[00:00:00] Speaker 02: The next case before the court, Milo and Gabby versus Amazon. [00:00:10] Speaker 02: It is case number 161290. [00:00:15] Speaker 02: It's appeal from the Western District of Washington. [00:00:27] Speaker 02: Again, it's my understanding, counsel, that you want at this time five minutes for rebuttal. [00:00:34] Speaker 02: Is that right, Mr. Gould? [00:00:35] Speaker 02: That is correct, Your Honor. [00:00:36] Speaker 02: Okay. [00:00:38] Speaker 02: You may begin. [00:00:38] Speaker 03: Thank you, Your Honor. [00:00:39] Speaker 03: Good morning. [00:00:40] Speaker 03: Philip Mann on behalf of the appellants. [00:00:42] Speaker 03: May it please the court. [00:00:45] Speaker 04: The facts of this case are largely... Mr. Mann, do you have a minute? [00:00:48] Speaker 04: You argue that a billing record entry for less than an hour of research relating to palming off [00:00:55] Speaker 04: confirms that Amazon had fair notice under 8-8-2. [00:01:00] Speaker 04: Do you have any authority for that proposition? [00:01:05] Speaker 03: Your Honor, it's just a basic fact. [00:01:07] Speaker 04: What happened in this case is... Well, it's basic fact that firms assign people, say to somebody, hey, take a look at this, if this could be something. [00:01:17] Speaker 04: You don't have any [00:01:19] Speaker 04: prove one way or the other what that means. [00:01:21] Speaker 03: My authority is the English language, Your Honor. [00:01:23] Speaker 03: That billing record said, as alleged by Milo and Gabby. [00:01:27] Speaker 03: Take a look at what Milo and Gabby might be referring to. [00:01:30] Speaker 04: So show me where it's alleged. [00:01:32] Speaker 04: It's alleged in the billing record that that was part of the... Show me where it's alleged in a pleading. [00:01:40] Speaker 03: Oh, I'm sorry, Your Honor. [00:01:41] Speaker 03: It is alleged in the pleading. [00:01:42] Speaker 03: This is A157. [00:01:46] Speaker 03: is of our complaint in the appendix. [00:01:49] Speaker 03: It's A157. [00:01:49] Speaker 03: Okay, and you're going to show me the word palming off. [00:01:53] Speaker 03: It doesn't use the word palming off. [00:01:55] Speaker 03: What it uses is the word misrepresentation and false designation of origin. [00:02:00] Speaker 03: This is a Section 43A claim, Your Honor. [00:02:03] Speaker 03: Our position is that Amazon shows genuine pictures of our clients' products. [00:02:08] Speaker 03: And it says, that is what you go to their website, that's what is seen. [00:02:12] Speaker 02: Now... But even if, say, [00:02:15] Speaker 02: I was the district court judge and I thought, well, there's probably really enough in this complaint that they could have figured it out. [00:02:22] Speaker 02: Is it an abuse of discretion to say, for a trial court judge to say, figuring it out isn't enough, you actually have to allege it as a count in the complaint? [00:02:31] Speaker 03: No, Your Honor, the background in this case was a little bit different. [00:02:33] Speaker 03: What happened was when, I'm sorry, when Amazon moved for summary judgment, they said that we did not make this allegation, period. [00:02:41] Speaker 03: In our reply to that, our opposition to that, we said, yes, we did. [00:02:44] Speaker 03: Take a look right here at the complaint. [00:02:47] Speaker 03: The district court refused, didn't address that at all, said, no, this was not alleged. [00:02:53] Speaker 03: We filed a request for reconsideration, and we pointed out that this was alleged in our complaint. [00:02:59] Speaker 03: And then they came back, and they said, oh, well, that's a little bit different. [00:03:02] Speaker 03: We're actually relying on other grounds for the attorney's fees. [00:03:07] Speaker 03: What happened was then we got the billing records. [00:03:09] Speaker 03: We then applied to the court and said, [00:03:11] Speaker 03: Your Honor, it's right here. [00:03:13] Speaker 03: You see the billing record right here where they say the palming off as alleged in our complaint. [00:03:20] Speaker 03: What happened since then, the district court has been silent on this. [00:03:23] Speaker 03: The district court has not come back with a finding of how many attorney's fees should be awarded in this case. [00:03:29] Speaker 03: In fact, Amazon emailed the district court and said, you have not answered this question yet. [00:03:35] Speaker 03: The district court came back and said, yes, I know. [00:03:40] Speaker 03: That was over a year ago. [00:03:41] Speaker 03: I suspect what happened is the district court is now reconsidering this, having been shown that its original position is incorrect. [00:03:49] Speaker 02: We have demonstrated to the district court... Well, do you think it's possible the district court's just waiting to see what we say? [00:03:54] Speaker 02: Why come forward with a number if the thing gets reversed? [00:03:58] Speaker 03: Well, the fact of the matter is, Your Honor, we did point out it is in our complaint. [00:04:02] Speaker 03: We addressed this in our responses to the summary judgment. [00:04:06] Speaker 03: Amazon misrepresented to the district court, said these people never raised this, period. [00:04:10] Speaker 02: Well, and what is it exactly that you say that you raised, an express palming off or an implied palming off? [00:04:17] Speaker 02: I mean, they're very different theories of