[00:00:00] Speaker 03:
Next case is Carnegie Mellon.

[00:00:15] Speaker 03:
Ms.

[00:00:16] Speaker 03:
Sullivan, you want 25 and 5?

[00:00:17] Speaker 02:
Yes, Your Honor.

[00:00:20] Speaker 03:
Go ahead and start when you like.

[00:00:40] Speaker 02:
Good morning, Your Honors, and may it please the Court.

[00:00:42] Speaker 02:
Kathleen Sullivan for Marvell.

[00:00:44] Speaker 02:
We respectfully urge the Court to reverse the judgment below because CMU's patent claims are invalid, as anticipated by Worstel, and because Marvell does not infringe them.

[00:00:57] Speaker 02:
But alternatively, we respectfully request that you at a minimum remand for a new trial on damages, because no reasonable jury could have found that 50 cents a chip on worldwide sales

[00:01:09] Speaker 02:
represents a reasonable royalty for any domestic infringing use of CMU's claims.

[00:01:15] Speaker 02:
I'd like to cover invalidity very briefly, if I may.

[00:01:18] Speaker 02:
It boils down to two very simple points, Your Honors.

[00:01:21] Speaker 02:
Worstal anticipates both limitations in the CMU claims.

[00:01:27] Speaker 02:
The key limitations are that there be a set of signal-dependent branch metric functions, and that that be applied to a plurality of signal samples.

[00:01:39] Speaker 02:
You need look no further than the plain language of worstal to find both of those limitations disclosed.

[00:01:46] Speaker 02:
I respectfully refer you to worstal column 10, line 52.

[00:01:50] Speaker 02:
That's where you get the set of signal dependent branch metric functions.

[00:01:55] Speaker 05:
That seems for all the world to say that there is a single branch metric function

[00:02:05] Speaker 05:
standard deviation based numbers.

[00:02:07] Speaker 05:
Doesn't matter whether it's squared or not.

[00:02:08] Speaker 05:
I don't care about that.

[00:02:10] Speaker 05:
But it's a single one used for every single column in the trellis.

[00:02:18] Speaker 05:
Assume that that signals dependence, which I'm prepared to assume.

[00:02:23] Speaker 05:
I'm gonna assume here that set actually means plurality rather than a trivial set.

[00:02:29] Speaker 05:
So how have we gotten to two?

[00:02:32] Speaker 02:
greater than, your honor.

[00:02:33] Speaker 02:
The disclosure at line 52 is that the fraction derived from sigma will be greater for the one branches than the zero branches.

[00:02:42] Speaker 02:
That means there's going to be two equations.

[00:02:44] Speaker 02:
It doesn't matter if you multiply the zero branches by one.

[00:02:46] Speaker 05:
That may mean that you are selecting among functions based on a signal.

[00:02:53] Speaker 05:
That doesn't mean that what you select in the zero branches is a signal dependent method.

[00:03:01] Speaker 05:
It seems to be, and I think this is the idea in the testimony, that you select for the zeros a non-signal-dependent function, namely equation 20, which is not signal-dependent.

[00:03:14] Speaker 05:
I think your own witness said about four times.

[00:03:18] Speaker 05:
And you select for the ones something that is signal-dependent.

[00:03:21] Speaker 05:
But because it's constant, it doesn't vary from time slot to time slot.

[00:03:30] Speaker 02:
Column 10, line 52, discloses that there'll be a difference between the function for the ones and the zero, the one branches and the zero branches.

[00:03:40] Speaker 02:
And if I could refer your honor in Column 10, equation 20 is the starting point.

[00:03:45] Speaker 02:
But Column 10 asks that you further modify.

[00:03:48] Speaker 02:
What Wurzel does is he further modifies the modified

[00:03:51] Speaker 02:
branch metric function.

[00:03:52] Speaker 05:
Or by multiplying by some number dependent on the standard deviation.

[00:03:57] Speaker 02:
Yes, Your Honor, but the standard deviation expressing the transition noise is going to differ between the zero branches and the one branches.

[00:04:04] Speaker 02:
And it's that that produces the plurality and is the set.

[00:04:07] Speaker 02:
The fraction, it doesn't matter if you keep the zero branches constant or multiply them by one, the comparison to the one branches is going to yield two different equations, two different functions.

[00:04:17] Speaker 02:
because the sigma fraction is going to differ for the one branches and the zero branches.

[00:04:22] Speaker 02:
Your honor, as to the plurality, that's our argument.

[00:04:25] Speaker 02:
We would just respectively suggest that CMU's own expert conceded both that transition noise is a form of signal dependent noise and that the column 10 disposes a set.

[00:04:39] Speaker 02:
All he disagreed about is whether both equations in the set were signal dependent.

[00:04:44] Speaker 02:
We believe that's impossible to argue when he's conceded.

[00:04:47] Speaker 02:
that the transition noise, which is measured on both branches, is signal dependent.

[00:04:54] Speaker 02:
So your honor, that's the invalidity argument in the nutshell.

[00:04:57] Speaker 05:
Just to be clear about one thing, you're not suggesting that the sigma referred to, I guess not by letter, but standard deviation is one that is being updated over time.

[00:05:12] Speaker 05:
It is in fact the same

[00:05:15] Speaker 05:
numbers is used as a multiplier against the rest of it, against equation 20, everywhere you have a one branch.

[00:05:24] Speaker 02:
Correct, Your Honor, but the difference is between the one branches and the zero branches and that's the set.

[00:05:28] Speaker 02:
And Your Honor, as to plurality again, it's simple from the plain language of the patent column 12 line, beginning at lines 48, the modified metric, and by this he's referring to the further modified metric, takes into account not only a presently sampled input signal but a previously sampled

[00:05:45] Speaker 02:
signal as well.

[00:05:46] Speaker 02:
So your honor, on invalidity we respectfully suggest that it was not a matter of a battle of the experts.

[00:05:52] Speaker 02:
The plain language of worstal coupled with McLaughlin's admissions with respect to worstal makes a case for invalidity.

[00:05:59] Speaker 04:
If I could just stay on worstal for a second.

[00:06:03] Speaker 04:
It talks about transition noise.

[00:06:06] Speaker 04:
What do you understand transition noise to mean?

[00:06:10] Speaker 02:
We understand it to mean

[00:06:11] Speaker 02:
signal dependent noise.

[00:06:14] Speaker 04:
Let's just talk about this Beck and what Wurzel means when he's talking about transition noise.

[00:06:20] Speaker 04:
Is that talking about when you go from a first bit to a second bit if you flip the plurality on the second bit compared to the first bit?

[00:06:31] Speaker 04:
then there will be some resulting noise at the transition on the flip of the plurality?

[00:06:35] Speaker 02:
Yes, your honor.

[00:06:36] Speaker 02:
And where there's no transition, the noise will be different from the noise when there is a transition.

[00:06:41] Speaker 04:
So I guess I'm wondering why is that signal dependent noise based on the claim construction provided for signal dependent noise, which was a noise structure attributable to a specific sequence of symbols, e.g.

[00:06:57] Speaker 04:
written symbols.

[00:07:00] Speaker 04:
why is the flip of plurality between two bits the same thing as a specific sequence of symbols?

[00:07:09] Speaker 02:
Because the transition or no transition is expressed in a series of bits, ones and zeros, and we believe those are covered by the term symbols.

[00:07:18] Speaker 04:
But why is symbols the same thing as bits?

[00:07:21] Speaker 04:
Because when I look at the 839 pattern, and I try to understand what the disclosure says,

[00:07:29] Speaker 04:
it repeatedly makes reference to symbols and written symbols with reference to these funny symbols that say plus, plus with a circle around it, minus, minus with a circle around it.

[00:07:44] Speaker 04:
And so what the 839 pattern is telling me is that when it's talking about a specific sequence of symbols, it's talking about those particular pluses and minuses

[00:07:57] Speaker 04:
which represent transitions between two different bits.

[00:08:00] Speaker 04:
So now I'm beginning to wonder if the best understanding of the claim construction is, it's referring to a noise structure attributable to a specific sequence of transitions.

[00:08:14] Speaker 04:
And what Wurzel is trying to remedy is noise at a single transition.

[00:08:22] Speaker 04:
So do you see why I'm now seeing that there is daylight between Worcester as disclosed on its face and my understanding of what is being claimed when the claim references signal dependent?

[00:08:37] Speaker 02:
Your Honor, I do see your point, but the claim construction did not construe a symbol as narrowly as you described.

[00:08:43] Speaker 02:
And there's nothing to suggest that the transition noise equations that are disclosed in Wurzel don't themselves embody a sequence of symbols.

[00:08:53] Speaker 02:
Because the bits represented by 1 and 0 on the transition branches and the non-transition branches, we think that does fit within the term symbol as construed.

[00:09:02] Speaker 04:
But Dr. McLaughlin talked about how all Wurzel has is a single transition.

[00:09:08] Speaker 04:
And that's not the same thing as a specific sequence of written symbols

[00:09:12] Speaker 04:
And I didn't see anything by Dr. Proakis countering that by saying, well, worstal is really more than just about a particular transition of a flip of plurality between two bits.

[00:09:25] Speaker 04:
It could actually be more expansive than that.

[00:09:27] Speaker 04:
And that's really what worstal is contemplating.

[00:09:30] Speaker 04:
It's contemplating a sequence of transitions, which would require more than two bits.

[00:09:34] Speaker 04:
It would require at least three bits.

[00:09:37] Speaker 02:
Your Honor, that is a possible reading of worstal.

[00:09:41] Speaker 02:
But at a minimum here, our interpretation of worst-all renders the willfulness judgment here inappropriate, because we certainly had an objectively reasonable defense, because there's ambiguity in the term symbol.

