[00:00:03] Speaker 03:
All right, our next case this morning is Kester's Merchandising Display International v. Surface Quest, number 243112.

[00:00:15] Speaker 03:
And we'll let counsel get settled.

[00:00:22] Speaker 03:
And once you are, we will proceed.

[00:00:50] Speaker 00:
Sorry, I'm short.

[00:00:52] Speaker 03:
Can we adjust the light turn for her?

[00:00:59] Speaker 03:
Does that go up and down?

[00:01:03] Speaker 00:
A little closer?

[00:01:06] Speaker 00:
Is that good?

[00:01:07] Speaker 03:
That's good.

[00:01:08] Speaker 03:
OK.

[00:01:09] Speaker 03:
All right.

[00:01:09] Speaker 00:
Okay, good morning, Your Honors.

[00:01:12] Speaker 00:
My name is Teresa Young.

[00:01:13] Speaker 00:
I am coming from Baker Sturkey over in St.

[00:01:16] Speaker 00:
Louis, Missouri.

[00:01:17] Speaker 00:
I'm here representing Kester's Merchandising.

[00:01:20] Speaker 00:
The parties have been referring to it as KMDI, and I'll be doing that in the argument.

[00:01:26] Speaker 00:
The other party I'll be referencing is SQ, because again, that goes with the briefing.

[00:01:32] Speaker 00:
In this case, KMDI has brought a claim under the Lanham Act

[00:01:38] Speaker 00:
for advertising that it believes contains misrepresentations by SQ as to the products.

[00:01:45] Speaker 00:
The products that these parties have are advertising in their various mediums are a lightweight architectural element.

[00:01:57] Speaker 00:
I brought a little sample just because my client sent it to me this weekend to the extent that it helps you visualize it.

[00:02:03] Speaker 00:
It is effectively a dense foam core that can then be either painted or be wrapped with stickers, other things that make it appear to be a different surface.

[00:02:12] Speaker 02:
Could you tell me what evidence you have of injury?

[00:02:17] Speaker 00:
So on the issue of injury, Your Honor, we have two different arguments.

[00:02:23] Speaker 00:
Our first argument is that we would have the right to a presumption of injury.

[00:02:32] Speaker 00:
And effectively that's coming from the fact that these two companies are really the heavy hitters, the two substantial corporations that were acting within the same sub market that had the same subset of products that they were offering.

[00:02:52] Speaker 02:
But there was more than two in that market.

[00:02:55] Speaker 00:
There were some what we would consider insubstantial companies.

[00:02:59] Speaker 02:
Well, you would, but would they consider themselves insubstantial?

[00:03:03] Speaker 00:
Well, certainly they're not doing the same things.

[00:03:07] Speaker 00:
Some of the other companies are using wood as opposed to the fabrics that we use.

[00:03:13] Speaker 00:
Both SQ and KMDI use this sort of dense foam core.

[00:03:17] Speaker 00:
from a layman's term is how I understand it.

[00:03:20] Speaker 00:
And one of the things that that does is it makes it so light that, for instance, one of the things that PMDI has done is a wood kind of spiral across an entire ceiling, and they were able to suspend it with just a few wires.

[00:03:35] Speaker 00:
Obviously, that's not something that you could do with wood.

[00:03:38] Speaker 00:
And so, you know, some of those players use things like wood, use heavier materials, more expensive materials to get the same effect.

[00:03:47] Speaker 00:
Also, a lot of them are local.

[00:03:49] Speaker 00:
They're not dealing with national clients.

[00:03:51] Speaker 00:
They're not doing this work throughout the entire United States.

[00:03:55] Speaker 04:
Do you have any evidence other than Mr. Walter's affidavit to support what you just said?

[00:04:01] Speaker 00:
It really does come down to Mr. Walter's affidavit.

[00:04:05] Speaker 04:
And so if we decide that Walter's affidavit was submitted in support of SQ's motion for summary judgment,

[00:04:15] Speaker 04:
or I'm sorry, in support of your motion for summary judgment, not in response to SQ's motion for summary judgment, you would acknowledge that under vitamins online that there were more than two significant competitors.

[00:04:34] Speaker 04:
It really boils down to whether or not we can entertain the Walters affidavit.

