[00:00:00] Speaker 04:
for today is 2016-1357 our Seller-Middle versus AK Steel.

[00:00:27] Speaker 04:
Mr. Sharla, please proceed when you're ready.

[00:00:34] Speaker 02:
Thank you, Your Honor, being pleased to report.

[00:00:38] Speaker 02:
The district court in this case, without hearing any evidence, held claims 24 and 25 of the RE153 reissue patent invalid.

[00:00:47] Speaker 02:
That decision should be vacated.

[00:00:49] Speaker 02:
The threshold issue is did the district court have jurisdiction to decide on the validity of those claims?

[00:00:56] Speaker 02:
And the answer is it did not.

[00:00:58] Speaker 02:
Arcelor Mittal had not asserted infringement of those claims in this case.

[00:01:02] Speaker 02:
More importantly,

[00:01:04] Speaker 02:
It had provided a covenant not to sue defendants or their customers on those claims.

[00:01:09] Speaker 02:
That eliminated any possible case or controversy as to those claims.

[00:01:13] Speaker 04:
Let's put the covenant not to sue aside for just a minute, because I think these are two discreetly different arguments in the subject matter jurisdiction.

[00:01:21] Speaker 04:
Your first argument is they didn't assert it.

[00:01:24] Speaker 04:
But this case came up to us on appeal previously.

[00:01:27] Speaker 04:
And I read the briefs from the prior appeal.

[00:01:29] Speaker 04:
And it sure looked like they were acting in those briefs consistently as though

[00:01:34] Speaker 04:
Claim number 24 and 25 were at issue in the case as previously appealed.

[00:01:39] Speaker 04:
And they litigated them from start to finish throughout the prior district court proceeding on appeal to us, back down.

[00:01:45] Speaker 04:
And now, all of a sudden, it seems like an 11th hour argument that we never asserted 24 or 25.

[00:01:52] Speaker 04:
Who?

[00:01:52] Speaker 04:
What?

[00:01:52] Speaker 04:
Where?

[00:01:52] Speaker 04:
No.

[00:01:52] Speaker 04:
We had no idea what you're talking about.

[00:01:54] Speaker 04:
Where did those come from?

[00:01:55] Speaker 04:
Gosh darn.

[00:01:56] Speaker 04:
That's the way it feels to me having read all the briefing.

[00:01:59] Speaker 04:
Well, that's the way it feels to me having read all the briefing.

[00:02:02] Speaker 02:
Let me try to change your feeling on that.

[00:02:04] Speaker 02:
First of all, in the... Okay, so there were two prior appeals.

[00:02:08] Speaker 02:
Let's focus on the second appeal.

[00:02:09] Speaker 04:
They weren't even in existence in the first appeal.

[00:02:11] Speaker 02:
Exactly.

[00:02:12] Speaker 02:
Okay.

[00:02:12] Speaker 02:
So in the second appeal, it's important to remember three cases were consolidated for the purposes of that appeal.

[00:02:19] Speaker 02:
This case and two other cases that had to do with post-trial conduct of the defendants.

[00:02:25] Speaker 02:
Claims 24, that the RE153 patent in general was asserted in those two other cases.

[00:02:32] Speaker 02:
In our case,

[00:02:33] Speaker 02:
after the first remand, we had moved to amend to substitute specific claims of the RE153 patent, 1, 2, 5, 7, and 16, which were the claims that had originally been asserted under the original patent.

[00:02:46] Speaker 02:
Those were the only claims at issue in that case.

[00:02:49] Speaker 02:
So sure, the briefs talk about all of the claims because all of the claims were at issue, defined broadly, if for no other reason than Judge Robinson

[00:02:59] Speaker 02:
on the motion for summary judgment had sue a sponsor and validated all of the claims.

[00:03:04] Speaker 02:
So whether we asserted them in any of the cases or not, claims 24 and 25 were at issue because we needed to get that judgment as to those two claims vacated, which this court did.

[00:03:15] Speaker 04:
I know you can't waive subject matter jurisdiction, but certainly the argument didn't come up.

[00:03:20] Speaker 04:
And when I read your briefs from the prior case, it seemed as though

[00:03:25] Speaker 04:
you believe those claims were, in fact, at issue and treated them as such in the briefing.

[00:03:30] Speaker 04:
It wasn't just a matter of we need you to vacate this particular ruling.

[00:03:35] Speaker 04:
And certainly, it wasn't brought to the court's attention that these claims are not being asserted.

[00:03:38] Speaker 04:
In fact, throughout the briefing, they talk about infringement of the patent.

[00:03:42] Speaker 00:
Correct.

[00:03:42] Speaker 04:
They don't talk about the claims.

[00:03:43] Speaker 04:
And these claims are part of the patent.

[00:03:46] Speaker 04:
And so when I read all of that, I think it becomes difficult for you to convince me, at least, that your client didn't acquiesce in

[00:03:53] Speaker 04:
and act as though these claims were part of the litigation, at least as of the appeal briefs to us in Alaska.

[00:04:02] Speaker 02:
And, Your Honor, they were part of the litigation, certainly.

[00:04:05] Speaker 02:
They had been held invalid.

[00:04:07] Speaker 02:
So whether we wanted them to be part of the litigation or not, they were.

[00:04:09] Speaker 02:
They were necessarily at issue, to use the broad term, on appeal.

[00:04:14] Speaker 04:
But you spoke about infringing the patent.

[00:04:18] Speaker 04:
We did.

[00:04:18] Speaker 04:
You didn't identify specific claims.

[00:04:21] Speaker 04:
And 24 and 25 were at issue.

[00:04:23] Speaker 04:
in the litigation, why don't you, I mean, honestly, I don't want you to spend the most time on your worst argument, I'd rather you spend more time on your better argument, so why don't you get to the covenant?

[00:04:33] Speaker 02:
Exactly, and it's precisely because... Let me ask you a question about the covenant.

[00:04:37] Speaker 00:
Okay.

