[00:00:53] Speaker 02:
Okay, the next argued case this morning is number 14-1285, ETags Incorporated against Flambeau Incorporated.

[00:01:02] Speaker 02:
Mr. Pia, you may proceed.

[00:01:05] Speaker 00:
Thank you.

[00:01:05] Speaker 00:
May it please the court?

[00:01:06] Speaker 00:
My name is Joseph Pia and I represent ETags.

[00:01:09] Speaker 00:
The district court's decision should be reversed in this case, it remanded, for failure to make legal and factual findings as to invalidity and the exclusion of experts.

[00:01:20] Speaker 00:
On the other hand, the district court's decision should be upheld under an abuse of discretion standard as to exceptionality.

[00:01:27] Speaker 00:
And finally, the motion for frivolous appeal should be denied.

[00:01:32] Speaker 00:
With respect to invalidity, the very first step is claim construction.

[00:01:35] Speaker 00:
The district court didn't do it.

[00:01:38] Speaker 00:
It didn't do it expressly or informally.

[00:01:40] Speaker 00:
This is legally improper and merits reversal under this court's 02 micro international case 2008.

[00:01:48] Speaker 00:
Why should this court remand instead of attempt to construe the claims?

[00:01:52] Speaker 00:
The reason is that the parties have not asked this court to construe the claims, neither party.

[00:01:57] Speaker 00:
They didn't argue claim construction in their appeal, other than merely ETags arguing that as a legal matter, if the court were to adopt the claim construction offered by Flambeau, then Flambeau's art would not anticipate the claims at issue.

[00:02:12] Speaker 00:
The district court and the parties agreed that we had to construe at least two claim terms.

[00:02:17] Speaker 00:
Those claim terms were legal, and the other claim term was secure.

[00:02:22] Speaker 00:
The parties also disputed the meaning of the words control data and executables, although those claim terms didn't receive formal claim construction.

[00:02:31] Speaker 00:
They should have.

[00:02:34] Speaker 00:
But the district court, even after receiving oral argument, claim construction briefing, argumentation within the summary judgment briefing on these claim terms, didn't make any determination as to their meeting.

[00:02:47] Speaker 00:
And what the court should have attempted to do is construe the claims in a way that could maintain their validity if possible.

[00:02:55] Speaker 00:
Further, the record is incomplete on appeal if this court were to attempt to construe the claims.

[00:03:00] Speaker 00:
For example, we don't have the entirety of the claim construction briefs cited or in the record before appeal.

[00:03:07] Speaker 00:
We have part of the summary judgment briefing, and we don't have all of the oral argument that was before the district court on claim construction.

[00:03:17] Speaker 00:
With respect to anticipation, the rule is that Clambeau has a burden of clear and convincing evidence that never shifts to show that each and every limitation of each and every claim exists in the prior art.

[00:03:32] Speaker 00:
Clambeau didn't do this.

[00:03:35] Speaker 00:
And in fact, as the court knows, that anticipation is typically an issue that's reserved for the jury, and the burden is even higher after reexamination.

[00:03:45] Speaker 00:
And this court has reversed and remanded in instances where a district court has failed to consider the examiner's decision on re-exam.

[00:03:53] Speaker 00:
This is in the interconnect planning court case in 1985, for example.

[00:04:00] Speaker 00:
And it is, in fact, reversible error for the district court not to consider re-exam proceedings.

[00:04:06] Speaker 00:
The examiner on re-exam, importantly, considered the exact same prior art that was before the district court in this case.

[00:04:13] Speaker 00:
and it allowed new claims.

[00:04:16] Speaker 00:
It rejected two claims, as this court knows.

[00:04:18] Speaker 00:
For example, the Windows 95 disk was distinguished by the PTO on re-exam, as was the ChexQuest AOL disk, as was the AOL disk all by itself.

[00:04:31] Speaker 00:
And this is the only art that is cited specifically by the district court in its order, on the last page of the order, just these three pieces of art.

[00:04:39] Speaker 00:
Now, the district court does say at least these three pieces of prior art

[00:04:43] Speaker 00:
invalidate the patent claims.

[00:04:45] Speaker 00:
But it's improper for the court to lump all the claims together, lump all the prior art together, and simply make a rote statement that these, without an analysis on a claim by claim, element by element analysis.

[00:04:59] Speaker 00:
And it didn't state that any other particular art invalidated the claims, and therefore, this court shouldn't consider that either.

[00:05:07] Speaker 00:
Regarding inherency, Lambeau

[00:05:09] Speaker 00:
cannot and should not be able to say that whatever element is missing in the prior art is simply inherent.

[00:05:16] Speaker 00:
The rule of this court is there must be substantial evidence to support a finding of inherent disclosure.

[00:05:22] Speaker 00:
And all that inherent disclosure requires that the element necessarily exists in the prior art.

[00:05:29] Speaker 00:
And what's interesting in this case, of course, is that the expert de Flambeau, Prockford, didn't even have physical copies of the art.

[00:05:36] Speaker 00:
the AOL reference, the ChexQuest reference, or the Windows 95 reference, that he stated had inherent elements.

[00:05:44] Speaker 00:
That doesn't meet the burden of reasonable evidence, particularly when we're talking about claim terms like control data, executables, linking data, vendor and source data within the CD-ROMs themselves, or in this case, they were disks.

[00:06:05] Speaker 01:
claim by claim analysis for invalidity purposes?

[00:06:09] Speaker 00:
It attempted to, but by its own admission, missed elements within the prior art.

