[00:00:15] Speaker 04:
All right, second case of the morning.

[00:00:18] Speaker 04:
14-1360, Kouranos LLC versus Silicon Storage Technology.

[00:00:52] Speaker 04:
Ms.

[00:00:52] Speaker 04:
Bright, am I pronouncing that correctly?

[00:00:55] Speaker 01:
Right.

[00:00:55] Speaker 01:
Right.

[00:00:55] Speaker 04:
Okay, terrific.

[00:00:56] Speaker 04:
And you reserved three minutes for rebuttal?

[00:00:59] Speaker 01:
I have.

[00:00:59] Speaker 04:
Okay.

[00:01:01] Speaker 04:
Please begin whenever you're ready.

[00:01:42] Speaker 01:
We're here today under what's considered to be truly extraordinary circumstances.

[00:01:51] Speaker 01:
Essentially, Kerenose's entire lawsuit was dismissed based on the finding that it didn't comply with patent local rule 3-1.

[00:02:01] Speaker 01:
Even though Kerenose had performed all of the following, it performed an extensive search to identify accused products.

[00:02:10] Speaker 01:
It searched the Internet

[00:02:12] Speaker 01:
the defendant's website.

[00:02:14] Speaker 01:
It performed hundreds of hours of analysis of data sheets.

[00:02:20] Speaker 01:
It reverse engineered products to try to identify accused products and even hired experts before filing the lawsuit to help identify the accused products.

[00:02:33] Speaker 01:
Keranos provided timely infringement contentions with fair notice of its infringement theories.

[00:02:42] Speaker 02:
One of the problems for us, at least, in going through this case is that the multiplicity of differently situated defendants.

[00:02:52] Speaker 02:
And I think everybody recognizes that there are big differences in every respect with respect to many of these defendants, including one defendant who didn't even object to the request for the amended infringement contingency.

[00:03:09] Speaker 02:
But take the defendant

[00:03:11] Speaker 02:
SST, if you will.

[00:03:14] Speaker 02:
Why wasn't it possible for Karanos to discover from publicly available sources the accused products for SST and leaving out all the other defendants?

[00:03:25] Speaker 01:
I understand, Your Honor.

[00:03:27] Speaker 01:
I'm not going to say that it wasn't possible.

[00:03:30] Speaker 01:
I believe that... Not even possible, but not all that hard.

[00:03:34] Speaker 01:
Karanos understood and believed that when it identified SuperFlash,

[00:03:39] Speaker 01:
and the architectural designs to SST that SST knew exactly which products were accused in the case.

[00:03:48] Speaker 02:
SST, the local rules do say, and with specificity as to products where possible, words to that effect.

[00:03:56] Speaker 04:
Right.

[00:03:56] Speaker 04:
It talks about you have to identify the product number if known, right?

[00:04:02] Speaker 02:
That's right.

[00:04:03] Speaker 02:
And that wasn't done.

[00:04:05] Speaker 02:
with respect to SST.

[00:04:06] Speaker 01:
That's right.

[00:04:06] Speaker 01:
Karenos believed that by identifying the trade name SuperFlash with the architectural designs, because Karenos did include the architectural design by number for each of the accused generations of products.

[00:04:25] Speaker 01:
But Your Honor is correct that Karenos did not identify the individual part numbers

[00:04:31] Speaker 01:
by individual members.

[00:04:32] Speaker 04:
For SST, is it fair to say that Caranos' position is, although it didn't follow the letter of the local rule, it nevertheless followed the spirit of the rule?

[00:04:43] Speaker 01:
Absolutely, Your Honor.

[00:04:44] Speaker 01:
In every discussion as to what rule 3-1 is supposed to do, what the purpose of the rule, the idea is for the parties to identify their infringement theories early in the case

[00:05:00] Speaker 01:
to crystallize those theories and to not shift them later.

[00:05:05] Speaker 01:
Caranos absolutely complied with the purpose of Rule 3-1.

[00:05:09] Speaker 01:
There's no question that SST and all of the defendants knew which products were in the case.

[00:05:15] Speaker 04:
This is an abusive discretion standard, right?

[00:05:17] Speaker 04:
That we have to refute this order by the district court.

[00:05:22] Speaker 01:
That's right.

[00:05:23] Speaker 04:
And if you don't follow the letter of the rule, how can we say that was an abusive discretion?

[00:05:29] Speaker 01:
Well, the ultimate result, the court needs to rule on the orders, on the existing rules.

[00:05:38] Speaker 01:
But the court also needs to look at the facts and weigh the facts.

[00:05:43] Speaker 01:
And in this case, the court didn't consider that, first of all, under the circumstances, that there were no prejudice to any of the defendants.

[00:05:55] Speaker 01:
that this motion to amend occurred very early in the case.

[00:06:01] Speaker 01:
There was barely any discovery conducted at that point.

[00:06:05] Speaker 01:
The claim construction hearing was months away.

[00:06:08] Speaker 01:
There wasn't even a trial date set.

[00:06:10] Speaker 01:
So this was an enforcement of the courts.

[00:06:17] Speaker 01:
This court views it as a series of case management

[00:06:21] Speaker 01:
orders, the local rule.

[00:06:22] Speaker 01:
So this would have been a case management order.

[00:06:23] Speaker 02:
But the local rules of the Eastern District of Texas, like the local rules of a few other districts that have specific patent rules, is designed to extract from the plaintiff the infringement contingent right at the start.

[00:06:37] Speaker 02:
Now, sometimes it's harder, sometimes it's easier, but the idea is you've got to do the best you possibly can.

[00:06:43] Speaker 02:
And they define the best you possibly can to include specific product numbers.

[00:06:48] Speaker 02:
And the idea is that that sets the case

[00:06:51] Speaker 02:
on the right course and to say that we are, as Judge Chen has just said, we're reviewing not only an abusive discretion standard, but we're reviewing the application of a local rule by the local court.

[00:07:08] Speaker 02:
And it's kind of hard to say to the local court, you're misreading your own rule if you are reading it by its terms to require specificity.

[00:07:17] Speaker 01:
But the local rule also has to be consistent with the federal rules of civil procedure.

[00:07:22] Speaker 03:
And it has to be consistent with the type of penalties that... Let's assume, though, that this specific product information is publicly accessible and it's no more burdensome for you to search it out than the defendant's.

[00:07:39] Speaker 03:
Why would it be an abuse of discretion for the district court to require you to do that in your infringement condition?

[00:07:46] Speaker 03:
rather than try to push the burden on the defendants during the discovery phase.

[00:07:51] Speaker 01:
Well, in this particular circumstance, I don't think that there was any additional burden on the defendants.

[00:07:57] Speaker 01:
I mean, are we still talking about it?

[00:07:59] Speaker 03:
Well, no, my hypothetical assumes the burden is equally, you know, you can find it just as easy as they can.

[00:08:04] Speaker 03:
Why isn't the burden on you?

[00:08:07] Speaker 03:
Well, and again, if we're talking about- It's not just a lack of prejudice, it's why shouldn't you have to do the legwork and not them?

[00:08:14] Speaker 01:
if we're still talking about the various situated defendants in this case?

[00:08:19] Speaker 03:
Well again, so just take my hypothetical.

[00:08:20] Speaker 03:
I understand that you have some arguments that in some instances the information either wasn't publicly accessible or it would have required expensive reverse engineering and therefore you might have an argument that it would have been more burdensome or more difficult than you within the defendant and that's a different that I would assume

[00:08:40] Speaker 03:
that you can find the information as easily as they can.

[00:08:43] Speaker 03:
Why isn't it within the district court's discretion to require you to do that?

[00:08:48] Speaker 03:
And when you didn't do that, to dismiss those claims?

[00:08:51] Speaker 01:
Well, again, I think that to dismiss the claims, the court has to look at more than whether the rule wasn't followed to the letter.

[00:08:58] Speaker 01:
I think the court needs to look at whether it's just to dismiss the claims under those circumstances.