liability. [00:04:19] Speaker 03: Well, what we're talking about, we're calling it knockoffs palming off. [00:04:22] Speaker 03: This is, we did have a section 43A count, that's count 11, I'm sorry, count four of our complaint that appears on page 157. [00:04:31] Speaker 03: And what we do allege is that they show our genuine products, yet when they deliver, [00:04:37] Speaker 03: products that are ordered. [00:04:39] Speaker 03: There's a picture of our exact product. [00:04:42] Speaker 03: It's a picture of our genuine product. [00:04:43] Speaker 03: When people order that, they knock off his ship instead. [00:04:47] Speaker 00: That is- Can I ask you? [00:04:48] Speaker 00: I think it was at, what, $590.91 of the appendix. [00:04:55] Speaker 00: There's a screenshot, and in the lower right-hand corner, there is a picture. [00:05:00] Speaker 00: It says Amazon and looks like maybe your product, but no more information. [00:05:06] Speaker 00: And I think you say you can buy through there. [00:05:10] Speaker 00: Does the record tell us that you put on, introduce, or submit potential evidence that says, if you're going to buy through there, you click, and what do you get? [00:05:22] Speaker 00: Do you go to then one of the product pages that does then have the name of manufacturer, et cetera, or? [00:05:31] Speaker 03: Your honor, I don't want to misspeak on that. [00:05:34] Speaker 03: I don't know the exact question, the answer to that question. [00:05:36] Speaker 03: What I do know is that they do have it fulfilled by Amazon with respect to at least one of the suppliers. [00:05:42] Speaker 00: The reason I ask is it seems to me it could make a difference. [00:05:44] Speaker 00: If it's right that the particular theory of palming off requires that I ask for a Milo and Gabi product and somebody gives me something different that's not in fact that product, [00:05:59] Speaker 00: then it matters whether before I purchase I'm told this is manufactured by Smith and Jones or not. [00:06:10] Speaker 00: And the little inset picture at 595.91, I think it is, doesn't say who it is. [00:06:18] Speaker 00: But the other product pages in each case, as far as I can tell, does identify a manufacturer who is not Milo and Gabbard. [00:06:29] Speaker 03: I understand your question. [00:06:31] Speaker 03: I think the answer to that question is this. [00:06:33] Speaker 03: Our position is actually simpler than that. [00:06:36] Speaker 03: When you go to the Amazon page, what you see is the genuine Milo and Gabby product. [00:06:41] Speaker 03: In fact, we point out not only is it a genuine Milo and Gabby product, it's my client's son's picture is actually on that page. [00:06:48] Speaker 03: So what happens is somebody goes to that page, sees the product, says, I like that product. [00:06:53] Speaker 03: Then they go through the purchase process. [00:06:55] Speaker 03: They go and they click on, you know, go enter it into your shopping cart, then go through the checkout process that Amazon has. [00:07:03] Speaker 03: What they see is that product, they think they're going to be buying that product. [00:07:07] Speaker 00: Right. [00:07:07] Speaker 00: But doesn't the, I mean, at least the red brief says for the particular kind of passing off theory, as opposed to other misleading or something, other kind of 43a theories, but for passing off, it could well be, [00:07:21] Speaker 00: that the customer looks and says, I like that product. [00:07:24] Speaker 00: I have no idea who's making it, but I want that. [00:07:28] Speaker 00: And then somebody sends them that in exchange for money. [00:07:32] Speaker 03: No, that's exactly the difference. [00:07:35] Speaker 03: They don't send them that. [00:07:36] Speaker 03: They see the product up there. [00:07:37] Speaker 03: They say, I want that. [00:07:38] Speaker 03: This is absolutely correct. [00:07:39] Speaker 03: They see the product. [00:07:40] Speaker 03: They say, yes, I want that product. [00:07:43] Speaker 03: They go through the checkout process. [00:07:44] Speaker 03: They hand in their credit card information. [00:07:46] Speaker 03: What is shipped to them is not that product. [00:07:49] Speaker 03: It's a knockoff product. [00:07:50] Speaker 03: This is undisputed. [00:07:52] Speaker 03: That's the problem. [00:07:52] Speaker 04: Wait a minute. [00:07:53] Speaker 04: Stop talking. [00:07:54] Speaker 04: I'm sorry, your honor. [00:07:55] Speaker 04: A judge talks. [00:07:57] Speaker 04: Yes. [00:07:57] Speaker 04: But you're just running through the phrase, they go through the checkout process without discussing what pages appear after they click on the initial page. [00:08:10] Speaker 03: Well, I think Mr. Pode testified at trial. [00:08:14] Speaker 03: This was the Amazon witness himself. [00:08:16] Speaker 03: He had basically described that. [00:08:18] Speaker 03: He said, you go to this prep page, you go through, and you just go through the checkout process. [00:08:22] Speaker 03: It was never an issue of what is shown. [00:08:24] Speaker 03: What Amazon was pointing to was that with respect to certain products in very small print, it says, sold by or supplied by. [00:08:33] Speaker 03: But that does not appear in the checkout process. [00:08:37] Speaker 03: That appears when you look at the actual prep page in very small print. [00:08:42] Speaker 03: And nothing, they never