[00:00:18] Speaker 04:
Next case is Mayfair Wireless v. Skelco Verizon AT&T Sprint et al.

[00:00:27] Speaker 04:
2014-1587.

[00:00:29] Speaker 04:
Mr. Kotcher.

[00:00:31] Speaker 01:
Good morning, Your Honor.

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

[00:00:36] Speaker 01:
At issue is a magistrate judge's decision as adopted in full by the District Court, in which the magistrate judge found two alleged breaks in the chain of title of offense.

[00:00:46] Speaker 01:
Both of these alleged breaks involved the transfer of title pursuant to UCC foreclosure sales.

[00:00:54] Speaker 01:
All the parties connected with the sales, all the parties agreed and abided by the patents being transferred pursuant to the sales.

[00:01:01] Speaker 01:
Not a single party objected to the sale.

[00:01:03] Speaker 01:
None of the parties under state law could now object to the sales.

[00:01:07] Speaker 01:
If the magistrate judge's decision is upheld, the patent at issue would effectively be rendered onerous, as if it never existed in the first place.

[00:01:17] Speaker 04:
Well, there certainly were a lot of things going on here.

[00:01:20] Speaker 01:
I agree with that, Your Honor.

[00:01:22] Speaker 04:
What you said sounds like an injustice, but there are a lot of things going on that the purported owners were responsible for.

[00:01:33] Speaker 01:
There were certainly, this is not the simplest chain of title case, I certainly understand that.

[00:01:38] Speaker 00:
No, and I mean, you're saying it would be ownerless.

[00:01:39] Speaker 00:
Well, if we agreed with you on the first lapse wasn't a lapse,

[00:01:44] Speaker 00:
But we didn't agree with you on the second, so wouldn't the patent be sitting in the caulkers of technology alternatives right now?

[00:01:50] Speaker 01:
Technology alternatives, for two reasons it would not.

[00:01:54] Speaker 01:
Technology alternatives consented to the patent being pledged to services by design laws.

[00:02:00] Speaker 00:
You didn't hear the disagree with you part?

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

[00:02:02] Speaker 00:
If we agree with you on the first lap, but not the second,

[00:02:07] Speaker 01:
The second last is the transfer to technology alternatives.

[00:02:10] Speaker 00:
Technology alternatives to TechAlt to design whatever.

[00:02:15] Speaker 00:
So if we don't agree with you on that one, if we don't think that transfer from TechAlt to design was any good because we don't agree there was consent by technology alternatives, doesn't the patent sit with technology alternatives now?

[00:02:26] Speaker 00:
Or is that a defunct corporation?

[00:02:28] Speaker 01:
Technology alternatives is a defunct corporation.

[00:02:30] Speaker 01:
It's no longer in existence.

[00:02:32] Speaker 01:
Technology alternatives allowed the patent.

[00:02:34] Speaker 00:
So where did all of its assets go?

[00:02:37] Speaker 01:
Presumably reverted to its owners.

[00:02:38] Speaker 00:
So they're the ones in possession of the patent now, if we disagree with you on this second point.

[00:02:43] Speaker 00:
It's not that the patent doesn't exist and nobody owns it.

[00:02:46] Speaker 00:
It exists and somebody owns it.

[00:02:47] Speaker 00:
It's just a question of who.

[00:02:49] Speaker 01:
But under pubs of champagne.

[00:02:51] Speaker 01:
Under what?

[00:02:51] Speaker 01:
Pubs of champagne, a great name.

[00:02:54] Speaker 01:
The Seventh Circuit case interpreting Illinois UCC law.

[00:02:59] Speaker 01:
Technology, in all terms, is a stop from claiming any sort of interest in the patent today.

[00:03:06] Speaker 01:
And also, it consented to the patent being pledged to services by DesignWise.

[00:03:12] Speaker 01:
Jim Solomon, who is the CEO of Technology Alternatives, was also the CEO of TechAlt.

[00:03:18] Speaker 04:
TechAlt never got the patent.

[00:03:21] Speaker 01:
TechAlt was the parent corporation's technology alternatives.

[00:03:24] Speaker 01:
That's correct.

