[00:00:24] Speaker 03:
The next case is Catholic of Connections versus Ivera Medical, 2014, 1443.

[00:00:32] Speaker 03:
Mr. Handdoctor.

[00:00:34] Speaker 01:
May it please the court?

[00:00:37] Speaker 01:
There are a number of issues of error that are presented in this appeal.

[00:00:42] Speaker 01:
But I'd like to start with one that's not specific to the injunction itself, and that is the amount of the bond set in this case.

[00:00:51] Speaker 01:
An injunction is extraordinary relief.

[00:00:53] Speaker 01:
And as this court has expressed many times, it's not to be granted lightly.

[00:00:57] Speaker 01:
And there are a number of safeguards put in place when there is injunctive relief granted.

[00:01:01] Speaker 03:
and almost sounds like uh... merit, clamp construction, or secondary merit since you're leading off of the injunction.

[00:01:10] Speaker 01:
No, Your Honor.

[00:01:11] Speaker 01:
I am not.

[00:01:12] Speaker 01:
That should not be taken that way.

[00:01:14] Speaker 01:
However, the bond is a critical issue and I think it can be addressed quite quickly, Your Honor.

[00:01:18] Speaker 04:
Let me ask you this though, on the bond.

[00:01:19] Speaker 04:
What if the court had put a zero bond?

[00:01:24] Speaker 04:
Would that have failed to put a cap on your ability to come back?

[00:01:30] Speaker 04:
In other words, on this issue of the capping, is there a way the court could have taken into consideration the limited resources of your opponent and still not capped your ability to come back?

[00:01:43] Speaker 01:
The case law doesn't seem to indicate that that's the case, Your Honor.

[00:01:46] Speaker 01:
It's our understanding of the case law that it is a cap, regardless of whatever amount it is set at that functions as a cap.

[00:01:54] Speaker 01:
If this court clarifies that there is this opportunity for further redress,

[00:01:59] Speaker 01:
One of the problems we have here is this.

[00:02:01] Speaker 01:
Catheter connections, as reflected in the bond order, has extremely limited resources.

[00:02:06] Speaker 01:
So it's really sort of a hollow backstop that we may be able to come back later and recover.

[00:02:12] Speaker 01:
Because, in fact, it's very unlikely there would be money there to recover.

[00:02:16] Speaker 01:
And that's the whole purpose of this bond requirement.

[00:02:20] Speaker 01:
And again, Rule 65 could not be more clear.

[00:02:22] Speaker 01:
There is a single basis for setting the bond, and that is the potential damage to the enjoined party.

[00:02:29] Speaker 01:
Now, the court clearly did not set a bond based on that amount.

[00:02:35] Speaker 01:
It disregarded the plain language of the statute.

[00:02:38] Speaker 01:
And on that basis, we believe that order should be vacated and should be remanded for a proper determination of the bond amount.

[00:02:46] Speaker 04:
The court already had a hearing after the fact.

[00:02:49] Speaker 04:
Is that right?

[00:02:50] Speaker 01:
The court did have a hearing after the fact and found that it lacked jurisdiction because of this appeal.

[00:02:55] Speaker 01:
So it had no jurisdiction to reconsider the bond amount at that point.

[00:02:59] Speaker 01:
and on that basis, deferred to this proceeding for that determination.

[00:03:04] Speaker 04:
But at this point, the court does have a more detailed factual record.

[00:03:07] Speaker 04:
The court just hasn't had the opportunity to address that more detail.

[00:03:10] Speaker 01:
That is correct, Your Honor.

[00:03:11] Speaker 01:
And in fact, circumstances did change.

[00:03:13] Speaker 01:
I very reduced the amount that it believed was necessary for the bond because it's successfully designed around the patent.

[00:03:19] Speaker 01:
and has started selling another product.

[00:03:21] Speaker 04:
If we vacate the bond, doesn't that effectively vacate the injunction unless and until the court sets another bond?

[00:03:30] Speaker 01:
The court has the power, we believe, to determine whether that would vacate the injunction as well or whether that should be stayed pending the new bond amount being set.

[00:03:41] Speaker 01:
We do believe that upon the setting of a new bond amount, the injunction should be vacated pending the posting of that bond, just as it is in the first instance.

[00:03:50] Speaker 01:
Because it could, in fact, determine a lower bond is required.

[00:03:52] Speaker 01:
And I think that's why this court would have that authority in the interim prior to the next determination to make that stay in effect for the injunction during that time period.

[00:04:03] Speaker 01:
With that, Your Honor, I will turn to the merits.