[00:06:16] Speaker 00:
And all the elements that were missing in the prior art, one of the most notable examples is the term label, which it admitted, the expert admitted that he didn't define, but that term label appears in every single claim.

[00:06:29] Speaker 00:
He said he didn't identify label in some of the prior art.

[00:06:33] Speaker 00:
And here's an example.

[00:06:34] Speaker 00:
As we've gone through this claim chart, which I know we provided a portion to the court, is that the expert said that control data is inherent in the ChexQuest reference.

[00:06:47] Speaker 00:
It's inherent in the AOL reference.

[00:06:48] Speaker 00:
It's inherent in the Windows 95 reference.

[00:06:51] Speaker 00:
Says that executables are inherent in those same references.

[00:06:56] Speaker 00:
He says linking data is inherent in those references.

[00:06:59] Speaker 00:
He says that establishing communication is inherent in those references.

[00:07:05] Speaker 00:
He says that vendor data on the CD-ROM is inherent in those references.

[00:07:10] Speaker 00:
And with respect to the claim term networking, he says that it's inherent in three of those, in actually those three references as well.

[00:07:22] Speaker 00:
So although the expert ostensibly listed out every claim and every claim limitation, he simply didn't find elements that correspond in the prior art to the claimed invention.

[00:07:33] Speaker 00:
He didn't go that far.

[00:07:34] Speaker 00:
And the court should not have accepted that inherency argument.

[00:07:37] Speaker 00:
In fact, we don't even know if the court did accept that inherency argument, because it's not as if the court incorporated by reference that Dr. Tonkin report.

[00:07:48] Speaker 00:
The order itself doesn't make any reference to that report.

[00:07:52] Speaker 00:
All that the order says in the last paragraph is the AOL checks, quests, and the Windows 95 references and validate the patents at issue.

[00:08:02] Speaker 00:
There's no analysis whatsoever.

[00:08:05] Speaker 00:
Under section 103, obviousness, again, the district court failed to undertake.

[00:08:11] Speaker 05:
What do you think is the basis upon which the district court excluded your expert?

[00:08:17] Speaker 00:
With respect to rule 702,

[00:08:21] Speaker 00:
We're unclear.

[00:08:22] Speaker 05:
He says he doesn't think his testimony would be helpful because he doesn't have any of the background that is relevant to the invention.

[00:08:29] Speaker 05:
Now what he didn't say precisely was he isn't one of skill in the art, but he clearly isn't one of skill in the art.

[00:08:34] Speaker 05:
He doesn't have any experience relevant to what's at issue in these patents.

[00:08:40] Speaker 05:
So why isn't it harmless error that he failed to articulate with precision the patent law jargon that we would like to hear

[00:08:48] Speaker 05:
you know, when he did clearly say your expert didn't have a background that was related to this.

[00:08:54] Speaker 00:
The court said that his background wouldn't be helpful in one sentence.

[00:09:01] Speaker 00:
In fact, there's one paragraph, but it's just the very last sentence where he says that it's JA7597.

[00:09:09] Speaker 00:
The rule 702 requires particularized findings under Dodge in the 10th Circuit.

[00:09:14] Speaker 00:
And in fact, the 10th Circuit reverses

[00:09:17] Speaker 00:
if there are not specific findings, and says that in the absence of such findings, we must conclude that the court abused its discretion in admitting such testimony.

[00:09:27] Speaker 00:
This is on page 1223, and there's a long paragraph there that talks about how detailed these factual findings need to be.

[00:09:34] Speaker 00:
So the court, either the court's ruling should be reviewed de novo because it didn't apply the elements A, B, and C, and D of Rule 702,

[00:09:45] Speaker 02:
The court said he was a mechanical engineer, and I take from that that he thought that there was inadequate experience in the computer activities.

[00:09:57] Speaker 02:
Is that your sense?

[00:10:00] Speaker 00:
The court did mention that he was a mechanical engineer, and he is.

[00:10:04] Speaker 00:
What's interesting to note here is that under ETAC's definition of a person of ordinary skill in the art, which the, by the way, the court never defined,

[00:10:14] Speaker 00:
But under ETAC's definition, he does meet those requirements.

[00:10:19] Speaker 00:
Flambeau's expert doesn't meet its own requirements.

[00:10:23] Speaker 00:
And that's the reason we say that should be reversed.

[00:10:25] Speaker 05:
Yeah, well, I don't even understand Flambeau's expert.

[00:10:28] Speaker 05:
He said it's a team of people.

[00:10:30] Speaker 05:
This is an invention in which there is one inventor listed.

[00:10:33] Speaker 05:
But his view is for you to have ordinary skills in the art, you have to actually be, quote, a team of people.

[00:10:41] Speaker 00:
That's right.

[00:10:41] Speaker 00:
And he says- I don't understand that.

[00:10:43] Speaker 00:
We don't understand it either.

[00:10:45] Speaker 00:
It's unusual.

[00:10:46] Speaker 00:
And he said you have to have one, two, three, four, five different levels of experience.

[00:10:53] Speaker 00:
And then he candidly admitted during cross-examination on the stand that he has none of those things.

[00:10:59] Speaker 00:
But what he said is that he falls under his catchall provision, quote, or similar comparable training or experience.

[00:11:05] Speaker 00:
This is JA 4628.

[00:11:07] Speaker 00:
If we look at our expert's testimony, although he was a mechanical engineer,

[00:11:12] Speaker 00:
He said that he programmed code, he had pieced together computers himself, and now I'm looking at JA7349 through 50.

