on 240, Your Honor. And in that, we said that there is material – there is evidence that we need to uncover – before the court can render its opinion on summary judgment.

[00:08:28] Speaker 03:
But that's not enough, because you were the one in possession of the evidence, and you didn't explain to the court what you needed or what was preventing you from getting to the evidence. That's why the court was upset with you, is you can't wait two years and then have the court decide something, and then the whole two years you're sitting on it. You've got the evidence.

[00:08:48] Speaker 01:
Your Honor, first of all, there wasn't two years. We filed our initial discovery in February, I believe, of 2022.

[00:08:55] Speaker 01:
I can't remember. But it was in February. The court granted additional discovery in September of that year.

[00:09:00] Speaker 03:
The court says the available evidence shows Upstream has been in possession of video footage for nearly two years.

[00:09:06] Speaker 01:
That's correct, Your Honor, but we couldn't break it. We did not have access to the code.

[00:09:11] Speaker 03:
You didn't explain that to the district court, and if you did, you need to show me where, because the district court said in its opinion on reconsideration that you can't come and seek reconsideration of an already decided issue on the basis of evidence that you possessed all along and did not take reasonable diligence to uncover.

[00:09:29] Speaker 01:
Your Honor, part of the problem that we have here is the Appleese made material misrepresentations regarding what had occurred under their watch of the equipment. They finally admitted that they operated the machinery. They tested the machinery. You are trying to blame us for not being able to find out what they had done in...

[00:09:50] Speaker 03:
I'm not blaming you for anything. I'm an appellate court. The district court has made fact-finding. I have to give those fact-findings deference unless you can show me in the record why those fact-findings are clearly erroneous. That's my standard of review. I don't find anything. Even if I agreed with you, I can't fine for you unless the district court was clearly erroneous. Agreement isn't even enough.

[00:10:13] Speaker 01:
Well, Your Honor, the district court was clearly erroneous because they failed. You are allowing the Appalese here to... I'm not allowing him. Okay, but the district court allowed the Appalese, Your Honor, the district court allowed the Appalese to make material misrepresentations, which was not found by us until after the court entered summary judgment. And that is allowing them to have a benefit of making these material misrepresentations.

[00:10:42] Speaker 03:
Yes, but... But you had reconsideration motion.

[00:10:45] Speaker 01:
Yes.

[00:10:45] Speaker 03:
After that time, the district court directly, it appears to me, considered your reconsideration arguments and explains why it does not think that it should reconsider a summary judgment. So I don't, what's missing? What am I missing?

[00:11:01] Speaker 01:
What you're missing, Your Honor, is the truth. The Appalachians truthfully...

[00:11:08] Speaker 01:
answering requests for production of documents. That is what is going on.

[00:11:13] Speaker 03:
You ultimately gained access to the video.

[00:11:15] Speaker 01:
Yes.

[00:11:15] Speaker 03:
How did you gain access?

[00:11:17] Speaker 01:
We just were able to, we found somebody that could get into the machinery or into the video equipment.

[00:11:24] Speaker 03:
Who was the person?

[00:11:26] Speaker 01:
I'm sorry, what?

[00:11:27] Speaker 03:
Who was the person?

[00:11:28] Speaker 01:
I have no idea. My son was the one who did it. He found somebody who gained access.

[00:11:33] Speaker 03:
Okay, but you had two years in which to do that, and that's what the court said. The court says you were able to gain access to the video. You provided no explanation why... The means you gained access to it isn't a means that was available to you earlier.

[00:11:46] Speaker 01:
Your Honor, there is evidence in the record that we tried repeatedly to gain access, and we finally were able to gain access. Once again, you're trying to blame us. Sir, I'm not blaming you for anything. Please do not blame me. Okay, but what the district court is, they're blaming us for the material misrepresentations of the other party.

[00:12:06] Speaker 03:
The other party has no representations regarding what you did. What you did is what you did. You had the burden of establishing to the court. You were the one that didn't produce this, didn't rely on this evidence earlier. So you had the obligation of explaining to the court. It was your burden to explain to the court why you weren't able to do that.

