[00:00:00] Speaker 00:
The next case is number 14, 1807, Seldar LLC against SK Innovation Company Limited, Mr. Luke.

[00:00:11] Speaker 01:
Good morning.

[00:00:12] Speaker 01:
Thank you, Your Honor, and may it please the court.

[00:00:15] Speaker 01:
Under Asahi and Beverly Hills fan, the district court erred when it found no jurisdiction.

[00:00:22] Speaker 03:
Mr. Luke, SKI claims in its brief that although Seldar was granted

[00:00:30] Speaker 03:
jurisdictional discovery had, quote, failed to find a single product containing an SKI accused separator in North Carolina.

[00:00:38] Speaker 03:
Is that true?

[00:00:41] Speaker 01:
What was not found was an individual separator.

[00:00:45] Speaker 01:
And the reason for that is these products are highly engineered, these separators are highly engineered, and the brand is not placed on the separator itself.

[00:00:55] Speaker 01:
So if the court went to the F. David

[00:00:58] Speaker 01:
of Dr. Murtha at, from my runway at Appendix 2038 to 2165, you can see a number of these products were tested, but none of them identified where the separator came from.

[00:01:13] Speaker 03:
They were consistent with... Well, you had the ability through discovery to determine that, did you not, by deposing the manufacturers?

[00:01:23] Speaker 01:
The manufacturers were not deposed, Ronner.

[00:01:26] Speaker 03:
But... That wasn't my question.

[00:01:28] Speaker 03:
My question was, you had the ability to do that through discovery, did you not?

[00:01:32] Speaker 01:
Perhaps a deposition notice could have been served to that effect.

[00:01:37] Speaker 01:
I candidly wasn't part of the team that did that.

[00:01:43] Speaker 01:
Can't answer directly, but I can tell you that there is abundant certainty.

[00:01:46] Speaker 01:
You can answer.

[00:01:48] Speaker 01:
Well, a deposition notice certainly could have been served.

[00:01:52] Speaker 04:
Is there anything in the record that shows that SKI's products were actually in

[00:01:57] Speaker 04:
in North Carolina?

[00:01:59] Speaker 01:
Yes, your honor.

[00:02:01] Speaker 01:
Circumstantially, if we go to the spreadsheets that were produced by SKI, and then we take the affidavit of Mr. Buckley from Apple, what we can show is that if you do the straight line mathematics, the percentage of the market that SKI supplied to the battery manufacturers for Apple, and then you take Apple's shipments of products

[00:02:23] Speaker 01:
directly into the Western District of North Carolina.

[00:02:26] Speaker 01:
That math comes out on the order of 45,000 iPhones, iPads, and iPads.

[00:02:31] Speaker 04:
Is this guy the only supplier to Apple?

[00:02:35] Speaker 01:
SKI is the supplier to the battery manufacturers of Apple.

[00:02:39] Speaker 04:
Are they the only suppliers?

[00:02:40] Speaker 04:
No.

[00:02:41] Speaker 04:
I'm sorry.

[00:02:42] Speaker 04:
And does that affect that math?

[00:02:44] Speaker 01:
It does not.

[00:02:45] Speaker 01:
So let me just take the court through the math.

[00:02:48] Speaker 01:
What we did

[00:02:49] Speaker 01:
is if we go to, I can give the court an example at Appendix 1876.

[00:02:55] Speaker 04:
Well, at the end of the day, your math takes you to a probability, correct?

[00:03:03] Speaker 04:
The math, I would agree with that.

[00:03:05] Speaker 04:
It takes to a probability, yes.

[00:03:06] Speaker 04:
But there's no certainty.

[00:03:08] Speaker 04:
I mean, there's nothing in the record that shows with certainty that SKI products are in North Carolina.

[00:03:16] Speaker 01:
There's not a certainty, but we're not found to show by a certainty.

[00:03:20] Speaker 01:
Our burden is to make a prima facie showing.