[00:09:04] Speaker 01:
That's a very extreme penalty.

[00:09:07] Speaker 01:
And even in cases where

[00:09:09] Speaker 01:
parties are willfully in defiance of a court order, which was not the case here.

[00:09:17] Speaker 01:
The court still needs to look at what were the circumstances, whether that kind of penalty is appropriate and just under the circumstances.

[00:09:27] Speaker 04:
This argument you're making now is that, in your view, the district judge failed to consider all four of the factors for good cause to amend the

[00:09:37] Speaker 01:
Yes, that and also that if the court was considering the kind of ruling that it ultimately considered, it needed to look at the consequences and whether that was a just penalty under the circumstances, even assuming that... That's part of the four factors.

[00:09:56] Speaker 04:
Prejudice, importance.

[00:09:58] Speaker 04:
Absolutely.

[00:09:59] Speaker 03:
But if the court finds that you fail to comply with your obligations under the local rules to provide sufficient infringement contentions,

[00:10:07] Speaker 03:
then why isn't that a ground for dismissal?

[00:10:11] Speaker 01:
Because, again, a dismissal is a very extreme penalty under every standard, certainly under the Fifth Circuit standard.

[00:10:20] Speaker 04:
Well, let's put it differently, the denial for your motion to amend, to restrict your contention to the actual product numbers that you alleged or you identified in your original contention.

[00:10:33] Speaker 04:
I think if we look at it that way, that that's all the district court

[00:10:37] Speaker 04:
judge did.

[00:10:38] Speaker 04:
You filed a motion to amend.

[00:10:40] Speaker 04:
You needed to come forward with good cause.

[00:10:42] Speaker 04:
The judge concluded otherwise and then denied the motion.

[00:10:46] Speaker 04:
So you're left with what you originally had before, whatever that was in your original contention.

[00:10:50] Speaker 01:
Well, what we had before was the identity of the products by their trade name SuperFlash.

[00:10:56] Speaker 01:
But the court, the effect of the court was to find that unless it was the product number that it didn't comply.

[00:11:05] Speaker 01:
So if we had never brought the motion to amend, then I'm convinced, and I think that the record shows that this case would have gone all the way through trial without interruption.

[00:11:16] Speaker 01:
The parties would have done exactly what the parties did in this case.

[00:11:20] Speaker 01:
They would have litigated the case with all of the SuperFlash products in.

[00:11:26] Speaker 01:
All of the products were treated exactly the same.

[00:11:28] Speaker 01:
And so, I mean, you can see as far as those other factors go,

[00:11:33] Speaker 04:
Going back to those factors, the other side cites our O2 micro opinion that appears to suggest that if the patent owner somehow lacked diligence in amending the contention, then a district court need not look any further beyond that and simply deny the motion to amend.

[00:11:58] Speaker 04:
How is O2 micro different from your circumstance?

[00:12:02] Speaker 01:
Well, a couple things.

[00:12:03] Speaker 01:
First of all, O2 micro doesn't mandate that if the court finds a lack of diligence, that the court not look any further.

[00:12:11] Speaker 01:
It permits it, but doesn't mandate it.

[00:12:14] Speaker 04:
I think- Just like we could also step back and permit it here and say, just as an O2 micro, this district judge did not abuse its discretion in denying your motion.

[00:12:25] Speaker 01:
But the court needs to also, the district court needs to exercise its discretion and it continues to have discretion and has to exercise that soundly.

[00:12:34] Speaker 01:
In this case in particular, in 02 Micro, the issue was first of all the shifting of an entire theory after the case had already gone through discovery, after expert reports had already been prepared, completely different circumstance.

[00:12:52] Speaker 02:
Let me ask the same question that Judge Chen did, because I really want to make sure I understand your position on this.

[00:13:03] Speaker 02:
Assume that we could all agree that your client was not diligent, but that there was no prejudice.

[00:13:13] Speaker 02:
Is it not only the case, in your view, that the district court should have granted the motion to amend, but that the district court

[00:13:22] Speaker 02:
should be reversed by us for having relied solely on lack of diligence.

[00:13:28] Speaker 01:
Assuming that the diligence ruling was correct.

[00:13:31] Speaker 01:
Yes.

[00:13:32] Speaker 01:
Right.

[00:13:32] Speaker 02:
That the court should have in this case looked at... Well, just again, if we concede diligence was absent, is that enough to justify the judge's application of local rule?

[00:13:47] Speaker 02:
Or would we be required to reverse unless we could find prejudice?

[00:13:52] Speaker 01:
So I don't think that's, I'm sorry, I just lost my train of thought.

[00:13:58] Speaker 02:
Basically, I'm asking the same question, which is, is lack of diligence enough to justify the denial of the motion to amend?

[00:14:08] Speaker 01:
I don't think in this case that's so.

[00:14:11] Speaker 01:
I think that the circumstances here were very different than 02 micro.

[00:14:16] Speaker 01:
That in this case, because we were so early in the case, discovery had barely started.

[00:14:21] Speaker 01:
There was absolutely no possibility of prejudice here.

[00:14:25] Speaker 01:
This is just, as a result, it's a form over substance elevation.

[00:14:29] Speaker 02:
Could I ask you real quickly to turn to this standing issue?

[00:14:33] Speaker 02:
And my question to you on standing is, why isn't this case a carbon copy of the Mars case?

[00:14:40] Speaker 01:
Oh, because in the Mars case, the only rights that were granted to the plaintiff were the right to enforce the

[00:14:51] Speaker 01:
the right to sue for infringement.

[00:14:54] Speaker 02:
Right, but the critical language of Mars says that if you have not transferred title in an expired patent situation, then the transfer of, for example, the right to sue is not enough to give standing to the party that gets the right to sue for past infringement.

[00:15:15] Speaker 02:
So it makes, as Crown Die does as well, it makes the transfer of title critical.

[00:15:21] Speaker 02:
And you didn't transfer title.

[00:15:24] Speaker 01:
I think ownership is what Crown was looking at.

[00:15:30] Speaker 01:
They talk about title.

[00:15:31] Speaker 01:
And here there's an explicit reservation of title in the original owner, right?

[00:15:38] Speaker 01:
Well, I don't know that there's an explicit reservation of title so much as a recital that says

[00:15:43] Speaker 01:
that the United module owns all the rights... Retains the title.

[00:15:47] Speaker 01:
Owns all rights, title, and interests.

[00:15:49] Speaker 01:
That sounds like a retention of title.

[00:15:50] Speaker 01:
Yes, it does.

[00:15:51] Speaker 01:
Yes, it does, Your Honor.

[00:15:52] Speaker 01:
But there was a transfer of all substantial rights.

[00:15:56] Speaker 01:
Well, then why didn't they transfer title?

[00:15:57] Speaker 02:
They held back something.

[00:16:00] Speaker 02:
What were they doing holding back title?

[00:16:01] Speaker 01:
Rightfully, I think it was a tax issue.

[00:16:03] Speaker 01:
Well, then they held back something of value.

[00:16:05] Speaker 01:
But no, it's not whether they held back something of value or not, because always when there's an exclusive license,

[00:16:12] Speaker 01:
and substantial rights are transferred, the patent holder is holding something.

[00:16:17] Speaker 01:
But the proof of licensee still has standing.

[00:16:20] Speaker 01:
In here, in this case, every substantial right was transferred.

[00:16:24] Speaker 04:
Just like in... But what are those?

[00:16:26] Speaker 04:
What are the substantial rights to an expired patent?

[00:16:30] Speaker 04:
When you say that you have all substantial rights to a patent that expired two years ago, what do you really have at that point?

[00:16:38] Speaker 01:
Well, you certainly have the right to sue for past and future.

[00:16:42] Speaker 01:
What future?

[00:16:45] Speaker 01:
No future, Your Honor.

[00:16:46] Speaker 01:
Right.

[00:16:47] Speaker 01:
No future.