[00:09:54] Speaker 02:
And because we reasonably believed that there was a set of signal-dependent branch metric functions, and we reasonably believed that it was applied to a plurality of signals.

[00:10:05] Speaker 02:
And the further details of the CMU patents

[00:10:09] Speaker 02:
are not necessarily relevant to the particular claims that issue here.

[00:10:12] Speaker 02:
There may be other differences between Wurstel and CMU.

[00:10:15] Speaker 02:
In fact, Wurstel himself said there might be some differences.

[00:10:18] Speaker 02:
But the claims here are really quite simple.

[00:10:21] Speaker 02:
Instead of signal dependent

[00:10:23] Speaker 02:
a set of signal-dependent functions and plurality of signal samples we think are covered by the plain terms of birth control.

[00:10:30] Speaker 04:
What do you think Mr. Wurzel meant when he said that this work by Kavchik goes above and beyond Wurzel's own work?

[00:10:37] Speaker 02:
We don't know, Your Honor, but as narrowed for trial, the covariance matrices dropped out of the case.

[00:10:44] Speaker 02:
And to the extent that covariance matrices were what CMU pointed to as part of the complexity of their analysis,

[00:10:50] Speaker 02:
that may have been what he was referring to, but we don't think... He fully reviewed the work at that point.

[00:10:54] Speaker 02:
No, Your Honor.

[00:10:55] Speaker 02:
He had just reviewed the disclosures.

[00:10:57] Speaker 02:
So, Your Honor, if I could, because I really do want to focus on the damages issues in the case, be extremely brief about non-infringement.

[00:11:04] Speaker 02:
Again, I want to suggest that, at a minimum, we have a reasonable, an objectively reasonable non-infringement defense.

[00:11:10] Speaker 04:
Sorry, just real quickly, one last quick question on validity, and maybe I didn't catch it in your first colloquy with Judge Toronto.

[00:11:20] Speaker 02:
Well, Your Honor, non-infringement very quickly.

[00:11:25] Speaker 02:
The MNP chips perform the analysis in a post processor, not in the trellis.

[00:11:31] Speaker 02:
You might say, why does the analysis have to be in the trellis?

[00:11:34] Speaker 02:
The answer is the court's construction to which CMU stipulated of the term branch.

[00:11:39] Speaker 02:
which modifies both branch metric function and branch metric value.

[00:11:43] Speaker 05:
Am I remembering right or wrong that there was a quite substantial dispute in the claim construction process about whether the post processor was going to be excluded or not and the court ruled against Marvell and for CMU.

[00:12:01] Speaker 05:
In what way are you making a point different from what was

[00:12:05] Speaker 05:
Rejected.

[00:12:06] Speaker 02:
Your honor, simply that to include the post-processor in the application of the function is incorrect under the stipulated claim construction about branch.

[00:12:20] Speaker 02:
Because branch is defined as a transition between two nodes or states in a trellis.

[00:12:26] Speaker 02:
And that's confirmed, of course, by Kavchik's admission that his claims operate in the trellis and not in the post-processor.

[00:12:32] Speaker 02:
So your honor, with that, however we draw the line around the thing that is doing the detection, we think the application step has to be performed in the trellis by virtue of the claim construction of branch.

[00:12:44] Speaker 02:
On the NLD chips, the argument is very straightforward.

[00:12:47] Speaker 02:
CMU's claims both require application to a plurality of signal samples.

[00:12:53] Speaker 02:
Our branch metric function, which is in the chip stipulation, so it's part of the technical documents that are binding in the case,

[00:13:02] Speaker 02:
on both parties applies the branch metric function to a signal, signal sample that's outputted by the pre-filter and that's represented by the parameter f sub y. So no plurality there.

[00:13:17] Speaker 02:
And finally on simulations, your honor, we would respectfully suggest that simulations are not covered by the claims.

[00:13:23] Speaker 02:
If you look at the... Can I just ask you about that?

[00:13:26] Speaker 05:
It seems to me that the patent itself makes clear

[00:13:31] Speaker 05:
contrary to a kind of ordinary English reaction to the word detector, that this is not a sensor of the magnetic properties of the hard drive.

[00:13:42] Speaker 05:
It is, in fact, a data detector, which is why it's separated from the sensor in the figure one, at which point if, and I gather there's evidence of this, that you get data from actual hard drives and then

[00:14:00] Speaker 05:
feed it into the processor, the Viterbi-like processor.

[00:14:05] Speaker 05:
It doesn't matter whether you call that a computer or not.

[00:14:08] Speaker 05:
It's still a relevant detector because it's detecting the data by running a process to figure out what the true bits were.

[00:14:18] Speaker 02:
Correct, Your Honor.

[00:14:19] Speaker 02:
in real time.

[00:14:20] Speaker 02:
And in fact, the opening of the 839 patent says that the patent is directed to high density magnetic recording sequence detectors and other aspects of the claims that we detail in the brief refer to the notion of a real time hard drive data detector, not a simulation using a computer.

[00:14:39] Speaker 02:
And the admission again of CMU's own expert confirms that reading of the patent because McLaughlin admitted that the detector is in the chip.

[00:14:47] Speaker 02:
And we'd further suggest that if CMU now wants to say, well, this is just an algorithm, it would run into Alice problems because if it's just a patent ineligible mathematical equation that doesn't have a structure, we think it would run into problems of eligibility.

[00:15:03] Speaker 02:
But Your Honor, I would like if I could because they're complex to spend the rest of my time on the damages issues.

[00:15:11] Speaker 02:
And I'd like to begin by simply, let's break it out into the base and the rate.

[00:15:17] Speaker 02:
And let me begin with the problems with the royalty base.

[00:15:20] Speaker 02:
And I'd like to begin with the instruction, because that's what we think is the root of the problem here.

[00:15:24] Speaker 02:
The judge instructed the jury that it was entitled to include as a proxy for the domestic infringing use all sales, including all foreign sales, all sales of chips manufactured, sold, and used abroad, all sales, including foreign sales,

[00:15:45] Speaker 02:
quote, resulting from Marvell's alleged infringing use during the sale cycle.

[00:15:50] Speaker 04:
Now, the problem with that instruction... Wasn't there another place in the instruction that said you can't award damages based on the foreign sales?

[00:16:00] Speaker 02:
That's correct.

[00:16:00] Speaker 02:
In the preceding sentence, Your Honor, the court instructs you may not award damages on the basis of the foreign sales, but it goes on to say you may consider all sales resulting from Marvell's alleged infringing use during the sale cycle

[00:16:15] Speaker 02:
as a means of valuing the domestic infringing use.

[00:16:18] Speaker 02:
So she says you can't literally award damages for the foreign sale, but you can use foreign sales as part of the royalty base for creating this proxy for the valuation of the domestic infringing use in the sale cycle.

[00:16:30] Speaker 02:
Now there's two problems with this, Your Honor.

[00:16:32] Speaker 02:
I'd like to start with the first problem.

[00:16:34] Speaker 02:
By including foreign sales at all, we believe it violates the long line of precedence by which this court and other courts have said

[00:16:45] Speaker 02:
as a matter of law that you may not recover U.S.

[00:16:49] Speaker 02:
patent damages for foreign sales.

[00:16:51] Speaker 02:
It doesn't matter if it's direct or indirect.

[00:16:53] Speaker 02:
If they're in the base, they're being used as a basis for calculation here.

[00:16:57] Speaker 02:
Do you generally agree that the law is different in the copyright world?

[00:17:04] Speaker 05:
I can't speak to that, Your Honor.

[00:17:05] Speaker 05:
I thought there were quite a number of cases cited, Fourth Circuit, Second Circuit, Ninth Circuit, others that

[00:17:11] Speaker 05:
allow the use of foreign sales to calculate copyright damages for domestic activity as long as the former followed from the latter?

[00:17:21] Speaker 02:
So, Your Honor, the argument in the patent context is that the territoriality principle for patent law, which may well be different from that for copyright law, requires that a U.S.

[00:17:32] Speaker 02:
patent rights holder does not obtain, in a sense, the value of a worldwide license

[00:17:38] Speaker 02:
Now I want to just say that there isn't a single case that CMU can cite in the patent context as opposed to the copyright context that suggests this kind of fruit of the poisonous tree theory that lets you get out and reach out to the foreign sales.

[00:17:53] Speaker 02:
And power integrations is just the latest statement of this.

[00:17:56] Speaker 02:
Power integrations obviously have some differences from this case.

[00:17:59] Speaker 02:
That's right.

[00:17:59] Speaker 02:
That's what I'm wondering.

[00:18:00] Speaker 04:
Is it likewise true that there's no case this kind of back pattern going the other way in your favor?

[00:18:07] Speaker 04:
I feel like we have here something of an in-between case.

[00:18:10] Speaker 02:
I agree, Your Honor.

[00:18:11] Speaker 02:
I think there is no clear case either way.

[00:18:13] Speaker 02:
And what we would respectfully suggest is that you should make clear in this case

[00:18:17] Speaker 02:
that the principle of power integrations, which of course expresses a long line of territoriality cases in the patent context, requires you to send the case back for a new trial with an instruction that excludes the foreign ships from the royalty base.

[00:18:31] Speaker 02:
Now, let me say why.

[00:18:32] Speaker 02:
I think the closest case to our side is power integrations.

[00:18:36] Speaker 02:
And I think the reason for that is power integrations obviously involve an apparatus patent where sales were potential acts of infringement.

[00:18:45] Speaker 02:
We're a method patent.

[00:18:46] Speaker 02:
The infringement here is used.

[00:18:47] Speaker 02:
That in our view makes no difference because what this court rejected in power integrations was the idea that near proximate causation or reasonable foreseeability was enough to allow the patent holder to reach out into foreign jurisdictions and include the foreign ships in the base.

