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Case number 15-1449, Security Point Holdings, Inc.

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Petitioner versus Transportation Security Administration.

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Mr. Graveline for the petitioner, Mr. Cappell for the respondent.

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Mr. Graveline, good morning.

[00:00:16] Speaker 01:
Good morning.

[00:00:18] Speaker 01:
May it please the court?

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My name is Brad Graveline from the law firm Sheppard Mullen, and I represent the petitioner security point in this case.

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This is the second time we've been before the court on very similar issues.

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Security Point contends that TSA inserted indemnification language into MOUs in order to retaliate against Security Point for filing a patent infringement case against the TSA.

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We also contend that the TSA's insertion of the indemnification language is arbitrary and capricious and not the result of reasoned decision making.

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And as a result, Security Point requests that TSA remove the indemnification language from the MOU.

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Just by way of quick background, the MOUs are required by TSA

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TSA requires that airport operators and the TSA enter into the MOUs before the advertising brokers can provide their services into the airports.

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And if the airport operators provide their services to the airports, they are able to provide advertising on the bottom of the trays that you see when you pass through security screening checkpoints.

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On October 28, 2014, this court held that TSA's attempt to insert the indemnification clause into the MOU was arbitrary and capricious and remanded the case to TSA.

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The court held that TSA failed to consider two important factors.

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First, that airports could not agree to the indemnification language.

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And second, the TSA failed to consider the harms that would result to TSA from insistence on the indemnification provision.

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The court also awarded Security Point its attorney's fees for that matter.

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On remand, TSA made a single change to the indemnification language.

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And what it did is it offered airport operators the option, it referred to it as an option, of requiring the advertising brokers to provide the indemnification to TSA.

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Security point contends that this change remains arbitrary and capricious.

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To SecurityPoint's knowledge, it currently is the only advertising broker participating in the BIN advertising program.

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So if SecurityPoint is the advertising broker, and if the airport operators were to exercise the option of requiring SecurityPoint to provide the indemnification, what that would mean is that SecurityPoint would be indemnifying TSA for infringing SecurityPoint's patent at all time that

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TSA was infringing the patent.

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We contend that that is not a legitimate option, and obviously, SecurityPoint would not provide that indemnification, even in the event that a different...

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So if SecurityPoint is the advertising broker, and if the airport operator were to require the advertising broker to provide the indemnification, SecurityPoint would be indemnifying TSA for infringing SecurityPoint's patent.

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Well, that doesn't cost you anything.

[00:03:38] Speaker 01:
Well, but the difference is, Your Honor, the language that Security Point proposed to TSA was a covenant not to sue, and Security Point would provide a covenant not to sue during periods of time that the MOU was in place, because Security Point would be receiving compensation during... So what are you worried about, other intellectual property?

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We're not concerned.

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We don't believe there is any other intellectual property.

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So then I don't get what this concern is.

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The concern is that SecurityPoint would be providing indemnification even for periods of time that the MOUs was not in place.

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So if TSA was infringing the patent prior to the MOU being in place, SecurityPoint would be providing indemnification for a period of time before that with no compensation.

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We would be surrendering our patent.

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You're already in litigation with them.

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correct prevail first instance correct.

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That would not you would not.

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Well I believe your honor that under the language the TSA has proposed we would be because it would be retroactive.

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The language is very broad.

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It says that security point... Well, if we can get the government to acknowledge that it's not retroactive, does that solve your problem?

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We'd have to see the language, but certainly under the language that they have proposed, it would not be acceptable because it would require security point to surrender its patent rights up until the time that the MOU is in place, which we believe is not a realistic option.

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Is this point made in your brief?

[00:05:07] Speaker 01:
It is, Your Honor, yes.

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I didn't really understand it as relating to a concern about the existing judgment.

[00:05:14] Speaker 01:
The existing judgment?

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Yes.

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The current suit.

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You had a judgment in your favor, right?

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A great deal of money.

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No.

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So what has happened in the Court of Federal Claims litigation is the case was bifurcated.

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So right now, what we have is... So you have a finding of validity?

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Validity, correct.

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Yeah.

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And so continuing then, if some different advertising broker.

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So what's the current status of that?

