[00:01:01] Speaker 00:
Okay, the next case is number 13-1665, a Justicam LLC against Newegg, Incorporated.

[00:01:10] Speaker 00:
Mr. Edmonds?

[00:01:13] Speaker 01:
May it please the court?

[00:01:15] Speaker 01:
I'm going to speak first as to a Justicam's appeal on the claim construction issue.

[00:01:21] Speaker 03:
If Newegg hadn't filed an appeal of an attorney's fee issue, could you have appealed the claim construction?

[00:01:28] Speaker 01:
I don't believe so.

[00:01:29] Speaker 03:
then why is it an appropriate appeal even if they have appealed it?

[00:01:33] Speaker 03:
Doesn't an appeal, whether it's a cross-appeal or not, have to have independent jurisdiction?

[00:01:39] Speaker 01:
As we see it, the cases that have been relied on have to do with voluntary dismissals, they have to do with other situations.

[00:01:48] Speaker 01:
This case... Which is what you have here, voluntary dismissal.

[00:01:52] Speaker 03:
This is not a case where you got a bad claim construction and you stipulate it to non-infringement

[00:01:58] Speaker 03:
preserve it for appeal.

[00:01:59] Speaker 01:
Ultimately in the case, the claim, the asserted claims were canceled.

[00:02:04] Speaker 01:
So there was, there was no case or controversy before the court as to those claim this fee was moot.

[00:02:10] Speaker 01:
And so it had to be dismissed.

[00:02:13] Speaker 03:
If it was moot there, how is it not moot here?

[00:02:16] Speaker 01:
Well, our point is that this is a situation that has not, we've seen no cases directly on point where one side, where there was a claim construction, then

[00:02:27] Speaker 01:
the party that prevailed in that claim construction has now appealed the district court's determination alleging that our infringement positions were meritless both before and after the claim construction.

[00:02:41] Speaker 01:
And based on that, we look to general principles of whether there's a case of controversy, whether this is moot.

[00:02:48] Speaker 03:
And what we see is the cases have- But you can argue about whether the district court was right in the claim construction

[00:02:55] Speaker 03:
for purposes of denying or granting attorney's fees without appealing?

[00:03:00] Speaker 01:
Well, I think that, but for the cross appeal, first of all, our position is that, as the district court found, that it's consistent with its claim construction.

[00:03:12] Speaker 01:
But our position is that if the court reversed the claim construction, then their 285 arguments would fall away.

[00:03:20] Speaker 02:
Yeah, but your position is not what's at issue.

[00:03:24] Speaker 02:
is you don't have a case or controversy to appeal.

[00:03:29] Speaker 02:
And I understand the court's comments on that.

[00:03:30] Speaker 02:
I don't understand even how you're standing up there, to be perfectly honest with you.

[00:03:34] Speaker 02:
If I understand it, you filed a new unopposed motion to dismiss your claims with prejudice, and Newegg's counterclaims without prejudice, which was granted, right?

[00:03:49] Speaker 02:
Correct.

[00:03:50] Speaker 02:
That's the end of your case.

[00:03:52] Speaker 02:
You may think you want to participate in their case, which is another question, but you don't have a case.

[00:04:01] Speaker 02:
Why do you think you have a case?

[00:04:03] Speaker 02:
How can you have a case if you dismissed it?

[00:04:08] Speaker 03:
What would the change in judgment be even if we agreed on the claim construction?

[00:04:14] Speaker 03:
There's no judgment for us to change.

[00:04:17] Speaker 01:
New Egg filed their notice of appeal first.

[00:04:19] Speaker 03:
They appealed the judgment on the theory that... It doesn't matter whether they filed first or you filed first or who filed first.

[00:04:25] Speaker 03:
You can only cross-appeal if you have a live case or controversy.

[00:04:29] Speaker 03:
Well, our... Your Honor, I understand... If you were already conceded without their appeal, you wouldn't be here.

[00:04:33] Speaker 01:
I have conceded.

[00:04:34] Speaker 01:
I want to be up front with the court.

[00:04:36] Speaker 01:
Our position as we've articulated is that this situation is one that the court has not been faced before where you have

[00:04:44] Speaker 01:
then appealing an adverse 285 ruling based upon the allegation that our infringement position was meritless, which we believe is an enduring case of controversy as to whether our infringement position was meritless.

[00:04:59] Speaker 03:
Which you can argue in the attorney fee's case.

[00:05:02] Speaker 03:
You can't argue that you have a case.

