[00:00:00] Speaker 00:
This morning is 15150 for Trirem Medical versus Anglo score.

[00:00:07] Speaker 00:
I know you need no rush.

[00:00:08] Speaker 00:
We know you need to set up here.

[00:00:53] Speaker 00:
Mr. Kane?

[00:00:56] Speaker 02:
Yes, may I please record David Kane for the appellant triory medical.

[00:01:00] Speaker 02:
And I believe I reserved three minutes for rebuttal.

[00:01:07] Speaker 02:
The district court erred in its interpretation of a May 1, 2003 consulting agreement between Dr. Chaim Lotan and Angios Quar.

[00:01:19] Speaker 02:
It was the district court's erroneous contract interpretation that led the court to conclude that Dr. Lotan had assigned his inventorship rights to Angioscore.

[00:01:30] Speaker 00:
Do you agree that he should have listed this stuff under 9A?

[00:01:36] Speaker 00:
No, Your Honor.

[00:01:37] Speaker 00:
Because?

[00:01:38] Speaker 02:
Because 9A, the language of 9A, said that Dr. Lotan was required

[00:01:46] Speaker 02:
where the consultant was obligated to list all inventions, original works of authorship, developments and improvements, and trade secrets, which were made by the consultant prior to the date of this agreement.

[00:02:02] Speaker 02:
And the Preston case confirms that the ordinary meaning of the word made is physically constructed.

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And what the record reflects is that Dr. Lotan,

[00:02:15] Speaker 02:
prior to May 1st of 2003 hadn't made anything.

[00:02:19] Speaker 02:
He had come up with a solution to a problem with a prototype that he had tested.

[00:02:25] Speaker 02:
And he communicated that solution to the other co-inventors, Dr. Constantino and Mr. Feld.

[00:02:33] Speaker 02:
And subsequent to that, Mr. Feld and others worked on, took that concept

[00:02:41] Speaker 02:
took that solution that Dr. Lotan had provided.

[00:02:43] Speaker 02:
And they were the ones who were involved in reducing that to practice and creating a new embodiment, including that solution.

[00:02:50] Speaker 02:
So Dr. Lotan hadn't made anything prior to made first.

[00:02:55] Speaker 02:
OK, suppose we reject that argument.

[00:02:57] Speaker 02:
OK.

[00:02:58] Speaker 02:
Where are we?

[00:02:59] Speaker 02:
Well, even if, so then we have to look back.

[00:03:03] Speaker 01:
Then if we reject that argument, he had to list it, right?

[00:03:06] Speaker 01:
I understand.

[00:03:07] Speaker 01:
I understand the hypothetical.

[00:03:09] Speaker 01:
No, but do you agree that if we reject your argument about me, he was obligated to list- I understand the question.

[00:03:18] Speaker 01:
In the space provided, right?

[00:03:22] Speaker 02:
Well, then the question becomes, what is an improvement?

[00:03:26] Speaker 02:
What is a development?

[00:03:27] Speaker 02:
Does it constitute any of those?

[00:03:29] Speaker 00:
Does coming up with- Okay, let me just, because our time is limited.

[00:03:33] Speaker 00:
Sure.

[00:03:34] Speaker 00:
What if we think that what happened in August

[00:03:37] Speaker 00:
I'm sorry, April, comes within 9A.

[00:03:40] Speaker 00:
And he should have listed it, and he did not.

[00:03:44] Speaker 00:
What, in your view, are the consequences of that?

[00:03:48] Speaker 02:
OK.

[00:03:49] Speaker 02:
If that's the case, the only consequence, then we have to go to the next sentence.

[00:03:56] Speaker 02:
There's two sentences in paragraph 9A.

[00:04:01] Speaker 02:
The first sentence has this requirement for listing prior inventions and says, if the consultant doesn't list,

[00:04:07] Speaker 02:
then he represents that there are no prior inventions.

[00:04:10] Speaker 02:
But beyond that, there is no consequence.

[00:04:13] Speaker 04:
There's nothing stated in terms of a forfeiture of rights or an automatic assignment that results in... What do you think Andrea Skor would have done if Dr. Lotan had in fact listed as a prior invention the work that Dr. Lotan had done in April of 2003?

[00:04:30] Speaker 04:
What do you think Andrea Skor would have said when they have said, okay?

[00:04:35] Speaker 02:
Well, it's hard to say because

[00:04:37] Speaker 02:
In fact, the people who were involved in Andrea's score were aware of this, and yet they dated the agreement.

[00:04:42] Speaker 04:
Wouldn't you think that Andrea's score would have its hair on fire and say, what is going on here?

[00:04:47] Speaker 04:
This guy, Dr. Lotan, is trying to hold back work that he's been doing for us, and is declaring it as his own work, and he has his own rights to it.

[00:05:00] Speaker 04:
And the best we're going to get is a royalty-free, non-exclusive license.

[00:05:06] Speaker 04:
As a rational person, don't you think that's how Androscor would have reacted?

[00:05:11] Speaker 02:
Well, I mean, it's hard to speculate.

[00:05:14] Speaker 02:
You don't know?

[00:05:15] Speaker 02:
Well, the reason I'm hesitating is only because there weren't a lot.

[00:05:20] Speaker 02:
It is bizarre.

[00:05:21] Speaker 02:
I grant you that.

[00:05:22] Speaker 02:
It is bizarre to sort of have this situation where everybody knows what was going on.

[00:05:28] Speaker 02:
The people who were on the other side of the contract, on the Androscor side of the contract,

[00:05:33] Speaker 02:
knew that Dr. Lotan was involved and knew what he was doing in April of 2003.

[00:05:39] Speaker 02:
So I think I understand the gist of the question, but the reason I hesitate is I don't know why they didn't simply say, well, let's make the agreement April 1st.

[00:05:52] Speaker 02:
Let's make the agreement March 1st.

