[00:00:37] Speaker 02:
Okay.

[00:00:38] Speaker 02:
Our next case is number 14-1405, Sealant Systems International versus Tech Global.

[00:00:45] Speaker 02:
Mr. Jackson.

[00:00:55] Speaker 00:
Thank you, your honor.

[00:00:56] Speaker 00:
May it please the court?

[00:00:58] Speaker 00:
Good morning.

[00:00:58] Speaker 00:
Dan Jackson of Kekker & Van Nest, representing Tech.

[00:01:02] Speaker 00:
On December 5th, 2014, this court stayed the permanent injunction in this case.

[00:01:08] Speaker 00:
the court should now reverse that injunction entirely.

[00:01:11] Speaker 00:
As the court recognizes its stay orders, AMI and SSI do not practice the 581 patent on which the injunction is based.

[00:01:19] Speaker 00:
SSI doesn't own the patent and concedes it lacks standing.

[00:01:23] Speaker 00:
AMI does not compete with TEC, although it claims otherwise in its briefs.

[00:01:30] Speaker 02:
Do we have in the appendix here a visual representation of the accused's product?

[00:01:40] Speaker 00:
I don't believe that there's a direct representation of the accused product, but the 110 patent is a fair representation of the accused product.

[00:01:55] Speaker 00:
In other words, the accused product practices the 110 patent, which is included in the materials.

[00:02:06] Speaker 02:
Hard to follow some of the testimony because it appears to be

[00:02:10] Speaker 02:
referring to graphics which aren't included.

[00:02:13] Speaker 02:
That makes it very hard to follow.

[00:02:16] Speaker 00:
I understand.

[00:02:16] Speaker 00:
Is there a particular?

[00:02:20] Speaker 00:
Just go ahead.

[00:02:21] Speaker 00:
We'll get to it.

[00:02:23] Speaker 01:
I can't resist.

[00:02:24] Speaker 01:
As somebody who's obviously very familiar with Murphy's Law, as you can tell, I really didn't appreciate the opening paragraph of your brief or the attacks on the

[00:02:39] Speaker 01:
judicial officer.

[00:02:40] Speaker 01:
I mean, do you think those were really necessary to get your message across that you're appealing particular issues in this case?

[00:02:46] Speaker 00:
I'm sorry, Your Honor.

[00:02:48] Speaker 00:
That was not our intent.

[00:02:50] Speaker 00:
Our intent was to express that there were multiple errors that were of a cumulative nature.

[00:02:57] Speaker 00:
But by no means did we intend to attack or give the impression that we were attacking Ms.

[00:03:02] Speaker 00:
Graywall, who we respect very much.

[00:03:04] Speaker 01:
And it's clear that part of the, at least,

[00:03:08] Speaker 01:
argument here is that to the extent a lot of things went wrong below, that they went wrong because there were mistakes made below because you didn't act quickly enough with respect to certain actions as it relates to what you were supposed to do or what you were supposed to claim.

[00:03:27] Speaker 01:
I mean it doesn't look like placing all the blame on the judge here is really fair, is it?

[00:03:35] Speaker 00:
Well I think that there were

[00:03:37] Speaker 00:
definitely errors by the magistrate judge that are not attributable in any way to TEC.

[00:03:46] Speaker 00:
For example, the permanent injunction that I began with, there is no, I don't think, sense in which TEC failed to make its case that in fact AMI does not compete with TEC.

[00:04:04] Speaker 00:
AMI only acquired the 581

[00:04:07] Speaker 00:
after this litigation began.

[00:04:09] Speaker 00:
SSI, AMI relies in large part on SSI's reported lost profits, but those are irrelevant because SSI doesn't own the 5A1 patent and concedes it lack standing, as I mentioned, and AMI's witnesses admitted at trial that AMI, quote, cannot identify one sale that went to tech that would have gone to SSI, but for the infringement of the 5A1 patent,

[00:04:36] Speaker 00:
since it's purchased by AMI.

[00:04:39] Speaker 00:
It also makes no sense for AMI to claim that it is stepping into IDQ's shoes if you purchase the patent from IDQ in 2011 for purposes of the injunction because AMI vigorously asserts, in connection with the marketing, sorry, marketing argument, that IDQ also never lost any sales to tech.

[00:05:02] Speaker 00:
In any event, having stepped into IDQ's shoes

[00:05:06] Speaker 00:
AMI is charged with IDQ's dilatory conduct and never asserting this patent.

[00:05:11] Speaker 00:
And even after AMI bought the patent, it never sought a preliminary injunction.

[00:05:16] Speaker 00:
And even if AMI could get past all of those problems, it can't show causation.

[00:05:22] Speaker 00:
AMI's only attempt to prove causation is its assertion that tech's tire repair kit wouldn't work if not for

[00:05:31] Speaker 00:
the two-piece receptacle and port design of 581 Claim 27.

[00:05:36] Speaker 01:
Let me ask you about your standing argument.