[00:11:24] Speaker 00:
He stated that for 15 years, he participated in value analysis seminars for companies on advertising and the use of new medias, including emerging technologies.

[00:11:34] Speaker 00:
He stated that he had marketed his own company with CD-ROM.

[00:11:38] Speaker 05:
But what other, let's go back to Mr. Smith for a minute, because I think, I mean, I understand there are problems here, but let's go back to Mr. Smith.

[00:11:48] Speaker 05:
What experience does he have relevant to the field of this invention at all that was proffered?

[00:11:55] Speaker 00:
As I was mentioning is that he marketed his own company with digital media, including CD-ROMs.

[00:12:02] Speaker 00:
He programmed executable code and knew what executables were.

[00:12:06] Speaker 00:
He had in fact

[00:12:08] Speaker 00:
created software programs.

[00:12:10] Speaker 00:
He had coordinated a team comprising of marketing, purchasing, and web designers for over a period of 15 years.

[00:12:17] Speaker 00:
And what's interesting here is that our expert probably does fit within most of the categories of Flambeau's alleged person of ordinary skill in the art, because Flambeau also states that if you don't have comparable experience, what you could do is you could consult with people that do.

[00:12:35] Speaker 00:
This is in their last element, JA7244 through 45 or JA6685 or 7841 through 52.

[00:12:45] Speaker 00:
And our expert says that he did consult for a period of 15 years with those skilled in the various categories of confidence testimony.

[00:12:54] Speaker 00:
With respect to exceptionality, well, let me just go back for one minute just for the purposes of the record on obviousness.

[00:13:03] Speaker 00:
There was no effort.

[00:13:05] Speaker 00:
by the district judge to make any findings under the Graham Factors.

[00:13:09] Speaker 00:
He never attempted to define the scope and content of the prior art.

[00:13:14] Speaker 00:
And this is important because the patent examiners on reexamination held that this art was not analogous to the claims that were issued and permitted to go forward.

[00:13:23] Speaker 00:
Another big problem is that the district court made no findings with respect to motivation to combine those references and instead erred on the side of

[00:13:34] Speaker 00:
hindsight.

[00:13:36] Speaker 00:
And we cautioned the court, as mentioned in our brief, that it shouldn't use hindsight.

[00:13:40] Speaker 00:
And the court kept saying, in today's world, in today's world.

[00:13:44] Speaker 00:
And the court went on to say, then we should combine those references.

[00:13:49] Speaker 00:
And the court went on to say that we use hindsight all the time.

[00:13:52] Speaker 00:
And that's how we make our analysis, which maybe works in other contexts.

[00:13:56] Speaker 00:
It just doesn't work in the patent law.

[00:13:59] Speaker 00:
With respect to exceptionality,

[00:14:03] Speaker 00:
The district court did not abuse its discretion in denying Flambeau's request for fees and costs.

[00:14:08] Speaker 00:
This case is not unusual in the manner that it was litigated or in the litigating position of e-tax.

[00:14:15] Speaker 01:
As a primary matter- Am I right in thinking that the judge's ruling on that comes at JA 7600?

[00:14:20] Speaker 01:
I was looking for the judge's ruling on exceptional- It comes on- At 7600.

[00:14:33] Speaker 00:
the second page of the order in paragraph F, and it says, Defendant Flambeau's Inks Request for Attorneys' Fees and Costs Pursuant to Enter ALIA 35 U.S.

[00:14:51] Speaker 00:
Code.

[00:14:53] Speaker 01:
It looked to me like, if you look at 7, what did I say, 7600?

[00:14:59] Speaker 01:
where the district court was saying, I think in part because of what they've done, this is not a case which justifies any particular compensation by way of fees or otherwise?

[00:15:08] Speaker 00:
Yes.

[00:15:09] Speaker 01:
I don't know what he was talking about, what they have done.

[00:15:12] Speaker 00:
Oh, what he was talking about is what the PTO did on reexamination.

[00:15:15] Speaker 00:
And what he was really saying is that our litigating position of trying to uphold the patents as valid was not unusual or exceptional because the PTO did what it did.

[00:15:26] Speaker 00:
In other words, the PTO issued these patent claims.

[00:15:31] Speaker 01:
As of the time that discussion was going on, 7600, Myers said that Flambeau had not by then filed an actual motion for an exceptional case.

[00:15:42] Speaker 00:
It never in fact filed a motion.

[00:15:44] Speaker 01:
Well, that's what I wanted to ask about.

[00:15:46] Speaker 00:
It made its motion verbally.

[00:15:48] Speaker 00:
at the end of all of the proceedings, the summary judgment proceedings.

[00:15:52] Speaker 01:
The Lambos Council says we will seek fees if we win, but we'll brief that up separate.

[00:15:57] Speaker 00:
They never did.

[00:15:58] Speaker 01:
That's at 75-79.

[00:16:00] Speaker 00:
They never filed a motion.

[00:16:01] Speaker 00:
That's another reason why the court's decision should be upheld based on the oral motion that they made.

[00:16:08] Speaker 01:
And do we know exactly where the oral motion was in the record?

[00:16:11] Speaker 00:
It was on the last day of the hearings.

[00:16:15] Speaker 00:
And I can try to look at this here.

[00:16:19] Speaker 01:
So maybe Flambeau's counsel, I was going to ask them whether they actually made a motion.

[00:16:23] Speaker 01:
I didn't see in the documents that we had.

[00:16:27] Speaker 00:
I believe it was December 13, 2013 is what I'm seeing on page 12 of the order.

[00:16:34] Speaker 02:
We'll take that up with the other side.

