[00:00:00] Speaker 03: luminaria worldwide versus electronics. [00:00:31] Speaker 03: Mr. Bagatell, please proceed. [00:00:47] Speaker 00: May I please report, Dan Bagatell, on behalf of the appellants with me, with the court's permission, I'd like to focus on two issues this morning, the first being [00:00:58] Speaker 00: Luminara's lack of standing to sue for infringement of the patents and suit, and the second being the construction of the claim term pivot on which validity turned. [00:01:06] Speaker 00: But I also would like to save a little bit of time to explain why the situation for our clients is dire and why we need relief from the preliminary injunction almost immediately. [00:01:15] Speaker 00: So let's start with the standing issue, if I may. [00:01:17] Speaker 00: The problem here is that the sole owner of the patent suit is Disney Enterprises, Inc., which is not a party to the lawsuit. [00:01:26] Speaker 00: Moreover, it has the ability, through the affiliates provision, to indulge any potential infringement by the defendants. [00:01:33] Speaker 00: As a result, the current claim of Fluminara has neither constitutional standing nor statutory standing. [00:01:40] Speaker 04: How can you say they don't have constitutional standing? [00:01:43] Speaker 04: That's a much lower FAR. [00:01:46] Speaker 04: They've got an exclusive license [00:01:50] Speaker 04: and they've got the right to sue, if they've got the right to these products, to assign these products, assign the rights to these products, how could they not be injured by someone who is engaging in infringing conduct? [00:02:05] Speaker 00: Well, the question is whether they can unilaterally exclude us. [00:02:10] Speaker 00: If Rumanar can unilaterally exclude us, then they have constitutional standing. [00:02:16] Speaker 00: But if Disney can allow us to practice the patents, then they don't have constitutional standing. [00:02:21] Speaker 00: And that's the situation here. [00:02:22] Speaker 00: We've got the provision, section 2.2 of the Disney-Kindela agreement. [00:02:27] Speaker 04: And that says that... I think you're confusing the constitutional standing with the statutory. [00:02:31] Speaker 00: No, no, because I think that's what the case law says. [00:02:34] Speaker 00: The question is whether Luminara has the ability to prevent us, to exclude us. [00:02:39] Speaker 00: If Disney is allowed to unilaterally allow us to practice the patent, then they don't have constitutional standing. [00:02:46] Speaker 00: That's from the YAF case. [00:02:48] Speaker 01: Can I ask this? [00:02:50] Speaker 01: I mean, put aside the label constitutional standing. [00:02:53] Speaker 01: Why does the answer to the can Luminarra exclude Leon turn on the breadth of the affiliate provision? [00:03:05] Speaker 01: Why do you not say, even if the affiliate provision is narrow, [00:03:11] Speaker 01: Disney can, in fact, grant Leona a license to make these things under the operational control of Disney. [00:03:19] Speaker 01: And therefore, even under a narrow view of the affiliate provision, Luminaire can't exclude you. [00:03:25] Speaker 00: Well, I agree with that, Your Honor. [00:03:26] Speaker 00: The district court took the analysis that direction of operational control was required. [00:03:32] Speaker 00: That's the position that my opponent is taking. [00:03:35] Speaker 00: But I don't think it is required. [00:03:36] Speaker 00: But even if it were required, let me get back to the provision here, because there are three portions of the affiliate provision. [00:03:45] Speaker 00: One is general corporate affiliates, which are corporately related entities. [00:03:50] Speaker 00: Then there's operation and control. [00:03:51] Speaker 00: And the third one is any entity operated under license from Disney. [00:03:55] Speaker 01: If the dispute, or at least part of the dispute, was about the scope of the affiliate provision, how [00:04:03] Speaker 01: I guess I'm having trouble understanding how when you look at the license agreement as a whole that the narrow view as opposed to the broad view isn't really the one that makes sense and that at least under California loose contract interpretation law that could be found. [00:04:24] Speaker 00: Well, there wasn't any resort to expensive evidence. [00:04:28] Speaker 00: California does have a liberal parole evidence rule. [00:04:30] Speaker 00: All the extrinsic evidence was in control of the other side, and they didn't introduce it. [00:04:35] Speaker 01: I'm not sure how much extrinsic evidence one needs. [00:04:38] Speaker 01: All over these agreements, there seemed to be Disney's effort to do everything possible to give either luminaire, as it now exists, full rights. [00:04:51] Speaker 00: I don't think so. [00:04:52] Speaker 01: Except for what it wanted to do itself. [00:04:55] Speaker 00: Correct. [00:04:55] Speaker 00: And what Disney wanted all along [00:04:57] Speaker 00: was the free right to practice the patents and to have affiliates practice the patents. [00:05:01] Speaker 00: And this is very important. [00:05:02] Speaker 00: Disney is a licensing business. [00:05:04] Speaker 00: I mean, yes, it does make movies. [00:05:05] Speaker 00: Yes, it has cruise ships and it has Disneyland. [00:05:08] Speaker 00: But a huge portion of Disney's business is licensing. [00:05:11] Speaker 00: And they wanted unfettered ability to license whoever they want under whatever terms they want. [00:05:16] Speaker 00: Even when they expanded the scope of Luminar, or actually Candela's rights in 2012, [00:05:22] Speaker 00: It was subject to 2.2. [00:05:24] Speaker 00: That's expressed there. [00:05:26] Speaker 00: It's subject to Disney's retained rights, which have not changed. [00:05:30] Speaker 03: But the YF case, which has a lot of relevance to this one it seems, expressly says, the ability of Qualcomm to license its affiliates is also immaterial, as there's no evidence or argument suggesting that defendants are Qualcomm affiliates. [00:05:45] Speaker 03: There's no evidence or argument suggesting you all are Disney affiliates. [00:05:49] Speaker 00: We are not. [00:05:50] Speaker 03: So why aren't you in exactly the same situation? [00:05:53] Speaker 00: No, the question really is the ability to exclude us, not the current status. [00:05:57] Speaker 03: You're absolutely right. [00:05:58] Speaker 03: YF says an exclusive licensee has the right to exclude others and is incapable of obtaining a license right from the other party. [00:06:06] Speaker 03: However, so that's the language, the broad legal language they use. [00:06:10] Speaker 03: But in application, [00:06:11] Speaker 03: they make it clear that several of the parties that were at issue in that case retained not only the right to practice, but the right to license affiliates, almost identical language here, and that that didn't qualify under the incapable of attaining a license thing. [00:06:27] Speaker 00: I think the difference is that in some cases you're using the narrow definition of affiliates, which is corporate relatives. [00:06:34] Speaker 00: In this case, Disney insisted on two additional terms for itself, not for Candela, by the way. [00:06:39] Speaker 03: But just to be clear, [00:06:40] Speaker 03: then are you acquiescing in the fact that if the very narrow definition of affiliates, only corporate relatives were to apply, and that if that is all Disney retained, then you would not have an argument here. [00:06:54] Speaker 03: In light of YF. [00:06:56] Speaker 03: Then you better tell me head on why you don't fall under YF. [00:07:00] Speaker 