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So you have a finding of validity?

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Yes, we have a finding of validity by the court of federal claims.

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And we are currently engaged in discovery about the damages question, at least with regard to a certain number of airports that the parties have selected to proceed with.

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So if there was an advertising broker other than SecurityPoint,

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What the indemnification language would require is that that other advertising broker provide the indemnification.

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That's not going to happen.

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Exactly.

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So that's good for you.

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You have a monopoly.

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Well, but I think the point is that the language that TSA inserted into the agreement is arbitrary and capricious and not the result of reasoned decision-making.

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But what's the harm to you of making it impossible for other brokers to get an MOU?

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Well, our point is that nobody could agree to the indemnification.

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Well, let's stick to you.

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Okay.

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Because insofar as it's nobody, it's a benefit to you.

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I suppose it would be, but it still is not the result of reason decision making because what has happened is the TSA has inserted indemnification language into the MOUs that simply doesn't make sense.

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So the only change with regard to the indemnification language

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that TSA provided after remand was inserting the option that the advertising broker could provide the indemnification.

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So as I noted, it wouldn't make sense with regard to SecurityPoint, but it further would not make sense with regard to any other advertising broker.

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As your honor mentioned, there already has been a finding that the patent is valid.

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TSA has acknowledged that the damages could be very significant in this case.

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So certainly, no other advertising broker

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would agree to that language.

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And the justification that TSA has put forth for that indemnification language is exactly the same as what was before the court previously.

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They provided a declaration of a TSA IP attorney by the name of William Washington.

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That declaration was before the court during the prior appeal.

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Mr. Washington has said that the indemnification language was the result of a comprehensive review of potential legal liability, but there's no evidence that that actually took place.

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And so what we have here is the only justification is a post hoc litigation affidavit provided by Mr. Washington.

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And I'd like to put forth- But they have a much lengthier explanation.

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than they did before, right?

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I don't believe they do.

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I believe that what they have provided is exactly what they said before.

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And their justification is that the indemnification language is necessary as part of a legal review, and that there may be some other intellectual property out there that TSA is concerned about.

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But the Washington Declaration does not identify any of that other IP that might be out there that could potentially be infringed.

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And the Washington declaration was not provided until after SecurityPoint raised the issue about the indemnification in this litigation.

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So prior to 2011, there were about 40 airports that entered into the BIN advertising program.

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This was before any indemnification language was inserted.

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After that time, or I'm sorry, even before 2011, TSA began using the patented method at all of the other airports.

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There's about 400 airports in the country, 40 of them have MOUs.

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TSA began using the patented method at all of the other airports.

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In May of 2011, SecurityPoint filed the patent infringement language, and then after that, in August of 2012, TSA added the initial indemnification language.

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We objected to that in

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December of 2012, in January of 2013, by writing letters to TSA stating that the indemnification language does not make sense, it would preclude airports from entering into the MOUs with the airport operators.

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But then some did.

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Some airports did enter into the MOU.

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You know, I don't believe that's the case.

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In the government's brief, they have put forth the MOUs that are signed by Boston, two airports in Rochester, and Durango.

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There is no evidence at all that any of those airports actually entered in, or actually have done, have participated in the bin advertising program.

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So there are signed MOUs, but none of those airports have actually participated in the bin advertising program.

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What's the difference as far as

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the point you're raising, what's the difference between signing the MOU and implementing it, or getting a broker?

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It could be, Your Honor, that after they signed it, they realized that they would provide this indemnification, and then they could not participate in the bin advertising program.

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That's speculation.

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Well, the government, in this case, bears the burden of proof.

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So it's up to the government to provide evidence that its order was the result of reasoned decision making.

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Well, they answered into an MOU with the operator as a passport or whatever.

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It's not really within their reach to say why the operator didn't follow through, is it?

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Your Honor, it's up to the government to prove, they have the burden of proof, that the new language was the result of reasoned decision-making.

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And the MOUs that those few airports have signed... You seem to be ruling out the possibility that reasoned decision-making would not lead to this program being implemented lightly.

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And a reasoned decision might indeed lead to just that.

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No program at all, perhaps.