[00:05:39] Speaker 01:
AMI did own the patent at the time it filed the claim, correct?

[00:05:47] Speaker 00:
AMI owned the patent at the time SSI amended its complaint at AMI as a party asserting.

[00:05:55] Speaker 01:
Well, AMI was added as a new party plaintiff, right?

[00:06:01] Speaker 00:
The complaint was amended to add them.

[00:06:04] Speaker 00:
They didn't file a separate claim or a separate lawsuit.

[00:06:07] Speaker 01:
Right.

[00:06:07] Speaker 01:
So why didn't you move to dismiss for misjoinder?

[00:06:12] Speaker 01:
Isn't that really the problem here?

[00:06:13] Speaker 01:
It's a procedural problem that you ultimately waived?

[00:06:18] Speaker 00:
It is not clear to me.

[00:06:20] Speaker 00:
I've not seen a case directly on point that addresses whether this could be merely a procedural issue that can be waived or is a standing issue

[00:06:31] Speaker 01:
Well, you just admitted that AMI could have filed its own lawsuit at the time.

[00:06:36] Speaker 00:
That's right.

[00:06:36] Speaker 00:
AMI could have filed a separate lawsuit and sought to consolidate it with this lawsuit.

[00:06:44] Speaker 00:
It did not do so, and because it didn't do so, there was only ever one lawsuit, and our point was standing.

[00:06:51] Speaker 01:
But you never moved to dismiss for misjoinder.

[00:06:53] Speaker 00:
That's correct.

[00:06:53] Speaker 01:
That's correct.

[00:06:54] Speaker 01:
And it's true that misjoinder is wakeable, is it not?

[00:07:00] Speaker 00:
They didn't join, they simply amended the complaint.

[00:07:04] Speaker 00:
And because there was only ever the one lawsuit, the rule that standing is evaluated at the time of the filing of suit applies.

[00:07:16] Speaker 02:
But they did own the patent at the time they filed the counterclaim, right?

[00:07:23] Speaker 00:
They owned the patent at the time the SSI amended the complaint at AMI.

[00:07:30] Speaker 00:
asserting the patent.

[00:07:32] Speaker 00:
But SSI did not have standing to assert the patent and our point or really question because really we're required in the jurisdictional statement to take a position on jurisdiction and my point really is that there are many other issues in this case and errors that we focus on but jurisdiction is something that has to be addressed and it is

[00:07:58] Speaker 00:
at the very least unclear to me that a party can sort of retroactively create article 3 standing by saying, well, we could have followed protocol.

[00:08:06] Speaker 01:
Well, they didn't create standing for SSI.

[00:08:09] Speaker 01:
SSI, the jury verdict only went to AMI.

[00:08:12] Speaker 01:
SSI never argued a standing to assert, didn't ask for the verdict form or the jury instructions to reflect that SSI was a party plaintiff with respect to the 581, did it?

[00:08:24] Speaker 00:
No, I'm not saying that.

[00:08:25] Speaker 00:
I'm saying that AMI was added

[00:08:29] Speaker 00:
Not by bringing a separate lawsuit and seeking to consolidate the actions.

[00:08:34] Speaker 01:
Yes, procedurally all wrong.

[00:08:36] Speaker 01:
But you never asked to have that corrected.

[00:08:39] Speaker 00:
That's correct.

[00:08:40] Speaker 00:
If it's simply a procedural issue, that's true.

[00:08:45] Speaker 00:
If it's a core, a standing issue based on the rule that standing is evaluated as of the commencement of the suit, which was commenced by SSI, then we would submit that it does raise a standing question, which can't be waived.

[00:08:58] Speaker 00:
Okay.

[00:08:58] Speaker 00:
That's our position.

[00:08:59] Speaker 01:
All right.

[00:09:00] Speaker 01:
Let's move on to something else.

[00:09:01] Speaker 02:
Let's talk about the 581.

[00:09:02] Speaker 02:
Yes, Your Honor.

[00:09:04] Speaker 02:
And as I understand it, you say that you point out that their expert testified that there was a port, right?

[00:09:13] Speaker 02:
That's correct, Your Honor.

[00:09:14] Speaker 02:
And the notion with the claims other than claim 42 is that there was lacking a receptacle ceiling we connected.

[00:09:23] Speaker 02:
Is that correct?

[00:09:25] Speaker 00:
That's correct, except for that

[00:09:27] Speaker 00:
The port in any claim that has the only claim that really remains for this purpose, which is claim 27, has a port and a receptacle.

[00:09:38] Speaker 00:
It's the port that is ceilingly connected to the bottle.

[00:09:42] Speaker 00:
The receptacle is simply a hole in which the port is located.

[00:09:48] Speaker 00:
The district court at AMI's insistence construed receptacle

[00:09:54] Speaker 00:
to simply be something that receives or contains something.

[00:09:57] Speaker 00:
It doesn't have to have any particular structure.