03: Don't tell me broad definition of affiliates. [00:07:02] Speaker 03: That's a separate question. [00:07:04] Speaker 03: Tell me if I can screw affiliates narrowly. [00:07:07] Speaker 00: If you construe affiliates to mean strictly corporate relatives, we are not corporate relatives, and do not currently have... Disney would have to require... So why don't you file squarely under YAB then? [00:07:19] Speaker 00: Because I think the answer is that Disney can make us a corporate affiliate simply by licensing. [00:07:25] Speaker 03: That's a different... No, that's not... That's the broad view. [00:07:28] Speaker 03: I said you can't use that. [00:07:30] Speaker 03: That's a separate question. [00:07:31] Speaker 03: Answer my question. [00:07:33] Speaker 03: Why don't you fall under YAB? [00:07:35] Speaker 03: Because your case... [00:07:36] Speaker 03: is on all fours with YF if affiliates is to have the same meaning, which I said you have to presuppose. [00:07:42] Speaker 00: If affiliates is the narrow definition, strictly corporate relatives, then I would agree we do not, then Luminara might have constitutional standing. [00:07:55] Speaker 00: That is not the scenario. [00:07:56] Speaker 00: I'm arguing, I'm accepting your premise for purposes of this question. [00:07:59] Speaker 03: I'm agreeing with you that- Well, that's what you're supposed to do when a judge gives you a hypothetical. [00:08:02] Speaker 00: No, I'm agreeing with you. [00:08:02] Speaker 03: Eventually, after you buck them five times first. [00:08:05] Speaker 00: I'm agreeing with you that we are not a corporate relative of Disney and are not currently an affiliate. [00:08:11] Speaker 03: And you're agreeing with that, but YF says under those circumstances it's enough. [00:08:19] Speaker 03: Even though they have that incapable of becoming language as though if in the future you could become an affiliate of Disney in the corporate ownership capacity, that's still not enough under YF because they applied it in that very case to Qualcomm. [00:08:32] Speaker 00: Well, I read YF a little bit differently, but let me move on. [00:08:36] Speaker 03: No, you cannot move on. [00:08:37] Speaker 03: How do you read YF differently? [00:08:40] Speaker 03: If you're going to tell me I'm wrong, then you've got to tell me why. [00:08:43] Speaker 00: I think YF stands for the proposition. [00:08:46] Speaker 03: Tell me where in the case I'm wrong. [00:08:48] Speaker 03: Where in the case do you see language that supports your view of YF instead of mine? [00:09:18] Speaker 00: I believe it is on pages 1266 to 67. [00:09:28] Speaker 00: What the court says here is that for a licensee to be the exclusive licensee of a patent, the licensee must be the only party with the ability to license the patent. [00:09:38] Speaker 00: It says it doesn't have to be. [00:09:44] Speaker 00: I agree with that. [00:09:47] Speaker 04: That was talking about the proposition that the defendants were asserting on appeal and the court was saying that's not accurate. [00:09:53] Speaker 04: And then it says this court therefore holds that an exclusive licensee does not lack constitutional standing to assert its rights under the license patent merely because its license is subject not only to rights in existence at the time but also to future licenses that may be granted only to parties other than the accused. [00:10:10] Speaker 04: And then it went on to say that because [00:10:13] Speaker 04: the accused was not a Qualcomm affiliate that there was standing. [00:10:21] Speaker 04: Isn't that your circumstance if we read the affiliate provision? [00:10:24] Speaker 00: If we read the affiliate provision narrowly, I would agree with you. [00:10:30] Speaker 01: Can I just ask though, it seems to be there, why isn't the only narrow [00:10:40] Speaker 01: view of affiliate at issue, one that extends beyond corporate relatives. [00:10:47] Speaker 01: At a minimum, the last clause allows Disney to license somebody that operates its business under Disney's control. [00:10:56] Speaker 01: Why can't that be Leon? [00:10:59] Speaker 00: It can be Leon, and moreover, it doesn't even have to be controlled, but I agree with you. [00:11:04] Speaker 00: It does not have to be controlled [00:11:06] Speaker 00: by Disney, but even if it is controlled by Disney, whether or not Disney has more than 50% corporate ownership. [00:11:12] Speaker 00: That's one in two parentheses. [00:11:15] Speaker 00: The second one goes on and says, even if you don't have that scenario, you can go on and become an affiliate if you are operating under license from any Walt Disney Corporation or any affiliate thereof. [00:11:27] Speaker 01: So both of those apply legally. [00:11:31] Speaker 01: issued, namely, assume for current purposes that Lubinari can be a plaintiff. [00:11:38] Speaker 01: Why is Disney needed in your view? [00:11:42] Speaker 01: And if you could say anything as a practical matter about whether Disney can be compelled to join or would be expected to join voluntarily, I'd be interested in that as well. [00:11:54] Speaker 00: Okay. [00:11:54] Speaker 00: Well, let me give you my argument on prudential standing. [00:11:58] Speaker 00: It's undisputed that [00:11:59] Speaker 00: Disney Enterprises Inc. [00:12:01] Speaker 00: is the owner of this patent. [00:12:02] Speaker 00: And so to have Prudential standing, Luminarra would have to join Disney as a party unless Luminarra holds all substantial rights. [00:12:12] Speaker 00: And in this case, Disney is not just a bystander here. [00:12:16] Speaker 00: Let's walk through what they have. [00:12:18] Speaker 00: Not only do they have the right to practice under Section 2.2, not only do they have the right to license at least some others under Section 2.2, [00:12:25] Speaker 00: They unilaterally control whether to maintain the patents and force at all. [00:12:29] Speaker 00: That control is left up to Disney. [00:12:31] Speaker 00: That's section 12, which was relevant under PROPATH. [00:12:34] Speaker 01: Are there cases that actually hold? [00:12:37] Speaker 01: I know that there are cases that say one has to look at a lot of different rights, but actually hold that you have to, if you're an exclusive licensee in the sense that crosses the first threshold, that they do have a right to exclude you, [00:12:54] Speaker 01: Nevertheless, the patent owner, which has some rights, has to be joined even if the patent owner could not possibly sue you and create a risk of multiple litigation. [00:13:06] Speaker 00: Yes. [00:13:08] Speaker 00: I believe both Morrow and Propat are situations where the exclusive licensee with the sole right to sue and standing were not permitted to sue alone. [00:13:20] Speaker 00: Morrow and Propat. [00:13:22] Speaker 00: So it's not sort of the sine qua non. [00:13:24] Speaker 03: But in Moreau, if I remember right, I think I remember PROPAT pretty well, but in Moreau, if I remember right, didn't it explain that the reason, the alternative rationale that was important, which also doesn't support you here. [00:13:39] Speaker 03: Unfortunately, these cases, I don't love the language of it, but it says the most important thing is the right to sue. [00:13:46] Speaker 03: But in Moreau, what it said is, [00:13:48] Speaker 03: And moreover, another important thing is to make sure the owner of the patent has a right to defend against potential invalidation or unenforceability of the patent in the event that the exclusive licensee is brought. [00:14:03] Speaker 03: But here, Disney has a, because you don't want the patentee to be out of the whole ball