[00:05:05] Speaker 03:
You should be over there.

[00:05:08] Speaker 01:
You shouldn't be over here.

[00:05:10] Speaker 01:
I understand the court's comments.

[00:05:12] Speaker 03:
Our view is... Can I just comment?

[00:05:14] Speaker 03:
I mean, it's very close to filing a frivolous appeal to get another brief.

[00:05:18] Speaker 03:
I mean, it's very distressing to me that you filed an appeal for a case that you dismissed as moot.

[00:05:24] Speaker 01:
Well, that was not our intention to get another brief.

[00:05:26] Speaker 01:
What I'd say is, though, in the absence of a case, directly on point, when you have a 285, that we felt we had a duty to raise the issue with the court.

[00:05:34] Speaker 02:
You had to recognize that you don't have a case.

[00:05:38] Speaker 02:
when you started down this road.

[00:05:40] Speaker 02:
Didn't you recognize that?

[00:05:41] Speaker 01:
What we recognize is that there are cases that we've cited that talk about if there is a dispute between the parties, if there's a case or controversy.

[00:05:51] Speaker 01:
What I would prefer to do, because I hear the court loud and clear.

[00:05:54] Speaker 01:
What I'd prefer to do is focus on the other issues, which we'd like to have the court hear.

[00:06:01] Speaker 00:
If you're defending against the appeal on attorney's fees, then I think it would be appropriate

[00:06:07] Speaker 00:
for the other side to proceed first.

[00:06:11] Speaker 00:
And you can respond as appropriate.

[00:06:15] Speaker 01:
We defer that, Your Honor.

[00:06:16] Speaker 01:
Thank you.

[00:06:17] Speaker 00:
OK.

[00:06:18] Speaker 00:
Mr. Freckle.

[00:06:22] Speaker 04:
May it please the court.

[00:06:24] Speaker 04:
The Supreme Court in Optane Fitness told this court and district courts that courts may shift fees in cases that stand out from the rest.

[00:06:32] Speaker 04:
And the purpose behind Section 285 is to deter cases that should not have been brought in the first place, and to protect defendants from having to pay to defend against such cases.

[00:06:42] Speaker 02:
Who makes that decision, counsel?

[00:06:44] Speaker 04:
Well, the district court does in the first instance.

[00:06:46] Speaker 02:
Very broad discretion.

[00:06:48] Speaker 04:
It's an abusive discretion standard, Your Honor.

[00:06:50] Speaker 04:
But in Highmark, the Supreme Court said that it's necessarily abusive discretion, where the district court premises its case based on clearly erroneous

[00:07:00] Speaker 04:
facts or clearly erroneous laws.

[00:07:02] Speaker 04:
And that's what happened here, and that's why we think the district court should be reversed.

[00:07:08] Speaker 04:
And we'll get into those, I'll go right into the district court.

[00:07:11] Speaker 03:
I mean, since the district court, I mean, I think I have the facts right, the district court denied the motion before Octane, right?

[00:07:18] Speaker 03:
That's right, Your Honor.

[00:07:19] Speaker 03:
Why doesn't this just need to go back for a proper review under Octane and Highmark?

[00:07:25] Speaker 04:
Well, there are two reasons, Your Honor, why we think the district court is

[00:07:28] Speaker 03:
You want us to make the exceptional circumstances factual finding in the first instance.

[00:07:32] Speaker 04:
Right.

[00:07:33] Speaker 04:
And there are two reasons why.

[00:07:34] Speaker 04:
I think, first of all, this is a very easy to understand patent and accused product.

[00:07:40] Speaker 04:
But we don't do that.

[00:07:41] Speaker 03:
I mean, it seems you're asking for an awful lot.

[00:07:46] Speaker 03:
I don't understand why you're not just asking us to send this back and ask the district court to look at this under the right standard.

[00:07:52] Speaker 04:
But we did say in our brief, Your Honor, that at a minimum, this court should remand under octane fitness.

[00:07:57] Speaker 04:
But we think that that's just going to bring the case back to this court on the same record.

[00:08:01] Speaker 03:
Well, how do we know until the district court looks at it and makes the proper factual finding?

[00:08:05] Speaker 04:
Well, the other issue that's happened here, Your Honor, within the last couple of weeks, is the district court has announced its retirement three weeks from today.

[00:08:12] Speaker 04:
And so we're going to remand it to a court that's going to look at it, you know, to the different judges.

[00:08:16] Speaker 00:
Remand it at the end of the year, is that right?