[00:16:37] Speaker 02:
Any more questions at the moment?

[00:16:38] Speaker 02:
We'll save you a bit of time.

[00:16:44] Speaker 02:
Thank you.

[00:16:48] Speaker 04:
Thank you.

[00:16:48] Speaker 04:
May it please the court.

[00:16:49] Speaker 04:
My name is Josephine Bankers.

[00:16:51] Speaker 04:
I'm from Coral, from Brady, on behalf of Defendant Appellee, Crosses Hill.

[00:16:56] Speaker 01:
Did you file a motion for exceptional case?

[00:16:59] Speaker 04:
I don't have the exact quote on the record.

[00:17:03] Speaker 04:
My recollection is that we definitely said we intended to seek our fees, and there was some question.

[00:17:10] Speaker 01:
I see that.

[00:17:10] Speaker 01:
That's on page 7579.

[00:17:12] Speaker 01:
We will seek the fees if we win, but we'll bring that up separate.

[00:17:15] Speaker 01:
I'm just curious to know whether a motion was ever filed.

[00:17:18] Speaker 04:
There wasn't a formal motion filed at that point after that.

[00:17:23] Speaker 04:
On the record, the judge was very clear that he was denying the request for fees.

[00:17:29] Speaker 04:
And in the written order, he very clearly denied the request for fees.

[00:17:36] Speaker 04:
And that was an order that was drafted by Flambeau.

[00:17:40] Speaker 04:
E-Takes had a chance to see it and approve it and then entered by the judge where the request for fees was denied.

[00:17:49] Speaker 04:
Okay, proceed.

[00:17:53] Speaker 04:
We're here today on 79 patent claims.

[00:17:58] Speaker 04:
But when you look at the patent claims, they are a conglomeration of very similar patent claims across three patents.

[00:18:07] Speaker 04:
These patents are directed to the decades-old practice of labeling products, including labeling to communicate some type of information or advertising for promotional purposes.

[00:18:19] Speaker 04:
There's nothing novel or non-obvious about a single one of the asserted claims in the three patents in suit.

[00:18:25] Speaker 05:
In ETag's own words... How do we know if the District Court rendered that conclusion when he didn't do any sort of claim-by-claim analysis?

[00:18:34] Speaker 04:
There is a very detailed... Let me just start by saying where we were at in the process at the point that the District Court ruled.

[00:18:45] Speaker 04:
Flambeau had moved for summary judgment, proposing a multitude of findings of facts that were undisputed by e-tags as to what was in the prior art and how the prior art, either undisputed or unrefuted with any expert or other admissible evidence, I should say, or how the prior art read on each and every claim.

[00:19:06] Speaker 04:
Included with that motion for summary judgment was the unrebutted expert testimony of Flambeau's expert, Dr. Chip Tonkin, which went through on an element by element, claim by claim basis.

[00:19:17] Speaker 05:
Yes, the district court didn't adopt any of that.

[00:19:21] Speaker 05:
He didn't expressly rely on it.

[00:19:23] Speaker 05:
He didn't give any indication that he was all in with Mr. Tonkin and his analysis.

[00:19:29] Speaker 04:
I think if you read the district court's decision and you read some of the discussion that Flambeau cites,

[00:19:35] Speaker 04:
that led up to the decision.

[00:19:37] Speaker 04:
This was the result of days of discussion.

[00:19:40] Speaker 05:
So where in the decision am I to ascertain his findings of fact and conclusions of law?

[00:19:48] Speaker 04:
He spoke for at least several minutes before he ruled about how he tried very hard to find the novelty.

[00:19:55] Speaker 04:
And throughout the discussion, there are multiple times where the court asked Etigs, what's the inventive concept here?

[00:20:05] Speaker 04:
E-Tags repeatedly said, this is about creating an ongoing advertising relationship with a customer.

[00:20:12] Speaker 05:
Yes, but the inventive concept isn't what is anticipated or rendered obvious.

[00:20:16] Speaker 05:
It's the claim language.

[00:20:17] Speaker 05:
And for example here, a lot of these claims required a first computer and a second computer.

[00:20:23] Speaker 05:
And your expert nonetheless said that those claims were anticipated by references that undisputedly have no computers involved in them.

[00:20:30] Speaker 04:
Well, that's a very interesting point.

[00:20:32] Speaker 05:
And I understand that they argued for infringement purposes.

[00:20:35] Speaker 05:
That's right.

[00:20:36] Speaker 05:
But that is irrelevant because nothing on infringement is before this court.

[00:20:40] Speaker 05:
What's before this court is a district court's conclusion that every claim in this patent is anticipated by references that include no computers, even though many of the claims expressly and unequivocally require computers.

[00:20:53] Speaker 04:
And we agree that claims, for example, claims 1 through 10 of the 332 patents do expressly

[00:21:01] Speaker 04:
cite a first computer and a second computer limitation.

[00:21:07] Speaker 04:
Flambeau's experts opined that the accused products don't infringe because they're, for example, a packaged yo-yo with a CD.

[00:21:18] Speaker 04:
The invalidity analysis is okay.

[00:21:21] Speaker 04:
Iteg said, ignore those claim elements.

[00:21:24] Speaker 04:
For the purposes of infringement, those claim elements are in a yo-yo with a CD, which is

[00:21:30] Speaker 04:
undisputably not a first and second computer.

[00:21:33] Speaker 04:
So Flambeau's theory was fine.

[00:21:35] Speaker 04:
We'll take each exedit's word for it.

[00:21:37] Speaker 04:
If it's in the accused products, then it's met by the prior art, because those are also used.