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That is perhaps a case, but the government still has the burden of showing that its insertion of the indemnification language was the result of reasoned decision-making.

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But all that goes not to whether the other airports ever sign on or whether it's practical to implement, but whether the reasons given for having it make sense, right?

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And they're protecting themselves, or so they say, from IP liability.

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That is what they say, Your Honor, but the reality is in the evidence that TSA has put forth, there is no evidence whatsoever that they actually conducted that sort of a review.

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There's an affidavit from the man who says he reviewed 50 procurement type contracts.

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And if that were the case, the government could have put forth other contracts where they inserted that indemnification language.

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But that doesn't follow.

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If they reviewed, we don't know what they put into other contracts or what changes they recommended.

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That's correct.

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But whether they made no other changes at all is irrelevant.

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If they went through a comprehensive review, examined 50 contracts, did whatever they thought was appropriate for each one, all we know about is yours.

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I mean, if it didn't make sense for them to protect themselves from intellectual property liability, you'd have a compelling case.

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But it obviously makes sense for anyone to do that.

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In certain situations, it might.

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And if that is what TSA actually did, they could have put forth additional evidence of that.

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The only evidence... It seems to me that all you're saying is it must go to your motive point.

[00:13:06] Speaker 01:
It does go to motive.

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And I think the evidence is clear.

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It seems that we allied it into motive from whether this was reasoned decision making.

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And I believe this is not reason decision-making, and this is clear retaliation against Security Point for filing the patent case.

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And I think when you have a situation where you have these emails from the TSA employee who was tasked with implementing and running the program who said we are not going to be pushed around by Security Point, I think that that we would submit.

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He's not the person of relevance here.

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Why is it not inherently rational once they've encountered a law case in which the validity of your patent has been upheld to make sure that the damages don't keep on accumulating?

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Well, what they have done here, this happened all after the fact.

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And so the only evidence that we have that this review was actually done is the affidavit of Mr. Washington, which does not provide any critical details.

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It doesn't indicate which contracts he reviewed.

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It doesn't indicate when.

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Why would we care which contracts he reviewed?

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Ain't the courts interested in that?

[00:14:18] Speaker 01:
Well, Your Honor, our contention is that what the government has done is they have put forth this affidavit to cover up their retaliation of Security Point for filing the patent case.

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If it were not in their self-interest to avoid further damages to you and possible damages to others unknown, that would make sense, but clearly it's in their interest not to accumulate damages and that's not retaliation, that's just prudence.

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But the retaliation occurred before any of this happened.

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So we have the emails from Mr. Drenth saying, and this is before we had a validity decision, saying that- But you were already in litigation, were you not?

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We were in litigation, yes.

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The point stands, then.

[00:15:01] Speaker 03:
It's not quite as-

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But if you've been sued, you've got a patent that could be upheld, why would I just go on accumulating potential damages?

[00:15:12] Speaker 01:
Well, if that were the case, Your Honor, there would never be a situation.

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The government could, any time a patent infringement case were asserted against the government... They could stop violating it.

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They could stop violating it.

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They could stop violating it, yes.

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It would make a lot of good sense, wouldn't it?

[00:15:28] Speaker 01:
Yes, it would, yeah.

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It's not retaliation to do that.

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It's good sense.

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But that's not what they did.

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They are continuing to violate the patent.

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The method is still being used at all of the other airports.

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So what we have here is... Well, pardon me.

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The ones that had MOUs before are still operating, is that what you're saying?

[00:15:46] Speaker 01:
It's operating everywhere.

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At the 40?

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At the 40, as well as at the 360 or so additional airports that do not have MOUs.

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So the government is continuing to infringe the patent.

[00:15:58] Speaker 03:
But they have contracts with those people, right?

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They do not.

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They're operating at 400 airports.

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Correct.

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Just doing it themselves.

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Doing it themselves.

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And they have no relation, no contract with the airport to do this.

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Not to use the method that is provided by SecurityPoint.

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There is no MOU in place at those 360 or so airports.

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Is there any contract with those airports that they just come in and do what they want to do?

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I believe that TSA just came in and began using the patented method without providing any compensation to SecurityPoint and without entering into MOUs with the airport operators.