[00:03:23] Speaker 01:
And when I say 45,000 products, I'm only talking about Apple iPads, iPhones, and MacBooks that went into the Western District of North Carolina.

[00:03:34] Speaker 01:
Cell Guard gets the benefit of the entire state of North Carolina.

[00:03:38] Speaker 04:
The West jurisdictional discovery, correct?

[00:03:40] Speaker 04:
That is correct.

[00:03:41] Speaker 04:
Doesn't that change the standard that we're looking at from

[00:03:44] Speaker 04:
from a prima facie, from looking at the pleadings to now looking at a preponderance?

[00:03:49] Speaker 01:
It does not, Your Honor.

[00:03:50] Speaker 01:
Under this court's decision in electronics for imaging, even where there are affidavits, it remains a prima facie standard unless there is a hearing and then it goes... Not affidavits, jurisdictional discovery.

[00:04:06] Speaker 01:
No, Your Honor.

[00:04:07] Speaker 01:
I believe only a hearing, if we look at the electronics for imaging case,

[00:04:12] Speaker 01:
and the PizzaNet case, if there's a hearing, it changes the preponderance of the evidence.

[00:04:19] Speaker 01:
But I believe we've shown by a preponderance of the evidence and met that standard in any event.

[00:04:24] Speaker 04:
Did you request a hearing in this case?

[00:04:27] Speaker 01:
It's not clear that a hearing was requested.

[00:04:29] Speaker 01:
There was argument requested on reconsideration.

[00:04:34] Speaker 01:
But I don't believe either party requested an evidentiary hearing.

[00:04:40] Speaker 01:
Now, if I can follow up on that, I don't believe it's Selgard's obligation to request that hearing.

[00:04:46] Speaker 01:
If we look at this court's opinion in Beverly Hills Fan and look at page 1563 to see what the allegation was.

[00:04:55] Speaker 04:
I'm thinking of the case of Peacenik.

[00:04:57] Speaker 04:
It seems to me that there was jurisdictional discovery there, no hearing, and the standard that was applied was a preponderance of the evidence.

[00:05:06] Speaker 01:
Well, the standard was applied was a preponderance.

[00:05:09] Speaker 01:
There was jurisdictional discovery, but I believe there was a hearing as well.

[00:05:12] Speaker 01:
But it, you know, if I'm wrong about that, I'm wrong.

[00:05:15] Speaker 01:
But I can tell you, your honor, if you look at electronics for imaging, there, you know, the discussion is directly prima facie versus preponderance and affidavits were submitted to the court and the prima facie standard supporting the pleading allegations was applied.

[00:05:32] Speaker 01:
The point I'm making is that, and I'd just like to go back to it for a moment, and we're not talking about tens of thousands of products.

[00:05:40] Speaker 01:
We're talking about likely hundreds of thousands of products.

[00:05:43] Speaker 01:
And when I use the word likely, even the preponderance is a more likely than not standard.

[00:05:49] Speaker 01:
And so if I could just for a moment say what else could go into that.

[00:05:53] Speaker 01:
There are, you know, the iPhones and iPads and MacBooks that were identified here

[00:05:58] Speaker 01:
were only those sold through Apple stores and the Apple website in the Western District of North Carolina.

[00:06:06] Speaker 01:
Doesn't include Best Buy, doesn't include any of the phone manufacturers like AT&T or phone service providers like AT&T and Verizon.

[00:06:14] Speaker 01:
And so when we talk about what's likely, the likely result is there are literally hundreds of thousands of these products that are in the forum state.

[00:06:23] Speaker 01:
And that's where

[00:06:25] Speaker 01:
you know, that's the measurement that we're going to apply for determining the stream of commerce.

[00:06:30] Speaker 01:
So I think by either the prima facie standard or the ponderance of the evidence standard, Selgar is more than adduced circumstantial evidence that supports the allegations that SKI's product is found within the forum state.

[00:06:46] Speaker 01:
And that's the first prong of personal jurisdiction.