[00:09:59] Speaker 00:
And so when the expert admitted that socket 18 of the 282 prior art publication, the socket is sort of like a socket that a light bulb would screw into, the bottle screws into it, he conceded that socket 18 is a port.

[00:10:17] Speaker 00:
And he conceded that the 282 has a hole that the socket 18 goes into.

[00:10:22] Speaker 00:
So the only issue is whether that hole is a receptacle.

[00:10:26] Speaker 00:
AMI says, no, it's not because a receptacle can contain something, but a hole can't contain anything.

[00:10:33] Speaker 00:
But that's not the case.

[00:10:34] Speaker 00:
And it's particularly not the case here because Dr. King admitted.

[00:10:37] Speaker 02:
I thought the district court said that it didn't qualify as a receptacle because it wasn't sealingly connected, which I found a little puzzling since the 282 talks about being sealed.

[00:10:51] Speaker 00:
That's right.

[00:10:52] Speaker 00:
As I read it, the argument that the magistrate judge agreed with but that came from AMI is circular in nature.

[00:11:01] Speaker 00:
It's basically a mouth to saying that the socket isn't a port because the hole it's in isn't a receptacle because the hole doesn't ceilingly fit, the bottle doesn't ceilingly fit in the hole, but it ceilingly fits inside the port, which is what Claim 27 requires.

[00:11:23] Speaker 00:
which is inside the hole, and it wouldn't make any sense now, you know, it's screwed into both things.

[00:11:27] Speaker 00:
I mean, the receptacle is just the location for the port in this claim where the two are separate.

[00:11:34] Speaker 00:
In claim one, which the jury found anticipated and invalid, essentially the port and the receptacle are the same thing.

[00:11:43] Speaker 00:
The bottle just screws into this.

[00:11:46] Speaker 00:
And the witnesses for AMI... It seems to me, Frank, looking at this,

[00:11:52] Speaker 03:
that the receptacle is sort of where the user aims the tube.

[00:12:00] Speaker 03:
It's like, okay, this is where the port's gonna be.

[00:12:05] Speaker 03:
In common usage, in the norm, somebody who's looking for that port might find it a lot easier to spot if there's a place there that fits the tube.

[00:12:22] Speaker 00:
Well, I think that's mostly correct.

[00:12:24] Speaker 00:
I mean, I would say that to return to the light bulb analogy, the port is, if you're going to screw in a light bulb, usually there's a metal thing with threads in there.

[00:12:34] Speaker 00:
That sits inside the other larger piece.

[00:12:40] Speaker 00:
The larger piece that is cylindrical is the receptacle.

[00:12:44] Speaker 00:
And the metal piece that's with the threads is the port.

[00:12:47] Speaker 00:
If you were to have, for design reasons or something,

[00:12:52] Speaker 00:
aesthetics, a single unified piece that it screwed into and then that would be just the receptacle in the claim one sense of a receptacle that seemingly receives the bottle or the light bulb in whichever case.

[00:13:09] Speaker 00:
But the expert admitted, I think, that every element of the claim 27 is found in the 282 because

[00:13:23] Speaker 00:
He admitted that the socket is a port, and then it sits inside of a hole.

[00:13:29] Speaker 00:
And the argument that a hole can't contain something, I don't think makes much sense, especially given that here it does contain the socket.

[00:13:39] Speaker 02:
You're in here.

[00:13:40] Speaker 02:
Rebuttal time.

[00:13:41] Speaker 02:
Do you want to say that?

[00:13:42] Speaker 02:
Thank you.

[00:13:42] Speaker 00:
I would like to say it.

[00:13:52] Speaker 02:
Mr. Gibson.

[00:13:55] Speaker 04:
Good morning, Your Honors.

[00:13:56] Speaker 04:
May it please the Court, Stan Gibson, on behalf of Sealance Systems International and Accessories Marketing, Inc.

[00:14:01] Speaker 03:
Mr. Gibson, would you concede that absent waiver AMI lacks standing?

[00:14:08] Speaker 04:
No, AMI certainly has standing.

[00:14:11] Speaker 04:
AMI asserted the patent when it owned it.

[00:14:14] Speaker 04:
The cases all address that issue of the cases where the lawsuit's been filed, the patent

[00:14:23] Speaker 04:
is not owned at the time it's asserted.

[00:14:25] Speaker 04:
So we're looking at Article III standing in that situation.

[00:14:28] Speaker 04:
Article III standing requires injury in fact.

[00:14:31] Speaker 04:
Obviously if you don't own a patent and you assert it, without owning it you don't have injury in fact.

[00:14:36] Speaker 03:
But regardless of whether you assert a patent into... Is it correct that the assertion was made when it was not owned?

[00:14:46] Speaker 03:
I'm referring to the statement in the yellow brief in which Tech says

[00:14:51] Speaker 03:
sealant and AMI cannot deny that when they added the 581 patent to this case, they falsely asserted that AMI owned it when sealant first filed the suit.