[00:16:37] Speaker 03:
So when I've seen these TSA employees pick up a bunch of bins and move them, that was before this all occurred?

[00:16:46] Speaker 01:
Yeah, so what happened is in about 2008, TSA began using the patented method nationwide.

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So what you currently see is the method being used where the trays are returned on the carts.

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And TSA is using that method without providing any compensation to SecurityPoint.

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And under the MOU, SecurityPoint was getting at least some amount of compensation by providing the advertising.

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What TSA has done is TSA is using the method, providing no compensation to SecurityPoint and preventing SecurityPoint from providing advertising, getting revenue from that, because it's cut off the possibility that any additional airports could ever enter in to an MLU.

[00:17:28] Speaker 03:
So the question that we address to the government is, if you altered the prescribed form, the language, to avoid liability, then why are you continuing to accumulate potential liability?

[00:17:41] Speaker 01:
I think that's exactly the question.

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And Security Point's business is being decimated by the government's actions.

[00:17:47] Speaker 00:
So can I just ask you, in the ongoing litigation, is all of this in play with respect to the damages?

[00:17:55] Speaker 00:
All of the airports are in play with respect to damages, yes.

[00:17:57] Speaker 00:
So the 40 airports, whatever you said, that's going on without the agreement in place, that's all factoring into the calculation of liability?

[00:18:07] Speaker 01:
It is factoring in, during the periods of time that those airports had an MOU, there would be an implied license to use the method during that period of time, but the government would still be subject to damages during periods of time that the MOU was not in place.

[00:18:21] Speaker 03:
All right, we'll give you a couple… It was never in place in most of these airports.

[00:18:28] Speaker 01:
Never in place in most of the airports, yes.

[00:18:30] Speaker 03:
We'll give you a couple minutes to reply.

[00:18:32] Speaker 01:
Okay, thank you very much.

[00:18:48] Speaker 02:
May it please the Court?

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I'm John Capell from the Appellate Staff Civil Division, U.S.

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Department of Justice, and I'm representing the respondent Transportation Security Administration on this petition for review.

[00:19:01] Speaker 02:
At the outset, I don't have a great deal to add to our brief and to the colloquy between Judge Ginsburg and opposing counsel.

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I would emphasize that

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TSA complied fully with this court's remand order to engage in reasoned decision-making and to respond to the various contentions that Security Point made that this court suggested in its earlier decision warranted a response from TSA.

[00:19:37] Speaker 02:
The

[00:19:40] Speaker 00:
Can you address the retroactivity question that came up in the first argument?

[00:19:46] Speaker 02:
Well, yes.

[00:19:47] Speaker 02:
The changes made by the MOU were prospective in nature.

[00:19:54] Speaker 02:
They were not retroactive.

[00:19:59] Speaker 02:
This was simply a matter going forward for new airport operators that chose to enter into the program.

[00:20:14] Speaker 02:
It didn't affect the current participants in the program, the approximately 44.

[00:20:21] Speaker 00:
Does it affect the ongoing litigation?

[00:20:24] Speaker 00:
So in other words, I took the argument that was made earlier to be that the MOU could be read to have an impact going back on the subject of the ongoing patent litigation.

[00:20:35] Speaker 02:
I don't believe that it does, Your Honor.

[00:20:37] Speaker 02:
I believe that it was prospective only in order to essentially to

[00:20:42] Speaker 02:
to cut off, prospectively, the very type of problem that had been raised by the security point patent litigation.

[00:20:54] Speaker 00:
For those airports and brokers who chose to enter into the MOU.

[00:20:58] Speaker 00:
Excuse me?

[00:20:59] Speaker 00:
Prospectively with respect to those airports and brokers who chose to enter into the MOU.

[00:21:05] Speaker 02:
Right, which would be new ones.

[00:21:06] Speaker 02:
It would not be the ones that were already in the program.

[00:21:09] Speaker 02:
And there are about 44, I believe, and this is in the agency's decision, there are approximately 44 airports total out of more than 450 that participate in the program.

[00:21:27] Speaker 02:
security points is the broker in 40 or 41.

[00:21:32] Speaker 02:
I believe it was originally 41, but one San Diego has dropped out.