[00:21:44] Speaker 04:
For example, ChexQuest is also used by a first computer and a second computer, a vendor link, linking AOL to the consumer, the exact same match as the infringement contention.

[00:21:59] Speaker 04:
So e-takes can't have it both ways.

[00:22:01] Speaker 05:
And we don't have any indication because we have no district court opinion to review here that the district court agreed with you.

[00:22:08] Speaker 05:
For example, a detailed opinion would include, for example, they argued for infringes purposes blank.

[00:22:16] Speaker 05:
I am going to stop them from arguing anything to the contrary for validity because I don't

[00:22:23] Speaker 05:
I mean, I have you telling me what they argued on infringement, but there are no rulings on infringement.

[00:22:27] Speaker 05:
There's no collateral estoppel or race to decoder or anything.

[00:22:29] Speaker 05:
They didn't benefit or win on any of those infringement arguments.

[00:22:34] Speaker 05:
So I don't even know that that is the basis upon which the district court decided that all of these claims were anticipated.

[00:22:41] Speaker 05:
I have no way of figuring out whether he agreed with you on that, whether he was concluding they ought to be stopped or bound by it or anything.

[00:22:49] Speaker 04:
I understand and I agree that I wish the District Court would have undertaken the endeavor to write a detailed opinion.

[00:22:57] Speaker 04:
What is in the order is an agreed upon list of 70 of the findings of facts from summary judgment.

[00:23:06] Speaker 04:
Those were things that eTakes had a chance to approve going in there.

[00:23:10] Speaker 04:
They're not the full list that Campbell wanted, frankly.

[00:23:14] Speaker 04:
And if you just look at that list you can see all of the elements of each of the claims are either in there expressly or for a few claims the difference that is Okay, so checks quest the disk was in the cereal box some of the claims require that the computer readable label be visible at a point of purchase so that would be an area where in light of checks quest we would say

[00:23:42] Speaker 04:
Okay, well it's obvious in light of, for example, the PC magazine.

[00:23:46] Speaker 04:
PC Gamer magazine where the disc is right on the front cover.

[00:23:49] Speaker 04:
The top where you have the clear lid where you can see the disc in it.

[00:23:53] Speaker 04:
The AOL where you don't purchase it, you get it for free in the mail, but it's visible as soon as you get it.

[00:23:59] Speaker 05:
But this district court held that every claim was anticipated by all those references.

[00:24:03] Speaker 05:
And your own admission through your discussion right now is that that's clearly not the case.

[00:24:07] Speaker 05:
what you're saying is nonetheless obvious, because you're even the tone of your voice, come on, you know.

[00:24:12] Speaker 05:
I mean, and I get it, and I'm not saying that you're actually wrong, by the way, about any of what you're saying on the merits.

[00:24:18] Speaker 05:
The problem is I'm reviewing a decision by the district court that every one of these claims was anticipated or without any analysis of obviousness obvious.

[00:24:28] Speaker 05:
He doesn't even cite a claim limitation anywhere.

[00:24:30] Speaker 05:
He doesn't discuss any of the claims, not a representative one or much less the 79.

[00:24:36] Speaker 05:
And I'm just having a little trouble accepting a judgment that includes no analysis, even if, I mean, I can't be the one on appeal to individually review 79 claims for anticipation and obviousness, right?

[00:24:53] Speaker 05:
You're admitting there's a whole bunch of claims and a whole bunch of references that might be missing particular elements of those claims, but if they're so obvious, then I don't

[00:25:02] Speaker 05:
know that I'll disagree with you on a single thing you said, except that I just don't see it as my job on appeal to do that in the first instance.

[00:25:09] Speaker 04:
Well, I think in this instance, there are enough findings of fact in the order.

[00:25:16] Speaker 04:
I do wish the judge would have written a nice long written opinion, claim by claim, element by element.

[00:25:21] Speaker 04:
That would have been helpful here.

[00:25:24] Speaker 04:
There is discussion.

[00:25:25] Speaker 05:
It's not a question of whether it would be helpful.

[00:25:27] Speaker 05:
It's a question of whether it's required by law.

[00:25:29] Speaker 05:
I don't think I have anything to review here, anything meaningful.

[00:25:34] Speaker 05:
And I don't know how to review 79 claims when not a single element of one of those claims is actually discussed in an opinion that renders them all anticipated and or obvious.

[00:25:43] Speaker 04:
I do think this court does have authority.

[00:25:45] Speaker 04:
I mean, a review of summary judgment is de novo.

[00:25:48] Speaker 04:
So, obviousness is a question.

[00:25:50] Speaker 05:
Do you think we have authority?

[00:25:51] Speaker 05:
Do you honestly think that it would be a good

[00:25:55] Speaker 05:
A, use of our time, or B, good for the judicial system as a whole, for us to, in the first instance, even though our authority is de novo, element by element review 79 separate claims and compare them to a number of different references.

[00:26:12] Speaker 05:
You may be right that technically we have the authority, and maybe in a case where there's a single representative claim, we went ahead and did it.

[00:26:18] Speaker 05:
I feel like what you're asking is more than what we should ever do.

[00:26:21] Speaker 04:
Sure.

[00:26:22] Speaker 04:
I think there are representative claims here.

[00:26:25] Speaker 04:
On appeal, and we briefed what we thought was representative, we think there's any number of claims that have the same sorts of claim elements.

[00:26:35] Speaker 04:
When you read through the list of claims, it's the same thing over and over again.

[00:26:39] Speaker 05:
But you're saying they're representative, but he probably is not going to agree with you on all that.