[00:15:02] Speaker 04:
That was a typographical error, Your Honor.

[00:15:04] Speaker 04:
That is not a correct statement.

[00:15:06] Speaker 04:
The patent was purchased after SSI filed the declaratory relief suit on the 110 patent.

[00:15:12] Speaker 04:
But at the time that AMI filed or added itself into the case, was added into the case, it owned the patent.

[00:15:19] Speaker 04:
And I think that's all that's required for Article III standards.

[00:15:22] Speaker 01:
Would you agree, though, that procedurally it was completely improper to add AMI as a party plaintiff with an independent cause of action?

[00:15:30] Speaker 04:
I would agree that it's an unusual procedural posture to have.

[00:15:35] Speaker 04:
However, there was a stipulation where Tech Corps was later added.

[00:15:39] Speaker 04:
The parties agreed to it.

[00:15:40] Speaker 04:
The reason for that was patent litigation is expensive.

[00:15:43] Speaker 04:
I think both parties felt that it was more efficient to handle both cases together because the technology was so closely related.

[00:15:50] Speaker 04:
uh... and these are companies that do directly compete with each other so it was it was done procedurally as it is and i think that in the record uh... i can find that your honor as we're uh... as we're talking about it i did want to cover the the injunction uh... issue as well uh... where they started and i understand the court did stay the injunction i want to address one particular point uh... on that issue

[00:16:20] Speaker 04:
in particular, the lost sales issue.

[00:16:24] Speaker 02:
It's true.

[00:16:25] Speaker 02:
Wait, wait, wait.

[00:16:25] Speaker 02:
Why don't you find the reference first?

[00:16:29] Speaker 02:
You can't find it now.

[00:16:30] Speaker 02:
You can do it on your rebuttal.

[00:16:33] Speaker 04:
It's in footnote two of our brief, Your Honor.

[00:16:36] Speaker 04:
And it is cited at A6467-69.

[00:16:47] Speaker 02:
Going back to the injunction issue.

[00:16:49] Speaker 02:
I want you to start with the 581 patent.

[00:16:53] Speaker 02:
You heard the discussion about that.

[00:16:55] Speaker 02:
Why are these claims, other than claim 42, not anticipated or made obvious by the 282?

[00:17:02] Speaker 02:
You have the testimony by your own expert that there's a port here.

[00:17:08] Speaker 02:
The patent talks about seal.

[00:17:11] Speaker 04:
What's missing?

[00:17:13] Speaker 04:
Because what the argument is on the other side is they just look at the word receptacle.

[00:17:17] Speaker 04:
The receptacle has to be formed in the housing, and in claim 27, that's explicitly stated, it has to be formed in the housing, and it has to be in communication with the airflow path.

[00:17:27] Speaker 04:
All we have in 282 is a hole.

[00:17:32] Speaker 04:
There's no structure there.

[00:17:34] Speaker 04:
There's nothing that communicates with the airflow path.

[00:17:37] Speaker 04:
There's nothing that's formed in the housing.

[00:17:38] Speaker 04:
It's just an absence of structure.

[00:17:40] Speaker 04:
And so what the claim 27 is talking about is not just a receptacle.

[00:17:45] Speaker 04:
It has to be a receptacle formed in the housing.

[00:17:47] Speaker 04:
And it has to be in communication with the airflow path.

[00:17:52] Speaker 04:
And to do those things, to be in communication with the airflow path, it also has to ceilingly receive.

[00:17:57] Speaker 02:
Now, I don't recall the district court relying on connected to the airflow path.

[00:18:05] Speaker 02:
He seemed to think that it wasn't ceilingly received.

[00:18:09] Speaker 02:
Am I correct about that?

[00:18:10] Speaker 04:
He did focus on the ceiling receive part of it.

[00:18:13] Speaker 02:
That's not correct, right?

[00:18:15] Speaker 02:
Because in the 282, it is ceilingly received.

[00:18:19] Speaker 02:
Is it not?

[00:18:20] Speaker 04:
In the 282, the receptacle is not seen.

[00:18:22] Speaker 04:
There's no receptacle.

[00:18:24] Speaker 04:
There's a court that ceilingly receives, but no receptacle.

[00:18:27] Speaker 04:
So you have a one piece structure.

[00:18:29] Speaker 04:
And both experts testified that there is no receptacle in 282 that ceilingly receives.

[00:18:35] Speaker 04:
And the district court did, your honor is correct, the district court did rely on that testimony.

[00:18:39] Speaker 04:
It also relied on the fact that there was no receptacle formed in the housing, and a hole is simply not formed in the housing.

[00:18:45] Speaker 04:
And both experts' testimony is certainly substantial evidence on which the jury could rely to find the patent valid.

[00:18:52] Speaker 02:
Can we treat the, for present purposes, the depiction of the invention in the 110 as being the accused device here?

[00:19:00] Speaker 04:
It was represented in court by tech as the commercial embodiment of the 110 patent.