[00:03:24] Speaker 04:
Yes.

[00:03:25] Speaker 04:
Moreover, the problem goes all the way back when only two out of six inventors signed to GUI Tech.

[00:03:35] Speaker 01:
Well, two of the six assignments were recorded with the PTO.

[00:03:39] Speaker 01:
The subsequent four inventors signed assignments.

[00:03:44] Speaker 01:
They assigned the patent to the extent it hadn't been assigned previously, which we respectfully believe it had.

[00:03:49] Speaker 01:
They assigned it to Mayfair.

[00:03:51] Speaker 04:
Yes, but a lot of it happened in the meantime, and maybe they no longer had the right to assign to Mayfair.

[00:03:58] Speaker 01:
Well, we don't think they had title to the patent because the patent was assigned initially to GUI tech.

[00:04:05] Speaker 01:
GUITECH was the owner of the patent.

[00:04:07] Speaker 01:
And GUITECH, abided by UCC foreclosure sale, was the patent, the patent application.

[00:04:12] Speaker 04:
And then you had the Hillsdale problem.

[00:04:15] Speaker 04:
Yes.

[00:04:15] Speaker 04:
It was a security agreement.

[00:04:17] Speaker 04:
And Hillsdale took over as a result of that.

[00:04:23] Speaker 04:
Yes.

[00:04:24] Speaker 04:
And it was a failure of proof.

[00:04:27] Speaker 04:
It wasn't a bill of sale showing that they were entitled to ownership.

[00:04:32] Speaker 01:
Well.

[00:04:34] Speaker 04:
We're skipping around, but the problem is that there are so many flaws in this chain.

[00:04:39] Speaker 01:
Well, to be clear about the proof, we had a sworn statement from GUITECH CEO that the patent went from GUITECH to Hinsdale.

[00:04:47] Speaker 01:
We had the fact that Hinsdale had a security agreement that encompassed the patent application.

[00:04:51] Speaker 01:
We have that Hinsdale foreclosed on GUITECH's assets, including the patent application, and then purchased GUITECH's assets at a UCC sale.

[00:05:01] Speaker 03:
That's what we don't know.

[00:05:02] Speaker 03:
We don't know if the UCC sale took place.

[00:05:05] Speaker 01:
Well, there is one document that we don't have.

[00:05:08] Speaker 01:
We do have the GUI tech CEO.

[00:05:10] Speaker 01:
Subsequent to the sale, he filed a sworn statement with the PTO.

[00:05:13] Speaker 03:
But that can be self-serving.

[00:05:15] Speaker 03:
Fair enough.

[00:05:17] Speaker 03:
I looked at the retail floor and I didn't see any evidence that the sale actually took place.

[00:05:22] Speaker 03:
There's a notice that we don't know if it was ever published or if it went out.

[00:05:27] Speaker 03:
There's nothing there.

[00:05:29] Speaker 01:
Well, we do not have the bill of sale.

[00:05:31] Speaker 01:
And the reason we don't is because Hensdale Bank wouldn't produce that absent a subpoena.

[00:05:37] Speaker 01:
Discovery has not started in the case.

[00:05:40] Speaker 01:
I called Hensdale Bank personally.

[00:05:42] Speaker 01:
It tries to say, can we get the bill of sale?

[00:05:45] Speaker 01:
And they said, we need a subpoena in order to do that.

[00:05:47] Speaker 01:
We were dealing with this with the motion to dismiss at that time.

[00:05:51] Speaker 01:
And so respectfully, to the extent that there's any factual question,

[00:05:56] Speaker 01:
at issue here.

[00:05:57] Speaker 01:
We respectfully submit that we should be afforded the opportunity to take discovery to resolve this fact.

[00:06:02] Speaker 03:
At that point, wouldn't you make the bank a named party in the lawsuit?

[00:06:08] Speaker 01:
I don't know, quite frankly, I don't know under what theory.

[00:06:10] Speaker 01:
They're not an infringer so far as we know, and maybe we could interpleat them.

[00:06:17] Speaker 01:
What occurred to me is calling them and trying to get the bill of sale.

[00:06:22] Speaker 01:
They said, please submit to us a subpoena.