[00:08:18] Speaker 00:
No, I think it's a... The official will remand it.

[00:08:19] Speaker 04:
I'm sorry, what, Your Honor?

[00:08:20] Speaker 00:
When they announce its retirement as of the end of

[00:08:23] Speaker 00:
2015, I don't think any sooner.

[00:08:25] Speaker 00:
Did I misread it?

[00:08:26] Speaker 04:
I thought it was at the end of April, Your Honor.

[00:08:28] Speaker 00:
All right, you may be right.

[00:08:30] Speaker 03:
But even if that's the case, it doesn't matter.

[00:08:33] Speaker 03:
There's still going to be a district court judge to remand this to who can be the fact finder.

[00:08:37] Speaker 03:
We're not fact finders.

[00:08:39] Speaker 02:
Indeed, counsel, wouldn't you, let's be candid for a minute, wouldn't you be better off if Leonard Davis had left?

[00:08:47] Speaker 02:
Because it's clear he's not going to give you a penny under any stance.

[00:08:52] Speaker 02:
He didn't like the way the case got litigated.

[00:08:55] Speaker 02:
Let's talk real life.

[00:08:58] Speaker 02:
He didn't like the way you litigate your case, and he isn't going to give you a penny.

[00:09:03] Speaker 02:
Now, it doesn't matter whether we send it back for Octane Fitness or we send it back for anything else.

[00:09:09] Speaker 02:
You're not going to get money from Leonard Davis as long as he's sitting there.

[00:09:14] Speaker 02:
So what do you want us to do?

[00:09:16] Speaker 02:
We're not going to give you the money.

[00:09:17] Speaker 02:
That's for clear.

[00:09:19] Speaker 04:
Your Honor, this court can still review the lower court's opinion for the clear errors that we pointed out.

[00:09:24] Speaker 04:
Now, in terms of the ultimate opinion, maybe this court is right, that maybe the district court has to do away.

[00:09:30] Speaker 03:
But even if we find clear error, we're just going to send it back.

[00:09:33] Speaker 03:
We're not going to make a new factual finding.

[00:09:36] Speaker 03:
So why would we go to the problem of making a clear error determination when it really just needs a new factual determination?

[00:09:43] Speaker 04:
Well, I mean, that's what the court just did in the Biax versus NVIDIA case.

[00:09:48] Speaker 04:
last week was it decided that there was a clear error from the district court and rather than sending it back for reweighing, it just reversed the finding.

[00:09:57] Speaker 04:
We think that that can happen here under the record here.

[00:10:01] Speaker 04:
I'd like to go into the clear error here.

[00:10:05] Speaker 04:
The district court on page A6 of the record talking about the infringement case promised its

[00:10:13] Speaker 04:
on, quote, the assumption that, quote, the ball and socket joint of the Nuhig product truly restricts the range of movement such that it cannot rotate about multiple axes.

[00:10:25] Speaker 04:
And that just ignored the facts in the record.

[00:10:27] Speaker 04:
Nuhig had shown that not only its own expert showed that its camera could rotate about multiple axes, but it quoted a Justicam's expert who also admitted, this is a page A284.143 and A284.165 of the record,

[00:10:42] Speaker 04:
that the new egg camera could rotate freely about two axes and in a limited motion in a third axis.

[00:10:51] Speaker 04:
So right there, based on that, if this court sends back under octane fitness, we're sending it back with the district court already having premised its opinion on a clearly erroneous finding of fact that's contradicted by the record.

[00:11:08] Speaker 04:
Beyond that, we think that we showed

[00:11:11] Speaker 04:
evidence in the record that a justicam used a pattern and practice of seeking nuisance value fees well under the cost of litigation, which the district court waved away, holding on page 8-7 of the record that this was a, quote, settlement-driven case.

[00:11:27] Speaker 04:
Settlement-driven case that the district court held was appropriately low value in terms of the settlement amount due to the cost of goods.

[00:11:36] Speaker 04:
But whether a case is meritless should not depend on whether the sales prices of the products at issue are high or low.

[00:11:42] Speaker 02:
What is it you want us to do, counsel?

[00:11:44] Speaker 04:
Well, we think that based on this record, this court could reverse and find the case exceptional as one that stands out from the rest.

[00:11:50] Speaker 04:
Okay.

[00:11:52] Speaker 04:
The court in Eonet, of course, it was a different procedural posture.

[00:11:57] Speaker 04:
The court there had found under Section 285 it to be an exceptional case, and this court affirmed.