[00:04:05] Speaker 02:
Why is a bond inadequate?

[00:04:06] Speaker 02:
You're saying it's too low or too big and you believe that, I believe you just said that if necessary, you have to collect the money.

[00:04:14] Speaker 02:
It's not going to be there or something to that effect.

[00:04:16] Speaker 01:
That's correct, Your Honor.

[00:04:17] Speaker 01:
For example, I veer out in subsequent proceedings

[00:04:20] Speaker 01:
predicted and this is quite accurate prediction that it's damages as a result of the injunction when the order of six hundred thousand dollars there's currently a bond posted for two hundred fifty thousand dollars if the injunction is ultimately found to have been improper ivira will be capped at two hundred fifty thousand dollars in its recovery and it will be out that additional uh... three hundred fifty thousand dollars that it actually suffered in terms of damage so right now and you can still collect that from your judge

[00:04:50] Speaker 01:
No, no, Your Honor, we cannot get a separate judgment.

[00:04:52] Speaker 01:
The case law is quite clear that the bond acts as a cap.

[00:04:56] Speaker 01:
And so, I cannot ask the court for a judgment in the amount of the difference between the bond and its damages and go collect that judgment.

[00:05:05] Speaker 01:
That is not allowed under the case law.

[00:05:08] Speaker 01:
The bond is the cap.

[00:05:09] Speaker 01:
So Iver would only recover up to the $250,000.

[00:05:12] Speaker 04:
So your concern is that assuming that we've given the standard of review we have here, that we say that at least at the preliminary stage we're not going to find clear error or abusive discretion and we'll let the PI stand, ultimately if you prevail,

[00:05:31] Speaker 04:
on the merits, either because the court decides with more information a different claim construction would be appropriate, or because they would have that option, or because the jury finds in your favor that then the best you could do is hope to get attorney's fees, but that doesn't save you from the damage you've already suffered.

[00:05:52] Speaker 01:
That's right, Your Honor.

[00:05:53] Speaker 01:
And furthermore, it's unlikely we could collect any of those amounts that are not bonded because of the financial condition of the plaintiff.

[00:06:00] Speaker 04:
But you do concede that your initial projection of a huge number has been rethought, and you're now talking 600.

[00:06:08] Speaker 01:
It was mitigated by the ability of Iberia to design around and continue selling the product after some gap.

[00:06:15] Speaker 01:
With that, Your Honor, I will move on to the issue of delay, which is part of irreparable harm.

[00:06:21] Speaker 01:
And I'd like to talk briefly about irreparable harm, where the plaintiff carries the high burden, again, of establishing urgent

[00:06:28] Speaker 01:
irreparable, substantial irreparable harm in order to invoke this extreme remedy of an injunction.

[00:06:35] Speaker 01:
We have a situation here where a product, a medical device that is important to hospitals and their protection of patient safety, had been on the market since December of 2012.

[00:06:47] Speaker 01:
At the time it was launched, Catheter Connections already had three pending patent infringement cases against that product.

[00:06:56] Speaker 01:
and it declines to move for a preliminary injunction at any point prior to the launch when it could have prevented all harm.

[00:07:05] Speaker 01:
After launch, throughout the entire year of 2013, when Iberia was investing in this product and developing the market, it had its sales people out creating a market.

[00:07:14] Speaker 01:
This is a new market.

[00:07:16] Speaker 01:
It requires missionary sales

[00:07:17] Speaker 01:
I've devoted substantial resources to create a market for this product.

[00:07:21] Speaker 03:
Well, the answer was, and the court so held, that they were waiting for the grant of other patents that gave them a stronger chance of getting the injunctions.

[00:07:34] Speaker 01:
Understood, Your Honor.

[00:07:35] Speaker 01:
But that issue does not go to the question of irreparable harm.

[00:07:40] Speaker 01:
And that's the problem.

[00:07:41] Speaker 01:
There's a complete disconnect.

[00:07:42] Speaker 04:
It goes to whether or not delay

[00:07:45] Speaker 04:
could offset any claim of irreparable harm, isn't that right?

[00:07:49] Speaker 01:
Your Honor, essentially no, because the problem is that if in fact there was urgent irreparable harm, they had the ability to seek the injunction.

[00:08:00] Speaker 01:
It may not have been granted, but they had this exclusive right that they held in their pocket for 14 months while Iver was selling this product.

[00:08:10] Speaker 01:
only to bring it out on the grounds of a social question.

[00:08:13] Speaker 04:
One is, are they going to suffer irreparable harm if they don't get the injunction, which the trial court made finding the facts that they did, and the record was pretty strong on that point.