[00:06:24] Speaker 01:
And so, well, we did not submit a subpoena.

[00:06:34] Speaker 01:
That's correct.

[00:06:35] Speaker 01:
But we believe that if that's an issue, we believe that we should have the opportunity to submit a subpoena in discovery.

[00:06:43] Speaker 01:
Now, the appellees here, when we were in the lower court, we had this issue about a presumption that technology alternatives is the proper assignee and patentee.

[00:06:54] Speaker 01:
The district court, the magistrate found that there is a presumption.

[00:06:57] Speaker 01:
The penalties admitted that the presumption existed.

[00:07:00] Speaker 01:
If that presumption existed at all, there's not a need for further discovery.

[00:07:04] Speaker 01:
We have the factual record that's consistent with the notion that the chain of title was appropriate from GUI tech through technology.

[00:07:11] Speaker 00:
I don't understand the presumption you're talking about.

[00:07:13] Speaker 00:
There's a presumption that if an assignment is recorded with the PTO, that it is valid.

[00:07:19] Speaker 00:
But this assignment was never recorded with the PTO.

[00:07:21] Speaker 00:
So what is the presumption you're talking about?

[00:07:23] Speaker 01:
The presumption is, if the patent issues to the patentee, that the patentee is the rightful owner.

[00:07:29] Speaker 01:
So the patentee, in order to satisfy the PTO's own standards to issue a patent, has to satisfy the PTO director that he or she or it is the rightful owner of the patent.

[00:07:40] Speaker 00:
It has to, but you know, stranger things have happened that the Patent Office makes mistakes.

[00:07:45] Speaker 00:
Here, there is no assignment that was ever provided to the Patent Office.

[00:07:49] Speaker 00:
So technically, under its rules, it should not have listed whoever it was.

[00:07:55] Speaker 00:
I can't keep track of all these people as the Patent D, because no assignment was actually filed with the PTO.

[00:08:01] Speaker 00:
A notice of assignment, ala.

[00:08:03] Speaker 01:
3B.

[00:08:04] Speaker 00:
Yeah.

[00:08:05] Speaker 00:
But usually, that's a single document.

[00:08:07] Speaker 00:
In most cases, in my experience, it's

[00:08:09] Speaker 00:
not really notice of an assignment.

[00:08:11] Speaker 00:
It's like, here's a document contemporaneous with the assignment that we are recording in the patent office.

[00:08:15] Speaker 00:
I haven't seen this sort of, let me file a notice of an assignment without an actual assignment.

[00:08:21] Speaker 01:
Right.

[00:08:22] Speaker 01:
Well, two responses to that.

[00:08:23] Speaker 01:
One, the magistrate did find that that notice of assignment satisfied the standards for

[00:08:28] Speaker 00:
That doesn't satisfy the standard for whether or not an assignment is recorded with the PTO, which is the only place I know of where a presumption vis-a-vis an assignment and ownership arises.

[00:08:40] Speaker 01:
Fair enough.

[00:08:42] Speaker 01:
But we don't know exactly what other documents were submitted to the PTO.

[00:08:47] Speaker 01:
We have that notice of assignment.

[00:08:49] Speaker 00:
What do you mean you don't know what other documents were submitted to the PTO?

[00:08:51] Speaker 00:
Are you suggesting that something was lost in prosecution?

[00:08:55] Speaker 01:
I'm not, Your Honor.

[00:08:56] Speaker 01:
There's no other document besides the Notice of Assignment that we have that would be constituted in assignment.

[00:09:02] Speaker 00:
So never filed in this case was a recorded assignment.

[00:09:07] Speaker 00:
Under those circumstances, I'm pretty sure the PTO was not supposed to list.

[00:09:12] Speaker 00:
Technology alternatives.

[00:09:14] Speaker 00:
No, not the technology alternatives or GUI tech or HINTSAL.

[00:09:17] Speaker 01:
The patent issued to technology alternatives.

[00:09:19] Speaker 01:
Okay.

[00:09:20] Speaker 01:
But going back to the only break in the chain of title, pre-issuance.