[00:12:04] Speaker 04:
But we really knew it has a hard time distinguishing between the facts of the EANET and the facts of this case.

[00:12:10] Speaker 04:
They're both cases involved, frivolous assertions on the merits of infringement and validity, and combined with nuisance values fees that were set to- Why do you think the District Court exercised its discretion not to give you the attorney's fees?

[00:12:27] Speaker 04:
Well, we think the District Court just didn't look at, very carefully look at the facts in the record.

[00:12:32] Speaker 04:
And this is evident.

[00:12:34] Speaker 04:
He wasn't familiar with the record.

[00:12:38] Speaker 04:
May not have spent the time necessary to get familiar with the record.

[00:12:41] Speaker 04:
If you recall, a justicam didn't let the district court see the merits of the claim construction because a justicam abandoned his case, giving Newegg a superset covenant not to sue.

[00:12:52] Speaker 04:
Newegg couldn't prevail on the merits on invalidity or non-infringement, which we think Newegg would have done.

[00:12:58] Speaker 04:
All of that evidence had to be put in on the attorney's fees motion.

[00:13:04] Speaker 04:
even though AdjustiCAM, as is mentioned, canceled the claims not before dismissing Newegg, but rather after dismissing Newegg.

[00:13:14] Speaker 04:
But the reason why AdjustiCAM canceled the claims was because the claims were invalid in light of a reference that was very similar to the patent.

[00:13:22] Speaker 04:
The district court said none of this and said that, in a single line, that Newegg failed to prove that AdjustiCAM's validity case was baseless.

[00:13:31] Speaker 04:
We think that this court

[00:13:33] Speaker 04:
can look at that and see an abuse of discretion here, rather than send it back and have it come back up to this court and probably what's going to be the same record.

[00:13:46] Speaker 04:
If it would indulge me, Your Honors, I'd like to just point out that on page A1282 and A1283 of the record, Newegg showed that what a justicam was really doing was coming up with low value, rounded lump sum numbers

[00:14:00] Speaker 04:
again, to dissuade defendants from litigating the case.

[00:14:04] Speaker 04:
They tried to justify those licenses as being at $1.25 to $1.50, but the range of actual rates as calculated by Newegg's expert was from a dime to $160.

[00:14:15] Speaker 04:
And that's exactly what the fact pattern in EonNet was.

[00:14:19] Speaker 00:
In EonNet, they were... You're not arguing that the payments that they were asking of Newegg was out of line with what they've been

[00:14:29] Speaker 00:
settling in, settling with others for your position, as I understand it, is that there was a point at which they should not have pursued your client and that they went well beyond that point.

[00:14:47] Speaker 04:
Right.

[00:14:47] Speaker 04:
Well, Your Honor, we think that this case, obviously, we think this case shouldn't have been brought in the first place.

[00:14:52] Speaker 04:
But beyond that, at the very beginning of the case, Newegg disclosed his damages figures to adjust the CAM.

[00:14:57] Speaker 04:
and showed that they had $100,000 in sales total of the accused product.

[00:15:01] Speaker 04:
And the initial demand was $75,000.

[00:15:03] Speaker 04:
Again, you can't litigate a case for $75,000.

[00:15:06] Speaker 04:
That's far below the cost of litigation.

[00:15:09] Speaker 04:
But it's three quarters of New Egg's revenue from the accused product.

[00:15:13] Speaker 04:
The settlement demands until the very end were completely out of line with revenue.

[00:15:20] Speaker 04:
And even the figures that counsel pointed to in the brief at the very end

[00:15:24] Speaker 04:
were still way out of line with the remaining revenue that was at stake.

[00:15:30] Speaker 04:
Justice Kemp saw from the very beginning of this case that if they went to trial, they weren't going to recover more than $10,000, $20,000 at the most.

[00:15:38] Speaker 04:
Yet, they persisted in litigating this case against Newegg, and after Newegg prevailed in claims instruction.

[00:15:45] Speaker 04:
At that point, the district court, the magistrate judge, as affirmed by the district court, said that the patent clearly shows

[00:15:53] Speaker 04:
a camera rotating relative to a hinge member around a single axis of rotation, just as if I'm turning my head now to look at the panel.

[00:16:02] Speaker 04:
It's one axis of rotation.

[00:16:04] Speaker 04:
New Egg's camera could rotate in multiple axis of rotation.

[00:16:07] Speaker 04:
After that claim construction, Justice Kim should have done what Your Honor has just suggested.