[00:08:22] Speaker 04:
The other point is, are they prohibited from claiming that irreparable harm or relying on that irreparable harm when they delay?

[00:08:31] Speaker 04:
And so the delay question is a separate question from the irreparable harm.

[00:08:36] Speaker 04:
Yes, they're related.

[00:08:38] Speaker 04:
But so the court makes a determination on delay, and as Judge Laurie points out, makes a factual determination that there is a justification for the delay.

[00:08:47] Speaker 04:
So do we review the court's refusal to say that the delay is enough to offset the reputable harm for an abuse of discretion or clear error?

[00:08:56] Speaker 04:
What's our review on this?

[00:08:57] Speaker 01:
For abuse of discretion, Your Honor, in the context of this preliminary injunction.

[00:09:01] Speaker 01:
And in fact, it was an abuse of discretion

[00:09:06] Speaker 01:
rely on the justification for this delay.

[00:09:08] Speaker 01:
The case law is quite clear that delay undercuts the claim of urgency which is a cornerstone of irreparable harm.

[00:09:15] Speaker 01:
Irreparable harm connotes urgency and in fact here in this case the evidence of irreparable harm was relatively standard measures of patent damages, lost sales, lost profits, price erosion in a two-party market

[00:09:28] Speaker 01:
with relatively, in the scheme of things, dollar amounts that are not huge.

[00:09:34] Speaker 01:
And these are all things that are routinely compensated in patent enforcement cases.

[00:09:40] Speaker 01:
And so this irreparable harm delay issue becomes critical in the balancing of this.

[00:09:46] Speaker 01:
And frankly, it is improper to discount the delay

[00:09:51] Speaker 01:
simply because they wanted to get a better patent, that they were going to just sit and wait until they got a patent they thought they could prove more quickly and easily.

[00:09:58] Speaker 01:
It's also telling, in fact, that, and the court, I think, can take judicial notice of this, they have now moved for a preliminary injunction based on the 825 patent, the very first patent that they asserted in June of 2012.

[00:10:09] Speaker 01:
There is now a pending motion for preliminary injunction against Ivory's Curious Tips product in the court.

[00:10:16] Speaker 01:
So it can't be that this was so hard.

[00:10:17] Speaker 04:
If they move for a preliminary injunction the day that's the patent,

[00:10:20] Speaker 04:
that are an issue in this case were issued, right?

[00:10:24] Speaker 04:
Yes.

[00:10:25] Speaker 04:
And so it's your argument that we can't consider the claims of these patents in terms of whether or not there's irreparable harm that we have to go back and say, well, they had other patents that maybe weren't as strong, but they could have done something and they didn't?

[00:10:39] Speaker 01:
The concept is, well, you've raised a separate issue, which is nexus, I think, which is that there is nothing linking the irreparable harms here to the specific claims of these patents.

[00:10:50] Speaker 01:
as opposed to the earlier 825.

[00:10:52] Speaker 04:
You didn't make that argument until your reply break, though, did you?

[00:10:55] Speaker 01:
Your Honor, I believe we did raise the nexus argument in our opening brief.

[00:10:59] Speaker 01:
It didn't get a lot of, there's not a lot in there.

[00:11:01] Speaker 01:
I do believe it is presented as an issue on appeal.

[00:11:05] Speaker 01:
And in fact, this issue of nexus has been present throughout all of these proceedings below and in the briefs themselves.

[00:11:11] Speaker 01:
This issue of nexus is an important issue, but it ties in again.

[00:11:16] Speaker 01:
It's all interrelated to this issue

[00:11:18] Speaker 01:
What is the delay that we're looking at?

[00:11:21] Speaker 01:
Sure, they filed this case the day the patent's issued, but they had had the ability to file a motion for preliminary injunction against the exact same product for over 14 months.

[00:11:33] Speaker 01:
It's the product that's causing the alleged irreparable harm.

[00:11:38] Speaker 01:
If in fact that product was causing urgent irreparable harm, they should have filed the motion earlier.

[00:11:43] Speaker 01:
And their decision to stand by because they wanted to get a better patent,

[00:11:48] Speaker 01:
was done at their peril.

[00:11:50] Speaker 01:
And it indicates that this was not a truly urgent irreparable harm.

[00:11:54] Speaker 01:
I see that I'm down through my time.

[00:11:55] Speaker 01:
I'd like to reserve time for rebuttal.

[00:11:58] Speaker 03:
Thank you.

[00:12:06] Speaker 00:
May it please the court.