[00:16:48] Speaker 01:
You have whatever rights, and I think that... What are those rights?

[00:16:51] Speaker 01:
Well, I think the Marsh case recognized there is theoretically a bundle of rights.

[00:16:59] Speaker 01:
Whatever those rights are, they were all transferred.

[00:17:00] Speaker 01:
Right.

[00:17:01] Speaker 04:
You have more time to think about this than I have.

[00:17:02] Speaker 04:
So what are those extra sticks in the bundle of rights when you have possession or

[00:17:10] Speaker 04:
of substantial rights to an expired patent?

[00:17:14] Speaker 01:
Beyond trying to, beyond enforcing the patent, there may be rights related to prior art where the joint ownership of a patent, where the ownership of a patent provides certain protections as far as prior art for new inventions.

[00:17:39] Speaker 01:
I mean, at this point, Your Honor, I'm not sure of the bundle.

[00:17:43] Speaker 01:
I do know that the court in Mars made the same indication.

[00:17:50] Speaker 01:
It said that title to expire to patent includes more than merely the right to recover damages for patent infringement and the transfer of the right to sue for past damages divorced from title creates risk of unnecessary third-party litigation whether or not the title has expired.

[00:18:08] Speaker 01:
I mean, there are certainly rights that this Court has recognized right now.

[00:18:12] Speaker 01:
I'm not able to account for them.

[00:18:14] Speaker 01:
But this transfer of ownership was that transfer of all substantial rights in order to give this party standing.

[00:18:22] Speaker 01:
As a matter of fact, the licensor was not in a position to do anything.

[00:18:28] Speaker 01:
It was prohibited from exercising any rights under the patent, prohibited from bringing lawsuits, from participating in lawsuits,

[00:18:37] Speaker 01:
It was all very explicit.

[00:18:40] Speaker 01:
And the agreement itself said that it was the intent of the parties to transfer absolutely every right that would give Tarrant a standing.

[00:18:48] Speaker 02:
Let me ask one more question.

[00:18:51] Speaker 02:
We've run you over time, but it is true that the agreement prohibits the licensor, the original owner, from enforcement.

[00:19:05] Speaker 02:
But if there were a suit by the original owner against a third party, it's not clear to me where the third party would be in a position to enforce that contractual bargain between the licensor and the licensee.

[00:19:21] Speaker 02:
Therefore, I'm not sure that the contract would be a defense on the part of the third party, who wouldn't be, for example, a third party beneficiary, presumably, of that contract.

[00:19:31] Speaker 02:
What would be the basis for the defense?

[00:19:34] Speaker 02:
of a third party against a suit brought by the patent title owner for past infringement.

[00:19:41] Speaker 03:
Well, I think the third party could point to the... Wouldn't it be that the licensor had given up all rights and no longer had standing to a certain patent?

[00:19:50] Speaker 03:
Exactly.

[00:19:51] Speaker 02:
But that's a contractual... I mean, do you think that this conveyance by a title owner who retains title would nonetheless then be enforceable in effect?

[00:20:04] Speaker 02:
as a contractual matter.

[00:20:06] Speaker 01:
But courts always look at what the current ownership position was and what the contractual situations were with parties who come in where standing is challenged, and often the standing is challenged by a defendant who was not a party to the circumstances.

[00:20:23] Speaker 02:
But it's typically with an eye towards determining whether there's been a transfer of title, in other words, a property conveyance.

[00:20:30] Speaker 02:
It's not clear to me that the contractual agreement constitutes a property conveyance, particularly in light of the fact that title is reserved in the licensor.

[00:20:37] Speaker 02:
That's my concern.

[00:20:40] Speaker 01:
But you're asking how could the defendant challenge the standing?

[00:20:44] Speaker 01:
Right.

[00:20:44] Speaker 01:
Right.

[00:20:44] Speaker 01:
And that happens all the time.

[00:20:46] Speaker 01:
We look at situations whether a party is an exclusive licensee or a non-exclusive licensee.

[00:20:53] Speaker 01:
And then jurisdiction can be challenged by the defendant if the defendant

[00:20:58] Speaker 01:
wants to argue that the plaintiff is not an exclusive licensee and the court looks at the contract and looks at what was intended between the licensor and the licensee and whether the licensee can start.

[00:21:10] Speaker 02:
Thank you.

[00:21:11] Speaker 04:
Thank you.

[00:21:11] Speaker 04:
Okay.

[00:21:13] Speaker 04:
Thank you, Ms.

[00:21:13] Speaker 04:
Bright.

[00:21:14] Speaker 04:
We'll restore your three minutes to the bottom.

[00:21:16] Speaker 04:
We have too a lot of questions.

[00:21:18] Speaker 04:
All right.

[00:21:19] Speaker 04:
Let's hear from the appellee, Mr. Joseph.

[00:21:25] Speaker 05:
Whenever you're ready.

[00:21:27] Speaker 05:
Good morning, and may it please the court.

[00:21:29] Speaker 05:
On standing, our point is simple.

[00:21:32] Speaker 05:
A patentee cannot transfer a hunting license, which is to say, a mere right to sue divorced from the underlying substance of right.

[00:21:38] Speaker 05:
But that's exactly what happened here.

[00:21:40] Speaker 02:
Well, there was a transfer of more things than just the right to sue.

[00:21:45] Speaker 02:
If I read the contract correctly, there was a transfer of everything but their naked title for whatever reason.

[00:21:55] Speaker 02:
But they seemed to me

[00:21:57] Speaker 02:
trying to transfer everything they could possibly transfer except title.

[00:22:02] Speaker 02:
Isn't that a slightly different situation from transferring only the right to sue for past infringement?

[00:22:08] Speaker 05:
Well, it's not because what's required, as a matter of standing law, what's required is that the plaintiff have suffered an injury in fact to a legally protected interest of its own.

[00:22:17] Speaker 05:
In other words, that they suffered the underlying substance of injury.

[00:22:21] Speaker 05:
And for that, if you own the patent,

[00:22:23] Speaker 05:
that's good enough.

[00:22:24] Speaker 05:
If you own the exclusionary right, that can be good enough under the substantial rights cases.

[00:22:28] Speaker 05:
But if you own neither the title to the patent nor the underlying exclusionary right, then you're in the same position as effectively a non-exclusive licensee.

[00:22:36] Speaker 03:
So why doesn't this agreement transfer the exclusionary right?

[00:22:40] Speaker 05:
Because there was none left to transfer.

[00:22:42] Speaker 05:
It had expired two years earlier.

[00:22:43] Speaker 03:
So in your view, essentially, that there's no way when there's an expired patent to transfer

[00:22:50] Speaker 03:
all substantial rights but retain title.

[00:22:52] Speaker 03:
You have to transfer the title if you want to transfer it to somebody else.

[00:22:56] Speaker 05:
Yes, which is the general rule.

[00:22:57] Speaker 04:
I don't think Mars went that far though.

[00:23:00] Speaker 04:
Mars clearly left the door open for a situation perhaps just like this one.

[00:23:06] Speaker 04:
Mars, the only right that had been transferred was the right to sue for past damages.

[00:23:11] Speaker 04:
Here, I think we can all agree that everything except title was transferred.

[00:23:18] Speaker 04:
Your point would be, well,

[00:23:20] Speaker 04:
that everything amounts to very little beyond the right to sue for past damages.

[00:23:25] Speaker 04:
But at the very least, there is a distinction between the facts here or the license here and the license in Mars.

[00:23:32] Speaker 05:
I recognize there's that factual distinction between the two cases.

[00:23:35] Speaker 05:
The reasons we don't think it amounts to anything is that one, it's not at all clear what else there is of any substantial value of work.

[00:23:44] Speaker 04:
The patent owner or the title holder doesn't have any real right to participate in any of these litigations.

[00:23:50] Speaker 04:
that the exclusive licensee gets to choose to be involved in or negotiate any settlement on that.