[00:04:38] Speaker 00:
I think that the Walters affidavit certainly is very important to this case and we would argue that

[00:04:44] Speaker 00:
It should be considered obviously, you know, the way that these arguments developed during the summary judgment proceedings was that, you know, the Walters issue or the issue that Mr. Walters provided the affidavit for really came up during KMDI's motion for summary judgment.

[00:05:03] Speaker 00:
It came up during the time in which SQ was responding to our summary judgment motion.

[00:05:09] Speaker 00:
And so by virtue of that, it wasn't included in the original.

[00:05:14] Speaker 00:
However, I can tell you that the attorneys who were in front of the district court understood and believed that everything was going to be taken together.

[00:05:23] Speaker 00:
It was their understanding that these two motions were going to be considered together and that the evidence would be considered together.

[00:05:31] Speaker 04:
That is why they... Isn't that the wrong question?

[00:05:34] Speaker 04:
Isn't it what the judge would have considered?

[00:05:37] Speaker 04:
If you're the district judge, and you have KMBI's motion for summary judgment and SQ's motion for summary judgment, and you set this for hearing, as the judge did, for both motions, still wouldn't the judge naturally look at the arguments and the evidence that was presented in connection with SQ's motion for summary judgment?

[00:06:00] Speaker 04:
And if he decides that first, your motion for summary judgment then becomes moot?

[00:06:06] Speaker 04:
Because the judge would have already granted Eskew's motion for summary judgment, and the Walters affidavit was never submitted in connection with Eskew's motion for summary judgment.

[00:06:15] Speaker 04:
What do you think?

[00:06:17] Speaker 00:
So in some circumstances, I think that that would be the case.

[00:06:21] Speaker 00:
I think that in this particular case, these motions were so intermingled that effectively, ruling on one is ruling on the other.

[00:06:29] Speaker 00:
Um, the issues presented were nearly identical between the two motions.

[00:06:35] Speaker 00:
Um, and so it wouldn't, there wouldn't be the chronological step of one versus the other.

[00:06:40] Speaker 00:
Um, they really were taken together.

[00:06:42] Speaker 00:
They weren't argued separately.

[00:06:44] Speaker 00:
Um, they were argued together.

[00:06:45] Speaker 00:
They were considered together and they were ultimately decided together.

[00:06:48] Speaker 04:
Did surface quest ever have an opportunity to respond to the Walters affidavit?

[00:06:53] Speaker 00:
So the Walters affidavit was in the reply to our summary judgment motion.

[00:06:59] Speaker 00:
However, they would have, under the rules, had the opportunity to request a cert reply in order to respond to that affidavit, including to provide an affidavit of their own in response as well.

[00:07:12] Speaker 00:
They did not request that during the summary judgment.

[00:07:15] Speaker 04:
But they would have had to obtain a deviation from the local rule.

[00:07:18] Speaker 04:
They would have had to obtain special permission, and they would have had

[00:07:22] Speaker 04:
in effect, as a practical matter, to have waived any argument that the Walters affidavit shouldn't be considered, at least in connection with a response to SG's motion for server judgment.

[00:07:34] Speaker 04:
Is that fair?

[00:07:35] Speaker 00:
I think that it would be fair to say that they would have had to move for leave to file the server apply.

[00:07:42] Speaker 00:
I think that that type of a server apply is contemplated within the rules in the local procedure.

[00:07:48] Speaker 00:
And so I'm not sure I would say it was outside of that, but certainly they would have had to seek leave.

[00:07:54] Speaker 00:
Again, if it were me in their position, I probably would still argue.

[00:07:59] Speaker 00:
that it should have been included in the other motion as an alternative argument if I were to do a serve reply.

[00:08:07] Speaker 00:
But I think I understand your meaning.

[00:08:09] Speaker 00:
And certainly, this issue was coming late in the summary judgment proceedings.

[00:08:15] Speaker 00:
Again, that's how the arguments developed.

[00:08:18] Speaker 00:
And so that was when KMDI had the ability and went ahead and put that forward.

[00:08:26] Speaker 03:
Well, apart from this procedural thicket,

[00:08:30] Speaker 03:
Was there any evidence presented on relevant market in the nature of cross-elasticity analysis?

