[00:00:03] Speaker 00: The next case for argument is 151597, Asia-Vital Components versus Aztec [00:01:04] Speaker 00: Mr. Aiken? [00:01:06] Speaker 00: Yes. [00:01:07] Speaker 00: We've got another divided time situation. [00:01:09] Speaker 00: So am I correct that you're going to do 10 minutes in the first go and that your colleague is going to do the five minutes for reply? [00:01:17] Speaker 00: Yes, Your Honor. [00:01:21] Speaker 00: Whenever you're ready. [00:01:24] Speaker 06: May it please the Court. [00:01:25] Speaker 06: Good morning. [00:01:27] Speaker 06: My name is Andy Aiken. [00:01:29] Speaker 06: I'm here on behalf of the Appellant, Asia Vital Components Company. [00:01:34] Speaker 06: It's a company organized under the laws of Taiwan. [00:01:38] Speaker 06: And we're here on appeal of a district court action that dismissed our complaint for declaratory judgment for patent invalidity and non-infringement. [00:01:52] Speaker 06: That was out in the Eastern District of Virginia. [00:01:55] Speaker 00: Let me ask you that what's troubling me here is really not so much the question of whether or not they knew of the products, the K-7 and the K-9. [00:02:03] Speaker 00: But the very scant allegation in your complaint with respect to where you stood in terms of producing your products. [00:02:12] Speaker 00: Let me just give you my thing. [00:02:14] Speaker 00: Because the complaint just says you've completed, I think, you've completed your designs and you intend to market and sell the products in the US. [00:02:24] Speaker 00: Now you give a lot of more detail and fulsomeness to those statements before the district court and certainly on appeal for us. [00:02:31] Speaker 00: But if we are left to the allegations in your complaint, how are those sufficient? [00:02:36] Speaker 06: Well, I would point to the actual complaint. [00:02:40] Speaker 06: When we did refer to the K-7 and K-9 as products repeatedly, the district court actually seized upon one instance where we called them prototypes. [00:02:50] Speaker 06: But in a number of areas. [00:02:53] Speaker 00: But they weren't products, right? [00:02:55] Speaker 00: I mean, there's no dispute. [00:02:57] Speaker 00: They were not products on the market, right? [00:03:00] Speaker 06: There is a dispute with respect to that. [00:03:03] Speaker 06: The district court found that they were prototypes and not on the market. [00:03:09] Speaker 02: Is there any evidence that they were being sold to anyone outside the United States? [00:03:16] Speaker 06: That's where they had been offered. [00:03:18] Speaker 06: My client is in Taiwan, and they were seeking distribution and presenting... Let me just try to... [00:03:27] Speaker 02: get the focus on what's in my mind, was something other than a prototype, but rather units that the intended users were going to have were those out in the marketplace in the hands of users using them. [00:03:47] Speaker 06: They were being offered for sale at the time of the complaint. [00:03:53] Speaker 02: And where's that? [00:03:55] Speaker 02: What's the evidence of that? [00:03:56] Speaker 06: Well, the evidence is the products are positioned to directly compete. [00:04:00] Speaker 02: I was actually looking for joint appendix site questions. [00:04:03] Speaker 06: That's A67. [00:04:05] Speaker 06: ABC's customers for the K7 and K9 products have expressed concern that these were going to subject them to liability. [00:04:14] Speaker 06: So the customers had seen the K7 and K9 products, and that's alleged in the complaint. [00:04:20] Speaker 06: I mean, that's implicit by their, that's paragraph 26. [00:04:26] Speaker 06: The customers for them have expressed concern, and obviously the paragraph is not complete, but that these products are going to subject these clients to potential liability, which they would like to avoid. [00:04:48] Speaker 02: But that's as specific as the evidence gets. [00:04:51] Speaker 02: We don't have anything that goes, for example, to the ready for patenting kind of standard that the Supreme Court articulated in On Sale Bar, which indicates a higher degree of completion so that the question of infringement might be better defined. [00:05:13] Speaker 06: We think that that may, well, is [00:05:16] Speaker 06: met by paragraph 24 where it said we'd completed the designs of the K9 products as manufactured, we called them prototype products, but intended to sell those products into the US. [00:05:31] Speaker 06: So the product had been completed. [00:05:33] Speaker 06: It was ready for patenting. [00:05:35] Speaker 06: It was ready for production. [00:05:37] Speaker 00: There's no suggestion of what the timetable is, whether you have sufficient investment to do that or what. [00:05:44] Speaker 00: I mean, this could [00:05:45] Speaker 00: taking this at face value, this could mean, and you intend to do it five years down the road, right? [00:05:52] Speaker 06: Well, I would suggest that would be impossible, because the actual customers that had seen them by the time of the complaint, based on paragraph 26, and they'd actually expressed concern with respect to liability. [00:06:06] Speaker 06: So we think the pleading is adequate to show that the products were ready to be launched into the marketplace. [00:06:15] Speaker 06: And then before the district court, we actually did a side-by-side comparison showing the product that had been manufactured and compared it to an accused product. [00:06:26] Speaker 02: Is that in photographs or the actual physical thing? [00:06:29] Speaker 02: Has the other side seen this? [00:06:32] Speaker 06: That was a photograph of the product. [00:06:35] Speaker 02: It may be a separate question. [00:06:36] Speaker 02: Has the other side now seen the K7 and K9? [00:06:40] Speaker 06: I am not