[00:12:10] Speaker 00:
Your honor, this is a case where the district court received briefing

[00:12:14] Speaker 00:
provided for discovery and claim construction for a period of almost three months.

[00:12:20] Speaker 00:
It had a markman hearing and evidentiary hearing over two days.

[00:12:25] Speaker 00:
It heard an evaluated expert testimony.

[00:12:27] Speaker 03:
Well, why wasn't the court wrong in interpreting engage against to be just contact?

[00:12:36] Speaker 03:
The 681 patent shows all over, they were talking about a forceful contact, an interlocking, an interfacing contact.

[00:12:48] Speaker 03:
Why wasn't the court wrong?

[00:12:49] Speaker 00:
We're talking about engage against.

[00:12:51] Speaker 03:
Engage against.

[00:12:52] Speaker 03:
And the word against is relevant.

[00:12:54] Speaker 00:
It is relevant, Your Honor, as part of the claim.

[00:12:58] Speaker 00:
In that particular claim construction, the Court looked at the specification in several places.

[00:13:04] Speaker 00:
It also looked at Claim 11, where there was a distinction between engage with and engage against.

[00:13:13] Speaker 00:
A good example of that, Your Honor, is found in the patent, Appendix 68.

[00:13:22] Speaker 03:
Yes, we are, but I think that the claims of the other claims of the patent are relevant in looking at what the claims mean in claims 1 and 18.

[00:13:41] Speaker 03:
Well, what's the answer to the question?

[00:13:44] Speaker 00:
Well, the answer to the question is that

[00:13:46] Speaker 00:
When engage with is looked at, we're talking about the threads of the cap that engage with the inner part of the male lure, the outer threads on the other side.

[00:13:58] Speaker 00:
When we're talking about a gauge against, we're talking about merely the tip going in and making contact with the inner edges of the male lure.

[00:14:08] Speaker 00:
There are several places in the specification where in the same

[00:14:15] Speaker 00:
it distinguishes between those two.

[00:14:17] Speaker 02:
It would seem to me, for example, in what you're talking about, the threads are engaging because they start the threading process.

[00:14:27] Speaker 02:
Now that would be contact.

[00:14:29] Speaker 02:
but engage against, there still has to be a little bit more.

[00:14:33] Speaker 02:
And given that the pen works once that the tip reaches up against the seal, and presses the seal, compresses it to a point to where it releases the antiseptic fluid, it would seem that there's got to be more than just near contact.

[00:14:49] Speaker 02:
Contact is, for example, nearly touching something.

[00:14:53] Speaker 02:
That's not how this works.

[00:14:54] Speaker 02:
That's not how the pen explains itself anyway.

[00:14:58] Speaker 00:
If I could draw the court's attention to some places where that actually does explain itself.

[00:15:05] Speaker 00:
In the specification in column 30, I'm looking at Appendix 115, column 32.

[00:15:20] Speaker 02:
Go down to line 50, column 32.

[00:15:22] Speaker 02:
And there it's talking about, in the illustrated embodiment,

[00:15:28] Speaker 02:
and I think it's still looking at 37.

[00:15:31] Speaker 00:
Yes, and that is a good example, Your Honor.

[00:15:33] Speaker 02:
There's contact.

[00:15:34] Speaker 02:
Now I was talking about contact between the tip and ceiling member.

[00:15:39] Speaker 02:
That's right.

[00:15:39] Speaker 02:
It occurs just prior to engagement.

[00:15:42] Speaker 00:
Yes, exactly.

[00:15:43] Speaker 02:
You have contact prior to engagement.

[00:15:46] Speaker 02:
Those seem to be two separate things.

[00:15:49] Speaker 00:
Your Honor, the engagement in this Senate is talking about the engagement of the threat.

[00:15:57] Speaker 00:
The contact between the tip and the ceiling member is exactly what the claim language is going to where it engages against, where the tip engages against, the tip of the lure engages against the ceiling member.

[00:16:11] Speaker 00:
And so that is exactly the distinction the court was looking at because engagement in the context of the threads isn't interlocking.

[00:16:22] Speaker 00:
engage against is again another modifier of the term engage.

[00:16:27] Speaker 00:
It's like a car engages against another car when it runs into it.

[00:16:32] Speaker 00:
That's an engagement in that context.

[00:16:35] Speaker 03:
What about in the 308 happens with sex?

[00:16:39] Speaker 03:
Why is it that clear that that's a depression rather than something between two protrudences?

[00:16:50] Speaker 00:
Again, the plain meaning of this term recess that came up just at the hearing, it wasn't one of the initial claims that was subject to briefing and argument before the Markman hearing.