[00:19:07] Speaker 04:
It's not the only embodiment of the 110 patent.

[00:19:09] Speaker 02:
Well, I'm asking you, can we, because you both have created a very confusing record here because there's all sorts of testimony about the accused device, but there's no depiction of it.

[00:19:22] Speaker 02:
So can we treat the 110

[00:19:24] Speaker 02:
as a depiction of the accused device?

[00:19:27] Speaker 04:
Yes, Your Honor.

[00:19:28] Speaker 04:
I think that would be fine.

[00:19:29] Speaker 04:
I apologize that there's not a citation in the record.

[00:19:31] Speaker 04:
That's probably because the infringement issue is not up on appeal on the 581.

[00:19:38] Speaker 04:
So we didn't put a picture of the accused device.

[00:19:40] Speaker 04:
But the accused device does look like the figures that are in the 110 patent.

[00:19:46] Speaker 02:
OK, so how is the 110 depiction not the same as the 282?

[00:19:54] Speaker 02:
In other words, the problem I'm having is seeing how the 282 could not anticipate when the accused device here infringes.

[00:20:04] Speaker 04:
The 110, Your Honor, has a receptacle and a court.

[00:20:09] Speaker 04:
If you look at figure two,

[00:20:23] Speaker 04:
Your Honor, you see the device that the sealant canister is going to go into.

[00:20:29] Speaker 04:
That is the port.

[00:20:30] Speaker 04:
And the port comes out of, you can see that it's going to be inserted into the receptacle.

[00:20:38] Speaker 04:
And that receptacle is, in fact, in communication with the air flow path.

[00:20:41] Speaker 04:
The receptacle is what, 48?

[00:20:43] Speaker 04:
I believe it is 49.

[00:20:45] Speaker 04:
48 is the port.

[00:20:49] Speaker 04:
So that's the two-piece structure.

[00:20:51] Speaker 04:
48 is the port, and then 49... Well, that sits on the... 48 sits right on 49, right?

[00:20:58] Speaker 04:
It does, Your Honor.

[00:20:58] Speaker 04:
It goes into 49.

[00:21:01] Speaker 04:
And 49 is the receptacle.

[00:21:04] Speaker 04:
It's formed in the housing.

[00:21:05] Speaker 02:
But there's no separate area for the accumulation of the sealant in there?

[00:21:12] Speaker 04:
The sealant accumulates... I believe it does... The sealant accumulates in the port area.

[00:21:20] Speaker 04:
as well as then some sealant goes into the receptacle and into the airflow path.

[00:21:24] Speaker 04:
Because the receptacle, it's not just a hole, it's in communication with the airflow path, which we can see there's a knot that's coming out in the figure.

[00:21:34] Speaker 04:
Well, why isn't that true in the 282 also?

[00:21:36] Speaker 04:
Because the 282 has nothing.

[00:21:38] Speaker 04:
It is nothing more than a hole that has no structure.

[00:21:44] Speaker 04:
There's nothing formed in the housing.

[00:21:47] Speaker 04:
There's nothing that

[00:21:49] Speaker 04:
concealing and received.

[00:21:50] Speaker 04:
And the claim 27 explicitly requires for there to be a, that there's a receptacle that's formed in the housing as a separate piece.

[00:22:02] Speaker 02:
And a hole doesn't satisfy that.

[00:22:03] Speaker 02:
Well, I'm not, I'm sorry, I'm not seeing the difference between what's shown on page 145 and the 282.

[00:22:13] Speaker 02:
Well, Your Honor, where's there a separate

[00:22:17] Speaker 02:
receptacle here because you say that 48 is in direct contact with 49.

[00:22:23] Speaker 02:
That's correct, but 49 has structure.

[00:22:26] Speaker 04:
There's structure that is going to surround that port and receive that port.

[00:22:32] Speaker 04:
There's nothing like that in the 282.

[00:22:33] Speaker 04:
The 282 is just a hole.

[00:22:35] Speaker 02:
There's two... Yeah, but it's a receptacle.

[00:22:40] Speaker 02:
The pen's not talking about a receptacle for

[00:22:45] Speaker 02:
What's listed here is 48.

[00:22:46] Speaker 02:
It's talking about a receptacle for the sealant, right?

[00:22:50] Speaker 04:
Well, it's talking about a receptacle that's formed in the housing.

[00:22:53] Speaker 04:
For the sealant?

[00:22:55] Speaker 04:
No, it has the port goes into the receptacle, just like it does in Figure 2, which is why the jury found infringement, which isn't even challenged on appeal.

[00:23:04] Speaker 04:
There's two separate structures.

[00:23:06] Speaker 04:
There's the structure for the receptacle and a separate structure for the port.

[00:23:12] Speaker 04:
And in Figure 2,

[00:23:14] Speaker 04:
Both of those structures are going to receive sealant and going to ceilingly receive it.

[00:23:21] Speaker 02:
Looking at the 282 on 2363, it seems as though, just as on page 145, the bottle of sealant goes into a port or whatever you want to call it.