[00:26:44] Speaker 05:
And what's more, nobody stipulated to and nor did the district court find, as we have in most of these cases, that there are a few representative claims.

[00:26:51] Speaker 04:
What I think is interesting in this instance is that Itegs, who is the appellant, didn't make any effort in its opening brief to explain how a single one of the 79 claims is actually patentedly distinct from, for example, claims 11 and claims 16, which were invalidated by the Patent Office.

[00:27:13] Speaker 05:
That is a fair argument, and look, it's not lost on me.

[00:27:18] Speaker 05:
But I think that most of his argument is,

[00:27:21] Speaker 05:
I don't have to sit here and justify because the district court didn't actually make any findings.

[00:27:26] Speaker 05:
He didn't articulate.

[00:27:27] Speaker 05:
I'm not going to shoot at the wall with a blindfold on.

[00:27:31] Speaker 05:
The district court didn't actually put a target up on the wall.

[00:27:34] Speaker 05:
He didn't actually articulate any findings.

[00:27:37] Speaker 05:
And you're right.

[00:27:38] Speaker 05:
I would have much rather seen his brief say, let me give you an example.

[00:27:41] Speaker 05:
Look at claim 74.

[00:27:42] Speaker 05:
It has these elements.

[00:27:44] Speaker 05:
Of course, I would have preferred to have seen something like that in his brief.

[00:27:48] Speaker 05:
But his brief does fairly make the argument.

[00:27:50] Speaker 05:
that the district court's decision is fatally flawed by virtue of not doing any kind of element by element analysis.

[00:27:57] Speaker 05:
That argument he makes.

[00:27:59] Speaker 05:
So I guess I'm quite frankly a little troubled by your motion for damages and costs that the appeal is frivolous.

[00:28:06] Speaker 05:
In light of the cursory nature of the district court opinion, I'm genuinely surprised that you would have the wherewithal to file such a motion in this court.

[00:28:17] Speaker 05:
I mean, I'm not saying you don't deserve to win at the end of the day, but this is for me far from a frivolous appeal.

[00:28:25] Speaker 05:
So I'd like you to explain why you think it's frivolous.

[00:28:28] Speaker 04:
I don't think that there's a good faith basis for arguing on the record as it was developed at the district court that the district court erred simply because the district court didn't articulate a long opinion.

[00:28:44] Speaker 01:
I think when... Well, they're arguing that their expert should have been considered.

[00:28:50] Speaker 04:
And if we agree with them on that point... Well, their expert didn't have any invalidity opinions, and that was admitted.

[00:28:57] Speaker 04:
He only opined on infringement.

[00:29:06] Speaker 04:
I also think that there are a number of arguments that Ethics has made on appeal, aside from this one issue.

[00:29:14] Speaker 04:
that aren't tenable.

[00:29:18] Speaker 04:
For example, why are we here on claims 1 through 10 that require a first tech computer and a second computer?

[00:29:25] Speaker 05:
Why would we take... Let me just double check back on Smith because I will tell you we looked extensively to try to find Smith's testimony, expert report, whatever.

[00:29:33] Speaker 05:
Couldn't find it anywhere.

[00:29:34] Speaker 05:
It's been successfully expunged from anything that I could find with reference to this case or the docket.

[00:29:40] Speaker 05:
You're saying, and interestingly, why didn't you put this in your brief, or did I miss it, that Smith actually offered no testimony and was not presented as an expert on the question of validity?

[00:29:51] Speaker 05:
Because that seems like an undisputable nail in the coffin for you.

[00:29:55] Speaker 05:
So I don't know how I could have missed that.

[00:29:58] Speaker 04:
Well, I thought I put it in my brief, but that is absolutely, he was only up there on infringement.

[00:30:07] Speaker 05:
that his entire reason for an infringement because he was excluded from offering expert testimony on validity.

[00:30:15] Speaker 05:
No.

[00:30:15] Speaker 05:
Did they try to proffer him as an expert for validity purposes?

[00:30:19] Speaker 04:
No.

[00:30:21] Speaker 04:
They had no report on validity.

[00:30:23] Speaker 04:
On the day of the Dalver hearing, Smith attempted to... How are we supposed to know all this?

[00:30:31] Speaker 01:
When you're telling me this, I mean, it's not in your brief.

[00:30:34] Speaker 01:
A lot of the papers you found are under seal.

[00:30:37] Speaker 01:
How am I supposed to know?

[00:30:40] Speaker 01:
I mean, I know you're an officer in a court, but we're trying to decide this case on a record that's in front of us, right?

[00:30:50] Speaker 01:
Why is it relevant to me right now that maybe their expert had no validity views?

[00:30:56] Speaker 04:
Well, that is something that, I mean, eTakes have appealed that decision.

[00:31:00] Speaker 01:
They wanted their expert to be considered.

[00:31:04] Speaker 01:
Correct.

[00:31:04] Speaker 01:
Their expert was thrown out on qualification.

[00:31:07] Speaker 01:
That's right.

[00:31:08] Speaker 01:
The trial judge said, as to your witness, Mr. Tonkin, I got problems with his qualifications, too.

[00:31:14] Speaker 01:
That's his very words.

[00:31:16] Speaker 01:
But he says, I won't tell you why.

[00:31:19] Speaker 01:
I won't tell you what the difference is.

[00:31:21] Speaker 01:
So when you get up on appeal, you just guess as to why the qualifications were no good for Smith, but they were OK for Tonkin, even though I had trouble with both.

