[00:01:13] Speaker 01: The next case is Biax Corporation versus NVIDIA and Sony Computer, 2013, 1649, 53, and 54. [00:01:26] Speaker 01: Before we begin, Judge Dyke has some questions concerning confidentiality. [00:01:34] Speaker 02: In reading both of these briefs, it struck me that there are improper confidentiality markings in both of them. [00:01:41] Speaker 02: And if you look at the blu-ray, for example, on page 6 in the middle, there's a reference to the report of Dr. Davidson and the whole paragraph is marked confidential. [00:01:56] Speaker 02: What is the basis for the confidentiality markings in here? [00:02:03] Speaker 07: Your Honor, are you interested in the question to the plan? [00:02:07] Speaker 07: Your Honor, to our understanding, the protective order prevents any discussion or revelation of the expert witness reports in this case to anyone except attorneys only. [00:02:22] Speaker 02: Because you requested that. [00:02:23] Speaker 07: We did not request that, Your Honor. [00:02:26] Speaker 02: Who did? [00:02:27] Speaker 07: The defendants requested that over the plaintiff's objection and got that order. [00:02:33] Speaker 02: All right. [00:02:33] Speaker 02: Well, I would suggest to you that it would be useful if you sat down and tried to remove [00:02:41] Speaker 02: the confidentiality markings in these briefs. [00:02:43] Speaker 02: Even the key expert testimony here is marked as confidential and there doesn't seem to be any basis for marking that based on the usual standards for confidentiality. [00:02:54] Speaker 02: So rather than take more time with this, I suggest that you get together and see if you can remove the confidentiality markings. [00:03:06] Speaker 05: So we take the court's point here very seriously. [00:03:08] Speaker 05: You'll notice in the merits appeal, our documents are completely public. [00:03:13] Speaker 05: Here, the only thing in our brief that we've designated as confidential are quotations from sealed documents below, confidential technical information. [00:03:24] Speaker 05: So we only redacted a very few things in our brief. [00:03:27] Speaker 02: You redacted legal argument. [00:03:30] Speaker 02: including the key expert testimony, which we're going to be discussing this morning. [00:03:35] Speaker 02: I don't understand the basis for that. [00:03:39] Speaker 02: The basic infringement theory, which is relevant to the attorney's fees issue, is marked as confidential. [00:03:46] Speaker 02: How can we possibly discuss this here in the briefs without being able to reference the materials involved? [00:04:00] Speaker 02: repeat my suggestion get together and see if you can eliminate these markings and file a new set of briefs. [00:04:07] Speaker 02: But I don't mean to take any more time. [00:04:11] Speaker 01: We have a complicated argument this morning. [00:04:13] Speaker 01: At least four lawyers and a cross-appeal. [00:04:18] Speaker 01: Let's do our best to [00:04:20] Speaker 01: keep it straight. [00:04:23] Speaker 01: By-axis repellent and we'll hear from Mr. Ansager first. [00:04:37] Speaker 07: Your honor, may it please the court. [00:04:38] Speaker 07: Good morning. [00:04:39] Speaker 07: I'm Christian Ansager on behalf of By-Hatch Corporation repellent here. [00:04:43] Speaker 07: Your honors, the court below committed clear error when it awarded fees against BIOX based on its holding that its claim construction orders unambiguously precluded BIOX's arguments. [00:04:56] Speaker 02: BIOX had argued... I don't think that's quite right. [00:04:58] Speaker 02: I think it's a combination of two things. [00:05:01] Speaker 02: It says claim construction order precluded one of the arguments and that the expert testimony by your own expert precluded the other. [00:05:11] Speaker 07: Well, Your Honor, I think it's exactly the same thing. [00:05:13] Speaker 07: It's exactly the same thing. [00:05:14] Speaker 07: In other words, what the district court held was that the expert simply ignored the claim construction orders and testified that, in fact, in a multiple processor device, essentially what the expert said, the court selectively quotes the expert. [00:05:33] Speaker 02: But the expert assessment is based on the question of what you mean by computer, whether it's the whole chip or whether the individual shaders are treated as separate processes. [00:05:44] Speaker 02: Correct. [00:05:45] Speaker 02: And I don't understand that the district court didn't construe the word computer in the claim. [00:05:50] Speaker 02: And I don't understand how his claim construction addresses this particular issue. [00:05:56] Speaker 07: It didn't address that particular issue. [00:05:57] Speaker 07: That's, in fact, part of our point. [00:06:00] Speaker 07: Your Honor, Bayek's argument was really quite simple. [00:06:04] Speaker 07: The question that was left open at claims construction, you had two different kinds of potential devices here. [00:06:14] Speaker 07: A single processor device, which access multiple condition code registers. [00:06:19] Speaker 07: That's what claim one of the 628 patent covers. [00:06:21] Speaker 07: And I'm going to talk just in the terms of the 628 patent to avoid confusion. [00:06:26] Speaker 07: The 313 patent is the same. [00:06:29] Speaker 07: It just uses a somewhat different construction. [00:06:33] Speaker 07: Claim one, according to the district court, absolutely, validly reads on a single processor device. [00:06:41] Speaker 07: Other claims in the 628 patent read on multiple processor devices. [00:06:47] Speaker 07: What the court said, it claims construction was in the event of a multiple processor device, the processors all had to share the condition code registers. [00:06:59] Speaker 07: That's all it says. [00:07:00] Speaker 03: Because other language in those other claims required that. [00:07:04] Speaker 07: Because other language and the other claims require that. [00:07:09] Speaker 07: The question that was left open here was, when you have a set of single processor devices, each with its own condition code registers, each of which meets the stipulated definition of computer, which is the language of claim one of the patent, when do you no longer have a collection [00:07:31] Speaker 07: of single processor devices, each of which is separately accusable as violating claim one, and instead have a single multiple processor device. [00:07:44] Speaker 07: The district court never decides that scope issue until its summary judgment order. [00:07:50] Speaker 07: Even in the summary judgment order, however, it does so summarily. [00:07:54] Speaker 07: There's no