[00:21:37] Speaker 02:
And contrary to what the opposing counsel stated, there have been other brokers in this

[00:21:45] Speaker 02:
in the process – I believe at least three other brokers in the process since November of 2012.

[00:21:54] Speaker 02:
Again, that is also in TSA's decision.

[00:22:00] Speaker 02:
But more importantly, the – whether or not

[00:22:05] Speaker 02:
even brokers, others have entered the program.

[00:22:09] Speaker 02:
It is clear that four airport operators, including Boston Logan Airport, which is one of the country's largest, have entered into MOUs using the new language.

[00:22:26] Speaker 02:
And that, in and of itself, refutes SecurityPoint's argument that this is a poison pill.

[00:22:33] Speaker 02:
that would prevent airport authorities from entering into the program.

[00:22:40] Speaker 02:
So that is really a red herring, as is the other argument that TSA didn't factor, didn't consider the benefits and the costs of the changes to the MOU, because the TSA explicitly

[00:23:02] Speaker 02:
considered that with respect to the five airports that Security Point had identified as declining to enter into the new MOU, and the agency determined

[00:23:18] Speaker 02:
that given that it was – it does indeed operate already using the carts, bins, and trays, there really were no – there were no benefits because its only costs were marginal replacement costs for the – and SecurityPoint

[00:23:39] Speaker 02:
wanted the agency to basically compare those against the startup costs, the $435,000 that were mentioned with respect to the pilot program affecting 14 airports.

[00:23:56] Speaker 02:
And that was truly an apples and oranges comparison.

[00:24:04] Speaker 02:
Because TSA is already using the carts, bins, and trays system at all other airports, including the five airports that were identified by SecurityPoint as rejecting the new MOU, TSA

[00:24:23] Speaker 02:
would not incur significant financial benefit, and it weighed that against the prospect, the substantial prospect of further potential patent liability.

[00:24:38] Speaker 03:
Mr. Campbell, that's what I wanted to do, to get some clarification.

[00:24:43] Speaker 03:
Your justification for the changes

[00:24:45] Speaker 03:
or to protect the agency from additional IP liability.

[00:24:50] Speaker 03:
And yet, you're continuing to practice the patent at nearly 400 airports.

[00:24:56] Speaker 02:
That is true.

[00:24:58] Speaker 03:
Well, if you were trying to protect yourself from liability, I should think you would stop practicing the patent at the 90% of the airport.

[00:25:07] Speaker 02:
Well, of course, the TSA is contesting the patent litigation.

[00:25:12] Speaker 03:
But if you're saying we change the DMOU to avoid accumulating liability over here and meanwhile we're continuing to accumulate potential liability over there, then it makes hash of the explanation.

[00:25:26] Speaker 02:
Well, Your Honor, I respectfully disagree.

[00:25:29] Speaker 02:
The MOU is really is only focused on the relationship between the airport operator and TSA.

[00:25:36] Speaker 03:
It's 10% of the airports, maybe.

[00:25:41] Speaker 02:
But potentially, it is much more.

[00:25:43] Speaker 02:
And potentially, it's however many choose to enroll in the bin advertising program.

[00:25:53] Speaker 02:
Conceivably, it could affect all airports.

[00:25:56] Speaker 03:
It's just a matter of... And while all airports have not signed up, and even if they all did in the near future, from the time you redrafted the MOU to until such time as someone picks up the liability through an indemnification agreement, it's on you.

[00:26:14] Speaker 03:
If there's liability, you're bearing it.

[00:26:16] Speaker 03:
You're risking it.

[00:26:18] Speaker 02:
Well, that is correct.

[00:26:19] Speaker 03:
And yet you've come in and said that the whole reason for redrafting the MOU was to avoid infringement liability.

[00:26:26] Speaker 03:
It seemed like a very prudent step.

[00:26:29] Speaker 03:
And so one realizes that you're just sticking one finger in a dike that's already broken.

[00:26:34] Speaker 02:
Well, it's to avoid infringement liability in the BIN advertising program and as opposed to... But liability arises not from the BIN advertising program, but from the use of the carts.

[00:26:48] Speaker 02:
from the use of the system.