disputed. [00:08:44] Speaker 03: There was no dispute. [00:08:46] Speaker 03: that when you see our product, you see a picture of the genuine product, you buy that product, you think you're going to get that product, and what happens is they ship you something else. [00:08:57] Speaker 03: In fact, you know, this was, I tried to introduce a trial. [00:09:02] Speaker 03: Some people were complaining. [00:09:03] Speaker 03: They had reviews on it. [00:09:04] Speaker 03: They said, I like the way the product looked, but when I got it, the zipper fell apart, the colors ran. [00:09:09] Speaker 03: The judge wouldn't let me put that before the jury, but that's classic palming off. [00:09:14] Speaker 03: My client was getting blamed for the deficiencies of somebody else's product. [00:09:18] Speaker 04: In the blue brief at 25, you say the sales of the accused products are essentially consignment sales. [00:09:27] Speaker 04: But you don't have any record citations. [00:09:29] Speaker 04: What's your authority for that statement? [00:09:32] Speaker 03: Well, the authority for that is Amazon has been saying throughout this entire case that they do not take title to the products. [00:09:38] Speaker 03: And we agreed with that. [00:09:39] Speaker 03: We said we do not have any evidence. [00:09:41] Speaker 03: We cannot counter Amazon's argument. [00:09:43] Speaker 03: that they don't take title. [00:09:45] Speaker 03: Our authority is UCC. [00:09:47] Speaker 03: It says that the consignment sale is when somebody sells a product for somebody else without taking title. [00:09:53] Speaker 02: So, I mean... But even under the UCC, there are pretty specific requirements that you don't, that at least in this particular instance, aren't satisfied. [00:10:04] Speaker 03: Well, again, but I mean, the thing, what we're trying to say is we're not trying to say that this is a consignment sale. [00:10:10] Speaker 03: What we're trying to say, the argument we're making is [00:10:13] Speaker 03: The word sale includes all sorts of transactions that this court has recognized and the Supreme Court has recognized does not involve a transfer of title from the seller. [00:10:24] Speaker 03: Are you conceding that they're not consignment sales? [00:10:27] Speaker 03: I'm not conceding that they're not consignment sales. [00:10:29] Speaker 03: What I am conceding is that Amazon may not take title to the products that are sold [00:10:35] Speaker 03: Our argument is that there are any number of sales. [00:10:39] Speaker 04: In responding to Judge O'Malley's question that the UCC has specific requirements for consignment sales, you said, well, we're not arguing that. [00:10:56] Speaker 03: What we are saying is that [00:10:59] Speaker 03: The statute, and again, I'm sorry that we've got sort of off track here, our particular argument is 271A says anyone who offers for sale or anyone who sells a product that infringes a patent is a direct infringer. [00:11:13] Speaker 03: The issue before this court is, now the district court says that unless you are the person transferring title, unless I am personally transferring title, I can neither offer for sale nor sell the product. [00:11:25] Speaker 03: Our position is a little broader than that. [00:11:27] Speaker 03: Our position is saying that the security is long. [00:11:30] Speaker 02: Did the trial court really say that you have to have title to offer the product for sale? [00:11:34] Speaker 02: I thought that's not what they said. [00:11:36] Speaker 02: I thought that the trial court said you have to have title, you have to transfer title to actually be the seller. [00:11:41] Speaker 02: But the offer for sale piece was, that's where the court didn't grant summary judgment, went to the jury on factual findings. [00:11:49] Speaker 02: The court adopted those factual findings and then you abandoned that argument. [00:11:52] Speaker 02: Right? [00:11:53] Speaker 03: We did not abandon that argument. [00:11:54] Speaker 03: What the district court did was district court told the jury, I have already determined that Amazon does not sell. [00:12:02] Speaker 03: That was not with our consent. [00:12:03] Speaker 03: We did not stipulate to that. [00:12:05] Speaker 00: Did you oppose that instruction? [00:12:07] Speaker 00: That's on the jury instruction, I think on page 86. [00:12:09] Speaker 00: Did you oppose that? [00:12:10] Speaker 03: We did before the trial, Your Honor. [00:12:12] Speaker 00: But you haven't raised that on appeal. [00:12:16] Speaker 03: Raised what? [00:12:17] Speaker 03: Well, we've raised that the, we've challenged the... You did not appeal the [00:12:22] Speaker 02: jury instruction. [00:12:24] Speaker 03: I don't know if that's been specifically raised on appeal. [00:12:29] Speaker 02: I don't see anything in your blue brief where you have raised the offer for sale issue on appeal. [00:12:35] Speaker 03: The offer for sale issue? [00:12:37] Speaker 03: We're challenging the district court's finding on that particular issue. [00:12:41] Speaker 00: Here's what's confusing at least. [00:12:44] Speaker 00: There are two different [00:12:45] Speaker 00: relevant here, two different ways you might come under 271A. [00:12:50] Speaker 00: One is Amazon was selling, the other is Amazon is offering for sale. [00:12:55] Speaker 00: Now in your complaint and even in your opposition to the motion to dismiss, I think you