[00:23:57] Speaker 04:
And in addition, the Toronto's, the licensee gets to be the one in control of any reexamination or reissue of the patent.

[00:24:07] Speaker 04:
So in that sense, it's also controlling the livelihood of that patent right to the extent that the patent right can still be used to sue for past damage.

[00:24:18] Speaker 05:
But none of it bears on the right to exclude.

[00:24:21] Speaker 05:
And the all-substantial-rights cases hold that, because one, the general rule is transfer title, right?

[00:24:26] Speaker 05:
The all-substantial-rights cases create an exception, saying some circumstances, when exclusionary rights and other rights, all-substantial rights, are transferred, that can be good enough.

[00:24:35] Speaker 05:
Those cases indicate that to transfer all-substantial rights, you have to be transferring exclusionary rights.

[00:24:42] Speaker 05:
Moro squarely holds that.

[00:24:43] Speaker 05:
in Azure networks, this court again recently reiterated that whole thing.

[00:24:47] Speaker 03:
And the reason- But when there's no exclusionary right around anymore because the patent's expired, then why does that analysis matter?

[00:24:56] Speaker 03:
So I think what troubles me about where I think your argument is going is that you seem to be suggesting that there should be a different rule for expired patents versus patents that aren't expired.

[00:25:08] Speaker 03:
And that when a patent isn't expired,

[00:25:11] Speaker 03:
a patent owner can retain title but transfer everything else and the licensee will have standing.

[00:25:17] Speaker 03:
But when it's expired, the only way to give a licensee standing is to transfer title.

[00:25:22] Speaker 03:
Why would we have those inconsistent rules about when triat title has to be transferred or doesn't have to be transferred?

[00:25:28] Speaker 05:
I'd say there's a single rule that just applies differently in different fact contexts.

[00:25:31] Speaker 05:
The single rule is that you have to transfer, the right to sue has to be accompanied by possession of the underlying substance of right, such that the

[00:25:40] Speaker 05:
plaintiff can be said to have suffered an injury, in fact, to its own legally protected interest.

[00:25:45] Speaker 03:
Ordinarily... But do you agree that that can be done without transferring title?

[00:25:50] Speaker 05:
If the All Substantial Rights case is satisfied, that's treated as being good enough.

[00:25:54] Speaker 03:
No, no.

[00:25:55] Speaker 03:
Oh, I don't understand that answer.

[00:25:56] Speaker 03:
So it either... you do have to transfer title or you don't have to transfer title.

[00:26:00] Speaker 05:
You have to transfer either title

[00:26:01] Speaker 05:
Or, so the answer is no, or you have to transfer exclusionary rights, which is the underlying substance of rights.

[00:26:07] Speaker 03:
But then, so again, you're asking us to apply a different rule when there are no exclusionary rights left.

[00:26:12] Speaker 05:
I don't want to put, let's say that it's the same rule, the outcome is different.

[00:26:15] Speaker 05:
If there's no exclusionary rights left to transfer, you can't transfer them.

[00:26:18] Speaker 05:
Therefore, the only way you can transfer the underlying legally protected interest is through title.

[00:26:23] Speaker 03:
Why is that logically consistent?

[00:26:25] Speaker 03:
I mean, if you don't have to transfer title to allow somebody to sue for unexpired patents

[00:26:31] Speaker 03:
Why can't you transfer everything but title for expired patents?

[00:26:36] Speaker 05:
Because as a matter of first principles... Let me ask you first.

[00:26:41] Speaker 03:
That's a legal question.

[00:26:43] Speaker 03:
I read this license agreement as transferring everything except title.

[00:26:47] Speaker 03:
Do you agree on that?

[00:26:49] Speaker 05:
It seems to be trying to.

[00:26:50] Speaker 05:
There's a big provision in there about, and this transfers anything else necessary for standing.

[00:26:54] Speaker 03:
I mean, I don't understand except for maybe title that this retains anything.

[00:27:00] Speaker 04:
You couldn't identify something that held back by the title, right?

[00:27:04] Speaker 04:
Nothing substantial.

[00:27:07] Speaker 05:
In other words, I mean, Dan's tried to brainstorm with your question earlier.

[00:27:10] Speaker 05:
We have had more time to think about this than you.

[00:27:13] Speaker 05:
Nothing significant.

[00:27:14] Speaker 05:
I mean, if you own title, then obviously you can alienate it, pledge it as collateral.

[00:27:18] Speaker 05:
There are tax consequences.

[00:27:20] Speaker 05:
There are some, in theory, I mean, if you had, if there was

[00:27:25] Speaker 05:
a related application pending, then you get some continuation benefits.

[00:27:29] Speaker 05:
As counsel mentioned, under the older practice, if you're trying to avoid prior art for other purposes, ownership of the patent could be helpful.

[00:27:37] Speaker 05:
Under the older interference practice, it can also have some relevance to seniority.

[00:27:44] Speaker 05:
But I agree, these are not, the things that we've thought of, one, we're not sure those, it's hard to mention fact patterns where those things even happen, but they're not, we agree, the things we thought of don't have

[00:27:53] Speaker 04:
But the right to control any further administrative agency review of the merits of the patent, those were transferred in terms of being able to control the defense of the patent.

[00:28:05] Speaker 05:
Yeah, that, I mean, the duty to defend strikes me as somewhat, whether it's an obligation or a right, but I agree that was transferred.

[00:28:12] Speaker 05:
The point, though, is that as a matter of standing law, going back to the first principles, why do we care about this?

[00:28:16] Speaker 05:
Why is the general rule title transfer under Crown Die, for example?

[00:28:20] Speaker 05:
The reason, as Primatech explained,

[00:28:22] Speaker 05:
is that the right to sue has to be accompanied by ownership of the underlying substantive right because that means that I have suffered an injury in fact to my own legally protected interest.

[00:28:31] Speaker 05:
That's why Crown Die holds that I have to have either own title, in which case I stand in the shoes of the earlier owner, or I have to have had the exclusionary right at the time of the alleged infringement, not just later.

[00:28:43] Speaker 05:
I have to have it at the time of the alleged infringement because that means that I was the one that was injured by the alleged infringement.

[00:28:48] Speaker 05:
I had the relevant injury in fact at the time.

[00:28:51] Speaker 05:
If I don't have the underlying substantive right, I don't have the injury to illegally protect interest of my own, I just have a mere hunting license.

[00:28:59] Speaker 05:
And that means there are two ways, as Crown Dice says, the way to transfer it is title.

[00:29:04] Speaker 05:
The exception under the all substantial rights cases as well, it could transfer exclusionary rights and everything else that's substantial, that's good enough.

[00:29:10] Speaker 05:
But the substantial rights cases hold more squarely holds.

[00:29:13] Speaker 05:
If you don't have both title and exclusionary rights, excuse me, it holds, if you don't have both right to and exclusionary rights,

[00:29:20] Speaker 05:
you don't have all substantial rights.

[00:29:21] Speaker 05:
In Azure, again, this court held that's why a non-exclusive licensee does not have standing to sue.

[00:29:28] Speaker 05:
A non-exclusive licensee may prefer that other people not practice the patent invention as well, but has no right to exclude them from doing so.

[00:29:35] Speaker 05:
And therefore, there's no injury in fact.

[00:29:37] Speaker 02:
So are you saying that in a Volpelle type case, in which there is a transfer of all substantial rights on, let's say, in the year 2005,

[00:29:47] Speaker 02:
that the party that has obtained the transfer of all substantial rights to a still in effect patent can sue going forward for infringement going forward but cannot sue for infringement in the past.

[00:30:05] Speaker 05:
Sure.

[00:30:05] Speaker 05:
Do we have any cases that address that issue?

[00:30:09] Speaker 05:
I think that under your precedence, I'm not sure, I think though that under your precedence, you transferred all substantial rights as permitting suit going back further.

[00:30:16] Speaker 02:
Well, then that seems to break the logic of your argument because you are saying that you have to have had either title or the right to sue at the time of the injury.