[00:05:54] Speaker 02:
So maybe they weren't concerned, maybe covering

[00:05:57] Speaker 02:
the intellectual property rights at that time wasn't a big deal to them, and their hair wasn't on fire.

[00:06:02] Speaker 01:
I don't think... Do you agree that the failure to list wouldn't deprive them of the right to the license?

[00:06:12] Speaker 02:
If you assume that he had an obligation to list, then the question is, did he incorporate?

[00:06:17] Speaker 01:
No, but answer my question.

[00:06:20] Speaker 01:
If he failed to list something, he should have.

[00:06:23] Speaker 01:
They'd still get the license, right?

[00:06:26] Speaker 02:
So the argument is the language of that second sentence says... What's the answer?

[00:06:31] Speaker 01:
Do they get the license or they don't get the license?

[00:06:34] Speaker 02:
At most.

[00:06:35] Speaker 02:
But the answer is I don't think that they do because the language of that second sentence says that the consultant has to incorporate

[00:06:45] Speaker 02:
that prior invention into a company invention product or process.

[00:06:50] Speaker 02:
Dr. Lowton didn't do that either.

[00:06:52] Speaker 01:
But... That's a different question.

[00:06:54] Speaker 01:
Let's assume that he should have listed it, but he didn't list it, and it was incorporated.

[00:06:58] Speaker 01:
They get a license, right?

[00:07:00] Speaker 01:
Well, the language is, he incorporates it.

[00:07:03] Speaker 01:
I don't know why you're taking the decision.

[00:07:05] Speaker 01:
That makes no sense at all.

[00:07:08] Speaker 01:
Well, if... That's ridiculous.

[00:07:10] Speaker 01:
If he can leave it out and they don't get a license when he should have put it in, that doesn't make any sense, does it?

[00:07:17] Speaker 02:
Well, I take, I interpret incorporate to mean he has to actually put it in.

[00:07:23] Speaker 02:
But if we give it a different, if you don't accept that argument, then the answer is yes.

[00:07:29] Speaker 02:
What they would get is a non-exclusive license under 9A, not assignment.

[00:07:34] Speaker 04:
Did he breach the contract by not listing it?

[00:07:38] Speaker 02:
Angios Core hasn't made that allegation.

[00:07:41] Speaker 04:
He had an obligation, though, right?

[00:07:44] Speaker 04:
And then he didn't meet that obligation.

[00:07:46] Speaker 04:
That's also a right.

[00:07:48] Speaker 04:
Can you say right?

[00:07:51] Speaker 02:
Well, what I can say is that there is some ambiguity in the record as to what he was representing.

[00:07:57] Speaker 04:
Did he have an obligation to list his prior inventions?

[00:08:02] Speaker 02:
Yes.

[00:08:02] Speaker 04:
The paragraph says that he does.

[00:08:04] Speaker 04:
The answer is yes.

[00:08:05] Speaker 04:
Yeah.

[00:08:05] Speaker 04:
OK.

[00:08:06] Speaker 04:
Did he meet that obligation?

[00:08:08] Speaker 02:
Again, it depends on how you define prior invention.

[00:08:14] Speaker 02:
But if we make the assumption that it was a prior invention, which I'm not conceding, then yes, he had an obligation to list it as a prior invention.

[00:08:25] Speaker 01:
It seems to me the question is, if he fails to list something that he should have, is the consequence of that that there's a license or an assignment?

[00:08:34] Speaker 01:
That's the issue.

[00:08:35] Speaker 02:
And the consequence under 9A very clearly

[00:08:38] Speaker 02:
Again, assuming everything we've talked about, incorporate, made, et cetera, the consequence is a non-exclusive license, leaving Dr. Lotan free to make an assignment, I'm sorry, to grant another license because he's still the owner of his inventive rights.

[00:08:54] Speaker 01:
Well, I guess the counter argument would be,

[00:08:57] Speaker 01:
that if he'd listed this, maybe they wouldn't have gone forward with the contract because they would have said, we can't settle for a non-exclusive license to this, which is something that's incorporated into our invention that's this significant.

[00:09:15] Speaker 02:
Maybe they would have.

[00:09:16] Speaker 02:
I can't say that.

[00:09:17] Speaker 02:
They signed this agreement.

[00:09:19] Speaker 02:
If you look at the... And I guess your argument is they knew what was going on.

[00:09:23] Speaker 02:
They knew what was going on.

[00:09:24] Speaker 02:
They had this agreement dated May 1st.

[00:09:27] Speaker 02:
I believe Angioscore signed it.

[00:09:29] Speaker 02:
The Angioscore representative, who was one of just a handful of people, signed it in October of 2003.

[00:09:35] Speaker 02:
Dr. Lotan signed it in November of 2003.

[00:09:37] Speaker 02:
So we're talking about five to six months later.

[00:09:40] Speaker 02:
This agreement clearly was not a priority.

[00:09:44] Speaker 02:
The agreement is not well drafted.

[00:09:47] Speaker 02:
And it simply doesn't cover what Dr. Lotan did in April of 2003.

[00:09:52] Speaker 04:
What's your position on why May 1, 2003 was picked as the date

[00:09:57] Speaker 02:
There is absolutely no evidence in the record.

[00:10:00] Speaker 02:
I mean, I could speculate.

[00:10:01] Speaker 02:
But if I were, I don't know.

[00:10:03] Speaker 02:
I have no idea why they did that.

[00:10:04] Speaker 04:
When did Dr. Lotan really start doing work, consulting work for Angioscler?

[00:10:08] Speaker 04:
Do you know that?

[00:10:09] Speaker 02:
Well, so this is a small group of people.

[00:10:13] Speaker 02:
And according to Dr. Lotan's testimony and Dr. Constantino's declaration, both of which are in the record, they started talking about the idea of this angioplasty balloon generally in late 2002.

[00:10:27] Speaker 02:
And the first provisional application was filed in January of 2003.