[00:09:24] Speaker 01:
That break that the court found was between Goitech and Hinsdale pursuant to a UCC foreclosure sale.

[00:09:30] Speaker 00:
But they also found something between Tech Alternatives and TechAlt.

[00:09:33] Speaker 01:
That was after the patent issued.

[00:09:34] Speaker 00:
Right.

[00:09:35] Speaker 01:
So there's two.

[00:09:35] Speaker 01:
There's one pre-issue and there's one post-issue.

[00:09:39] Speaker 04:
Yes, but that ultimately relates to whether Mayfair is a proper plaintiff here.

[00:09:46] Speaker 04:
If there was a defect between technology alternatives and TechAlt, that affects the result

[00:09:54] Speaker 04:
as well.

[00:09:55] Speaker 04:
And if I'm remembering correctly, TA, Technology Alternatives, didn't assign to TechAlt.

[00:10:05] Speaker 04:
It became a sub of TechAlt, which is a different story.

[00:10:09] Speaker 01:
It became a subsidiary of TechAlt.

[00:10:11] Speaker 01:
But bear in mind, what we're talking about here are transfers of the patent pursuant to UCC foreclosure sales.

[00:10:18] Speaker 01:
And so Technology Alternatives consented to TechAlt assigning the patent as collateral.

[00:10:24] Speaker 01:
Technology alternatives did not object to the UCC foreclosure sale.

[00:10:29] Speaker 01:
That happened 10 years ago.

[00:10:31] Speaker 01:
Technology alternatives under state law, if you look at pubs of Champaign, if you look at the Chicago Title case, if you look at the Bryant case, when it doesn't stand up and say during, of course, the UCC sale, we clearly had noticed that it was patents going from one party to another.

[00:10:47] Speaker 00:
It's then a stop from challenging

[00:10:49] Speaker 00:
It has an ownership interest.

[00:10:51] Speaker 00:
That part, I agree with you on.

[00:10:52] Speaker 00:
What I don't get to is, therefore, it actually transferred.

[00:10:55] Speaker 00:
That's the part that I feel like isn't quite right about what you're saying.

[00:10:58] Speaker 01:
Well, if it's a stop from asserting an ownership interest.

[00:11:02] Speaker 00:
Maybe you're right.

[00:11:03] Speaker 00:
Nobody owns it.

[00:11:04] Speaker 00:
Maybe I'll go back to the very first thing you stood up and said.

[00:11:06] Speaker 00:
OK, nobody owns it.

[00:11:07] Speaker 01:
That's the point.

[00:11:08] Speaker 01:
If it's a stop, it can't stand up and say, we have an ownership interest in this.

[00:11:13] Speaker 01:
The UCC foreclosure sale has got to have a degree of finality to it.

[00:11:18] Speaker 01:
So when technology alternatives says, OK, we're going to allow this to be part of the UCCA foreclosure sale, we're going to allow it to be used as collateral.

[00:11:27] Speaker 00:
Even though you don't own it?

[00:11:28] Speaker 01:
Technology alternatives owns it.

[00:11:30] Speaker 00:
Yeah, but we're going to allow TechAlt, who doesn't own it, to use something as collateral as they don't own.

[00:11:35] Speaker 01:
Yes.

[00:11:36] Speaker 01:
And pubs of champagne, a third party can allow someone to use their collateral to sign it, to use their property as collateral and security.

[00:11:48] Speaker 01:
And then, pursuant to the foreclosure sale, they're not standing up and saying, OK, we object because we want our path.

[00:11:55] Speaker 01:
They didn't say that.

[00:11:56] Speaker 01:
They were clearly on notice.

[00:11:57] Speaker 01:
Jim Solomon was part of that.

[00:11:59] Speaker 01:
He was the CEO of Technology Alternatives, in addition to being the CEO of TechAlt.

[00:12:03] Speaker 01:
So I would encourage you to look at the last two paragraphs of Sky Technologies and the policy rationale for why we need finality in UCC foreclosure sales.

[00:12:12] Speaker 04:
Mr. Kutcher, into your rebuttal time, you can continue.

[00:12:16] Speaker 04:
It's your turn.