[00:08:40] Speaker 03:
So the evidence that was put forward by Mr. Walters... Well, I just want to know if there's any cross-elasticity evidence from anybody, including Mr. Walters.

[00:08:50] Speaker 00:
I don't believe that there's any specific cross-elasticity evidence.

[00:08:54] Speaker 03:
Don't you need that to determine what the relevant market is?

[00:08:58] Speaker 00:
I think that in a summary judgment setting, at the point where we are creating a question of fact, I think more needs to get into it.

[00:09:08] Speaker 00:
So in other words, I think that that

[00:09:11] Speaker 00:
makes a very difficult row for me to hoe if I were to argue that our summary judgment should be granted on that same ground.

[00:09:19] Speaker 00:
But I think that we did present sufficient factual questions as to this issue to defeat summary judgment motion of the present council.

[00:09:30] Speaker 03:
Well, isn't the problem though, as I understand the argument, it's KMDI and SQ using a common material.

[00:09:39] Speaker 03:
and they're the only ones who do use that material.

[00:09:44] Speaker 03:
But there's still the question of whether consumers consider other material as adequate substitutes for the material the KMDI and SQ use.

[00:09:57] Speaker 03:
And in the absence of any analysis of that, how can anyone say that the market consisted of just these two firms?

[00:10:07] Speaker 00:
I think that what I would point you to, Your Honor, is the list that we gave of what makes this a unique sub-market.

[00:10:13] Speaker 00:
And while there are, in other words, you can take wood and you can put laminate over the top of it.

[00:10:21] Speaker 00:
You could take a particle board and put laminate over the top of it.

[00:10:25] Speaker 00:
That is an entirely different product than what KMDI is doing.

[00:10:29] Speaker 00:
What they're doing is creating something, again, that is extremely lightweight.

[00:10:35] Speaker 00:
It therefore can be suspended.

[00:10:38] Speaker 00:
It can be stuck to walls.

[00:10:40] Speaker 03:
I understand that part of the argument, but in terms of the people or entities that buy this stuff, do they care?

[00:10:50] Speaker 03:
Do you have any evidence that it even matters?

[00:10:53] Speaker 00:
Well, I think that if you look at the type of products that they're developing, those are not products that could be made out of wood.

[00:11:01] Speaker 00:
And so I'm, which I think is, I'm trying to round about answer your question here.

[00:11:05] Speaker 03:
Is there anything in the record that supports what you just said?

[00:11:08] Speaker 00:
That the products that are being made could not be made out of wood?

[00:11:13] Speaker 00:
Is that your question?

[00:11:15] Speaker 03:
Well, I guess it is.

[00:11:16] Speaker 03:
I'm not really sure, but go ahead.

[00:11:20] Speaker 00:
So there is evidence that the wood would be much heavier, that, you know, suspending wood, you know, isn't a viable option, you know, things like that, yes.

[00:11:34] Speaker 02:
Well, you don't argue that, uh, there was any competitive advertising done by SQ, do you?

[00:11:44] Speaker 00:
Um, we do argue that there's competitive advertising and that they were, um, placing our photos.

[00:11:51] Speaker 02:
Well, but that's, that you're saying that they represented your product as their product.

[00:11:58] Speaker 02:
Right.

[00:11:59] Speaker 02:
But that's different than, than, uh,

[00:12:02] Speaker 02:
comparative advertising.

[00:12:03] Speaker 02:
They never use the name KMDI in their advertising.

[00:12:10] Speaker 02:
And you point out to them that they were using your product and say, oops, we're sorry about that.

[00:12:15] Speaker 02:
We won't do that anymore.

[00:12:17] Speaker 02:
Isn't that correct?

[00:12:18] Speaker 00:
Yes, that's correct.

[00:12:19] Speaker 00:
And I apologize, Your Honor.

[00:12:20] Speaker 00:
I think I misheard what you said.

[00:12:22] Speaker 02:
Do you have any evidence of injury, of any economic evidence that your client was injured?

[00:12:30] Speaker 02:
You can't get a presumption

[00:12:32] Speaker 02:
simply because you say, I want a presumption.

[00:12:35] Speaker 00:
Right.

[00:12:35] Speaker 00:
And that's it.