[00:06:49] Speaker 03:
Does that refer you, though, to assert circumstantial evidence when direct

[00:06:54] Speaker 03:
evidence was available and you failed to obtain it.

[00:06:59] Speaker 01:
Your Honor, the circumstantial evidence and direct evidence are entitled to the same weight.

[00:07:04] Speaker 01:
And, you know, the decision of how far to go with discovery is one that has to be made in every case.

[00:07:10] Speaker 03:
We're entitled to weight, but isn't there an inference from your failure to obtain direct evidence that it would have been adverse to you?

[00:07:21] Speaker 01:
Well, there might be an inference if it's shown that that evidence was available, but... I just asked you that.

[00:07:27] Speaker 01:
Okay.

[00:07:28] Speaker 01:
So under McIntyre... You told me that you could have issued subpoenas.

[00:07:36] Speaker 01:
We could have issued subpoenas.

[00:07:38] Speaker 01:
We could have attempted to take discovery of foreign manufacturers.

[00:07:44] Speaker 01:
Yes.

[00:07:45] Speaker 01:
I mean, whether we would have been successful, I don't know.

[00:07:48] Speaker 01:
I mean, the problem there is that we have the same argument of personal jurisdiction.

[00:07:54] Speaker 01:
The discovery that we got was written discovery, and that's what was submitted to the court.

[00:08:01] Speaker 01:
And I think if you look at that discovery in an objective light and you measure it against either the prima facie standard or the preponderance of the evidence standard, it shows that there is likely tens of thousands, if not hundreds of thousands of these separators in North Carolina.

[00:08:19] Speaker 04:
I'm not too sure that the law is clear on that point.

[00:08:22] Speaker 04:
That's why I've been asking you these questions.

[00:08:25] Speaker 04:
Sure.

[00:08:26] Speaker 04:
And so you may want to focus on that.

[00:08:29] Speaker 04:
And I've been trying to focus your arguments on that as well, because I do think it makes a difference when you're arguing mathematical probabilities.

[00:08:37] Speaker 04:
I think the standard between prima facie and a preponderance are oceans and park.

[00:08:44] Speaker 04:
OK.

[00:08:44] Speaker 01:
Well, let's talk about from the preponderance point of view.

[00:08:48] Speaker 01:
And I'd like to go to the statement that's in the McIntyre case from the Supreme Court that decisions on personal jurisdiction need to be made based upon the developing area of the law in the common law fashion as we do with other things.

[00:09:03] Speaker 01:
And it has to take into account the economic realities of the marketplace.

[00:09:07] Speaker 01:
The economic reality of the marketplace here is that the separators are manufactured in Korea, sold to battery manufacturers in China,

[00:09:17] Speaker 01:
Korea and elsewhere in Asia and then are incorporated into the Apple phones.

[00:09:22] Speaker 01:
I'm not certain that anyone could say for particular this separator material came from this particular manufacturer.

[00:09:31] Speaker 00:
The reason... At what stage then are you relying on Beverly Hills fan for jurisdiction of the manufacturer, the foreign manufacturer?

[00:09:40] Speaker 01:
Well, in particular, what Beverly Hills fan looks to is the additional conduct directed to the forum state in the sense of taking advantage of ongoing and continuous use of distribution channels that are going to place the product in the forum state.

[00:09:57] Speaker 00:
Well, in that case, there was no dispute that the product was at hand.

[00:10:02] Speaker 00:
The question was tracing the chains.

[00:10:03] Speaker 00:
Is that right?

[00:10:04] Speaker 01:
That is correct.

[00:10:05] Speaker 01:
And looking at the additional conduct.

[00:10:08] Speaker 01:
And here, the evidence that we have is the evidence of probability through taking the percentages of separator material, applying it to the number of products, confirming it with tests that show that it is consistent, although it doesn't show it directly, and the fact that they don't deny.

[00:10:30] Speaker 01:
And then the pleading standard that we're entitled to is the resolution of

[00:10:36] Speaker 01:
inferences in favor of Selgar here.