[00:12:26] Speaker 01:
And we did. We said that we could not break into the... We did not have access. How we got into getting access was probably... It was very difficult. We repeatedly tried to gain access to the video equipment.

[00:12:40] Speaker 02:
Is there a stat in the record?

[00:12:42] Speaker 01:
I'll have to review the record.

[00:12:45] Speaker 01:
It's in the record because it's in several of our declarations that we filed that we could not gain access.

[00:12:53] Speaker 01:
And then the...

[00:12:55] Speaker 01:
the other party kept making and changing their testimony as we went along in the case. And once again, the district court ignored those changes. They were punishing us for believing the other side's misrepresentations. I'll save the rest of my time, Your Honor.

[00:13:15] Speaker 02:
Let me point to Appendix 267. Okay. Did you get that? Yes? Thank you, sir.

[00:13:35] Speaker 01:
67? Yes. Yes?

[00:13:42] Speaker 02:
It says, moreover, it does not appear that the footage substantially contradicts any of the statements defendants made in connection with the summary judgment motion. As discussed above, a few portions of the footage at upstream sites using both the file name and the timestamp are ambiguous and do not actually show anyone producing the finished work.

[00:14:07] Speaker 02:
You told me a while ago that the video clearly showed the Apple East making the gutters or the covers.

[00:14:19] Speaker 01:
Yes, it does. It's in the record.

[00:14:21] Speaker 02:
That contradicts what the court found.

[00:14:23] Speaker 01:
That's correct. And also, we have in the record the fist bump that Mr. Breckinich gave to a third party after they had a production run.

[00:14:37] Speaker 02:
So was the court disciplined wrong in finding that

[00:14:41] Speaker 01:
could not see the faces of who was producing the... It doesn't... We identified who the parties were because the district court... The video. The video. The court doesn't show who was making... But we knew who it was because we recognized them.

[00:14:55] Speaker 02:
The video doesn't show that.

[00:14:57] Speaker 01:
Yes, it does. The video showed the people that we knew who made the fist bump. We also know the people that it showed catching other products that had been extruded. I see that I'm out of time. I'm going to thank this court for...

[00:15:11] Speaker 03:
We'll restore some rebuttal time, Mr. Bachman.

[00:15:13] Speaker 01:
Okay.

[00:15:14] Speaker 03:
I'm not sure how to say your name, Councilman. Mr. Bay?

[00:15:17] Speaker 00:
Yes.

[00:15:17] Speaker 03:
Mr. Bay, please proceed.

[00:15:40] Speaker 00:
May it please the court, good morning. I represent the appellees in this case.

[00:15:45] Speaker 00:
This is not a close infringement case. This is a case about lack of diligence and lack of evidence.

[00:15:51] Speaker 00:
The district court correctly granted summary judgment because the appellant failed to present evidence that created a genuine issue of material fact regarding whether or not my clients produced infringing gutter covers.

[00:16:07] Speaker 00:
despite removing, appellees, it is our position that that was our camera, despite removing from our facility a video camera and having it for two years, nearly two years, from the time that they removed it to the time of the granting of the motion for summary judgment, they didn't review the footage at all, apparently.

[00:16:30] Speaker 00:
And as Your Honor correctly pointed out... Well, they didn't have the password. And they didn't ask for the password in discovery despite Mr. Bauchman's statement earlier.

[00:16:40] Speaker 03:
So when he says they asked for the password in discovery, that's not true?

[00:16:43] Speaker 00:
That is not true. It was never asked for in discovery.

[00:16:46] Speaker 03:
Never?

[00:16:48] Speaker 00:
He made a statement after the fact that he asked for it informally on a phone call. And that was a blatant misrepresentation to the court. There was no request for production or any other form of written discovery that asked for a password. He asked for footage. not a password, in his written discovery. That's my recollection of the record, and that's my recollection of the conversation.

[00:17:12] Speaker 02:
But how can you review the footage, or what good is the footage, if you don't have a password?

[00:17:18] Speaker 00:
Apparently he was able to get the footage without... I did not know the password. I didn't give him anything. I didn't have a password.

