[00:00:00] Speaker 07:
Our regular business, I'd like to turn to Judge Raina for a motion.

[00:00:05] Speaker 03:
Thank you, Judge Proge.

[00:00:10] Speaker 03:
It's a real honor for me to move for admission.

[00:00:14] Speaker 03:
One of my law clerks, this is Christopher Christ.

[00:00:22] Speaker 03:
He is a member of the standing of the California State Bar, and he's been clerking with me for a while.

[00:00:30] Speaker 03:
Close to a year, it's going to be a year and a couple of weeks.

[00:00:34] Speaker 03:
And you know, they say, Chris, that time flies when you're working hard.

[00:00:40] Speaker 03:
Time must have really flown hard fast for you.

[00:00:44] Speaker 03:
And your hard work, your professionalism has brought credit not only to my chambers, to my work, but to the court as a whole.

[00:00:56] Speaker 03:
With that, I move for admission, though.

[00:00:59] Speaker 03:
You guys were admission to this.

[00:01:02] Speaker 07:
Well, I think we all agree that the best part about this wonderful job that each of us has are our colleagues from the court.

[00:01:11] Speaker 07:
So with enthusiasm, I grant the motion with Judge Laurie's agreement.

[00:01:16] Speaker 05:
You may be sworn in.

[00:01:25] Speaker 05:
Okay.

[00:01:34] Speaker 07:
First case for argument this morning is 14-1841, personalized user model versus Google.

[00:01:41] Speaker 07:
Mr. Pearlson?

[00:01:43] Speaker 07:
Yes, when you're ready.

[00:01:46] Speaker 04:
May it please the court?

[00:01:48] Speaker 04:
Your honor, the district court erred in this case by taking the issue of discovery rule tolling away from the jury by replacing the jury's role as the fact finder.

[00:02:00] Speaker 04:
and by mis-supplying binding Delaware law on discovery rule tolling.

[00:02:05] Speaker 07:
Let me just start with just where we are.

[00:02:08] Speaker 07:
This is your counterclaim to sue for breach of contract.

[00:02:11] Speaker 04:
Sure, yeah.

[00:02:12] Speaker 07:
So that's the subject of the appeal here.

[00:02:13] Speaker 04:
Exactly.

[00:02:14] Speaker 07:
Withstanding the infringement and the validity has all gone away.

[00:02:17] Speaker 04:
Right, exactly.

[00:02:18] Speaker 04:
So at trial we prevailed on infringement.

[00:02:20] Speaker 04:
There was a finding of no infringement.

[00:02:22] Speaker 04:
We prevailed on invalidity.

[00:02:23] Speaker 04:
There was a finding of invalidity.

[00:02:26] Speaker 04:
And we prevailed on the breach of contract claim, which

[00:02:29] Speaker 04:
occurred by virtue of the fact that the inventor, Mr. Konig, was working at his prior employer, SRI, during the time he conceived the inventions of the patent suit.

[00:02:41] Speaker 04:
We discovered this during discovery in this case based on confidential documents, deposition, and interrogatory responses, and subsequently purchased the right from SRI's prior employer to assert this cause of action, breach of contract claim.

[00:02:58] Speaker 04:
It was tried before the jury, and we won on all counts, including discovery rule tolling.

[00:03:05] Speaker 04:
And then subsequent to trial, the judge indicated that he would likely grant J. Maul in Pugh's favor on discovery rule tolling, and eventually did just that.

[00:03:17] Speaker 04:
And we would submit, Your Honor, that there was no basis whatsoever to take this issue away from the jury.

[00:03:25] Speaker 02:
But the question is whether the prior invention during employment was inherently unknowable.

[00:03:35] Speaker 02:
Now, a substantial, well-organized research institution, when a scientist is leaving,

[00:03:44] Speaker 02:
has on the last day or near that period, has an exit interview.

[00:03:52] Speaker 02:
And they want to find out whether the employee has fulfilled his contract and assigned all inventions that he's made to the company.

[00:04:05] Speaker 02:
Did that occur here?

[00:04:07] Speaker 04:
Well, there's no evidence in the record as to whether an exit interview occurred or not.

[00:04:11] Speaker 02:
Which means it probably didn't.

[00:04:13] Speaker 04:
Well, maybe it did.

[00:04:15] Speaker 02:
Maybe it didn't.

[00:04:16] Speaker 02:
In which case, how could it have been inherently unknowable when they didn't perform these usual standard steps of when an employee is leaving?

[00:04:26] Speaker 04:
Well, what the Delaware Supreme Court says in terms of when we determine whether blamelessly ignorant, which is, I think, along the lines of where you're going, is that they looked to whether there was facts

[00:04:42] Speaker 04:
the existence of facts that would have put an ordinary person on notice of an inquiry, which, if pursued, would have led to the discovery of the facts underlying the cause of action.

[00:04:52] Speaker 04:
And so what the Delaware Supreme Court says is we look to see what would have happened if he would have pursued.

[00:04:59] Speaker 04:
So let's say that there would have been an interview and they would have asked the questions.

[00:05:04] Speaker 04:
All the inferences at trial, or at least

[00:05:09] Speaker 04:
certainly viewed in our favor, would have suggested that that inquiry, if pursued, if for example that had happened, would have not accomplished anything in terms of discovering this.

[00:05:21] Speaker 03:
How can you say that?

[00:05:22] Speaker 03:
Wasn't there an employment contract between SRI and Dr. Koenig that specifically addressed inventions while Dr. Koenig was employed at SRI?