explanation of how the court all of a sudden jumps [00:07:58] Speaker 07: from the device that was specifically accused by Biax, which was each individual shader, to the idea that the chip was the accused device. [00:08:09] Speaker 07: And since the chip had multiple processors, you now didn't meet the claim limitation for, as we call it, shared by all. [00:08:19] Speaker 02: Yeah, but I think what he was doing there was saying that the expert testimony [00:08:25] Speaker 02: precluded that argument that under the claim construction that you lost, no? [00:08:35] Speaker 07: No, that is actually not what the district court says. [00:08:38] Speaker 07: If you read the quote, the testimony of the expert that was quoted, [00:08:44] Speaker 07: What it says was... No, no, I understand that. [00:08:47] Speaker 02: But I'm just telling you what I understand the district court to have ruled. [00:08:51] Speaker 02: And the question is whether that ruling is sustainable based on what the testimony actually was. [00:08:56] Speaker 02: Because I understand that his ruling was the reason that this is objectively baseless is that your own expert admitted that there was no infringement. [00:09:06] Speaker 07: That's correct. [00:09:07] Speaker 07: And the expert did not so admit. [00:09:09] Speaker 07: That's the point. [00:09:10] Speaker 07: The expert admitted that in a hypothetical [00:09:13] Speaker 07: that hypothesized a multiple processor device, then shared by all was a requirement. [00:09:20] Speaker 07: But he said there was no requirement here because a shader was a single processor device [00:09:28] Speaker 07: that met all of the claim limitations of claim one and the definition of computer. [00:09:33] Speaker 03: Let me ask this question. [00:09:37] Speaker 03: Put aside what you have just said and assume for purposes of this question that I'm not going to contest back of what the district court said. [00:09:45] Speaker 03: Tell me why the exceptional case finding could not rest [00:09:53] Speaker 03: on a determination that this claim construction that you asserted, your expert asserted basically from the beginning about the single processor being satisfying it even if there were other processors nearby even on the same piece of silicon. [00:10:14] Speaker 03: Why could the exceptional case finding not rest on the proposition that that is simply unreasonable when you read the patent as a whole? [00:10:25] Speaker 07: Well, it could. [00:10:25] Speaker 07: I think you would have to read into the district court's mind that in fact it found that particular argument to be objectively baseless. [00:10:35] Speaker 07: But the court gives you absolutely no reasoning as to how it made the leap. [00:10:39] Speaker 03: OK, so let me. [00:10:40] Speaker 03: The underlying question is, why is that view of the patent not clearly understood? [00:10:46] Speaker 07: And I think, Your Honor, you hit in part on the way I would illustrate the argument. [00:10:52] Speaker 07: Let's assume you have two chips on a board. [00:10:55] Speaker 07: And each chip is, in fact, a single processor device with multiple condition code registers. [00:11:00] Speaker 07: That is, claim one reads on each chip. [00:11:05] Speaker 07: It seems to me fairly obvious that you could accuse each chip under Claim 1. [00:11:10] Speaker 03: Unless the whole point in some sense of the patent was that when you have a device in which different processors are working together, they all have to share these condition code registers. [00:11:25] Speaker 07: I agree. [00:11:27] Speaker 07: your honor, if in fact you could find that to be the conclusion. [00:11:32] Speaker 07: But you don't have anything from the district court that tells you. [00:11:36] Speaker 07: So one would assume, given that gap, if the argument were objectively baseless or even objectively weak, the defendants would fill that gap in for you. [00:11:48] Speaker 07: In other words, they would show, hey, look at this language in the patent. [00:11:51] Speaker 07: It clearly makes Biax's argument on this point ridiculous. [00:11:56] Speaker 07: Let me walk through the arguments that they make. [00:11:59] Speaker 03: No, no, I agree that they don't do that filling in. [00:12:02] Speaker 03: I think I'm pretty clear about that. [00:12:05] Speaker 03: But where is the invention if [00:12:09] Speaker 03: I'm sorry, which invention, Ron? [00:12:10] Speaker 03: Where is the advance over prior art found in the patent if you're talking about the side-by-side individual processors that are in fact working together but not sharing? [00:12:25] Speaker 07: Well, Your Honor, the 628 patent really covered two innovations. [00:12:30] Speaker 07: And the first was embodied essentially in claim one. [00:12:34] Speaker 07: It's sometimes called parallel processing. [00:12:36] Speaker 07: It's the ability of a single processor to simultaneously access multiple condition code registers. [00:12:44] Speaker 07: In fact, the defendants argued that was prior art. [00:12:48] Speaker 07: And the district court, and in fact, they did so specifically referring back to the Gilliland patent when they made their motion for clarification of the markman orders. [00:12:58] Speaker 07: The district court rejected their [00:13:02] Speaker 07: a clarification motion, basically holding that the single processor that claim one properly read on a single processor device. [00:13:12] Speaker 07: You can't square that with an idea that claim one is somehow barred by prior art. [00:13:17] Speaker 07: There's no finding in the record on that point. [00:13:22] Speaker 07: And the multiple processor devices actually cover a different concept which is called simultaneous multi-threading, which is the ability of multiple processors to share [00:13:33] Speaker 07: all of the condition code registers in whatever the accused computer is under the language of the patent. [00:13:40] Speaker 07: There are two different advances. [00:13:44] Speaker 02: Could I shift for a moment to a different argument? [00:13:48] Speaker 02: Originally you were arguing that it wasn't proper to read this language from claim two into claim one. [00:13:56] Speaker 02: about the sharing of law. [00:14:03] Speaker 02: The argument was made, that's correct. [00:14:05] Speaker 02: Are you making that argument now as a basis for reversing his determination of objective unreasonableness? [00:14:17] Speaker 07: Well, I simply phrased the argument differently. [00:14:20] Speaker 07: I think the result that the court essentially reaches [00:14:23] Speaker 07: by determining that the only possible, that claim one is required