[00:12:35] Speaker 00:
I mean, the presumption that we're asking for, the presumption that injury flows from the fact that this was a sub market.

[00:12:44] Speaker 00:
It doesn't flow from anything.

[00:12:47] Speaker 00:
I would have to respectfully disagree, per my brief.

[00:12:52] Speaker 00:
But, you know, that's where we're talking, that we believe we're squarely within vitamin online.

[00:12:59] Speaker 00:
You know, that's kind of the case that we are pointing to.

[00:13:03] Speaker 00:
The circuit has acknowledged through that case that, in fact, the, you know, presumption of injury is an appropriate thing to employ.

[00:13:13] Speaker 00:
Um, it is, again, we think that, you know, this case really boils down to what is happening across a lot of markets today, which is that people are buying things by looking at photos online.

[00:13:26] Speaker 00:
And so our photos were used.

[00:13:29] Speaker 02:
Um, the photos... Nobody knew they were your photos because you didn't say this is a KDMI photo.

[00:13:35] Speaker 02:
Well, it was photos of KMDI's products.

[00:13:37] Speaker 02:
But nobody knew that unless they had a magnifying glass and could look at the product.

[00:13:43] Speaker 00:
I understand what you're saying, Your Honor, but in the end, the product that was pictured is a custom product.

[00:13:50] Speaker 00:
Everything that KMDI is custom to their customers.

[00:13:54] Speaker 00:
So the customers give some specifications, tell them what they want it to look like, what size they want it to be, et cetera, and then they go ahead and they create that.

[00:14:03] Speaker 00:
So those photos are a representation of the craftsmanship that KMDI brings to what they're doing.

[00:14:09] Speaker 03:
Could I just make sure I'm understanding

[00:14:13] Speaker 03:
your response to Judge Kelly.

[00:14:15] Speaker 03:
So we have the argument for presumptive injury.

[00:14:19] Speaker 03:
Are you also arguing that there was actual injury?

[00:14:25] Speaker 03:
Or is it just the presumptive injury argument that you're making now?

[00:14:30] Speaker 03:
Because in surface question brief, they say you don't even attempt to argue actual injury in your opening brief.

[00:14:38] Speaker 03:
Is that correct?

[00:14:40] Speaker 00:
So the actual injury really is flowing from the fact that SQ had $8 million worth of business during this time that they were displaying largely, almost exclusively, photos of KMDI's product in order to secure their customer and to secure sales.

[00:15:01] Speaker 00:
And so it flows from that that, you know,

[00:15:05] Speaker 00:
that money was being diverted from and work was being diverted from KMBI to SQ.

[00:15:12] Speaker 04:
But you're not, and I do understand that, you're not also arguing that there was a particular customer that decided to buy from SurfaceQuest instead of KMBI.

[00:15:28] Speaker 00:
We have two different, both Acme and the

[00:15:34] Speaker 00:
Hy-Vee accounts that it appears that SQ went in and used photos of our product in order to secure those accounts.

[00:15:47] Speaker 00:
I think there's a question of fact as to whether or not that was the deciding factor, whether it was cost, other things.

[00:15:54] Speaker 00:
But it's our position that there were direct sales that were lost.

[00:15:59] Speaker 04:
Am I correct in thinking that you didn't make this argument about Hy-Vee in district court?

[00:16:05] Speaker 04:
I'm sorry, I didn't hear what you did.

[00:16:08] Speaker 04:
You do have an argument of actual injury based on Hy-Vee here.

[00:16:15] Speaker 04:
But you did not make that argument, as I understand it, in district court, that there was an actual injury because Hy-Vee decided to purchase from SQ as opposed to K&DA.

[00:16:26] Speaker 00:
I could be wrong about this, Your Honor.

[00:16:28] Speaker 00:
Off the top of my head, I do believe that was presented in the district court as well.

[00:16:32] Speaker 02:
Well, if we find you're not entitled to a presumption of injury, is that fatal to your case?

[00:16:39] Speaker 00:
It's not helpful to my case.

[00:16:41] Speaker 00:
Not helpful, but is it fatal?

[00:16:43] Speaker 00:
I think that, again, there's enough in this record to show that SQ was getting deals from other clients that had previously been KMDI clients.