[00:31:30] Speaker 01:
Right?

[00:31:31] Speaker 01:
So on the topic of the 702, it seems to me that we're not even being asked to get into what was in the expert, what they wanted to testify to when they excluded.

[00:31:43] Speaker 04:
That's the way I read ETAG's appeal as well, is merely to reverse the exclusion.

[00:31:48] Speaker 04:
But what ETAG's didn't explain, and ETAG's frankly didn't put their expert report in the record to show, ETAG's has a very good proof here.

[00:31:56] Speaker 01:
There may be a basis for saying, for example,

[00:31:59] Speaker 01:
the whole question of whether or not Smith was properly admitted may be harmless error.

[00:32:06] Speaker 01:
If indeed he had no view on validity and validity, all that was up there, then under tense of it all, clearly, harmless error will vitiate a mistake in a 702 rule.

[00:32:18] Speaker 01:
But we don't know that.

[00:32:20] Speaker 04:
I think it's ETAG's job to put that record before this court.

[00:32:28] Speaker 04:
the party who's proffering the expert's burden to show that they're qualified and that their report and opinion should have been admitted and... Well, he thinks he's done that.

[00:32:40] Speaker 01:
Your adversaries explained to us when he was up there why he thought Smith was qualified.

[00:32:45] Speaker 01:
He ran right through Smith's biography, if you will, right?

[00:32:49] Speaker 01:
And presumably that's in an expert statement somewhere, his background.

[00:32:54] Speaker 05:
So would it be fair to summarize your current argument

[00:32:57] Speaker 05:
in this oral argument as even if the court was wrong to exclude Smith, it is harmless error as to the court's decision on invalidity because Smith offered no opinions related to validity.

[00:33:13] Speaker 04:
Correct.

[00:33:13] Speaker 04:
And I did just find, I flipped back in my brief, I do have it in my brief.

[00:33:20] Speaker 04:
On page 81 that ETAGS had submitted a report on infringement.

[00:33:26] Speaker 04:
He had not been disclosed on invalidity and confirmed he had no opinions on same and there's J.A.

[00:33:31] Speaker 04:
placed there to the record.

[00:33:32] Speaker 01:
What is that on 81?

[00:33:35] Speaker 04:
Page 81 of my brief.

[00:33:42] Speaker 01:
What does it mean when he had not been disclosed on invalidity?

[00:33:45] Speaker 01:
What does that mean?

[00:33:45] Speaker 04:
So by the Rule 26 expert disclosure date, he had given no opinion on invalidity after Flambeau's expert gave its opinions on invalidity.

[00:33:58] Speaker 04:
ETags did not seek leave to or attempt to prior to the Dahlberg hearing submit a report on invalidity.

[00:34:09] Speaker 04:
At that hearing, there was confirmation on the record, and I believe I don't have it right in front of me.

[00:34:14] Speaker 04:
That is the EJ insight right there.

[00:34:15] Speaker 02:
You're saying that that's aggravatory?

[00:34:17] Speaker 02:
We see export reports on each side.

[00:34:20] Speaker 02:
Rebuttal from experts is not required.

[00:34:25] Speaker 04:
He stated his case.

[00:34:27] Speaker 04:
Right.

[00:34:28] Speaker 04:
My point is that at no time did ETags attempt to proffer an invalidity report or a validity report from Mr. Smith.

[00:34:38] Speaker 05:
So it's your argument that Rule 26 requires identification of all experts and the subject of the testimony they're going to give.

[00:34:45] Speaker 05:
And here, while they identified Mr. Smith on issues of infringement, they expressly did not identify him on issues of validity.

[00:34:52] Speaker 05:
And that is true even in the face of your expert being identified for both.

[00:34:56] Speaker 04:
That is correct.

[00:34:57] Speaker 04:
And at the point that the court ruled, we had fully briefed summary judgment.

[00:35:02] Speaker 04:
We had conducted discovery for years.

[00:35:04] Speaker 04:
Experts had been deposed.

[00:35:07] Speaker 04:
after five or six days of final pretrial and Daubert hearings, there was extensive discussion on the record, the point of which was to decide if anything was there to be tried.

[00:35:20] Speaker 04:
That's how it was judged.

[00:35:21] Speaker 02:
I must say you hadn't made your point as a matter of law.

[00:35:24] Speaker 02:
You hadn't gone through all of the claims, every element of every claim.

[00:35:28] Speaker 02:
If, as a matter of fact, the expert's opinion fails as a matter of law because it doesn't meet the legal requirement,

[00:35:37] Speaker 02:
Why do they have to submit a contrary expert report?

[00:35:41] Speaker 04:
Well, I think Dr. Tonkin's report, Flambeau's expert report, doesn't fail as a matter of law.

[00:35:47] Speaker 04:
Dr. Tonkin did go claim by claim, element by element, not only in his expert report.

[00:35:53] Speaker 04:
And we went claim by claim, element by element, on summary judgment.

[00:35:57] Speaker 04:
But during the final pretrial hearing, Dr. Tonkin, and at the Daubert hearing we went,

[00:36:04] Speaker 04:
claim by claim, element by element.

[00:36:06] Speaker 04:
Toward the end of the hearing, there was a little bit of some... These are questions of law.

[00:36:10] Speaker 02:
I'm trying to understand the emphasis on the absence of a second expert report from the plaintiff.

[00:36:18] Speaker 04:
From the plaintiff?

[00:36:19] Speaker 04:
It is Flambeau's position that Dr. Tonkin's expert analysis as to these claims are essentially entirely unrebutted.