[00:04:39] Speaker 00:
By its terms, it prohibits you from, your client, from suing epiles for activities and products passed and pressed based on RE 153.

[00:04:50] Speaker 00:
Yes.

[00:04:51] Speaker 00:
Does it also cover future actions?

[00:04:53] Speaker 02:
It does, Your Honor.

[00:04:55] Speaker 02:
For claims under that patent, absolutely.

[00:04:57] Speaker 02:
It covers past and future.

[00:04:59] Speaker 02:
And we made that, I think the covenant's clear, but we also made that clear on the record multiple times.

[00:05:06] Speaker 02:
At the hearing on October 27, 2015, counsel said,

[00:05:09] Speaker 02:
We are not asserting this patent against anybody.

[00:05:13] Speaker 02:
We're dropping it.

[00:05:13] Speaker 02:
They have a free ride on this patent.

[00:05:15] Speaker 02:
So absolutely, it covered future claims.

[00:05:17] Speaker 00:
I just wanted that said here, too.

[00:05:19] Speaker 02:
It is now on the record here as well, Your Honor.

[00:05:22] Speaker 02:
And Judge Moore, to get back to the covenant, it's precisely because of, I mean, look, we could have been clearer.

[00:05:31] Speaker 04:
Suppose she did it in two separate orders.

[00:05:33] Speaker 04:
She did it in one order.

[00:05:34] Speaker 04:
So I mean, I'm not sure which one happens first in that case.

[00:05:37] Speaker 04:
But she did it in a single order.

[00:05:38] Speaker 04:
But suppose she did it in two separate orders a day apart.

[00:05:42] Speaker 04:
The first order was the summary judgment order.

[00:05:44] Speaker 04:
So the covenant still would not have gone into effect, because the covenant was conditional on the amendment of the complaint in the other case.

[00:05:52] Speaker 04:
I'm not going to remember the docket numbers.

[00:05:54] Speaker 04:
I'm sorry.

[00:05:54] Speaker 04:
Right?

[00:05:55] Speaker 04:
I'm getting the facts, though, generally right.

[00:05:56] Speaker 02:
Generally, sure.

[00:05:58] Speaker 04:
Close.

[00:05:58] Speaker 04:
So suppose she had not done it in a single order.

[00:06:02] Speaker 04:
but had done it in two separate orders, a day apart, with the first one being summary judgment.

[00:06:06] Speaker 04:
At that point, the covenant had not taken effect.

[00:06:09] Speaker 02:
Well, I'll come back to the taken effect part.

[00:06:12] Speaker 02:
But I don't think it matters, Your Honor.

[00:06:13] Speaker 02:
And here's why.

[00:06:14] Speaker 02:
And let me maybe lay out the timeline a little bit, because I think it's important.

[00:06:19] Speaker 02:
So the mandate in the second appeal issued on June 18, 2015.

[00:06:24] Speaker 02:
On July 28, 2015,

[00:06:26] Speaker 02:
ArcelorMintel moved to amend in the other case to drop the 153 patent and substitute in the new reissue patent.

[00:06:34] Speaker 02:
On August 4th, there was a hearing in the district court.

[00:06:37] Speaker 02:
And that's, I don't have the page site here, but it's at the back of the appendix.

[00:06:42] Speaker 02:
There was a hearing in the district court where counsel said, we're done with the 050 case.

[00:06:46] Speaker 02:
The only claims that were at issue in that case have been held invalid.

[00:06:49] Speaker 02:
We're not asserting that patent anymore.

[00:06:51] Speaker 02:
We want to proceed in the other case on the new patent.

[00:06:54] Speaker 02:
Then on September 4th, we moved to dismiss this case, the 050 case, on the ground that we weren't asserting any valid claims in this case.

[00:07:04] Speaker 02:
And in that motion, and this is at 4956 of the appendix, we said, although we don't think it's necessary, we are prepared to grant a covenant not to sue on this patent.

[00:07:17] Speaker 02:
I think at that point, to the extent that there was any question at all about whether the claims had been asserted,

[00:07:24] Speaker 02:
That question was resolved and there was no jurisdiction at that point.

[00:07:28] Speaker 04:
That's ridiculous.

[00:07:28] Speaker 04:
We're prepared to do this.

[00:07:30] Speaker 04:
We haven't actually done it.

[00:07:32] Speaker 04:
We're prepared to do it.

[00:07:33] Speaker 04:
Under what terms?

[00:07:34] Speaker 02:
Under what criteria?

[00:07:34] Speaker 02:
This is against the backdrop of already having said, we're not asserting this patent anymore.

[00:07:39] Speaker 02:
We're dropping it.

[00:07:41] Speaker 04:
You're a litigator.

[00:07:44] Speaker 04:
People say this crap all the time and then they come up with a million technicalities afterwards.

[00:07:48] Speaker 04:
We're not asserting this patent anymore today at two o'clock on Tuesday.

[00:07:52] Speaker 04:
You know, I mean, and then you go into court the next day and say, well, today's Wednesday.

[00:07:56] Speaker 04:
I mean, this is the way these things work.

[00:07:59] Speaker 04:
You hadn't signed anything.

[00:08:00] Speaker 04:
There's no document in writing.

[00:08:04] Speaker 02:
And I don't think you have to have a document.

[00:08:06] Speaker 02:
Let me make a couple of points.

[00:08:08] Speaker 03:
First of all, you still have to grant a covenant not to sue.

[00:08:12] Speaker 03:
If the filing had said, we grant an unconditional covenant not to sue on this patent in your filing,

[00:08:20] Speaker 03:
And you had authority to say that, that would be a covenant not to sue.

[00:08:24] Speaker 03:
But that's different than saying, we will grant one if you think one's necessary.

[00:08:28] Speaker 02:
Well, let me make a couple of points, Judge Hughes.

[00:08:31] Speaker 02:
First of all, in the Dow Jones case, for example, there was no signed covenant.