to read on an entire chip essentially has the effect of importing into claim one the sharing language of claim two. [00:14:37] Speaker 07: Claim one actually has no sharing language. [00:14:41] Speaker 07: So are you saying that this sharing requirement is not part of claim one? [00:14:45] Speaker 07: I'm saying that the sharing language is essentially [00:14:50] Speaker 07: It's not part of claim one because if claim one reads on a single processor device, there is no sharing. [00:14:56] Speaker 07: There's nothing to share. [00:14:57] Speaker 07: By definition, virtually, all condition code registers under that patent have to be accessible by that single processor in the device. [00:15:07] Speaker 07: That's what the district court recognized. [00:15:09] Speaker 07: But that is fundamentally different than the defendants who wanted, essentially, to have claim one have a sharing requirement. [00:15:18] Speaker 07: They argued. [00:15:19] Speaker 07: at the markman stage that the definition of condition code register should import a sharing requirement into that definition. [00:15:25] Speaker 07: And the court rejected that. [00:15:28] Speaker 07: The court said, no, I'm not going to put it in there. [00:15:30] Speaker 07: The language of the claims takes care of it. [00:15:34] Speaker 07: That actually introduced a certain amount of confusion into this case, because claim one doesn't have any word like sharing. [00:15:40] Speaker 07: It doesn't have any sharing concept. [00:15:42] Speaker 07: And the district court says it certainly has no applicability in a single processor device. [00:15:48] Speaker 07: So you come back down to the same question. [00:15:50] Speaker 07: Was it unreasonable for VAX to argue that, in fact, these shaders were all individually accusable devices? [00:16:00] Speaker 07: And nobody tells you why that's unreasonable. [00:16:03] Speaker 07: I think the court has already said it. [00:16:04] Speaker 07: The dependents don't appear to fill in the gap at all. [00:16:07] Speaker 07: And certainly, the district court doesn't. [00:16:09] Speaker 07: And I think this court can conclude on its own. [00:16:11] Speaker 07: It's an eminently reasonable argument that VAX made. [00:16:15] Speaker 07: You may be losing, but it's not exceptionally weak by any stretch of the imagination. [00:16:20] Speaker 02: Well, to conclude that, wouldn't we still have to send this back to make a determination under the new octane standard? [00:16:29] Speaker 07: Your Honor, if my choice is between affirmance and remand, I of course would choose remand. [00:16:36] Speaker 07: But I think this court, on this record, given the fact that both parties have not requested remand on this to go back under the new octane standard, [00:16:44] Speaker 07: I think this court is capable of essentially determining that, in fact, Biax's arguments are not exceptionally weak. [00:16:51] Speaker 07: What argument is going to be made to the district court that hasn't been made to you here? [00:16:57] Speaker 07: The defendants have all the opportunity in the entire record to point to something that slammed the door on Biax's argument, and they failed, which tells you that Biax's argument was not exceptionally weak. [00:17:09] Speaker 07: and can't even meet the lower threshold in Optane. [00:17:12] Speaker 01: We'll save the remainder of your time for a bottle. [00:17:16] Speaker 01: Mr. Davies, you are going to split your time with Mr. Rokacz, is it? [00:17:22] Speaker 01: Yes, Your Honor. [00:17:25] Speaker 01: And I want to save two minutes for Mr. Rokacz for the bottle. [00:17:29] Speaker 01: Yes. [00:17:32] Speaker 05: So this is your exact time. [00:17:33] Speaker 05: That's my complete allotment of time. [00:17:36] Speaker 05: Thank you, Your Honor. [00:17:39] Speaker 05: So the district court here, Judge Bremer, has heard 40 patent cases. [00:17:42] Speaker 02: Okay, but forget about the 40 fatten cases. [00:17:46] Speaker 02: What about the two issues that they raise here, which they say rendered their argument for infringement as not being objectively based. [00:17:56] Speaker 02: One, that the judge improperly read language from claim two into claim one. [00:18:02] Speaker 02: And second, that the expert testimony that the district court relied on doesn't say what the district court said it said. [00:18:11] Speaker 05: Yeah, happy to talk about those topics. [00:18:15] Speaker 05: To understand the key ruling here, which is the clarification, the clarification ruling of the appendix 1204. [00:18:22] Speaker 05: And that ruling is not claim specific. [00:18:25] Speaker 05: It does not talk about any particular claim. [00:18:27] Speaker 05: So if there's any ambiguity at the claim construction, I don't think there was, the clarification ruling is definitely not claim specific. [00:18:34] Speaker 05: And it's issued in a certain context. [00:18:36] Speaker 05: And the context is [00:18:38] Speaker 05: patent, which is a multiprocessor patent, and the context is their complaint, which accuses systems, it accuses the overall device. [00:18:49] Speaker 05: It does not accuse an isolated single processor. [00:18:52] Speaker 03: I'm sorry, can I just stop you there? [00:18:54] Speaker 03: Isn't that incredibly common? [00:18:56] Speaker 03: You would accuse the iPhone [00:18:59] Speaker 03: because it contained some infringing component. [00:19:03] Speaker 03: You would still write your complaint to say this is the accused device. [00:19:07] Speaker 03: So the fact that they accused the game system or whatever it is doesn't seem to me to imply [00:19:16] Speaker 03: that to imply anything about whether the analysis is done properly at the level of an individual shader or at some greater level where there are multiple shaders. [00:19:31] Speaker 05: I think it's a starting point. [00:19:33] Speaker 05: I agree it's probably not dispositive, but certainly relevant. [00:19:36] Speaker 02: He didn't rely on that. [00:19:37] Speaker 02: He didn't say your complaint was limited to this. [00:19:40] Speaker 02: He said two things. [00:19:41] Speaker 02: One, unreasonable claim construction, reasonable challenge to my claim construction, where I read the language from claim two into claim one, and two, your expert gave away the infringement argument. [00:19:56] Speaker 02: Let's talk about the second one. [00:19:57] Speaker 02: First, I read that testimony several times. [00:20:00] Speaker 02: I don't see that it can bear the construction that the district court gave to it. [00:20:05] Speaker 02: It doesn't say that there is no infringement if you consider the individual