certain. [00:06:41] Speaker 06: There's been no discovery that [00:06:44] Speaker 06: has taken place in the case. [00:06:45] Speaker 06: So we have no idea what the ACETEC has seen or not seen. [00:06:54] Speaker 06: I mean, it was our suspicion that they had actually saw the K7 and K9. [00:06:59] Speaker 06: And that's why they had actually made an express threat of infringement in August after we told them we weren't responsible for the Intermax 120 that they had mistakenly accused us. [00:07:10] Speaker 06: They told us in our email. [00:07:12] Speaker 06: We still think you're infringing. [00:07:15] Speaker 06: And it was our assumption that they had probably come across the product somewhere, maybe even out of the country. [00:07:22] Speaker 06: Or maybe it was in the country. [00:07:24] Speaker 06: We don't know, because there was no discovery taken in the case. [00:07:27] Speaker 06: But they've represented that they didn't know. [00:07:30] Speaker 06: And the court made that finding. [00:07:32] Speaker 06: It was not an unreasonable finding. [00:07:34] Speaker 06: We don't take issue with that. [00:07:36] Speaker 02: But the fact is we- I'm not sure that this matters, but I guess I- [00:07:46] Speaker 02: You know something about where K7 and K9 units might have been in the world, because they're yours, right? [00:07:55] Speaker 02: So what is it? [00:07:57] Speaker 02: This is connected to the question whether, you know, did you have 10,000 of those units in user's hands in Taiwan at the time, or what? [00:08:10] Speaker 06: Well, unfortunately, I can't go back and supplement the record with that information. [00:08:15] Speaker 06: That's not a record. [00:08:17] Speaker 06: We believe, and I'm not exactly certain, my client's in Taiwan, but there was product distribution. [00:08:24] Speaker 06: We had them review the complaint, and this is what, based on some communications issues, that we were able to affirmatively represent to the court when we filed it. [00:08:35] Speaker 06: Certainly, we could go back and find out exactly what the degree of distribution was. [00:08:40] Speaker 06: But that's not of the record. [00:08:41] Speaker 06: Unfortunately, we can't come back now and supplement the record. [00:08:44] Speaker 06: We agree. [00:08:45] Speaker 06: We're somewhat constrained to what we alleged in the complaint and what we've presented to some extent to the district court to explain what the materials in the complaint meant. [00:08:56] Speaker 06: But we're somewhat limited to just putting in new facts. [00:09:00] Speaker 06: We did present the declaration of Mr. Wang with respect to that. [00:09:05] Speaker 06: who actually discussed some of the clients of the K7 and K9 concern. [00:09:17] Speaker 00: Look at paragraph 23 where you say on information and belief the K7 and K9 products may have a number of structural similarities to the accused product sold by Coolit. [00:09:31] Speaker 00: Firstly, there's a may in there. [00:09:32] Speaker 00: Secondly, we don't know what [00:09:34] Speaker 00: the number of structural similarities, whether that has anything to do with reading on the patents. [00:09:41] Speaker 00: So that's not helpful, is it? [00:09:45] Speaker 06: It could be more definite, but I think the case law is pretty clear. [00:09:48] Speaker 06: You don't have to admit that your product infringes. [00:09:52] Speaker 06: You just have to have a reasonable apprehension you're going to get sued. [00:09:57] Speaker 06: And as we presented this side-by-side photograph, it was almost identical. [00:10:01] Speaker 06: When you look at these photographs, they're substantially identical. [00:10:04] Speaker 06: to the Intermax that was accused. [00:10:07] Speaker 06: So you look at this from the perspective of AVC, they don't have to come out and explain exactly why they think their product may infringe. [00:10:20] Speaker 06: They don't have to do that. [00:10:21] Speaker 06: I mean, in this instance, Acitec made an express charge of infringement. [00:10:26] Speaker 05: And we frankly think that that... But that charge of infringement was directed to a product that your client is not selling. [00:10:33] Speaker 06: We disagreed with that. [00:10:35] Speaker 06: They made an express charge by letter in May of 2014. [00:10:41] Speaker 06: We responded to that letter and indicated that we were not selling that Liquamax 120 that was expressly identified. [00:10:49] Speaker 06: They came back and said, well, when this is on August 2, after we responded, it says, we still think that you are infringing our products in the United States. [00:10:58] Speaker 06: So that's an express threat of infringement that we think [00:11:02] Speaker 06: which reverses the other reasonable apprehension test. [00:11:05] Speaker 05: You weren't selling any products at that time. [00:11:09] Speaker 06: Correct. [00:11:09] Speaker 06: We were not selling. [00:11:11] Speaker 06: They weren't in the United States. [00:11:13] Speaker 06: We were attempting to sell, but we weren't selling. [00:11:16] Speaker 06: Actually, an offer for sale is an infringement technically. [00:11:20] Speaker 06: So we think that that actually traverses the entire reasonable apprehension test. [00:11:26] Speaker 00: This is an express chart. [00:11:26] Speaker 00: Can I just go back to a statement you made a couple minutes ago, because I didn't hear it. [00:11:29] Speaker 00: I'm not sure I heard it correctly. [00:11:30] Speaker 00: You were saying something about the comparative charts between Lickmax 120 and your product. [00:11:38] Speaker 00: Well, where is there any suggestion in the complaint that there was a similarity between those? [00:11:43] Speaker 00: Because I'm looking at paragraph 22 that just states [00:11:48] Speaker 00: that they provided charts that