[00:08:35] Speaker 02:
There was an offer of a covenant.

[00:08:37] Speaker 02:
And that was conditional, by the way, on Dow Jones, the defendant, dropping its invalidity counterclaims, which it refused to do.

[00:08:44] Speaker 02:
This court nonetheless held the offer of the covenant was enough to divest the court of jurisdiction.

[00:08:50] Speaker 04:
In the Benetech case... Because it was an unconditional covenant in that case.

[00:08:54] Speaker 02:
But Your Honor, it hadn't been signed.

[00:08:56] Speaker 02:
It hadn't been filed.

[00:08:58] Speaker 04:
But it was also... And it was not unconditional.

[00:09:01] Speaker 02:
It was conditional on Dow Jones dropping its invalidity counterclaims, which it expressly refused to do.

[00:09:06] Speaker 02:
And here, let's talk about the condition.

[00:09:09] Speaker 03:
The condition here was... The problem is, all of this was in your control.

[00:09:15] Speaker 03:
From day one, you could have signed a covenant not to sue.

[00:09:18] Speaker 03:
And then you would have been out.

[00:09:19] Speaker 02:
Correct, as Judge Robinson recognized.

[00:09:22] Speaker 02:
But you didn't do it.

[00:09:23] Speaker 02:
Well, Your Honor, we made it crystal clear that these claims were not at issue.

[00:09:29] Speaker 02:
We then said,

[00:09:30] Speaker 02:
If you have any doubt, we'll give you a covenant.

[00:09:32] Speaker 03:
It's apparently not crystal clear that they weren't at issue, because we're up here on appeal for the third time.

[00:09:38] Speaker 02:
We thought it was crystal clear.

[00:09:40] Speaker 02:
And obviously, you're right.

[00:09:41] Speaker 02:
It wasn't crystal clear to everyone.

[00:09:43] Speaker 02:
Then in the reply brief on the motion to dismiss, this was October 23, appendix 5103, we renewed that and we attached a draft of the covenant.

[00:09:54] Speaker 02:
It hadn't been signed yet, but we said, and here is the covenant.

[00:09:58] Speaker 02:
Then at the hearing on October 27,

[00:10:00] Speaker 02:
We said, we're giving them a free ride.

[00:10:03] Speaker 02:
We are not asserting these claims.

[00:10:05] Speaker 02:
And we've tendered a covenant.

[00:10:07] Speaker 02:
And counsel said, and we're getting it.

[00:10:09] Speaker 02:
Clients in Europe, they're signing it.

[00:10:12] Speaker 02:
As soon as it's signed, we'll file it with the court.

[00:10:14] Speaker 02:
Then on November 18, it was submitted with the letter that said, and it's 5218 of the appendix.

[00:10:21] Speaker 02:
As explained at the hearing, we tender it conditioned on resolution of the motion to amend, which is obviously the core of the problem.

[00:10:29] Speaker 02:
But the condition, Your Honor, notice it wasn't conditioned on granting the motion.

[00:10:34] Speaker 02:
It was conditioned on resolving it.

[00:10:36] Speaker 02:
It was going to happen.

[00:10:37] Speaker 02:
The covenant itself is unconditional, the text of the covenant.

[00:10:42] Speaker 02:
And it doesn't say it runs from the date of the granting of the resolution of the motion to amend.

[00:10:48] Speaker 03:
Why don't you just give it to him?

[00:10:50] Speaker 02:
Your Honor, and this is the height of irony.

[00:10:53] Speaker 02:
Believe it or not, we thought this would be simpler.

[00:10:58] Speaker 03:
Yeah.

[00:10:59] Speaker 03:
I think you did this so that you wouldn't have to refile the case.

[00:11:03] Speaker 03:
And it would make it easier for the court and the like.

[00:11:06] Speaker 02:
Exactly.

[00:11:07] Speaker 03:
Exactly.

[00:11:08] Speaker 03:
But is that enough to make it non-conditional?

[00:11:11] Speaker 02:
I think it is, Your Honor, because the test under the Supreme Court precedent and this court's precedent is whether, under all of the circumstances, the defendant had a reasonable expectation that it could be sued on these claims.

[00:11:24] Speaker 02:
There was no way.

[00:11:25] Speaker 00:
Well, the real question is, did you have a reasonable expectation that eventually the motion to amend would be resolved?

[00:11:33] Speaker 02:
I think we did, Your Honor.

[00:11:35] Speaker 02:
But even if it didn't, even if it hung in the limbo forever, first of all, we would have just gone ahead and filed a new lawsuit, which we made clear on the record on October 27.

[00:11:44] Speaker 02:
If you want us to file a new suit, we will.

[00:11:47] Speaker 02:
But we thought this would be simpler.

[00:11:50] Speaker 00:
I don't know.

[00:11:51] Speaker 00:
I'm not comfortable with a presumption

[00:11:54] Speaker 00:
that federal courts won't eventually resolve things?

[00:11:58] Speaker 02:
Well, I am comfortable that, in particular, Judge Robinson would resolve the motion to amend, as she did in the very order that's at issue.

[00:12:08] Speaker 02:
So the test is, did they have any reasonable apprehension?

[00:12:12] Speaker 03:
Would it have made any difference if your letter had said, conditioned upon the grant of the motion to amend?

[00:12:21] Speaker 02:
I'm glad that it didn't, because I think our argument is better, because there was no condition on this thing becoming effective.

[00:12:30] Speaker 02:
Or if you didn't think it was already effective, the motion was going to be resolved one way or the other.

[00:12:35] Speaker 02:
There's no question about that.

[00:12:36] Speaker 02:
The terms of the covenant were clear.

[00:12:38] Speaker 02:
It's not like it ran from the date of some action.

[00:12:40] Speaker 02:
It was forever and ever, past and future.

[00:12:43] Speaker 02:
So there was no reasonable apprehension that the defendants could have had.

[00:12:47] Speaker 02:
that they would be sued on these claims.