game. [00:14:10] Speaker 03: If it's his patent, it's going to be destroyed. [00:14:12] Speaker 03: But Disney here acquiesced entirely in being bound by whatever happens vis-a-vis their defense of your patent. [00:14:18] Speaker 00: It did acquiesce, but it doesn't follow. [00:14:20] Speaker 00: I think Asymmetrix makes clear that it's not simply a question of whether the defendant could be sued a second time. [00:14:28] Speaker 00: The question is, do all substantial rights in this patent belong to Luminara, or does Disney have a significant set of rights? [00:14:36] Speaker 00: The bundle of sticks has been divided, no doubt. [00:14:38] Speaker 00: But I've talked about not only the right to practice, the right to license, the right to decide whether to have maintenance fees, it has [00:14:45] Speaker 00: some ability to veto assignments. [00:14:47] Speaker 04: So is it your argument that the affiliate provision doesn't matter then? [00:14:50] Speaker 04: That you think that they still wouldn't be the exclusives? [00:14:54] Speaker 00: Well, I think the affiliate provision is still relevant because it shows that Disney wanted broad rights to practice and allow others to practice, but it's not essential to it. [00:15:01] Speaker 04: What about the fact that they excluded from their definition of affiliates people licensed to artificial flame tech? [00:15:08] Speaker 00: only artificial technology. [00:15:10] Speaker 00: I think that actually helps us, by the way, because it shows that it wasn't all about operational control. [00:15:16] Speaker 00: This was an intellectual property provision. [00:15:18] Speaker 00: And why would Disney license? [00:15:19] Speaker 04: But if you read in the context of the decision, they're talking about venues, theme parks. [00:15:26] Speaker 00: Well, and any other entity. [00:15:29] Speaker 00: And by the way, Disney has a very broad interest in licensing this to this type of company, for example. [00:15:36] Speaker 00: If you look at page 880 in the record, it's talking about Candela, talking about licensing the character Lumiere from Beauty and the Beast. [00:15:46] Speaker 00: These candles can come in the form of Disney characters. [00:15:50] Speaker 00: You could use all sorts of different lights and theme songs with the candles. [00:15:55] Speaker 00: We have a possibility of cross-license to Leon, given Leon makes LEDs. [00:16:00] Speaker 00: There's a lot of reasons why Disney might want to license [00:16:04] Speaker 00: But getting back to the credential standing issue, apart from the ones I've mentioned, not only does it have a share of proceeds and notices, it even owns the right to all improvements under Section 9.2. [00:16:15] Speaker 00: Collectively, I realize individually just the right to some proceeds might not be enough, but collectively this is showing that Disney has a real interest in this patent and it needs to be here. [00:16:26] Speaker 00: Disney apparently doesn't want to be here. [00:16:28] Speaker 03: Why does it need to be here? [00:16:31] Speaker 03: Because I think that's the crux of what Judge Toronto was asking you earlier, which is, yeah, we have cases that discuss eight, nine factors. [00:16:40] Speaker 03: But why? [00:16:41] Speaker 03: Why does Disney need to be here? [00:16:43] Speaker 03: It's relinquished its rights vis-a-vis validity and enforceability. [00:16:47] Speaker 03: It is willing to be bound and has expressly said so. [00:16:50] Speaker 03: It's relinquished its rights to participate in litigation, reserving only rights to [00:16:55] Speaker 03: hear about it in advance and to provide comments, which don't have to be followed. [00:16:59] Speaker 03: I mean, I read carefully all of the retention. [00:17:03] Speaker 03: And there's no chance of a duplicative lawsuit being brought. [00:17:07] Speaker 03: So why? [00:17:08] Speaker 03: Why does Disney need to be here? [00:17:09] Speaker 00: Because this is a narrow exception to the general rule that the patentee has to be present. [00:17:14] Speaker 00: Disney is the patentee. [00:17:16] Speaker 00: And only if it has no substantial rights can Luminar sue without Disney. [00:17:21] Speaker 00: And Disney does [00:17:23] Speaker 00: have an interest whether or not it can go ahead and sue these defendants later on. [00:17:29] Speaker 00: It has an interest in the outcome of this. [00:17:31] Speaker 00: It certainly has a financial interest. [00:17:35] Speaker 01: But it's signed away all of that. [00:17:37] Speaker 01: It's signed away its interests in what would happen to its patents in litigation. [00:17:44] Speaker 00: It did agree to be bound by the result of the litigation. [00:17:48] Speaker 00: But that doesn't mean it has no interest in ownership. [00:17:50] Speaker 00: Remember how this is structured. [00:17:52] Speaker 00: This wasn't an assignment [00:17:53] Speaker 00: and grant back. [00:17:54] Speaker 00: It wasn't that way in 2008. [00:17:55] Speaker 00: It wasn't that way in 2012. [00:17:57] Speaker 00: It's not that way in 2014-15. [00:17:59] Speaker 00: This was Disney retaining the rights and giving certain rights to Luminar. [00:18:04] Speaker 00: Even after all of the amendments, it remains in that posture. [00:18:07] Speaker 00: And that means Disney has an interest here. [00:18:10] Speaker 04: You said before that Disney apparently doesn't want to be here. [00:18:13] Speaker 04: So do you think the result is that if we found that there was standing but that Disney [00:18:20] Speaker 04: also should be joined that the result would be the case would have to be dismissed. [00:18:24] Speaker 00: If Disney refuses to join and they are not, I think Coach Toronto asked the question, is there a possibility that Luminara could join them forcibly as a party defendant? [00:18:35] Speaker 00: And there is the independent wireless case from the Supreme Court in 1926. [00:18:38] Speaker 01: Why wouldn't that apply? [00:18:39] Speaker 01: I mean, granting this exclusive or second exclusive license, it basically put itself in the position of making sure that the rights recipient was able to enforce them. [00:18:54] Speaker 00: If Luminar were to sue Disney, perhaps then Disney would be a party and we would not have a credential standing. [00:19:00] Speaker 00: But as we stand here today, we have a preliminary injunction against us where the patentee isn't present. [00:19:06] Speaker 00: We think the patentee is able to indulge any infringement that we do, but even if you don't accept that, the patentee still has substantial rights. [00:19:14] Speaker 00: And again, on a preliminary injunction, you don't have to dismiss the case right now. [00:19:18] Speaker 00: You can find substantial doubt about standing and vacate the preliminary injunction on that [00:19:23] Speaker 00: If I can turn to the merits, because we have, I think, quite a good argument on the merits as well. [00:19:27] Speaker 00: Again, there's at least a substantial question about the validity of claim one. [00:19:30] Speaker 02: You don't have to talk really fast. [00:19:32] Speaker 02: I'll give you more time. [00:19:33] Speaker 00: OK. [00:19:33] Speaker 00: Well, I noticed that I was over the time. [00:19:36] Speaker 00: Yeah. [00:19:36] Speaker 02: It's OK. [00:19:36] Speaker 02: I'm going to give you a little more time. [00:19:37] Speaker 00: Go ahead. [00:19:38] Speaker 00: Thank you. [00:19:39] Speaker 00: So claim one is extremely broad. [00:19:42] Speaker 00: It's actually printed on the inside cover of our flyer. [00:19:45] Speaker 03: So tell us what pivoting means and why they got it wrong below. [00:19:47] Speaker 