[00:19:03] Speaker 02:
We think what happened here is even worse.

[00:19:05] Speaker 02:
Power integrations at least involved a proximate causation notion about reasonable foreseeability.

[00:19:11] Speaker 02:
Here the instruction is just a but for causation instruction.

[00:19:14] Speaker 02:
You, the jury, can use foreign sales as a proxy for domestic infringing use if they resulted from.

[00:19:22] Speaker 02:
There's no qualification.

[00:19:24] Speaker 02:
If they resulted from, there's no definition.

[00:19:26] Speaker 02:
And that's the second error here, Your Honor.

[00:19:28] Speaker 04:
What's the nature of the sales cycles?

[00:19:31] Speaker 04:
If you win a sales cycle, does that mean that you and

[00:19:37] Speaker 04:
Your customer are essentially attached at the hip for the next four or five years, and they're going to be making billions of dollars together?

[00:19:43] Speaker 04:
I mean, how does it exactly work?

[00:19:46] Speaker 04:
What are they agreeing to when there is a sales cycle win?

[00:19:51] Speaker 02:
Your Honor, the answer to that question is the record does not say.

[00:19:54] Speaker 02:
The record does not say for a very basic reason.

[00:19:57] Speaker 02:
We sought at many points pre-trial and during the trial to exclude evidence of foreign sales as part of the royalty basis.

[00:20:07] Speaker 02:
That was denied and the court repeatedly ruled, both in pre-trial motions, motions and limiting and in response to our trial objections, that all sales, including foreign sales, could come into the case.

[00:20:18] Speaker 02:
So there was never an opportunity for the jury to decide what does a sales cycle mean, where did the sales take place.

[00:20:25] Speaker 02:
There was never any joining of issue on that because the court's instructions precluded a definition of the sales cycle or a definition of where the sales took place.

[00:20:33] Speaker 02:
And that's an additional reason.

[00:20:35] Speaker 05:
But there was lots of talk about design wins.

[00:20:38] Speaker 05:
There was, Your Honor.

[00:20:39] Speaker 05:
When a design win occurs, is there a contract?

[00:20:44] Speaker 02:
The record does not say, Your Honor.

[00:20:46] Speaker 02:
There was no evidence in the record that established where contracts were signed.

[00:20:52] Speaker 02:
Never mind where.

[00:20:53] Speaker 05:
Is there a contract?

[00:20:54] Speaker 05:
When Seagate agrees with Marvell, we're going to use your chip.

[00:20:59] Speaker 05:
Is that embodied in a contract?

[00:21:02] Speaker 05:
Yes, Your Honor.

[00:21:03] Speaker 05:
But the evidence in the record... Yes, and then what is the... is it a requirements contract?

[00:21:08] Speaker 05:
Are there minimum numbers?

[00:21:09] Speaker 02:
Your Honor, I can't answer that because it's not in the record.

[00:21:12] Speaker 02:
And I think this is one of the central reasons why you need to send it back.

[00:21:15] Speaker 02:
I mean, I could try to give you answers from personal knowledge, but that isn't the point.

[00:21:22] Speaker 02:
The point here is that the record does not have any evidence of what sale cycle means, where the contracts took place,

[00:21:29] Speaker 02:
And as this court made clear recently in Halo, a mere offer in the United States is certainly not enough to establish that a sale took place in the United States.

[00:21:37] Speaker 02:
You might want evidence about where contracts were signed, where sales were made.

[00:21:41] Speaker 02:
So Your Honor, two separate problems with the instruction.

[00:21:45] Speaker 02:
One is it included foreign sales.

[00:21:47] Speaker 02:
You have repeatedly said as a matter of law that foreign sales can't be the basis for determining a royalty base.

[00:21:54] Speaker 02:
And you asked what case we had the closest case for us as power integrations.

[00:21:58] Speaker 02:
The only case for them, your honor, is railroad dynamics.

[00:22:02] Speaker 02:
And we think that railroad dynamics is a case that allows the inclusion in a royalty base of some foreign sales of car sets containing infringing snubbered components.

[00:22:14] Speaker 02:
But it does so in the only context in which you've ever approved the use of foreign sales as part of the royalty base, and that is,

[00:22:21] Speaker 02:
where the infringing car sets were domestically manufactured and the manufacturer was the infringer.

[00:22:26] Speaker 05:
If the underlying concern about extraterritoriality as a common sense matter is trying to prevent duplicative regulation, why doesn't the railroad case present exactly that problem?

[00:22:44] Speaker 05:
The making and the selling, where the making is here and the selling is abroad, and the two countries may have quite different

[00:22:50] Speaker 05:
regimes or even the same regime and want to tax it twice with damages, and yet that's OK.

[00:22:57] Speaker 02:
It does present it, Your Honor, and we don't necessarily believe railroad dynamics would survive this court's approach in power integrations, which suggested that the extraterritorial principle should trump the principle of fair compensation and for the reasons that you described.

[00:23:12] Speaker 02:
So I'm not suggesting railroad dynamics is correct.

[00:23:15] Speaker 02:
I'm just saying that to the extent it's still good law,

[00:23:17] Speaker 02:
it doesn't apply to our case because in our case you've got a long attenuated chain of causation between the domestic act of infringement, the use of demonstration ships and simulations in Santa Clara to create a relationship that becomes contractual at some point not specified in the record.

[00:23:33] Speaker 02:
That's very different.

[00:23:34] Speaker 02:
There's a one-to-one correspondence between the infringing manufacturer and railroad dynamics and all the other cases that

[00:23:40] Speaker 02:
CMU has cited for this principle, and the foreign sale.

[00:23:43] Speaker 04:
Are you suggesting there are times where there's a sale cycle win that ultimately there's a breakdown on the way to ultimate sale and manufacture and incorporation of the chips?

[00:23:54] Speaker 02:
We do, Your Honor.

[00:23:55] Speaker 02:
It's undisputed in this case that the chips are all manufactured in a foundry in Taiwan that was completed by CMU's own expert.

[00:24:01] Speaker 02:
We also believe that when power integration said that the act of foreign sale, manufacture, or use

[00:24:08] Speaker 02:
creates an intervening cause that breaks the chain of causation, there is a real problem with this kind of case.

[00:24:14] Speaker 02:
The reason why the car set might be understood as an acceptable proxy is that the car set is not a consequence of the infringement in the United States.

[00:24:23] Speaker 02:
It's literally a measure on a one-to-one basis of the infringement in the United States, because the thing is completed before it leaves our borders.

[00:24:31] Speaker 02:
We think that our case is dispositively different from Railroad Dynamics, and it would take a new carve-out from the territoriality principle for this court to affirm.

[00:24:39] Speaker 02:
I see my time is nearly up.

[00:24:40] Speaker 02:
I wonder if I could switch to the royalty rate and just briefly make a few quick points.

[00:24:47] Speaker 02:
On the base, there may be one more thing to say if I can interrupt myself.

[00:24:52] Speaker 02:
On the base, I made the argument about what's wrong with the instruction.

[00:24:56] Speaker 02:
It includes foreign sales and the resulting from the but for causation piece is undefined

[00:25:02] Speaker 02:
The court compounded the error by not saying what the sales cycle means.

[00:25:05] Speaker 02:
And the parties were precluded from inputting evidence on where sales took place, an additional reason for remand.

[00:25:11] Speaker 02:
But on the base, I just want to say why a reasonable- I'm sorry.

[00:25:16] Speaker 05:
I just want to follow up on one thing, though I'm not sure it matters.

[00:25:19] Speaker 05:
I was not seeing a preclusion of evidence on the question of where the sales took place.

[00:25:28] Speaker 02:
Actually, Your Honor, the district court.

[00:25:31] Speaker 05:
There was a summary judgment, and which I think, I forget the citation.

[00:25:34] Speaker 05:
I thought the district court said near the end, this question is an issue for trial.

[00:25:41] Speaker 02:
The district court repeatedly said, I'm letting all sales come in regardless of place.

[00:25:46] Speaker 02:
And we regard that as effectively precluding or rendering futile.

[00:25:49] Speaker 02:
Oh, so you're equating those two.

[00:25:50] Speaker 02:
Yes, we are.

[00:25:51] Speaker 02:
OK, I'm not sure I would.

[00:25:52] Speaker 05:
OK, go on.

[00:25:52] Speaker 02:
Fair enough, Your Honor.

[00:25:54] Speaker 02:
On the basis, one last quick point.

[00:25:57] Speaker 02:
Even if you think this instruction is acceptable, we don't.

[00:26:00] Speaker 02:
We think you must remand for a new trial, giving clarifying principles about foreign sales and the causation standard.

[00:26:06] Speaker 02:
No reasonable jury could have found that the foreign sales would have been included in a hypothetical negotiation in this case.

[00:26:13] Speaker 02:
So just on the record here, three quick points.

[00:26:16] Speaker 02:
The parties must be assumed to bargain in the hypothetical negotiation in the shadow of the law.

[00:26:22] Speaker 02:
CMU had no evidence of any analog foreign patents here.

[00:26:25] Speaker 02:
So CMU was not in a position in the hypothetical negotiation here to bargain for a worldwide license.

[00:26:30] Speaker 02:
Second quick point, there was no industry practice data or any other real world data point in this case whatsoever to suggest that percentage of worldwide sales was ever the kind of license given in this industry for this kind of venture project of a university.

[00:26:45] Speaker 02:
To the contrary, there won't be labor.

[00:26:47] Speaker 02:
all the real-world evidence in this case, such as the $200,000 a year offer to Intel.