[00:26:53] Speaker 02:
That is true.

[00:26:58] Speaker 03:
So we have two choices here.

[00:26:59] Speaker 03:
Either the people who came up with the amendments are not very smart, or it's a pretext.

[00:27:08] Speaker 02:
Well, Your Honor, I certainly would

[00:27:15] Speaker 00:
Well, I thought I'm missing something.

[00:27:17] Speaker 00:
I thought your explanation was that I thought the government stance was that as to with respect to everything that's happened today, you don't think it's a problem, but that's ongoing in litigation with respect to stuff that's happening in the future.

[00:27:28] Speaker 00:
You're just taking out.

[00:27:29] Speaker 00:
You're just getting extra assurance that it won't be a problem in the future.

[00:27:32] Speaker 00:
It's not to the exclusion of contesting liability as with respect to everything that's already on the books today.

[00:27:38] Speaker 00:
That's correct.

[00:27:39] Speaker 00:
You're being extra careful going forward.

[00:27:41] Speaker 03:
Exactly, Your Honor.

[00:27:42] Speaker 03:
Except you're being extra careful only in the 40-some airports and the others you're just... You're rolling the dice.

[00:27:47] Speaker 00:
You're rolling the dice.

[00:27:49] Speaker 02:
Right.

[00:27:50] Speaker 02:
It's only in the bin advertising program.

[00:27:53] Speaker 02:
The agency, which of course is the focus of this litigation.

[00:28:02] Speaker 02:
There's no way that the agency can take steps to avoid liability with respect to the other airports, except by not using their system, because SecurityPoint continues to argue that that violates.

[00:28:20] Speaker 03:
So is the answer that the system is essential?

[00:28:26] Speaker 02:
Well, TSA obviously feels that the system is beneficial, that it works and it's an effective method.

[00:28:36] Speaker 03:
It might be somebody else's method.

[00:28:41] Speaker 03:
It's very peculiar.

[00:28:45] Speaker 03:
It may be that this is the sensible thing to do, but the explanation given for changing the MOU doesn't address, which is to say, prudence and avoiding liability, doesn't address the larger context in which you're potentially incurring liability.

[00:29:01] Speaker 02:
But it does address it completely with respect to the BIN advertising program.

[00:29:05] Speaker 02:
Yes, it does.

[00:29:07] Speaker 03:
So your answer is that you can't stop using the cards.

[00:29:12] Speaker 03:
You just have to take your chances.

[00:29:16] Speaker 02:
That is essentially the decision that TSA has made.

[00:29:19] Speaker 02:
Of course, TSA is challenging the validity of the patent and is appealing the adverse liability decision.

[00:29:27] Speaker 02:
TSA believes that it's an obvious method and therefore the patent is invalid.

[00:29:35] Speaker 03:
But you're hedging with regards to the 40 airport, any airports that enter into an MOU.

[00:29:41] Speaker 02:
Well, TSA obviously is trying to reduce its exposure with respect to the bin advertising program.

[00:29:52] Speaker 02:
Turning to the First Amendment retaliation claim, given the reasons that TSA has provided with respect to the APA claim,

[00:30:09] Speaker 02:
That also essentially takes care of the First Amendment violation claim.

[00:30:17] Speaker 02:
The dispute there is really over the standard, whether the pickering standard should apply in this context or whether it should just be a more general retaliation standard.

[00:30:30] Speaker 02:
But the government should win under either of those standards, which are very similar as we have

[00:30:36] Speaker 02:
pointed out in our brief.

[00:30:38] Speaker 02:
But with respect to pickering, the key point is that this really is not a matter of public concern.

[00:30:47] Speaker 02:
This is essentially a private dispute.

[00:30:52] Speaker 00:
I'm not quite sure I understand how pickering applies here, because I thought the whole predicate for pickering is that

[00:30:57] Speaker 00:
the government essentially acknowledges that it takes an action against a government employee because of speech, but then it says it has latitude to do that because it has to be able to manage the workplace.

[00:31:08] Speaker 00:
But here the argument that's being put forward with the government is that we didn't take an action because of speech.