[00:10:33] Speaker 02:
They were talking about doing testing, and I believe had a first generation prototype in March of 2003.

[00:10:42] Speaker 02:
And then the animal study, as we know from the record, occurred on April 14 of 2003.

[00:10:50] Speaker 00:
Can I, let me go back to what we were talking about before.

[00:10:53] Speaker 00:
Let's assume, because, I mean, we can talk about that, leaving aside what people might have known and so forth.

[00:11:00] Speaker 00:
If we're just looking at the contract, it seems to me, don't argue with me.

[00:11:06] Speaker 00:
If we assume 9A has been violated, and you assume this is something that he should have listed and he did not list, then the question becomes, what are the consequences?

[00:11:14] Speaker 00:
Are the consequences simply a 9A

[00:11:18] Speaker 00:
non-exclusive license, or the consequences reach into 9b.

[00:11:23] Speaker 00:
Why is it not fair to construe 9a and 9b together?

[00:11:29] Speaker 00:
And if, and I think Judge Dyke started to talk about this, which is there are consequences if you have not done what you were obligated to do in 9a and have not listed an invention that should have been listed, then that can feed into what they're trying to do in 9b.

[00:11:48] Speaker 00:
if they really didn't know about it, then it could affect what they're letting them work on that they otherwise wouldn't have, et cetera.

[00:11:55] Speaker 00:
So aren't there circumstances where, in fact, the failure to list could feed into the remedy in 9b for assignment?

[00:12:03] Speaker 02:
Well, I don't think so, Your Honor.

[00:12:05] Speaker 02:
I don't think there's any support for that in the language of the contract.

[00:12:08] Speaker 02:
And of course, the contract is essentially a form contract that doesn't take into account any of the circumstances

[00:12:16] Speaker 02:
of what went on here, which is somewhat... What do you mean it's a form contract?

[00:12:19] Speaker 02:
Well, I mean, it's not written to the extent of the record that we have.

[00:12:25] Speaker 02:
It didn't come out of a form book, right?

[00:12:27] Speaker 02:
I'm sure it didn't come out of a form book, but I'm sure it came off an attorney's computer not tailored to these particular... You're sure, or the record shows that?

[00:12:34] Speaker 02:
Speculated, Your Honor.

[00:12:36] Speaker 02:
I don't have any evidence one way or the other, but I don't believe there is any testimony that this contract was specifically written and tailored

[00:12:44] Speaker 02:
for this particular circumstance for one consultant.

[00:12:49] Speaker 00:
But I don't care.

[00:12:50] Speaker 00:
I mean, the party signed a contract that applied.

[00:12:52] Speaker 00:
You're not arguing that this contract doesn't apply to these circumstances.

[00:12:55] Speaker 02:
I'm not arguing that.

[00:12:57] Speaker 02:
What I'm arguing is that there's nothing in 9b that says that in the event that a consultant does not list a prior invention,

[00:13:10] Speaker 02:
it becomes assigned or somehow occurs during the term of the agreement.

[00:13:15] Speaker 02:
The language of 9b is very clear that the only assignment obligations comes with respect to conception, reduction to practice, or development occurring during the term of the agreement.

[00:13:28] Speaker 01:
Yeah, but the problem is this, that if he complied with his obligation to list it, they might have said, well, May 1st is the wrong date for this agreement.

[00:13:37] Speaker 01:
We've got to move it back to April 1st.

[00:13:40] Speaker 01:
so that this is encompassed within 9B.

[00:13:44] Speaker 01:
And that would be the argument that they wouldn't have been satisfied with a non-exclusive license under 9A, but that they would have insisted on redrafting the agreement to bring this within 9B.

[00:13:56] Speaker 02:
Well, if that's the case, then that would sound like they would have a contract revenue, or perhaps that's what they should pursue if they believe

[00:14:05] Speaker 02:
that there was some listing that should have occurred that it didn't.

[00:14:08] Speaker 02:
But that doesn't deprive, that can't deprive Dr. Lotan of his inventorship rights.

[00:14:14] Speaker 02:
I mean, absent some express language that says, if you don't, and we see this in some agreements in Imitac and in Preston, where they spell out, if you don't list, then something becomes a sign based on this particular language of those agreements.

[00:14:31] Speaker 02:
That's not the language here.

[00:14:33] Speaker 02:
The language here in 9b doesn't have any tieback that says- You're talking about inventorship.

[00:14:38] Speaker 00:
You're talking about his ownership rights.

[00:14:40] Speaker 02:
Yes, his ownership rights in his own inventions.

[00:14:43] Speaker 02:
Yes, that's right.

[00:14:45] Speaker 00:
OK, we're going to rebuttal.

[00:14:47] Speaker 00:
Why don't we save the rebuttal here from the other side.

[00:14:50] Speaker 03:
Thank you.

[00:14:55] Speaker 03:
Please, the court.

[00:14:56] Speaker 03:
Peter Arminio for the Papaly-Angius score.

[00:14:59] Speaker 03:
I'd like to pick up with the court's questions,

[00:15:02] Speaker 03:
What would Angioscore have done if Dr. Lotan had properly listed?

[00:15:07] Speaker 03:
They would have either, as Judge Chen suggested, changed the date of the contract, changed the effective language for 9B.

[00:15:15] Speaker 03:
They could have changed the product and decided, well, we don't have full rights to what Dr. Lotan is disclosing and reserving, so we're going to take our product, which was in a fluid design and development stage,

[00:15:26] Speaker 03:
in a bit of a different direction so as not to use his rights that he's reserving.

[00:15:31] Speaker 00:
Well, isn't it clear?

[00:15:32] Speaker 00:
Your friend, I think, suggested or talked as if everybody knew what was going on here.

[00:15:37] Speaker 00:
Everybody was working together, and everybody knew what was going on in April.

[00:15:43] Speaker 00:
So how can you come here and tell us that there should be consequences because they would have acted differently if indeed they knew about it anyway?