[00:17:04] Speaker 00:
The plain language is that it's a space in between two elevations.

[00:17:10] Speaker 00:
Whether that's created by digging material out or placing two ribs on either side.

[00:17:16] Speaker 03:
The court has recessed for 10 minutes.

[00:17:20] Speaker 03:
We're leaving.

[00:17:21] Speaker 03:
There's something missing.

[00:17:23] Speaker 03:
So why isn't it something that's taken out as is shown in many places in this specification?

[00:17:29] Speaker 00:
As the court found, there was nothing in the specification that would require that additional limitation on the term recess.

[00:17:37] Speaker 00:
of requiring that there be material removed to create it.

[00:17:43] Speaker 00:
It doesn't provide that the recess must be created in a certain way.

[00:17:47] Speaker 00:
The specification just shows a recess and claims a recess.

[00:17:53] Speaker 00:
There was evidence before the court from expert witnesses, from Dr.

[00:18:00] Speaker 00:
that the recess need not be created in a certain way.

[00:18:04] Speaker 03:
But aren't these close questions affecting the likelihood of success of the preliminary injunction?

[00:18:11] Speaker 00:
With due respect, Your Honor, these are plain meaning interpretations.

[00:18:15] Speaker 00:
And the court, certainly this court, can look at those claim constructions, again, here.

[00:18:21] Speaker 00:
Although under the Nutiva case, it does give deference to the extent there was extrinsic evidence offered.

[00:18:27] Speaker 03:
Which doesn't appear to be the case here, right?

[00:18:29] Speaker 03:
We need to respect.

[00:18:31] Speaker 00:
We are looking at the spec.

[00:18:32] Speaker 00:
With respect to recess, there is no further enlightenment on that except from the expert witnesses, including Dr. Durgan, the expert witness in this case, for Ivera.

[00:18:42] Speaker 02:
The court considered that.

[00:18:51] Speaker 02:
uh... your honor though there was an expert testimony on the on those issues so reading the decision it seems to me that judge says well looking at looking at both sides of this i'm not going to rely on either side your honor the the opinion looks like it looks like judge campbell relied on the specification with respect to that particular construction there's no intrinsic evidence because the judge relied only on the specification i think the court could just look at the judge's opinion and look at the specification

[00:19:21] Speaker 00:
and see the distinction between those two uses of engage against and engage with.

[00:19:25] Speaker 02:
My point there is, in that situation, we don't owe Tiva deference with construction of engage against.

[00:19:33] Speaker 00:
Your Honor, I think the court could look at the record and see that there was extrinsic evidence offered.

[00:19:38] Speaker 00:
But in the opinion, I concede that the judge didn't rely on extrinsic evidence in making her decision about engage against, in which case I don't see that Tiva

[00:19:49] Speaker 00:
could apply right there on those points.

[00:19:52] Speaker 00:
So, Your Honor, if I could address some of the issues raised in Mr. Hangartner's argument with respect to the bond, I think Mr. Hangartner is overlooking the discretion that a court has in setting a bond.

[00:20:09] Speaker 00:
And we cited case law to the court on this effect.

[00:20:12] Speaker 00:
In fact, in the 10th Circuit, the court has wide discretion.

[00:20:18] Speaker 00:
The Ninth Circuit case of Go To versus Disney is our instructive two.

[00:20:22] Speaker 00:
In that case, Disney wanted a $20 million bond to support an injunction in the trademark case, and the court set a $25,000 bond in that case.

[00:20:34] Speaker 00:
And specifically, it said that in its discretion, it was not going to deny the plaintiff's judicial review, which would occur

[00:20:43] Speaker 00:
if it required a bond that was as large as the defendant in that case was asking for.

[00:20:49] Speaker 00:
Disney.

[00:20:50] Speaker 00:
I think if we were to take this argument to its extreme that I vera wants to assert here to the court, a small party could never get injunctive relief against a large party.

[00:21:02] Speaker 00:
If we were here seeking, for example, an injunction against Bard Medical or another large medical device company, they might ask for $100 million or $200 million bond.

[00:21:11] Speaker 00:
Injunctive relief would never be available to a company like Catheter Connections.

[00:21:16] Speaker 04:
critical arguments you're making here with respect to irreparable harm is that this is really a two-player market, and that's for every sale that they make, they're taking one away from you.

[00:21:26] Speaker 04:
Doesn't that hurt you in that context, in that looking only at your available resources isn't appropriately considering the harm to the other side?

[00:21:43] Speaker 00:
Well, first of all, this court has recognized that you can still have irreparable harm in a two-player market.