[00:05:34] Speaker 04:
Certainly.

[00:05:35] Speaker 04:
And the reason why I say that, Your Honor, is precisely based on what Mr. Koenig said at trial.

[00:05:41] Speaker 04:
He testified at trial that he did not conceive of the invention while he was at SRI.

[00:05:48] Speaker 04:
And so the reasonable inference drawn from that would be that had SRI done an inquiry, asked him what he would have

[00:05:55] Speaker 04:
said one of the things he may have done is lie and said no, I didn't conceive it during this time.

[00:06:00] Speaker 04:
And in fact, the district court below acknowledged that.

[00:06:03] Speaker 03:
You're arguing that there was no basis to make a reasonable inquiry.

[00:06:07] Speaker 04:
Well, there's the twofold.

[00:06:08] Speaker 04:
There's two aspects.

[00:06:09] Speaker 03:
There's one whether... Shouldn't we start with employment agreement as a basis?

[00:06:14] Speaker 04:
Well, I don't know that an employment agreement in and of itself is a basis, and there certainly hasn't been any case law or authority cited that an employment agreement in and of itself is a basis to

[00:06:25] Speaker 03:
Inquire whether someone's reaching an employment agreement that specifically addresses intellectual property rights and the owner of any intellectual property rights that are developed during the term of the employment.

[00:06:38] Speaker 03:
And you're employing a research scientist that you have employed in order to develop IP assets.

[00:06:47] Speaker 04:
Well, Your Honor, that is a very commonplace agreement that in any technology company comes up.

[00:06:52] Speaker 04:
Essentially, what would be the case if, in fact, the mere fact that you have an employment agreement would put you on inquiry notice to inquire whether there was a breach of that agreement would essentially mean that at any technology company that any time someone leaves, you have to ask the question, did you steal from us?

[00:07:12] Speaker 02:
But there were subsequent events.

[00:07:14] Speaker 02:
beyond the limitations period.

[00:07:19] Speaker 02:
There was a patent application filed and issued in this person's name and one of the SRI employees tested this person's invention and weren't those events that should have put SRI on notice?

[00:07:38] Speaker 04:
Well, Your Honor, with the reasonable inferences viewed in our favor, we would submit that no, that none of those things were the clear and unmistakable red flag that the Coleman Court, the Delaware Supreme Court has found is required to put a company on notice.

[00:07:56] Speaker 04:
Let's first take the patent application.

[00:08:00] Speaker 04:
That was filed five months after he left SRI, after Mr. Koenig left SRI.

[00:08:07] Speaker 04:
The testimony elicited by Hume during trial was that we were in this internet gold rush in 1999.

[00:08:15] Speaker 04:
People were doing things fast.

[00:08:17] Speaker 04:
Well, viewing the facts in our favor, reasonable inferences in our favor, SRI could have viewed this five-month period of time as more than enough time for him to come up with this invention on his own and would not have been a clear and unmistakable red flag, if it is,

[00:08:34] Speaker 04:
Then we have the situation, and this is somewhat akin to what I had alluded to earlier, that you have a situation where any time a former employee goes to another company and five months later down the road files a patent in the same general field, then there is this duty of that company to go and search and determine whether there was a breach.

[00:08:57] Speaker 07:
especially given... Well, I guess you're saying all these words.

[00:09:01] Speaker 07:
I don't think that anyone here suggested that was necessarily the burden.

[00:09:05] Speaker 07:
But here, nothing was done.

[00:09:07] Speaker 07:
There was no inquiry.

[00:09:08] Speaker 07:
And it seems your answer to that, your response to that is, well, if they had asked, he would have lied to them.

[00:09:15] Speaker 07:
So whatever obligation they had to ask is irrelevant and shouldn't be held against them.

[00:09:20] Speaker 04:
Well, Your Honor, I think as a matter of law, as a matter of Delaware law, there is no requirement for a

[00:09:26] Speaker 04:
diligent inquiry.

[00:09:28] Speaker 04:
And in fact, that's what Coleman specifically says.

[00:09:33] Speaker 07:
Well, but Coleman doesn't undermine or undo.

[00:09:36] Speaker 07:
Coleman is consistent with the standards of blameless ignorance and inherently unknowable rights.

[00:09:42] Speaker 07:
Those standards still apply.

[00:09:44] Speaker 04:
Absolutely, Your Honor.

[00:09:45] Speaker 04:
And they do apply, and it's the application of the standards that Coleman shows that you don't actually have to have an inquiry of it in itself if it would have been futile.

[00:09:58] Speaker 04:
And what Coleman looks at is that... How can you show?

[00:10:01] Speaker 07:
I mean, the burden is on you to show that it would have been futile.

[00:10:05] Speaker 07:
Right.

[00:10:06] Speaker 07:
And the way you've met the burden, you say, is to say, well, he would have lied to us anyway?

[00:10:11] Speaker 04:
No.

[00:10:12] Speaker 04:
The burden that we've said initially, what we've initially said is that all the evidence that we relied on in trial and that we relied on to actually bring the counterclaim was confidential.

[00:10:23] Speaker 04:
None of it was available to SRI at the time, any time before trial.

[00:10:28] Speaker 04:
And so that was inherently unknowable.

[00:10:32] Speaker 04:
It was confidential.

[00:10:33] Speaker 04:
They hid it.

[00:10:35] Speaker 04:
They hid it.

[00:10:35] Speaker 04:
It was testimony and trial.

[00:10:37] Speaker 03:
What evidence did you introduce that SRI was blamelessly ignorant?