[00:12:16] Speaker 01:
I will wait for a moment.

[00:12:18] Speaker 01:
Thank you, Your Honor.

[00:12:19] Speaker 04:
Mr. Franklin.

[00:12:25] Speaker 02:
Who owns this factory?

[00:12:27] Speaker 02:
Your Honor, we don't necessarily know who owns it.

[00:12:29] Speaker 02:
We know Mayfair has not shown that they own it.

[00:12:32] Speaker 02:
And that is not on us.

[00:12:34] Speaker 02:
That is on them, and that is on their predecessors.

[00:12:36] Speaker 04:
What about the final assignment by all six inventors to make it?

[00:12:40] Speaker 04:
Right.

[00:12:41] Speaker 02:
That did not cure the problem, because as everyone admits,

[00:12:46] Speaker 02:
At least two of them, and most likely six of them, assigned their rights prior to that to another company.

[00:12:52] Speaker 04:
So the later... In other words, the six inventors no longer had a title to the patent.

[00:12:59] Speaker 04:
Right.

[00:13:00] Speaker 04:
And in the attempt to rectify all these potential problems, they couldn't do that.

[00:13:06] Speaker 02:
Right.

[00:13:06] Speaker 02:
Mayfair's never made an argument that that rectifies the problem, and it couldn't, because that was a belt and suspenders kind of a thing.

[00:13:13] Speaker 02:
They did not have the right at that point to give to Mayfair.

[00:13:18] Speaker 02:
I could take these in Crown Law's quarter.

[00:13:20] Speaker 02:
I think I probably should.

[00:13:21] Speaker 03:
Was there an obligation for Hinsedale to file a bill of sale on that foreclosure?

[00:13:28] Speaker 02:
File it with the PTO, Your Honor?

[00:13:30] Speaker 03:
The PTO or with the state?

[00:13:33] Speaker 02:
It owes a secured interest now.

[00:13:35] Speaker 02:
I don't know about the state, Your Honor, but if there were a public foreclosure sale, then there would have been some sort of a public notice.

[00:13:41] Speaker 02:
And I would say on that regard, there is no evidence that there ever was a foreclosure sale.

[00:13:47] Speaker 02:
My colleague over here refers to the statement that was made by GUI Tech CEO a year later, which, as Your Honor points out, could be self-serving.

[00:13:57] Speaker 02:
That statement actually only said that Hinsdale Bank took possession of

[00:14:01] Speaker 02:
the patents pursuant to an execution of a security interest.

[00:14:04] Speaker 02:
That's just the first step in a security, a foreclosure, is a repossession.

[00:14:08] Speaker 02:
The next step and the critical step under Sky Technologies is the foreclosure sale itself.

[00:14:14] Speaker 02:
And following the repossession, a number of different things could have happened.

[00:14:17] Speaker 02:
The Hinsdale could have reached an agreement with GUITECH, in which case GUITECH would retain the rights in the collateral.

[00:14:24] Speaker 02:
Hinsdale could have

[00:14:25] Speaker 02:
sold it to someone else.

[00:14:26] Speaker 02:
It could have been a private sale, not a public sale, which would require... Yeah, but there's no evidence of any of that.

[00:14:32] Speaker 00:
And nobody else... GUI Tech certainly didn't act at any relevant point after these moments as though it owned the patent.

[00:14:39] Speaker 00:
I mean, you've got a reported sale that took place.

[00:14:43] Speaker 00:
You've got a CEO testifying that it, in fact, did take place.

[00:14:47] Speaker 00:
We don't have it in writing, but as far as I can tell, this is the one exception to the writing requirement, right?

[00:14:51] Speaker 00:
So I don't know.

[00:14:52] Speaker 00:
I feel like you're asking me to make the one exception to the writing requirement require writing.

[00:14:57] Speaker 02:
No, Your Honor.

[00:14:58] Speaker 02:
I think what we're asking you to do is to make sure that there is evidence that that exception is satisfied.

[00:15:02] Speaker 00:
But the CEO came along and said it happened.

[00:15:05] Speaker 02:
No, he didn't say.

[00:15:06] Speaker 02:
My only clarification I was going to point out is that he didn't say foreclosure sale happened.