changes. [00:20:11] Speaker 05: No, it doesn't say that. [00:20:14] Speaker 05: So? [00:20:15] Speaker 05: Well, obviously, we have a wide range of discretion. [00:20:19] Speaker 05: And our point really is that the clarification order, anything from there, [00:20:23] Speaker 05: They needed to stop after the clarification order, because the clarification order is not claim specific, and it's done in a context in which people are talking about the entire device. [00:20:34] Speaker 05: And to continue the conversation, to understand the context, the judge had a Markman hearing, an all-day Markman hearing. [00:20:42] Speaker 05: He knew the party disputed 17 terms through a detailed audiovisual [00:20:46] Speaker 05: tutorials, nothing about the single process of isolated process of theory comes up. [00:20:51] Speaker 05: And why doesn't it come up? [00:20:52] Speaker 05: It's because they only raise it before the court after that proceeding. [00:20:56] Speaker 05: And to the extent... Well, so what? [00:20:58] Speaker 05: Why does that make it unreasonable? [00:21:01] Speaker 05: It's not that it makes the reading of the clarification order unreasonable, Your Honor, because the clarification order... I don't see that the clarification order addresses this individual shader, does it? [00:21:13] Speaker 05: It wasn't before the court. [00:21:15] Speaker 05: Right. [00:21:16] Speaker 05: No, but it does address the relevant question, which is what arguments can they run and not run? [00:21:21] Speaker 05: And it says little risk that they're going to run [00:21:25] Speaker 05: attempt to argue at trial the process elements are not able to act as any condition code. [00:21:30] Speaker 02: But why, if he didn't address the individual shader argument at claim construction and it wasn't asked to, what's the matter with their raising the argument later? [00:21:39] Speaker 05: Now of course you can always refine your theories your honor, but the question is whether it's a reasonable construction of the clarification order and the district court said no it's not. [00:21:47] Speaker 02: Because after the Mark- No, I don't read what he said as being what you say. [00:21:52] Speaker 02: I read him as saying two separate things. [00:21:55] Speaker 02: One, [00:21:55] Speaker 02: that the claim construction order precluded your argument that the language from claim two shouldn't be read into claim one. [00:22:05] Speaker 02: But I don't see him saying that the claim construction order precluded the individual shader argument. [00:22:11] Speaker 02: If you can show me where he said that, I'd be happy to look at it, but that's not the way I read what he said. [00:22:16] Speaker 05: Why would he say that if nobody was making that argument? [00:22:20] Speaker 05: he didn't say that no they were not pushing they didn't make that argument. [00:22:24] Speaker 02: No, I'm talking here in connection with the attorney's fees issue. [00:22:29] Speaker 02: Yes. [00:22:29] Speaker 02: Where does he say that the individual shader argument was precluded by my claim instruction? [00:22:36] Speaker 02: I don't see that. [00:22:37] Speaker 02: Right, he doesn't specifically say that. [00:22:41] Speaker 02: So his ruling about the individual shader argument rests does it not on his reading of the expert testimony. [00:22:52] Speaker 05: I don't think it does, no, he would have thought that the order is very clear and cites repeatedly to the clarification order and the claim construction order. [00:23:02] Speaker 02: He is obviously, the date, he triggers the date off when the expert testimony, I guess that was the feather that broke the... I can understand why you were running away from the expert testimony issue because you admitted that the expert didn't say that individual shaders couldn't infringe the patent. [00:23:20] Speaker 05: It's not an admission, that's what he said. [00:23:22] Speaker 05: The district court read that and knew what he said. [00:23:27] Speaker 02: He didn't say that individual sheeters couldn't infringe. [00:23:32] Speaker 02: He said that if you consider the entire chip, it doesn't infringe, right? [00:23:37] Speaker 05: Yes, but just to tie a different tack on, obviously deference is a really important doctrine that the Supreme Court just made clear. [00:23:46] Speaker 05: His view was that his own clarification order, at a minimum, [00:23:49] Speaker 05: was disregarded by the parties here and he's not a judge who issues these regularly. [00:23:54] Speaker 05: He's done it once out of forty times. [00:23:56] Speaker 02: First of all, the fact that a district court has made a ruling doesn't mean that [00:24:01] Speaker 02: continuing to challenge that rule and is objectively unreasonable, right? [00:24:05] Speaker 02: Of course not. [00:24:06] Speaker 02: I mean, he seemed to think that as soon as he issued his order, parties should stop. [00:24:10] Speaker 02: That's not right. [00:24:12] Speaker 05: No, but they can't run over it. [00:24:14] Speaker 05: And when he said there's little risk, the plaintiffs are going to run a particular argument. [00:24:18] Speaker 05: And then they run that argument. [00:24:19] Speaker 05: They took the dare. [00:24:20] Speaker 05: He felt that he would have been [00:24:22] Speaker 05: He said, you know, I don't believe they're going to do it. [00:24:25] Speaker 05: And then they turned around and that's exactly what they did. [00:24:27] Speaker 02: But he wasn't addressing the individual shader argument. [00:24:31] Speaker 02: You yourself say it wasn't raised until later. [00:24:35] Speaker 02: Why was the individual shader argument unreasonable? [00:24:39] Speaker 05: In light of the patent alone, it's unreasonable. [00:24:42] Speaker 05: I mean, if you look at figure six, it's clearly a multiprocessor device. [00:24:46] Speaker 05: The field that we mentioned is all about multiprocessor devices. [00:24:49] Speaker 05: And so it's unreasonable in light of just go straight to the patent. [00:24:54] Speaker 02: Did you make that argument in the district court? [00:25:03] Speaker 05: It's not teed up that way because the court had already ruled that. [00:25:07] Speaker 05: And this court summarily affirmed. [00:25:11] Speaker 02: In connection with the attorney's fees, you didn't argue to him that the individual shader argument was untenable in light of the specification, did you? [00:25:23] Speaker 05: To this court, we definitely emphasize figure six. [00:25:26] Speaker 05: I don't have the sites in front of me about whether, we put it that way, we probably did. [00:25:30] Speaker 05: We probably did, but I don't have