[00:26:53] Speaker 05:
It does have this seemingly quite appealing economic rationale of everybody

[00:27:01] Speaker 05:
getting money if the thing turns out to be a success and you're getting basically three quarters of it and they're getting one quarter when the alternative is maybe, maybe much, much worse for you.

[00:27:11] Speaker 02:
Your honor, there's no evidence Marvell would have signed a license that's 600 or 6,000 times more expensive for it than it could have gotten by joining the DSSC or taking the deal offered to Intel or taking the deal, the $2 million annual deal that CMU said posts the date of the hypothetical negotiation, 2004,

[00:27:30] Speaker 02:
In 2005, the CMU says, hey, a great optimistic scenario would be 2 million from Marvell.

[00:27:35] Speaker 02:
So there's no evidence that the willing licensor here would have contemplated this license.

[00:27:41] Speaker 02:
And there's no evidence that the willing licensee here would have contemplated it, because if Marvell was faced with paying 600 or 6,000 times the nearest historical license, it could have moved offshore for the trip cycle.

[00:27:52] Speaker 02:
Your Honor, I see I'm almost out of time for my rebuttal.

[00:27:54] Speaker 02:
On the rate point, we've covered it in our brief, but I can cover it briefly if Your Honor wants, or I can save it for rebuttal.

[00:28:00] Speaker 04:
What about, just if I could move on or go back for a second.

[00:28:05] Speaker 04:
So you're basically saying the hypothetical negotiation would be restricted to actual U.S.

[00:28:12] Speaker 04:
usages and sales.

[00:28:14] Speaker 02:
Yes, Your Honor.

[00:28:14] Speaker 04:
So what about Ms.

[00:28:17] Speaker 04:
Lawton's reference to a calculation that resulted in something like 556 million chips making it back onto U.S.

[00:28:26] Speaker 00:
stores.

[00:28:26] Speaker 04:
Yes, Your Honor.

[00:28:27] Speaker 04:
So I guess that would be

[00:28:30] Speaker 04:
something that you would agree is an infringement?

[00:28:34] Speaker 02:
Well, I don't agree with that, Your Honor, but first may I ask, Your Honor, may I preserve my rebuttal time if I answer Judge Chen's question?

[00:28:42] Speaker 03:
We'll give you two minutes.

[00:28:44] Speaker 02:
Okay, thank you.

[00:28:46] Speaker 02:
The answer to that, Judge Chen, is we don't concede that if the sale cycle begins in Santa Clara, the manufacturer and

[00:28:55] Speaker 02:
and a sale occurs abroad and the chips come back into the United States.

[00:28:58] Speaker 02:
We don't concede that that necessarily is a proper piece of the royalty base.

[00:29:03] Speaker 02:
We don't concede it because there's been intervening causes.

[00:29:06] Speaker 02:
But your honor, on this record, there was also a contributory and induced infringement verdict.

[00:29:12] Speaker 02:
And so the notion that the chips that come back into the United States might be fairly encompassed by a secondary liability theory

[00:29:21] Speaker 02:
might allow you to sustain that piece of the verdict.

[00:29:24] Speaker 02:
But then at most, the liability would be for the domestic, the chips that come back into the country.

[00:29:30] Speaker 02:
We don't think the evidence on that was proper.

[00:29:33] Speaker 02:
It was based on industry-wide PC data and not data specific to Marvell.

[00:29:38] Speaker 02:
There's a lower number that's more data specific, 329 million chips.

[00:29:42] Speaker 02:
But Your Honor, we don't concede, of course we don't concede infringement.

[00:29:46] Speaker 02:
But we don't concede that causation that takes a round trip out of the country and back in is necessarily proper.

[00:29:51] Speaker 02:
You'd have to ask, is that the direct and immediate result?

[00:29:55] Speaker 02:
Do we want to extend causal chains that far to include it for direct infringement?

[00:29:59] Speaker 02:
So to summarize, we don't concede on direct infringement.

[00:30:02] Speaker 02:
You might sustain those trips here if you had a contributory or induced infringement theory.

[00:30:08] Speaker 02:
But, Your Honor, the last point on rape, we've said in our brief that the rape should be... Thank you, Your Honor.

[00:30:14] Speaker 02:
If I have things to address in the race, I'll thank you very much, Your Honor.

[00:30:16] Speaker 02:
Thank you.

[00:30:24] Speaker 01:
Good morning, Your Honors.

[00:30:25] Speaker 01:
May it please the Court, Josh Rosencrans, representing Carnegie Mellon University.

[00:30:31] Speaker 01:
Your Honor, if I may, I'd like to take an unconventional approach and begin with damages first and then circle back to the merits and, in particular, willfulness.

[00:30:42] Speaker 01:
But just to frame it all up in one package, this case truly is extraordinary, but not for the reasons that Marvell has recounted.

[00:30:53] Speaker 01:
You almost never see copying as blatant or as reckless as this.

[00:30:58] Speaker 01:
You almost never see a case

[00:31:00] Speaker 01:
where the accused infringer has admitted and never argued that it has anything by way of a non-infringing alternative.

[00:31:10] Speaker 01:
You almost never see such a stark before and after picture of a company struggling in a life and death struggle about to go out of business and then rising to the top of the market where the company itself says that the reason is this particular invention.

[00:31:29] Speaker 05:
But on the damages point, in particular the extraterritoriality point, that point at least, I take it to be independent of any questioning of the tightness of the causation from all of the activity in, is it Santa Clara?

[00:31:46] Speaker 05:
Is that where it is?

[00:31:47] Speaker 05:
It's Santa Clara and Taiwan and other places that the resulting chips were made and delivered and most of them used.

[00:31:58] Speaker 05:
Um, so why is it that even if your basic narrative is accepted that the alternative to infringement here was Marvell going out of business and the amount of 25% of their multi-billion dollar profit, um, resulting was, is a reasonable price to pay.

[00:32:20] Speaker 05:
Nevertheless, the extraterritoriality argument is you've reached too far.

[00:32:25] Speaker 01:
I understood your honor, and actually the narrative links directly to extraterritoriality.

[00:32:30] Speaker 01:
Not just was it necessary for Marvell to infringe to save its life, it was necessary for Marvell to infringe in Silicon Valley.

[00:32:40] Speaker 01:
That was part of the no non-infringing alternative, and that makes this case the diametric opposite of power integrations.

[00:32:49] Speaker 01:
In power integrations, there was absolutely no linkage between

[00:32:53] Speaker 01:
the domestic act of sales and the foreign sales.

[00:32:58] Speaker 04:
I thought I read power integration differently, where the opinion at least rejected the theory of awarding damages on foreign sales that were connected to or related to or caused by domestic infringement.

[00:33:16] Speaker 01:
No, Your Honor.

[00:33:16] Speaker 01:
Actually, the word was foreseeable.

[00:33:18] Speaker 01:
I mean, it was a completely crackpot theory of damages in that case.

[00:33:23] Speaker 01:
there were domestic sales.

[00:33:26] Speaker 01:
And the plaintiff said, because it was foreseeable that there would be foreign sales, we get to claw back the lost sales that we would have made in foreign territories.

[00:33:37] Speaker 01:
And this court went out of its way to say that the expert admitted that his damages estimate was, quote, not actually rooted in the defendant's activity in the United States, was, quote, not related to any parts that were manufactured, used, or sold in the United States.

[00:33:53] Speaker 01:
So to segue back to Judge Toronto's question, here we have that definitive linkage.

[00:33:59] Speaker 01:
This may be the unique case, the extraordinary case, where that linkage is very clear, precisely because here is where the sales force was.

[00:34:10] Speaker 01:
Here's where the design force was, 150 Marbelle design employees out of 153.

[00:34:15] Speaker 01:
Here's where the customers and their design centers were.

[00:34:20] Speaker 01:
They had no choice but to be infringing

[00:34:23] Speaker 01:
for trillions of times per chip over the course of millions of chips, hand in hand over the course of several years for each design win.

[00:34:34] Speaker 03:
In the red brief, you describe the patents in the suit as must have cutting edge technology.

[00:34:43] Speaker 03:
Does every other chip use it?

[00:34:46] Speaker 03:
Have you sued other chip manufacturers?

[00:34:49] Speaker 01:
The answer to the first question is yes.

[00:34:51] Speaker 01:
Every other chip in a hard drive has it according to our industry expert, Biorik.

[00:34:57] Speaker 01:
It's become industry standard.

[00:35:00] Speaker 01:
Everyone's asking for it.

[00:35:02] Speaker 01:
So you've sued others.

[00:35:03] Speaker 01:
The answer to the second question is no, we haven't sued.

[00:35:05] Speaker 01:
It was a big lift to sue Marvell.

[00:35:07] Speaker 01:
Now understand,

[00:35:09] Speaker 01:
that the reason it took so long to sue Marbelle is because you can't pry open the chip and see that someone's infringing.

[00:35:16] Speaker 01:
You have to actually get their documents to figure out the nature of the infringement.

[00:35:21] Speaker 01:
I want to turn to Judge Chan's question about what the record says about a design win, because it supplies the rest of the nexus.

[00:35:31] Speaker 01:
It is a winner-take-all market, and on page 42, 124,

[00:35:36] Speaker 01:
You have a clear quote from our industry expert that says, when you win, you get all the chips on the drive in that generation.

[00:35:46] Speaker 01:
He says that he's never heard of a case where some other chip gets put into the drive once you get the design win.

[00:35:53] Speaker 01:
So yes, Judge Toronto, it is like a requirement contract.

[00:35:57] Speaker 05:
But we don't actually have a record either containing the contract or saying,

[00:36:03] Speaker 05:
Seagate or Western Digital or the other five, four customers or something, they commit to buying either a certain amount or everything that they're going to use when they make hard drives for a certain period.

[00:36:14] Speaker 01:
Oh, please.