demonstrated how patents read on that. [00:11:53] Speaker 00: But I don't see where you're saying, we're just like K7 and K9 are just like or very similar to LiquiVac. [00:12:01] Speaker 00: Is that anywhere in the complaint? [00:12:02] Speaker 06: That's not in the complaint. [00:12:03] Speaker 06: We said it was similar to the Coolant Systems and Cooler Masters, which have been expressly, they actually brought infringement cases against both of those products. [00:12:14] Speaker 00: Yes, so what are we supposed to do with the point you were making, which I assume you think is appropriate to our determination about, or there ought to be a DJ here, which is this comparison between Litmax and your products, if that's nowhere in the complaint? [00:12:30] Speaker 06: That's not in the complaint, I agree, but it's, you know, what is important is from the perspective, the objective perspective from Asia Vital Components, is they're getting cease and desist letters, express [00:12:44] Speaker 06: content express charges of infringement and they have these products sitting sitting there that they're attempting to introduce into the market and from their perspective when they look at this enter max directly with the with what they're making [00:13:01] Speaker 06: They have a objective uncertainty. [00:13:03] Speaker 00: But even if I accept what you're saying and agree with it, my concern is that I don't see that in the complaint. [00:13:10] Speaker 06: That specific is not in the complaint, but we believe we have it covered based on the similarities with the Coolant and Coolant Master, which is just a continuum of similar products. [00:13:23] Speaker 00: Is there anything in the complaint that tells us that the Coolant, the Coolant, and the Coolant Master are like the Lickmax? [00:13:30] Speaker 06: No, we don't connect all the dots. [00:13:34] Speaker 06: I agree that there is not a direct statement in the complaint, but we tried to explain to the district court this is exactly why this mistake may have actually happened. [00:13:49] Speaker 06: The district court found that part of the reason why that [00:13:53] Speaker 06: comparison was presented before the district court. [00:13:56] Speaker 00: What are you saying? [00:13:57] Speaker 00: What mistake would have happened? [00:13:59] Speaker 00: Why were they erroneously accused you of doing it? [00:14:03] Speaker 00: Right. [00:14:03] Speaker 00: But it's quite clear they didn't know of the K-7 and K-9 products, right? [00:14:10] Speaker 06: The judge found that we don't know that. [00:14:12] Speaker 06: I mean, those products were, at the time of, in the summer of 2014, it's my understanding they were out there trying to [00:14:22] Speaker 06: sell these products. [00:14:23] Speaker 06: They're not going to go present this to Acitec. [00:14:30] Speaker 06: They're seeking distribution. [00:14:32] Speaker 06: There are people throughout the world, this is a world market, and it was not like they're going to confront their competitor and say, take a look at our products that we've developed, what do you think of these? [00:14:48] Speaker 06: Rather, they're selling to [00:14:49] Speaker 06: potential distributors to put their products into the market. [00:14:53] Speaker 06: Now, Acetech says they didn't learn about that, and we understand that's not unreasonable for them to take that position. [00:15:01] Speaker 06: But the fact is, there's shows throughout the world where products are presented. [00:15:06] Speaker 06: There are meetings between distributors and people at meetings talk to other people. [00:15:13] Speaker 06: So that's a complex factual finding at the end of the day. [00:15:19] Speaker 06: We're stuck with the district court's finding, unless it was clear error. [00:15:23] Speaker 06: But they've had two executives said they didn't know about the K7 and K9 products. [00:15:28] Speaker 06: And we are stuck with that. [00:15:32] Speaker 06: And we're not saying there was clear error in that finding. [00:15:35] Speaker 06: But we believe that there's sufficient information overall in the complaint. [00:15:40] Speaker 06: And I would point out that we think the judge at the district court just focused on this issue. [00:15:45] Speaker 06: And the test is really a totality of circumstance. [00:15:49] Speaker 06: And we've also presented evidence regarding their aggressive enforcement actions. [00:15:55] Speaker 06: They did sue Coolant and Cooler Masters on these integrated pump solutions. [00:16:00] Speaker 06: They sent cease and desist letters to our, well, to Enermax, another person in there. [00:16:08] Speaker 06: They didn't initiate that litigation. [00:16:11] Speaker 06: They contacted our customers. [00:16:12] Speaker 06: And that's clear from the pleadings as well. [00:16:17] Speaker 06: that the customers were concerned about this patent liability. [00:16:21] Speaker 06: So we think under this total circumstances test, combined with this express charge of infringement after we told them that the Intermax 120 was not ours is adequate and more than adequate to confer Article III jurisdiction here. [00:16:38] Speaker 00: I think we have your argument. [00:16:39] Speaker 00: Thank you. [00:16:39] Speaker 00: Thank you very much. [00:16:48] Speaker 04: Good morning. [00:16:49] Speaker 04: May it please the court? [00:16:49] Speaker 04: Robert McCauley on behalf of Asatec. [00:16:53] Speaker 04: Your Honor, as I was sitting over here listening to Mr. Aiken argue, I was struck many times by so many points that he was making that have no basis whatsoever in the complaint. [00:17:05] Speaker 04: The complaint is bare. [00:17:08] Speaker 04: There's- But we're not limited to the complaint, are we? [00:17:11] Speaker 02: Your Honor- There's evidence. [00:17:12] Speaker 02: There's