fairly carry both forward. [00:13:01] Speaker 00: But on summary judgment, they move for summary judgment saying no sale or offer for sale. [00:13:08] Speaker 00: Your brief in response [00:13:11] Speaker 00: can be read as limited to offer for sale, not sale. [00:13:17] Speaker 00: Might be read the other way. [00:13:18] Speaker 00: It's not entirely clear to me. [00:13:20] Speaker 00: The district court discussed only the offer for sale piece and said, I can't give summary judgment to Amazon on this because you might be able to find offer for sale. [00:13:30] Speaker 00: Didn't discuss sale. [00:13:33] Speaker 00: But then it come time for the trial and the jury instruction is given said, I've already decided the sale [00:13:40] Speaker 00: question. [00:13:41] Speaker 00: Now, if the court decided the sale question, it seems like a fair inference that it did so because it understood your opposition to summary judgment as not really contesting that. [00:13:55] Speaker 00: And so what we're left with is a waived sale question and an unappealed offer for sale question. [00:14:04] Speaker 00: That's the puzzle. [00:14:06] Speaker 03: Yes, Your Honor. [00:14:06] Speaker 03: I can tell you that that's not in our intent. [00:14:09] Speaker 03: And what we did [00:14:11] Speaker 03: What the district court did was sort of extrapolated from what we did stipulate to. [00:14:16] Speaker 03: The district court, I'm sorry, back up. [00:14:18] Speaker 03: Amazon says, we do not take title for this. [00:14:21] Speaker 03: There's no evidence that Amazon takes title. [00:14:24] Speaker 03: We said, we have no evidence. [00:14:26] Speaker 03: We agree. [00:14:26] Speaker 03: There's no evidence that Amazon takes title to this. [00:14:29] Speaker 03: We did not say that because Amazon does not take title, Amazon is not a seller. [00:14:34] Speaker 03: The district court took our [00:14:36] Speaker 03: agreement that we did not have evidence that Amazon took title and extrapolated that into a because they don't take title Amazon does not sell. [00:14:46] Speaker 03: We never stipulated to that. [00:14:48] Speaker 03: It's a subtle point. [00:14:50] Speaker 03: What we stipulated to is we have no evidence that they take title or that they have title. [00:14:54] Speaker 03: We never stipulated to the idea that because of that they can make no sale or offer for sale. [00:15:00] Speaker 04: I want to get in one more question and that is at 37 of the blue brief you say [00:15:07] Speaker 04: that, I'm quoting, Amazon tacitly conceded that the passing off claim is supported by the facts. [00:15:14] Speaker 04: But you don't cite to anything for that proposition. [00:15:18] Speaker 04: I'm sorry, what page was that? [00:15:19] Speaker 04: 37 at the bottom and then running over to 38, but there's no citation there either. [00:15:27] Speaker 04: There's nothing in that paragraph. [00:15:35] Speaker 04: Where'd they tacitly make a concession? [00:15:53] Speaker 04: And while you're at it, in your blue brief at 16 and 17, you say, at trial, Amazon's corporate representative testified that Amazon acts as a seller in every step of a transaction. [00:16:06] Speaker 04: And you didn't give me any citation of the record for that one either. [00:16:09] Speaker 04: And I like those citations. [00:16:10] Speaker 03: I'm sorry, what page is it, 16 and 17? [00:16:12] Speaker 04: Yeah. [00:16:24] Speaker 03: I believe that's the Mr. Pote's testimony, roughly A129 through A129. [00:16:33] Speaker 03: I'm sorry, 2140. [00:16:35] Speaker 03: A 2129 through 2140. [00:16:37] Speaker 03: I think that is his testimony, is in the record. [00:16:42] Speaker 03: Mr. Poe testified basically... No, no. [00:16:47] Speaker 04: I think you're going to get at least a minute or two to come back up, and I want you to give me specific citations of record. [00:16:56] Speaker 03: Just so we're clear, Your Honor, that's on page... 16 and 17. [00:16:59] Speaker 04: 16 and 17. [00:17:00] Speaker 04: And the other one I asked for as well, please. [00:17:04] Speaker 04: at 37, a tacit concession. [00:17:07] Speaker 04: Okay, thank you. [00:17:08] Speaker 04: Thank you. [00:17:28] Speaker 01: Good morning. [00:17:29] Speaker 01: John Hughes for Amazon. [00:17:31] Speaker 02: Mr. Hughes, I want to ask you a question right away in terms of the palming off. [00:17:34] Speaker 02: I mean, these advertisements on Amazon showing their products with their children, how is that not at least implied palming off? [00:17:46] Speaker 02: I mean, it seems like it is a classic implied palming off. [00:17:50] Speaker 01: Well, I want to make sure that the record is clear. [00:17:51] Speaker 01: This is actually right where I wanted to start, which is if you look at [00:17:55] Speaker 01: what we refer to as the product listing pages, and I believe that what you're looking at in the record beginning at A, 24 of 79, none of the product listing pages for the pillow cases at issue ever identify Milo and Gabby as the manufacturer of the pillow cases. [00:18:16] Speaker 02: Clearly, but they showed their pillow cases with their children. [00:18:21] Speaker 02: And so the implication is that that's what you're going to get. [00:18:26] Speaker 01: They do show the advertising material, Milo and Gabby advertising material, that was put up by the third party sellers who are offering and selling the pillow