[00:15:50] Speaker 03:
Sure.

[00:15:50] Speaker 03:
And Your Honor, you're exactly correct.

[00:15:52] Speaker 03:
This was a small medical startup company.

[00:15:54] Speaker 03:
They were all working on one thing, the angiosculpt product.

[00:15:58] Speaker 03:
There wasn't a big company with lots of different products.

[00:16:01] Speaker 03:
But what Dr. Lotan did is when he signed the contract with Exhibit C blank.

[00:16:07] Speaker 03:
And he signed Exhibit C. He was the one who drafted Exhibit C. He could have written anything he wanted to say, I reserve rights and the following things.

[00:16:15] Speaker 03:
So he was the drafter of Exhibit C, not angioscler.

[00:16:19] Speaker 03:
He left it blank.

[00:16:20] Speaker 03:
And Section 9A of the contract tells us the exact effect of that.

[00:16:25] Speaker 03:
It says, if no such list is attached, consultant represents that there are no such prior inventions.

[00:16:32] Speaker 03:
So that was Dr. Lotan telling his colleagues at Angerscore,

[00:16:36] Speaker 03:
i'm not claiming anything like that before may one is my property either solely or jointly i'm giving you my colleagues assurance well that i'm not going to lose testimony was i didn't list it because you know basically i misread the contract and think it was an invention supposing

[00:16:57] Speaker 01:
said at the time, you know, I did this work before May 1.

[00:17:03] Speaker 01:
I'm not listing it in the attachment because I don't consider this to be an invention.

[00:17:07] Speaker 01:
And nobody had said anything.

[00:17:08] Speaker 01:
Where would we be then?

[00:17:09] Speaker 03:
I think we would be in a place where there is a binding representation that 9A provides if the list is blank.

[00:17:20] Speaker 03:
That is, the contract says exactly how a blank list is to be interpreted, and it's interpreted as a representation that there are no

[00:17:27] Speaker 03:
prior inventions.

[00:17:28] Speaker 01:
But that doesn't say that there's an assignment of anything that's not listed, either.

[00:17:33] Speaker 03:
Well, the representation would be a binding one, as we know, both by contract and by the California evidentiary code.

[00:17:41] Speaker 03:
So he's telling his colleagues, I didn't do anything before the operative date, May 1, 2003.

[00:17:48] Speaker 03:
And then we know he did work on the angioscoped project and angioscope product after.

[00:17:54] Speaker 03:
That's admitted.

[00:17:56] Speaker 03:
Council has written in their brief that he shepherded the design through clinical trials for FDA approval.

[00:18:01] Speaker 03:
So he did work on it.

[00:18:03] Speaker 03:
So that triggers the 9B assignment.

[00:18:06] Speaker 04:
This is not a 9B case in front of us right now.

[00:18:09] Speaker 04:
This is a 9A case.

[00:18:10] Speaker 04:
I didn't see the district court relying on 9B as having been triggered to the point where all invention rights automatically flowed to angioscores.

[00:18:21] Speaker 04:
So sticking with 9A,

[00:18:23] Speaker 04:
The problem with the reading of 9A that you are needing to defend is that if Dr. Lotan had in fact invented something five years before ever talking to Angioscore, but had not listed that invention on Exhibit C, then this reading of 9A mandates that that invention that Angioscore never had anything to do with is now those rights are transferred to Angioscore.

[00:18:53] Speaker 04:
And that seems really extreme.

[00:18:55] Speaker 04:
What do you have to say?

[00:18:56] Speaker 03:
Two ports.

[00:18:57] Speaker 03:
First, and I'll save it for the second part, the district court did find a 9b transfer as well.

[00:19:03] Speaker 03:
But to address your question, Judge Chen, on 9a, if he had this prior invention and he failed to disclose it, but then again, that's a representation by him that he didn't have any rights.

[00:19:16] Speaker 01:
You can't possibly argue that he invented something five years earlier that got assigned to him.

[00:19:20] Speaker 01:
The question is really, to my mind... That's as bad as the argument that there's no license.

[00:19:28] Speaker 03:
The argument I'm trying to articulate is, and perhaps not well, I apologize, really what we look at is, did Dr. Locan have anything to give to try Riemann in 2014?

[00:19:40] Speaker 01:
Take Judge Kinn's hypothetical.

[00:19:41] Speaker 01:
He invented something totally different.

[00:19:44] Speaker 01:
here, but that nonetheless came within the language of the contract five years earlier.

[00:19:50] Speaker 01:
That wouldn't be assigned, right?

[00:19:53] Speaker 01:
How could you read this as suggesting that 9A would assign that?

[00:20:00] Speaker 03:
I'm not suggesting that, Judge Seig, because what we have is language we haven't yet focused on in 9A that these inventions prior, right,

[00:20:08] Speaker 03:
have to relate to any of the company's current or proposed businesses, products, or research and development.

[00:20:15] Speaker 03:
So it's basically saying, we're bringing you on, Dr. Lotan, to work with us.

[00:20:19] Speaker 03:
Do you have rights that you believe are yours solely or jointly to what we are working on?

[00:20:25] Speaker 03:
And he represented by leaving Exhibit C blank.

[00:20:28] Speaker 03:
He had no such rights.

[00:20:29] Speaker 03:
He should be held to that representation.

[00:20:31] Speaker 03:
The district court found that.

[00:20:34] Speaker 03:
So number one,

[00:20:35] Speaker 03:
in the question, did Dr. Lotan have anything to license to try him in 2014?

[00:20:41] Speaker 03:
Well, no, because he represented that he didn't have anything prior.

[00:20:46] Speaker 00:
I'm getting more confused rather than less confused.

[00:20:48] Speaker 00:
Can I go back to Judge Chen's hypothetical?

[00:20:52] Speaker 00:
If he had invented something five years early, and it's a witch

[00:20:57] Speaker 00:
And what the contract doesn't say, you don't get a non-exclusive license just to all of his inventions, right?