that. [00:25:33] Speaker 03: Can I ask you a question? [00:25:35] Speaker 03: I'm not sure I got the timing of this right, but this is June of 2010. [00:25:41] Speaker 03: Yeah, got the claim construction order coming out, and then you yourselves realize [00:25:50] Speaker 03: There's some confusion about it. [00:25:54] Speaker 03: You see reconsideration because he says various things in there that leave you uncertain about what its scope is. [00:26:02] Speaker 03: And then in August he issues his motion for clarification. [00:26:06] Speaker 03: Is it September, or is it a whole year later that they put out specific allegations of infringement that refer specifically to the shader? [00:26:20] Speaker 03: It's later. [00:26:20] Speaker 05: Thank you, Your Honor. [00:26:22] Speaker 05: And I think that's what I was trying to say. [00:26:25] Speaker 05: Yes, it's later. [00:26:26] Speaker 05: So the appendix 1370, that's in March 2010. [00:26:29] Speaker 05: Those are their amended contentions that after the Markman hearing, after the claim construction ruling, [00:26:36] Speaker 05: and yet their implication here is that they've made the single processor all along, theory all along, and they have not. [00:26:41] Speaker 05: It only came out a year later after the claim construction. [00:26:45] Speaker 02: And that's why... Well, they amended the infringement contention, right? [00:26:48] Speaker 05: Yes, with a new theory after the claim construction. [00:26:51] Speaker 05: Okay, so why does the theory objectively unreasonable? [00:26:56] Speaker 05: It doesn't... What it does is it provides the [00:27:00] Speaker 05: the context for the order. [00:27:03] Speaker 05: I mean we all speak language and when things are said, particularly in a complicated like this, not every background principle is articulated, Your Honor. [00:27:11] Speaker 05: And here the parties, because of the complaint, because of the original infringement contentions, nobody was thinking about this because of the pen, which is a multi-processor pen. [00:27:20] Speaker 05: The conversation at the Markman, it was all about the multiprocessor patent. [00:27:25] Speaker 05: And he says what he says in the clarification order. [00:27:27] Speaker 05: The point I'm making, Your Honor, is that the single processor comes up later. [00:27:31] Speaker 05: It's not that they can't have another theory. [00:27:33] Speaker 05: It's that it doesn't help them explain why they couldn't understand what the clarification order says. [00:27:43] Speaker 01: Go ahead. [00:27:50] Speaker 05: So also, I think, telling to understand the argument here that the argument is disgusting. [00:27:56] Speaker 05: But they actually had four excuses for ignoring this clarification order. [00:28:01] Speaker 05: There's the claim-specific point. [00:28:03] Speaker 05: Their lead argument below was not the one we can discuss with Your Honor. [00:28:07] Speaker 05: Their lead argument below was that the claim construction was limited to particular claims. [00:28:12] Speaker 05: And that's just not tenable when you look at the clarification order, which is not claim-specific. [00:28:18] Speaker 05: They have the computer theory that's new to this case. [00:28:21] Speaker 05: You can read the merits argument all you want of the first case. [00:28:25] Speaker 05: There was no mention of the computer theory. [00:28:26] Speaker 05: That is new. [00:28:28] Speaker 05: And they have the protective order to it. [00:28:29] Speaker 05: That is new. [00:28:30] Speaker 05: And why are they shifting? [00:28:30] Speaker 05: They're just shifting because they're trying to find a theory that sticks. [00:28:34] Speaker 03: I'm sorry. [00:28:34] Speaker 03: The computer theory, when you say new, I mean, I took it that that was actually the argument in the first appeal on the second argument, pages 40 to 44, their brief. [00:28:43] Speaker 03: They didn't use the language computer, but so what? [00:28:45] Speaker 03: It's perfectly clear that they were saying the same thing. [00:28:49] Speaker 05: But the substantive point is there for sure, and that's what we've said. [00:28:52] Speaker 03: So you could look at each individual processor, and if the individual processor has access to the substantive point. [00:28:58] Speaker 05: And this court knows word matter. [00:29:00] Speaker 05: And to the extent they were trying to get any mileage out of rephrasing it under different terms, I don't think that's committed. [00:29:06] Speaker 05: The substantive point, for sure, and that's what we've been discussing. [00:29:08] Speaker 03: Was this page 1370 infringement contention, which I think the, you said March, but I thought the table of contents says September. [00:29:19] Speaker 03: 30th, 2011? [00:29:20] Speaker 03: No, it's certainly March. [00:29:22] Speaker 03: It's certainly March? [00:29:23] Speaker 03: Okay. [00:29:25] Speaker 05: I think you go to A2100. [00:29:27] Speaker 03: One reason I guess I'm just trying to, was that the first time that this contention was made? [00:29:40] Speaker 04: No, and if you go to Appendix 1256, [00:30:09] Speaker 04: So I think this is instructive. [00:30:14] Speaker 04: If you go to 1256, this is the attachment to the summary judgment course. [00:30:21] Speaker 05: So this is the October 2010 amended infringement. [00:30:26] Speaker 05: The March one is on 1370. [00:30:27] Speaker 05: So these are the two key documents. [00:30:30] Speaker 05: Before the claim construction ruling, it's A1370. [00:30:34] Speaker 05: And the computer is the RSX processor. [00:30:38] Speaker 03: Where are you getting these dates from? [00:30:44] Speaker 03: I'm looking at the table of contents and they have quite different dates. [00:30:56] Speaker 03: 1256 is in a range that is identified as August 3rd, 2011. [00:31:01] Speaker 03: I guess that's the summary judgment motion. [00:31:04] Speaker 03: But how do we know you're saying that this infringement contention was sometime in March? [00:31:11] Speaker 05: The 1256 is the second one, the amended infringement contention. [00:31:19] Speaker 05: And that one is October 21, 2010. [00:31:21] Speaker 05: And we know that from Appendix 12,147. [00:31:25] Speaker 02: Did they make a motion to amend the infringement contention? [00:31:31] Speaker 05: The infringement contention was between the parties. [00:31:34] Speaker 05: It wasn't, I don't think they were filed. [00:31:36] Speaker 05: It's not like the Northern District of California. [00:31:38] Speaker 05: Not as I understand. [00:31:39] Speaker 02: But nobody objected to the amendment to the infringement conventions, right? [00:31:45] Speaker 