[00:30:27] Speaker 02:
And in that situation, the

[00:30:30] Speaker 02:
the assignee would not have had either title or the right to shoot at the time of the injury.

[00:30:36] Speaker 05:
Right.

[00:30:36] Speaker 05:
Well, that's what Crown Die holds.

[00:30:37] Speaker 05:
But the substantial rights cases, I mean, there's two ways to look at substantial rights cases.

[00:30:41] Speaker 05:
One, they're not satisfied because there's no exclusionary right.

[00:30:43] Speaker 05:
The other would be that it doesn't apply in this context.

[00:30:46] Speaker 05:
But either way, the point is that we know the substantial rights cases either don't apply or aren't satisfied here because they hold.

[00:30:51] Speaker 05:
The transfer of all substantial rights entails the transfer of exclusionary rights.

[00:30:56] Speaker 03:
When they exist,

[00:30:57] Speaker 05:
There's no case saying that.

[00:30:59] Speaker 05:
There's no case saying we can transfer all substantial rights.

[00:31:03] Speaker 03:
Well, that's because you probably haven't had the case when there's an expired patent.

[00:31:09] Speaker 03:
Well, Mars doesn't address whether all rights were transferred there.

[00:31:13] Speaker 03:
Mars, I think that the factual basis for that is that the only thing that was transferred was the right to sue.

[00:31:19] Speaker 03:
And that's not, at least, the facts we have here.

[00:31:21] Speaker 05:
And it rejects the distinction of this other court's case, well, this is an expired patent, and therefore the right to sue.

[00:31:27] Speaker 05:
more important.

[00:31:28] Speaker 03:
Well, I recognize that even in an expired patent, the right to sue is not all rights.

[00:31:34] Speaker 03:
It seems to me that you really are arguing for two different outcomes for expired and unexpired patents.

[00:31:40] Speaker 03:
I don't see outcomes.

[00:31:43] Speaker 03:
But I don't see the logic in that.

[00:31:46] Speaker 03:
I mean, for a live patent, you can sue for past infringement, even if you didn't get transfer title and the infringement occurred before the transfer of all substantial rights

[00:31:57] Speaker 03:
Why can't, when you get the transfer of all substantial rights of an expired patent, sue for passive infringement?

[00:32:03] Speaker 05:
The reason is this is the extreme case.

[00:32:05] Speaker 05:
Remember, the first principles, you know, primatech and non-recognized, you can't have a hunting license means you gotta have the right to sue and the underlying substance of interest in some way.

[00:32:15] Speaker 05:
Here, wherever you might draw the lines, there's no claim that they ever had any underlying substance of right to be violated because they never had title

[00:32:24] Speaker 05:
and they never had any exclusionary rights because they were gone before Kyrgyzstan even came into existence.

[00:32:31] Speaker 05:
So I understand there's some other substantial rights cases are murky in places trying to draw the line.

[00:32:36] Speaker 05:
Here we got the extreme one.

[00:32:38] Speaker 05:
They never got near any underlying substance of right that could have given them an injury in fact to their own legally cognizable rights.

[00:32:45] Speaker 02:
Let me ask you a question this way.

[00:32:46] Speaker 02:
If the transfer of ownership or the transfer of all substantial rights in

[00:32:52] Speaker 02:
the patent had occurred the day before this patent expired, would this case, in your view, come out differently, with respect to standing?

[00:33:05] Speaker 05:
It's a good question.

[00:33:05] Speaker 05:
I mean, the huge difference is... What's the answer?

[00:33:08] Speaker 05:
...exclusionary right transfer.

[00:33:11] Speaker 05:
I think under your case, the answer is probably no, and I understand your point.

[00:33:17] Speaker 02:
When you say it's probably no, the answer would be that

[00:33:22] Speaker 02:
You could not sue, or you could sue?

[00:33:25] Speaker 02:
I'm not sure.

[00:33:26] Speaker 05:
I think the answer would be that you could sue under some of this court's cases.

[00:33:30] Speaker 02:
Under Volpelle.

[00:33:31] Speaker 05:
But whether or not that's right, the point is, when we know here, that's not a result, in my view.

[00:33:36] Speaker 05:
But here, in this case, we know they have to couple the right to sue with the underlying legal interests that's being violated.

[00:33:45] Speaker 05:
Here, there's no argument.

[00:33:46] Speaker 05:
It's an extreme case.

[00:33:47] Speaker 05:
There's no argument they ever got near that.

[00:33:49] Speaker 05:
Never had title, never even existed when there was an exclusionary right.

[00:33:52] Speaker 05:
And as a reactant confirmed, you can't retroactively transfer the assignment to a title to a patent.

[00:33:59] Speaker 05:
So whatever the case might be in other cases, this should be the easy one because they never got near the legally protected interest and therefore never suffered an injury in fact.

[00:34:06] Speaker 05:
I should probably move on to the other issue.

[00:34:11] Speaker 05:
On the other issue, in answer to some questions, yes, the lack of diligence is dispositive because the rules require

[00:34:19] Speaker 05:
The rules, especially, and the courts interpret the rules, require a plaintiff to exercise diligence in formulating the, and then if they wish to add new products later, they have to, they bear the burden of proof.

[00:34:30] Speaker 04:
But the good cause standard has four factors.

[00:34:34] Speaker 04:
I mean, four factors for a reason, right?

[00:34:36] Speaker 05:
No, good, there are two aspects of good cause.

[00:34:38] Speaker 05:
First, diligence is a stand-alone requirement.

[00:34:42] Speaker 05:
If the plaintiff did act diligently, then you balance other factors to decide whether to leave to amend.

[00:34:47] Speaker 04:
I read O2 Micro to be talking about diligence in the context of once you become aware of information during discovery, being prompt about going to the court and seeking to amend your contention.

[00:35:05] Speaker 04:
In that particular instance, there was no good reason for the apparent lack of diligence in coming forward with the motion to amend after the expert testimony.

[00:35:18] Speaker 04:
Whereas in this instance, to the extent that you want to call it diligence, it's more about effort, the upfront effort and the scope of your effort in trying to figure out what product numbers were truly publicly accessible at the time.

[00:35:38] Speaker 04:
So to me, that feels like a different situation.

[00:35:41] Speaker 05:
I agree with the fact pattern in this case in OT micro, I have some differences, no argument there.

[00:35:45] Speaker 05:
But on the question, the legal question of what good cause means under the rules, my first OT micro, I mean, spot on point, quote, good cause requires a showing of diligence, is what this court held.

[00:35:55] Speaker 05:
But that's not just, we're not just relying on OT micro, the Eastern District of Texas, which construes its own rules, of course, has, you know, consistent with that, and consistent with the fact that the good cause requirement comes from Rule 16, which has also been construed similarly.

[00:36:07] Speaker 05:
The Eastern District of Texas cases, you know, repeatedly,

[00:36:10] Speaker 05:
that diligence is a requirement.

[00:36:13] Speaker 05:
And in fact, the cases that they cite, Eastern District cases that they cite try to prove the opposite, prove the point.

[00:36:20] Speaker 05:
They cite four Eastern District cases for the proposition diligence is supposedly not required.

[00:36:24] Speaker 05:
Two of them don't even address diligence, but of the two that do, Alexson against IDT starts by saying that the courts in this district construe the rules require diligence.

[00:36:34] Speaker 05:
On the facts of that case, it found there had been a mixed bag as to diligence that made a decision.

[00:36:38] Speaker 05:
The other one, Global Sessions, gets tripled.

[00:36:40] Speaker 04:
What if it turns out that of the 3,500 product numbers that we're talking about, maybe 300 of those product numbers were truly publicly available, but then the other 3,200 were not.

[00:36:56] Speaker 04:
And then it was only through discovery was the plaintiff able to learn of those product numbers.

[00:37:03] Speaker 04:
bring them to the court's attention through an amended infringement contention.