[00:23:42] Speaker 02:
Why isn't that the same structure as we see on 145?

[00:23:46] Speaker 04:
Because there's no receptacle, Your Honor.

[00:23:49] Speaker 04:
There's simply an opening in the housing, and there's nothing underneath it.

[00:23:57] Speaker 04:
The pork just simply sits there.

[00:23:58] Speaker 04:
There's no separate structure.

[00:24:00] Speaker 04:
There's nothing there.

[00:24:02] Speaker 03:
Does that not guide the user in that hole?

[00:24:07] Speaker 04:
I don't know that it guides the user in.

[00:24:09] Speaker 04:
It's just a hole.

[00:24:10] Speaker 04:
It's just where the port sits.

[00:24:13] Speaker 04:
Why isn't that a receptacle?

[00:24:15] Speaker 04:
Because it's not formed in the housing.

[00:24:17] Speaker 04:
There's no housing around it.

[00:24:18] Speaker 04:
If we look at Figure 2, there's a housing that forms the receptacle.

[00:24:26] Speaker 04:
And there's no receptacle that's going to seemingly receive.

[00:24:29] Speaker 04:
Both experts admitted that, or a text expert admitted that.

[00:24:32] Speaker 01:
Is your argument really the absence of communication with the air flow path?

[00:24:37] Speaker 01:
Is that, I mean, that's not, it didn't seem to be the way you were making your argument in the brief, but.

[00:24:43] Speaker 04:
That's an additional point, but the formed in the housing and the ceiling you receive are the two arguments that for any of those three reasons, there's a receptacle in the one that's shown on the figure two of the 110 patent that's not in 282.

[00:25:03] Speaker 01:
Now the formed in the housing appears in claim 42.

[00:25:07] Speaker 01:
The formed in the housing is not in client 27.

[00:25:11] Speaker 04:
It is, Your Honor.

[00:25:12] Speaker 04:
The element is a receptacle formed in said housing in communication with said airflow path.

[00:25:20] Speaker 04:
And a port disposed in said receptacle in communication with said airflow path.

[00:25:27] Speaker 02:
So the idea here, if I'm understanding correctly, is that in the 282, there's no floor

[00:25:37] Speaker 02:
On which 48 rests in the 110?

[00:25:48] Speaker 04:
That's part of the structure, Your Honor.

[00:25:49] Speaker 04:
There's also no surrounding wall structure.

[00:25:51] Speaker 04:
There's no floor.

[00:25:52] Speaker 04:
There's nothing that's formed in the housing in 282.

[00:25:54] Speaker 04:
It's just an opening.

[00:25:56] Speaker 04:
Well, there is a surrounding wall structure, isn't there?

[00:25:59] Speaker 04:
I think if you're looking at the demonstrator that was used at trial, there's lines that have been created.

[00:26:04] Speaker 04:
Well, I can't look at the demonstrator that was used at trial because you guys didn't include it in the joint appendix.

[00:26:09] Speaker 04:
It's in their brief.

[00:26:10] Speaker 04:
They put it into their brief.

[00:26:12] Speaker 04:
And that in the brief, there's been some lines that have been drawn in, but those aren't in the actual 282.

[00:26:19] Speaker 04:
The 282 has no walls.

[00:26:22] Speaker 04:
It is just an opening at the top that the port sits in.

[00:26:26] Speaker 02:
We're looking at 2363.

[00:26:29] Speaker 02:
Why aren't the walls there?

[00:26:32] Speaker 04:
There's no walls there.

[00:26:37] Speaker 04:
Both experts agreed there were no walls there.

[00:26:43] Speaker 04:
And that should be substantial evidence to support the jury's verdict.

[00:26:47] Speaker 04:
If I might just briefly mention one thing on the injunction, Your Honor.

[00:26:50] Speaker 04:
In terms of the sale issue,

[00:26:53] Speaker 04:
One of the things that has been ignored by tech is the issue of the design wins.

[00:26:57] Speaker 04:
And there clearly were design wins here.

[00:26:59] Speaker 04:
So when AMI says it hasn't lost sales, what it hasn't lost since it bought the patent are design wins.

[00:27:06] Speaker 04:
There have been additional lost sales.

[00:27:08] Speaker 04:
That's why there's a damage amount that was awarded.

[00:27:10] Speaker 04:
That's why there's supplemental damages.

[00:27:11] Speaker 04:
So there is ongoing harm because once you have a design win, you're locked in into the market.

[00:27:20] Speaker 04:
And for those car platforms,

[00:27:22] Speaker 04:
The manufacturers, the original equipment manufacturers don't change what is going in to the car.

[00:27:28] Speaker 04:
They wait until the next platform comes out.

[00:27:30] Speaker 04:
So there's a long lock-in, maybe several years, where these products continue to be sold.

[00:27:36] Speaker 04:
So that is the irreparable harm.