an evidentiary record here of which, to me, the most striking thing is [00:17:18] Speaker 02: Your email was at, I can't entirely tell because some of the characters are Korean, but August 2nd was at the email at A207 after they told you that they're not responsible for the LICMAX 120, paragraph 4th. [00:17:38] Speaker 02: says, please be advised that Acitec believes that ABC is likely selling other infringing products in the US. [00:17:44] Speaker 02: We're sure you're aware that Acitec enforces its IP, and it has pending litigation against Coolit and Coolmaster, et cetera. [00:17:52] Speaker 02: So that, I take it, is some kind of assertion of your belief about infringement once you accept that they're not responsible for litigation. [00:18:05] Speaker 02: Max, their complaint says they've got prototypes of these other things. [00:18:10] Speaker 02: You don't know about the other things, but as I read our precedent, it's quite clear you don't have to know. [00:18:17] Speaker 02: And why shouldn't that be enough given the essential policy of the Declaratory Judgment Act that patentees should not by mere, I don't want to call it threat, but the prospect of infringement [00:18:33] Speaker 02: be able to freeze a competitor out of the market with the competitor not able to get resolution of the issue. [00:18:41] Speaker 04: Your honor, there were a lot of questions in there. [00:18:43] Speaker 04: I'll do my best to answer. [00:18:44] Speaker 02: But all of this is all together. [00:18:46] Speaker 02: This is the story. [00:18:47] Speaker 02: This is really different. [00:18:49] Speaker 02: I mean, really outside the bounds of what the Supreme Court had in mind in MedImmune? [00:18:54] Speaker 04: Absolutely, your honor, for a variety of reasons. [00:18:56] Speaker 04: To answer the court's first question, Judge Parenteau, we believe that [00:19:01] Speaker 04: The complaint sets forth the allegations upon which declaratory judgment jurisdiction should be determined. [00:19:08] Speaker 04: We did file a facial challenge to the complaint and then there was some evidence that was induced. [00:19:13] Speaker 04: It's our position that the evidence that ABC presented should have been presented to support or substantiate the allegations that were in the complaint but not add new allegations. [00:19:24] Speaker 04: We believe they did that in a couple of respects. [00:19:26] Speaker 04: I will also say in all candor to the court, I'm not aware of any cases that discuss the cleavage between what might be in the complaint and what is in the affidavits that are submitted in the Rule 12B proceeding. [00:19:38] Speaker 04: But nevertheless, even if you consider the affidavits that were submitted on behalf of ABC in connection with ASITEC's Rule 12B challenge of the facts, they are very vague and they are not sufficient to establish [00:19:55] Speaker 04: subject matter jurisdiction or a case or controversy. [00:19:58] Speaker 04: There were a lot of states. [00:20:00] Speaker 02: What should they have said about their product that is short of asserting that it infringes that isn't reasonably implicit in what they did say? [00:20:15] Speaker 02: They're not required to say, our product infringes. [00:20:18] Speaker 02: That would be, A, would be ridiculous, and B, we said that's not required because it would be ridiculous. [00:20:24] Speaker 02: So what should they have said? [00:20:26] Speaker 04: Forgive me, I didn't mean to interrupt the court. [00:20:29] Speaker 04: What they should have said is that their product has structural similarities that are relevant to the claims in the case. [00:20:37] Speaker 04: And we sent them a claim chart with respect to the Intermax product that could have been an easy template for them to use to focus on certain elements of the claimed invention. [00:20:47] Speaker 04: For instance, the claimed invention is specific. [00:20:49] Speaker 04: It refers in claim one of the 362 patent. [00:20:52] Speaker 04: to a reservoir that's divided into an upper and a lower chamber that's divided by a horizontal wall that has certain passages, et cetera. [00:21:03] Speaker 04: We sent them a claim chart that mapped that. [00:21:06] Speaker 04: They'd made absolutely no attempt to try to say or explain in their complaint or in their affidavits that the K7 and K9 products, which Asetek was unaware of, had the same structure or [00:21:23] Speaker 04: were even close to what was. [00:21:24] Speaker 05: Mr. McCoy, excuse me. [00:21:26] Speaker 05: Yes, sir. [00:21:28] Speaker 05: Then what infringing products were being referred to in the letter on the appendix page 8207, the letter that Judge Toronto referred to a moment ago? [00:21:40] Speaker 05: Well, Your Honor, it says, please be advised that Ascetech believes that ABC is likely selling other infringing products in the United States. [00:21:49] Speaker 05: What products [00:21:51] Speaker 05: Was that referred to? [00:21:52] Speaker 04: Well, Your Honor, I can say it did not refer to the K-7 and the K-9 products. [00:21:56] Speaker 04: At this point, I cannot recall specifically what was being referred to there. [00:22:02] Speaker 05: But it was obviously something other than the Lick Max 120. [00:22:06] Speaker 04: That's correct, Your Honor, because they had assured us that they were not selling the Lick Max 120. [00:22:11] Speaker 05: So there was an assertion there of infringement based on these patents. [00:22:15] Speaker 04: Your Honor, respectfully, we disagree with the characterization by ABC's counsel [00:22:20] Speaker 04: that this statement at 8207 in the record is an express charge of infringement. [00:22:27] Speaker 04: What it says is that ACETEC believes that ABC is likely selling other infringing products in the United States. [00:22:36] Speaker 04: It doesn't