[00:37:07] Speaker 04:
Do you think it would be appropriate to wipe out all 3,500?

[00:37:12] Speaker 05:
Well, first, obviously, we don't think the facts are remotely like that.

[00:37:15] Speaker 05:
But the point is, in formulating their infringement contentions, which then kicks off the whole rocket docket that you see down in Eastern District, Texas, with lots of obligations on both sides, they had to exercise diligence.

[00:37:26] Speaker 05:
And they bear the burden of proving that they exercised diligence in seeking to identify the products as specifically as they could.

[00:37:32] Speaker 05:
in order to then form the basis for all of this.

[00:37:34] Speaker 04:
Right, and then they have a declarant, I think his name is Gross, who came forward and said he and their team did many, many things.

[00:37:42] Speaker 04:
They looked at the defendants website, they did all kinds of internet searches, they looked through

[00:37:50] Speaker 04:
product guide descriptions or whatever it is that you did.

[00:37:53] Speaker 04:
And in addition, doing a lot of reverse engineering that took a lot of time and effort.

[00:37:57] Speaker 05:
Not a lot.

[00:37:58] Speaker 05:
What they say for the 49, and this is why, I mean, the district court's subsidiary findings of fact, I mean, address why there's just an overall lack of diligence here, which is first, what they said is they spent hundreds of hours, for 49 defendants total, hundreds of hours, not clear how many hundreds, at $30,000, which per defendant is maybe five or six hours, $700.

[00:38:16] Speaker 05:
The district court, as fact finder in the case, is this complex involving so many downstream products with embedded things from others.

[00:38:23] Speaker 05:
It was well within his rights to conclude that that wasn't even close to what the Eastern District requires in terms of real diligence.

[00:38:29] Speaker 03:
Is there any argument that this technology that they've identified that is infringing operates in a different way in different products and that in one product it may operate in an infringing way and in another product it doesn't?

[00:38:46] Speaker 03:
where it's, if you have this technology in your product, under their infringement contention, it infringes.

[00:38:56] Speaker 05:
It's a little bit, first remember the rules separately require specific disclosure of infringement theories.

[00:39:01] Speaker 05:
I understand, but that's not, you're not answering my question.

[00:39:04] Speaker 05:
I understand, but so in terms, so that it doesn't go to whether they try to burden, the other problem though,

[00:39:10] Speaker 05:
is that if you do eventually figure out which is hard, which products they think involve SuperFlash, there have been disputes over whether some products do or don't, it's harder than you think.

[00:39:20] Speaker 05:
I mean, there's Freescale.

[00:39:22] Speaker 03:
Well, let me ask you this.

[00:39:23] Speaker 03:
I'm going to assume the answer to my question is that it doesn't operate differently depending on the product, since you're not answering it.

[00:39:29] Speaker 03:
But let's hypothetically say there's a situation with a company where none of that information is public.

[00:39:38] Speaker 03:
And so they can't, through reasonable diligence, look at product guides.

[00:39:41] Speaker 03:
They can't find the product in reverse engineering.

[00:39:44] Speaker 03:
All they can do is they have some notion that this company may be infringing because of various factors.

[00:39:50] Speaker 03:
They identify that as quickly as they can.

[00:39:52] Speaker 03:
And then during discovery, because the information is in your possession, they ask, give us a list of which products use that technology.

[00:40:02] Speaker 03:
Why isn't that sufficient?

[00:40:04] Speaker 03:
Diligent, and then when they move to amend,

[00:40:07] Speaker 03:
sufficient to comply with the infringement contingent role.

[00:40:10] Speaker 05:
I think I could put together a hypothetical set of facts in which it would, because they would have exercised and done their best they could and accused in good faith and gone from there.

[00:40:19] Speaker 05:
The point is they haven't even come close to bearing the burden of showing that's what happens here.

[00:40:24] Speaker 04:
And also, though... Where did the district court say everything that you just said?

[00:40:28] Speaker 04:
To me, what I think I saw the district court say was that defendants were able to demonstrate that

[00:40:37] Speaker 04:
Several product numbers were in fact publicly available and so that was it.

[00:40:44] Speaker 04:
They need, so therefore the plaintiff didn't comply with the local rule.

[00:40:48] Speaker 04:
I'm going to deny the motion to amend all the way across the board.

[00:40:52] Speaker 05:
You know, I would have said that was probably the third bit of its reasoning.

[00:40:56] Speaker 05:
I mean, it'll free all three of us back.

[00:40:58] Speaker 05:
First on the appendix page 813, the court found that they put little effort into identifying

[00:41:05] Speaker 05:
specifically accused, specifically identifying accused products, that was on reconsideration, which is very fair given the scope of the case they brought.

[00:41:14] Speaker 05:
Second, earlier on page A7 to 8, and I think this is what should make it an easy case even without, even for the court, even without regard to the standard of appellate review, is the court found that what plaintiff did was it found the efforts to identify products to be expensive and cumbersome and instead, for that reason, disclosed only a few products, choosing

[00:41:34] Speaker 05:
a handful of exemplar products and then demand that defendants disclose the others.

[00:41:39] Speaker 02:
That means they... Go ahead.

[00:41:43] Speaker 02:
You can finish.

[00:41:44] Speaker 02:
I have a follow-up question, but go ahead.

[00:41:46] Speaker 05:
I'm going to say that that means that they weren't even trying, as SSG demonstrates, to comply with the letter of the rule.

[00:41:51] Speaker 05:
They found it would be expensive for them to bear their own burden, so they would identify a few and then require the defendants to do all of the work and discovery that they were required to do under the local rules.

[00:42:01] Speaker 02:
Suppose that what you've got is a case, and it seems to me that some of the defendants here may well fall into this category.

[00:42:13] Speaker 02:
You may quarrel with that.

[00:42:14] Speaker 02:
But suppose you've got a case in which it might be possible with Herculean effort to come up with a few of the product names and specific numbers.

[00:42:30] Speaker 02:
Public information is not available.

[00:42:32] Speaker 02:
You'd have to go through an extensive reverse engineering of those products you were aware of, whereas the defendant would have in this hypothetical case a list that it could produce by hitting a button of all products that contain the smart flash.

[00:42:51] Speaker 02:
In that situation, where there's a huge disparity in the amount of effort necessary and in the public availability of the information,

[00:43:00] Speaker 02:
Would it not be an abuse of discretion for the court to say, you didn't do enough, you imposed on the defendants the burden, even though the burden might be light, of producing the actual numbers?

[00:43:15] Speaker 05:
I think if the plaintiff in a given fact pattern did what it reasonably could, which can be considerable, this is a high demand because of the way the docket works, but if the plaintiff did what it reasonably could,

[00:43:26] Speaker 05:
then I can certainly see at least a district court determining that, well, that was diligent.

[00:43:29] Speaker 05:
You did what you reasonably could.

[00:43:31] Speaker 02:
Well, if it pulled up all the numbers that, part numbers that were publicly available, and other than that, let's say it just described them by family numbers, why wouldn't that be sufficient?

[00:43:42] Speaker 02:
Since the family numbers give ample notice to the defendants of what's being charged.

[00:43:48] Speaker 05:
Not, well, a lot, most of the accused product families, most of them,

[00:43:53] Speaker 05:
contained some products that contain superflash and others that did not.

[00:43:56] Speaker 02:
Well, suppose they say all the products in the following families that contain superflash.

[00:44:01] Speaker 02:
Wouldn't that be sufficient to put the defendants on notice and put the defendants in a position that all they have to do is look at their internal records and determine what products fall within a notice?

[00:44:11] Speaker 05:
Which for downstream defendants is much harder than it sounds.

[00:44:13] Speaker 05:
But the point is, I will agree that you can hypothesize a series of facts which explains everything it reasonably could.

[00:44:20] Speaker 05:
and then you go into discovery.

[00:44:21] Speaker 05:
The thing is here we know they didn't.