[00:10:42] Speaker 04:
Well that is, the notion of them being blamelessly ignorant is in effect the fact that they could not have discovered

[00:10:51] Speaker 04:
the breach because all the information was confidential.

[00:10:56] Speaker 04:
The information that we relied on at trial and to bring the claim was confidential documents.

[00:11:02] Speaker 03:
What about the exit interview?

[00:11:04] Speaker 04:
I think the evidence would show that had they asked

[00:11:13] Speaker 04:
Mr. Koenig, that he would have said he did not conceive it at the time while he was at SRI.

[00:11:19] Speaker 02:
But there were co-inventors of that patent, right?

[00:11:23] Speaker 02:
And people worked together and they could have asked other employees?

[00:11:30] Speaker 04:
Absolutely.

[00:11:31] Speaker 04:
They could have asked the co-inventors and the result would have been the same.

[00:11:34] Speaker 04:
Berthold was one of the co-inventors.

[00:11:36] Speaker 02:
You mean they all might have lied?

[00:11:38] Speaker 04:
Well, Berthold wasn't involved in the conception at all.

[00:11:40] Speaker 04:
He was actually part of, I think his only contribution was in relation to a dependent claim that happened sometime after, you know, maybe in, he wasn't involved in this July time frame while he was still at SRI.

[00:11:55] Speaker 04:
So he wasn't there.

[00:11:57] Speaker 04:
And then Tversky, he initially testified

[00:12:00] Speaker 04:
on when I took his deposition.

[00:12:02] Speaker 04:
He initially testified that the date was in July of 1999 while Mr. Koenig was employed at SRI.

[00:12:11] Speaker 04:
But then once we brought the issue up and brought our counterclaim in relation to this, he changed his story.

[00:12:19] Speaker 04:
He changed his story and he said that it was conceived

[00:12:22] Speaker 04:
after he left SRI.

[00:12:23] Speaker 04:
So there's every inference to suggest that had he done.

[00:12:26] Speaker 07:
I'm sorry.

[00:12:27] Speaker 07:
Before your time runs out, I wanted to direct you to your, I guess you have an alternative argument with respect to the tolling question.

[00:12:34] Speaker 07:
And that's the statutory one.

[00:12:35] Speaker 04:
So I thought you might want to spend a couple minutes on that.

[00:12:38] Speaker 04:
Sure.

[00:12:40] Speaker 04:
I appreciate that.

[00:12:40] Speaker 04:
Thank you.

[00:12:41] Speaker 04:
This question is a simple question of law, really.

[00:12:44] Speaker 04:
The statute 8117 of Delaware says that

[00:12:50] Speaker 04:
If, at the time, the cause of action accrues against any person, it's basically told until that person comes back into Delaware.

[00:13:01] Speaker 07:
Now, there's no case comparable to here, similar to the circumstances in this case, where that statutory provision has been applied.

[00:13:11] Speaker 04:
Well, I would say that there's no case that's on all fours.

[00:13:14] Speaker 04:
There's probably only a few handful of cases that discuss it at all.

[00:13:16] Speaker 04:
But certainly, Saudi Basic,

[00:13:18] Speaker 04:
is, if not on all fours, is similar in some respects.

[00:13:22] Speaker 07:
Well, one striking difference, at least in my view, and you can tell me why I'm wrong about this, is between this and the Saudi cases.

[00:13:28] Speaker 07:
In the Saudi case, the parties were from Delaware.

[00:13:30] Speaker 07:
I mean, Delaware was the only place they could go.

[00:13:33] Speaker 07:
Whereas here, California is clearly a jurisdiction where both the parties reside and where this case could have been pursued earlier.

[00:13:41] Speaker 04:
Well, actually, in Saudi Basic, the plaintiff was a Saudi corporation.

[00:13:46] Speaker 04:
They were not a Delaware corporation.

[00:13:48] Speaker 04:
And it was a Saudi claim.

[00:13:50] Speaker 04:
It was a claim in relation to Saudi law.

[00:13:53] Speaker 07:
So there was no other jurisdiction in the United States where this case could have been timely brought, right?

[00:13:57] Speaker 04:
Well, I think it could have been brought in any jurisdiction.

[00:14:00] Speaker 04:
What happened was that the Saudi plaintiff, the Saudi basic, the plaintiff brought, and this is what the case is suggesting occurred, is that they were trying to avoid being sued in other jurisdictions.

[00:14:16] Speaker 04:
And then they brought a DJ action in Delaware because they thought that it had the most favorable statute of limitations.

[00:14:27] Speaker 04:
And so it could have been brought anywhere, but it was the choice of the plaintiff to bring it in, plaintiff Saudi Basic, to bring it in Delaware.

[00:14:33] Speaker 04:
Well, here, there was no form shopping by Google.

[00:14:36] Speaker 04:
Google was in Delaware because that's where Pume filed its case.

[00:14:43] Speaker 04:
And in fact, as admitted by plaintiff in oral argument, it was actually the first time, oral argument on the JMAW below, it was actually the first time that the parties were in the same place where these rights of the breach of contract action could have been fixed.

[00:15:01] Speaker 02:
But this provision, 8117, reads absence from state.

[00:15:07] Speaker 02:
Speaking of someone who was in state but is absent, whereas 8121 deals with out-of-state cause of action.

[00:15:17] Speaker 04:
Well, actually, the Delaware Supreme Court in Saudi basic explicitly says, and this is, I think, at page 18 of the opinion, it says that it has settled law that the purpose and effect of section 8117 is to toll the statute of limitations as to defendants who, at the time it causes action, approves

[00:15:35] Speaker 04:
are out of state and are not otherwise subject to service or process in the state.