03: Why did the district court get it wrong? [00:19:50] Speaker 00: Well, first of all, the 455 patent concededly contains all the limitations, but the last one, which has the hole in the bottom. [00:19:56] Speaker 03: Go back to answering my questions. [00:19:57] Speaker 03: I thought we got to that point already. [00:19:59] Speaker 03: Pivoting. [00:20:00] Speaker 03: What does it mean and why did they get it wrong? [00:20:01] Speaker 03: Because that's your argument. [00:20:02] Speaker 03: That's your best argument. [00:20:03] Speaker 00: So go to it. [00:20:04] Speaker 00: Thank you. [00:20:05] Speaker 00: Because neither the claim language, nor the specification, nor the prosecution history supports the district court's requirement that the body of the pendulum be able to rotate randomly or chaotically in all three dimensions. [00:20:19] Speaker 00: What does the claim language say? [00:20:21] Speaker 00: It says just free to pivot when supported. [00:20:24] Speaker 00: The party stipulated to a definition of pivot to mean rotate around a point of access, essentially. [00:20:29] Speaker 00: That's what a pivot is. [00:20:31] Speaker 00: And to pivot means to go around that axis. [00:20:33] Speaker 00: There's nothing in the claim that suggests that. [00:20:36] Speaker 04: The specification says interesting. [00:20:37] Speaker 04: What's your best point as it relates to the written description to support your conclusion? [00:20:42] Speaker 00: Sure. [00:20:42] Speaker 00: The written description describes a whole variety of different embodiments [00:20:47] Speaker 00: that can be used, not simply the one in figure one where you have a V shape and a larger hole. [00:20:53] Speaker 00: That's covered by some dependent claims. [00:20:54] Speaker 00: But it also makes clear that you can have a fixed rod, a rigid support. [00:21:00] Speaker 00: You don't have to have the bigger hole. [00:21:01] Speaker 00: And if you don't, it's just going to rotate around that support. [00:21:05] Speaker 00: And moreover, it's expressly discusses gimbals, multi-axis gimbals as an alternative embodiment. [00:21:11] Speaker 04: Well, if the patent is directed to candles with chaotic movement, [00:21:17] Speaker 04: Why is it wrong for the district court to assume that that chaotic movement was established by a pivoting mechanism? [00:21:26] Speaker 00: Well, first of all, the patent is really about kinetic movement. [00:21:29] Speaker 00: There was some discussion of chaotic movement, but the patent really focuses on kinetic movement, which means it's constantly moving. [00:21:35] Speaker 00: But in any event, we have, undisputedly, chaotic or random movement in two dimensions around the pivot in the 455 patent. [00:21:45] Speaker 00: So the real question is, do you have to have chaotic motion in three dimensions? [00:21:49] Speaker 00: I don't think you have to have chaotic motion at all. [00:21:52] Speaker 00: But to the extent you do, you certainly don't need to have it in all three dimensions. [00:21:55] Speaker 00: Let's consider not only the embodiments that are disclosed and not disclaimed, they're disclosed as alternative embodiments to Figure 1, the prosecution history. [00:22:05] Speaker 00: The prosecution history discusses pivotal mounting, which is the language that's used at the top of Column 7. [00:22:11] Speaker 00: You pivotally mount the pendulum member. [00:22:13] Speaker 00: The PTO rejected that claim. [00:22:15] Speaker 00: because the 455 patent disclosed pivotal mounting. [00:22:19] Speaker 00: And Disney exceeded to that rejection and didn't traverse it. [00:22:23] Speaker 00: What it did is it added additional limitations. [00:22:26] Speaker 00: So we also have the 355 patent, which is a relative. [00:22:30] Speaker 00: And we know that patent has a claim that expressly recites chaotic motion in two dimensions. [00:22:36] Speaker 00: Disney knew how to claim this. [00:22:37] Speaker 00: It didn't claim it in this patent. [00:22:39] Speaker 00: And so there's no reason in either the claim language [00:22:42] Speaker 00: This is a plain English word, which has an accepted meaning. [00:22:45] Speaker 00: There's no redefinition of the term to pivot in this patent. [00:22:49] Speaker 00: There's another portion of the specification that talks about free to pivot. [00:22:52] Speaker 00: That basically means it's not impeded from pivoting. [00:22:54] Speaker 00: The real question is, what does pivot mean? [00:22:56] Speaker 00: And there's nothing in the specification that requires three-dimensional movement. [00:23:00] Speaker 00: And there's nothing in the prosecution history that does. [00:23:03] Speaker 00: At a minimum, again, even if we don't have a definitive determination from this court, there's at least substantial doubt. [00:23:08] Speaker 00: And that alone is enough to vacate the preliminary injunction. [00:23:12] Speaker 01: bases asserted in the motion for preliminary injunction beside the patent infringement? [00:23:18] Speaker 00: Yes, there was a tortious interference claim that the district court... Tortuous interference with existing contract or prospective contract? [00:23:25] Speaker 00: Existing contracts with two distributors. [00:23:27] Speaker 00: That couldn't obviously justify the current injunction against 15 customers. [00:23:32] Speaker 01: And the district court just didn't reach that? [00:23:33] Speaker 00: Didn't reach it. [00:23:34] Speaker 00: There were fact issues about first of all did these distributors [00:23:37] Speaker 00: breached the contract. [00:23:38] Speaker 00: Their argument is that Luminara breached, and so they covered by buying from Lyon. [00:23:44] Speaker 01: Was the trademark claim an asserted basis for the theater? [00:23:49] Speaker 00: No. [00:23:50] Speaker 00: They tried to work that in a little bit to the irreparable harm side of the case, which is the third issue, which I'm happy to reach if Your Honors would like. [00:23:59] Speaker 04: Just let me ask one more question on the claim construction. [00:24:04] Speaker 04: So what if there be [00:24:08] Speaker 04: claim asserted had been claim 14 of 166. [00:24:11] Speaker 04: Would that be different? [00:24:15] Speaker 00: Well, claim 14 has additional elements. [00:24:17] Speaker 00: And we have, by the way, alleged invalidity contentions regarding claim 14. [00:24:22] Speaker 00: We've got a petition for interparties review, which is pending on claim 14. [00:24:29] Speaker 00: We would have asserted different art. [00:24:30] Speaker 04: The petition is pending or the interparties review is pending? [00:24:32] Speaker 00: The petition is pending. [00:24:33] Speaker 00: We should get an institution decision later this month. [00:24:36] Speaker 00: So Claim 14 was never asserted at the preliminary injunction phase. [00:24:40] Speaker 00: They tried to add it in their briefs on appeal, but it was never asserted. [00:24:43] Speaker 00: So it would be a due process problem if we weren't able to put in defenses regarding that. [00:24:47] Speaker 00: We put in defenses on the sole claim that they asserted. [00:24:50] Speaker 03: So you're currently under the preliminary injunction, correct? [00:24:52] Speaker 03: Correct. [00:24:53] Speaker 03: And you began by saying, if you had time, which clearly you don't, but we'll just give you a sentence or so. [00:25:00] Speaker 03: Why is it so dire and did you ask for expedited briefing argument in this case? [00:25:05] Speaker 00: We did. [00:25:06] Speaker 00: We actually moved to expedite the appeal. [00:25:08] Speaker 00: We self-expedited our