[00:10:41] Speaker 01:
And that's plainly set forth in Beverly Hills Ban and a number of other cases.

[00:10:46] Speaker 00:
So where is the distinction as to the concession of jurisdiction in New York?

[00:10:53] Speaker 01:
In New York, you know, in my view, that's reverse forum shopping, Your Honor.

[00:10:59] Speaker 01:
If we show that we have the stream of commerce element satisfied,

[00:11:05] Speaker 01:
And we have the additional purposeful conduct directed to the forum state satisfied, as I believe we do under Beverly Hills fan.

[00:11:13] Speaker 01:
And then they don't carry their burden on reasonableness.

[00:11:17] Speaker 01:
We're entitled to our forum state.

[00:11:21] Speaker 01:
And a defendant shouldn't be permitted to simply say.

[00:11:24] Speaker 04:
Why wouldn't your argument ask you the probabilities in this mathematical theory that you lay out?

[00:11:32] Speaker 04:
Why doesn't that invoke 42K?

[00:11:35] Speaker 04:
Where you can't identify any particular market that the product goes to, presumably, under your equation.

[00:11:47] Speaker 04:
It can go to any of the 50 states.

[00:11:48] Speaker 04:
Correct.

[00:11:50] Speaker 04:
OK, so that now you're invoking national type jurisdiction.

[00:11:55] Speaker 04:
And you have one forum that says, I'm willing to be sued in New York.

[00:12:00] Speaker 04:
And that forum says, you can bring those type of lawsuits here.

[00:12:05] Speaker 01:
We're not invoking national jurisdiction, Your Honor, and I look to two district court decisions that I think make plain exactly what's taking place here.

[00:12:14] Speaker 01:
One is Kernius from the District of Maryland.

[00:12:18] Speaker 01:
The other is Cole Morgan from the Western District of Virginia.

[00:12:22] Speaker 01:
Both of those cases involved manufacturers taking advantage of ongoing and continuous distribution networks, and the fact that those products would end up at

[00:12:34] Speaker 01:
Best Buy or other places and they didn't know the specific locations was not an excuse that would excuse them from personal jurisdiction.

[00:12:44] Speaker 01:
So, for example, in Cole Morgan, the district court statement was you cannot take an ostrich-like stance.

[00:12:53] Speaker 01:
And if you look at what took place here, SKI actively worked with Apple to try to deepen its penetration

[00:13:02] Speaker 01:
of Apple's product in the United States.

[00:13:06] Speaker 01:
It's not necessary under Beverly Hills fan to specifically target the specific state.

[00:13:11] Speaker 01:
The manufacturer there did not target the specific state.

[00:13:15] Speaker 01:
That was a manufacturer in China selling to a U.S.

[00:13:19] Speaker 01:
distributor who in turn had a relationship.

[00:13:22] Speaker 04:
SKA is not selling directly to Apple in this case, correct?

[00:13:25] Speaker 04:
That is correct.

[00:13:27] Speaker 04:
OEMs and it's OEMs that are supplying the power sources to Apple.

[00:13:33] Speaker 04:
That is correct.

[00:13:33] Speaker 04:
Isn't that different from the cases that you cite?

[00:13:36] Speaker 01:
I think it is a little bit different from Beverly Hills fan, but as Matt Entire tells us, we have to take in the economic realities of the marketplace and it's still a two-pronged test.

[00:13:46] Speaker 01:
Are the products here and was there additional conduct directed to the forum state in the sense of using distribution channels?

[00:13:53] Speaker 01:
And if I could,

[00:13:54] Speaker 01:
Just take the court for a moment to the appendix at age 1642.

[00:13:58] Speaker 01:
It shows some of the efforts that SKI took to increase its sales of its product through Apple.

[00:14:08] Speaker 01:
And that's 1642.

[00:14:09] Speaker 01:
This is a marketing document that came out of SKI's files in the jurisdictional discovery.