cases. [00:18:35] Speaker 01: There's no evidence in the record that anyone that purchased these pillow cases thought they were getting a Milo and Gabby product. [00:18:42] Speaker 01: There's no evidence making that connection. [00:18:44] Speaker 01: They didn't put any evidence from a purchaser of the pillows in, and the evidence that he talked about that the judge [00:18:51] Speaker 01: I didn't permit him to introduce a trial about complaints about the quality of the pillowcases. [00:18:57] Speaker 01: If you've used Amazon, you can see probably familiar with the review feature on the website. [00:19:04] Speaker 01: And none of those complaints were directed toward Milo and Gabby. [00:19:07] Speaker 01: Nobody ever thought they were getting a Milo and Gabby pillowcase. [00:19:11] Speaker 01: They just thought they were and were purchasing children's pillowcases from these [00:19:16] Speaker 01: third-party sellers. [00:19:17] Speaker 02: Well, how do you know that? [00:19:18] Speaker 02: I mean, you don't know that. [00:19:19] Speaker 02: You're saying there's no evidence from the other side. [00:19:21] Speaker 02: You didn't put any evidence that they were sure they weren't getting Milo and Gabby. [00:19:26] Speaker 01: No evidence was presented to the court at summary judgment. [00:19:30] Speaker 02: No evidence was presented during the trial that any purchaser thought... Well, does that have something to do with the fact that the court said it wasn't in the complaint, and I'm not going to let you do anything with respect to it, move forward with discovery or anything else? [00:19:42] Speaker 01: I am not aware of any evidence in the record before this court or before the district court where any purchaser of a pillowcase, pillowcases that were sold through the amazon.com website thought that they were purchasing a Milo and Gabby product or thought that the advertising copy that was on the product listing pages that we're looking at in the record were advertising. [00:20:10] Speaker 01: Milo and Gabby products. [00:20:11] Speaker 04: In fact, to the contrary, the evidence that... Do you disagree that the photograph itself, the picture of the children is a thing of value? [00:20:26] Speaker 01: Their advertising material has some value. [00:20:29] Speaker 04: Right. [00:20:30] Speaker 04: So Amazon is in possession of a thing of value which has been obtained illegally. [00:20:34] Speaker 04: Is that correct? [00:20:39] Speaker 01: The image is loaded onto the Amazon website by the third party sellers. [00:20:45] Speaker 02: Amazon doesn't... When you say that it's loaded by the third party sellers, at least the briefs below say that in the discovery, it's established that in fact it's Amazon that picks the advertising material. [00:20:59] Speaker 01: That's not quite right, Your Honor. [00:21:02] Speaker 01: I believe that the way it works, if you want to sell a product, a pillowcase or a vaporizer, [00:21:09] Speaker 01: earlier this morning, and you're a third-party seller, you load the image, the third-party seller, onto the website. [00:21:15] Speaker 01: That was very clearly the testimony of Mr. Pote. [00:21:18] Speaker 01: Perhaps what you're referring to is once you've done that, once you've created a product listing, Amazon in some instances may send out an email advertising the product, or there may be a [00:21:36] Speaker 01: product placement ad on a website, like if you've just been on Amazon searching for products, then you navigate away to CNN. [00:21:44] Speaker 01: You might see a banner ad, and that's part of the service that Amazon supplies. [00:21:49] Speaker 02: Right, so Amazon uses an algorithm to select an advertisement that's targeted to the particular viewer, right? [00:21:56] Speaker 01: Yes. [00:21:56] Speaker 02: So in other words, they give you the thing that gets loaded when you click on other sellers are available, but the thing that's on the main [00:22:06] Speaker 02: page that describes the product generically is chosen by Amazon's algorithm, right? [00:22:13] Speaker 01: That's not right. [00:22:14] Speaker 01: So if we look at page 2479 of the record, that's the product listing page for one of the pillowcases at issue here. [00:22:25] Speaker 01: You can see the picture in the upper left-hand corner of the boy holding one of the pillowcases. [00:22:32] Speaker 01: That picture was loaded by the third party seller, who in this case is FAC Systems. [00:22:43] Speaker 00: That's the one that actually stored the goods at your warehouse. [00:22:47] Speaker 01: FAC Systems is the only third party seller that took advantage of the fulfillment by Amazon service and had their product stored in the warehouse. [00:22:58] Speaker 01: But turning back to Judge O'Malley's question, that image [00:23:02] Speaker 01: All of those images were loaded by third-party sellers, never by Amazon. [00:23:07] Speaker 01: The algorithm that you're referring to is what I was talking about with the targeted emails and the banner ads. [00:23:13] Speaker 01: But even there, the images that are supplied in the email or the banner ad are the images that are supplied by the third-party sellers and never supplied by Amazon. [00:23:27] Speaker 02: I don't understand why this is a big deal for Amazon. [00:23:30] Speaker 02: Don't you have indemnification agreements with everybody that goes on your website? [00:23:36] Speaker 01: With