[00:17:29] Speaker 00:
There was nothing to give.

[00:17:34] Speaker 00:
So despite having this information for two years, they sat on it. Apparently, after the district court granted summary judgment, mysteriously, they were able to get a password somewhere and break into the system and file their motion for reconsideration. Why they were able to do that in two weeks after an adverse ruling and why they weren't able to do it for two years is what the district court had a serious issue with.

[00:17:59] Speaker 02:
Does footage depict who was producing the covers?

[00:18:03] Speaker 00:
So the footage itself does not show in any detail what gutter covers are being produced. It's our position that the footage is showing a test production of what are called blanks in some instances.

[00:18:22] Speaker 02:
But it shows who is producing them.

[00:18:25] Speaker 00:
It was not a production. There was no production going on.

[00:18:28] Speaker 03:
Is it clear who the individuals are?

[00:18:33] Speaker 00:
Yes, you can see in subsequent footage, you can identify individuals. Yes, you can do that. And you can also identify in footage unboxed gutter covers that haven't been boxed. But giving a high five to someone and not boxing gutter covers is not an element of patent infringement. And the footage itself does not show in any detail the actual gutter covers. You can't see what they look like. You can't see whether or not they satisfy the elements of a patent. You just see something coming off of a machine.

[00:19:08] Speaker 00:
So that issue, and that is why the district court said this information is immaterial. It doesn't go to the issue of are clients producing...

[00:19:19] Speaker 00:
infringing gutter covers because there's no detail to see. You see something, but you don't see what it is. And that's why the district court correctly found that the late relied upon evidence was, most importantly, the appellants didn't exercise reasonable diligence in obtaining it. They have provided no explanation as to why for two years they couldn't review it, but in two weeks they could.

[00:19:46] Speaker 00:
Mr. Bachman doesn't even know who looked at it. He can't even point to anything that says, this is what we did in that two-year span. The record is devoid of that information, and that's why the district court was very upset with him. And that's why it didn't satisfy Central District Local Rule 7-18 subsection A that requires the exercise of reasonable diligence before you can review newly discovered information after a judgment, which is what we have here. And the other point that the district court made is that It's not material to the issue of infringement because it does not show that this gutter cover is infringing, and it doesn't show how it would be infringing even if my clients did produce it.

[00:20:33] Speaker 00:
So it wasn't material to the issue of infringement. But most importantly, it was untimely, not supported by diligence, and in the grand scheme of things, it was not outcome determinative, I guess is the right way to explain that.

[00:20:49] Speaker 00:
The court also – Mr. Bachman, the appellants filed a motion for reconsideration not once but twice. And the first motion for reconsideration is not before this court.

[00:21:03] Speaker 00:
He never appealed that, and I think that's a fatal problem for the appellants because – That's the ruling that found that he didn't exercise reasonable diligence. And so if he's not going to challenge the ruling that says he didn't exercise reasonable diligence, then as far as I can tell, he can't make any subsequent argument that also relies upon untimely video footage that likewise fails to explain how or what exercise of reasonable diligence was committed.

[00:21:36] Speaker 00:
And so that's, as far as I can tell, a fatal flaw, even if he wants to take the position that the district court erred in not finding an exercise of reasonable diligence. It's a fatal flaw in his appeal. Every piece of footage that he's now wanting to, after the fact, get into the record and argue is tainted by the same problem of lacking reasonable diligence in the exercise of obtaining it. And if you're not going to appeal that decision, you can't complain that it wasn't allowed or wasn't considered by this court.

[00:22:16] Speaker 00:
In terms of the other motions that were filed, the fee award, for example, the court made very clear findings that due to misrepresentations by Mr. Bachman about that discovery that he wants to... at this stage argue about, that that discovery was that the information that he requested was not withheld by the defendants, by the appellees.

[00:22:47] Speaker 00:
It was not withheld in their responses to requests for production.

[00:22:51] Speaker 00:
A password was not specifically requested in writing in a written request for production or interrogatory.

[00:23:00] Speaker 00:
and there was no misconduct in discovery by the appellees as found by the district court.