[00:14:29] Speaker 01:
And if we go two pages in this presentation to A1647, you can see a document entitled Cooperation Between Apple and SKI.

[00:14:42] Speaker 01:
And I would just point to two things.

[00:14:47] Speaker 01:
SKI wishes to create and provide values for Apple.

[00:14:51] Speaker 01:
That's in the purple box along the right-hand side.

[00:14:54] Speaker 01:
And the timeline shows during the relevant period

[00:14:57] Speaker 01:
of alleged infringement, SKI's activities to try to deepen its relationship with Apple and increase its sales.

[00:15:05] Speaker 01:
Now, that's sales worldwide, but that includes the U.S.

[00:15:10] Speaker 01:
And if we look further in the appendix, at A2236, this also is a document that came out of SKI's files during

[00:15:27] Speaker 01:
the discovery.

[00:15:31] Speaker 01:
A couple of things are made plain.

[00:15:33] Speaker 01:
I just point to the statement above the table, Apple's market position.

[00:15:39] Speaker 01:
It has an analysis of their market position.

[00:15:41] Speaker 01:
And then below it, it says, Apple is the biggest consumer of separation films, which consumed 10% or more of the world's supply.

[00:15:53] Speaker 01:
And so as I look at this, and I recognize that

[00:15:57] Speaker 01:
the issue with trying to approve the stream of commerce through statistics.

[00:16:04] Speaker 01:
But when we look at the scale of the statistics here, we look at SKI's conduct in trying to increase its distribution through Apple's sales channels, which indisputably end up in North Carolina.

[00:16:18] Speaker 01:
And then we take the difference that you raised

[00:16:21] Speaker 01:
Your Honor, with respect to Beverly Hills fan, I think the better rule in today's economic reality is if you are a foreign competitor and you are actively taking steps to compete in the 50 states of the United States, then you ought in fairness be subject to personal jurisdiction and to answer for torts within those states.

[00:16:46] Speaker 00:
Thank you, Mr. Jake.

[00:16:50] Speaker 00:
We brought up some new issues on our questions.

[00:16:52] Speaker 00:
Do you want a minute or two to respond?

[00:16:54] Speaker 00:
No, Your Honor.

[00:16:57] Speaker 02:
I think I'm prepared.

[00:16:59] Speaker 00:
Okay.

[00:16:59] Speaker 02:
Yes.

[00:17:01] Speaker 02:
And good morning.

[00:17:02] Speaker 02:
May it please the court?

[00:17:04] Speaker 02:
The facts here are fairly simple.

[00:17:07] Speaker 02:
SK does not have offices, employees, contacts with North Carolina.

[00:17:12] Speaker 02:
It doesn't ship products into North Carolina.

[00:17:14] Speaker 02:
And after extensive jurisdictional discovery, Cellgarden still did not find and identify a single product that had an SK separator.

[00:17:24] Speaker 04:
Did any of the parties request a hearing?

[00:17:27] Speaker 02:
I don't believe either side requested a hearing.

[00:17:29] Speaker 02:
That's what I understand from the record.

[00:17:31] Speaker 02:
And Your Honor, that does go to the evidentiary standard.

[00:17:35] Speaker 02:
But as I understand the Peacenik case, there was no evidentiary hearing in that case as well because the parties didn't

[00:17:43] Speaker 02:
either requested or it didn't take place, but there was extensive jurisdictional discovery.

[00:17:48] Speaker 02:
And that's what we have here.

[00:17:50] Speaker 02:
I don't think that cell guards should be able to somehow manipulate the standard by taking extensive jurisdictional discovery and then saying, well, we don't want a hearing, so we don't have to be there.

[00:18:00] Speaker 04:
Would a preponderance of evidence standard take into account statistical evidence?

[00:18:11] Speaker 02:
Two answers to that, Your Honor.

[00:18:14] Speaker 02:
The statistical evidence here is not complete.

[00:18:19] Speaker 02:
For one thing, it assumes that there was an even distribution of all of these products, that somehow a particular batch didn't go to a particular location.