[00:12:50] Speaker 04:
But I want to ask you a question about the merits.

[00:12:53] Speaker 04:
Judge Robinson found these claims to be obvious.

[00:12:56] Speaker 04:
She based it in large part on the prior obviousness decision, which was law of the case and binding.

[00:13:03] Speaker 04:
Claim 24, the prior obviousness decision, found the claim obvious.

[00:13:08] Speaker 04:
The only difference between claim 24 and the rendered obvious claim

[00:13:13] Speaker 04:
is the rendered obvious claim was construed as 1500 MP or greater, which includes 1500 MP and greater, and claim 24 says in excess of 1500 MP.

[00:13:28] Speaker 04:
I've looked at the prior art reference at issue.

[00:13:30] Speaker 04:
It's clearly disclosed expressly.

[00:13:32] Speaker 04:
Why are you here?

[00:13:34] Speaker 04:
And let's look at claim 25.

[00:13:37] Speaker 04:
which the only difference between the claim rendered obvious and claim 25 is predominantly of Martin's site.

[00:13:44] Speaker 04:
And when I look at the prior art reference, and it's located, let's see what page it is, on 5206, it says that the actual steel sheet is totally Martin's site.

[00:13:56] Speaker 04:
So I don't know why the heck you're standing here and taking up all this time on these two claims, because they're clearly invalid.

[00:14:04] Speaker 04:
So why are we here?

[00:14:07] Speaker 04:
Tell me why I'm spending my morning discussing subject matter jurisdiction with you.

[00:14:11] Speaker 04:
And you're fighting me over these two claims, which have not the sliverest of hope of being held not obvious.

[00:14:19] Speaker 02:
Well, let me say two things.

[00:14:21] Speaker 02:
One is we're here.

[00:14:22] Speaker 02:
We didn't want to be here.

[00:14:23] Speaker 02:
We wanted to drop these claims and just move ahead with the reissue patterns.

[00:14:30] Speaker 02:
And the second thing is, Your Honor, I would take issue with the fact that there's no chance that these claims are valid.

[00:14:36] Speaker 02:
It's important to note that the Patent Office reissued these claims.

[00:14:39] Speaker 02:
And claim 25 is different.

[00:14:41] Speaker 02:
It's narrower in scope than the other claims.

[00:14:43] Speaker 02:
After being... So is 24 narrower in scope, by the way.

[00:14:48] Speaker 04:
But claim 25 only discloses the material.

[00:14:50] Speaker 04:
And the primary reference for obviousness, the primary embodiment, is made of that exact material, expressly disclosed.

[00:14:57] Speaker 02:
I understand, Your Honor.

[00:14:59] Speaker 02:
I hear your point.

[00:15:00] Speaker 02:
But the point is that no fact finder has ever considered

[00:15:04] Speaker 02:
that claim.

[00:15:05] Speaker 04:
Well, can't I take judicial notice?

[00:15:07] Speaker 02:
No, I don't think you can, Your Honor.

[00:15:08] Speaker 02:
Wait.

[00:15:08] Speaker 04:
Of whether or not this prior art reference expressly says the word Martin site in it.

[00:15:13] Speaker 02:
You can certainly read a prior art document and see what it says.

[00:15:16] Speaker 02:
But what it would have disclosed to one of ordinary skill at the time is a question of fact.

[00:15:21] Speaker 02:
That fact has never been addressed.

[00:15:23] Speaker 02:
The PTO issued these claims despite being informed of that precise prior art, as well as this court's prior decision, as well as the jury verdict.

[00:15:32] Speaker 02:
So I hear you.

[00:15:33] Speaker 02:
I understand your point.

[00:15:35] Speaker 02:
But I disagree that these claims are clearly invalid.

[00:15:38] Speaker 04:
Then tell me about claim 24.

[00:15:39] Speaker 04:
How is claim 24 patentably distinct from that which was rendered invalid?

[00:15:44] Speaker 02:
I think the issue there, Your Honor, I think has to do with the fact that I'm not going to argue that the scope is materially- Credibility.

[00:15:51] Speaker 04:
Go ahead.

[00:15:52] Speaker 04:
Tell me what you want to tell me.

[00:15:53] Speaker 02:
I'm going to tell you that the Patent Office issued it, notwithstanding being confronted with that prior art.

[00:15:59] Speaker 04:
And that is- In other words, you will hang your-

[00:16:02] Speaker 04:
argument on the fact that the patent office, the infallible patent office, issued it?

[00:16:09] Speaker 02:
No, I will hang my argument on the fact that it is a question of fact.

[00:16:12] Speaker 02:
That is an important piece of evidence, as this court has held in other cases, that no fact finder has considered.

[00:16:19] Speaker 01:
Thank you.

[00:16:24] Speaker 04:
Mr. Sipes?

[00:16:25] Speaker 01:
Thank you, Your Honor.

[00:16:26] Speaker 01:
Christopher Sipes on behalf of the defendants.

[00:16:28] Speaker 01:
I want to take one thing about the claims asserted, but before that, I want to address your last question first.

[00:16:33] Speaker 01:
Why are we here?

[00:16:35] Speaker 01:
The reason we're here is because ArcelorMittal lost the jury verdict.

[00:16:39] Speaker 01:
It then lost twice on appeal about infringement and obviousness.

[00:16:43] Speaker 01:
And they are desperate to avoid a final judgment.

[00:16:47] Speaker 01:
And they tend to argue they have another reissue, which they have since gotten, which they are enforcing against defendants.

[00:16:54] Speaker 01:
And they are arguing that there is no preclusive effect

[00:16:58] Speaker 01:
From all of this prior litigation, the jury verdict, the prior decisions of this court, because there is no final judgment.

[00:17:05] Speaker 01:
That's it.

[00:17:05] Speaker 01:
For example, 8506K87.

[00:17:07] Speaker 04:
Is this like a prosenius thing?

[00:17:08] Speaker 01:
This is prosenius.