05: Nobody, nobody direct, no, but that's not how it came, it wasn't litigated that particular way. [00:31:52] Speaker 05: We certainly objected to the late introduction of a new theory, for sure. [00:31:56] Speaker 02: How did you object? [00:32:02] Speaker 05: By moving for summary judgment, Your Honor. [00:32:04] Speaker 02: On the ground that it was ways too late? [00:32:07] Speaker 05: No, on the ground that our device had not infringed our patents and then they came back their opposite. [00:32:12] Speaker 02: You addressed it on the merits then. [00:32:13] Speaker 02: You addressed the new infringement contention on the merits. [00:32:17] Speaker 02: You didn't argue it was made too late. [00:32:22] Speaker 05: The first time we see this isolated process of theory is in their opposition to civil [00:32:32] Speaker 05: appendix 1285 and 1286 and then we come back and say that's not what the court held. [00:32:37] Speaker 02: Right, but you didn't argue that the issue was introduced too late in the process. [00:32:48] Speaker 05: I don't have the district corporation here, but I don't think it's a waiver, if it isn't like a waiver of waiver, I mean. [00:32:56] Speaker 05: You didn't make a waiver on it. [00:33:00] Speaker 05: We didn't put it in waiver terms, no. [00:33:02] Speaker 05: But what we said, and it's what the district court agreed with, is that that is not consistent with the court's claim construction. [00:33:08] Speaker 05: And I think that would preserve any possible complaint we have. [00:33:15] Speaker 01: Thank you, Mr. Davies. [00:33:17] Speaker 01: We'll hear from Mr. Robcatch. [00:33:23] Speaker 01: minutes and wants to save two for a bottle. [00:33:28] Speaker 00: Just to be clear, Your Honor, my argument concerns the cross-appeal, so I would be willing to go after the rebuttal or right now whatever the court prefers. [00:33:37] Speaker 01: Then we'll hold it then. [00:33:40] Speaker 01: We'll hold it. [00:33:43] Speaker 01: We'll hear from Mr. Onsider. [00:33:55] Speaker 07: Your honor, just so the court doesn't lose sight of it, the experts report is in the record. [00:34:02] Speaker 07: And you can see the argument that, in fact, the expert used that is adumbrated in significant detail. [00:34:11] Speaker 07: It's actually somewhat readable. [00:34:13] Speaker 03: What's the date of that? [00:34:14] Speaker 03: I'm sorry? [00:34:15] Speaker 03: What's the date of the expert report? [00:34:16] Speaker 07: I believe the expert report is dated June 2011. [00:34:20] Speaker 07: No, Your Honor, the report actually is fairly long. [00:34:31] Speaker 07: It starts, I believe, at A-1521. [00:34:34] Speaker 03: I'm sorry, I'm shifting topics now. [00:34:36] Speaker 07: Oh, the claim, yes, the infringement allegations are in two different places, 1253 through 1277. [00:34:43] Speaker 03: uh... and and and uh... also at thirteen seven and am i right i think mister david said that october twenty first twenty ten i'm afraid i don't have the information to contest that. [00:34:54] Speaker 03: I'm trying to get straight on this in part because if it's october twenty first that's a week before the clarification order so i'm trying to understand was that were those infringement contentions known to the district court at the time of the clarification [00:35:11] Speaker 03: It might matter what the district court thought the issue was in front of it at the time it issued the clarification. [00:35:22] Speaker 07: Your Honor, I'm sorry I can't answer the question because I actually don't know the answer and I apologize for that. [00:35:31] Speaker 07: I will point out, Your Honor, though it would be highly unusual at the markman stage for the court to address a specific infringement allegation in light of the product. [00:35:41] Speaker 07: or the chip or anything like that. [00:35:43] Speaker 07: Obviously that wouldn't be proper since Markman claims construction is done in the abstract just looking at the patent itself. [00:35:50] Speaker 07: and anything that in fact was relevant to that, I would assume the defendants would bring to the court's attention. [00:35:57] Speaker 07: And as I said, they tried to bring in the prior art question. [00:36:01] Speaker 03: Was there discussion either oral or on paper as part of the first claim construction opinion or as part of the clarification, motions, oral arguments, whatever, of the distinction between [00:36:20] Speaker 03: a full system and an individual shader? [00:36:25] Speaker 07: There was not. [00:36:26] Speaker 07: Your Honor, at best, the argument was over the question of whether claim one would read on a single processor device. [00:36:33] Speaker 07: And the issue was raised by the defendants on the basis that the court should construe the definition of condition code register to include a sharing requirement in that definition. [00:36:50] Speaker 07: And what the district court said was, no, I'm not going to do that because claim one clearly would read on a single processor device, in which case you only have one processor and there's no sharing. [00:37:01] Speaker 07: So I'm not going to put that in the definition. [00:37:03] Speaker 07: The language of the claims took care of it, is what the district court said. [00:37:09] Speaker 01: Do you have one more final thought, Mr. Armstrong? [00:37:12] Speaker 07: Your Honor, I'll only point out that certainly nobody, the district court never, ever, [00:37:18] Speaker 07: rested any portion of its opinion on the idea that it was improper to refine the theory of infringement here to accuse the individual shaders as opposed to the entire chip. [00:37:32] Speaker 07: Your Honor, I think this court is left with the definite and firm conviction that a mistake was made and that the district court exercised discretion here based on an error of law [00:37:44] Speaker 07: or a clearly as erroneous fact-finding namely it's miss reading of the expert witness report and therefore should be reversed on. [00:37:51] Speaker 07: Thank you. [00:37:52] Speaker 01: Thank you, Mr. Ronson and Mr. Rokacs on the cross appeal. [00:38:01] Speaker 00: May it please the court, David Rokacs representing Sony, I'll address the 1927 cross appeal issue. [00:38:08] Speaker 00: If I may take a moment before diving into the substance of 1927, since [00:38:13] Speaker 00: To a large degree, this turns on the same issues that the court has been addressing. [00:38:17] Speaker 03: Do you agree that if the 285 award goes away, there cannot be here a 1927 award? [00:38:24] Speaker 00: If it goes away. [00:38:24] Speaker 03: It goes away permanently, I don't