identify any products whatsoever and certainly not the K7 and the K9 products. [00:22:41] Speaker 00: The case law doesn't require the identification of particular products, does it? [00:22:45] Speaker 04: Your Honor, there are three cases that [00:22:48] Speaker 04: uh, that ABC is relying on to try to state that products don't need to be identified. [00:22:53] Speaker 04: The first thing I'd like to point out is they face what this court referred to as a high barrier in the, uh, PRASCO decision because ACETEC never made any kind of assertion or a concrete claim of a specific right. [00:23:12] Speaker 04: And there's no objective evidence that we ever believed or planned to assert. [00:23:17] Speaker 04: the patents against the K7 or the K9 prototypes. [00:23:22] Speaker 04: They do have a high burden. [00:23:23] Speaker 04: There are three cases that they attempt to rely on to try to state that products don't have to be identified. [00:23:29] Speaker 04: Your Honor, those cases are a rarity in the spectrum of jurisprudence that has developed in this area. [00:23:35] Speaker 00: Well, if they're precedential opinions and if they do say that you don't have to identify the product, that you may consider them a rarity, but we consider them precedent. [00:23:42] Speaker 04: Your Honor, they are precedent, but they're all distinguishable, which is the point that I wanted to get to. [00:23:47] Speaker 04: One of the two of the decisions that are involved refer to processes. [00:23:53] Speaker 04: One of them is the Dewey case, which is a 1940 case from, I can't remember the circuit. [00:24:00] Speaker 04: Thank you, your honor. [00:24:02] Speaker 04: And then that was cited with approval in the Arrowhead case by this court. [00:24:06] Speaker 04: In both those cases, you have processes. [00:24:09] Speaker 04: In the Dewey case, it was a coagulant dip manufacturing process for making rubber. [00:24:14] Speaker 04: And then in the [00:24:15] Speaker 04: Arrowhead case, it was a deoxygenation process. [00:24:22] Speaker 04: And there was no dispute that that process was being employed by the declaratory plaintiffs in those cases. [00:24:29] Speaker 04: In this case, we don't have a situation where Asetek has accused a process and ABC is doing the same process. [00:24:36] Speaker 04: Asetek has accused some specific products against other competitors, in this case Coolit and Coolermaster. [00:24:44] Speaker 04: And there's no allegation that their products are the same, that ABC's K7 and K9 prototypes are the same as the products that Asetek suit. [00:24:55] Speaker 02: The assertion is structural similarities, and they might have said structural similarities in a way relevant to the patent. [00:25:05] Speaker 02: I'm not sure why that's not implicit in other contexts, and I guess I'm thinking of [00:25:12] Speaker 02: and I forget whether it's ANDA or the new or biosimilar act, the way you get DJ jurisdiction sort of indirectly is to say something as general as our product might reasonably be accused of infringement. [00:25:26] Speaker 02: And that suddenly supports DJ action. [00:25:29] Speaker 02: You don't have to do mapping or anything. [00:25:32] Speaker 02: Why in context is this not enough, including the context of the JA207 [00:25:42] Speaker 02: email. [00:25:44] Speaker 02: Yeah, I guess full stop. [00:25:46] Speaker 02: Why is that not what the Supreme Court in MedImmune meant? [00:25:53] Speaker 02: Very deliberately trying to expand the opportunity for resolution of possible patent barriers that freeze people out by risk averseness of the market. [00:26:06] Speaker 04: Your Honor, the reason is this case is different because we never accused these products [00:26:11] Speaker 04: The statement, as I was saying earlier at 8207 in my email, that we believe it's likely that they're infringing other products. [00:26:19] Speaker 02: Can you focus for me on, I mean, it seems to me, starting with Medimmune, there's lots of opportunity to find uncertainty about how much definiteness of various sorts one needs. [00:26:31] Speaker 02: Lots of judgment opportunities. [00:26:32] Speaker 02: Just focus for me on what I take to be the core policy. [00:26:36] Speaker 02: somebody in Asia Vital's position might decide to stay out of the market unnecessarily for fear that you're going to sue them for infringement. [00:26:50] Speaker 02: And they might wait and wait and wait, and you get the benefit of that. [00:26:55] Speaker 02: DJ actions under MedImmune are supposed to avoid that, to attack that very specific thing. [00:27:03] Speaker 02: Why is this not within that policy? [00:27:06] Speaker 04: Your honor, respectfully, they have not alleged those facts in their complaint and answer the question that the court asked me earlier, Judge Toronto. [00:27:14] Speaker 04: It's not alleged in the affidavit by Mr. David Wang either. [00:27:18] Speaker 04: There's a lot of argumentation in the papers by counsel that's pure attorney argument that finds no support in the complaint. [00:27:25] Speaker 02: I thought Mr. Wang said, I've talked to at least two customers and I'm paraphrasing some, and maybe the paraphrase is [00:27:36] Speaker 02: incorrect in a critical way, but they have told me that they've even heard from you, Acitec, and feel that they might be sued for infringement if they deal with, if they buy these products. [00:27:51] Speaker 04: Your Honor, forgive me, I didn't mean to interrupt you, Judge Toronto. [00:27:53] Speaker 04: That's paragraph four at A213 of the appendix, and specifically what Mr. Wang says is that he has had conversations with iBuyPower and Thermaltake. [00:28:06] Speaker 04: And according to him, and by the way, Your Honor, this is all an admissible hearsay, but we can set that aside for the moment. [00:28:14] Speaker 