[00:44:23] Speaker 03:
You know, why is this product by product stuff really even relevant at the infringement stage?

[00:44:28] Speaker 03:
Given that I think this applies basically if their infringement contention is if you have this technology you're infringing and if it doesn't it doesn't.

[00:44:38] Speaker 03:
So how many specific products the plaintiff or the defendant may have doesn't change the infringement analysis.

[00:44:46] Speaker 03:
What it ultimately may change is the damages

[00:44:48] Speaker 05:
Here's why it matters to infringement, getting back to another question that I pulled myself away from too early, which is it matters in the infringement analysis in a few respects.

[00:44:59] Speaker 05:
First, for direct infringement, it can matter because, for example, in the 009 patent, there's a requirement about applying a program voltage.

[00:45:09] Speaker 05:
Depending on the product, it's entirely possible that someone other than the defendant would have applied the program voltage.

[00:45:14] Speaker 05:
So in other words, you get a divided infringement scenario.

[00:45:17] Speaker 05:
For indirect infringement, it's especially clear because these are, a lot of these, you get a product that allegedly contains something that embodies relevant technology.

[00:45:27] Speaker 05:
That can be sold as part of a broader product by someone else.

[00:45:29] Speaker 05:
In other words, it gets embedded on down the road.

[00:45:33] Speaker 05:
That matters enormously to indirect infringement because from the perspective of any given defendant, I need to know if I'm being accused of direct or indirect infringement for any given products.

[00:45:40] Speaker 05:
If it's indirect infringement for certain products,

[00:45:42] Speaker 05:
Okay, we'll go look at those elements, and by the way, where did all this conduct occur?

[00:45:46] Speaker 05:
A lot of it was probably overseas, so you then get into extraterritorial issues, and also just into different scenarios concerning patterns of proof about what happened where.

[00:45:55] Speaker 05:
Until you know what you're dealing with, it does matter.

[00:45:58] Speaker 05:
It also matters because the plaintiff's had to do, the defendant has to do its invalidity contentions shortly after the non-infringement contentions, and the two have a bearing on each other because when you know exactly which products are alleged to be accused,

[00:46:12] Speaker 05:
that does guide to some extent your prior art search, it guides to some extent your understanding of what they think the total scope of infringement is.

[00:46:19] Speaker 05:
So when you look at shortly after the infringement contentions, you have to do your validity contentions, you have to decide which claim terms you're going to pick, you get into doing a lot of expensive discovery.

[00:46:30] Speaker 05:
The whole point of the local rules is at that point everyone should be as focused as possible on what the accused products

[00:46:38] Speaker 04:
Is it clear?

[00:46:40] Speaker 04:
I'm sorry.

[00:46:40] Speaker 04:
But the picture you're painting about trying to build non-infringement defenses, that's painting a picture demonstrating how difficult it can be to know from the outset which product numbers have the patented technology.

[00:46:57] Speaker 04:
It's kind of hard to expect them to come forward and identify all the product numbers.

[00:47:04] Speaker 04:
And in fact, I think everybody here agrees that

[00:47:08] Speaker 04:
at least some, maybe most of the product numbers weren't truly publicly available.

[00:47:14] Speaker 05:
No, first off, there's no, I mean, the court said it wasn't categorically precluding, you know, requiring product numbering.

[00:47:20] Speaker 05:
It's on page 813.

[00:47:23] Speaker 05:
The point was it said that, well, the court does not necessarily foreclose any categorical infringement contention.

[00:47:29] Speaker 05:
Plaintiff's disclosure of entire product families with little or no attempt to narrow the accused product descriptions is inconsistent with the rules.

[00:47:35] Speaker 05:
It is a case specific contextual good faith requirement.

[00:47:38] Speaker 05:
We agree with that.

[00:47:38] Speaker 04:
But I didn't feel that contextual here in the sense that maybe for certain parties, I'll just say SST for example, maybe for that particular party there's a strong reason to say that the plaintiff could have and should have done more in complying with the actual

[00:47:58] Speaker 04:
plain language of the local rule, but then there are other parties.

[00:48:03] Speaker 04:
One called TSMC, for example, where there's no response from you.

[00:48:11] Speaker 04:
It's essentially conceded that

[00:48:13] Speaker 04:
There weren't any product numbers available for the plaintiff to go find to install an infringement contention.

[00:48:20] Speaker 05:
TSMC is, the point there is just that there's one specific numbering system wasn't publicly available but there were other ways to publicly identify it.

[00:48:29] Speaker 05:
TSMC is a foundry, makes products for others.

[00:48:33] Speaker 05:
The evidence shows, and I think they ended up considering this in their reply brief, that the evidence shows that you can go online and find out who is a TSMC

[00:48:41] Speaker 05:
customer who gets the products made for them by TSMC, and you can then use those product numbers.

[00:48:47] Speaker 05:
So in other words, there are different ways of identifying the products apart from one specific internal set of product numbers.

[00:48:53] Speaker 02:
How would they know?

[00:48:54] Speaker 05:
I'm sorry, go ahead.

[00:48:56] Speaker 02:
To go back to the question that was asked much earlier in the argument, is it fair with respect to at least some, if not all, of the defendants that the term superflash defines

[00:49:09] Speaker 02:
the boundaries of what we now understand to be the accused infringing devices.

[00:49:15] Speaker 05:
SuperFlash is a technology that's allegedly embodied in certain devices, but it's not a product itself.

[00:49:22] Speaker 02:
No, I understand that.

[00:49:23] Speaker 02:
But if I said I accuse all products that contain SuperFlash technology, would my statement be equivalent to the statement that

[00:49:38] Speaker 02:
Kouranos would be making as to what is the universe of accused products?

[00:49:45] Speaker 02:
Would it be under-inclusive or over-inclusive, or would it be exactly the accused products?

[00:49:50] Speaker 05:
I think their desire is to accuse all products that include SuperFlash.

[00:49:54] Speaker 05:
I agree with that.

[00:49:57] Speaker 05:
Now, the other thing I was remembering is that they bear the burden of proving diligence.

[00:50:01] Speaker 05:
We don't bear the burden of disproving it.

[00:50:03] Speaker 05:
But from the district court's standpoint, if you look, for example,

[00:50:06] Speaker 05:
There should be no serious question that if they had been exercising even a little more effort at diligence instead of deciding it was too expensive and they'd rather push the burden on us, they would have found, I mean, at a minimum several hundred other specific accused products and probably a lot more.

[00:50:21] Speaker 05:
SST, they admit that they knew a bunch more product numbers and just chose not to put them in.

[00:50:26] Speaker 05:
For others, if you look at, for example, the declaration of Brian Banner, which is in the record and begins at

[00:50:36] Speaker 05:
page A17281.

[00:50:38] Speaker 05:
It marks us through how, with just some very simple Google searches, you can identify many hundreds of other products that are identified online as having, quote, super flash.

[00:50:51] Speaker 02:
This is SST products?

[00:50:53] Speaker 05:
No, others.

[00:50:54] Speaker 05:
There were several different ones.

[00:50:56] Speaker 05:
Freescale?

[00:50:57] Speaker 05:
If we get into, for Freescale, dozens of products that, quote, incorporate SuperFlash technology were available.

[00:51:03] Speaker 02:
But outside of SST and Freescale, it starts to get hard as I get.

[00:51:08] Speaker 05:
For Epson, there were dozens of product numbers saying that, quote, use the SuperFlash technology.

[00:51:12] Speaker 05:
Who?

[00:51:13] Speaker 02:
Epson isn't part of this.

[00:51:15] Speaker 05:
Since then, since that time, Epson's dropped out.

[00:51:18] Speaker 05:
But that was another one where their diligence wasn't serious.

[00:51:22] Speaker 05:
What about the ones that are still remaining?

[00:51:25] Speaker 05:
microchip, TSMC, ADM.

[00:51:27] Speaker 00:
IBM?