mean. [00:38:26] Speaker 00: Based on the finding that IACS conduct was reasonable, yes. [00:38:30] Speaker 00: If it goes away based on a finding under the protective order, I think if anything, that would emphasize the fact that Dorsey is the one who truly had culpability. [00:38:38] Speaker 00: But let me just take a moment to address the question that the court asked previously about where the district court had addressed this single processor issue. [00:38:46] Speaker 00: And I'll refer to pages A7 and A8 of the record. [00:38:51] Speaker 00: This is in the C award. [00:38:53] Speaker 00: The district court on A8 refers back to the summary judgment order. [00:38:58] Speaker 00: where the court noted that the attempted isolation of a single processor element does not change the fact that any particular processor element in the accused chip is incapable of accessing all condition code registers and so on. [00:39:12] Speaker 00: So this is where the district court took on. [00:39:14] Speaker 02: It seems as though you're re-arguing the main appeal, whereas I would have thought the cross appeal would be limiting to the question of whether the attorney should be treated differently. [00:39:23] Speaker 00: And yes, I'm going to move to that in a moment, Your Honor. [00:39:24] Speaker 00: I simply wanted to respond to the court's previous question with that citation. [00:39:29] Speaker 00: So turning to the cross-appeal, as my colleague mentioned, the district court made factual findings that once the expert had testified, at that point, FIAC's continued pursuit of its infringement theories essentially ignored the district court's order. [00:39:46] Speaker 00: And the district court further found that this prolonged litigation in bad faith. [00:39:53] Speaker 00: These findings, to the extent upheld by this court, necessarily apply to Biax's counsel at Dorsey and Whitney. [00:40:00] Speaker 00: Dorsey is the one who participated in claims instruction. [00:40:03] Speaker 00: They represented the expert when he made the admission in question. [00:40:06] Speaker 00: And Dorsey filed and signed the summary judgment opposition brief, which is the subject of the district court's fee order. [00:40:14] Speaker 00: Now, it's true that Biax had supervisory responsibility for Dorsey, and that's why the Section 285 award is appropriate. [00:40:22] Speaker 00: But the fact remains that Dorsey is the one who actually did the misconduct found by the District Court. [00:40:29] Speaker 00: Under 10th Circuit precedent, the specific factual findings of the District Court in this case easily satisfy the threshold for sanctions under Section 1927. [00:40:39] Speaker 02: Well, that may be true, but the question is whether the District Court was compelled to award sanctions under 1927 once he found that the arguments were unreasonable. [00:40:53] Speaker 00: That's correct, Your Honor. [00:40:54] Speaker 00: And I think that turns on, to a large degree, the reasoning stated by the district court. [00:40:59] Speaker 00: If we look at the reasons given by the district court for declining to award Section 1927Bs, we don't see any factual findings that somehow justify the conduct previously found by the district court. [00:41:11] Speaker 00: There's no fact that Dorsey was somehow misled, that there's something that Biax knew that Dorsey didn't. [00:41:18] Speaker 00: The reason given by the district court is that zealous advocacy was not exceeded in this case. [00:41:25] Speaker 00: And our view is that there is simply no such thing that zealous advocacy somehow expands the boundaries of what council is permitted to do. [00:41:35] Speaker 03: Would that mean, in your view, that an objectively unreasonable argument sufficiently so as to justify a 285 award would always compel a 1927 award? [00:41:48] Speaker 03: Assuming the attorneys knew, had the same knowledge, or in this case, even more knowledge than them. [00:41:56] Speaker 00: So under Tenth Circuit Law, Your Honor, I would agree that that would generally be the case. [00:42:01] Speaker 00: Now, given the recent [00:42:04] Speaker 00: standard for 285. [00:42:05] Speaker 00: I think it's fair in my understanding it's lower. [00:42:09] Speaker 00: So under the current standard section 285, there may be some things that are unreasonable enough for 285 and not for 1927. [00:42:17] Speaker 00: But I think if we look at the specific factual findings in this case, made under the previous standard, the answer would be yes. [00:42:25] Speaker 02: The answer is yes, meaning that if there is objective unreasonableness in the arguments that there must be a fee award under 1927. [00:42:34] Speaker 00: Yes, absent some finding of fact that somehow exculpates what counsel did. [00:42:39] Speaker 00: That's right. [00:42:40] Speaker 00: What would be such a finding? [00:42:44] Speaker 00: If you would have a situation where counsel was somehow unaware or somehow misled by the client, I'm not suggesting that that would be appropriate in any given case, and certainly that wasn't found in this case. [00:42:54] Speaker 00: But in general, I believe the answer to the question is yes. [00:42:57] Speaker 00: That if we have specific factual findings that a litigation position was unreasonable, that problem rests more with counsel than it does with the client. [00:43:08] Speaker 00: That's our view. [00:43:10] Speaker 00: And in particular, the reasoning of the district court that the concept of zealous advocacy somehow acts as a shield [00:43:18] Speaker 00: That's something that this court has directly rejected in Taurus IP and EANAP, and it's also something which the Tenth Circuit has rejected. [00:43:25] Speaker 00: For example, the Dryland case cited in both parties briefs, there was specific reference to the zealous advocacy argument, and the Tenth Circuit upheld a fee award against counsel under Section 1927 based on unreasonable litigation positions. [00:43:41] Speaker 01: Thank you, Mr. Ocasio, give you two minutes for rebuttal. [00:43:45] Speaker 01: Thank you, Your Honor. [00:43:50] Speaker 01: Mr. Lancaster, speaking for Dorsey and Whitney. [00:43:54] Speaker 06: Thank you, Your Honor, and I am, of course, limiting my argument to the 1927 issue. [00:44:01] Speaker 06: I will not belabor the point that has been the subject of discussion so far that, obviously, to the extent [00:44:10] Speaker 06: that what Biax and his lawyers did below was reasonable, and therefore not an appropriate basis for 285 award applies a fortiori to a 1927 award. [00:44:24] Speaker 03: So how would you describe the operationally useful way, the distinction