[00:00:00] Speaker 01:
The cast of characters are just saying parties.

[00:00:03] Speaker 01:
Number 15, 1909.

[00:00:06] Speaker 01:
Manquez against Vivid Seats.

[00:00:11] Speaker 01:
Good to see you again.

[00:00:13] Speaker 03:
Thank you, Your Honor.

[00:00:14] Speaker 03:
This is a cross-appeal by Vivid Seats for its motion for attorney's fees that the court denied with a text order in work before this court addressing this issue.

[00:00:27] Speaker 03:
And there's two issues.

[00:00:29] Speaker 01:
One is whether the case is... Right.

[00:00:30] Speaker 01:
Can I just clarify something?

[00:00:32] Speaker 01:
I think it is clear.

[00:00:36] Speaker 01:
If we vacate the judgment in the other case and send it back, then you're no longer a prevailing party and the question of fees, at least at this stage, goes away.

[00:00:46] Speaker 01:
Do you have any dispute about that?

[00:00:50] Speaker 03:
I do not dispute that with regard to

[00:00:55] Speaker 03:
the current case and the facts is pled.

[00:00:57] Speaker 03:
If this court decides that it wants to remain to see if Mankees can plead additional facts, then we will again test that theory below.

[00:01:07] Speaker 03:
And yes, then we would be back before the court not have a right motion for attorney's fees.

[00:01:14] Speaker 01:
I'm not quite sure I heard as clear an answer as seems to be warranted.

[00:01:21] Speaker 01:
If we vacate the judgment in your favor,

[00:01:25] Speaker 01:
That is, we vacate the judgment that was in your favor so you no longer have a judgment in your favor and the case is not over and it goes back for further proceedings.

[00:01:34] Speaker 01:
You are no longer a prevailing party and therefore you cannot get fees on the original judgment on which you did prevail.

[00:01:44] Speaker 01:
That's correct.

[00:01:46] Speaker 03:
that the issues here are both whether the case is exceptional under Octane Fitness and whether the district court provided sufficient analysis for an adequate appellate review.

[00:01:57] Speaker 01:
So I hope I'm safe.

[00:01:59] Speaker 01:
Oh, good.

[00:01:59] Speaker 01:
Go ahead.

[00:02:00] Speaker 00:
Oh, he's looking at shifting legal landscape that we had here and taking into account the discussion that you just heard in the preceding case.

[00:02:13] Speaker 00:
Isn't it difficult to argue

[00:02:16] Speaker 00:
that this is an exceptional case.

[00:02:19] Speaker 00:
And you see there's questions here that don't they seem to take this case out of the exceptional case category.

[00:02:29] Speaker 03:
I disagree, and here's why.

[00:02:30] Speaker 03:
Starting out with 271B and the pronouncement from this court's en banc 2012 opinion in Akamai, that opened the door for liability under 271B.

[00:02:43] Speaker 03:
Once that door was

[00:02:44] Speaker 03:
closed by the Supreme Court, that began a point in time where the case became exceptional.

[00:02:53] Speaker 03:
There was no longer a cause of action under 271B.

[00:02:56] Speaker 03:
We can debate and argue as to whether there was waiver or whether there was a properly pled claim under 271A.

[00:03:04] Speaker 03:
But mind you, there was an amended complaint when the original complaint was challenged for lack of sufficient facts pled to support even 271B.

[00:03:13] Speaker 03:
Under the existing 2012 opinion of this court on mock, counsel Firmakis amended the complaint.

[00:03:23] Speaker 03:
We move into a phase of staying the case where there are concessions, multiple concessions, where there is not a claim for direct infringement.

[00:03:31] Speaker 03:
The law changes, arguably expanding the scope for actual 271A infringement.

[00:03:41] Speaker 03:
Arguably.

[00:03:43] Speaker 03:
I believe that under the joint enterprise theory, it did not change.

[00:03:49] Speaker 03:
Direction and control, it became more specific as to conferring a benefit or receiving some incentive to perform the method steps that are claimed.

[00:04:01] Speaker 03:
And then you have some manner or time control tied to those steps.

[00:04:08] Speaker 01:
And opened the possibility that particular facts might warrant a finding of attribution and control when we see those particular facts.

[00:04:20] Speaker 03:
In another case, correct.

[00:04:23] Speaker 03:
This case is so closely aligned to the aristocrat case in its facts that it would have to be a reversal of that existing precedent.

[00:04:35] Speaker 03:
And I don't believe that given

[00:04:37] Speaker 03:
the question earlier from Judge Chen as to whether there was a consideration at that point in time of the precedent in Akamai, which was, that case was remanded to reassess 271B, but the facts as pled, which were much more evolved than in this case where we have a motion for judgment on the pleadings, there was

[00:05:02] Speaker 03:
an absolute finding that there was no direct infringement of the shoes of Monet.

[00:05:06] Speaker 01:
Can I get at Judge Shaw's question, I guess, in this way?