[00:16:55] Speaker 00:
I think that there's enough there to, again, to create a question of fact to get us through a summary judgment motion.

[00:17:02] Speaker 03:
Thank you, counsel.

[00:17:03] Speaker 03:
Thank you.

[00:17:17] Speaker 01:
May it please the court, Brian White on behalf of SurfaceQuest.

[00:17:21] Speaker 01:
This case on appeal begins and ends with KMBI's failure to prove injury under the Lan Am Act.

[00:17:28] Speaker 01:
We've raised multiple other issues in our briefing and what I'd say to the court today is those flaws in KAMDI's claim are fatal simply reinforced by the district court's judgment.

[00:17:39] Speaker 01:
In this case, summary judgment in favor of my client was appropriate.

[00:17:43] Speaker 01:
Simply put,

[00:17:44] Speaker 01:
KMDI failed to present evidence to create a genuine issue of material fact on essentially every element of a false advertisement claim.

[00:17:52] Speaker 01:
And for that reason, we're asking that this court affirm Judge Melgren's granting of judgment in favor of our client.

[00:18:01] Speaker 01:
I don't think at this point there's any dispute that this is a false advertising claim and that the elements of a false advertising claim are laid out pretty clearly in the Membo Bakeries case of the 10th Circuit, so I won't repeat them.

[00:18:17] Speaker 01:
And I think given the nature of how argument played out, I'm going to start where the district started, which is on the issue of injury.

[00:18:27] Speaker 01:
The Supreme Court has very expressly stated that to invoke the Lanham Act's cause of action for false advertisement, the plaintiff must plead and ultimately prove an injury to commercial interest in sales or business reputation proximately caused by the misrepresentations.

[00:18:48] Speaker 01:
I would assert to this court that

[00:18:51] Speaker 01:
on the issue of actual injury, evidence of actual injury or actual harm, that KMDI did not address that within their briefing to the Court of Appeals, and therefore has waived it.

[00:19:03] Speaker 01:
Had they briefed it, had they addressed it, that there's simply no evidence to support actual injury.

[00:19:09] Speaker 01:
So what they're left with is a very narrow presumption that was late.

[00:19:14] Speaker 03:
Before we get to presumption, what about this high V

[00:19:19] Speaker 03:
project, and there's reference to this spec, quote unquote, in the record mentioning surface quest.

[00:19:32] Speaker 03:
Does that create any genuine factual issue on actual injury?

[00:19:37] Speaker 01:
No, it doesn't.

[00:19:38] Speaker 01:
And it's because it's a spec.

[00:19:41] Speaker 01:
The spec itself, why it was in there is unclear.

[00:19:46] Speaker 01:
I take a step back and confirm that the burden of proof is on KMDI on all of these issues.

[00:19:54] Speaker 01:
And so the spec alone is simply that.

[00:19:57] Speaker 01:
The actual evidence

[00:19:59] Speaker 01:
has laid out in the briefing was that SurfaceQuest had nothing to do with that Hy-Vee work.

[00:20:06] Speaker 01:
It was actually done by a different competitor, C.G.

[00:20:09] Speaker 01:
Whitvawitt.

[00:20:11] Speaker 01:
That's the evidence.

[00:20:12] Speaker 01:
It's uncontroverted that the actual work was done by a different competitor.

[00:20:17] Speaker 03:
So it didn't go either to KMDI or SurfaceQuest?

[00:20:22] Speaker 01:
That is 100% true.

[00:20:26] Speaker 01:
Everyone that testified from SurfaceQuest testified we had nothing to do with that project.

[00:20:33] Speaker 01:
We weren't even aware of it.

[00:20:35] Speaker 01:
CG Void's corporate representative was deposed and they said that was our work and SurfaceQuest had nothing to do with it.

[00:20:45] Speaker 01:
KMDI presented no evidence to the contrary.

[00:20:47] Speaker 01:
And what I again represent is that one little statement in a spec with our name on it doesn't change or doesn't create a question of fact as to that.

[00:20:56] Speaker 01:
as to that specific alleged lost work.

[00:21:02] Speaker 03:
Well, as a segue into the presumption of injury, under the vitamins online case, does it require a two-player market for the presumption, or does it require a sparsely populated market?