[00:36:15] Speaker 01:
The best that we have is 42124 on line four.

[00:36:20] Speaker 01:
This is our industry expert.

[00:36:22] Speaker 01:
And so to my knowledge, no drive company has ever taken two rechannel suppliers to production on the same drive, on the same generation.

[00:36:31] Speaker 01:
at the same time.

[00:36:32] Speaker 01:
That essentially says winner take all.

[00:36:35] Speaker 04:
Is there a reason why there was no contract or partnership entered into the record that reflects what are the terms of the agreement between Marvell and... Well, so I would say Marvell completely punted on the question of where the sales occur.

[00:36:56] Speaker 01:
We put into the record that we were all about uses.

[00:36:59] Speaker 01:
It was a winner-take-all market.

[00:37:02] Speaker 01:
We had clear testimony about that.

[00:37:04] Speaker 01:
Marvell is saying, worldwide sales, worldwide sales.

[00:37:08] Speaker 01:
Well, the district court said Marvell did not produce any evidence that there were sales anywhere but in Silicon Valley.

[00:37:17] Speaker 01:
This was a design win.

[00:37:19] Speaker 01:
The design win was the sale.

[00:37:21] Speaker 01:
And the district court said that not only that, but that there was but for cause established

[00:37:26] Speaker 01:
between the infringement and the design wins.

[00:37:30] Speaker 03:
In the red brief at 61, you say Lawton testified that both Marvell and CMU frequently entered into running royalty agreements around the time of the hypothetical negotiation.

[00:37:45] Speaker 03:
I couldn't find any evidence in the record to support that assertion.

[00:37:48] Speaker 01:
Well, Your Honor, I've got pages 43, 335 to 36 where Lawton talks about it.

[00:37:55] Speaker 03:
and 34024 were... I looked at what you had in the brief, but it didn't seem to me to support it.

[00:38:02] Speaker 03:
What do you have in the way of other proof?

[00:38:06] Speaker 01:
Well, Your Honor, the three licenses that were put in the record were all licenses on the same exact chips, the systems on chips that our technology was incorporated into, and all three of them were what Ms.

[00:38:21] Speaker 01:
Sullivan refers to as worldwide sales.

[00:38:23] Speaker 01:
It was the sale of all chips.

[00:38:25] Speaker 01:
And that makes total sense.

[00:38:26] Speaker 01:
As Judge Toronto was saying, it's an economic matter.

[00:38:29] Speaker 01:
Marvell doesn't even track where the chips end up or where its customers' customers end up using the chips.

[00:38:38] Speaker 01:
What Marvell cares about and what in this hypothetical negotiation the parties would care about is that it's a winner take all design market and the infringement had to happen here.

[00:38:48] Speaker 01:
So let's share in the proceeds that come from that.

[00:38:51] Speaker 03:
I want to talk to you about 50 cents per chip.

[00:38:57] Speaker 01:
Absolutely, Your Honor.

[00:38:58] Speaker 03:
So the sales to the particular company, I don't know what's confidential on here or not.

[00:39:07] Speaker 03:
I think it's all free.

[00:39:09] Speaker 03:
Okay.

[00:39:09] Speaker 03:
So the sales to Maxtor of about 137,000 chips, which were included in Ms.

[00:39:15] Speaker 03:
Lawton's analysis, were associated with an operating premium of 47 cents.

[00:39:21] Speaker 03:
And those figures were from 2003, 2004.

[00:39:27] Speaker 03:
But Ms.

[00:39:28] Speaker 03:
Lawton says, in this industry, the price is always going down.

[00:39:32] Speaker 03:
So why is 50 cents a chip royalty reasonable at the time of the negotiation?

[00:39:40] Speaker 01:
Well, Your Honor, a few things to say about it.

[00:39:41] Speaker 01:
First, the same licenses that I mentioned are per-chip licenses.

[00:39:46] Speaker 01:
Marvell said, we don't really care much about the form of the license.

[00:39:49] Speaker 01:
What matters is

[00:39:51] Speaker 01:
is on a case by case basis how much money we're going to make, the difference between 50 cents a chip or a certain percentage.

[00:40:00] Speaker 01:
But the other thing that Ms.

[00:40:01] Speaker 01:
Lawdon testifies to is yes, the chip prices are going down.

[00:40:05] Speaker 01:
Why?

[00:40:05] Speaker 01:
Because as you manufacture more, the cost goes down.

[00:40:09] Speaker 01:
The operating premium goes up.

[00:40:12] Speaker 01:
The operating profits go up as the costs go down because you actually make more profit per chip.

[00:40:17] Speaker 01:
And so that's why it's reasonable and the only question here then becomes

[00:40:20] Speaker 01:
whether her methodology is reasonable or more specifically whether the district court erred in adopting, in approving of her methodology as a matter of abuse of discretion.

[00:40:34] Speaker 01:
But before we get too deeply in the 50 cent per chip and I'm happy to go back, I do want to make one other point about the question I think Judge Chin asked about whether there is a different standard in the Copyright Act

[00:40:48] Speaker 01:
rather than the patent act.

[00:40:51] Speaker 05:
I'm sure we're both interested in the answer.

[00:40:55] Speaker 01:
So the answer is no.

[00:40:57] Speaker 01:
There is one rule of extra-territoriality.

[00:41:00] Speaker 01:
The Copyright Act has that rule in it.

[00:41:03] Speaker 01:
It is called the Predicate Act doctrine.

[00:41:05] Speaker 01:
The Predicate Act doctrine says that when the Predicate Act here is the infringement

[00:41:15] Speaker 01:
That's what is necessary for it to occur in the United States, but in keeping with rules and railroad dynamics, once you have that predicate act in the United States, you are allowed to measure damages based upon benefit.

[00:41:31] Speaker 01:
The classic way of measuring benefit is based upon sales, and it doesn't matter.

[00:41:36] Speaker 01:
Once you are allowed to measure based even on non-infringing sales,

[00:41:42] Speaker 01:
It simply doesn't matter why the sales don't infringe, whether they don't infringe because this is a method patent and that's an apparatus, or because this is a patent on domestic use and

[00:41:55] Speaker 01:
the ultimate sales were not infringing because they were foreign.

[00:41:59] Speaker 04:
So do you think in a case like Microsoft versus AT&T, where the Supreme Court said all of those foreign uses and sales are not infringing, the Supreme Court nevertheless would have said it's okay to sweep in all of those sales into a reasonable royalty negotiation?

[00:42:15] Speaker 01:
Yes, not only would the Supreme Court say it, but the Supreme Court did say it in Gould's.

[00:42:21] Speaker 01:
In Gould's, the active infringement was domestic.

[00:42:24] Speaker 01:
And what the plaintiff was allowed to get were royalties on the foreign sales as well.

[00:42:31] Speaker 04:
I have to ask it again, because I want to make sure you say it again.

[00:42:36] Speaker 04:
Hundreds of millions of sales of windows abroad that the Supreme Court ruled did not infringe.

[00:42:46] Speaker 04:
Those would nevertheless be considered in a reasonable royalty negotiation between AT&T and Microsoft?

[00:42:52] Speaker 01:
If there is the clear nexus that we have established here between the domestic uses and the sales, regardless of where they were.

[00:43:02] Speaker 01:
And again, I have to emphasize, there's no evidence in this record that the sales were abroad.

[00:43:07] Speaker 05:
The disreport went out of its way to say... Right, the disreport did, but you, I thought, quite conspicuously say practically nothing about that point in your brief.

[00:43:17] Speaker 05:
All you do on page 83 is quote,

[00:43:20] Speaker 05:
what, J.A.

[00:43:21] Speaker 05:
250, where the district court's conclusion, but you don't make the argument that, in fact, under normal location of sales principles, which I realize are not complete, given the footnote in Halo, that nevertheless, these sales actually did occur in the United States.

[00:43:40] Speaker 01:
We didn't for lack of space, but that is clearly true.

[00:43:43] Speaker 01:
You know, but that is clearly true.

[00:43:45] Speaker 01:
We are not distancing ourselves from what the district court said.

[00:43:48] Speaker 01:
The location of these sales, the only thing we've got in this record is that the sales that is from Marvell to its customers were not just negotiated, not just designed, not just priced out, but consummated in the United States.

[00:44:06] Speaker 01:
But the reason we don't make much of that is because our theory was not about where the sales were consummated.

[00:44:12] Speaker 01:
Our theory was about the domestic uses.

[00:44:14] Speaker 01:
and the domestic uses were essential.

[00:44:18] Speaker 01:
We're not talking about an extravagant theory here.

[00:44:21] Speaker 01:
We're talking about an extraordinary, possibly unique linkage where everything that happened in the United States over the course of three to four years per cycle, every act of infringement had to happen in the United States, precisely because that's where Marvell's

[00:44:39] Speaker 01:
customers are, that's where the design centers are.

[00:44:41] Speaker 04:
Just so I understand, I have to think about only the question of whether it's permissible to award this kind of damages based on this causation theory of the direct infringement related to the testing, designing in the sales cycle.

[00:44:57] Speaker 04:
And I don't have to

[00:44:58] Speaker 04:
asked the other question of whether or not all of these sales of these 10 billion chips actually happened in the United States.

[00:45:05] Speaker 01:
That's correct, Your Honor.

[00:45:06] Speaker 01:
Our theory was not about where the sales were.

[00:45:08] Speaker 01:
Our theory under Minko and Spectrolitics and Union Carbide is once you have the active infringement, once you have an active infringement, you can value the benefit to the infringer based upon the resulting sales, even though in every one of those cases,

[00:45:26] Speaker 01:
The sales were not infringing.