the sellers? [00:23:37] Speaker 02: Yeah. [00:23:37] Speaker 02: Yes. [00:23:38] Speaker 02: So isn't there some interest in protecting purchasers from rogue sellers who would engage in conduct like this, and you could simply submit your indemnification claim to them? [00:23:50] Speaker 01: Amazon takes the issue of intellectual property and running a marketplace [00:23:56] Speaker 01: with integrity extremely seriously. [00:23:58] Speaker 01: All sellers who come to sell in the Amazon.com marketplace have to represent that they have the right to sell the products that they're listing on our website, including any necessary intellectual property rights. [00:24:11] Speaker 01: And we have a procedure where if you're an intellectual property owner, regardless of whether you're selling in the Amazon.com marketplace, you can fill out [00:24:20] Speaker 01: form on the website and say, that third party seller's product infringes my patent. [00:24:26] Speaker 01: And then the process is, we take down, Amazon takes down the listing, and there's a process to sort it all out. [00:24:34] Speaker 01: Here, in this case, Amazon, Milo and Gabby did not avail themselves of that process. [00:24:39] Speaker 01: So the first time Amazon learned about the issue was when we got the complaint, and we immediately removed all the listings, we kicked all the sellers, [00:24:48] Speaker 01: out of the marketplace. [00:24:49] Speaker 01: And I can tell you that since then, before that and after, Amazon has invested tens of millions of dollars in automated and human processes to keep problem products out of the website. [00:25:04] Speaker 01: So once Amazon understands that there's a problem with a particular product, we take action. [00:25:11] Speaker 01: We take it very seriously. [00:25:12] Speaker 00: Can I ask you, under your view of the various laws here, [00:25:18] Speaker 00: patent, copyright, Lanham Act. [00:25:23] Speaker 00: What if anything legally obliges Amazon to do all of those responsible things you just described? [00:25:32] Speaker 01: Well, they didn't pursue the theory here, but one example could be [00:25:37] Speaker 01: indirect patent infringement. [00:25:40] Speaker 01: So if Amazon knew that there were infringing products being often sold by third-party seller in the Amazon.com marketplace and sent the kind of targeted emails that we were discussing or the banner ads and the websites, that could potentially form the basis of an indirect infringement theory. [00:26:02] Speaker 01: So there are potential legal theories [00:26:05] Speaker 01: that could be in play here. [00:26:07] Speaker 04: But there was no demand letter. [00:26:11] Speaker 01: We got the complaints. [00:26:13] Speaker 01: I guess I was answering a question that seemed a little broader than the facts. [00:26:19] Speaker 02: There's also implied palming off, right? [00:26:22] Speaker 01: I'm sorry? [00:26:22] Speaker 02: There also could be implied palming off if it was properly alleged. [00:26:25] Speaker 01: If it was pled. [00:26:25] Speaker 01: And I think if you look at the complaint, it's nowhere to be found. [00:26:29] Speaker 00: And just to be clear, the argument you were making at the beginning of your argument, of your oral argument here, about there is no evidence that anybody actually thought they were getting Milo and Gabby. [00:26:41] Speaker 00: They were just ended up getting bad products, but they had no idea whether they were Milo and Gabby. [00:26:47] Speaker 00: That's not, in fact, the ground on which the district court dealt with the bombing off theory that he said just not pled. [00:26:55] Speaker 00: He didn't make a summary judgment assessment. [00:26:58] Speaker 01: District court found that Mylon Gabbard did not have a valid mark, and then also found on this pulling off theory that it had not been adequately pled in its complaint. [00:27:09] Speaker 01: I just wanted to make sure that the record was clear. [00:27:12] Speaker 00: Can I ask you this other record question? [00:27:13] Speaker 00: If you look at 590, this is the little inset on a web page about something else. [00:27:25] Speaker 00: where it says Amazon in the lower right hand corner Amazon.com and there are no names of anything in here there's just a pillow with a child. [00:27:35] Speaker 00: If I say, I'm very interested in that, how do I go about purchasing it? [00:27:39] Speaker 00: Do I then get to 2479 or a comparable page? [00:27:42] Speaker 00: Exactly. [00:27:43] Speaker 00: Is there something in the record that tells us that's the way it works or just the absence of anything to the contrary? [00:27:48] Speaker 01: Well, I'm fairly confident that Mr. Pote explained that during his direct testimony. [00:27:53] Speaker 01: And you have portions of that in the record. [00:27:55] Speaker 01: I'm not sure whether the explanation for that connection is in the portions that you have. [00:28:02] Speaker 01: But what I can tell you is what we're looking at on page 590 [00:28:05] Speaker 01: is an example of these banner or product placement ads. [00:28:09] Speaker 00: Right, and that comes from 2484. [00:28:10] Speaker 00: That's the corresponding product. [00:28:15] Speaker 01: If you click on the thing on page A590, then it takes you to Amazon.com website, the product listing page that your honor just identified. [00:28:25] Speaker 00: And I had asked Mr. Mann the