[00:15:10] Speaker 02:
He said Innsdale Bank took possession of the patents, whatever that means, by execution of a security interest.

[00:15:16] Speaker 02:
That is only the first step.

[00:15:17] Speaker 02:
in a foreclosure.

[00:15:19] Speaker 02:
He did not say that there was a foreclosure sale.

[00:15:22] Speaker 02:
And that is the bill of sale, Your Honor.

[00:15:24] Speaker 02:
That's what would be the bill of sale.

[00:15:26] Speaker 03:
And if it were a private sale, for example... When the CEO says that the bank took possession of the past, and these are business individuals, and when we look at the word possessed, wouldn't that show that or lead us to believe that the bank took ownership

[00:15:44] Speaker 02:
No, Your Honor.

[00:15:45] Speaker 02:
I think under foreclosure law, that would just be a possession.

[00:15:48] Speaker 02:
Possession means that you then have to dispose of the collateral.

[00:15:51] Speaker 02:
And it is not on us, I guess, is what I'm trying to say.

[00:15:53] Speaker 02:
They made fair at all times.

[00:15:55] Speaker 02:
They are the party asserting the right to prosecute this patent.

[00:15:59] Speaker 02:
They have the burden of proving that they have title to the patent.

[00:16:04] Speaker 02:
And they did not do that.

[00:16:05] Speaker 02:
They did not issue a subpoena, Your Honor, and parties routinely issue or seek jurisdictional discovery.

[00:16:12] Speaker 02:
They knew two years before the magistrate judge ruled that they claim anyway, it's not evidence, they claim that the Hinsdale was going to produce it with a subpoena.

[00:16:23] Speaker 02:
They made no effort to secure a subpoena and there's nothing in their brief to this court that mentions any question about discovery.

[00:16:32] Speaker 02:
And I would also add that it's at page 617, I believe, of the record when the magistrate judge expressly asked them at the hearing, do you need discovery?

[00:16:42] Speaker 02:
They said, no, Your Honor, we don't think there's a need to take discovery on this.

[00:16:46] Speaker 02:
And this issue is exactly what we're talking about now.

[00:16:49] Speaker 02:
So what we have here is just simply, Mayfair, as the party with the burden of proving title, has failed to prove that title.

[00:16:57] Speaker 02:
And that's nothing unusual about that.

[00:16:59] Speaker 02:
In terms of the ownership, yes, Your Honor, we don't know exactly who owns it.

[00:17:04] Speaker 02:
But I do agree with, I think, Judge Moore's original comments, that somebody owns the rights to this.

[00:17:10] Speaker 02:
It's just a matter that they did not

[00:17:12] Speaker 02:
prove who it is.

[00:17:13] Speaker 02:
And I would also add that there is a reason behind these rules.

[00:17:17] Speaker 02:
The federal law requires the written assignment to make patent transactions similar to those involving transactions in land.

[00:17:26] Speaker 02:
And the reason is so that everyone knows exactly who owns it and who does not.

[00:17:31] Speaker 02:
And in this case, the reason we don't know is that the procedures weren't followed.

[00:17:36] Speaker 02:
And if there's going to be an exception to the requirement, and it should be a limited one in our view,

[00:17:40] Speaker 02:
for foreclosures, there has to be at least clear evidence, as there was in Sky Technologies, that all of the foreclosure procedures were followed and that this was, in fact, an operation of law.

[00:17:52] Speaker 02:
I would like to turn at this point, if I might, to the second break in title, which was, so even assuming for the sake of argument that the patent somehow passed or made its way to technology alternatives, there is admittedly no written assignment of any interest in the patent

[00:18:10] Speaker 02:
from Technology Alternatives to TechAlt.

[00:18:13] Speaker 02:
There's no dispute about that.

[00:18:15] Speaker 04:
The TA became a subsidiary of TechAlt.

[00:18:20] Speaker 02:
Eventually they did, Your Honor, and it was, I think, assumed by the parties that the patent would be transferred following that transaction.