briefing. [00:25:11] Speaker 00: We filed everything as quickly as we could. [00:25:14] Speaker 00: Then we waited to be put on the next available oral argument calendar. [00:25:18] Speaker 00: For some reason, it was not put on the next available argument calendar. [00:25:21] Speaker 00: And we filed a motion to expedite oral argument, which was granted. [00:25:24] Speaker 00: That motion is at docket 78. [00:25:26] Speaker 03: So why is it so dire? [00:25:28] Speaker 03: You've given me additional of you thinking it's dire. [00:25:30] Speaker 00: So now why? [00:25:31] Speaker 00: Well, I was going to say the evidence, if Your Honor needs it, of subsequent events is in there. [00:25:35] Speaker 00: And I'll summarize it for you. [00:25:37] Speaker 00: We've been under adjunction for six months. [00:25:39] Speaker 00: Leon has not been able to sell to its two main distributors. [00:25:42] Speaker 00: Its two main distributors haven't been able to get any products. [00:25:44] Speaker 00: We've basically missed the Christmas season at this point. [00:25:46] Speaker 00: The three major trade shows. [00:25:48] Speaker 00: for this industry are in January. [00:25:51] Speaker 00: If we can't be at those trade shows, we're not going to be able to sell most products to the big boxes and everybody else for 2016. [00:25:57] Speaker 00: 2016 will be a hard to shop. [00:25:59] Speaker 03: OK, got it. [00:26:00] Speaker 03: All right, let's give Mr. Wright a chance. [00:26:02] Speaker 03: I'll give you back some rebuttal time. [00:26:05] Speaker 05: Thank you. [00:26:10] Speaker 03: OK, Mr. Wright, you've got a short 30 minutes in which we're going to question you. [00:26:14] Speaker 03: It'll feel like two minutes. [00:26:16] Speaker 03: Don't worry. [00:26:17] Speaker 03: It'll go very quickly. [00:26:23] Speaker 06: So I believe that the WIAV case is highly instructive, if not dispositive, of the constitutional standing issue. [00:26:35] Speaker 06: I'd like to address, starting off, the prudential standing issue. [00:26:41] Speaker 01: You're not going to start with what you call the constitutional standing issue? [00:26:45] Speaker 06: Well, so under WIAV, I think under any definition [00:26:53] Speaker 06: affiliate, there is still constitutional standing under WIV. [00:27:00] Speaker 06: So Disney retained for itself the right to use the patent and for others to have the right to use the patent, Disney would have to bring another party into their fold of affiliates. [00:27:16] Speaker 01: Now you just used the term that is being defined, so that seems to be cheating. [00:27:22] Speaker 01: It doesn't have to be a corporate relative. [00:27:25] Speaker 01: At best, it has to be somebody that is operating under operational control of Disney. [00:27:34] Speaker 01: So why couldn't Disney do that to Leon? [00:27:38] Speaker 06: If Disney... So I guess I'm a little bit confused that the additional definitions under affiliate are ways to bring another party into the fold [00:27:52] Speaker 01: I don't know what the term fold means. [00:27:56] Speaker 01: There's definition and the one everybody's arguing about is that last one and there's a question about whether Disney has to have operational control over the business that it is licensing. [00:28:13] Speaker 01: What I'm asking is let's assume it does. [00:28:16] Speaker 01: It seems to me it is no narrower than that. [00:28:20] Speaker 01: And if it is no narrower than that, why does that not allow Disney, should it wish, to license Leon and do it on the condition that Disney gets to control the candle business of Leon? [00:28:36] Speaker 06: At the outset, I would not concede that Disney has the ability to [00:28:41] Speaker 06: grant licenses to the AFT patents under third parties. [00:28:45] Speaker 06: Under this agreement, Disney is the exclusive licensee. [00:28:48] Speaker 03: It does to affiliates. [00:28:54] Speaker 06: When a party becomes an affiliate, they also enjoy the rights that Disney reserved to itself, which is the right to make, use, practice, and enjoy the fruits of the invention. [00:29:07] Speaker 04: But if they exclude somebody who's just operating under a license on the AFT, [00:29:11] Speaker 06: That's right. [00:29:13] Speaker 06: I think the purpose of that last definition of affiliates that we're talking about is that you cannot, or Disney cannot make someone an affiliate for the sole purpose of practicing the AFT path. [00:29:26] Speaker 01: Okay, so they have one other thing in their business. [00:29:30] Speaker 06: So that, so I don't think that's a reasonable interpretation of that last part of the definition of affiliates. [00:29:41] Speaker 06: California law says you have to turn to the business realities of the case and what the parties intended. [00:29:49] Speaker 06: And it's not reasonable to think that Disney could avoid its or get around the exclusive license that it granted to Luminara with a gratuitous grant of [00:30:09] Speaker 06: of a license assuming it could do that of the AFT patents and then the theme song to Aladdin. [00:30:19] Speaker 03: The reason the district court... I understand that your purposefulness argument in terms of overall what was attempting to be conveyed here, but under no state law can we read out terms expressly. [00:30:32] Speaker 03: So what is your best definition for how I construe or under license from [00:30:37] Speaker 03: because I can't construe it to solely be operated by because that's the predicate that came before. [00:30:43] Speaker 03: It sets out two different conditions, operated by or under license from. [00:30:49] Speaker 03: So they can't morph into just one. [00:30:51] Speaker 03: There's no state that allows me to do that when I'm construing language of contracts. [00:30:56] Speaker 03: So your thematic notions are well taken, but what do I do with that language? [00:31:02] Speaker 06: Well, I think a [00:31:05] Speaker 06: reasonable alternate construction of that language is that it's not just operated by the Walt Disney Company, but it's operated under a license from the Walt Disney Company. [00:31:16] Speaker 03: Well, that was rewritten entirely and removed the or, right? [00:31:19] Speaker 03: You just made it one condition instead of how it's clearly set out as two. [00:31:24] Speaker 03: And you actually added a condition to the operated by. [00:31:26] Speaker 03: Not only do you have to be operated by, it has to come in the form of a license. [00:31:30] Speaker 03: Can't be a ring in the cracker box. [00:31:33] Speaker 06: I think as a matter of standard written English, that is one way to read that clause is operated by or operated under license from the Walt Disney Company. [00:31:45] Speaker 01: In order for that to help you, you need some sort of narrowish concept of what it means to operate under the license. [00:31:54] Speaker 01: So let's agree for a minute that you could combine the under license phrase with the word operated. [00:32:00] Speaker 01: Nevertheless, why does that? [00:32:03] Speaker 01: How does that narrow in a way that would exclude Leon? [00:32:12] Speaker 06: Well, it implies operational control. [00:32:14] Speaker 06: That's the narrow construction of that. [00:32:17] Speaker 06: And to suggest that Disney would somehow grant Leon a license to operate, Disney as Disney, which I think is what the intent of that was. [00:32:29] Speaker 03: No, none of this says as Disney. [00:32:31] Speaker 03: They don't have to operate as Disney. [00:32:32] Speaker 03: Nothing in here says you have to assume the Disney name. [00:32:35] Speaker 03: And I don't see how you can