[00:17:09] Speaker 01:
This is an argument that to get preclusion, there has to be a final judgment.

[00:17:12] Speaker 01:
If they can moot this case, they intend to argue there's no final judgment, and that's all wiped out.

[00:17:19] Speaker 01:
In the district court's words below, they want a clean slate.

[00:17:21] Speaker 01:
Pretend no jury trial occurred.

[00:17:24] Speaker 01:
The appeals haven't occurred.

[00:17:25] Speaker 01:
What we are trying to do is get a final judgment to avoid the argument over preclusion.

[00:17:31] Speaker 01:
Let me start with whether 24 and 25 are in the case.

[00:17:34] Speaker 01:
They put it squarely in the case last time, and they did so to avoid a final judgment then.

[00:17:40] Speaker 01:
And remember how Mr. Trellis just said, well, there were many cases consolidated on appeal?

[00:17:45] Speaker 01:
The case we're talking about is the 050 case.

[00:17:49] Speaker 01:
That's the remand case.

[00:17:51] Speaker 01:
This is what they said to this court last time.

[00:17:54] Speaker 01:
This is at A5199 to 5200.

[00:17:57] Speaker 01:
Even if only reissue claims 24 and 25 remain, there is evidence that those claims were infringed during the time period at issue in the 050 case.

[00:18:11] Speaker 01:
They're saying claims 24 and 25, they're going to have certain infringement of them in the 050 case relating back to the time frame of that case.

[00:18:19] Speaker 01:
That also means they're admitting under 252

[00:18:22] Speaker 01:
that it relates back, that they're substantially identical.

[00:18:25] Speaker 01:
All that in that sentence.

[00:18:27] Speaker 01:
The next sentence.

[00:18:28] Speaker 01:
The proper remedy is therefore to remand the 050 case so that the district court can address infringement of reissue claims 24 and 25.

[00:18:36] Speaker 01:
I understand this argument.

[00:18:37] Speaker 04:
I think the court does.

[00:18:38] Speaker 04:
But I think your harder argument is the covenant not to sue.

[00:18:41] Speaker 01:
So let me take that up right away.

[00:18:43] Speaker 01:
First, let's make the facts clear here on the covenant.

[00:18:49] Speaker 01:
Two things.

[00:18:49] Speaker 01:
One, the covenant was not provided.

[00:18:53] Speaker 01:
until after our motion for summary judgment had been fully briefed and there was argument in it.

[00:19:00] Speaker 01:
Indeed, the first time they showed up with a covenant at all was a draft covenant attached to their reply brief and their motion to dismiss.

[00:19:09] Speaker 01:
At the end of the close of briefing, that draft covenant is not even the covenant they finally came in with because it had a number of problems.

[00:19:18] Speaker 01:
So they never moved.

[00:19:20] Speaker 01:
There was no briefing on that covenant.

[00:19:22] Speaker 01:
That covenant came in after, as the district court found, they weren't even contesting the lack of infringement in the trial record.

[00:19:29] Speaker 04:
Ultimately, the covenant not to sue was executed and filed with the court prior to the court's decision invalidating claim 24 and 25.

[00:19:39] Speaker 01:
That's right.

[00:19:39] Speaker 01:
So they have four problems, any one of which defeats the covenant.

[00:19:43] Speaker 01:
One is under already the Nike, the Supreme Court case, by the way, that post-dates thou.

[00:19:48] Speaker 01:
There was a controlling law now.

[00:19:50] Speaker 01:
They had a burden, a formidable burden, to show that it was absolutely clear that the case was moot.

[00:19:57] Speaker 01:
But they never made a motion.

[00:19:59] Speaker 01:
They never briefed the specific terms, including the conditions of that.

[00:20:04] Speaker 01:
So they made no showing.

[00:20:05] Speaker 01:
They're arguing to you about the conditions.

[00:20:07] Speaker 01:
They never made that argument to the district court.

[00:20:09] Speaker 01:
They're trying to raise on appeal issues they never presented below.

[00:20:12] Speaker 01:
Why?

[00:20:13] Speaker 01:
Because that covenant was so belated

[00:20:17] Speaker 01:
Two, the covenant was defective.

[00:20:19] Speaker 01:
Why?

[00:20:20] Speaker 01:
As they admit, and as it says in the condition, the purpose of the condition was to keep alive their other case, the 685 case, asserting the very same RE153 claims against us.

[00:20:36] Speaker 01:
So at the same time they're saying they had no intention to assert infringement of those claims, they have a second case

[00:20:42] Speaker 01:
asserting them.

[00:20:43] Speaker 01:
Now, they say, well, we weren't really serious about that case.

[00:20:46] Speaker 01:
We just wanted to amend.

[00:20:47] Speaker 01:
The fact remains, they said specifically in their cover letter submitting the covenant that they were not mooting that case.

[00:20:56] Speaker 01:
So they're acknowledging to the district court, they're bonding themselves to the fact that their enforcement of RE 153 was not yet moot.

[00:21:06] Speaker 01:
So what is their condition boiled down to?

[00:21:08] Speaker 01:
Who controls?

[00:21:09] Speaker 01:
Did you assert the covenant?

[00:21:12] Speaker 01:
Once it was signed, could you have asserted it in the other case?

[00:21:15] Speaker 01:
No, because it wasn't yet effective.

[00:21:17] Speaker 01:
It was expressly conditional.

[00:21:20] Speaker 00:
Once it was signed and it was in effect, could you have asserted it in the other case?

[00:21:25] Speaker 01:
We don't believe so, because it was said specifically that didn't become effective until she acted on their motion to amend.

[00:21:34] Speaker 01:
What they were saying was... You're not listening to me.

[00:21:37] Speaker 01:
I don't believe we could have asserted it, Your Honor.

[00:21:39] Speaker 00:
Once I said, once it became effective, could you have asserted it in the other case?