between objective unreasonableness of the sort found here, just assuming that, and whatever zealous advocacy or any other aspect of 1927 nevertheless would allow the council to do without getting personally [00:44:53] Speaker 03: subject to a fee award. [00:44:55] Speaker 06: The starting point, of course, Your Honor, is the language of the statute. [00:44:58] Speaker 06: And the language of the statute moves well beyond a phrase like objective reasonableness, who so multiplies the proceedings in any case unreasonably, that part is in common, and vexatiously. [00:45:13] Speaker 06: And so it would be a really bad argument. [00:45:16] Speaker 06: As a practical matter, I think that's right, Your Honor. [00:45:20] Speaker 06: But even more than that, when you look at the [00:45:23] Speaker 06: Few 10th Circuit cases that have upheld 1927 sanctions, they are nothing like this. [00:45:31] Speaker 06: Obviously, the 10th Circuit is not going to be dealing with a claim construction issue that is revisited later on. [00:45:38] Speaker 06: But it would constantly deal with interlocutory decisions by a judge that maybe are challenged, that are questioned, that are revisited later in a case. [00:45:49] Speaker 06: That's a very common situation. [00:45:51] Speaker 06: That is nothing like. [00:45:53] Speaker 06: any 1927 case that the Penn Circuit has permitted. [00:45:59] Speaker 06: And what are those cases? [00:46:01] Speaker 06: The words that come repeatedly in those cases are, in effect, lawyers who lied to the court. [00:46:09] Speaker 06: In one case, a lawyer who repeatedly filed baseless cases. [00:46:14] Speaker 06: They are extreme cases. [00:46:17] Speaker 06: And you're right, Your Honor, to put a precise definition on it is not that easy. [00:46:22] Speaker 06: But this court held, even before the changes reflected in Octane, Fitness, and Highmark, that there was a hierarchy from 285 to Rule 11 to 1927 in terms of the level of conduct that was necessary in order to justify a fee award. [00:46:42] Speaker 06: And so what does that mean in practical terms in this case? [00:46:45] Speaker 06: Obviously, I think if the courts were to hold that 285 fees were not justified, [00:46:51] Speaker 06: then the discretion that the judge exercised in applying 10th Circuit law as to 1927 should also be affirmed. [00:46:59] Speaker 06: But let's assume hypothetically that this court were to decide based upon the arguments of Viax that there wasn't a basis for 285 award. [00:47:09] Speaker 06: That had been shown, but that as Your Honor raised, maybe that's a question that is returned to the district court. [00:47:16] Speaker 06: Our view is that it needed to be [00:47:18] Speaker 06: return to the district court. [00:47:19] Speaker 06: But let's assume for the moment that issue is. [00:47:22] Speaker 06: Even in that event, the 1927 issue does not have to be returned to the district court for the reasons I've just articulated, a higher standard. [00:47:33] Speaker 06: And because in that case, the court was dealing with 10th Circuit law that it's obviously familiar with that do apply a higher standard. [00:47:44] Speaker 06: And that issue need not be revisited by the district court. [00:47:49] Speaker 06: The only other point that I am inclined to touch upon, and it was just barely touched upon in the other argument, is this protective order issue. [00:47:57] Speaker 06: And the notion that perhaps the lawyers were in a better position than the client to assess what's reasonable or not reasonable. [00:48:04] Speaker 06: And the policy point I would make with respect to that is, if, God forbid, there were a debate between client and lawyer, ultimately, about who was at fault for a fee award, obviously, the lawyers [00:48:19] Speaker 06: would point to communications between lawyer and client. [00:48:22] Speaker 06: Perhaps the client would do so as well. [00:48:25] Speaker 06: But for a third party to in effect force the waiver of privilege that that kind of examination of communication would require is an inappropriate fallout from being able to rely on a protective order to add to the pool of parties that might be responsible for a fee award. [00:48:44] Speaker 06: And so the narrow point that I want to make is [00:48:47] Speaker 06: That is a policy result that flows from the defendant's argument that is not a good one. [00:48:54] Speaker 06: I see that my time is up and subject to further questions. [00:48:58] Speaker 06: I have nothing else. [00:48:59] Speaker 01: Thank you, Mr. Lancaster. [00:49:02] Speaker 01: Mr. Rokach has up to two minutes if he wishes to utilize it. [00:49:09] Speaker 00: I was supposed to very briefly respond, your honor, to this argument that was raised that section 1927 somehow implies a higher threshold that really bad arguments are required. [00:49:20] Speaker 00: So first, we disagree with that altogether. [00:49:24] Speaker 00: We think the law is clear that section 1927 does not impose such a standard. [00:49:28] Speaker 00: There's the Hamilton case we cite in our brief, which states, for example, that pure heart, empty head is sufficient for 1927 fees. [00:49:37] Speaker 00: There's the Dryland case. [00:49:38] Speaker 00: where 1927 was based on unreasonable litigation positions. [00:49:44] Speaker 00: But moving beyond that, I think it's important to note that as a factual matter, there is not one fact identified in Dorsey's brief to somehow suggest that this misconduct here somehow falls beneath even the higher standard. [00:50:00] Speaker 00: We have the factual findings of the district court ignoring the court order, prolonging litigation in bad faith, [00:50:08] Speaker 00: There were no findings by the district court that somehow justified Dorsey. [00:50:12] Speaker 00: And there was not a single argument made in Dorsey's own brief that somehow those findings of the district court are either incorrect or apply less to Dorsey than they do to Biax. [00:50:22] Speaker 00: For that reason, we ask that the 1927 ruling be reversed. [00:50:28] Speaker 00: And I just want to note [00:50:30] Speaker 00: to the extent that there is a remand to the district court, we would ask that there be guidance given regarding the proper standard for 1927, in particular with regard to this zealous advocacy issue that we believe the district court was mistaken about. [00:50:45] Speaker 01: Thank you. [00:50:47] Speaker 01: Thank you, Mr. Rocaf. [00:50:48] Speaker 01: The pleasure is taken under advice. [00:50:51] Speaker 04: All rise. [00:50:56] Speaker 04: The honorable court is adjourned for tomorrow morning. [00:51:00] Speaker 04: Damn.