[00:21:06] Speaker 00:
The contract is more limited than that.

[00:21:08] Speaker 00:
9A says if then he incorporates this widget that he invented five years ago into the product of the company,

[00:21:19] Speaker 00:
then yeah, they get a non-exclusive license for that.

[00:21:24] Speaker 00:
Is it your view that that's the way it ought to go?

[00:21:26] Speaker 00:
So the answer to Judge Chen's question is, if he invented something five years ago, and then he is responsible for putting it in to the company's product while he's working with them, the company gets a non-exclusive license to that.

[00:21:41] Speaker 00:
Is that your construction of 9A?

[00:21:43] Speaker 03:
That's how 9A would work.

[00:21:46] Speaker 04:
But if Dr. Lotan didn't list it, the district court's reading would be that, oh, well, then Andrea's score, Dr. Lotan is effectively assigned, not merely licensed, but assigned that earlier patent from five years ago to Andrea's score.

[00:22:06] Speaker 03:
I don't believe that's how the district court looked at it.

[00:22:09] Speaker 03:
I believe what the district court did is, as Chief Judge Pro suggested, she read 9B and 9A together.

[00:22:15] Speaker 03:
9B is, if you're working on an invention solely or jointly during your time with us after May 1, 2003, you're assigning to us all of your rights in that.

[00:22:25] Speaker 03:
And the undisputed evidence of record is that Dr. Lotan did work on the invention after May 1, 2003 through his clinical studies and the like.

[00:22:35] Speaker 03:
What 9A was, as the district court held, was a carve out to 9B to say, okay,

[00:22:41] Speaker 03:
If you happen to work on some intellectual property during your time with us after May 1, 2003, but you had previously, this is previous work of yours, then you can carve out and merely grant us a license as opposed to the assignment effect of 9b.

[00:22:57] Speaker 04:
And so that I... So we still have what I'll call a lacuna, which is pre-May 1 work that maybe hasn't been listed in the exhibit C,

[00:23:10] Speaker 04:
But 9A is what applies.

[00:23:13] Speaker 04:
We're in 9A land, not 9B land, because we're talking about pre-May 1 work.

[00:23:18] Speaker 04:
Why is there anything in these two paragraphs that commands that all of those unlisted inventions get assigned to Angioscorp?

[00:23:27] Speaker 04:
That's the problem.

[00:23:30] Speaker 01:
So the way I would look at it.

[00:23:32] Speaker 01:
You have an argument with respect to something which

[00:23:36] Speaker 01:
was done at the time, and they would have had an earlier date for the agreement if they'd known about it.

[00:23:45] Speaker 01:
And that fits in with the facts of this case.

[00:23:48] Speaker 01:
But under Judge Chin's hypothetical, we're talking about something that happened earlier, and they couldn't predate the agreement to cover that thing.

[00:23:58] Speaker 01:
So it seems as though in that circumstance, the five-year earlier invention

[00:24:03] Speaker 01:
It's very difficult to read this as saying that that should be treated as a sign.

[00:24:08] Speaker 03:
If it were a five-year earlier invention for which there was no ability to invoke 9b because the consultant didn't work on it during the actual term, then there's not going to be any kind of assignment.

[00:24:22] Speaker 03:
We get the assignment out of 9b for things that were worked on during the term.

[00:24:27] Speaker 03:
And it was undisputed that Dr. Lotan worked on this during the term.

[00:24:30] Speaker 03:
He worked on the one product they had, the Angioscope product

[00:24:33] Speaker 03:
That's the subject of all these patents.

[00:24:35] Speaker 03:
So 9B applies.

[00:24:36] Speaker 03:
And then we looked at 9A to see, was there a carve-out?

[00:24:40] Speaker 03:
Did he hold something back?

[00:24:42] Speaker 03:
And this court has looked at a number of cases with carve-outs and tried to determine whether those apply.

[00:24:48] Speaker 03:
But here, that carve-out was fine.

[00:24:52] Speaker 04:
Is it wrong for me to look at 9A as being about everything that happens up to May 1, 2003?

[00:24:59] Speaker 04:
And then 9b being about everything that happens after May 1, 2003?

[00:25:04] Speaker 03:
It's not wrong to look at it structurally that way, but what happens is 9b has a reach-back effect.

[00:25:10] Speaker 03:
If you work on something, an invention, while you're at the company, if you work on it,

[00:25:17] Speaker 03:
develop it, improve it, move it forward.

[00:25:20] Speaker 03:
If you work on it, you're assigning things including things you brought to the consulting agreement that you may have done before unless you wrote those things down on 9A.

[00:25:34] Speaker 00:
Why does it matter if you wrote them down or not?

[00:25:37] Speaker 03:
It matters because he is saying

[00:25:40] Speaker 03:
and only carving out from 9B's assignment provision those things that are written down.

[00:25:46] Speaker 03:
So by writing nothing down, he is carving nothing out of 9B.

[00:25:50] Speaker 03:
So anything he worked on, any invention he worked on solely or jointly gets assigned to Angioscorp.

[00:25:58] Speaker 03:
And there's no dispute that he jointly worked on the one product they had at Angioscorp, the Angiosculpt, with the named co-inventors, the people who actually got on all of the patents.

[00:26:09] Speaker 03:
He jointly worked on it.

[00:26:10] Speaker 03:
They admit, counsel even said, others reduced it to practice.

[00:26:13] Speaker 04:
As I understand your position, if Dr. Lhotan had invented something and owned the patent to an invention from five years prior, with no relationship to Angioscore, but somehow that invention, thanks to him, got incorporated into Angioscore's catheter,

[00:26:36] Speaker 04:
Is it your position that that invention, that patent, Dr. Lotan's patent from five years prior has now been assigned to Angioscore?

[00:26:46] Speaker 03:
If we had fully developed issued patent IP, I think what there would be was a non-exclusive license under 9A if you listed it.