[00:45:28] Speaker 01:
And when you marry those cases with Gould and especially Railroad Dynamics, Railroad Dynamics says when you've got the active infringement in the United States, you are allowed to measure benefit based upon the non-infringing sales, including the non-infringing sales in other countries.

[00:45:50] Speaker 05:
Can I ask you this?

[00:45:51] Speaker 05:
Suppose, for purposes of this question,

[00:45:55] Speaker 05:
that we were to think that the jury instruction was improper on extraterritoriality grounds and that a new trial was needed as a result because we don't know if the jury found on any other basis.

[00:46:13] Speaker 05:
In such a new trial,

[00:46:15] Speaker 05:
I take it your position would be that at that point there could be a much more well-joined evidentiary dispute about location of sales.

[00:46:28] Speaker 01:
Yes, there could be, but I need to emphasize one point about your hypothetical, Your Honor.

[00:46:33] Speaker 05:
I realize you disagree.

[00:46:36] Speaker 01:
Yes, but even if the court were to include that, let's just be clear on what

[00:46:41] Speaker 01:
Instructions were on the table.

[00:46:43] Speaker 01:
There was our instruction, the resulting from instruction, which comes directly out of, for example, this court's opinion in King Instruments, which we didn't cite, but it says resulting from, or Marvell's instruction, which is sole cause, only cause, which is

[00:47:01] Speaker 01:
even more extreme than an EMVR instruction.

[00:47:05] Speaker 05:
So what's, what's, what's the law on the question if their instruction was incorrect, but so was yours and yours was adopted.

[00:47:14] Speaker 05:
Do they get to get a reversal?

[00:47:17] Speaker 01:
They don't, your honor.

[00:47:18] Speaker 03:
What they get is the benefit of the jury's improperly.

[00:47:21] Speaker 03:
You're saying the jury was improperly instructed, but forget about it.

[00:47:25] Speaker 01:
What I'm saying is if hypothetically,

[00:47:28] Speaker 01:
The court concludes that the jury had the wrong instruction.

[00:47:31] Speaker 01:
And the reason it was wrong is because it should have been a but for instruction.

[00:47:40] Speaker 01:
And Marvell never asked for a but for instruction.

[00:47:43] Speaker 01:
Absolutely, Marvell waived that argument.

[00:47:45] Speaker 01:
No, no, no.

[00:47:46] Speaker 05:
Suppose that the error is it needed to have some sort of territorial limit in it.

[00:47:54] Speaker 05:
preserved or waived or what?

[00:47:56] Speaker 01:
It depends what the territory limit was.

[00:47:58] Speaker 01:
I mean, Marbelle's objection was that the district court erred in saying the act of infringement has to occur in the United States.

[00:48:07] Speaker 01:
That is what the district court said.

[00:48:09] Speaker 01:
Do not count as infringement.

[00:48:11] Speaker 01:
But it's the next sentence that they have to.

[00:48:13] Speaker 01:
Yes, that's preserved.

[00:48:14] Speaker 01:
But you can count all sales, the entire benefit.

[00:48:18] Speaker 01:
Now, that comes directly out of Gould's and railroad dynamics, this notion

[00:48:24] Speaker 01:
that you count the benefit of all non-infringing sales.

[00:48:27] Speaker 01:
And by the way, that's exactly how parties would be negotiating, which is what we've already discussed.

[00:48:34] Speaker 05:
Well, except that the hypothetical negotiation is hypothetical in a number of ways.

[00:48:39] Speaker 05:
It's not tied to the specific parties, as we recently said, and not completely tied.

[00:48:45] Speaker 05:
It's somewhat related to the position of the particular parties, but not completely tied otherwise for various reasons.

[00:48:53] Speaker 05:
It's also under a set of hypothetical assumptions, including everybody knows that this patent is infringed.

[00:49:02] Speaker 05:
Everybody knows that it's valid.

[00:49:06] Speaker 05:
And the question, I guess, is why isn't another one of those hypothetical constraints?

[00:49:13] Speaker 05:
You may negotiate only about intra-territorial activity, whatever that may mean.

[00:49:22] Speaker 05:
So even if the extraterritorial is tied at the hip in a causation way to the domestic activity.

[00:49:32] Speaker 01:
I was with you up until that last sentence.

[00:49:35] Speaker 01:
Sure, you're negotiating about infringement in the United States.

[00:49:39] Speaker 01:
That's what the Predicate Act doctrine is about.

[00:49:41] Speaker 01:
That's the only doctrine that the Supreme Court has ever used when it talks about extraterritoriality.

[00:49:48] Speaker 01:
I mean, Marvell has never cited a single case

[00:49:52] Speaker 01:
that has said damages need to be limited or the benefit needs to be measured only with respect to acts that, excuse me, only with respect to sales that are domestic.

[00:50:02] Speaker 01:
I mean, Sheldon versus MGM, which is the learned hand opinion that talks about the predicate act doctrine, that was about making of a negative in the United States.

[00:50:14] Speaker 01:
But what ended up happening because the negative was made in the United States and exported abroad was all these copies were made abroad.

[00:50:21] Speaker 01:
Those acts were all abroad, but because the benefit to the infringer, the infringer infringed here, and because the benefit to the infringer is measured by sales, the act of infringement is measured by all of those sales.

[00:50:36] Speaker 01:
So to reach a different conclusion here would mean that the court has to conclude that there's a special patent law rule governing extraterritoriality that doesn't apply in any other context.

[00:50:49] Speaker 01:
Now, I did promise to turn... Hang on a minute.

[00:50:54] Speaker 03:
At page 50 in the blue brief, the argument is made that, and I think you probably agree, that at least actual licenses are probative evidence of the probable form of the Royal Instructure.

[00:51:06] Speaker 03:
And then they go on to say the only evidence of any contemporaneous actual licensing was flat fee.

[00:51:13] Speaker 03:
And I wrote a note to say I think that's right, but I wanted to give you a chance to discuss it.

[00:51:20] Speaker 01:
Well, so what I think they say is that the only evidence with respect to these specific... They say the only evidence of any contemporaneous actual licensing showed that CMU contemplated and received flat fee sums rather than permanent royalty.

[00:51:36] Speaker 01:
That's false, Your Honor.

[00:51:37] Speaker 01:
We put into evidence... That's why I wanted you to... Yeah.

[00:51:41] Speaker 01:
We put into evidence

[00:51:43] Speaker 01:
a license that was a running royalty.

[00:51:47] Speaker 01:
It was a 1998 license.

[00:51:49] Speaker 01:
It wasn't on this specific patent.

[00:51:52] Speaker 01:
But I need to underscore that Ms.

[00:51:54] Speaker 01:
Lawton did consider all of those other licenses and she concluded in the words of the district court that they are radically different.

[00:52:03] Speaker 01:
There is a huge difference between on the one hand a license that you provide to what are essentially

[00:52:11] Speaker 01:
partners in a joint venture.

[00:52:13] Speaker 01:
Let's go together and figure out how to solve these problems.

[00:52:17] Speaker 01:
It'll cost you a quarter of a million a year to be a member.

[00:52:20] Speaker 01:
But you're also giving hundreds of millions of dollars worth of research support and participating in the exercise of identifying and solving problems versus Marvell.

[00:52:32] Speaker 01:
And by the way, none of them actually know what you're going to invent.

[00:52:35] Speaker 05:
Of course... Is that by the way true of that last point in your last

[00:52:40] Speaker 05:
sentence by the waypoint.

[00:52:41] Speaker 05:
Is that true of all of the licenses that Marvell relied on?

[00:52:49] Speaker 01:
Yes, all of the DSSC.

[00:52:52] Speaker 05:
Pre-invention?

[00:52:53] Speaker 01:
Yes.

[00:52:53] Speaker 01:
Then there's the Intel offer.

[00:52:55] Speaker 01:
Now the Intel offer was a completely different scenario.

[00:52:59] Speaker 01:
Intel was not in the re-channel business.

[00:53:03] Speaker 01:
So Marvell went to Intel and said,

[00:53:05] Speaker 01:
We know we have this license that is worthless to you, but it would mean a great deal to us if you would license it so we could announce to the world.

[00:53:13] Speaker 05:
I'm sorry, that was post-invention.

[00:53:15] Speaker 01:
That is post-invention, yes.

[00:53:17] Speaker 01:
Now, if it's okay, I did promise to turn to the merits.

[00:53:21] Speaker 01:
And in particular, let me look at the merits through the lens of the willfulness because... I'm gonna ask you just one question about a topic that Ms.

[00:53:33] Speaker 05:
Sullivan

[00:53:34] Speaker 05:
of course, not bring up, but latches, put aside for the minute, are pending en banc proceeding.

[00:53:45] Speaker 05:
What do you do about the, what is it, the principal case?

[00:53:50] Speaker 05:
Soterabic.

[00:53:51] Speaker 05:
Yes.

[00:53:52] Speaker 05:
Thank you for saying it.

[00:53:54] Speaker 05:
I'm sorry, mispronounced it.

[00:53:55] Speaker 05:
Which I think says in terms and cites and quotes a few earlier decisions that say it is true that

[00:54:04] Speaker 05:
the defendant's bad conduct, inequitable conduct, can count against latches, but only if it is in some way responsible for the patent holder's delay.

[00:54:17] Speaker 05:
And we don't have that.

[00:54:20] Speaker 01:
Well, so first, Your Honor, I don't believe Sir Ravick cited other cases for that proposition, but it is an inventorship case

[00:54:29] Speaker 01:
And this court's law in the infringement context is completely different.

[00:54:35] Speaker 05:
The copying law.

[00:54:37] Speaker 05:
The copying by itself can be.

[00:54:39] Speaker 01:
Yes, in the infringement context.

[00:54:41] Speaker 01:
And that's, I mean, that's unbonked.