[00:16:11] Speaker 04:
They should have dismissed this case and appealed the claim construction issue to this court.

[00:16:16] Speaker 04:
It didn't do that.

[00:16:17] Speaker 04:
It perpetuated the case, finding an expert who ignored the record

[00:16:21] Speaker 04:
and said that, well, when you're rotating it one way, you're not rotating it the other way, and then when you're rotating it, and vice versa.

[00:16:28] Speaker 04:
And based on that, it's really functionally the same as a single axis of rotation.

[00:16:32] Speaker 04:
Of course, as soon as he was deposed, it all went out the window, and he admitted that the New Egg camera could rotate freely in multiple axes of rotation.

[00:16:39] Speaker 04:
That's the sort of evidence the New Egg put forth that the district court ignored.

[00:16:43] Speaker 00:
At that stage, did they know that yours was a ball and socket mounting?

[00:16:48] Speaker 04:
Yes, Your Honor.

[00:16:49] Speaker 04:
First of all, that was very clear from the very beginning.

[00:16:51] Speaker 04:
I think it's shown in pages, I think it's pages nine and 10 of our brief, or maybe it's page 12 of our brief.

[00:16:55] Speaker 04:
The New Egg or Q's product, you could just see them that they're mounted with a ball and socket.

[00:17:01] Speaker 04:
Anyone can order a camera, a New Egg camera, and, you know, pre-filing, which of course is their duty to do, and investigate it.

[00:17:09] Speaker 04:
And there's nothing hidden about that, the ball and socket joint.

[00:17:11] Speaker 04:
It was very clear.

[00:17:12] Speaker 04:
If there are no other questions, Your Honor, I'll save the rest of my time for my rebuttal.

[00:17:16] Speaker 00:
Okay.

[00:17:17] Speaker 00:
Thank you, Mr. Frankel.

[00:17:20] Speaker 00:
Mr. Edmonds, I think a rebuttal on this appeal is appropriate.

[00:17:24] Speaker 01:
Yes, Your Honor.

[00:17:26] Speaker 01:
The starting point for the court to review are the factual findings by the district court.

[00:17:33] Speaker 01:
Those are reviewed for clear error.

[00:17:35] Speaker 01:
No clear error has been shown.

[00:17:37] Speaker 01:
No abuse of discretion has been shown.

[00:17:40] Speaker 01:
The Octane case that has been cited has made it clear

[00:17:45] Speaker 01:
to this court that it needs to show substantial deference to district courts and to the factual findings of those district courts.

[00:17:52] Speaker 01:
The district court that presided over this case had the best knowledge of its claim construction, the implications of that claim construction, and New Egg had a full and fair chance to litigate these issues before the Supreme Court.

[00:18:08] Speaker 03:
But it wasn't applying the proper standard.

[00:18:10] Speaker 03:
The district court wasn't.

[00:18:12] Speaker 03:
I mean, the district court was applying our standard, which the Supreme Court reversed.

[00:18:16] Speaker 03:
So at a minimum, doesn't this case have to go back for redetermination under the proper standard?

[00:18:22] Speaker 01:
I appreciate that this case may be remanded.

[00:18:25] Speaker 01:
I've seen other cases that have fallen in this octane gap that have been remanded.

[00:18:29] Speaker 01:
I guess our position is that Newegg is the one who's appealed this.

[00:18:34] Speaker 01:
They took the position in their opening brief that

[00:18:38] Speaker 01:
This just needs to be reversed.

[00:18:39] Speaker 01:
They didn't request a remand.

[00:18:40] Speaker 01:
Fair enough.

[00:18:41] Speaker 01:
In their reply brief, when we pointed out they'd not requested a remand, they came back and said, well, maybe you should remand it.

[00:18:47] Speaker 01:
But our view would be that they didn't request a remand in their opening brief and that they should be stuck with the standard that it was applied under.

[00:18:54] Speaker 01:
If this court sees that differently, then you would need to remand it.

[00:18:57] Speaker 01:
Our view is also that, based on this factual record, that you could affirm it without remand.

[00:19:04] Speaker 00:
So as I understand your position to put a harsh spin on it, if a plaintiff partway through the case observes that things are going against him, clearly going against him, but the case has proceeded a certain way and deposition experts and so on, there have been expenditures in defense.

[00:19:30] Speaker 00:
But if the plaintiff decides to withdraw it,

[00:19:33] Speaker 00:
at that stage to agree to withdraw with prejudice that satisfies the other side who really can't insist that you go forward.