[00:23:07] Speaker 00:
And due to the misrepresentations he made to the court, namely that the video footage was withheld, according to him, and was withheld from production, even though they had the video camera that actually had it, and therefore we can't withhold something he has, we being my clients, that that was a repeated statement he made in every single motion he filed after losing on summary judgment.

[00:23:36] Speaker 03:
Council, I'm just going to tell you what I think about your case.

[00:23:38] Speaker 00:
Okay.

[00:23:39] Speaker 03:
I think your clients were probably infringing their patent. I think he was really pissed, and so was his son. I think they went in and took the videotape to prove it. Bad move. You don't steal. You don't take that stuff. At the end of the day, though, he didn't unfortunately do the job that a lawyer needed to do of producing that evidence in a timely fashion for the district court to consider. So you may win, but I don't think you're wearing the white hat at the moment. I think that high five told us all we needed to know about what was really going on in that courthouse, but that's not the issue before me. The only issue before me is what did he proffer to the district court, and in light of what he proffered, did the district court clearly err, which I don't think it did.

[00:24:16] Speaker 03:
So do you have anything further you'd like to offer? I just felt like I wanted to put that on the record for him and his son.

[00:24:21] Speaker 00:
Okay, well, the only thing I would add to that, Your Honor, is the video footage that you, I think, might be considering is not showing infringement.

[00:24:31] Speaker 03:
Well, I'm not considering it because it's not part of the record because it wasn't, unfortunately, properly introduced prior to the summary judgment motion.

[00:24:39] Speaker 00:
Right.

[00:24:39] Speaker 03:
I'm not considering it.

[00:24:41] Speaker 00:
Okay. Yeah. The potential conclusion that you may draw from it, or didn't draw but could draw potentially, is not reflective of what's actually in that subsequent footage. Giving a high-five doesn't mean we've infringed the patent. It means something is working properly. Correct.

[00:25:03] Speaker 03:
What is that something? The machinery that produces the infringing product. I mean, they weren't high-fiving because of the game on in the background and someone just scored a touchdown.

[00:25:11] Speaker 00:
That's probably true, unless there was a TV there. But that assumes that the machine was producing an infringing product, and that's an assumption that is a huge question of fact.

[00:25:21] Speaker 00:
the gutter covers that were being produced were not infringing, and that remains our position.

[00:25:28] Speaker 00:
And so even if the video had shown in detail what gutter cover is coming through the machine, which it didn't, but even if it did, it would show the defects, the flaws, And that's why it was a desk test panel, which the record will show, and I'll stop here on that issue. That's why the test panel is not infringing. Okay, fair enough, Your Honor. Okay, thank you very much.

[00:26:05] Speaker 03:
Mr. Bachman, come on back up. I'll be too late for the bubble time.

[00:26:13] Speaker 01:
Thank you, Your Honor. First of all, the gutter cover in question had a recessed water channel, which was protected by both the design and utility patent. So the mere fact that it ran through the roll former and came out the other end meant that they were infringing on the patent. Also, the opposing counsel has ignored that they had in their possession thousands of feet of finished product. So therefore, there was clear patent infringement here. I would like to draw the Court's attention to my brief on page 43, where I quote the Supreme Court.

[00:26:50] Speaker 01:
The Supreme Court of the United States has held the benefit of calculation, which can be little better than speculation, as to the extent of a wrong inflicted upon his opponent. This is what happened in the lower court. They did not answer their production of document request. Truthfully, they filed a materially misleading, They filed declarations that contained material misrepresentations, and now we are to be somehow blamed that we did not put the proper evidence in front of the court.

[00:27:26] Speaker 01:
We tried to get into the video. We could not get into the video. This whole problem would never have occurred if they had initially pleaded that they did test the product, that they did operate the machinery. They never answered truthfully. They never pled truthfully. That is why we are here today. The court abused its discretion when it ignored clear evidence of a violation of 35 U.S.C.

[00:27:56] UNKNOWN:
271.

[00:27:56] Speaker 01:
I thank you.

[00:28:00] Speaker 03:
Thank you, counsel. Please take another submission.