02: He says that- Just to confirm, hearsay is fine on summary judgment, isn't it? [00:28:20] Speaker 04: No, Your Honor. [00:28:21] Speaker 02: All you have to do is point to admissible evidence. [00:28:23] Speaker 04: Your Honor, the case law that we cited at page 12 of our brief that was submitted in this case makes clear that they have to present competent admissible evidence. [00:28:35] Speaker 04: Point to it. [00:28:36] Speaker 02: It's the way that Rule 56 is written. [00:28:39] Speaker 02: I'm sorry, Your Honor. [00:28:40] Speaker 02: Rule 56 says you have to point to the evidence. [00:28:43] Speaker 02: You don't actually have to submit evidence. [00:28:47] Speaker 02: So why is this? [00:28:48] Speaker 02: We may be on a detour here, so I guess I'd rather get back to the substance of this. [00:28:52] Speaker 00: Well, can I take another road off the detour, which is that you've been talking about the complaint. [00:28:58] Speaker 00: 26 in the complaint says that. [00:29:01] Speaker 00: It does refer to the fact that customers have expressed concern. [00:29:04] Speaker 00: So to the extent that you were quibbling with Judge Toronto in terms of use of other evidence versus what's actually asserted in this complaint, why isn't, let's look at the language of the complaint, that they're operating under fear of the possibility of liability. [00:29:18] Speaker 04: Your Honor, it does state that the, I am referring to paragraph 26 in the complaint at A67. [00:29:25] Speaker 04: It says that ABC's customers for the K7 and K9 products haven't expressed concern, and then there's some missing words in here, that [00:29:33] Speaker 04: will subject them to liability under the asserted patents. [00:29:37] Speaker 04: It doesn't say anywhere in the complaint that ACETech has ever told any customers that the K7 or K9 will infringe. [00:29:46] Speaker 04: There's no allegation of that. [00:29:48] Speaker 04: The thing that's telling, Your Honor, is if you look at the declaration of David Wang that was provided to try to support the allegations in the complaint, there is very little in there at all. [00:30:03] Speaker 04: about the substance of what we're now discussing. [00:30:06] Speaker 04: And in particular, nowhere does it talk about the state of K7 or K9 as of the date that the complaint was filed, which is a conspicuous absence, Your Honor. [00:30:16] Speaker 04: They were under the obligation to try to establish that as of the date the complaint was filed, September 30 of 2014, that they were, in their words, ready, willing, and able to sell these K7 and K9 products, and there's nothing [00:30:32] Speaker 04: in the Wang affidavit or any of the affidavits that comes anywhere close to that. [00:30:38] Speaker 04: The Wang affidavit actually doesn't even mention the K-7 or the K-9 until the final page in the final paragraphs where it's there addressing issues that are relevant to a motion to transfer. [00:30:50] Speaker 02: Can I ask you a question? [00:30:52] Speaker 02: I asked the opposite side, even though it really belongs to you. [00:30:56] Speaker 02: Have you now seen the K-7 and K-9? [00:31:00] Speaker 03: No, Your Honor. [00:31:00] Speaker 02: Still have not. [00:31:02] Speaker 02: I have not. [00:31:03] Speaker 02: I don't mean you personally, Mr. McCauley. [00:31:05] Speaker 02: I mean you and your client. [00:31:07] Speaker 02: Your Honor, I frankly... And let's extend it to all of Finnegan. [00:31:11] Speaker 02: I mean you in the relevant sense. [00:31:13] Speaker 04: Frankly, Your Honor, I don't know whether anyone at my client has seen the K-7 or the K-9. [00:31:18] Speaker 04: Candidly, Your Honor, this is all not relevant to the allegations that are supposed to be evaluated as of the date that the complaint was filed. [00:31:27] Speaker 04: But I don't know the answer to that question. [00:31:31] Speaker 04: Um, if we were going to assert, if ASITEC were going to assert that those products infringe, I would know about it. [00:31:38] Speaker 04: I'm lead litigation counsel for ASITEC on many matters, and I'm not familiar with anything along those lines. [00:31:44] Speaker 00: I guess I have to go home. [00:31:46] Speaker 00: What is the status of the other litigation? [00:31:48] Speaker 00: And you've got the suit going on in Northern District of California, right? [00:31:53] Speaker 04: I'm sorry, Your Honor. [00:31:54] Speaker 00: That's a question. [00:31:55] Speaker 04: Um, we had a case against Kuhl that it settled. [00:31:57] Speaker 04: We had a case against, uh, [00:32:00] Speaker 04: against a cooler master entity, and that case is currently up on appeal. [00:32:04] Speaker 04: It went to trial. [00:32:05] Speaker 04: The jury found it in favor of ace attack on all counts. [00:32:11] Speaker 04: To get back to the point that I was just elaborating on, and I see I'm running out of time, Your Honor, the Wang affidavit says nothing about the state of the K-7 or K-9, and it doesn't establish the immediacy [00:32:27] Speaker 04: or the reality prongs of the Supreme Court's tests and a metamune and all the articulations thereof later. [00:32:36] Speaker 04: Council has argued in their papers that there were expressed threats of infringement. [00:32:41] Speaker 04: Your Honor, we don't believe that's accurate. [00:32:43] Speaker 04: First of all, there were no accusations against any ABC products in the writings or at the meeting. [00:32:51] Speaker 02: And the statement- I'm sorry, just accusations that began all of this against what you believe to be an ABC product. [00:32:58] Speaker 02: That's correct. [00:32:58] Speaker 02: And then when I gather you became convinced that the Lickmax 120 was not an ABC product and in that JA207 document you say you actually believe there are other infringing ABC products and by