[00:19:41] Speaker 00:
There never would be attorneys fees because there's been no judgment by the court that you might lose or would lose or that the person who withdraws has experienced setbacks.

[00:20:00] Speaker 01:
No, we're not taking that position.

[00:20:01] Speaker 00:
I mean, New Age had- That's not what you're doing, but that's not your argument.

[00:20:04] Speaker 01:
That's not our argument.

[00:20:05] Speaker 01:
No, because they had every opportunity to show their position to the district court.

[00:20:11] Speaker 01:
As counsel spoke, these are relatively straightforward devices.

[00:20:17] Speaker 01:
Their arguments, besides arguments, are relatively straightforward.

[00:20:20] Speaker 01:
The district court found their arguments to be meritless.

[00:20:22] Speaker 01:
There was no need to have a trial on the merits.

[00:20:24] Speaker 01:
I just point out that we disagree with the characterization of how this case ended.

[00:20:27] Speaker 01:
I think the record is clear.

[00:20:29] Speaker 01:
including supported by sworn declarations, that what happened here is that New Egg, as the case went on, New Egg suppliers settled out.

[00:20:36] Speaker 01:
And New Egg damages, as the court may recall, there's no markings.

[00:20:41] Speaker 01:
There are no pre-suit damages.

[00:20:42] Speaker 01:
We're just talking about pre-suit damages.

[00:20:45] Speaker 01:
Two years into the case, the damage against New Egg were less than they were a year into the case.

[00:20:50] Speaker 01:
And they were down to basically one webcam, which was the Roseville webcam.

[00:20:55] Speaker 01:
And that's because

[00:20:56] Speaker 01:
eight or so different suppliers had settled out.

[00:20:58] Speaker 01:
And then finally, HP and Creative settled out.

[00:21:01] Speaker 01:
There was simply, New Egg's problem had been resolved by its suppliers.

[00:21:05] Speaker 01:
And the plaintiff was faced with a case in which one defendant, Sakhar, was clearly writing coattails.

[00:21:12] Speaker 01:
They haven't even showed up for argument as the court is aware.

[00:21:14] Speaker 01:
They copied New Egg's opening brief.

[00:21:16] Speaker 01:
They've been writing their coattails the entire case.

[00:21:18] Speaker 01:
Sakhar did not designate a damages expert.

[00:21:21] Speaker 01:
And we wanted to go to trial against the

[00:21:24] Speaker 01:
party that did not have a damages expert that was basically writing coattails and felt that the prudent thing to do was to dismiss against Newegg so we could focus on Sikhar for trial.

[00:21:34] Speaker 01:
That's why Newegg was dismissed, not because the case was weak.

[00:21:37] Speaker 02:
If I understood Mr. Frankel correctly, he's asking us to apply the substantive law, whether it's Brooks or whether it's Octane Fitness, and give him an award.

[00:21:49] Speaker 02:
Is it your view that we should apply the same

[00:21:53] Speaker 02:
Brooks, Octane Fitness, whichever we think is the right standard, and deny the award.

[00:22:00] Speaker 02:
You're both at least arguing that we have authority to decide this case without sending it back on a remand.

[00:22:08] Speaker 01:
Our view is that you have the authority to affirm this case without sending it back for remand because the factual findings in the district court support an affirmance under either Brooks or Octane.

[00:22:20] Speaker 01:
Our view is not that

[00:22:22] Speaker 01:
you could go back in and re-weigh the facts and ignore the district court's factual findings and reverse.

[00:22:31] Speaker 01:
If you felt that the district court erred, then our view is you'd be obliged to remand it to the district court.

[00:22:38] Speaker 01:
Or whether you felt they erred or whether you just felt that the district court needed to weigh it under a different standard, you'd be required to remand it.

[00:22:45] Speaker 01:
But our view is not that you could reverse the district court without remanding no.

[00:22:51] Speaker 01:
I also want to point out Judge Newman's comment about where the case goes bad.

[00:22:55] Speaker 01:
I think the record is also clear that a Justicam was ready, willing, and able to take its case to trial against the car and on forward all the way up to experts, through pre-trial order, everything.

[00:23:07] Speaker 01:
Ultimately, what happened was the claims were canceled in reexamination.

[00:23:10] Speaker 01:
After two years of reexamination, the claims were canceled and the case was over at that point.

[00:23:14] Speaker 01:
A plaintiff, the only reasonable thing a plaintiff can do is dismiss the case at that point.

[00:23:19] Speaker 01:
There's nothing unreasonable there.