[00:15:39] Speaker 04:
There's no suggestion that they have to leave.

[00:15:42] Speaker 04:
It just explicitly says that they're out, and that's just what happens.

[00:15:44] Speaker 02:
But the title of the provision suggests absence from state.

[00:15:48] Speaker 02:
You're not absent unless you're normally there.

[00:15:51] Speaker 04:
Well, what the Delaware Supreme Court, what they have said is that... And we're reviewing a decision of a Delaware judge, not only... Well, but it's a Delaware federal court judge who's not the Delaware Supreme Court.

[00:16:04] Speaker 04:
And also, Saudi Basic, the plaintiff in the Saudi Basic case was never in Delaware.

[00:16:11] Speaker 04:
It was never in Delaware.

[00:16:12] Speaker 04:
So it's not like Saudi Basic was hanging out in Delaware and then left.

[00:16:17] Speaker 04:
They were never in Delaware.

[00:16:18] Speaker 04:
And so I think that that conclusively shows that they don't have to have been there and then left.

[00:16:26] Speaker 07:
You're well into your rebuttal time.

[00:16:28] Speaker 07:
We'll restore four minutes for rebuttal.

[00:16:40] Speaker 01:
Good morning, Your Honor.

[00:16:41] Speaker 01:
I just wanted to, Richard Sargato for PUM.

[00:16:46] Speaker 01:
I just wanted to start out by speaking as to the first argument as to the discovery rule.

[00:16:52] Speaker 01:
And it's really important to keep in mind here that Google has a burden to satisfy the test.

[00:16:56] Speaker 01:
And the test has been the same for quite a while now.

[00:17:00] Speaker 01:
And Delaware remained the same today, which is a two pronged test.

[00:17:03] Speaker 01:
in which they have to show that it's inherently the injury.

[00:17:08] Speaker 01:
Yeah, you understand that.

[00:17:09] Speaker 07:
All right.

[00:17:10] Speaker 07:
Well, let me ask you then.

[00:17:12] Speaker 07:
Just the one fact, clear fact, that all this stuff was confidential.

[00:17:16] Speaker 07:
They got this in this proceeding, but all of it was otherwise confidential.

[00:17:21] Speaker 07:
Why isn't that sufficient?

[00:17:23] Speaker 01:
Well, one reason, going to the inherently undiscoverable song alone, I think it still would not be sufficient simply because all it asks is you have sufficient facts that you can then follow up on and dig deeper.

[00:17:34] Speaker 01:
I would think that this was found out during discovery.

[00:17:37] Speaker 01:
That same discovery could have happened had SRIs been vigilant, had they followed up on the objective factors they could have seen and pursued that.

[00:17:45] Speaker 01:
Wait, how so?

[00:17:46] Speaker 07:
They have an exit interview.

[00:17:48] Speaker 07:
The guy says, no, I didn't, you know,

[00:17:50] Speaker 07:
I'm doing this because I loved it.

[00:17:52] Speaker 07:
No suggestion that there was any wrongdoing that's apparent in anything he says.

[00:17:55] Speaker 07:
And then they presumably might well have satisfied this requirement, right?

[00:18:00] Speaker 07:
Don't you get the impression reading the district court that

[00:18:03] Speaker 07:
If they had had an exit interview, even if the guy had lied or whatever, he wasn't necessarily requiring that they go further than that in that instance, right?

[00:18:12] Speaker 01:
Absolutely, Your Honor, absolutely.

[00:18:13] Speaker 01:
I think that this is not about, did SRI do enough?

[00:18:16] Speaker 01:
The fact is, SRI did nothing.

[00:18:18] Speaker 01:
And that there's no evidence that SRI is doing anything.

[00:18:20] Speaker 07:
But can't we clearly infer that if they had done all, so we're saying they just had the duty to inquire, like saying, well, were you going to find out a little about what he was working on?

[00:18:31] Speaker 07:
Had it been this?

[00:18:32] Speaker 07:
Well, can't we clearly infer that they would not have discovered this based on that inquiry?

[00:18:39] Speaker 07:
So why shouldn't that end the case and be sufficient in terms of their burden?

[00:18:42] Speaker 01:
Well, Your Honor, going back to what Judge Stark found, I think he directly addressed that.

[00:18:46] Speaker 01:
And he found that three things could have happened.

[00:18:49] Speaker 01:
If they had actually sat down, Dr. Konig, and asked him that question, do you have some IP you're taking with you?

[00:18:54] Speaker 01:
What are you doing here?

[00:18:54] Speaker 01:
Where are you going?

[00:18:56] Speaker 01:
Three things would have happened.

[00:18:57] Speaker 01:
One, he would have said, sure, I have this IP that I'm taking with me.

[00:19:01] Speaker 01:
Well, obviously, that would have led one direction.

[00:19:04] Speaker 01:
He could have lied, which is what Mr. Pearlson has suggested would have happened.

[00:19:08] Speaker 01:
That would be a fundamentally different analysis.

[00:19:10] Speaker 01:
That would be essentially a fraudulent concealment situation.

[00:19:13] Speaker 01:
That would be a totally different analysis.

[00:19:15] Speaker 01:
I don't think at that point we could really say that if SRI had asked Dr. Coney... What if the third option, if he had kind of sidestepped the question?

[00:19:22] Speaker 07:
So he had changed the subject, he had just started talking about family, and then it went on.