[00:36:29] Speaker 02:
And then we have lawyer argument that this is

[00:36:34] Speaker 02:
as a matter of law, the requirements, the burdens have not been met.

[00:36:39] Speaker 02:
This is not an expert's argument.

[00:36:42] Speaker 02:
This is an argument on the law.

[00:36:47] Speaker 02:
Well, all right.

[00:36:49] Speaker 02:
I think we have the point.

[00:36:50] Speaker 02:
Any more questions for counsel?

[00:36:55] Speaker 02:
Any more questions for counsel?

[00:36:57] Speaker 02:
Okay.

[00:36:57] Speaker 02:
Thank you, Ms.

[00:36:58] Speaker 02:
Baker.

[00:36:58] Speaker 02:
Thank you.

[00:37:00] Speaker 02:
And Mr. Pia, you have three minutes.

[00:37:07] Speaker 00:
Thank you.

[00:37:08] Speaker 00:
Briefly, Mr. Smith did provide extensive testimony during the summary judgment proceedings on the issue of invalidity and novelty.

[00:37:19] Speaker 00:
And that is in JA7308 through 15, 7349 through 50, 7526 through 33, 6121, 6008, 6015, and 6020.

[00:37:36] Speaker 00:
While counsel is correct that he didn't provide a report in that regard, he was providing a rebuttal argument and was ultimately excluded, but it's not as if there were contentions of material facts that went unresponded to.

[00:37:53] Speaker 05:
So is it your view because

[00:38:00] Speaker 05:
quite frankly, Rule 26 doesn't give you the right to offer rebuttal testimony of an expert that you didn't disclose under Rule 26.

[00:38:07] Speaker 05:
So that could have formed a basis for the district court to exclude Mr. Smith from testifying on validity.

[00:38:13] Speaker 05:
But is it your view that that is absolutely not what this district court based his exclusion on?

[00:38:18] Speaker 05:
Clearly and unequivocally not.

[00:38:20] Speaker 05:
So even if the district court could have exercised his discretion to exclude your expert for not having been properly disclosed at the relevant time,

[00:38:28] Speaker 05:
that is sure as heck was not on appeal to us and he did in fact offer a validity opinion.

[00:38:34] Speaker 00:
Does that sum it up okay?

[00:38:35] Speaker 00:
That sums it up very well.

[00:38:37] Speaker 00:
One other point I'll make is that this Tonkin expert report that was not incorporated by reference by the district judge doesn't even have an analysis of the Windows 95 disk.

[00:38:50] Speaker 00:
So how does a court, a district judge, combine those references when it doesn't even have one of the references in front of it under an obviousness analysis?

[00:38:59] Speaker 00:
which it didn't do in the first instance.

[00:39:01] Speaker 00:
The multitude of facts that do appear in this order were facts as to authenticity of what certain prior art stated.

[00:39:09] Speaker 00:
And the reason that they appear in that order in the first place is simply because the judge said as to undisputed facts, include them in the order, but then made no analysis regarding those facts.

[00:39:21] Speaker 02:
But your friend says that there was neither

[00:39:27] Speaker 02:
in an expert report, even excluded, or in the argument before the court, any controverting of their position, claim by claim?

[00:39:39] Speaker 00:
There was an extensive analysis in the summary judgment briefing of e-tags of all the elements that are missing in the prior art, namely that under their definition of label and secure, none of the pieces of prior art disclosed those references.

[00:39:55] Speaker 00:
and during the oral argument and also during examination of experts, we got down to the nitty-gritty on the term control data and executables, which were also heavily disputed, and there was no resolution as to what those meant or whether or not they actually appeared in the references that apparently were argued by Flambeau should have been assumed through inherency.

[00:40:18] Speaker 00:
One point on this frivolous appeal motion.

[00:40:22] Speaker 00:
We have

[00:40:23] Speaker 00:
found a couple instances where fees and costs were actually awarded in reverse when it was an unnecessary motion in the first instance.

[00:40:30] Speaker 00:
And we request our fees and costs in that regard.

[00:40:33] Speaker 01:
Any other questions?

[00:40:34] Speaker 01:
So when you first stood up, you asked that we reverse the district court and remand for further proceedings.

[00:40:39] Speaker 01:
Is reverse correct or should we vacate?

[00:40:41] Speaker 01:
I mean, reverse is what you do when you know that there is legal error, right?

[00:40:50] Speaker 01:
Now, that's an interesting question because what we're really saying here is that there is procedural error in that the district court didn't give us a reviewable opinion.

[00:41:01] Speaker 01:
So I wonder if the proper result wouldn't be to vacate the various judgments and remain.

[00:41:07] Speaker 00:
That might be, Your Honor, because there are not findings specifically, although there are conclusions that should be

[00:41:16] Speaker 00:
and rulings that should be reversed.

[00:41:19] Speaker 00:
But the analysis is nonexistent in most cases.

[00:41:24] Speaker 00:
I'll leave that up to the court on the styling of the order.

[00:41:28] Speaker 02:
Any more questions?

[00:41:30] Speaker 02:
No.

[00:41:30] Speaker 02:
Any more questions?

[00:41:30] Speaker 00:
Thank you.

[00:41:31] Speaker 02:
Thank you both.

[00:41:31] Speaker 02:
The case is taken under submission.

[00:41:34] Speaker 02:
That concludes the argued cases for this morning.

[00:41:39] Speaker 01:
All rise.

[00:41:40] Speaker 01:
The honorable court is adjourned until tomorrow morning.

[00:41:45] Speaker 01:
It's at o'clock A.M.