[00:21:49] Speaker 00:
In fact, sometimes it's enhanced.

[00:21:51] Speaker 00:
It's stronger.

[00:21:52] Speaker 04:
I don't disagree with that, I'm saying.

[00:21:54] Speaker 04:
But doesn't that cut against you?

[00:21:56] Speaker 04:
The strength of your irreparable harm also shows the strength of the harm to them for being enjoined from the market.

[00:22:04] Speaker 00:
Certainly, there's an interaction there.

[00:22:05] Speaker 00:
And in fact, it goes the other way, too.

[00:22:07] Speaker 00:
Ivera was arguing to the trial court

[00:22:12] Speaker 00:
The mail cap was insignificant.

[00:22:14] Speaker 00:
It was not a big part of this market.

[00:22:17] Speaker 00:
Yet when it came to the bond, suddenly it was a huge deal and they were asking for a $20 million bond.

[00:22:24] Speaker 00:
So there is an interaction between irreparable harm and the harm that might come to the defendant.

[00:22:29] Speaker 04:
But now we're just talking about the difference between $250,000 and $600,000.

[00:22:33] Speaker 00:
We are, Your Honor.

[00:22:33] Speaker 00:
And again, it's within the trial court's wide discretion to consider

[00:22:40] Speaker 00:
what size of bond to apply, including to take into account the financial condition of the patent owner.

[00:22:47] Speaker 00:
Now, I would also point out that there is evidence in this record for Mr. Hampton, the damages expert, that there is a range of harm that might come to Ivera.

[00:22:58] Speaker 00:
And one of those ranges shows that they would have a loss if they were continuing to sell

[00:23:07] Speaker 00:
its male caps, it would have a $200,000 loss over a one-year period.

[00:23:11] Speaker 00:
And they're claiming that they would have all these lost profits.

[00:23:16] Speaker 00:
The court considered all of that evidence.

[00:23:19] Speaker 00:
In its order, it said that it carefully considered all of the evidence.

[00:23:23] Speaker 00:
And in its discretion, it decided on a $250,000 bond.

[00:23:27] Speaker 00:
As the court noted, the district court reviewed these findings again.

[00:23:33] Speaker 00:
It had a five-hour hearing.

[00:23:35] Speaker 04:
Right, but then said it couldn't do anything about it.

[00:23:37] Speaker 00:
But it also said, after looking at that evidence, that in view of all of the evidence, it was an appropriate amount.

[00:23:46] Speaker 00:
So there was an additional finding affirming.

[00:23:49] Speaker 00:
It did acknowledge that it was outside the jurisdiction to change it, but it said that it was appropriate even after hearing all of that evidence.

[00:23:58] Speaker 00:
Again, because it fully considered evidence before, but now it took testimony.

[00:24:02] Speaker 00:
There were expert witnesses and Mr. Rogers on the stand

[00:24:06] Speaker 00:
talking about these issues and the court still found that it was fine.

[00:24:09] Speaker 00:
The important thing is the law is clear, including in the 10th Circuit where this case was heard, that the trial court has wide discretion.

[00:24:18] Speaker 02:
Going back to the reputable harm and the nexus that was established by the court, when you look at the date of lost sales and lost market share and price erosion, it seems to me that there's evidence in that it draws to question whether your declining sales

[00:24:36] Speaker 02:
or lost profits were as a result of the entry into the market by the competitor.

[00:24:44] Speaker 02:
So if data shows that there's already a downward trend in lost sales, then where is the nexus?

[00:24:54] Speaker 02:
Where does the court address that in saying,

[00:24:57] Speaker 02:
Besides that downward trend, this is why the entry into the market has affected the financial condition of the company.

[00:25:06] Speaker 00:
Your Honor, first of all, this is unlike the Apple case where the Nexus was found with just specific product features.

[00:25:14] Speaker 00:
because the patents here go to the entire device.

[00:25:17] Speaker 02:
Right, I'm not talking about that.

[00:25:19] Speaker 02:
I'm talking about establishing a nexus between lost sales or defining profits to the infringement or the entry into the market.

[00:25:29] Speaker 00:
My point is that the entry into the market is of a device that became infringing as soon as these patents issued, the entire device.

[00:25:37] Speaker 00:
And so that shows a trend where continued

[00:25:41] Speaker 00:
existence of the infringing product in the market is what would cause the irritable injury.

[00:25:48] Speaker 00:
So the court looked at a remarkably big record of irritable injury.

[00:25:53] Speaker 02:
Prior to that competition, the data suggests that there's already a decline, there's a trend in your company for your client's loss of profits.