[00:18:29] Speaker 02:
No evidence of that.

[00:18:30] Speaker 02:
So you can't assume that they were all evenly distributed and that the same number ended up in every state.

[00:18:36] Speaker 02:
It's just not there.

[00:18:37] Speaker 02:
Second, there's... For every country, for that matter.

[00:18:40] Speaker 02:
Every... They're distributed worldwide.

[00:18:43] Speaker 02:
Yes, Your Honor.

[00:18:44] Speaker 02:
As recognized, SKI is only one of the suppliers to the battery manufacturers, and the battery manufacturers are only one of the suppliers to the CE manufacturers.

[00:18:56] Speaker 02:
So, you have a very complicated supply chain, and Selgar did have the opportunity to take discovery and wasn't able to establish that.

[00:19:07] Speaker 00:
But for the net foreign origin products of national distribution ultimately in the United States, what's the difference between New York and North Carolina?

[00:19:18] Speaker 02:
Well, in New York, as I understand, the SKI did have an employee there and did have actually some contacts.

[00:19:25] Speaker 02:
The district court also found that there was jurisdiction in California based on the fact that SKI had sent samples there.

[00:19:31] Speaker 00:
Well, I will right add that to my question.

[00:19:33] Speaker 00:
What's the difference?

[00:19:34] Speaker 02:
Well, the difference is that SKI actually has contacts with those locations.

[00:19:39] Speaker 00:
What do you mean by contacts?

[00:19:40] Speaker 00:
Companies?

[00:19:42] Speaker 02:
In the case of California, there were samples that were sent into the state to try to get customers.

[00:19:50] Speaker 02:
That did not happen in North Carolina.

[00:19:52] Speaker 02:
Selgard alleged that that had happened.

[00:19:54] Speaker 02:
In their complaint, it turned out to be not true.

[00:19:57] Speaker 02:
But with California, the judges did find that there were contacts, deliberate contacts with that state.

[00:20:02] Speaker 02:
and also accepted that the concession was for New York.

[00:20:06] Speaker 02:
That's right.

[00:20:06] Speaker 02:
There was a concession for New York.

[00:20:08] Speaker 00:
Should that hold for New York?

[00:20:09] Speaker 02:
New York has jurisdiction as well.

[00:20:11] Speaker 02:
Yes.

[00:20:12] Speaker 02:
But there were contacts.

[00:20:14] Speaker 03:
And the contact is, you said, an employee?

[00:20:16] Speaker 02:
That's what I understand.

[00:20:17] Speaker 02:
Yes.

[00:20:18] Speaker 00:
And so what we have now is an employee, but we're talking about the presence of the product in the state.

[00:20:25] Speaker 00:
Is that right?

[00:20:27] Speaker 00:
In the district?

[00:20:28] Speaker 00:
I don't think there's an issue.

[00:20:29] Speaker 02:
I don't think there's any concession that these particular products made by SKI were found in those states.

[00:20:35] Speaker 02:
There were other contacts associated with the sale and marketing of separator film, which is the accused product ultimately.

[00:20:43] Speaker 02:
But I don't think there's any concession that any of the consumer electronic products in those states, whether it's North Carolina or New York or California, contain SKI separators.

[00:20:55] Speaker 02:
I don't think there's any concession at all.

[00:20:57] Speaker 02:
And on that point,

[00:21:00] Speaker 02:
Selgarten repeats many times in its reply brief that SKH somehow failed to deny that products were found in North Carolina.

[00:21:08] Speaker 02:
We don't know.

[00:21:09] Speaker 02:
We said we don't know for an individual product because our customers don't tell us.

[00:21:14] Speaker 00:
This is your client, right?

[00:21:16] Speaker 02:
What's that?

[00:21:16] Speaker 00:
This is your client?

[00:21:18] Speaker 00:
We don't know?

[00:21:19] Speaker 02:
We don't know.

[00:21:19] Speaker 02:
The customers don't tell us that.