[00:19:26] Speaker 07:
Would that have satisfied their obligation then, even if he sidestepped the question and they didn't really press it or force an answer?

[00:19:32] Speaker 01:
Well, at that point in time, I would suggest that if you're a company and you think you have a right to IP and you ask somebody that question and they stonewall on you, there is at that point, that's an objective factor.

[00:19:43] Speaker 01:
You need to dig deeper and that's exactly where that should have gone.

[00:19:46] Speaker 07:
Well, they have a contract.

[00:19:48] Speaker 07:
The provision we're talking about, I think Judge Raina told me, it's in the contract.

[00:19:51] Speaker 07:
There's an obligation.

[00:19:53] Speaker 07:
So why are we involved in an exit interview?

[00:19:56] Speaker 07:
This guy had an obligation to come forward.

[00:19:58] Speaker 07:
Why couldn't SRI have said,

[00:19:59] Speaker 07:
Well, we know he's not taking IP with us because we have a right to presume that he's going to follow his legal obligation under the contract, and therefore he would tell us if he didn't.

[00:20:11] Speaker 07:
So why isn't that enough to get you by this sort of level of requirement of an inquiry?

[00:20:17] Speaker 01:
Well, I would submit that's because this is an equitable doctrine.

[00:20:20] Speaker 01:
This totaling provision is an equitable doctrine, and under Delaware law, equity is only vigilant.

[00:20:26] Speaker 01:
And there is some minimum threshold to enforce that.

[00:20:30] Speaker 01:
They have to do something.

[00:20:32] Speaker 01:
I think if they're simply bringing a cause of action later, I don't think there's a legal claim that you can come back and say, well, you didn't ask me when I left.

[00:20:38] Speaker 01:
I think that's the difference.

[00:20:39] Speaker 01:
But when they're actually kind of told, like, after limitations, that is an equitable doctrine and does have this blameless ignorance standard.

[00:20:46] Speaker 01:
That is one of the two components.

[00:20:48] Speaker 03:
Was there any evidence presented that would have showed that had SRI followed up or made some further inquiry?

[00:20:55] Speaker 03:
that they still would not have discovered the work that Dr. Koenig did following Floyd.

[00:21:02] Speaker 01:
I would submit no, Your Honor, simply because had they followed up, that there were various things.

[00:21:10] Speaker 03:
Was there any evidence presented to that effect?

[00:21:13] Speaker 01:
No, Your Honor, not that I'm recalling.

[00:21:16] Speaker 03:
Okay, under the statute, is it required to present this type of evidence?

[00:21:20] Speaker 01:
Was PUM required to present evidence?

[00:21:24] Speaker 01:
No, Your Honor.

[00:21:25] Speaker 01:
The burden entirely rests on Google, on that point.

[00:21:28] Speaker 01:
And it was Google's burden to prove, one, that it was inherently undiscoverable, and two, the blameless ignorant standard.

[00:21:33] Speaker 03:
And you're saying that Google did not present any evidence that would go to prove that particular point?

[00:21:38] Speaker 01:
That is correct, Your Honor.

[00:21:39] Speaker 01:
That is correct.

[00:21:40] Speaker 01:
Instead, what Google's argument was that this was confidential information, certain documents were kept confidential.

[00:21:46] Speaker 01:
But I think it's also important to note, and this wasn't really put before the court, but it's in the briefing, it's mentioned, is that another argument Google dealt with was the argument of whether this IP was related and resulted from the work that Dr. Konig was doing.

[00:22:01] Speaker 01:
While here's the SRI.

[00:22:03] Speaker 01:
Now, that's an important fact, because again, we lost on that.

[00:22:06] Speaker 01:
That's when the jury found, indeed, the IP at issue was related to and resulted from the work Dr. Konig was doing.

[00:22:13] Speaker 01:
And that's, again, not an appeal.

[00:22:14] Speaker 01:
It's not been challenged.

[00:22:16] Speaker 01:
So accepting that critical fact right there, we have SRI looking at IP that they should have been able to recognize pretty easily as, well, gosh, this is exactly what Dr. Konig was doing for us for the last several years.

[00:22:27] Speaker 01:
I think that that right there is an objective factor that should have put them on notice that indeed, let's dig a little bit deeper here.

[00:22:35] Speaker 07:
Well, but that came up later, right?

[00:22:37] Speaker 01:
They didn't know that at the time of his... Well, whether it resulted from or if they had looked they would have found out.

[00:22:43] Speaker 01:
I mean, they'd look at the patent.

[00:22:45] Speaker 01:
The patent is notice to the whole world, obviously.

[00:22:47] Speaker 01:
And once the patent was issued at that time,

[00:22:49] Speaker 01:
even in minimal exercise of diligence, so they can see what of our full employees patented.

[00:22:54] Speaker 01:
Since we think we have a right to their IP, let's take a look at what they patented.

[00:22:59] Speaker 01:
Well, they looked at the patent.

[00:23:00] Speaker 01:
They see this is what he was working on.

[00:23:02] Speaker 07:
What about the other alternative grounds for confirming the jury?

[00:23:05] Speaker 07:
The statute is clear, right?

[00:23:07] Speaker 07:
There's no dispute that the statutory language is unambiguous.

[00:23:11] Speaker 07:
So you and Judge Stark agreed, undermine the clear statutory language, but the argument is that this wasn't the purpose.

[00:23:20] Speaker 07:
isn't that a tough road in terms of

[00:23:23] Speaker 07:
how we're supposed to construe a statute.

[00:23:25] Speaker 07:
I mean, OK, if it's ambiguous, then you start looking.