[00:26:04] Speaker 00:
That's right, and it supports a continuing trend if the infringing product is allowed to stay on the market.

[00:26:09] Speaker 02:
So where does the court make the nexus between that continuing trend you're talking about?

[00:26:15] Speaker 02:
If the company's already losing money, and you're saying, well, the competitor came into the market and continued to lose money, and therefore it's due to the infringing of the accused device, where's the nexus?

[00:26:28] Speaker 00:
Your Honor, I'm not sure I can answer the specific question, but there are references in the judge's findings in her order and opinion to talk about the presence of this infringing product on the market causes the irreparable injury, causes the loss of pricing power.

[00:26:46] Speaker 02:
I've read that, but there's got to be more to it than that, right?

[00:26:50] Speaker 02:
I mean, that's just the conclusion of the statement.

[00:26:52] Speaker 02:
Where's the analysis when there's a link?

[00:26:55] Speaker 02:
She takes the evidence on the record and says, I believe that this downward trend is going to continue for these reasons based on the record evidence.

[00:27:04] Speaker 00:
Your Honor, I see that my time is up.

[00:27:05] Speaker 00:
And I would just encourage the court to look at the extensive record on irreparable injury in the court's findings.

[00:27:11] Speaker 00:
I believe it is there.

[00:27:12] Speaker 00:
And if I could just make one point about delay, Your Honor.

[00:27:15] Speaker 00:
because there was a lot of argument about that and I haven't even had a chance to address it.

[00:27:19] Speaker 00:
Ivar is ignoring the fact that these patents that are the basis of this injunction created a new patent right.

[00:27:28] Speaker 00:
It is basically saying it wouldn't have a right to seek an injunction unless it's sought an injunction on the first patent issued from a family.

[00:27:37] Speaker 00:
And that is not a precedent this court would want to set where every patent owner that has a family patent issuing must seek an injunction on the first patent or loses the right to seek it on any other patent.

[00:27:49] Speaker 00:
That is simply not the law here.

[00:27:51] Speaker 00:
the hybrid tech case, there was a three and a half year delay between the issuance of the patent and the time that the patent owner went after Abbott.

[00:27:59] Speaker 00:
And the court found that there were sufficient reasons.

[00:28:01] Speaker 00:
One of them was they were waiting for litigation to end with a separate competitor.

[00:28:12] Speaker 03:
Three and a half minutes left, and we'll give you your full five minutes, because Mr. Burton took a little extra time.

[00:28:18] Speaker 01:
Thank you, Your Honor.

[00:28:20] Speaker 01:
First, I'd like to answer Judge O'Malley's question about the causal nexus argument.

[00:28:24] Speaker 01:
It is present in the opening brief beginning on page 62.

[00:28:27] Speaker 01:
It's perhaps not as well laid out as in the reply, but it is there.

[00:28:30] Speaker 04:
So as I understand your nexus argument to the extent that it's made there, what you're saying is, even if we give them all these sales, they're going out of business anyway?

[00:28:40] Speaker 01:
to a certain extent your honor but I think it's more specific than that.

[00:28:44] Speaker 01:
Initially there was a lot of argument in this case about the financial condition of catheter connections and they seem to be linking their alleged irreparable harm to just their poor financial health and so a lot of argument was presented on that and that seems to have been part of the court's analysis here and that's not proper because there is no causal nexus between

[00:29:04] Speaker 01:
their financial condition and the features of this patented invention.

[00:29:08] Speaker 01:
More specifically in the reply I think we lay it out a little more clearly that in this situation where the earlier patent that issued, the 825 patent, that they declined to seek injunctive relief,

[00:29:20] Speaker 01:
They make a point about the fact that it requires a different element, a biasing member, which apparently to them was harder to prove.

[00:29:28] Speaker 01:
Therefore, their harm was not so bad that they had to go ask for an injunction.

[00:29:33] Speaker 01:
At that point, they put it off until they got a better patent.

[00:29:36] Speaker 01:
Now, we're not saying you always have to sue on your first patent.

[00:29:39] Speaker 01:
if you decline to sue on a patent that reads on the accused product, or I'm sorry, if you decline to ask for an injunction based on a patent that reads on the accused product, that definitely tends to indicate your harm is not that urgent and not that irreparable.

[00:29:55] Speaker 04:
It's certainly a fact that the trial court has to consider.

[00:29:58] Speaker 01:
Absolutely, and that's our point there.

[00:30:00] Speaker 01:
The court didn't appropriately consider that.