the way we've sued Coolit pretty serious, the word threat is [00:33:24] Speaker 02: too ambiguous to be used here, but you don't need an accusation anymore after med immune. [00:33:33] Speaker 02: You just need whatever enough reality and immediacy is to, I think, get to the policy that resolution so that the mere fear isn't keeping people out. [00:33:47] Speaker 02: So you have an answer. [00:33:50] Speaker 03: I'm sorry. [00:33:51] Speaker 03: I'm not sure I understand the court's question. [00:33:54] Speaker 02: I don't know why you... You said there was no accusation of infringement of an ABC product. [00:34:03] Speaker 02: There was an accusation of infringement by what, at the time you made this statement of accusation, you believed to be an ABC product. [00:34:09] Speaker 04: Your Honor, I'd like to respond to that in three parts, and I know I'm running out of time. [00:34:13] Speaker 04: The first is the first letter. [00:34:15] Speaker 04: That was an accusation, but it was a mistaken accusation because they didn't [00:34:20] Speaker 04: Manufactured the lick max that was cleared up and we dropped the matter. [00:34:24] Speaker 04: We didn't pursue it They wrote us back and they said we'd like to talk to you We'd like to get together and we said we don't see a point in getting together. [00:34:32] Speaker 04: You said you don't make the lick max What is there to talk about? [00:34:35] Speaker 04: This is all in the record and then they responded and said we want to talk about matters of mutual cooperation and then we responded and said that we would meet with them but that your honor the point that I've been trying to get to is a [00:34:49] Speaker 04: After all of these correspondence that the court has been asking me questions about in the record, the parties had an actual meeting that was requested by ABC. [00:34:58] Speaker 04: The parties sat down, and there was absolutely no discussion. [00:35:02] Speaker 04: There was no accusation of any infringing products at that meeting. [00:35:07] Speaker 04: Andre Erickson has testified to that in his declaration, which is in the record at 8282. [00:35:14] Speaker 04: Mr. Tuzzi submitted a declaration that's also in the record that says he agrees. [00:35:19] Speaker 04: that the K-7 and the K-9 were never discussed and there was no accusations of any AVC products in that meeting whatsoever. [00:35:27] Speaker 04: We think that that completely dispelled any possible objective apprehension of a lawsuit being filed by AVC in this, excuse me, being filed by ACETEC in this situation. [00:35:41] Speaker 04: So you can look at that string of correspondence and we don't agree that those were [00:35:48] Speaker 04: specific threats of infringement toward ABC products. [00:35:51] Speaker 04: You can disagree with me on that, but if you look at the actual meeting that happened, the face-to-face meeting where there were no accusations that were made about any products at all, and then we get sued a month later, we were caught completely off guard by surprise. [00:36:07] Speaker 04: There was no mention of anything about the K-7 or K-9 or a lawsuit coming. [00:36:12] Speaker 04: There was no attempt to clear the air. [00:36:14] Speaker 04: I think we have your argument. [00:36:15] Speaker 04: One more sentence. [00:36:16] Speaker 04: Thank you, Your Honor. [00:36:17] Speaker 04: We believe that under the circumstances that I've just described, that the lawsuit that was brought here does not comport with the purpose and intent of the Declaratory Judgment Act. [00:36:26] Speaker 04: Thank you. [00:36:28] Speaker 04: Thank you, Chief Judge, for hosting the panel. [00:36:44] Speaker 01: My name is Cameron and I just want to sort of take off on a couple of the comments that have been made. [00:36:52] Speaker 01: First of all, with respect to your question, Judge Toronto, of whether the product has actually been seen, it actually has. [00:37:01] Speaker 01: I understand if Mr. McCauley doesn't recall, but in court I actually held it up and showed it to Judge O'Grady. [00:37:08] Speaker 01: So that answers the question. [00:37:12] Speaker 02: Did they get to put their hands on it? [00:37:15] Speaker 01: Did they put their hands on it? [00:37:17] Speaker 02: I don't even know. [00:37:18] Speaker 02: Is this something that if you see it, you can tell what the relevant components are or are they all inside some casing? [00:37:27] Speaker 01: Well, it's relatively easy to take apart. [00:37:30] Speaker 01: Well, only if you have it in your hands. [00:37:31] Speaker 01: Yeah, if you have it in your hands, you can take a look at it. [00:37:34] Speaker 01: But at this point, recall, we've been in the very uncomfortable position of [00:37:40] Speaker 01: essentially having to kind of admit that we infringe, as you well know. [00:37:45] Speaker 01: I mean, it's in the record here, as you've already discussed, with respect to... Well, where does that take us, though? [00:37:52] Speaker 00: I mean, how does that count from your side? [00:37:55] Speaker 01: It takes us to a place, I think, that goes beyond where metamune was supposed to go. [00:38:00] Speaker 01: I think it takes us to a place of great discomfort, discomfort, maybe that's the correct word, for where AVC is sitting. [00:38:09] Speaker 00: You can't be saying that because you filed a DJ action, it should count in terms of your apprehension of liability, because now that you filed it, they're going to know or guess, suspect, that you're infringing and turn around the file. [00:38:25] Speaker 00: That can't be one of the components we consider, right? [00:38:28] Speaker 01: Well, Judge Pruce, I think one of the things that is in the record that may not be [00:38:34] Speaker 01: you know, that easy to, may not have easily come out during the arguments, is