[00:26:56] Speaker 03:
And if you didn't list it, perhaps there'd have to be an action to correct the listing.

[00:27:02] Speaker 03:
or the list would be deemed to include it to have an exclusive license.

[00:27:06] Speaker 04:
But what we have here... Okay, so your position is under my hypothetical, Andrew Scord doesn't get an automatic assignment of Dr. Lotan's patents.

[00:27:18] Speaker 03:
If it was fully formed IP that Dr. Lotan wasn't working on during the term with his colleagues, I think that's a scenario in which they wouldn't get an assignment.

[00:27:30] Speaker 04:
But somehow

[00:27:32] Speaker 04:
Under the actual facts of this case, where there was inventive work before May 1, but then it flows into additional development work after May 1, somehow all of those natural inventor rights that get developed in April automatically get assigned to Angioscore.

[00:27:55] Speaker 04:
They do because he, with his colleagues... Even assuming that whatever work he did after May 1 doesn't rise to the level of triggering the assignment provision in 9b.

[00:28:06] Speaker 04:
Let's just assume for the moment that whatever he did post May 1, it can't be deemed to be conceiving or developing or reducing to practice the invention.

[00:28:18] Speaker 03:
If he didn't do anything to trigger 9b, you would not need to look at the carve out of 9a.

[00:28:24] Speaker 03:
I agree with that as a fundamental proposition.

[00:28:27] Speaker 03:
I have to.

[00:28:27] Speaker 03:
That's the way the contract is written.

[00:28:29] Speaker 03:
But he did work on the invention.

[00:28:32] Speaker 03:
Council even admitted in this argument.

[00:28:34] Speaker 03:
It wasn't reduced to practice until after the assignment provision took effect, May 1, 2003.

[00:28:41] Speaker 03:
He worked on developing it.

[00:28:43] Speaker 03:
He worked on clinical trials for it.

[00:28:46] Speaker 03:
He worked on

[00:28:47] Speaker 03:
all of the things that made it be able to get FDA approval down the road, because this is a medical device.

[00:28:52] Speaker 04:
So then your argument sounds like it's just a straight-up 9B argument, that his work post-May 1 triggered paragraph 9B, and so you don't have to worry about 9A.

[00:29:05] Speaker 03:
It is a 9B argument.

[00:29:06] Speaker 03:
We prevail on 9B.

[00:29:09] Speaker 03:
But 9B, I have to be careful, right?

[00:29:11] Speaker 03:
Because 9B has a carve-out in 9A.

[00:29:13] Speaker 03:
If something had been listed,

[00:29:15] Speaker 03:
then that could have prevented assignment under 9B, but there was nothing listed, so there was no carve out.

[00:29:22] Speaker 04:
And a little more- Can you show me where in the district court's opinion, the district court said, I find that all the sum and substance of Dr. Lotan's work after May 1 amounts to either developing, conceiving, or reducing to practice this invention, and therefore,

[00:29:40] Speaker 04:
by the terms of paragraph 9b, Dr. Lopetan has assigned this invention to Angioscore.

[00:29:48] Speaker 04:
I didn't see that.

[00:29:48] Speaker 04:
What I saw instead was the district court observing that some of those post-May 1 activities, quote unquote, might have risen to the level of being a development or reduction to practice.

[00:30:01] Speaker 04:
But then I didn't see the judge go any further than that.

[00:30:10] Speaker 03:
to get you the best site for this.

[00:30:36] Speaker 03:
So if we look at A8, so it's page 7 of the district court's decision, the district court recounts that there's no dispute.

[00:30:43] Speaker 03:
The catheter was an angioscore product.

[00:30:46] Speaker 03:
And then lists and writes out the words of section 9B.

[00:30:53] Speaker 03:
And then the district court goes into the carve out that might pertain.

[00:30:58] Speaker 03:
And then going on to page 89, which is page 8 of the decision, the district judge says, well, there wasn't any carve out.

[00:31:06] Speaker 03:
because there's nothing listed on Exhibit C. So the court says from these undisputed points, Dr. Lotan assigned whatever rights he had in the balloon catheter in 2003, retained nothing through the exclusion mechanism of 9A.

[00:31:23] Speaker 04:
OK, so to me, that's why I looked at the judge's reasoning as being all about paragraph 9A.

[00:31:32] Speaker 04:
And then if you go to 815, lines 4 to 8, you'll see under the plain meaning of section 9B's terms, the judge says, this work, Dr. Lodan's work, might have amounted to, among other things, developing, improving, or reducing to practice.

[00:31:49] Speaker 00:
And let me just continue that.

[00:31:50] Speaker 00:
If you go down to 9 and 10, it says, Trirene says it was only collecting regulatory data.

[00:31:57] Speaker 00:
And she says that may be true, but does not change the end result.

[00:32:02] Speaker 00:
So she's saying, even assuming that his only work under 9b amounted to collecting regulatory data on a finished device, still would have been an assignment.

[00:32:18] Speaker 00:
How could that be?

[00:32:19] Speaker 00:
Right.

[00:32:22] Speaker 04:
Is it because the judge relied purely on 9a as operating to assign this invention to Andrew Score somehow?

[00:32:32] Speaker 03:
The judge in A14 and 15 reviewed all of the work that he did after May 1.

[00:32:38] Speaker 03:
I think if we look at it, the judge recounts the plane meeting and I, the words are there on the page, Chief Judge Pross, as you point out, might have amounted to, and that would be enough under 9B, the judge certainly- Has there been full discovery on the question of what he did after May 1st?

[00:32:56] Speaker 03:
He was deposed and he had document production, so discovery of him was performed

[00:33:02] Speaker 03:
That was something that only of Dr. Lotan was deposed and his documents were produced and the first phase was focused on the contract.

[00:33:13] Speaker 01:
So it doesn't seem to me that the record here really permits a determination as to whether this comes within 9B or not.