question whether [00:28:34] Speaker 00: when the district court proposed the jury instruction on page A86 that told the offer to sale jury that the absence of a sale had already been determined, I think he said we objected to that. [00:28:49] Speaker 00: Is that in material, is that [00:28:51] Speaker 00: Do you agree with that and if so, is there something in the materials we have in front of us or is that just true but not in the JA? [00:29:00] Speaker 01: First of all, I don't think the propriety of that jury instruction has been appealed in this appeal and we're left with it as is. [00:29:08] Speaker 02: But could it have been appealed? [00:29:09] Speaker 02: Was it preserved below? [00:29:11] Speaker 01: I don't remember whether there was an objection lodged to that instruction during the trial proceedings itself. [00:29:17] Speaker 01: I don't think there was like during the jury instruction. [00:29:20] Speaker 01: charge conference. [00:29:21] Speaker 01: I will say that the judge read that particular instruction to the jury, I think, even before opening statements, so at the beginning. [00:29:29] Speaker 01: And I just can't remember whether or not they objected to that. [00:29:33] Speaker 00: Well, let me just raise the question to a slightly greater level of generality. [00:29:41] Speaker 00: After the judge said what he said in the summary judgment ruling, [00:29:49] Speaker 00: Was there or was there not a dispute about what was still left of the patented Frenchman claim, whether sale was still left or not left? [00:30:00] Speaker 00: Because it's not entirely clear to me, either from their opposition to the summary judgment motion or the district court's summary judgment opinion, whether he meant to say only the offer to sale piece of 271A survives. [00:30:15] Speaker 01: So Amazon's view was that only the offer to sell [00:30:19] Speaker 01: theory of liability survived summary judgment. [00:30:22] Speaker 01: And I believe the district court agreed with that because we filed the motion. [00:30:26] Speaker 00: The instruction at A86 reflects agreement with that. [00:30:30] Speaker 00: But I'm trying to understand, was that a disputed proposition in whatever the period was between the summary judgment ruling and the trial? [00:30:39] Speaker 00: Certainly. [00:30:39] Speaker 01: Amazon's view, I can't say what was in their head, but Amazon's view was that we move for summary judgment on [00:30:47] Speaker 01: every basis of liability under 271A and the district court came back and they only opposed on offer to sell. [00:30:56] Speaker 00: Maybe yes, maybe no. [00:30:57] Speaker 01: Then the district court came back. [00:30:58] Speaker 00: Subsection A is about offer and Subsection B is about the UCC in a position of seller business and that Subsection B, I don't know, the second subsection does say sale, not just offer to sale. [00:31:12] Speaker 01: The language is not entirely precise, but if you look at the introduction to that second section that you're referring to in there, [00:31:18] Speaker 01: summary judgment opposition briefing. [00:31:19] Speaker 01: They say that the UCC, we can look to that to inform us of what it offers. [00:31:24] Speaker 00: That's right. [00:31:24] Speaker 00: The sentence opens that way, and then on 596 and 597, it gets broader. [00:31:29] Speaker 02: The trial court denied summary judgment. [00:31:33] Speaker 02: The trial court did not grant in part a deny in part. [00:31:36] Speaker 02: Correct? [00:31:37] Speaker 01: On the patent claim, we granted summary judgment on a number of claims, but on the patent claim, it denied Amazon's [00:31:45] Speaker 01: summary judgment motion on the basis that there was a fact dispute about offer for sale. [00:31:50] Speaker 01: And we went forward and had a trial on offer for sale. [00:31:53] Speaker 01: I think the sale issue was really resolved. [00:31:57] Speaker 01: If you look at it, they didn't raise it other than the way Judge Toronto has mentioned on the patent. [00:32:04] Speaker 01: But they did have a discussion of it in their opposition to the copyright portion of Amazon's summary judgment motion. [00:32:11] Speaker 01: And there, they effectively concede that [00:32:14] Speaker 01: not effectively, they do concede that the third party sellers are the ones that are making the sale. [00:32:19] Speaker 01: They were trying to make a vicarious liability that Amazon has control. [00:32:23] Speaker 01: But if you look at page A, 576, which is their opposition on the copyright, they concede that the third party sellers are making the sale. [00:32:32] Speaker 01: And then in resolving that portion of the Amazon's motion, the district court made the finding that Amazon was not the seller. [00:32:43] Speaker 02: So what do we have? [00:32:44] Speaker 02: If your position is that they waived the sale issue below and they waived the offer for sale issue here, what's left? [00:32:58] Speaker 01: To affirm the district court. [00:32:59] Speaker 01: I mean, they don't have anything left on their patent liability theory. [00:33:04] Speaker 01: They've waived sale, which is the only argument they're advancing here. [00:33:07] Speaker 01: And they have not attacked the jury verdict and the district court's adopting of [00:33:12] Speaker 01: the factual findings and ultimate conclusion of the jury verdict that Amazon did not offer to sell the