[00:23:27] Speaker 07:
If there's some ambiguity, you start looking at its purpose and yadda da.

[00:23:31] Speaker 07:
But when the language of the statute is clear, frankly, even if the legislature didn't really intend it would be applied as expansively as it was, isn't that up to them to change and not us to change?

[00:23:43] Speaker 01:
Well, there's certainly a absurd result doctrine.

[00:23:45] Speaker 01:
But long before you get to the absurd result concept, I would submit this isn't one statute.

[00:23:50] Speaker 01:
This is two separate statutes.

[00:23:51] Speaker 01:
And the courts in Delaware have already said these statutes are not meant to be read together.

[00:23:55] Speaker 01:
There's actually a case here I have that's in the brief, Glassburg, which came out just in 1955, right after these statutes were actually enacted.

[00:24:03] Speaker 01:
And it says, according to this court, to read the tolling statute,

[00:24:08] Speaker 01:
which is 8117, into the borrowing statute, which don't apply to the excessive borrowing statute.

[00:24:13] Speaker 01:
An out-of-state exception for foreign cause of action will not be read into the Delaware statute of limitations.

[00:24:19] Speaker 01:
Essentially, you have two statutes here.

[00:24:20] Speaker 01:
Delaware has one statute, which is meant to protect, for example, if there's an event or a cause of action that arises in Delaware, and then that would-be defendant leaves the state.

[00:24:30] Speaker 01:
You can't get them.

[00:24:31] Speaker 01:
They're hiding out of state somewhere.

[00:24:32] Speaker 01:
Well, this statue protects the Delaware blanket, to be able to say, you know what, when you came back to the state, I have you now.

[00:24:37] Speaker 01:
Maybe in 15 years, but you've come back in.

[00:24:40] Speaker 01:
8121, the borrowing statute, conversely, has the opposite effect.

[00:24:44] Speaker 01:
It is meant to prevent forum shopping by shortening the statute of limitations.

[00:24:47] Speaker 01:
Well, what Google has done here is they first took the borrowing statute, which we went with.

[00:24:52] Speaker 01:
We went with Delaware law here because Delaware has a three-year statute of limitations, whereas California, where this cause of action arose, would be a four or five-year statute of limitations.

[00:25:02] Speaker 01:
And so what they did was they took that four or five years.

[00:25:04] Speaker 01:
They took it three years.

[00:25:05] Speaker 01:
They said, well, Delaware is shorter, so we take Delaware law.

[00:25:07] Speaker 01:
Now, that's serving 8121 perfectly.

[00:25:10] Speaker 01:
But then it's sort of a coach and horse situation, where once you have 8121 applied in that three-year statute, they then bring in 8117 and say, but wait, now that we've dealt with our law, let's back it way back out, and now we have no statute limitations effectively.

[00:25:24] Speaker 07:
Right, but what I'm searching for is a lack of clarity.

[00:25:31] Speaker 07:
And you're right, and we can call it a Trojan horse, but the fact is it exists.

[00:25:38] Speaker 07:
So why is it not up to the legislature in a case where the language is clear, there's no argument of ambiguity, why isn't it up to them

[00:25:49] Speaker 07:
to say, whoops, we goofed, versus us to tell them they didn't really mean what they said.

[00:25:56] Speaker 01:
Well, the way the Delaware courts resolve that is to say, which statute came first?

[00:26:01] Speaker 01:
They enacted, and I want to make sure I'm listening.

[00:26:04] Speaker 07:
Well, you say the Delaware court.

[00:26:05] Speaker 07:
The Supreme Court has kind of adopted this, right, in the fraud case.

[00:26:08] Speaker 07:
So the Supreme Court's only spoke, the only time they've spoken on this, they've applied the statute as written.

[00:26:16] Speaker 01:
Well, actually, in Saudi Basic, they didn't actually apply it, technically.

[00:26:19] Speaker 01:
What they did was they said the borrowing statute in the first place, the 8121 statute, didn't apply.

[00:26:24] Speaker 01:
And so that was the actual holding in Saudi Basic, was they now also stopped right here, 8121 doesn't apply, there's no borrowing statute, game over.

[00:26:31] Speaker 01:
Then they went on to say, essentially what it's dictated, even if 8121 were to apply, it still wouldn't work under 8117.

[00:26:38] Speaker 01:
And we still, and that's essentially where that went.

[00:26:41] Speaker 01:
So it wasn't directly applying, saying that 8117 can be applied with 8121.

[00:26:45] Speaker 01:
The only time that issue's been looked at, the court came out the opposite direction saying the borrowing statute was enacted after 8117.

[00:26:54] Speaker 01:
So the out-of-state party tolling statute was adopted first, then the borrowing statute was adopted.

[00:27:01] Speaker 01:
And of course, it wasn't that they said when a legislature goes ahead and they're

[00:27:05] Speaker 01:
enacted later statute, their failure to acknowledge, they knew 8117 was on the book.

[00:27:10] Speaker 01:
They made no mention of it, they made no reference to it.

[00:27:12] Speaker 01:
Implicitly, they therefore, the legislature meant that not to apply.

[00:27:16] Speaker 01:
So arguably the legislature already spoke to this when they did not incorporate 8117 into 8121.

[00:27:22] Speaker 01:
And so by virtue of that, the two statutes simply are not meant to be put together.

[00:27:26] Speaker 07:
It's up to you, but you reserve some time for rebuttal on the cross appeal, which means you've got to get to the cross appeal.

[00:27:34] Speaker 01:
Sure, sure.