[00:21:21] Speaker 02:
That's very closely guarded information.

[00:21:23] Speaker 02:
That's important trade secret information.

[00:21:26] Speaker 02:
They sell

[00:21:27] Speaker 03:
SKI sell its trade secret information.

[00:21:30] Speaker 03:
Could our sell guard have obtained that information?

[00:21:35] Speaker 03:
Well, it certainly could have tried.

[00:21:38] Speaker 02:
But certainly, SKI doesn't know that.

[00:21:41] Speaker 02:
And when we have insufficient knowledge or information.

[00:21:45] Speaker 04:
Trade secret information, is this OEMs or let's say the retailer, the distributor like Apple?

[00:21:51] Speaker 02:
I think it's probably both.

[00:21:53] Speaker 02:
These kinds of things are not generally widely known.

[00:21:56] Speaker 02:
And certainly, SKI doesn't know it.

[00:21:58] Speaker 02:
that the S.K.I.'

[00:21:59] Speaker 02:
's representative was taken and he said multiple times, we don't know.

[00:22:03] Speaker 02:
You know, we make guesses.

[00:22:04] Speaker 02:
We try to figure out what's going on in the market and we guess, but we don't know.

[00:22:08] Speaker 02:
We don't even know whether or not a particular battery manufacturer coats our films.

[00:22:14] Speaker 02:
And that has to actually be done before there can even be an allegation of infringement.

[00:22:19] Speaker 02:
So there's no knowledge or information and that's the equivalent to a denial.

[00:22:24] Speaker 04:
So are all these membranes

[00:22:26] Speaker 04:
I mean, there's no identifying mark or design or shape or anything that would distinguish them?

[00:22:34] Speaker 02:
Your Honor, I don't know how close they are.

[00:22:38] Speaker 02:
I know that they are manufactured often to the customer's own particular standards, so there may be differences.

[00:22:45] Speaker 02:
But for the ultimate end product, there's certainly SKI doesn't know.

[00:22:56] Speaker 02:
And to continue with your question, Your Honor, about probability, let's assume that there is some probability that a product ended up in North Carolina.

[00:23:06] Speaker 02:
That's still not enough.

[00:23:08] Speaker 02:
If you go back to the whole stream of commerce theory originating in a worldwide Volkswagen, the court even said there, the mere likelihood that a product will find its way into the form state, it's not enough.

[00:23:22] Speaker 02:
You have to have some expectation that you'll be sued in that.

[00:23:26] Speaker 02:
There's no established distribution channel that SKI takes advantage of.

[00:23:30] Speaker 02:
They sell to the battery manufacturers who are also outside the US.

[00:23:35] Speaker 02:
And in that respect, there's certainly some uncertainty in the law with Asahi, but I don't think the court has to reach that because even under any standard, without a product being found in North Carolina, the stream of commerce theory has to fail.

[00:23:54] Speaker 02:
Unless your honors have any more questions, I think.

[00:23:56] Speaker 00:
Okay.

[00:23:56] Speaker 00:
Thank you, Mr. Jakes.

[00:24:07] Speaker 01:
I will make just a few brief points.

[00:24:10] Speaker 01:
First of all, to your question regarding pizza nick, your honor, I looked up the statement you were referring to at page 1334.

[00:24:20] Speaker 01:
There the parties conducted discovery related to jurisdictional issues and told the district court that no evidentiary hearing was necessary with respect to the issue of personal jurisdiction because the jurisdictional facts were undisputed.

[00:24:35] Speaker 01:
And there the court did apply the preponderance of evidence standard under those circumstances.

[00:24:42] Speaker 01:
And we can also look to electronics for imaging where you have affidavits like here.

[00:24:46] Speaker 04:
So applying what you just read to this case, in this case there was no

[00:24:50] Speaker 04:
jurisdictional hearing.

[00:24:51] Speaker 04:
The parties didn't request it.

[00:24:54] Speaker 04:
But I guess you're saying that the facts are disputed here.