[00:51:28] Speaker 05:
IBM, for IBM and Intel, when they did their motion to amend, what they did is they used SST product numbers to identify, and the point is, they knew the SST product numbers up front.

[00:51:38] Speaker 05:
So IBM and Intel are in the same situation as SST.

[00:51:42] Speaker 05:
Because the numbers that they eventually chose to amend, they actually had, they admit this in their red brief in a footnote, they actually had, just chose not to put in, IBM and Intel follow SST.

[00:51:52] Speaker 04:
But for, so is that acceptable though for IBM and Intel that they no more than seven forward with the SSP product numbers?

[00:52:01] Speaker 05:
No, in July.

[00:52:02] Speaker 05:
No, because again, and what we're talking about is the initial infringement intentions.

[00:52:06] Speaker 05:
There's a total lack of diligence to it.

[00:52:07] Speaker 05:
So I, none of those was in the initial infringement intentions.

[00:52:09] Speaker 05:
It's, you know, seven months later that they're seeking to amend to add stuff.

[00:52:14] Speaker 05:
Um, after a lot of, a lot of already happened and that applies for those three.

[00:52:18] Speaker 05:
For TSMC, again, their reply brief at 20 admits that, well, you could get not the internal TSMC product numbers, but the customer's product numbers identifying the same products.

[00:52:32] Speaker 05:
You could just use that.

[00:52:32] Speaker 05:
That's reply brief 20.

[00:52:34] Speaker 05:
Apple's no longer in the case, but it was another extreme one where they purchased a teardown of one Apple iPod Nano and used that to accuse, well, they could have done exactly the same thing with all the others.

[00:52:45] Speaker 05:
With NXP, they identified, in the initial infringement contentions, no, nothing at all.

[00:52:50] Speaker 05:
So a rule... I didn't hear Redbrief say anything about NXP.

[00:52:54] Speaker 05:
NXP is the one where Redbrief points out that NXP filed a Rule 11 motion based on the fact there were no products, and then not too long thereafter, they did the diligence they should have done in time to identify at least some NXP products, pointing out that what we have here is not, again, we don't bear the burden of doing this defendant by defendant.

[00:53:11] Speaker 05:
The point is that they haven't shown, and there's lots of evidence,

[00:53:15] Speaker 05:
that we have presented that does show, they haven't shown that they did a diligent search.

[00:53:19] Speaker 05:
Instead, I mean, they admitted that, well, geez, you know, we thought it was getting expensive, so we thought we'd shift it to the defendants.

[00:53:24] Speaker 05:
And at minimum, the district court, as finder of fact, and as manager of its own case docket, was certainly entitled to conclude that based on its understanding of local practice and local rules, and what's been required for a long time, that this wasn't close.

[00:53:38] Speaker 05:
I mean, the district court indicated it didn't think this was a close call.

[00:53:41] Speaker 05:
And whether or not that was right or wrong,

[00:53:44] Speaker 05:
it certainly warrants deference.

[00:53:46] Speaker 05:
In Genentech, for example, this court said that, look, the district court had ample reasons to permit an amendment, a motion for leave to amend.

[00:53:55] Speaker 05:
But it still affirmed the denial, because although there are ample reasons to, there's also sufficient evidence to support the other.

[00:54:01] Speaker 05:
There's further questions from the bench.

[00:54:05] Speaker 04:
I think, yeah.

[00:54:07] Speaker 04:
Thank you for all that extra time.

[00:54:10] Speaker 04:
Ms.

[00:54:10] Speaker 04:
Bright?

[00:54:15] Speaker 04:
Well, I feel like, you know, we have to give you some additional time now in light of our extended colloquy with Mr. Josephus, so why don't we say eight minutes?

[00:54:26] Speaker 01:
Oh, I won't need that much, Your Honor, unless the Court has more questions.

[00:54:31] Speaker 01:
There were just a couple of points.

[00:54:32] Speaker 01:
I think that this has been flushed out fairly well, but there were a few points that were made on the appellee side that I just want to mention.

[00:54:43] Speaker 01:
this assertion that Keranos just decided that it was too expensive and so just was going to shift that expense to the defendant.

[00:54:57] Speaker 01:
What was very expensive and what has continued to be very expensive was to reverse engineer all of the possibilities of products that could include SuperFlash and also to continue to

[00:55:13] Speaker 01:
do the analysis with experts before.

[00:55:18] Speaker 01:
It wasn't that it was too expensive to look at the public information.

[00:55:22] Speaker 01:
The public information wasn't yielding the information that Keranos would have needed in order to have identified all the product numbers.

[00:55:35] Speaker 01:
So I think that the court also made a statement to district court that Keranos

[00:55:41] Speaker 01:
And this is just to quote it, made virtually no effort to specifically identify the accused products as required by the patent local rule.

[00:55:50] Speaker 01:
And I think that that's just a clear abuse of discretion.

[00:55:55] Speaker 01:
It's an error on the judgment of the facts.

[00:56:02] Speaker 01:
Kerenos did make some pretty significant efforts, and those facts were before the court.

[00:56:10] Speaker 01:
That conclusion, I think, is clearly erroneous.

[00:56:14] Speaker 04:
Well, there's no doubt that the defendants came forward and were able to present product number after product number after product number.

[00:56:20] Speaker 04:
Not all the product numbers of the 3,500 you wanted to amend, but many, many, many product numbers that really were publicly available.

[00:56:29] Speaker 04:
Is that correct?

[00:56:31] Speaker 01:
Actually, I think that that's not correct with regard to most of the defendants.

[00:56:35] Speaker 04:
I'm just saying there were a lot of product numbers.

[00:56:37] Speaker 01:
Well, what the defendants did, though, was include the product numbers for products that were listed as only having flash memory.

[00:56:45] Speaker 04:
So if you include in that... I'm talking about the ones with super flash.

[00:56:48] Speaker 04:
I'm talking SST, for example.

[00:56:50] Speaker 01:
And there were some from... Freescale.

[00:56:53] Speaker 01:
From Freescale, but... So you... There were some.

[00:56:56] Speaker 01:
Please say yes.

[00:56:57] Speaker 00:
Yes.

[00:56:57] Speaker 01:
Okay.

[00:56:58] Speaker 01:
Oh, no, I'm not saying there weren't some, but you said many, many, and I kind of looked at the whole.

[00:57:03] Speaker 01:
the whole group, but yes, you're on that.

[00:57:05] Speaker 02:
We have to decide this case on a defendant-by-defendant basis, ultimately, if we get into the weeds on this.

[00:57:11] Speaker 02:
And the weeds look pretty hard to avoid, frankly, from this perspective.

[00:57:17] Speaker 02:
So we have to ask you, for example, with respect to the defendant as to which you have, it seems to me, the weakest case, SST, why couldn't you have just plucked out the product numbers from the SST catalog online?

[00:57:33] Speaker 01:
Your Honor, as we said in the brief, we believe that we were complying with the rule by identifying the name, the trade name SuperFlash identified by name.

[00:57:43] Speaker 02:
But you could have done that with all the defendants.

[00:57:45] Speaker 02:
You could have had a very short infringement contention, which would be one sentence, which would say, we accuse all products containing SuperFlash technology against all defendants.

[00:57:55] Speaker 02:
Period.

[00:57:56] Speaker 02:
Stop.

[00:57:56] Speaker 02:
End of discussion.

[00:57:57] Speaker 02:
Right?

[00:57:58] Speaker 02:
On your theory that SuperFlash is really all you need to say.

[00:58:01] Speaker 01:
Yes, but we were more diligent than that.

[00:58:03] Speaker 01:
We wanted to include product numbers also.

[00:58:06] Speaker 01:
If there aren't any other questions from the court, I'll.

[00:58:10] Speaker 01:
Thank you.

[00:58:11] Speaker 01:
Thank you.

[00:58:11] Speaker 04:
Thank you very much.

[00:58:12] Speaker 04:
Case is submitted.