[00:54:43] Speaker 01:
That's Alkermann, which says it explicitly.

[00:54:45] Speaker 01:
Conscious copying may be a factor weighing against the defendant.

[00:54:49] Speaker 01:
Gasser chair and explicit holding.

[00:54:52] Speaker 01:
Bott and explicit holding.

[00:54:54] Speaker 01:
And the point is that inventorship actions are just different from

[00:54:58] Speaker 01:
infringement actions.

[00:54:59] Speaker 01:
Why are they different?

[00:55:00] Speaker 01:
Well, because in the inventorship context, the inventor who is the defendant will always have unclean hands under that scenario.

[00:55:13] Speaker 01:
They will always know that they're cutting someone out of the action.

[00:55:17] Speaker 01:
And Sarah Revick says, well, that means that you would never be able to survive a latches defense.

[00:55:24] Speaker 01:
Here we've got the opposite.

[00:55:25] Speaker 01:
In the infringement context, you can be a blatant infringer.

[00:55:28] Speaker 01:
Because you know about the patents, for example, as was the case here, or you could be someone who accidentally trips across the line.

[00:55:35] Speaker 01:
And by the way, under Marvell's theory, no one would ever be able to present and win a latches claim because in the patent infringement context, the infringement, the copying, however egregious, is never the cause of the delay.

[00:55:54] Speaker 01:
But I keep promising to turn to the merits unless the

[00:55:58] Speaker 01:
The court has more questions about latches.

[00:56:02] Speaker 01:
So the bottom line here is that these defenses were not just wrong, but as the jury and the district court both found, they were unreasonably wrong.

[00:56:12] Speaker 01:
Marvell's top infringement argument was all about drawing boxes on chip diagrams and saying, this is what you should focus on, don't focus on that, even when Marvell's own documents described

[00:56:27] Speaker 01:
the chip otherwise.

[00:56:29] Speaker 01:
And this, in answer to one of the questions that was asked, was exactly the argument that the district court raised and rejected in claim construction, the argument that Marvell is making.

[00:56:42] Speaker 04:
So the argument that it has to be done in a trailer?

[00:56:45] Speaker 01:
Yes.

[00:56:45] Speaker 01:
Yes.

[00:56:46] Speaker 01:
Exactly what the district court said.

[00:56:48] Speaker 01:
Don't give me the seven word email.

[00:56:50] Speaker 05:
Right, but the response to that,

[00:56:52] Speaker 05:
I think I'm remembering correctly is, nevertheless, the claim construction adopted requires that this calculation be done for the branch.

[00:57:02] Speaker 05:
And if it's being done for a branch, you're in the trellis.

[00:57:06] Speaker 05:
Metaphorically, in the trellis.

[00:57:09] Speaker 01:
So, okay, but then that leads to the argument, therefore it's gotta be in, therefore a post-processor cannot work.

[00:57:17] Speaker 01:
Now, McLaughlin was very clear, our technical expert was very clear,

[00:57:23] Speaker 01:
It's going on in the trellis, in the MMP.

[00:57:26] Speaker 01:
Marvell kept pointing to, and if you look at page, at page 15 of the opening brief, you've got this great diagram.

[00:57:39] Speaker 01:
And McLaughlin, this is of the MMP.

[00:57:41] Speaker 01:
It's what Marvell called the MMP.

[00:57:44] Speaker 01:
It's what Marvell called the detector.

[00:57:47] Speaker 01:
Marvell kept saying, look, it says Viterbi detector.

[00:57:50] Speaker 01:
It's going on in there.

[00:57:52] Speaker 01:
But it's not going on in the MNP.

[00:57:54] Speaker 01:
And McLaughlin kept saying this is 46588.

[00:57:59] Speaker 01:
No, I'm talking about what's happening in the MNP.

[00:58:03] Speaker 01:
There's a second Viterbi detector with a second trellis.

[00:58:08] Speaker 01:
It's called a pruned trellis.

[00:58:10] Speaker 01:
And it's all actually going on in the MNP.

[00:58:13] Speaker 01:
Not that it matters, because this whole thing Marvell called the detector.

[00:58:18] Speaker 01:
And then as to validity, Marvell's position was simply to depended upon rewriting a formula that our experts said is ridiculously misleading, rewriting it in a way that contradicted the plain language of the very column that Ms.

[00:58:37] Speaker 05:
Sullivan- And just to check my understanding, the ridiculous

[00:58:45] Speaker 05:
aspect, I think you would say, of the rewriting was not using a variance instead of the standard deviation, but putting the index, putting the subscript, indexing the sigma to suggest that it was differing from time to time and branch to branch.

[00:59:04] Speaker 01:
Yes, the subscript is really small and really hard to see.

[00:59:10] Speaker 01:
But it didn't put one over on the jury or the district court.

[00:59:14] Speaker 01:
It is incredibly important.

[00:59:16] Speaker 01:
In column 10, it begins by saying on line 26, that sigma squared, it is a constant.

[00:59:23] Speaker 01:
It's 0.055.

[00:59:24] Speaker 01:
It could be something else.

[00:59:26] Speaker 01:
But it's a constant that he describes.

[00:59:29] Speaker 01:
And he goes further down in column 10.

[00:59:32] Speaker 01:
And he refers to it as a constant.

[00:59:35] Speaker 01:
And it is not different from branch to branch.

[00:59:38] Speaker 00:
And I have to emphasize.

[00:59:40] Speaker 01:
Column 10, at the bottom of the, it's sort of the bottom paragraph, line 55, by a fraction.

[00:59:55] Speaker 04:
Which depends on the transition noise standard deviation.

[00:59:59] Speaker 01:
Yes, correct.

[01:00:00] Speaker 01:
It's the, so line 26.

[01:00:03] Speaker 01:
It's talking about the standard deviation, that being a fraction, 0.055.

[01:00:08] Speaker 01:
He's talking down here about each branch of the metric, so it's the same branches.

[01:00:13] Speaker 01:
They're all being multiplied by the same number.

[01:00:16] Speaker 01:
You could choose a number, a number, that is different from 0.055, but it's the same number for every branch.

[01:00:24] Speaker 01:
And I have to underscore that Ms.

[01:00:25] Speaker 01:
Sullivan just

[01:00:26] Speaker 05:
Change the theory of... Which lines were you reading?

[01:00:31] Speaker 01:
The first line was column 10, line 26.

[01:00:35] Speaker 05:
This is in the unfurther modified example, right?

[01:00:42] Speaker 01:
Yes.

[01:00:43] Speaker 01:
That's the standard deviation.

[01:00:45] Speaker 01:
Standard deviation is a fraction.

[01:00:47] Speaker 01:
And then when you go down to the further modified, he's talking about the standard deviation.

[01:00:52] Speaker 01:
It's still a fraction, and it's further modified by multiplying by a scalar.

[01:00:58] Speaker 01:
It's a fraction.

[01:01:00] Speaker 01:
It could be sigma squared for all we care, but it's the same fraction every time it's multiplied.

[01:01:10] Speaker 01:
And I do want to underscore that the theory of infringement changed today.

[01:01:15] Speaker 01:
Marvell admitted in the district court, so there are two equations, there's equation 20, and there's the equation 20 that's multiplied by a constant, okay?

[01:01:26] Speaker 01:
One can call them two, I mean they are two different equations arguably.

[01:01:30] Speaker 01:
Marvell and its expert admitted in the district court, equation 20 is not signal dependent, and our whole argument was, well if equation 20 is not signal dependent, you can't make it signal dependent,

[01:01:43] Speaker 01:
by multiplying it by a fraction.

[01:01:46] Speaker 01:
And Ms.

[01:01:47] Speaker 01:
Sullivan today said, and so Marvell's entire theory was no, no, no.

[01:01:52] Speaker 01:
It is the further modified equation.

[01:01:55] Speaker 01:
That's the one that represents the set, precisely because of this B comma NT.

[01:02:00] Speaker 01:
That's the set.

[01:02:02] Speaker 01:
Ms.

[01:02:02] Speaker 01:
Sullivan today just said, no, that equation 20 is further modified is not the set.

[01:02:08] Speaker 01:
The set is equation 20.

[01:02:10] Speaker 01:
That's one element of the set.

[01:02:12] Speaker 01:
The second element of the set is the further modified.

[01:02:14] Speaker 05:
And which one you choose depends on the particular value, whether it's a one or a zero, whether it's a transition or not.

[01:02:23] Speaker 01:
Which one you choose depends upon whether or.

[01:02:25] Speaker 05:
Because the selection is signal dependent, though what you select in half the cases is.

[01:02:31] Speaker 01:
So no, your honor, because a transition is not the same as a sequence of symbols.

[01:02:36] Speaker 01:
So you can tell that there has been a transition

[01:02:40] Speaker 05:
Is that a different point?

[01:02:43] Speaker 05:
I thought you disagreed, even assuming that a particular transition is a signal and a function that you apply when you have that signal is signal dependent, even if you assume that, that when you apply exactly the same thing to all of the ones, all of the transitions, and don't

[01:03:10] Speaker 05:
to the zeros that the choice based on signal does not make what you choose into something signal dependent.

[01:03:17] Speaker 05:
So at the end of the day, you still have just one signal dependent function.

[01:03:21] Speaker 01:
I would say yes to that, but I am making it slightly.

[01:03:24] Speaker 01:
To the extent I made clear what I said.

[01:03:25] Speaker 01:
I know, I think you were very clear.

[01:03:27] Speaker 01:
But it's also an additional argument, which is being able to detect a transition, which is what in column one is described as the prior art, which is no good.

[01:03:40] Speaker 01:
That is not the same as being able to detect a sequence of signals because, per the conversation that Judge Chen was having with Ms.