[00:27:39] Speaker 04:
And there are ongoing losses that are accumulating.

[00:27:44] Speaker 04:
In the absence of injunction would be additional design wins and there'll be further incumbency to benefits and that's what leads to the irreparable harm.

[00:27:52] Speaker 01:
So let me ask you a question.

[00:27:54] Speaker 01:
For purposes of your damages analysis, was the base that was used for calculating royalty, did that begin as of the date of infringement or did it only begin as of the date of the purchase?

[00:28:08] Speaker 04:
I believe it went back to the date of infringement, Your Honor.

[00:28:13] Speaker 02:
How could the reasonable royalty here be determined based on what happened in 2007 when your clients weren't even in the picture at that point?

[00:28:28] Speaker 04:
Well, I think as a matter of law, the date of first infringement has to be the date of the hypothetical negotiation.

[00:28:33] Speaker 02:
So that's when... Well, but right.

[00:28:36] Speaker 02:
And the date of the first infringement here is before your clients acquired the patent, right?

[00:28:42] Speaker 02:
That is correct, Your Honor.

[00:28:43] Speaker 02:
So why are they sitting there at the hypothetical negotiation when they didn't even enter the picture?

[00:28:49] Speaker 04:
Well, the evidence from both experts was that they're not necessarily sitting there.

[00:28:53] Speaker 04:
Their interests are taken into consideration.

[00:28:54] Speaker 04:
Why?

[00:28:55] Speaker 04:
They didn't own the patent.

[00:28:57] Speaker 02:
How can their interests be taken into account?

[00:28:59] Speaker 02:
Well, and it's through the Book of Wisdom that both experts testify.

[00:29:02] Speaker 02:
What Book of Wisdom case says you take somebody who didn't own the patent and put them at the hypothetical negotiation?

[00:29:07] Speaker 04:
Well, I think what the Book of Wisdom says is you consider what happened in the future.

[00:29:10] Speaker 04:
There's not a particular case that's precisely like our case.

[00:29:14] Speaker 02:
All the Book of Wisdom cases involve looking at sales that happened later, not bringing in parties who didn't have a connection to the patent at an earlier time, right?

[00:29:23] Speaker 04:
That's correct, Your Honor.

[00:29:25] Speaker 04:
But I think that what the Book of Wisdom says is you look at interests that occur later.

[00:29:29] Speaker 04:
What are the facts that have occurred later?

[00:29:31] Speaker 04:
And these are additional facts that would be taken into consideration.

[00:29:34] Speaker 01:
But at most, the IDQ could be saying, well,

[00:29:37] Speaker 01:
AMI is going to purchase it ten years from now.

[00:29:40] Speaker 01:
Even if you're right that you take that into account, how could you possibly take into account an interest that before it actually exists?

[00:29:51] Speaker 04:
I think that's what the book of wisdom allows you to do in terms of the facts here.

[00:29:55] Speaker 04:
I agree with that, Your Honor, but there are

[00:30:01] Speaker 04:
cases that have talked about using the book of wisdom, and both experts here, and I think it's a factual question as to what interests are taken at the hypothetical negotiation, both experts agreed.

[00:30:11] Speaker 04:
It was only after trial that Tech came up with a different argument.

[00:30:16] Speaker 04:
Otherwise, their expert and our expert agreed that AMI's interests would be taken into consideration at the hypothetical negotiation.

[00:30:22] Speaker 02:
Well, their expert appeared to conclude that that was legally compelled, whereas that's an issue.

[00:30:29] Speaker 04:
Their expert testified as to the interest that would be taken into consideration in hypothetical negotiation.

[00:30:36] Speaker 04:
I don't believe she felt legally compelled to do that.

[00:30:38] Speaker 02:
Well, she said because of the Book of Wisdom.

[00:30:40] Speaker 04:
And she explained in her words what that was, in her expert opinion what that was.

[00:30:44] Speaker 02:
Why we don't take expert opinions is to the meaning of the legal principles for the Book of Wisdom.

[00:30:50] Speaker 04:
Well, I think the question, though, is whether

[00:30:52] Speaker 04:
The interest and the facts that you look at for Georgia Pacific factors to do this hypothetical negotiation is a factually intensive exercise.

[00:31:00] Speaker 04:
And that's something that the experts should, that if they agree upon, is something the jury can put weight upon.

[00:31:07] Speaker 04:
I don't think it's a legal determination as to what facts and interests those experts use to do their hypothetical negotiation.

[00:31:16] Speaker 03:
Isn't your hypothetical participant barred by the role in perpetuity?

[00:31:21] Speaker 03:
That was a joke.

[00:31:24] Speaker 02:
All right, Mr. Gibson, you're into your rebuttal time.

[00:31:27] Speaker 02:
We'll give you a minute.

[00:31:29] Speaker 02:
All right, thank you.

[00:31:44] Speaker 03:
I'm not going to pile on, but I'm going to just add to what Judge O'Malley said at the beginning.