[00:27:35] Speaker 01:
The cross appeal is pretty simple.

[00:27:38] Speaker 01:
It's, again, the term document, plain construction issue.

[00:27:42] Speaker 01:
And that's something where obviously we lost them.

[00:27:44] Speaker 07:
But you filed a note, Jamal, on the Peachtat case.

[00:27:47] Speaker 07:
I don't know, but I assume that plain construction might have been a piece of that, and you dismissed the appeal and didn't appeal it.

[00:27:55] Speaker 01:
Correct.

[00:27:55] Speaker 01:
It came over, right?

[00:27:56] Speaker 01:
The patents are dead.

[00:27:57] Speaker 03:
Where's the controversy?

[00:27:59] Speaker 01:
Well, the controversy there, and that's again, really, it turns here to this is pretty important language I wanted to read.

[00:28:05] Speaker 01:
which is from Kamretta B. Green.

[00:28:07] Speaker 01:
A party who seeks review of the merits of adverse ruling, but is frustrated by the vagaries of circumstance, ought not in fairness be forced to acquiesce in that rule.

[00:28:15] Speaker 01:
The situation we have here is a bad claim construction.

[00:28:17] Speaker 07:
Well, it's frustrated by the bad vagaries of that rule.

[00:28:20] Speaker 07:
Really?

[00:28:21] Speaker 07:
I mean, how do we apply that here?

[00:28:23] Speaker 01:
How do we know that was... We vacate the claim construction.

[00:28:26] Speaker 01:
I mean, that's essentially what we're asking for here, is a situation where we have a bad claim construction that we can't appeal.

[00:28:31] Speaker 01:
So if you can't appeal, there's other patents, though, that have that exact same claim term, and those patents aren't invalid.

[00:28:40] Speaker 01:
And now there's a lot of controversy after them?

[00:28:42] Speaker 01:
There's not.

[00:28:43] Speaker 01:
But our argument is our only concern here.

[00:28:44] Speaker 01:
It's a very small, narrow concern here.

[00:28:47] Speaker 07:
Well, whether you have a concern or not doesn't mean, as Judge Raina pointed out, there's some controversy.

[00:28:52] Speaker 07:
There's a wide controversy here.

[00:28:54] Speaker 07:
I mean, sure, I have a concern about a lot of things, but that doesn't mean that I can go into court and get an Article III court to decide it.

[00:28:59] Speaker 01:
That's correct.

[00:29:00] Speaker 01:
And so to that end, we're not asking the court to construe document.

[00:29:04] Speaker 01:
We're asking the court simply to vacate the construction, because again, it doesn't affect the outcome here.

[00:29:08] Speaker 01:
The patents are dead here.

[00:29:10] Speaker 07:
Well, I mean, that's not an answer.

[00:29:11] Speaker 07:
I mean, whether or not there's a... For us to do anything, it's not a question of like, OK, so it's a little shaky whether you can appear this case.

[00:29:20] Speaker 07:
So all we're asking you to do is vacate rather than reverse.

[00:29:24] Speaker 07:
Really?

[00:29:24] Speaker 07:
I mean, that's not... It's fair.

[00:29:26] Speaker 01:
I mean... What's fair?

[00:29:27] Speaker 03:
Well, your question there, that's a very... How can we even do that if we don't have jurisdiction over your crossword?

[00:29:33] Speaker 01:
And that again is exactly, if that's the outcome, that's fine as well.

[00:29:37] Speaker 03:
You didn't preserve the issue, right?

[00:29:39] Speaker 03:
You didn't move for a j-mall on this particular issue.

[00:29:42] Speaker 03:
So there's not a lot of controversy.

[00:29:44] Speaker 01:
It would have wasted the court's time to do that here.

[00:29:46] Speaker 03:
It's kind of wasting our time too, because

[00:29:49] Speaker 03:
You bring up an issue and there's no controversy on it.

[00:29:54] Speaker 01:
Exactly.

[00:29:55] Speaker 01:
And we're doing it out of abundance and making sure we're not bound by that two years down the road.

[00:29:59] Speaker 07:
Wait, so you think whatever collateral estoppel thing or whatever might conceivably come down the road, the fact that you raised this as a cross appeal and took our time and effort in dealing with this issue, just the fact that you raised it, so you did it just for a process?

[00:30:15] Speaker 01:
No, there have been various factors in this, Your Honor.

[00:30:19] Speaker 01:
We genuinely, we feel the claim of obstruction is wrong.

[00:30:22] Speaker 01:
We want to raise, we feel like there are reasons here, arguably, that it could be a live controversy, but I probably side with you that it's not.

[00:30:29] Speaker 01:
So, I ultimately agree with you.

[00:30:40] Speaker 04:
Thank you.

[00:30:41] Speaker 04:
I'd like to just address a few points.

[00:30:43] Speaker 04:
First of all, on 8117, there was some discussion about the borrowing statute and the interplay with 8117.

[00:30:50] Speaker 04:
So in Saudi Basic, there was two questions at issue, one related to the borrowing statute, and then the other related to 8117.

[00:31:01] Speaker 04:
And it was not dicta, as counsel represents, that happened in Saudi Basic.

[00:31:09] Speaker 04:
in relation to 8117.

[00:31:11] Speaker 04:
There were two reasons, and it explicitly says, and this is on page 18 of the Saudi basic decision, the conclusion that ExxonMobil's counterclaims were not time-barred was correct for a second independent reason.