[00:23:21] Speaker 01:
With respect to the prior ARC, we say that the PTO misunderstood the Irifuni reference.

[00:23:30] Speaker 01:
We respectfully disagree with the PTO's determination, but by the time it would have been appealed, the patent would have largely been exhausted, so we just simply had to accept it and take the claims that we could get.

[00:23:40] Speaker 01:
As far as their argument with Irifuni, what I ask you to look at Irifuni is, if Irifuni has

[00:23:51] Speaker 01:
a member that just slides through a hole.

[00:23:53] Speaker 01:
It's not attached at all.

[00:23:55] Speaker 01:
There are no threadings in that hole.

[00:23:59] Speaker 01:
The only way to hold that in place is to screw it from the bottom and screw it from the top.

[00:24:04] Speaker 01:
And the view we took during our examination was that it's not attached because if you clamp it down, then it's not rotatively attached.

[00:24:12] Speaker 01:
If you clamp it down, it's not rotatable.

[00:24:13] Speaker 01:
If you don't clamp it down, it's not attached because it just freely slides through.

[00:24:17] Speaker 00:
And the district... It's still got a limited degree of freedom.

[00:24:21] Speaker 01:
This is with the Irvine reference.

[00:24:24] Speaker 01:
Yes, we're not arguing with degrees of freedom with Irvine.

[00:24:26] Speaker 01:
We're arguing whether it's the attached part of the rotatively attached and whether it can be attached and rotatively attached at the same time.

[00:24:32] Speaker 01:
As the district court found the argument was reasonable.

[00:24:35] Speaker 01:
I point out in the reexamination, there were originally four references.

[00:24:39] Speaker 01:
Three of them were overcome.

[00:24:40] Speaker 01:
So over two years.

[00:24:42] Speaker 01:
And the patent office isn't always correct.

[00:24:45] Speaker 01:
And it was reasonable in rebutting that.

[00:24:49] Speaker 01:
With respect to the infringement,

[00:24:51] Speaker 01:
Council has, our new egg has plus comments from our expert out of context.

[00:24:58] Speaker 01:
District court heard, was privy to all the evidence from the experts and our experts testimony, our experts report and testimony were clear that when, because this restricted joint, it's not a ball and socket joint, it's a restricted ball and socket joint as depicted in our brief.

[00:25:15] Speaker 01:
Because it's a restricted joint, you have two functionally independent joints and because of that,

[00:25:20] Speaker 01:
At any configuration, there's a single axis rotation at a vector from the hinge member.

[00:25:27] Speaker 01:
And that's what our expert defined is correct.

[00:25:32] Speaker 01:
And the district court, who had the best knowledge of its claim construction ruling, found that to be in accord with the claim construction ruling and found it to be reasonable.

[00:25:42] Speaker 01:
And that's why we took issue with the claim construction ruling primarily, because we believe that New Egg has latched on to a

[00:25:48] Speaker 01:
a word in there, limited and ignored the rest of the claim construction ruling, which is largely just a restatement of the claim language and saying that it's plain meaning.

[00:25:57] Speaker 01:
But there has been no showing that our claim constructions, that our infringement positions were erroneous.

[00:26:03] Speaker 01:
Certainly no showing that they were clearly erroneous because the district court had ample foundation to define those to be reasonable based upon the expert, the totality expert testimony that was provided.

[00:26:18] Speaker 01:
With respect to the settlements, again, the conjecture about the settlements is just inaccurate.

[00:26:26] Speaker 01:
The settlements were, in this case, relatively small.

[00:26:29] Speaker 01:
They ranged from $225,000 to $15,000 because there just weren't that many webcams at issue in the case, and because there were no past damages.

[00:26:40] Speaker 01:
The evidence is clear, unrebutted, that

[00:26:44] Speaker 01:
The settlement metric of $1.25 to $1.50 per webcam was established before the case was filed by the predecessor in interest, that there's no suggestion that JustiCAM was unreasonable in following that metric.

[00:26:58] Speaker 01:
And the evidence is unrebutted that a JustiCAM, when it had settlement discussions with the defendant, that was the metric that it used as its benchmark for settlement.

[00:27:06] Speaker 01:
And in fact, Newegg took issue with that we'd offered to settle for $51,000 when they had $17,000 of past damages

[00:27:14] Speaker 01:
And as we showed, if they wanted a license throughout the tenancy of the patent, it was mathematically irrefutable that we'd mathematically taken that.