[00:21:29] Speaker 01:
My answer to that question is to go directly to what the 10th Circuit said in that case, which is on page 1240 of the opinion.

[00:21:42] Speaker 01:
lot of the discussion in that case is discussing what other circuits have done, correct?

[00:21:47] Speaker 01:
Because this issue at least hadn't been directly, there had been some discussion of presumption in prior cases, but this is really where the 10th circuit comes front and center with it.

[00:21:57] Speaker 01:
And this court says that we find this formulation of a presumption of injury sensible and conclude that

[00:22:04] Speaker 01:
Once a plaintiff has proven that defendant has falsely or materially inflated the value of its products or deflated the value of plaintiff's products, and that plaintiff and defendant are the only two significant participants in the market, may the court presume.

[00:22:21] Speaker 01:
So I guess it's a long way of getting to

[00:22:25] Speaker 01:
I believe that it is essentially narrowed down to two participants.

[00:22:29] Speaker 01:
But if it's going to be expanded further, it still has to be the only two significant participants in the market.

[00:22:38] Speaker 01:
And again, that would be something that KMDI had the burden to establish.

[00:22:42] Speaker 01:
And there is nothing in the record to establish that burden.

[00:22:45] Speaker 02:
What's the difference between a sparsely populated market and strictly two markets?

[00:22:52] Speaker 02:
Was the district court just wrong on that?

[00:22:55] Speaker 01:
The district court's ruling on that issue.

[00:22:57] Speaker 01:
So here's what I'd say is the term sparsely populated market is a little bit vague.

[00:23:05] Speaker 01:
It's not 100% clear, but I think then you have to turn to what the words actually say, which is a significantly, two significant players, only two significant players.

[00:23:17] Speaker 01:
And I think what the court was trying to say, and if you look at all the other cases, all the other cases that are cited both by the 10th Circuit

[00:23:24] Speaker 01:
in other cases, it really does essentially come down to two big players, whether it's Tropicana and Coca-Cola or DirecTV and the local cable company, it's two big players in the market.

[00:23:36] Speaker 01:
And so what I think this says is, well, perhaps there's a few other very de minimis players that don't count, but it really has to essentially be two players.

[00:23:47] Speaker 01:
And the reason is

[00:23:49] Speaker 01:
is sound, why you want it to be that way.

[00:23:53] Speaker 01:
Because we're going to apply a presumption of injury, right?

[00:23:57] Speaker 01:
We're going to say, you don't really have to come forward with evidence of injury.

[00:24:01] Speaker 01:
We're going to apply a presumption.

[00:24:03] Speaker 01:
Well, why would you want to do that?

[00:24:04] Speaker 01:
Where you essentially have, if it's a comparative advertisement, which I think we've conceded that this wasn't the case, but if it's a two player market and you falsely advertise, it's a presumption you're going to harm the other player.

[00:24:19] Speaker 01:
But if there's three or four or five or 10 or in this case, probably hundreds of different players in this light architectural element market, then each one of them could hypothetically come to us and make the exact same claim for the exact same amount of money without having to parse through what harm was actually caused to a specific company.

[00:24:41] Speaker 01:
And that's why it's gotta be so limited.

[00:24:43] Speaker 01:
And that's why it's been so limited in the cases.

[00:24:46] Speaker 03:
You agree though, don't you,

[00:24:48] Speaker 03:
KMDI and SurfaceQuest are the only firms that use this type of material?

[00:24:59] Speaker 01:
No, I don't.

[00:25:00] Speaker 01:
And I don't think the record supports that.

[00:25:03] Speaker 01:
And here's why.

[00:25:05] Speaker 01:
And I think KMDI's position actually proves SurfaceQuest's point.

[00:25:11] Speaker 01:
The Hy-Vee case.

[00:25:14] Speaker 01:
that they want to seek damages on.

[00:25:16] Speaker 01:
That was a project done by a separate competitor, CG Witwit, who uses a lightweight composite material and wraps it with films that surface quest, in some cases, supplies.

[00:25:30] Speaker 01:
When we initially got into the market of trying to make these lightweight beams

[00:25:34] Speaker 01:
We went to classic acrylics, and the classic acrylics did the same thing.