[00:31:25] Speaker 04:
Even if the borrowing statute did apply and thereby triggered Delaware's three-year statute of limitations, Delaware's tolling statute stopped the running of the statute of limitations until

[00:31:38] Speaker 04:
Saudi Basic filed this action and as a result became amenable to service of process.

[00:31:43] Speaker 04:
It was a second independent reason.

[00:31:45] Speaker 04:
The Glassburg case was a court of chancery opinion from like 1955 and to the extent that it held that the borrowing statute and 8117 couldn't be used in the same case, it's clearly overturned by Saudi Basic because it did that.

[00:32:04] Speaker 04:
And we are not relying on the borrowing statute for 8117 to apply.

[00:32:11] Speaker 04:
8117 applies regardless of the borrowing statute.

[00:32:14] Speaker 04:
In fact, it's actually Hume that's relied on the borrowing statute by having the three-year rather than the four-year limitation from California apply.

[00:32:26] Speaker 04:
And from the beginning, it was actually

[00:32:30] Speaker 04:
put the plaintiff, Pugh, that said Delaware law should apply.

[00:32:34] Speaker 04:
We said, OK, we didn't dispute that.

[00:32:36] Speaker 04:
And they chose Delaware law.

[00:32:38] Speaker 04:
And then now they're trying to suggest that somehow we're being sneaky by using the very law that they applied.

[00:32:44] Speaker 04:
So they are not inconsistent with each other, and it should be applied, just as what was said in Saudi Basic.

[00:32:53] Speaker 04:
In terms of the point about what could have been discovered

[00:32:58] Speaker 04:
through discovery and then also, you know, whether there was evidence presented that a investigation wouldn't have uncovered anything.

[00:33:09] Speaker 03:
Do you agree that it was your obligation to present that type of evidence?

[00:33:12] Speaker 04:
Yeah, it was our burden and we did that.

[00:33:14] Speaker 04:
And we did that, I think, in several ways.

[00:33:16] Speaker 04:
Well, we presented evidence that

[00:33:20] Speaker 04:
All the evidence that we relied on at trial and to bring the claim was confidential and unknown to SRI.

[00:33:27] Speaker 04:
That was in evidence.

[00:33:28] Speaker 04:
That was presented to the jury.

[00:33:30] Speaker 04:
And it was unrebutted.

[00:33:32] Speaker 04:
And then we also presented evidence of the evidence, frankly, listed by PUM as to what that conic said, that he didn't conceive it during his time frame while he was at SRI, thus leading to the inference that had

[00:33:50] Speaker 04:
SRI asked that same question, they would have gotten the same answer.

[00:33:55] Speaker 04:
And this notion that we discover these things during discovery and that SRI should have done some further investigation to uncover that, there is no evidence whatsoever that any further investigation would have done anything.

[00:34:07] Speaker 04:
And that frankly, Your Honor, is one of the problems with the lower court's opinion in that it engages in the speculation as to what SRI would have done

[00:34:17] Speaker 04:
if SRI would have asked the question at the census interview.

[00:34:21] Speaker 03:
To me, that brings us back to the beginning of the argument when Judge Lorry asked about the exit interview.

[00:34:27] Speaker 03:
Isn't it commonplace for there to be an exit interview?

[00:34:31] Speaker 04:
It may or may not be.

[00:34:33] Speaker 04:
There certainly was no evidence to that.

[00:34:34] Speaker 04:
But one thing that I think is clear in Delaware law, and I just want to point to that before we be out, is that in both in the Lawton case, which is the seminal case,

[00:34:44] Speaker 04:
In 1968, in Delaware, there was no inquiry in the Morton v. Skynales case.

[00:34:52] Speaker 07:
And Lawton is the one where the woman had something.

[00:34:54] Speaker 04:
Yeah, it's not directly on point.

[00:34:57] Speaker 04:
But I think the point is that the plaintiff in this case was blamelessly ignorant of the act or omission the injury complained of.

[00:35:05] Speaker 04:
She had no way of knowing that her rights had been violated.

[00:35:08] Speaker 04:
until the first painless experience.

[00:35:10] Speaker 04:
And that's the point that we're making here, is that even had SRI ask questions, had they done the accident interview, that the inference is drawn in our favor, we can show that they wouldn't have discovered anything.

[00:35:19] Speaker 03:
That may be the case, but they didn't even take that initial step.

[00:35:23] Speaker 03:
Right.

[00:35:23] Speaker 03:
That's missing.

[00:35:24] Speaker 03:
I mean, to ask the very basic question, what is it that you've been working on while you've been here?

[00:35:30] Speaker 03:
What are you taking with you?

[00:35:31] Speaker 03:
What do you have in that bag?

[00:35:33] Speaker 04:
Understood.

[00:35:35] Speaker 04:
I think that the Delaware law, what it says is that to be blamelessly ignorant is not whether you asked a question, necessarily, but whether an inquiry, if pursued, if you did it, would have uncovered anything.

[00:35:47] Speaker 04:
And so the person who investigates for a month and finds nothing is just as blamelessly ignorant as the person who doesn't ask and wouldn't have uncovered anything.

[00:35:57] Speaker 04:
And it basically, Delaware law, logically, does not penalize a party for not conducting an inquiry that would have been too tough.

[00:36:03] Speaker 07:
OK.

[00:36:04] Speaker 07:
Thank you.

[00:36:06] Speaker 07:
And I know you reserve rebuttal, but proceed and respond to your proper appeals.

[00:36:09] Speaker 07:
That's way.

[00:36:10] Speaker 07:
We thank both counsels.

[00:36:11] Speaker 07:
The case is submitted.