[00:21:46] Speaker 01:
If she had not granted the motion to amend, then once it became effective, we could have asserted it, but not until then.

[00:21:57] Speaker 01:
But before she granted the motion to amend, once she granted the motion to amend, so then that case had been amended.

[00:22:04] Speaker 01:
That wasn't done until she'd acted on her summary judgment motion.

[00:22:08] Speaker 04:
So.

[00:22:09] Speaker 04:
They were done at the same time, in the exact same order.

[00:22:11] Speaker 04:
In the same order, she grants the motion to amend the last sentence of the order or so.

[00:22:18] Speaker 04:
And I mean, I was even perplexed because the front page of that order, even though these two cases are not consolidated, it seems to be a single order with both dockets in the front to make it clear that it was entered in both dockets.

[00:22:32] Speaker 04:
So she granted the motion to amend.

[00:22:36] Speaker 04:
So the covenant went into effect right then and there.

[00:22:39] Speaker 04:
Why doesn't that moot everything?

[00:22:40] Speaker 01:
Because she also granted our summary judgment motion of non-offensiveness and validity.

[00:22:45] Speaker 01:
So she had jurisdiction to enter that order.

[00:22:48] Speaker 01:
And that order did both things.

[00:22:50] Speaker 01:
The order was entered when she had jurisdiction.

[00:22:54] Speaker 01:
And there's another reason, too, which is for James.

[00:22:57] Speaker 01:
Even if we got rid of the condition,

[00:23:01] Speaker 01:
And as I say, I think she had jurisdiction to enter that order.

[00:23:04] Speaker 01:
And that order invalidated under Fort James, a covenant that to sue after a jury trial, and when there's no reasonable apprehension of being found to infringe, is not effective, is not effective to deprive the court of counterclaims.

[00:23:20] Speaker 01:
And that's the Fort James case at 412 F3rd, 1340 at 1348.

[00:23:26] Speaker 01:
And so she had jurisdiction because

[00:23:29] Speaker 01:
By the time they gave a covenant not to sue, they'd already abandoned infringement because they'd lost.

[00:23:35] Speaker 01:
The jury had found that there was no infringement.

[00:23:37] Speaker 01:
This court had affirmed no infringement under doctrine of equivalence, remanded on literal infringement.

[00:23:43] Speaker 01:
We'd briefed twice, summary judgment of no literal infringement.

[00:23:47] Speaker 01:
Both times, as the just court found, they had not contested that in the trial record there was no evidence of literal infringement.

[00:23:53] Speaker 01:
So by the time the covenant came in,

[00:23:57] Speaker 01:
There was no reasonable hypertension infringement because they had not contested how we're shown.

[00:24:02] Speaker 03:
So your view is, even if they had sent you a signed unconditional covenant at the time of the summary judgment briefing, it still wouldn't be effective?

[00:24:11] Speaker 01:
It would be.

[00:24:12] Speaker 01:
Particularly at the close of briefing, when it was clear, too, they weren't even contesting infringement.

[00:24:17] Speaker 01:
That's exactly Fort James.

[00:24:18] Speaker 01:
We'd invested all of this time into litigating infringement.

[00:24:23] Speaker 01:
When we've won infringement, the law is

[00:24:26] Speaker 01:
They cannot move the case to avoid preclusion, which is exactly what they're trying to do here.

[00:24:32] Speaker 01:
They cannot move the case by giving a covenant.

[00:24:35] Speaker 01:
The covenant is not covenanting, because we don't infringe.

[00:24:39] Speaker 01:
And we've been found not to infringe.

[00:24:41] Speaker 01:
We didn't have a reasonable apprehension of being held liable for infringement in the 050s.

[00:24:46] Speaker 03:
But isn't the problem, this is all very complicated to me, but the problem is where Jane's argument is,

[00:24:56] Speaker 03:
there had never really been any ruling on claims 24 and 25.

[00:24:59] Speaker 03:
I mean, that's why we needed a remand in the first place.

[00:25:05] Speaker 03:
It's not a case where they're trying to say, we got a jury verdict against us, but before it gets enforced or whatever, we're going to grant you a covenant not to sue.

[00:25:14] Speaker 03:
Or even, we lost on claims 123, but before you enter a final judgment, we'll give you a covenant not to sue.

[00:25:21] Speaker 03:
You've got to remand.

[00:25:22] Speaker 03:
for further proceedings on 24 or 25.

[00:25:25] Speaker 01:
But the difference is we got a narrow remand for the limited purposes on the infringement side of determining literal infringement in summary judgment would be appropriate.

[00:25:37] Speaker 01:
We briefed summary judgment, and they weren't contesting there was no disputed fact.

[00:25:41] Speaker 01:
That, if anything, is further along than Fort James.

[00:25:44] Speaker 01:
In Fort James, it was a jury verdict.

[00:25:45] Speaker 01:
But part of the stipulation, the covenant.

[00:25:48] Speaker 00:
When the appellant executed the covenant,

[00:25:52] Speaker 00:
No jury or court had resolved whether there was an infringement of 24 and 25, right?

[00:26:01] Speaker 01:
Well, there was no judgment.

[00:26:03] Speaker 01:
There was no judgment, but nor was there a reasonable apprehension.

[00:26:06] Speaker 01:
The jury had resolved no infringement.

[00:26:08] Speaker 01:
The court had affirmed that it was a possible equivalence, remanded for literal infringement.

[00:26:14] Speaker 01:
We had moved for no literal infringement.

[00:26:17] Speaker 01:
They had not contested.

[00:26:18] Speaker 01:
Their sole basis for contesting that was jurisdiction.

[00:26:21] Speaker 01:
Not that there was a dispute of fact in the trial record.

[00:26:24] Speaker 01:
So that was effectively resolved.

[00:26:26] Speaker 01:
In Fort James, the jury had returned a verdict.

[00:26:29] Speaker 01:
But part of what Fort James there did is part of the covenant.

[00:26:31] Speaker 03:
It seems like you're asking us to take Fort James back a further step, though.