[00:05:11] Speaker 01:
Even if we did not have the August en banc opinion, what makes it unreasonable for Manquez to press a claim that it acknowledges would require a change in governing law

[00:05:31] Speaker 01:
On a subject in which it's hard to dispute, I think, the proposition that that legal standard was in play.

[00:05:41] Speaker 01:
We had granted, this court had granted en banc review of it, didn't decide it in 2012, but it had granted in, I guess, a pair of cases, the review of whether BMC and Muni Auction stated the correct standard.

[00:06:00] Speaker 01:
Why is it unreasonable to press a claim that expressly asks for a change in law on a topic that is very much in play?

[00:06:11] Speaker 03:
Well, you've got Mr. Manke's in his reply brief stating that he has sufficient facts.

[00:06:18] Speaker 03:
He's invited this court to make the decision based upon the facts, claims that there are sufficient facts in the amended complaint to support direction and control, and for the first time,

[00:06:29] Speaker 03:
There is a claim that there are sufficient facts to support a joint enterprise theory.

[00:06:35] Speaker 03:
And we strongly dispute that.

[00:06:37] Speaker 03:
So you can take the facts as is, rather than remand and go back down and see whether there are additional facts.

[00:06:45] Speaker 03:
Look at the reply brief, and there is further evidence of moving positions and arguments beyond what the law has changed to make claims that there was initially

[00:06:57] Speaker 03:
no claim for direct infringement.

[00:07:00] Speaker 03:
Then there is a claim for direct infringement.

[00:07:02] Speaker 03:
Then there is a claim for direction and control.

[00:07:05] Speaker 03:
And now in the reply brief, we have a claim for joint enterprise.

[00:07:08] Speaker 03:
This moving target is directly counter to what is permissible under the corporate of Charlestown v. Ligon, 67F, second 238 line of full circuit case law that prescribes any change in position, like we've seen here, where the facts are stacked.

[00:07:26] Speaker 03:
So if you presume after one opportunity to amend the complaint and take the facts in light most favorable to Mr. Manke's and is purported in the reply, they sufficiently meet, as they are arguing, direction and control or joint enterprise.

[00:07:48] Speaker 03:
So we're having a hard time.

[00:07:54] Speaker 03:
figuring out, A, what the claim is, and that's the reason for the emails.

[00:07:58] Speaker 03:
The basis for the claims, and this is all irrespective of the change in the law.

[00:08:02] Speaker 03:
The change in the law is convenient for Mr. Manke's to come back and try to make an additional claim.

[00:08:10] Speaker 03:
But the basis, specifically relying on DICTA from on demand as the sound reason for why is 271 claim, A claims, should survive,

[00:08:22] Speaker 03:
On the existing facts, that's impermissible.

[00:08:26] Speaker 03:
And we haven't got a lengthy record here, but looking at the patent itself and going back to the differences in the parties here, when you have a local event server in every one of the four independent claims.

[00:08:43] Speaker 01:
Can I just ask maybe, I guess this is a version of the question I asked in the last case.

[00:08:49] Speaker 01:
Did you make an argument to the district court that even if the on-demand formulation was correct law, nevertheless, this complaint had to be what was insufficient?

[00:09:06] Speaker 03:
No.

[00:09:07] Speaker 03:
Because under 271B, as the theory, the principal theory that we believe was only in the amended complaint, that argument

[00:09:19] Speaker 03:
was the focus of our motion for judgment on the pleadings.

[00:09:24] Speaker 01:
In the district court starting in August of 2014, you, I gather, had an argument that there was no direct infringement theory in the case.

[00:09:36] Speaker 01:
But you also, I assume, argued that even if the theory was in the case, it was meritless.

[00:09:41] Speaker 01:
And judgment had to be granted rejecting that.

[00:09:44] Speaker 01:
So put aside waiver, and let's now assume

[00:09:47] Speaker 01:
that there's a direct infringement theory in the case.

[00:09:50] Speaker 01:
Did you argue on that question that you were entitled to judgment on the pleadings, even if the district court adopted the formulation in the on demand case?

[00:10:01] Speaker 03:
No, we did not.

[00:10:08] Speaker 03:
The pleadings in this case also are significant in that going back to the response in opposition to our motion,

[00:10:17] Speaker 03:
for Sir Reply.

[00:10:19] Speaker 01:
And can I just double check?

[00:10:20] Speaker 01:
Yes.

[00:10:20] Speaker 01:
Did you happen to know, did Fandango make that argument?

[00:10:23] Speaker 03:
I don't know.

[00:10:24] Speaker 01:
Was this all conducted in one session, or were there two separate?

[00:10:27] Speaker 03:
There were separate cases.

[00:10:29] Speaker 01:
Right, but was there an oral argument?

[00:10:33] Speaker 01:
No, this was just on the paper.

[00:10:34] Speaker 01:
OK, thank you.

[00:10:36] Speaker 03:
But if you also look at the response in opposition to the motion for Sir Reply, there is an argument that Mankees makes that the pleadings in this case are irrelevant.