morph that into anything here. [00:32:38] Speaker 03: And in fact, I went online just out of curiosity. [00:32:41] Speaker 03: And I was trying to figure out Euro Disney, Paris Disney, how are these things connected? [00:32:46] Speaker 03: And what I discovered is that there are lots of things that are under Disney's control that in fact don't have the Disney name at all, at least appear to be my extra record search on the web, which of course is completely accurate. [00:32:59] Speaker 03: I just, the point being, there's nothing here that says they have to change their name to Disney in order to be operated by, right? [00:33:07] Speaker 06: That's correct. [00:33:08] Speaker 03: Disney, I mean, you know, gosh, these big companies like Disney, they have a million little companies that they operate and don't share their name. [00:33:15] Speaker 03: And that don't share their name, though. [00:33:16] Speaker 06: That's true. [00:33:18] Speaker 04: Well, I understand that your response to all this is that there is the separate carve-out that says, regardless of whatever affiliates is defined as initially, [00:33:29] Speaker 04: that separately say, affiliates do not include people licensed only to the artificial plane technology. [00:33:37] Speaker 04: So clearly, Leon couldn't be licensed as an affiliate to do this, just what it's doing. [00:33:44] Speaker 04: That's right. [00:33:47] Speaker 04: So you say that only can't be talking about something gratuitous. [00:33:53] Speaker 04: It's got to be something [00:33:55] Speaker 04: more substantial. [00:33:56] Speaker 04: Where in the set of agreements, where in the agreements can we go to see what that more substantial thing must be? [00:34:07] Speaker 06: I don't think there's evidence in the record in that regard. [00:34:11] Speaker 06: And I think that I will concede that is an inartfully articulated clause. [00:34:18] Speaker 06: And when there is any ambiguity as to two definitions, we turn to [00:34:24] Speaker 06: under California law, the business realities of the case. [00:34:28] Speaker 06: And that is what Luminaro's is relying on. [00:34:34] Speaker 01: I'm sorry, what's inartfully phrased about this as opposed to unhelpfully phrased from your point of view? [00:34:46] Speaker 06: So I think that under a license from the Walt Disney Company, [00:34:54] Speaker 01: Are you talking about the section one at page 420 or were we talking about this? [00:35:00] Speaker 06: Oh, I'm sorry, the reservation of rights. [00:35:04] Speaker 06: Yeah, I think that what the parties as business entities were trying to achieve there was to prevent any [00:35:17] Speaker 06: a gratuitous circumvention of the exclusive license that Disney granted to Luminar. [00:35:23] Speaker 03: What if Disney licensed their entire IP portfolio? [00:35:26] Speaker 03: You even have the right to Mickey ears. [00:35:28] Speaker 03: So it wasn't just artificial flame technology. [00:35:30] Speaker 03: They licensed somebody their entire IP portfolio. [00:35:35] Speaker 03: They're not operated by, they're not under control by, they don't have a 50% share of, they maintain their separate name. [00:35:42] Speaker 03: Would that be enough under this contract? [00:35:47] Speaker 03: all IP rights, which for a company like Disney is, wow, lots. [00:35:54] Speaker 06: So the question is, would that be enough to make them an affiliate without the AFT or including the AFT? [00:36:06] Speaker 06: What's including? [00:36:07] Speaker 06: Sorry, the artificial flame technology. [00:36:09] Speaker 03: Yeah, everything. [00:36:10] Speaker 03: Yeah, of course. [00:36:12] Speaker 03: Everything, all IP rights. [00:36:15] Speaker 06: I don't think that that would qualify as being an affiliate. [00:36:24] Speaker 06: I think we have to come back to WIAV there and look at the Qualcomm situation. [00:36:30] Speaker 06: And I think the court in YAV said, OK, if that happens and Disney brings into its fold [00:36:45] Speaker 06: as an affiliate in that way, then you have removed the cause of action against that defendant. [00:36:53] Speaker 06: But right now, in this case, none of these defendants are affiliates, and there is an injury in fact, a constitutionally recognized injury in fact, that Disney currently has against these defendants that gives it constitutional standing. [00:37:22] Speaker 03: Do you want to move on and just address prudential standing a little bit? [00:37:28] Speaker 03: All substantial rights? [00:37:30] Speaker 06: Yes. [00:37:30] Speaker 06: Luminara granted to Disney all substantial rights. [00:37:33] Speaker 06: The most important one here is the right to enforce the patents. [00:37:37] Speaker 06: And that right is unencumbered. [00:37:40] Speaker 06: It's not subject to veto by Disney. [00:37:44] Speaker 06: Luminara can indulge infringements under that grant. [00:37:49] Speaker 03: But if that were the only factor, and suppose every other factor pointed the other way. [00:37:55] Speaker 03: I mean, I know we have cases that say that's the most important factor, but they still articulate the list of eight, you know, the Azure factors or whatever. [00:38:02] Speaker 03: Certainly. [00:38:03] Speaker 03: And so what, I mean, is there one that's so dominant, if that were the case, that it would just wipe everything else out? [00:38:10] Speaker 06: Well, there are other important rights, of course. [00:38:14] Speaker 06: One is the right to sub license. [00:38:15] Speaker 06: Disney has the ability to sub license this [00:38:18] Speaker 06: uh... it's rights and again that isn't and on that is the isn't just a chart sublicense luminara has the right to sublicense its rights and that is unfettered as well luminara also has the ability to assign uh... its rights to dispose of them now that is subject to uh... disney's consent which won't be unreasonably withheld but that isn't a sufficient derogation of this right uh... so so when we look at uh... [00:38:49] Speaker 06: The issues that undergird the prudential standing requirement, none of these defendants or any defendants can be subject to a second suit. [00:39:01] Speaker 06: No other party has the right to enforce the patents. [00:39:04] Speaker 06: And Leonis mentioned while you're also protecting the patentee. [00:39:09] Speaker 06: And as the panel has noted, Luminara has agreed to be [00:39:17] Speaker 06: fully bound by any result in any litigation or any challenge to the patents in front of the patent office, et cetera. [00:39:25] Speaker 06: So Disney granted to Luminara all substantial rights such that there really are no concerns, prudential concerns, so that Luminara can sue in its own name in this case. [00:39:42] Speaker 06: I'd like to also turn [00:39:44] Speaker 03: I assume that you would argue that even if you were wrong, and that if we thought Disney need to be joined, that we should nonetheless reach the other issues, right? [00:39:59] Speaker 06: Absolutely. [00:39:59] Speaker 03: Is that your view? [00:40:00] Speaker 03: We should reach the other issue, because all we'd be doing would be sending it back to the district court for a mandatory joiner. [00:40:07] Speaker 06: That's right. [00:40:08] Speaker 06: And the prudential standing requirement is, of course, curable. [00:40:12] Speaker 01: And do you think that [00:40:14] Speaker 01: Do you do have a right to compel Disney to join? [00:40:18] Speaker 01: Or do you happen to know whether the compulsion is not going to be necessary? [00:40:25] Speaker 01: Because Disney would do it not well. [00:40:27] Speaker 06: Yeah, I don't think there's evidence in the record to