[00:26:34] Speaker 03:
It may be a reasonable step that if you get overwhelming briefing that shows you're going to lose, you shouldn't be able to avoid that just by a covenant to sue.

[00:26:45] Speaker 01:
I'm not sure.

[00:26:46] Speaker 03:
And you're not going to argue against it.

[00:26:48] Speaker 01:
In both cases, there was no final judgment of non-infringement.

[00:26:51] Speaker 01:
But it was a full jury trial.

[00:26:54] Speaker 01:
And then there was no reasonable apprehension.

[00:26:57] Speaker 01:
So that is what Fort James is talking about.

[00:26:59] Speaker 01:
Was there a reasonable apprehension in the case of being held liable?

[00:27:03] Speaker 01:
I think, if anything, the facts here are stronger.

[00:27:06] Speaker 01:
And Fort James, they promised not to do post-trial breathing to try to overturn the verdict.

[00:27:10] Speaker 01:
And there was no appeal.

[00:27:11] Speaker 01:
We were through an appeal.

[00:27:12] Speaker 01:
We had law of the case.

[00:27:14] Speaker 01:
The amount of resources and the surety was greater in our case.

[00:27:20] Speaker 01:
Because in our case, we had this court's review twice.

[00:27:23] Speaker 01:
And we had the jury verdict.

[00:27:25] Speaker 01:
And we had that they had not contested that in the trial record that there was evidence of infringement.

[00:27:31] Speaker 01:
Their sole opposition to no infringement was jurisdiction.

[00:27:34] Speaker 01:
Either way, there's no risk of liability in the case.

[00:27:38] Speaker 03:
If instead, in response to your summary judgment motion, they had contested infringement and said they're still on 24 and 25, there are genuine issues.

[00:27:47] Speaker 03:
and then said, but we won't push it forward.

[00:27:49] Speaker 03:
We'll give you a covenant on that.

[00:27:50] Speaker 03:
Would it have been effective then?

[00:27:53] Speaker 01:
You have to look at what they were saying.

[00:27:55] Speaker 01:
That would be a harder case.

[00:27:57] Speaker 01:
I think there's an important principle in Fort James, which is a principle that this court and the Supreme Court has articulated.

[00:28:02] Speaker 01:
You can't let a litigant, particularly if you're a plaintiff, manipulate the court's jurisdiction to avoid preclusive effect down the road, to have a party invest in all this litigation and be told, oh, clean slate.

[00:28:13] Speaker 01:
We start over again.

[00:28:14] Speaker 01:
I think even in that case, here where we've been through a jury trial and two appeals, it's time for a final judgment.

[00:28:22] Speaker 01:
But that would be a closer case in this case where there really was no reasonable apprehension.

[00:28:27] Speaker 01:
And that's exactly for James.

[00:28:30] Speaker 01:
There are other problems too, including the fact we believe that in a context where not only are they trying to move this case, but they're doing it at the same time, they're asserting yet another reissue of the original patent.

[00:28:42] Speaker 01:
That's an additional factor.

[00:28:43] Speaker 01:
Remember, the invalidity result that the court entered here are non-infringement.

[00:28:49] Speaker 01:
Both of them are relevant to the next case of the reissue because of the Kessler doctrine and other doctrines of preclusion.

[00:28:58] Speaker 01:
And both the reissue they're now asserting, RE940 and the one at issue in this case, are reissues of the same patent.

[00:29:05] Speaker 01:
So final judgment in this case bears on both.

[00:29:08] Speaker 00:
It's pretty obvious that PTO thought that we misread

[00:29:12] Speaker 00:
in the prior case, which is why they did the re-issues.

[00:29:17] Speaker 01:
Your Honor, I can't read the mind of the examiner as to what the examiner thought, whether it was a pure slip-up or something else.

[00:29:24] Speaker 01:
We don't know.

[00:29:25] Speaker 01:
But that was litigated.

[00:29:28] Speaker 01:
And this court held in Archimantial 2 that the judgment and the decision in Archimantial 1 continued.

[00:29:36] Speaker 01:
And that mandate continued in force.

[00:29:39] Speaker 01:
even after the reissue.

[00:29:40] Speaker 01:
So that issue we litigated, and we have law of the case on.

[00:29:44] Speaker 01:
And why the patent office did what it did, I can't speak to what was in the mind of the examiner.

[00:29:51] Speaker 01:
But what we do know is this court ruled even on that question.

[00:29:55] Speaker 01:
And in ArcelorMittal 2, this court, 3-0, agreed.

[00:30:00] Speaker 01:
And it remanded to the district court specifically to implement the mandate from ArcelorMittal 1.

[00:30:07] Speaker 01:
So at this point,

[00:30:09] Speaker 01:
We had the law of the case.

[00:30:11] Speaker 01:
We had the jury verdict.

[00:30:13] Speaker 01:
We had the absence of any genuine dispute.

[00:30:15] Speaker 01:
It was too late.

[00:30:16] Speaker 01:
And it's too narrow to try to move this case with a covenant and then litigate yet another reissue of the original patent that gave rise to all of this jurisdiction.

[00:30:27] Speaker 01:
Your Honor, if there's no further questions.

[00:30:29] Speaker 04:
No, thank you.

[00:30:30] Speaker 04:
Thank you, Your Honor.

[00:30:36] Speaker 02:
Thank you, Ron.

[00:30:37] Speaker 02:
Let me address the Fort James issue quickly.

[00:30:41] Speaker 02:
First of all, they made that argument below.

[00:30:42] Speaker 02:
Judge Robinson didn't accept it.

[00:30:45] Speaker 02:
Her hangup was on the supposed condition.

[00:30:48] Speaker 02:
She said, if we had just filed it, we would have been fine.

[00:30:51] Speaker 02:
But this is not anything like Fort James.

[00:30:53] Speaker 02:
Yeah, there was a trial here.