[00:24:57] Speaker 01:
They are undisputed here.

[00:24:59] Speaker 04:
And that's the difference between this case and Peacenik?

[00:25:02] Speaker 01:
Yes, Your Honor.

[00:25:03] Speaker 01:
But I would also say that under the preponderance, it's apparent by looking at this record that it is extremely difficult, if not impossible, to identify which film is in the battery.

[00:25:19] Speaker 01:
And, you know, that's the reality of this marketplace because Apple wants its, you know, its materials made to a high specification.

[00:25:30] Speaker 04:
And so I'm just going to go back to the statistical aspect for a second and just say what's more likely... Let me ask you, would Shell Guard be able to determine whether its own membranes are being sold in North Carolina?

[00:25:45] Speaker 01:
I believe they would, but I'm

[00:25:47] Speaker 01:
I'm not certain if they would be able to do it by inspecting the membrane itself.

[00:25:51] Speaker 01:
Perhaps they could.

[00:25:52] Speaker 01:
I can't answer the question with enough certainty for the court to rely on it.

[00:25:59] Speaker 03:
When Judge Raina asked you whether the facts were disputed or undisputed in your case, I thought you said they are undisputed here.

[00:26:13] Speaker 01:
The facts are undisputed.

[00:26:15] Speaker 01:
The inference is from the facts.

[00:26:17] Speaker 01:
are not.

[00:26:19] Speaker 01:
And I believe under Beverly Hills fan at... So this case is exactly like Peetsnik then?

[00:26:26] Speaker 04:
It's very similar, yes.

[00:26:28] Speaker 04:
So if we take a look at it from that perspective, we're looking at a preponderance standard.

[00:26:34] Speaker 01:
You could apply the preponderance standard of Peetsnik or you could apply the prima facie standard of electronics for imaging.

[00:26:40] Speaker 01:
I'm saying we meet our burden under either one.

[00:26:46] Speaker 01:
And I think that's an open question for the court to decide.

[00:26:51] Speaker 01:
What electronics for imaging says is another equally direct statement that if there is no evidentiary hearing, then a prima facie showing is all that's required.

[00:27:03] Speaker 04:
If it is a preponderance of evidence standard and your evidence is circumstantial in nature, you're arguing probabilities,

[00:27:13] Speaker 04:
Then what is it that we review here?

[00:27:16] Speaker 04:
The strength of your economic theory?

[00:27:19] Speaker 04:
The amount of probabilities, a percentage?

[00:27:23] Speaker 01:
I think you go to Beverly Hills Fan, where it says the allegations are that defendants purposefully shipped the accused fan into Virginia through established distribution channel.

[00:27:35] Speaker 01:
The cause of action for patent infringement is alleged to arise out of these activities.

[00:27:40] Speaker 01:
No more is usually required.

[00:27:42] Speaker 01:
We have stepped further and given an evidentiary basis for the allegation.

[00:27:48] Speaker 01:
One that is, you know, acknowledged, proved, circumstantially, but circumstantial evidence is entitled under the rules of evidence to the same weight as direct evidence.

[00:27:57] Speaker 00:
But I don't understand if you can't establish by evidence or by chemical analysis or any other way whether this product is present anyplace.

[00:28:11] Speaker 00:
And how, even if you were to cross this threshold of jurisdiction of the foreign producer, how can you establish your case?

[00:28:21] Speaker 01:
Well, we will have to be able to dig down into those details and trace the specific product shipments, but we would be entitled to... You could have done that in your jurisdictional discovery.

[00:28:35] Speaker 01:
Acknowledge, Your Honor.

[00:28:36] Speaker 01:
All right.

[00:28:38] Speaker 01:
Okay.

[00:28:38] Speaker 01:
Thank you.

[00:28:38] Speaker 01:
I have nothing further.

[00:28:40] Speaker 00:
Okay, thank you, Mr. Locke, Mr. Jake.

[00:28:42] Speaker 00:
The case is taken under submission.