there is a history between the companies. [00:38:41] Speaker 01: I mean, in 2007, Asetek had reached out to ABC, which is a major manufacturer, and wanted them to OEM its products. [00:38:50] Speaker 01: And over an IP dispute, there has been ongoing disputes between the company. [00:38:55] Speaker 01: So if you're looking objectively at where ABC is sitting, it's got that issue going on. [00:39:02] Speaker 01: During the licensing discussions, the CEO specifically mentioned to me that because of the bad acts and problems that he's had with ABC going back. [00:39:12] Speaker 00: Is this part of the record that you're referring to what the CEO said to you? [00:39:16] Speaker 01: It's part of it with the lower court. [00:39:19] Speaker 01: It is part of it. [00:39:21] Speaker 02: But what's the legal bearing of all of this? [00:39:24] Speaker 02: Obviously, your two companies are not bosom buddies at the moment. [00:39:29] Speaker 02: So what? [00:39:30] Speaker 02: Tie it to something [00:39:32] Speaker 02: that's part of our consideration of whether there's sufficient immediacy and reality of a patent dispute that comes within the metamune idea that the courts should take their time and put the patent holder to its time to litigate and resolve a potential patent dispute. [00:39:59] Speaker 02: What's all the bad blood have to do with that? [00:40:01] Speaker 01: Well, again, because it's an objective test where you have to sit in the shoes of ABC. [00:40:08] Speaker 01: And again, one of the issues that we keep dealing with is that Finnegan on behalf of Asetek is continuing to say, well, we didn't accuse the K7 and K9 products. [00:40:20] Speaker 01: But where our company was sitting, aside from that [00:40:24] Speaker 01: issue that I mentioned to you. [00:40:26] Speaker 01: In addition, there is an opposition against one of ABC's patents that's occurring. [00:40:31] Speaker 01: So again, there are some problems between a company and then they get hit with a letter regarding infringement of the Intermax product, which looks very close to the K7 and K9. [00:40:44] Speaker 01: So if you're ABC, you're getting very concerned and worried at that point. [00:40:48] Speaker 01: And it was clear that there was a threat there, but there were claim charts and everything else. [00:40:54] Speaker 01: So our company responds back that we don't make that product. [00:41:02] Speaker 01: And they respond back, well, we still think that you're infringing. [00:41:06] Speaker 01: So here we are. [00:41:07] Speaker 01: And then if you would, I'm sure you've seen the affidavit of Andrew Aiken, which is on 8253 of the Joint Appendix, where there is [00:41:18] Speaker 01: A255 specifically, there is a picture that we had in the brief as well of the LiquiMax product compared specifically to ABC's K7, K9, excuse me, K9 specifically. [00:41:31] Speaker 01: And if you look at the components with respect to the claim elements of mine, the assembly and the heat exchange plate and the Intermax liquid pump head, they're awfully close and it's a fairly broad claim. [00:41:47] Speaker 01: Any one further comment? [00:41:50] Speaker 01: Just a second. [00:41:51] Speaker 05: Let's see. [00:41:51] Speaker 05: Mr. Tisse, the email we were referring to on A207 that says, please be advised that Acitec believes that ABC is likely selling other infringing products, that was dated August 2, 2014, correct? [00:42:17] Speaker 05: yes i think so your honor so and the meeting that took place took place but the week after or two weeks after august thirteenth is that right? [00:42:31] Speaker 05: I believe so. [00:42:32] Speaker 05: So you have a letter that says Acetech believes ABC is likely selling other infringing products and then a few days later you meet and according to your affidavit [00:42:46] Speaker 05: The K7 and K9 products were not discussed during that meeting. [00:42:51] Speaker 01: Well, Your Honor, this was a discussion to resolve disputes between the companies. [00:42:55] Speaker 01: And they have ongoing pending negotiations. [00:42:57] Speaker 05: Is there any discussion about what was meant by this letter? [00:43:00] Speaker 05: Or what is it you're accusing us of doing? [00:43:04] Speaker 01: Yes. [00:43:05] Speaker 01: These specific products were not mentioned. [00:43:08] Speaker 01: But we were talking about a license. [00:43:11] Speaker 01: Because it's not in our interest to bring up all the products that may or may not be infringed. [00:43:15] Speaker 01: You know, we could do a list, and that's really not fair to us. [00:43:18] Speaker 01: Just like any kind of a licensing discussion, you would want a complete resolution and then a full license to the patent for any products that you make. [00:43:26] Speaker 01: That's the only reason it wasn't discussed. [00:43:28] Speaker 05: It wasn't so that, you know, we could just... You didn't say, I don't know what you're charging us with because we're not infringing anything? [00:43:37] Speaker 01: No, Your Honor. [00:43:38] Speaker 01: This was a discussion, and we're trying to resolve the dispute. [00:43:43] Speaker 01: So basically, [00:43:45] Speaker 01: We said, OK, where are you coming from? [00:43:47] Speaker 01: And we wanted to get more input regarding whether they would provide in the first place any kind of a license. [00:43:55] Speaker 01: And again, as I mentioned, the CEO said that there's been bad blood. [00:44:00] Speaker 01: We're not considering that. [00:44:01] Speaker 01: And then after that, he quoted a very high rate, something like 16%. [00:44:08] Speaker 01: And you could find that in the affidavit. [00:44:12] Speaker 00: OK, thank you. [00:44:13] Speaker 00: Thank you very much. [00:44:14] Speaker 00: Thank you. [00:44:15] Speaker 00: We thank all parties and the case is submitted.