that effect. [00:40:29] Speaker 06: And I'm not comfortable saying what Disney would or would not do. [00:40:34] Speaker 01: What about the mandatory joiner, independent under the Arctic? [00:40:37] Speaker 06: Certainly there's an argument that they could be compelled to join as well. [00:40:41] Speaker 04: How do you compel them to join? [00:40:43] Speaker 04: I mean, our STC case says that Rule 19 and voluntary jointer is not available. [00:40:52] Speaker 04: So you would have to sue them in an independent lawsuit before you could compel them to join. [00:40:57] Speaker 04: And you'd have to establish that, in fact, they had an obligation to join. [00:41:02] Speaker 06: That's one hypothetical. [00:41:05] Speaker 03: Doesn't STC actually create an exclusion and acknowledge that jointer is mandatory for exclusive licensees? [00:41:13] Speaker 01: or at least you could so argue. [00:41:14] Speaker 03: But doesn't STC actually say it expressly? [00:41:17] Speaker 01: I don't know. [00:41:20] Speaker 03: This is the other way around. [00:41:23] Speaker 01: STC says you can't join a non-consenting one, but part of consent is having been a patent owner who gives exclusive licenses. [00:41:33] Speaker 01: That's independent wiring. [00:41:34] Speaker 06: Understood. [00:41:37] Speaker 03: Okay, go ahead. [00:41:38] Speaker 03: Why don't you move on since [00:41:40] Speaker 03: We now know that even if we go against you on standing, you would like us to address the merits, which is helpful. [00:41:47] Speaker 03: So let's move on to those merits. [00:41:49] Speaker 03: Pivoting. [00:41:50] Speaker 03: You should focus on pivoting. [00:41:51] Speaker 06: I will focus on pivoting, Judge Morris, since you've said that's the most important issue. [00:41:56] Speaker 01: How do you get to this multidimensional chaotic whirling dervish requirement? [00:42:04] Speaker 06: I can explain how the district court got to that. [00:42:07] Speaker 01: No, I don't mean psychologically. [00:42:08] Speaker 01: How do you justify it as I mean? [00:42:10] Speaker 06: Well, so I think the district court turned to, and properly so, turned to the desired effect that's stated in the preamble and that's stressed throughout the 166 patent to help ascertain the scope of the claim. [00:42:29] Speaker 06: And when the district court did that, Judge Nelson relied on Luminar's expert, Dr. Brown. [00:42:37] Speaker 03: Is flickering flame a claim limitation? [00:42:41] Speaker 03: You're saying rely on the preamble. [00:42:42] Speaker 03: Preamble's not normally, generally, it's not a claim limitation. [00:42:45] Speaker 03: It's an exceptional case. [00:42:46] Speaker 03: And I didn't see that flow from this case. [00:42:50] Speaker 06: It didn't flow from the district court's decision because I don't think any party put that particular issue in front of the district court. [00:42:59] Speaker 06: I think it's an open question whether the preamble is limiting. [00:43:04] Speaker 06: But I don't think, ultimately, it has to be to still distinguish [00:43:09] Speaker 06: claim one from the 455 Schnuckel patent. [00:43:15] Speaker 06: So the hallmark of anticipation, of course, is prior invention. [00:43:22] Speaker 06: Somebody got there first. [00:43:24] Speaker 06: And what the Schnuckel 455 patent describes is a well-known gimbal mechanism that supports a light channel that has effectively two degrees of rotational freedom. [00:43:37] Speaker 06: The aha moment here for the inventor was recognizing that I don't have to constrain the pendulum to rotate about the flame support element if I can configure the hole so that the hole is free to pivot where it's supported by the flame support. [00:44:02] Speaker 01: So maybe some narrow claim does that, or maybe it doesn't. [00:44:05] Speaker 01: But we have only claim one here. [00:44:07] Speaker 06: So I think that's supported by claim one. [00:44:10] Speaker 06: The question is whether it's required by claim one. [00:44:14] Speaker 06: It's required by claim one, of course. [00:44:18] Speaker 06: And it comes, of course, in the last element of the pendulum member. [00:44:22] Speaker 06: You have a hole. [00:44:23] Speaker 06: The hole is configured. [00:44:27] Speaker 06: to receive the flame support element such that the body is free to pivot when supported by the flame support element. [00:44:35] Speaker 01: So you need, but then what you need, and I guess everybody, this is the way the case has been presented, is a particular meaning of the term pivot that means something more than this, maybe even something more than this and this, but something else. [00:44:51] Speaker 06: Something more than a constrained rotation about an axis. [00:44:57] Speaker 06: And I think that when you turn to column seven, at the bottom of column seven in the 166 patent, the patentee distinguished a gimbal mechanism from what it describes as an alternative pivotal mounting provided by the combination of the pivot hole and support element. [00:45:18] Speaker 06: Now, Leon has tried to characterize that as an alternative and claimed embodiment. [00:45:24] Speaker 01: I'm sorry. [00:45:26] Speaker 01: What was that? [00:45:26] Speaker 06: I'm at the bottom of column seven of the 166 patent. [00:45:30] Speaker 06: It's at A164. [00:45:32] Speaker 06: And I'm at line 58. [00:45:35] Speaker 06: So after describing what the 166 patent describes as a pivotally mounted support, it says that other mechanisms, such as a gimbal or other joints, [00:45:49] Speaker 06: allowing multi-axis movement as opposed to free pivoting movement may be used as an alternative to the pivotal mounting provided by the combination of the pivot hole and support element. [00:46:02] Speaker 06: So when you read that distinction between a gimbal mechanism and what the patent refers to as a pivotally mounted mechanism, you see that in [00:46:16] Speaker 06: claim one, what the patentee intended to do there, and what one of ordinary skill in the art would have understood, is that we are in a hole configured to receive a flame support element such that you are free to pivot when supported by the flame support element about that hole. [00:46:34] Speaker 04: But earlier in that same column, so if you go up to line 24 down to about 36, it talks about the nature of the [00:46:45] Speaker 04: support element defining the level of chaoticness, if that's a word, or the extent to which the movement is chaotic is a better phrasing. [00:46:57] Speaker 04: And it actually says that in other embodiments, though, it's preferable that the support element is rigid or semi-rigid and does not move with the pendulum member, which would imply that in those circumstances, even though it would still have to pivot, the movement wouldn't be chaotic. [00:47:15] Speaker 06: There are multiple ways to achieve the pivoting there, and it can be achieved with a rigid support member as well. [00:47:28] Speaker 06: What the 166 patent focuses on is how do you configure this hole in the pendulum to get a better flickering flame effect, better than what you could get with the, you know, there's a common inventor between those two, better than what you could get with a gimbal [00:47:46] Speaker 06: mechanism. [00:47:47] Speaker 06: So it's all about how is that hole configured? [00:47:48] Speaker 06: How far down the pendulum do you put the hole? [00:47:51] Speaker 06: How big do you make the hole? [00:47:53] Speaker 06: And then in addition, there are other things you can do with the flame support member to increase that. [00:48:00] Speaker 06: So when you look at the totality of the 166 patent