[00:30:55] Speaker 02:
But it was a trial of different claims from a different patent.

[00:30:58] Speaker 02:
And under the wrong claim construction, that jury verdict was vacated.

[00:31:04] Speaker 02:
Claims 24 and 25 were never tried.

[00:31:06] Speaker 04:
Poor James is not a strong argument.

[00:31:08] Speaker 04:
I'm sorry, Your Honor?

[00:31:09] Speaker 04:
Poor James is not a strong argument.

[00:31:10] Speaker 02:
Don't waste your two minutes.

[00:31:13] Speaker 02:
OK.

[00:31:13] Speaker 02:
Let me talk about then about the complaint about the fact that we're asserting this other reissue patent, and somehow that should make a difference on the effectiveness of the covenant.

[00:31:22] Speaker 02:
It's the covenant.

[00:31:22] Speaker 04:
The whole thing is on the conditional nature of the covenant.

[00:31:24] Speaker 04:
That's where, if you have a problem, you have it.

[00:31:27] Speaker 02:
Well, Your Honor, then let me talk about that with my minute left.

[00:31:32] Speaker 02:
There was no condition on the effectiveness of this covenant.

[00:31:36] Speaker 04:
There was.

[00:31:37] Speaker 04:
There was executing the motion to amend.

[00:31:41] Speaker 02:
Deciding the motion to amend, correct.

[00:31:43] Speaker 02:
But frankly, I think even had we not issued the covenant, our prior statements on the record were enough to divest the court of jurisdiction.

[00:31:51] Speaker 02:
We said we're not asserting this.

[00:31:53] Speaker 02:
They've got a free ride on this.

[00:31:54] Speaker 02:
You cannot be much clearer than that.

[00:31:57] Speaker 04:
What if I think your prior assertions on the record are not enough?

[00:32:01] Speaker 04:
So it required her granting the motion to amend.

[00:32:04] Speaker 04:
I think that was a meaningful condition on.

[00:32:06] Speaker 02:
It required her resolving the motion.

[00:32:08] Speaker 02:
Yeah, yeah, yeah.

[00:32:09] Speaker 04:
I don't think, no, resolving.

[00:32:11] Speaker 04:
I think you actually conditioned it on her granting.

[00:32:13] Speaker 04:
No, no, we conditioned it.

[00:32:15] Speaker 02:
Resolving?

[00:32:15] Speaker 02:
Yeah, 5218 in the appendix.

[00:32:16] Speaker 02:
It was on resolution of the motion.

[00:32:18] Speaker 04:
But why doesn't already be Nike actually say, look, it was your obligation to come forward and establish this?

[00:32:25] Speaker 04:
I mean, this is a burden of proof question.

[00:32:28] Speaker 04:
Who has the burden of coming forward

[00:32:30] Speaker 04:
We got an order where she did both simultaneously.

[00:32:33] Speaker 04:
I don't know what the heck to do with that.

[00:32:35] Speaker 04:
But what I do know is if I don't know what the heck to do with somebody, who loses?

[00:32:39] Speaker 04:
The person who had the burden of proof.

[00:32:41] Speaker 04:
So tell me, given already be Nike, and the burden that was thrust upon you in that case as the person asserting the validity of the covenant,

[00:32:51] Speaker 04:
You know, what do I do with her simultaneous grant of summary judgment of non-infringement and resolution of non-infringement?

[00:32:57] Speaker 02:
Well, the burden in already v. Nike has to do with the adequacy of the covenant.

[00:33:02] Speaker 04:
And as the Supreme Court there made clear... What they said is, you have the burden of showing there's no longer a reasonable expectation that this would be enforced against you.

[00:33:10] Speaker 04:
I believe that's pretty close to the language.

[00:33:12] Speaker 02:
Right.

[00:33:13] Speaker 02:
And here, we clearly met that standard determined.

[00:33:16] Speaker 02:
Our prior statements, which I know you by hypothesis were saying aren't enough, but still they're relevant.

[00:33:20] Speaker 02:
They're certainly relevant.

[00:33:21] Speaker 04:
They're relevant.

[00:33:22] Speaker 02:
And then we have the covenant saying that we are not asserting this patent against you or your customers forever and ever and ever.

[00:33:29] Speaker 02:
There was no reasonable expectation that we were going to assert these claims against these defendants or their customers.

[00:33:36] Speaker 02:
And that's the Nike already test.

[00:33:39] Speaker 02:
Now the condition issue is a separate one, and there I think

[00:33:44] Speaker 02:
Again, because the supposed condition was just as a matter of administrative convenience, we'd like to proceed in the old case.

[00:33:51] Speaker 02:
You know what?

[00:33:52] Speaker 02:
That's a choice you made, though.

[00:33:53] Speaker 02:
It is a choice we made, Your Honor, but it doesn't affect the effectiveness of the covenant.

[00:33:57] Speaker 02:
Well, it might.

[00:33:58] Speaker 02:
Well, it depends on what this court decides, obviously, but I think it didn't because... I mean, you certainly had a clear path to issuing a covenant.

[00:34:08] Speaker 03:
You could sign it, and you could send it to them.

[00:34:11] Speaker 02:
Which we did.

[00:34:12] Speaker 03:
And you could put no conditional language in it.

[00:34:13] Speaker 02:
And the covenant itself had none.

[00:34:15] Speaker 02:
All we were asking for was we thought to make it more convenient and orderly to just proceed with the 685 case rather than file a new one.

[00:34:24] Speaker 02:
That obviously backfired.

[00:34:25] Speaker 02:
With hindsight, we wouldn't have done that because we obviously made things much more complicated.

[00:34:30] Speaker 02:
But I think there was no reasonable expectation that they would ever be sued on those claims and that's the test.

[00:34:36] Speaker 02:
Thank you, Your Honor.

[00:34:37] Speaker 04:
Thank you.

[00:34:37] Speaker 04:
I thank both counsel.

[00:34:38] Speaker 04:
The argument was very helpful.