[00:27:25] Speaker 01:
And they seem to take the position that we've asked for too much because the settlement you've offered has in it a license going forward, when of course we know any defendant that settles is going to want a license going forward.

[00:27:38] Speaker 01:
There's just simply been no showing that

[00:27:41] Speaker 01:
The district court clearly aired in any respect the district court's findings were all appropriate because they're supported by the record, including sworn testimony by a Justicam's experts, both damages and infringement, also by the sworn testimony of a Justicam's 30B6 witness.

[00:27:57] Speaker 01:
And there just simply was no misconduct here.

[00:28:00] Speaker 01:
The district courts argue that the district court's findings should be affirmed.

[00:28:03] Speaker 00:
I think we have the argument.

[00:28:04] Speaker 00:
Thank you.

[00:28:06] Speaker 00:
Mr. Franco.

[00:28:09] Speaker 04:
Again, we heard of Justicam not dispute that the accused products could rotate around multiple axes, but rather said rotate around a single axis of rotation at a vector.

[00:28:22] Speaker 04:
Here, again, a Justicam's expert admitted that the accused products could be rotated around multiple axes.

[00:28:29] Speaker 04:
A Justicam in the district court, rather, did not see that, and that's a clear error.

[00:28:35] Speaker 04:
And while this case

[00:28:37] Speaker 04:
can and perhaps should be remanded to the district court, I think the right thing to do here is to at least look at the factual errors that Newick is raising.

[00:28:49] Speaker 04:
Because if the court could at least point it out, because that'll make the decision below a lot streamlined if the court can review those errors now.

[00:28:57] Speaker 04:
I don't think either side has said that this court can't review those findings.

[00:29:02] Speaker 04:
And one of the reasons for it is that the attorney sees it play an important role.

[00:29:07] Speaker 04:
Patent litigation is very expensive and companies that are forced to spend money to combat baseless claims are not spending money on developing new products or in their customers and employees.

[00:29:18] Speaker 04:
And just as they defended an EON that had the right to challenge that abusive patent assertion for what it was, so does Newegg here because otherwise these kinds of claims would remain unchallenged.

[00:29:32] Speaker 04:
Companies like Newegg shouldn't be forced to set

[00:29:34] Speaker 04:
just because, as the district court put it, it's a settlement-driven case.

[00:29:38] Speaker 04:
And we think here the district court was so focused on the fact that there are so many other settlements that lost track of the fact that New Egg had a right to stand up to frivolous assertions.

[00:29:48] Speaker 04:
And, you know, Justice Kam points out that the standard review in Highmark is abuse of discretion, but that doesn't mean that this court has to accept whatever the district court says, as Justice Kam appears to advocate.

[00:30:00] Speaker 04:
You know, Octane Fitness and Highmark, in combination with each other, need to mean something.

[00:30:05] Speaker 04:
If this court applies Highmark in the way AdjustaCAM contends it should be applied, octane fitness will mean nothing.

[00:30:11] Speaker 04:
Here, AdjustaCAM's pattern and practice of arbitrary approach to licensing, not tied to revenue, a number far below the cost of litigation, combined with unsustainable infringement ability theories, is precisely what led this court at EINET to declare that case exceptional and should be the basis for this court reversing the district court here.

[00:30:30] Speaker 04:
And the problem is, and one of the reasons why Newegg is pushing attorney fees in this case, is that there are too many other cases like this one.

[00:30:38] Speaker 04:
Massive patent litigation against dozens of defendants with minimal settlement amounts demanded that are flimsy at best on the merits.

[00:30:46] Speaker 04:
And it's unfortunate that this kind of case has become the rule and not the exception.

[00:30:50] Speaker 04:
And this court may not see many of those cases because most of the time, defendants will take the $25,000 settlement number and not

[00:30:58] Speaker 04:
goes through the whole process of trying to get attorney's fees.

[00:31:01] Speaker 04:
But courts cannot be immune to baseless litigation just because it's so prevalent.

[00:31:06] Speaker 04:
The commonality of a wrongful act cannot be unexceptional.

[00:31:11] Speaker 04:
By reversing the district court here, or at least giving the district court guidance as to where it committed factual error and how it should apply octane fitness, this court will send a signal that cases like the Justican's should not be brought to begin with, or, if brought, should be voluntarily dismissed at an early stage

[00:31:27] Speaker 04:
when it's clear that there is no case and not perpetuated to increase costs on both the improperly alleged infringers and the judicial system.

[00:31:41] Speaker 00:
Thank you.