[00:18:31] Speaker 02:
But as this court ruled, and there was no assignment, and as this court ruled in Abraxis, and this is clear precedent of this court,

[00:18:38] Speaker 02:
The fact that they are parenting of subsidiaries doesn't transfer the patent.

[00:18:41] Speaker 02:
You still need that written assignment of the interest in the patent.

[00:18:45] Speaker 02:
So they refer to the subsequent foreclosure, but all of the documentation of that foreclosure makes clear that it was simply the assets of TechAlt being transferred to SBD.

[00:18:58] Speaker 02:
TechAlt never validly received any interest in the patent.

[00:19:02] Speaker 02:
Was TA an asset of TechAlt?

[00:19:05] Speaker 02:
You mean that was technology, you're saying TA's technology alternatives?

[00:19:08] Speaker 02:
Technology alternatives.

[00:19:09] Speaker 02:
Was that an asset of TechAlt?

[00:19:11] Speaker 02:
Right, it was a sub.

[00:19:14] Speaker 02:
It was not an asset that passed in the foreclosure, Your Honor.

[00:19:17] Speaker 02:
If you look at the security agreement, there's nothing about, I don't know that you can foreclose on a subsidiary, but there you're probably getting beyond my knowledge of UCC law.

[00:19:26] Speaker 02:
I think UCC would not cover a corporate subsidiary.

[00:19:29] Speaker 02:
So no, I think in this context, it was not.

[00:19:33] Speaker 02:
The issue here, I think, frankly, is even under their theory of the case, there was some sort of consent.

[00:19:40] Speaker 02:
It's either a stopper or consent, which is a variant of consent under which rights to the patent somehow passed or were given from technology alternatives to tech alt.

[00:19:54] Speaker 02:
That's the only way that STD could have foreclosed on this patent is if some rights in the collateral had been given

[00:20:03] Speaker 02:
by technology alternatives to TechAlt.

[00:20:06] Speaker 02:
I would just point out that 261, the patent statute, requires a written instrument not even, not just for transfers of patents, but transfers of any interest in a patent must be by writing.

[00:20:17] Speaker 02:
So we have, even by their theory, a voluntary transfer of an interest in the patent from technology alternatives to TechAlt.

[00:20:26] Speaker 02:
That fails, as the district court held, in fact, because there's no written assignment.

[00:20:30] Speaker 04:
So you would say the question of

[00:20:33] Speaker 04:
Who owns this patent is not before us.

[00:20:36] Speaker 04:
The only question is, does May fail?

[00:20:40] Speaker 02:
Yes, Your Honor, and they do not.

[00:20:44] Speaker 02:
If there's any further questions, if not, I think I will... No one ever gets penalized for not using all this non-factual.

[00:20:53] Speaker 02:
I hope that's the case.

[00:20:54] Speaker 01:
Mr. Kachner.

[00:20:55] Speaker 01:
Thank you.

[00:20:56] Speaker 01:
Just a couple of points.

[00:20:59] Speaker 01:
the pre-issuance chain.

[00:21:01] Speaker 01:
We talked about the bill of sale.

[00:21:02] Speaker 01:
He said that we did not issue a subpoena.

[00:21:05] Speaker 01:
That is true.

[00:21:07] Speaker 01:
The appellees admitted to the district court, to the magistrate, that there was a presumption that technology in all terms was a proper assignee.

[00:21:16] Speaker 01:
And we had the record evidence there.

[00:21:18] Speaker 01:
As we told the district court, on the point of the bill of sale, given that they were admitting a presumption exists under Federal Circuit precedent, and the evidence we had, we did not need to issue a subpoena at that point in time.

[00:21:29] Speaker 01:
we could take the issue up generally in discovery as the case moved forward.

[00:21:35] Speaker 01:
The magistrate in her report and recommendation said specifically, Mayfair requests further discovery, including permission to obtain documents from third parties by subpoena to fully resolve these issues.

[00:21:46] Speaker 01:
That's exactly what we told her.

[00:21:49] Speaker 01:
As we move forward in discovery generally with this case, we will take the third party discovery to resolve the factual issues they have raised.

[00:21:57] Speaker 01:
We think we should be afforded

[00:21:59] Speaker 01:
afforded that opportunity.