specification, as we have to do, and you look at what is being claimed here, it's a pendulum member, a hole below the body of the flame silhouette element. [00:48:14] Speaker 06: And that hole has to be configured [00:48:16] Speaker 06: such that it's free to pivot when supported by the flame support element. [00:48:20] Speaker 03: But why does it have to pivot in more than two dimensions? [00:48:25] Speaker 03: Why do you have to have more than two dimensions? [00:48:30] Speaker 03: Two axes, why? [00:48:32] Speaker 03: You could be chaotic in one axis. [00:48:35] Speaker 06: It could. [00:48:37] Speaker 06: Certainly you can have chaotic pivoting around one axis. [00:48:40] Speaker 06: A single axis. [00:48:41] Speaker 03: And you can certainly have it around two. [00:48:42] Speaker 03: So why does it have to be more than two? [00:48:44] Speaker 03: Why didn't the district court err [00:48:46] Speaker 03: when it went so far as to say it has to be more than two. [00:48:50] Speaker 06: Well, I don't think it has to be more than two to still be distinguishable from Schnuckel. [00:48:58] Speaker 06: I don't think it's the number of dimensions, per se. [00:49:02] Speaker 06: I think why the district court didn't err when it addressed that argument is that it relied on Luminar as expert in that case to ascertain the scope of that plan element. [00:49:15] Speaker 03: The word is pivot. [00:49:16] Speaker 03: I don't understand why it has to be in three dimensions. [00:49:20] Speaker 03: So it's not just... I don't even know how to pivot in three dimensions. [00:49:23] Speaker 06: It's not just the word pivot. [00:49:25] Speaker 06: I think the main, just to answer that very... The word is pivot. [00:49:28] Speaker 03: That's the word we're considering. [00:49:29] Speaker 03: The body is free to pivot. [00:49:31] Speaker 03: Free to doesn't multiply the dimensions. [00:49:36] Speaker 06: I think free to pivot certainly implies that you are doing more than [00:49:42] Speaker 06: rotational. [00:49:43] Speaker 06: What is missing from Schnuckel is the ability to twist. [00:49:47] Speaker 06: Just to say, how can you pivot it more in three dimensions? [00:49:50] Speaker 06: In Schnuckel you can go this way, and in the gimbaled mechanism you can go this way, but you do not have the ability to twist. [00:50:00] Speaker 03: That's, and that is... But that's not the plain definition of free to pivot. [00:50:06] Speaker 03: So, I mean that, you're now, you want me to read into the definition all of [00:50:12] Speaker 03: what you say is necessary to distinguish from that prior art? [00:50:18] Speaker 06: The alternate theory that was put before the district court which she addressed in a footnote because she thinks she needed to address it given what she did with free to pivot was the nature of a whole that is configured to support [00:50:38] Speaker 06: that when supported by the flame support element allows this free to pivot, free to pivot idea. [00:50:45] Speaker 01: Can I ask you a, I guess, a kind of, I don't know whether it's a physics question or a mechanics question or something. [00:50:55] Speaker 01: If you have the support element going through the hole, the only way, tell me if this is wrong, the only way you could get [00:51:07] Speaker 01: pivoting like this is to make the hole bigger. [00:51:10] Speaker 01: And that's what claim 14 does by way of narrowing. [00:51:13] Speaker 01: Doesn't that almost prove that claim one doesn't require that? [00:51:17] Speaker 01: Unless there's some other way beside... I mean, if the hole is hugging the rod, it can't move in that direction, right? [00:51:28] Speaker 01: Or can it? [00:51:29] Speaker 06: I can envision another way. [00:51:31] Speaker 06: You could have a hole... A wedge-shaped thing. [00:51:33] Speaker 06: Yeah, wedge-shaped in the shape [00:51:34] Speaker 06: of an hourglass that comes through. [00:51:36] Speaker 06: In that case, the hole would be configured such that you can get that third dimension. [00:51:45] Speaker 06: But again, when you look at how one of ordinary skill in the art would read this claim in view of the 166 patent specification and in view of the 455 patent, which doesn't talk about pivots or pendulums, a pivot is simply the point of rotation in a lever system. [00:52:04] Speaker 06: A pendulum is a weight supported by a pivot, and that's the way the patentee here chose to claim this innovation, and he distinguished it, explicitly distinguished it from a gimbal mechanism in the specification at the bottom of Column 7. [00:52:23] Speaker 03: Do you have any final thoughts? [00:52:27] Speaker 06: No, Your Honor. [00:52:28] Speaker 03: Okay. [00:52:28] Speaker 03: Thank you, Mr. Wright. [00:52:30] Speaker 03: I'll give two minutes of rebuttal to Mr. Bagatell. [00:52:42] Speaker 00: I appreciate that I'm on borrowed time. [00:52:44] Speaker 04: And I'm going to borrow some of it myself. [00:52:47] Speaker 04: So can we start where he ended up? [00:52:49] Speaker 04: Sure. [00:52:49] Speaker 04: He said there's an explicit distinction from a gimbal mechanism at the bottom of Column 7. [00:52:56] Speaker 04: Do you agree with that? [00:52:57] Speaker 00: No. [00:52:58] Speaker 00: Well, I do agree that Column 7 discusses a gimbal mechanism as an alternative embodiment of the invention. [00:53:05] Speaker 00: And it says that's an alternative [00:53:07] Speaker 00: to the pivot hole 112 and the support element 113. [00:53:10] Speaker 00: Namely, if you look at figure one where that is shown, that's that V-shaped embodiment. [00:53:15] Speaker 00: So they're describing you don't have to do figure one, which is our point. [00:53:19] Speaker 00: This is not any kind of a disclaimer of all gimbal mechanisms. [00:53:24] Speaker 00: That's certainly not the ground on which the district court will... So you think this actually supports you? [00:53:28] Speaker 00: I do. [00:53:29] Speaker 00: And I think your point is exactly right. [00:53:31] Speaker 00: It lists a whole lot of different potential embodiments. [00:53:34] Speaker 00: Nowhere does this specification suggest that the invention is limited to this flexible line thing where it's got a dip in a bigger hole. [00:53:43] Speaker 00: That's all discussed in dependent claims. [00:53:45] Speaker 00: 1419 talks about the dip. [00:53:48] Speaker 04: And do I understand correctly that the description of the chaotic movement is often referenced as it relates to the changes in the electromagnetic field as opposed to the pivot? [00:54:02] Speaker 00: Yeah, it's true. [00:54:03] Speaker 00: The patent talks about a bunch of different ways to move things around, including variations in the electromagnetic field. [00:54:11] Speaker 00: All we have to have at the end of the day in this claim is some sort of a hole with a support member so that it's free to pivot in some way. [00:54:20] Speaker 00: It doesn't discuss all those articulating mechanisms. [00:54:24] Speaker 00: I suppose you could also have wind or a blowing mechanism or something like that for purposes of this patent. [00:54:30] Speaker 00: because it doesn't require all the rest of that stuff. [00:54:33] Speaker 00: But the patent as a whole is talking about a variety of ways to articulate the thing. [00:54:39] Speaker 00: And really, to the extent there's any requirement, it's kineticness, which means that it's moving all the time, and we certainly have that in the prior. [00:54:48] Speaker 03: Okay, Mr. Becatel, thank you very much. [00:54:50] Speaker 03: I thank both counsel for their argument. [00:54:52] Speaker 03: The case is taken under submission.