[00:25:39] Speaker 01:
They created these beams using composite material.

[00:25:45] Speaker 01:
And I'm going to stop myself and also make this point that it is somewhat unfair for plaintiff to try to make this comparison of products when throughout the entire case, they refused to really tell us how they did their product or what it was made of.

[00:26:01] Speaker 01:
That's just the fact that we pushed, how did you make your product?

[00:26:05] Speaker 01:
What was it?

[00:26:05] Speaker 01:
What's it made of?

[00:26:07] Speaker 01:
It's protected.

[00:26:08] Speaker 01:
You don't get it.

[00:26:09] Speaker 01:
And now they want to say, well, our product is essentially like your product.

[00:26:12] Speaker 01:
How do we know that?

[00:26:13] Speaker 01:
Do we have to take your word for it?

[00:26:14] Speaker 01:
We shouldn't have to.

[00:26:15] Speaker 01:
What I can tell you is there are plenty of other vendors, competitors, including the ones listed in the briefing, that can do lightweight memes.

[00:26:25] Speaker 04:
What about the testimony

[00:26:29] Speaker 04:
from the KMBI executive that these other companies were a bunch of losers, coupled with the fact that we view the evidence in the light most favorable to KMBI in response to your motion for summary judgment, can we get a reasonable fact finder and reasonably infer from that testimony, viewing the evidence favorably to KMBI, that these other competitors may be like Hy-Vee,

[00:26:56] Speaker 04:
or that sold high V. Some of these other minor players were not significant participants in the market under Vitamins Online.

[00:27:06] Speaker 01:
Yeah, I guess I view that testimony a little differently in that I view the testimony of the inventor of Microlite and the owner of the company saying there are a bunch of competitors out there.

[00:27:20] Speaker 01:
They all distinct.

[00:27:22] Speaker 01:
as essentially a bunch of losers.

[00:27:25] Speaker 01:
I paraphrased it.

[00:27:28] Speaker 04:
Yeah.

[00:27:30] Speaker 04:
But I mean, I don't mean it pejorative to pick on you, but we're talking about the antinim of significant in terms of being losers, not he's not, I don't care whether or not he thinks they were bad companies, but whether or not they were losers creates a reasonable inference that they were not significant competitors.

[00:27:50] Speaker 01:
Oh, I,

[00:27:51] Speaker 04:
I'm just asking you to comment on that testimony, viewing the evidence favorably to KMBI, why that doesn't create a reasonable inference that KMBI and Esquieu were the only significant competitors.

[00:28:06] Speaker 01:
I guess I'd start by saying that wasn't an argument that has been presented on appeal.

[00:28:11] Speaker 01:
It wasn't?

[00:28:12] Speaker 01:
Not that the bunch of losers should create it.

[00:28:16] Speaker 04:
You don't think KMBI made that argument in their briefs?

[00:28:18] Speaker 01:
I don't believe so, but if they did, I apologize that I missed it.

[00:28:21] Speaker 01:
But even if they did, I would say that the focus on that should be on the bunch, which are their multiple competitors.

[00:28:28] Speaker 01:
Whether his opinion is that they're good competitors or bad competitors doesn't really go to the fact of whether or not they're significant in the market.

[00:28:36] Speaker 01:
And again, what does it mean to be significant in the market?

[00:28:39] Speaker 01:
A lot of these things should be fleshed out.

[00:28:41] Speaker 01:
by the person who has the burden of the proof, and they didn't do it.

[00:28:44] Speaker 04:
Well, you actually have the burden of proof on your motion to show right to judgment as a matter of law, viewing the evidence favorably through the non-movement.

[00:28:53] Speaker 01:
Yeah.

[00:28:54] Speaker 04:
I mean, you said that three times, and I just questioned why you keep saying that they have the burden.

[00:29:00] Speaker 04:
Certainly in a trial, they have the burden.

[00:29:01] Speaker 01:
Well, they have the ultimate burden to prove the elements of the claim.

[00:29:05] Speaker 01:
And so they have the ultimate burden to come forward with sufficient evidence to create a question of fact.

[00:29:11] Speaker 01:
And that fact certainly, in my opinion, doesn't support a question of fact on two player market.