[00:33:21] Speaker 03:
Actually it does because we know through his deposition testimony

[00:33:25] Speaker 03:
that he worked on the clinical trials.

[00:33:28] Speaker 03:
He was talking with his co-inventors, the people who were actually listed on the patent and whom he claims co-inventor status with.

[00:33:35] Speaker 03:
They reduced the device to practice during the May 1, 2003 period forward.

[00:33:42] Speaker 03:
So the record lets us see that 9B applies.

[00:33:45] Speaker 03:
And even in the brief that counsel submitted, they said and admitted he

[00:33:52] Speaker 00:
Dr. Locan did the clinical trials that Shepard... If it were stipulated, if everybody agreed that the only thing he did under this consulting agreement was collect regulatory data on a finished device, would that come under 9B?

[00:34:10] Speaker 03:
Yes, because he helped develop

[00:34:12] Speaker 03:
the product.

[00:34:13] Speaker 03:
He helped develop it.

[00:34:14] Speaker 03:
It's a medical device we're talking about.

[00:34:16] Speaker 00:
It couldn't... But if everything he did after May 1st, 2003, the only thing he did was collect regulatory data on a finished device, that would come under 9-B?

[00:34:28] Speaker 03:
It would, because it's not a finished device.

[00:34:30] Speaker 03:
I mean,

[00:34:31] Speaker 03:
It can't be a finished medical device until we know it works.

[00:34:34] Speaker 03:
The whole reason that the study in April was so important is they thought they had a device then that worked.

[00:34:40] Speaker 03:
They put it in the pig as the pig studied, and they found it fell off.

[00:34:44] Speaker 03:
It didn't work.

[00:34:45] Speaker 03:
So his testing, the clinical trial work, is necessary to develop a medical device.

[00:34:52] Speaker 03:
Absolutely necessary.

[00:34:53] Speaker 03:
It's critical.

[00:34:54] Speaker 03:
It's not just an oh, by the way.

[00:34:56] Speaker 03:
It's a critical part of the development process for a medical device.

[00:34:59] Speaker 03:
If he had learned that there was tearing of the vessel wall, that there were retraction problems, it would have triggered a whole other phase in the development work.

[00:35:09] Speaker 03:
It turned out that it worked nicely, and to use his words from the testimony, but that doesn't make it any less a part and a crucial part of the development of a medical device for which he was subject to 9B.

[00:35:22] Speaker 01:
Let me bring you back just for one moment to 9A.

[00:35:25] Speaker 01:
It seems to me that the question here is there's been a breach of the agreement by failing to list his prior invention in the attachment the way he was supposed to.

[00:35:36] Speaker 01:
The consequences of that breach have to be remedied.

[00:35:42] Speaker 01:
And the question is, if it's a five-year-old invention, the consequences of the breach to put the non-breaching party in the position it should be in are to give it a license,

[00:35:54] Speaker 01:
The argument is that the consequences of the breach with respect to something which was done as part of the development of this product are that the human should be treated as having an earlier effective date.

[00:36:07] Speaker 01:
Is that a possible way of looking at this?

[00:36:09] Speaker 03:
It is, and a third way to look at it is a possible consequence of the breach is hold him to his representation, which the contract itself provides as the effect of having a blank exhibit C.

[00:36:23] Speaker 03:
if Exhibit C is born.

[00:36:25] Speaker 01:
If you've agreed that the consequence with respect to a five-year-old invention is not an assignment, but a license.

[00:36:35] Speaker 01:
So it seems to me that the consequences of the breach vary from situation to situation.

[00:36:42] Speaker 03:
Certainly we have to look at situation to situation, but here in this situation where you've got

[00:36:48] Speaker 03:
Everybody focused on one thing.

[00:36:51] Speaker 03:
This isn't five-year-old, separate, independent work.

[00:36:54] Speaker 03:
This is work together with Angioscore.

[00:36:57] Speaker 03:
They write the contract.

[00:36:58] Speaker 03:
He says, everything up to May 1, 2003, I'm not claiming any rights in any of it as a sole or joint

[00:37:05] Speaker 03:
developer, not claiming anything and then going forward he works on the project with everybody else and he puts his IP into the assignment kit, into the pot with everybody else who's working at Angioscore.

[00:37:17] Speaker 03:
It shouldn't be allowed that he can skinny his way through all this, fail to disclose his contention that he owns something from prior to May 1, then keep working on it, making sure that the device with

[00:37:33] Speaker 03:
That particular feature on it makes its way through the development.

[00:37:36] Speaker 04:
Maybe the answer is what Judge Dyck is suggesting is that it's a breach of contract remedy, not a patent law remedy.

[00:37:44] Speaker 03:
But if he breached his contract, we have to remember the one thing.

[00:37:48] Speaker 03:
It's not Dr. Lotan who's suing for correction.

[00:37:51] Speaker 03:
It's Trireme.

[00:37:52] Speaker 03:
So really the question is, did Dr. Lotan have anything to give Trireme in 2014?

[00:37:57] Speaker 03:
And I would respectfully submit.

[00:38:00] Speaker 03:
The answer is no.

[00:38:01] Speaker 03:
No, because 9b applies.

[00:38:03] Speaker 03:
know also under 9a because he said and he should be held to his representation that he hadn't done anything but even if we want to say he did and he should have listed it and he breached his contract

[00:38:16] Speaker 03:
This effect should be the same.

[00:38:18] Speaker 03:
He did not have anything that he could legitimately hand over to try him in 2014 so that they could turn around and sue Angioscor and try to get rights that way through Dr. Lotez.

[00:38:30] Speaker 04:
Do you know why Angioscor chose May 1, 2003 as the effective date of this agreement?

[00:38:35] Speaker 03:
There is no evidence in the record of that.

[00:38:37] Speaker 03:
And some of the case here is very strange because

[00:38:41] Speaker 03:
the person who negotiated the agreement.

[00:38:43] Speaker 04:
Sometimes these employment assignment agreements don't work out perfectly.