[00:31:51] Speaker 03:
At the bottom, I use briefs as an opportunity to teach my clerks as well.

[00:31:56] Speaker 03:
In the bottom of that first paragraph, I have underlined bad writing.

[00:32:02] Speaker 00:
Well, I'm sorry for that, Your Honor.

[00:32:03] Speaker 00:
Very, very sorry.

[00:32:05] Speaker 02:
You heard our discussion of the 581 and the argument that Mr. Gibson seems to be making now is a bit different as the argument in the brief.

[00:32:16] Speaker 02:
So help us understand whether there was a receptacle here.

[00:32:22] Speaker 00:
Thank you, Your Honor.

[00:32:23] Speaker 00:
I would like to do exactly that.

[00:32:27] Speaker 00:
The argument, as just stated, is largely based on the notion that it is simply an opening and it's not formed in the housing.

[00:32:37] Speaker 00:
But at AMI's insistence... They say it doesn't have walls or floors.

[00:32:43] Speaker 00:
Right.

[00:32:44] Speaker 00:
And the claim construction, which the judge adopted AMI's proposal there, the judge said

[00:32:53] Speaker 00:
and this is on page seven of the claim construction order, A25.7.

[00:32:56] Speaker 00:
Nor does the claim language or specification require that the receptacle be integral to the housing.

[00:33:03] Speaker 00:
The court rejected the notion that there was some particular structure to the receptacle and said that, quote, a person skilled in the art would understand receptacle as something that receives or contains something.

[00:33:16] Speaker 00:
So the notion that there has to be a wall or something formed in the housing is contrary to the court's

[00:33:23] Speaker 00:
construction and AMI's own arguments that led to that construction.

[00:33:28] Speaker 00:
And even in their brief on page 20, they admit that a wall is not necessary to have a receptacle.

[00:33:36] Speaker 00:
They sort of back away from their expert, Dr. King, who did talk at length about how a wall would have made this hole a receptacle.

[00:33:47] Speaker 00:
And in fact,

[00:33:51] Speaker 00:
there is no such requirement of a wall that's contrary to the construction and now on appeal they sort of disavow the notion of a wall.

[00:33:59] Speaker 00:
So the hole in which the socket 18 of the 282 sits is the receptor hole.

[00:34:07] Speaker 01:
I would like to, before my time is up... But his whole point is that it has to be actually formed in the housing and to be formed in the housing it has to be in communication with the airflow.

[00:34:20] Speaker 01:
How is that

[00:34:21] Speaker 01:
found in the 282.

[00:34:24] Speaker 01:
What structure shows that?

[00:34:26] Speaker 00:
The premise is incorrect, Your Honor, because to be formed in the housing, it simply has to be a hole that's, you know, in the housing that the court can then sit inside.

[00:34:37] Speaker 00:
It actually doesn't make sense to say that it would communicate with the airflow path because that would, I mean, in AMI's own brief, they say that would cause leaks.

[00:34:48] Speaker 00:
I mean, to have two,

[00:34:50] Speaker 00:
the airflow and the sealant go into the port and then from there into the tire.

[00:34:58] Speaker 00:
I would like to, before my time is up, just so he doesn't get... The whole idea of the port is that it's screw sealed, correct?

[00:35:05] Speaker 00:
That's correct.

[00:35:06] Speaker 00:
It has threads that the bottle of sealant screws into.

[00:35:09] Speaker 00:
And that's what the 282 sets, right?

[00:35:12] Speaker 00:
That's exactly right.

[00:35:15] Speaker 00:
I would just like to say that we also think that the

[00:35:20] Speaker 00:
The summary judgment of invalidity of the 110 should be reversed.

[00:35:25] Speaker 00:
That boils down to the question of whether the additional hose, the whole purpose of which is to, as the patent explicitly says, to quickly and easily inflate a tire without using the sealant, whether that's connectable to the tire.

[00:35:42] Speaker 00:
The specification directly answers that.

[00:35:44] Speaker 00:
It says that the additional hose is connectable to the tire.

[00:35:47] Speaker 00:
the magistrate judge aired by reading that limitation to apply to a prior art device whose hose is not connectable to the tire.

[00:35:58] Speaker 02:
Okay.

[00:36:00] Speaker 02:
Thank you, Mr. Jackson.

[00:36:01] Speaker 02:
Mr. Gibson, I don't think any of the cross appeal was addressed, so there's nothing further to discuss.

[00:36:08] Speaker 02:
I would note that your certificate, if you could just stand here for a moment.

[00:36:15] Speaker 02:
that your certificate at the end of your brief says that the brief is in 14-point height, and that's not correct, is that the brief is in 12-point height.

[00:36:30] Speaker 02:
You shouldn't be certifying to something not correct.

[00:36:35] Speaker 02:
All right.

[00:36:35] Speaker 02:
We thank both counsels.

[00:36:36] Speaker 02:
The case is submitted, and that concludes our session for the