[00:31:15] Speaker 00:
So it just seems like an odd

[00:31:18] Speaker 00:
odd effort to use pickering, because pickering presupposes that action was taken because of speech.

[00:31:25] Speaker 00:
And then the question is, well, even if that's true, it's still OK in some situations because the government gets to manage its employees.

[00:31:31] Speaker 00:
Whereas here we have a predicate dispute about whether this is a response to the speech in the first place, which seems like an odd context in which to apply pickering.

[00:31:41] Speaker 02:
Well, I think that the point is well taken, that the First Amendment argument really only comes into play if the government's explanation is rejected as arbitrary and capricious, because it's not really a...

[00:32:00] Speaker 02:
It does presuppose what you've suggested, that it was based on speech.

[00:32:11] Speaker 02:
The key point is that

[00:32:16] Speaker 02:
even if it were to be said to be based on speech, not only is it not a matter of public concern, but it's also there's no animus here.

[00:32:24] Speaker 02:
As the Court has emphasized, this is simply an effort on TSA's part to protect itself with respect to potential exposure to liability in the VIN advertising program.

[00:32:40] Speaker 02:
Given that, the notion that it's retaliation just simply does not fly.

[00:32:47] Speaker 02:
I believe that we've essentially covered the subject matter here.

[00:32:58] Speaker 02:
And if there are any further questions, rest on the briefs.

[00:33:04] Speaker 02:
I urge the court to deny the petition for review.

[00:33:07] Speaker 02:
Thank you.

[00:33:09] Speaker 02:
All right, why don't you take two minutes if you feel you need them.

[00:33:18] Speaker 01:
Just a few points that I would like to make briefly.

[00:33:21] Speaker 01:
I think the facts here are clear.

[00:33:23] Speaker 01:
SecurityPoint filed a patent infringement case against the government, and in response, the government retaliated by taking an action that decimated SecurityPoint's business.

[00:33:34] Speaker 01:
It prevented SecurityPoint from signing up any additional airports, and that evidence is uncontradicted.

[00:33:40] Speaker 01:
The government has put forth no evidence whatsoever that any airports have agreed to the language and actually gone into airports and provided the advertising, the bin advertising program

[00:33:54] Speaker 01:
after the indemnification language was inserted.

[00:33:58] Speaker 01:
With regard to the four airports, there is no evidence that any of those airports actually are participating in the BIN advertising program.

[00:34:06] Speaker 01:
And there is no evidence at all that any airport actually signed an MOU with the new language that TSA has inserted with this new indemnification option.

[00:34:18] Speaker 01:
I wanted to emphasize.

[00:34:20] Speaker 03:
It's supposed that everything you just said is not only true, but the court makes that the basis for its reasoning or its decision.

[00:34:34] Speaker 03:
Insofar as the result of the changes is for no airport to sign up.

[00:34:40] Speaker 03:
Not many have signed up before the change, but in any event, no additional airports sign up.

[00:34:46] Speaker 03:
It just, it means that your business model is not revenue from advertising, it's revenue from your patent.

[00:34:54] Speaker 01:
We would prefer that it be revenue from the patent, but we did have a business model that was working.

[00:34:59] Speaker 03:
We were in the process... But you'd prefer it be from the patent infringement.

[00:35:03] Speaker 03:
Well, we certainly hope that... Well, then you're in Fat City, right?

[00:35:06] Speaker 01:
If we prevail then, yes, but what has happened is the government has continued to infringe the patent and then taken, so the government is continuing to infringe the patent and then it has taken action with regard to the MOU that has prevented any airport operators from signing up and doing this.

[00:35:25] Speaker 01:
So now SecurityPoint has no possibility of revenue given the actions that was taken by the government.

[00:35:32] Speaker 03:
So your best case is you win on the patents.

[00:35:35] Speaker 03:
Your second best case is that the government gets out of the way and you have an ongoing advertising business.

[00:35:41] Speaker 01:
I think that's very good.

[00:35:42] Speaker 03:
Your worst case is that you lose on the patents.

[00:35:44] Speaker 01:
That's correct.

[00:35:45] Speaker 01:
But what we have here is a situation where the government has cut us off completely.

[00:35:49] Speaker 01:
So thank you very much.