[00:38:48] Speaker 04:
Stanford v. Roche is an example of that.

[00:38:51] Speaker 03:
Very true.

[00:38:52] Speaker 03:
The situation here is very strange.

[00:38:54] Speaker 03:
Dr. Constantino, who was the person who involved Dr. Lohtan, he went and found it in a tri-ring.

[00:39:00] Speaker 03:
So he went on the other side of things.

[00:39:04] Speaker 03:
So it's not like we could reach out to Dr. Constantino and say, well, why was it May 1, 2003?

[00:39:09] Speaker 03:
He's on the other side.

[00:39:11] Speaker 03:
he was in a pretty vigorous breach of fiduciary duty litigation that he lost.

[00:39:16] Speaker 03:
It turns out this whole thing came up because during that litigation he went and tried to buy this license from Dr. Lotan for a certain amount of money and then argued license back against Angioscore.

[00:39:29] Speaker 03:
So the lack of evidence about why particularly May 1, 2003 is compounded by the fact that one of the co-inventors, Dr. Constantino, switched sides during

[00:39:41] Speaker 03:
All of this, so I don't have any hard evidence to say why exactly May 1.

[00:39:45] Speaker 03:
But what I can say, and the district court said it, and California law allows to look at the extrinsic evidence of the context.

[00:39:53] Speaker 03:
They were all working on one thing at a small startup.

[00:39:57] Speaker 03:
Dr. Lotan was brought in to help work on that one thing.

[00:39:59] Speaker 03:
The contract date was May 1.

[00:40:01] Speaker 03:
They said, do you claim any rights up to May 1?

[00:40:05] Speaker 03:
He said no.

[00:40:06] Speaker 03:
And the contract was very clear that if you leave that Exhibit C blank, it's a representation.

[00:40:10] Speaker 03:
You have no rights.

[00:40:12] Speaker 03:
And then going forward, did he work on the project?

[00:40:14] Speaker 03:
Absolutely.

[00:40:15] Speaker 03:
There was no other project to work on at Angioscope.

[00:40:18] Speaker 03:
All they did was the Angioscope, and his work was critical.

[00:40:22] Speaker 03:
His work was absolutely critical.

[00:40:24] Speaker 00:
OK.

[00:40:25] Speaker 00:
Thank you.

[00:40:26] Speaker 03:
Thank you, Your Honor.

[00:40:33] Speaker 02:
Your Honor, if I may point you to a piece of evidence in the record.

[00:40:37] Speaker 02:
A601 is an email from Dr. Constantino to... A601?

[00:40:46] Speaker 02:
A601, yes, your honor.

[00:40:49] Speaker 02:
Okay.

[00:41:01] Speaker 02:
This is an email from Dr. Constantino

[00:41:04] Speaker 02:
on May 14, 2003, the date of the animal study.

[00:41:08] Speaker 02:
It's sent to Mr. Tsori, one of the named inventors on the Pattinson suit, Mr. Heller, who is the person who signed the May 2003 consulting agreement on behalf of Angioscore, the CEO of Angioscore at the time, Mr. Gershoni, one of the other founders of Angioscore, and CCT Feld, that's Tannheim Feld, the fifth

[00:41:35] Speaker 02:
member of Angioscore.

[00:41:36] Speaker 02:
So here you have an email that includes all five members of Angioscore at the time, sent on the day of Dr. Lotan's experiment.

[00:41:47] Speaker 02:
And it says, subject animal trial today.

[00:41:50] Speaker 02:
Dear all, we had a good experiment today with Chaim and David.

[00:41:54] Speaker 02:
That's Dr. Myrkin, who wrote the report and was Dr. Lotan's assistant.

[00:42:00] Speaker 02:
We spent all day there until late evening discussing engineering aspects of the device.

[00:42:05] Speaker 00:
Is that absolutely 1,000% clear that the we includes Dr. Lothan?

[00:42:11] Speaker 00:
That the we includes the inventor here?

[00:42:14] Speaker 02:
Dr. Lothan?

[00:42:15] Speaker 02:
Yes, it is, because we have that in Dr. Lothan's testimony saying he was doing the animal study and at the meeting following it.

[00:42:25] Speaker 02:
If that's your honor's question, maybe I'm not answering the right thing.

[00:42:29] Speaker 02:
So in other words, this is not a case where Dr. Lothan was

[00:42:33] Speaker 02:
pulling the wool over somebody's eyes, everyone was aware.

[00:42:36] Speaker 02:
Everyone was aware of what Dr. Lotan did, when Dr. Lotan did it, at the same day that he did it.

[00:42:46] Speaker 02:
The fact that the, and I do agree with counsel that there's nothing in the record that says why May 1st was chosen, but I would respectfully submit that's irrelevant because the contract says what it says.

[00:42:58] Speaker 02:
The contract says the effective day is May 1st.

[00:43:01] Speaker 02:
Everyone had full awareness of what was done

[00:43:03] Speaker 02:
When it was done, at the time it was done, they wrote the agreement later in October, or at least it was signed in October and November of 2003.

[00:43:12] Speaker 02:
The fact that they didn't put the effective date in April as April 1st, or March 1st, or what have you, shouldn't reflect any more poorly on Dr. Loton than on Angioscore.

[00:43:24] Speaker 02:
Both were parties to the agreement.

[00:43:26] Speaker 02:
And in any event, it doesn't affect an assignment

[00:43:29] Speaker 02:
Whether he had to list or didn't have to list under 9A, the only consequence under 9A is a license.

[00:43:36] Speaker 04:
When did Dr. Constantino start working on what eventually became TriReam?

[00:43:42] Speaker 04:
Was it 2003?

[00:43:43] Speaker 02:
So TriReam was founded, I believe, in 2005.

[00:43:46] Speaker 02:
And then, yes, 2005.

[00:43:55] Speaker 00:
If there's nothing further I will yield to the court.