[00:10:45] Speaker 03:
So we're moving from

[00:10:47] Speaker 03:
an amended complaint with a 271b theory alone to a response in opposition to a motion for judgment on the pleadings opening a 271a argument for the first time to a statement that the law must change based upon the dictum on demand to now a position where the facts in the amended complaint are sufficient to finally the argument is

[00:11:12] Speaker 03:
that the case law, I mean, the pleadings in this case are irrelevant and that we should just proceed to discovery.

[00:11:18] Speaker 03:
That flies in the face of Ikebal and Twombly and much of this court's precedent.

[00:11:24] Speaker 03:
And I'm going to reserve the remaining minutes.

[00:11:28] Speaker 03:
Thank you.

[00:11:39] Speaker 02:
Please.

[00:11:40] Speaker 02:
Thank you, Your Honor.

[00:11:41] Speaker 02:
I don't recall ever stating today, and I certainly don't recall ever writing in the brief that we found the pleadings to be irrelevant.

[00:11:51] Speaker 02:
We believe our position has consistently been that we've met the requirements of pleading, as articulated by this Court, as set forth by Form 18.

[00:12:01] Speaker 02:
And that's all that needs to be met at the Rule 12 stage.

[00:12:06] Speaker 02:
The issue on the current panel discussion is,

[00:12:11] Speaker 02:
whether Chief Judge Flanagan abused her discretion in denying vivid seats motion for attorney fees.

[00:12:23] Speaker 02:
This court in Wedgestone versus Hubblestone, Deluxe 576, F-3rd, 1302 at page 1305 explained that in fee motions, the district court

[00:12:40] Speaker 02:
is deserving of a very high degree of discretion.

[00:12:46] Speaker 01:
The district court... I think we know all of that.

[00:12:54] Speaker 01:
Your argument about why this is not exceptional is that it's perfectly reasonable for you to have presented a claim arguing for a change in law.

[00:13:03] Speaker 01:
The shape of that change in law might have been on demand, might have been something else.

[00:13:07] Speaker 01:
And there's nothing unreasonable about that.

[00:13:09] Speaker 02:
I mean, is that the gist of it?

[00:13:11] Speaker 02:
There were plenty of third parties writing, filing meekest briefs, Judge Moore's.

[00:13:17] Speaker 02:
I don't remember if it was concurring, in part, and dissenting, in part, or if it's just dissenting.

[00:13:22] Speaker 02:
But in the 2012 Acame on Bach decision, we thought it was exactly on point.

[00:13:28] Speaker 02:
We weren't alone in advocating that divided infringement should proceed under 271A.

[00:13:36] Speaker 02:
consistent with theories of joint liability found in the restatement of torts.

[00:13:45] Speaker 02:
And finally, in the 2015 en banc decision, this court has at least opened the door to looking at the restatement and expanding divided

[00:13:56] Speaker 02:
theory of divided infringement.

[00:13:58] Speaker 02:
And it opened the door to the restatement.

[00:14:00] Speaker 02:
And finally, articulating a clear standard for what constitutes a joint enterprise.

[00:14:05] Speaker 02:
So yes, we believe our client proceeded in pursuit of a good faith extension of the law.

[00:14:10] Speaker 02:
And we think the law has come closer to what Manx has advocated and believe that his pleadings then and now put forth a good faith basis for divided infringement and an actionable basis

[00:14:26] Speaker 02:
at least in light of the August 2015 on-box decision.

[00:14:31] Speaker 02:
There's no record evidence of inequitable conduct, vexatious litigation, or any other form of litigation misconduct.

[00:14:39] Speaker 02:
He's simply advocated for expanding the law of divided infringement.

[00:14:44] Speaker 02:
In fact, we think that that has happened.

[00:14:46] Speaker 01:
Thank you, Your Honor.

[00:14:50] Speaker 01:
Thank you.

[00:14:54] Speaker 01:
Mr. Matthews, you have

[00:14:56] Speaker 01:
Four minutes and change.

[00:14:57] Speaker 03:
And I won't take all the court's time.

[00:14:59] Speaker 03:
I just want to point out that looking at the facts of this case, as we're required to do in formulating a plausible claim under Twombly and Ikebal and setting forth a claim, even under what might be a open standard for further review, looking at the claims, the facts don't support the case against vivid seeds.

[00:15:25] Speaker 03:
These are ticket resellers.

[00:15:27] Speaker 03:
There's no inventory control here.

[00:15:29] Speaker 03:
They have no knowledge of the amphitheater or the movie theater that they are reselling tickets.

[00:15:36] Speaker 03:
And that is in the complaint.

[00:15:38] Speaker 03:
It is in the record.

[00:15:40] Speaker 03:
So there's no question there is a reseller here of tickets.

[00:15:44] Speaker 03:
It's further removed from the position that I believe Vandango is in.

[00:15:51] Speaker 03:
plus the actions, the email correspondence, the positions taken.

[00:15:54] Speaker 03:
But we're a moving target.

[00:15:56] Speaker 03:
Make this case unreasonable.

[00:15:57] Speaker 03:
And that's the reason why looking at the facts and looking at the claim language, it is impossible that these claims could be infringed under any theory.

[00:16:09] Speaker 01:
Thank you very much.