[00:30:02] Speaker 01:
With Nexus,

[00:30:04] Speaker 01:
This plays into this because in fact the court made no effort to tie the irreparable harm at issue today, supposedly.

[00:30:12] Speaker 01:
to these new features or the different features of the 308 and the 681 patent as compared to the 825 patent.

[00:30:21] Speaker 01:
These new patents don't require a biasing member, but they have very specific requirements.

[00:30:25] Speaker 01:
In addition to the basic disinfecting cap features, the claims, asserted claims of the 681 patent require that it have this movable member, that that engage against the interior periphery of the opening to the lumen.

[00:30:39] Speaker 01:
some of the claim construction issues that were discussed with Mr. Burton, that there's nothing linking the alleged irreparable harm to those features of this patented invention, nor is there any indication linking the alleged harm

[00:30:56] Speaker 01:
To the gripping feature, it's a gripping feature.

[00:30:58] Speaker 01:
It's some ribs on the side of a cap.

[00:31:01] Speaker 01:
No customers talk about how wonderful that gripping feature is.

[00:31:03] Speaker 01:
There's no evidence that customers care about the sufficiency of that engagement with the inner periphery.

[00:31:10] Speaker 01:
There's no nexus between those patented features.

[00:31:14] Speaker 01:
and the alleged damages resulting to catheter connections.

[00:31:18] Speaker 01:
There's no customer saying, this is the greatest thing about this.

[00:31:21] Speaker 01:
There's no advertising presented saying that this is the key feature.

[00:31:25] Speaker 01:
There was not that Nexus established, and there was no finding at all.

[00:31:29] Speaker 02:
Well, let's just argue that there's no need to establish Nexus, at least to a great degree, given that this is a two-horse market.

[00:31:38] Speaker 02:
There's only two competitors here.

[00:31:40] Speaker 01:
Even in a two-horse market though, Your Honor, the damage needs to be linked to the patented features, not just that we're selling a cap.

[00:31:48] Speaker 01:
And so there still has to be some showing to establish that nexus between the patented features and the alleged harm.

[00:31:56] Speaker 01:
And looking at these patented features, it's really interesting.

[00:31:59] Speaker 01:
The court discussed engage against.

[00:32:01] Speaker 01:
The specification is quite clear, that engagement is not mere contact.

[00:32:06] Speaker 04:
You say that, but you do cite a single sentence from the specification in your brief.

[00:32:13] Speaker 04:
You only rely on the testimony of your expert.

[00:32:17] Speaker 01:
Your honor, I believe we did cite in fact the column 32 discussion and figures 41 to 45, which walked through and highlight this distinction where the specification actually indicates a difference between contact and engagement.

[00:32:34] Speaker 04:
But not at that point.

[00:32:37] Speaker 04:
It's talking about engagement as it relates to the connector interface, not as it relates to simply entry.

[00:32:46] Speaker 01:
It's talking about, so it's interesting because it talks about at the time contact is made between the ceiling member and the inner periphery.

[00:32:54] Speaker 01:
It then refers to the simultaneous engagement of the connection interface, which is the threads.

[00:33:00] Speaker 01:
It uses engagement in that context.

[00:33:03] Speaker 01:
that it's a clear distinction between the idea of contact which is referring to specifically it says in the illustrated embodiment contact between the tip 2021 and the ceiling member 2290 so that's the contact that it's referring to.

[00:33:19] Speaker 01:
Just prior to engagement of the connection interface.

[00:33:22] Speaker 04:
So that's the thread.

[00:33:23] Speaker 04:
So it says it in the claim too.

[00:33:25] Speaker 04:
The contact is the engage against and then the engaging is what happens between the connector and the connector interface.

[00:33:33] Speaker 01:
But this is where that falls apart.

[00:33:35] Speaker 01:
This is a step in the process and it continues to describe what happens then.

[00:33:39] Speaker 01:
The threads, when they engage, apply a force to the ceiling member.

[00:33:44] Speaker 01:
And there's a critical aspect of this path.

[00:33:46] Speaker 01:
They apply a force to the ceiling member

[00:33:48] Speaker 01:
which takes it beyond contact.

[00:33:50] Speaker 01:
It drives the tip of that ceiling member against that inner periphery of the wall.

[00:33:56] Speaker 01:
So the specifications description of that interaction is completely consistent with the idea of engagement not being mere contact, but it's that contact and then there's a connection interface or a biasing member that applies a force.

[00:34:10] Speaker 01:
That's the resistance concept.

[00:34:11] Speaker 03:
Even though we gave you extra bottle time, your red light has been on for a while.

[00:34:19] Speaker 03:
So we'll take the case under the light.