[00:22:01] Speaker 01:
With respect to the foreclosure procedures not being followed that he talked about, they never made an argument about that.

[00:22:08] Speaker 01:
All the parties to the foreclosure sales abided by the foreclosure sales.

[00:22:13] Speaker 01:
There was never a question that they weren't followed.

[00:22:16] Speaker 01:
I think they are picking up on the fact that the magistrate in her decision said there's no evidence that the foreclosure sales were followed, but that was not an argument they had raised.

[00:22:26] Speaker 01:
in the district court.

[00:22:27] Speaker 01:
Again, if we move forward in the discovery, if that's an issue that we need to resolve, we can resolve it in discovery.

[00:22:33] Speaker 01:
With regard to the assets that transferred to tech hall, this again is a new argument they made here, a factual argument, that there's nothing that shows the patent transferred to services by design-wise.

[00:22:45] Speaker 01:
They talk about an order of repleven in their brief here.

[00:22:50] Speaker 01:
The order of repleven has an attachment A that specifically

[00:22:55] Speaker 01:
the patent number on page seven.

[00:22:57] Speaker 01:
The same is true for the assignment and bill of sale that's at A330 to 332.

[00:23:02] Speaker 01:
If you look at page 332 of the record, the patent is explicitly listed as an asset that's being transferred to services by design office.

[00:23:15] Speaker 01:
Again, I will go back when we talk about the UCC sale between

[00:23:20] Speaker 01:
Services by design-wise and technology alternatives who have no notice there.

[00:23:24] Speaker 01:
There has to be finality to it.

[00:23:26] Speaker 01:
Technology alternatives is no longer a corporation that exists.

[00:23:30] Speaker 01:
If they can't identify an owner, which is something they haven't done, we don't think that their theory is right as a matter of law.

[00:23:36] Speaker 01:
We think that that foreclosure sale needs to be final in that technique.

[00:23:40] Speaker 01:
If you look at the state law of the cases we cite.

[00:23:42] Speaker 03:
Counsel, you were tossed out of court on a failure to state a cost, correct?

[00:23:47] Speaker 01:
There's a 12-by-1 motion, Your Honor.

[00:23:50] Speaker 03:
So going into filing your complaint, weren't you aware that you may have had a problem with asserting title?

[00:24:01] Speaker 01:
We were aware of that.

[00:24:03] Speaker 03:
Why did you plead out all the facts on the chain of title in your complaint?

[00:24:09] Speaker 01:
Well, what we were aware of was that there was an argument before that the six inventors hadn't assigned the patent.

[00:24:21] Speaker 01:
So we went forward and we got assignments from the remaining four inventors whose assignments were not recorded in the PTO.

[00:24:31] Speaker 01:
We pled in the complaint that we rightfully owned the patent and we have jurisdiction to submit it.

[00:24:35] Speaker 03:
If the appellees under the... You pled that you were the owner, but you didn't plead the chain of title.

[00:24:43] Speaker 01:
If they, if they are, it is their obligation, if they think we don't have chain of title, to raise factual arguments as to why.

[00:24:51] Speaker 01:
Conversion to 12B100.

[00:24:52] Speaker 03:
What I would have to do is say there's no chain of title here, they're not the owners.

[00:24:56] Speaker 03:
You look at the complaint, there's nothing else there.

[00:25:00] Speaker 01:
It's a fair point, but if you look at the Gould case, the 3rd Circuit Gould case, they have to come forward with facts because they raised, I don't know exactly how many arguments, let's say 20 arguments.

[00:25:09] Speaker 01:
It would almost be impossible for us to anticipate every argument they're going to raise in pleading out a complaint.

[00:25:15] Speaker 01:
Once they raise the argument, if you look at Gould, we should be afforded the opportunity to respond with our own facts as to why their arguments lack merit.

[00:25:25] Speaker 04:
And that's it.

[00:25:25] Speaker 04:
Thank you, Mr. Cartran.

[00:25:27] Speaker 04:
We'll take the case under advisement.

[00:25:29] Speaker 01:
Yes, Your Honor.

[00:25:29] Speaker 01:
Thank you.