[00:29:18] Speaker 01:
it if anything supports our position, which is there are a bunch of competitors out there, which is again laid out in the brief, at least 14 or 15 identified that can create lightweight architectural elements.

[00:29:31] Speaker 01:
And I also think it's important to go back just procedurally, Your Honor, and point out that this idea, this presumption

[00:29:39] Speaker 01:
It was never raised in discovery.

[00:29:42] Speaker 01:
It was never raised as a claim.

[00:29:43] Speaker 01:
It was never stated, hey, we're not going to prove actual damages.

[00:29:47] Speaker 01:
We're just going to rely on this presumption.

[00:29:49] Speaker 04:
How do you do that at a deposition?

[00:29:51] Speaker 04:
In an interrogatory, I can see, in a contention interrogatory, but I'm not sure that I follow that they didn't raise the presumption

[00:30:08] Speaker 04:
that that's not fair game.

[00:30:11] Speaker 04:
Have you argued this previously that we shouldn't even entertain a presumption of injury because they didn't tell you during discovery that they were going to raise this legal theory?

[00:30:23] Speaker 01:
Yeah, it was part of our brief to the district court, and I believe it's in our brief here, and the contention interrogatories upon which we rely are attached to the appellate briefs where we

[00:30:32] Speaker 01:
I litigated the case for three years and worked very hard to try to figure out what is... So just walk me through how we write the opinion.

[00:30:44] Speaker 04:
Do we say, well, at a Rule 37 of the Rules of Civil Procedure, we should sanction KMBI by not entertaining their theory on appeal that there was a presumption of injury because they didn't answer a contention interrogatory?

[00:31:00] Speaker 04:
Is that your argument?

[00:31:01] Speaker 01:
It's part of the argument.

[00:31:03] Speaker 01:
It's not the only basis.

[00:31:05] Speaker 01:
I understand that, but that's how we get from A to Z. I think we get from A to Z by saying, you failed to raise it in discovery, you failed to raise it in response to the motion for summary judgment.

[00:31:18] Speaker 01:
The presumption argument made on summary judgment in response to our motion

[00:31:22] Speaker 01:
didn't even reference vitamins online or this two-player market.

[00:31:25] Speaker 01:
It wasn't raised, and no evidence was presented of it.

[00:31:28] Speaker 01:
And then, last but not least, even if we put all of that aside and we want to consider this Walters affidavit, that was clearly untimely, which shouldn't be considered.

[00:31:41] Speaker 01:
But if the court says we're going to consider it anyways, I would represent to this court that it lacks foundation for any kind of affidavit.

[00:31:50] Speaker 01:
It's ambiguous at most, and it certainly doesn't support the position of the two-player market.

[00:31:55] Speaker 02:
Well, there was ample evidence in the record, I believe, that they still compete directly with lightweight agricultural elements across the board, even if it's not exactly the type that either one of them make it.

[00:32:11] Speaker 02:
Isn't that correct?

[00:32:12] Speaker 01:
That SurfaceQuest does?

[00:32:13] Speaker 01:
Yeah.

[00:32:14] Speaker 01:
SurfaceQuest's, what I'd say is the record certainly supports that SurfaceQuest

[00:32:20] Speaker 01:
was attempting to compete in what I would call the beam, the lightweight beam market.

[00:32:26] Speaker 01:
And when we filed our motion, we said there's all of these other dispositive issues that are fully dispositive, not just the injury, but materiality, et cetera, not false, those type of things.

[00:32:39] Speaker 01:
But if we're going to boil it down and the court is going to say, you're going to be able to move forward with something, the reality is the only place that we actually competed was on the beam market.

[00:32:50] Speaker 01:
If this case were to move forward, which is our position it shouldn't, that should be the only place it moves forward.

[00:32:56] Speaker 01:
Thank you.

[00:32:57] Speaker 01:
I appreciate it.

[00:32:57] Speaker 01:
Thank you, counsel.

[00:33:03] Speaker 03:
Did we have any rebuttal?

[00:33:06] Speaker 03:
All right.

[00:33:07] Speaker 03:
Thank you, counsel, for the arguments this morning.

[00:33:09] Speaker 03:
The case will be submitted and counsel are excused.