[01:03:48] Speaker 01:
Sullivan, being able to detect whether it's a transition only tells you whether it's, it doesn't tell you whether it's north to north or south to south.

[01:04:00] Speaker 01:
Whether it's north to north or south to south depends upon the sequence of symbols and the district court's unappealed claim construction was

[01:04:09] Speaker 01:
that the signal dependent branch metric function has to be able to determine the sequence of signals.

[01:04:18] Speaker 01:
Symbols, I should say.

[01:04:20] Speaker 01:
Thank you, Your Honor.

[01:04:21] Speaker 01:
You've been very patient and we respectfully request that this court affirm the district court in all respects.

[01:04:30] Speaker 03:
I'm going to give you six minutes.

[01:04:33] Speaker 02:
Thank you, Your Honor.

[01:04:39] Speaker 02:
Judge Taranto, you asked my friend if you corrected the erroneous instruction and sent the case back for remand.

[01:04:45] Speaker 02:
Could a robust evidentiary direct record be joined on the meaning of sale cycle and the location of the sales?

[01:04:51] Speaker 02:
And the answer is absolutely yes.

[01:04:53] Speaker 02:
It could be and it has been in post-Marvel cases like the France Telecom case just finished in the Northern District of California.

[01:05:00] Speaker 02:
There was no evidence to support my friend's assertions about sales actually taking place in the United States or a sales cycle.

[01:05:08] Speaker 02:
necessarily being located in the United States.

[01:05:10] Speaker 02:
There was no evidence to suggest that Marvell didn't have non-infringing alternatives out of the country.

[01:05:15] Speaker 05:
I took it from the district court's three or so pages, perhaps 248 to 250 of the Joint Appendix, that no evidence was really on your side.

[01:05:26] Speaker 05:
There was plenty of testimony that said all the negotiations took place, these were design wins, the point that Mr. Rosencrantz pointed us to a little while ago that said

[01:05:38] Speaker 05:
Once you have one of these, all of the chips are bought from the same source.

[01:05:42] Speaker 05:
And what was no evidence was anything to the contrary from your side.

[01:05:46] Speaker 02:
The instruction kept the jury from deciding where the sales were located.

[01:05:52] Speaker 02:
That's a different point.

[01:05:53] Speaker 02:
Your Honor, what I'm suggesting is a properly instructed jury.

[01:05:57] Speaker 02:
You can't accept the trial record or its omissions.

[01:06:01] Speaker 02:
without a proper instruction that gets the jury to see the relationship between any sales.

[01:06:06] Speaker 02:
In real life, in fact, the contracts in Santa Clara are subject to a lot of other contingencies, like whether there'll be contracts signed abroad.

[01:06:14] Speaker 02:
But your honor, my key point is the instruction was erroneous, and I want to just go to the point about Mr. Rosenkrantz said we didn't object

[01:06:20] Speaker 02:
to the but for language of the instruction.

[01:06:21] Speaker 02:
That's incorrect.

[01:06:22] Speaker 02:
We strenuously objected to it.

[01:06:24] Speaker 02:
We proffered an alternative instruction that said solely resulting from the domestic infringing is not was denied.

[01:06:31] Speaker 02:
So the instruction was incorrect both as to excluding the extraterritorial chips and as to the weak standard of causation.

[01:06:39] Speaker 02:
And if you send it back, we could join.

[01:06:41] Speaker 02:
In this case, it was Marvell's first course to prove the damages.

[01:06:45] Speaker 02:
We were not given an opportunity to debate where the sales took place because they were all folded in, and so I would argue that we were effectively precluded.

[01:06:52] Speaker 02:
Your Honor, Judge Chen, you asked my friend, well, wouldn't AT&T versus Microsoft mean that if it was redone as a reasonable royalty case, all the foreign windows sales would come in?

[01:07:04] Speaker 02:
And the answer is absolutely yes.

[01:07:05] Speaker 02:
He tried to say, oh, this is a causal nexus case and there's no causal nexus in Microsoft.

[01:07:09] Speaker 02:
That's not true.

[01:07:10] Speaker 02:
The master document, the golden source in Microsoft was of course causally related to all the foreign sales.

[01:07:16] Speaker 02:
He proves our point that this would have sweeping consequences if reasonable royalties could end run territoriality by bringing in all foreign sales.

[01:07:24] Speaker 02:
Judge Wallach, you asked my friend, where's the evidence that the licenses for running royalties were comparable?

[01:07:30] Speaker 02:
There is none.

[01:07:31] Speaker 02:
Ms.

[01:07:31] Speaker 02:
Lawton, their expert, did not say that the running royalty licenses were comparable.

[01:07:35] Speaker 02:
And in fact, air damages expert Mr. Hoffman said all were agreed they were not.

[01:07:39] Speaker 02:
The comparable licenses were all flat feet.

[01:07:42] Speaker 02:
And we're not saying the jury was bound to find a flat feet, but certainly where the delta is 600 to 6,000 times the jury verdict in this case, surely the historical licenses are probative of the unreasonableness of the jury award.

[01:07:55] Speaker 02:
And finally, sorry, two more just quickly, Your Honor.

[01:07:58] Speaker 02:
Oh, you gave me six minutes.

[01:07:59] Speaker 02:
I'll slow down.

[01:08:01] Speaker 02:
The Latches point, Your Honor.

[01:08:04] Speaker 02:
Judge Toronto, we do think Latches, under the court's current law, warrants vacator here.

[01:08:10] Speaker 02:
This is a rare case in which her Latches ruling warrants vacator under current law.

[01:08:16] Speaker 05:
Just on that, although not in the Latches ruling, I think later in time, the district court said,

[01:08:24] Speaker 05:
The only reason I denied Latches was willfulness.

[01:08:28] Speaker 05:
So in your view, Latches falls with willfulness.

[01:08:32] Speaker 02:
Absolutely correct, Your Honor.

[01:08:33] Speaker 05:
And if you look at her opinion, she says the only reason... I'm sorry, for a remand.

[01:08:41] Speaker 05:
That is, the district court might well, if the Latches doctrine survives, still be able on a remand to say,

[01:08:52] Speaker 05:
put aside now willfulness, I still think that Latchez doesn't bar the pre-suit damages.

[01:09:00] Speaker 05:
Well, Your Honor, in her rule... I don't think you get into a judgment of no pre-suit damages just because the district court said my reason was dependent on willfulness.

[01:09:14] Speaker 05:
If you took that out, the district court could come to the same conclusion on a different basis, possibly.

[01:09:19] Speaker 02:
That is possible, Your Honor, but we would suggest at a minimum you should remand because she found all elements of laches.

[01:09:25] Speaker 02:
The district court found that there was no causation under Sarah Derevik and we didn't cause their delay.

[01:09:32] Speaker 02:
And therefore the only ground was egregious conduct which equated with willfulness.

[01:09:36] Speaker 02:
If you throw out willfulness, you should throw out laches.

[01:09:38] Speaker 02:
And if anything, remand to see if there's some other equitable basis that can override the elements.

[01:09:43] Speaker 02:
We don't see that there can be.

[01:09:44] Speaker 02:
Conscious, everything about latches was co-extensive with willfulness.

[01:09:48] Speaker 02:
It was all about actual knowledge of consciousness.

[01:09:50] Speaker 04:
So then you dammed or fall together?

[01:09:51] Speaker 02:
They do.

[01:09:52] Speaker 02:
Well, we do.

[01:09:53] Speaker 02:
We believe if we went on willfulness, latches should go out.

[01:09:56] Speaker 02:
If we lose on willfulness, then... Latches should still go out because she found all the elements and her... Yes, Your Honor, let me explain.

[01:10:06] Speaker 02:
Your Honor, let me explain.

[01:10:08] Speaker 02:
We believe we have an independent basis to throw out latches even if you don't rule with us on willfulness because

[01:10:14] Speaker 02:
egregious conduct must cause the delay.

[01:10:18] Speaker 02:
And she found, as a finding, that our supposed copying did not cause any delay.

[01:10:23] Speaker 04:
What about the statements in Ackerman and Gasser chair that your friend quoted that seem to suggest that there isn't necessarily a causation element between the unclean hands and the latches?

[01:10:37] Speaker 02:
Your Honor, we think if that's in doubt, the proper remedy is remand here and let her see if she can come up with some sort of unclean hands that isn't dependent on willfulness.

[01:10:46] Speaker 02:
Last point, Your Honor.

[01:10:48] Speaker 02:
Sigma is not constant.

[01:10:50] Speaker 02:
Column 10 uses the word greater.

[01:10:52] Speaker 02:
Mr. Rosencrantz is simply incorrect.

[01:10:55] Speaker 02:
Sigma is not constant.

[01:10:56] Speaker 05:
No, no.

[01:10:56] Speaker 05:
It uses the word greater.

[01:10:57] Speaker 02:
Greater.

[01:10:58] Speaker 02:
Column 10, line 52.

[01:10:59] Speaker 02:
The fraction for the standard deviation for the transition noise is greater for the one branches than the zero branches.

[01:11:09] Speaker 05:
But it's the same one you're using everywhere.

[01:11:10] Speaker 05:
It's not varying from time to time.

[01:11:13] Speaker 02:
Correct, John.

[01:11:15] Speaker 02:
Two functions, not one.

[01:11:17] Speaker 02:
Morality is a set.

[01:11:19] Speaker 02:
With respect, Your Honor, you should reverse, at a minimum, remand for a new trial in which you'll guide the jury not to create sweeping extraterritorial reach, and in which the $0.50 ship, which is detailed in our brief, is redone for proper apportionment under this Court's precedence.

[01:11:36] Speaker 02:
Thank you, Your Honor.

[01:11:38] Speaker 03:
Thank you, Counsel.