pillowcases. [00:33:19] Speaker 01: So, procedurally, I think they're in a very difficult spot on the pat infringement issue. [00:33:25] Speaker 00: Can I ask you about the copyright? [00:33:27] Speaker 00: I don't remember. [00:33:30] Speaker 00: Did you cite or do you have copyright law authority about the meaning of [00:33:37] Speaker 00: sale in 1063, right, distribute by sale or other transfer of ownership. [00:33:43] Speaker 00: I think it's language like that. [00:33:44] Speaker 00: How do we know if we know that under the copyright law [00:33:53] Speaker 00: what we have said about sale under 271A in the patent context supplies the same standard or what? [00:34:00] Speaker 01: So I don't believe we cited any cases that were copyright law cases on the definition of sale. [00:34:07] Speaker 01: What I will say is that this court has consistently interpreted sale or offered a sale language in the Patent Act and in the Intercontin case and the Tariff Act based on ordinary [00:34:23] Speaker 01: definition supplied by the lax law dictionary in the UCC. [00:34:28] Speaker 01: It's out of the ordinary. [00:34:30] Speaker 00: But if we're talking copyright law, suddenly we're talking Ninth Circuit law, right? [00:34:34] Speaker 00: Not Federal Circuit. [00:34:36] Speaker 00: law. [00:34:37] Speaker 00: So I guess I'd be interested in Ninth Circuit law on the interpretation of 1063 and what those words mean. [00:34:47] Speaker 00: And as I think you just noted, you haven't given us that case. [00:34:53] Speaker 01: I don't think we have supplied Ninth Circuit authority. [00:34:56] Speaker 01: I think under any definition of sale, Amazon's not in the position of making the sale here. [00:35:03] Speaker 02: But what about the other transfer of ownership language? [00:35:06] Speaker 01: So I think that, in the context of the Copyright Act, and I've thought about this before argument, is that that's talking about giving away. [00:35:14] Speaker 01: You're not transferring it by sale, which you're giving away. [00:35:18] Speaker 01: You're transferring ownership of something that's copyrighted. [00:35:21] Speaker 01: And that extra language is meant to capture that. [00:35:24] Speaker 02: But you don't have any authority for that proposition. [00:35:29] Speaker 01: I don't have a case to cite for that. [00:35:31] Speaker 01: But what I would say, if we read the transfer of ownership language [00:35:35] Speaker 01: the way that Milo and Gabby proposes, then UPS, any warehouse distribution business, would be on the hook for liability under their reading. [00:35:46] Speaker 01: And I don't think that is an appropriate reading. [00:35:49] Speaker 00: Is it possible that one of the first sale cases in copyright law talks about gift as a form of transfer? [00:35:57] Speaker 01: It is, yes. [00:35:58] Speaker 01: I believe so. [00:35:58] Speaker 01: That's what I'm thinking of. [00:36:01] Speaker 01: I see that I'm well past my time. [00:36:03] Speaker 00: Well, I just want to follow up on this. [00:36:06] Speaker 00: I guess maybe I'm confused, but tell me why I should not feel a little bit at a loss to understand what we do with the 1063 claim in the absence of law telling us whether there was a sale or other transfer of ownership here. [00:36:23] Speaker 01: Well, I think that you've got all of the necessary... There's no waiver issue as to that, right? [00:36:29] Speaker 00: I mean, or forfeiture or [00:36:31] Speaker 00: It's not before you issue whatever the waiver is. [00:36:34] Speaker 01: We have not advanced a waiver argument on that point. [00:36:38] Speaker 01: And I do think that the information that the court has before it clearly establishes that Amazon did not sell the pillow cases. [00:36:46] Speaker 01: And in order for their liability to attach, there has to be a sale or transfer of ownership. [00:36:54] Speaker 00: And you were pointing to A576. [00:36:57] Speaker 00: What were you pointing to there? [00:36:58] Speaker 00: This was a piece of their opposition to summary judgment. [00:37:02] Speaker 01: So their A576 is where they make concessions, I think, concerning the fact that third-party sellers are making the sale. [00:37:12] Speaker 01: They say further, Amazon's selling on Amazon service terms outline similar additional points of control over the third party's who sell the infringing items. [00:37:24] Speaker 02: It says who sell the infringing items with Amazon. [00:37:28] Speaker 01: ellipsing out. [00:37:30] Speaker 01: Yes, with Amazon, but they're talking about third-party sellers are making the sale. [00:37:35] Speaker 01: And later on the page they say these points of influence are only examples of Amazon's control, this is where they're making their vicarious liability argument, over the terms of sale between non-FBA sellers and in-purchasers. [00:37:49] Speaker 01: They're saying that the sale is between the third-party sellers and the in-purchasers. [00:37:56] Speaker 01: plain language of the copyright sale or other transfer of ownership. [00:37:59] Speaker 01: Amazon never does neither of those ever. [00:38:02] Speaker 01: And that's what the evidence below clearly establishes. [00:38:07] Speaker 00: But that would require us to say, just as we have said in the 271A context, we borrow the UCC definition requiring that not only title be transferred, but that it be transferred from the seller and say, [00:38:26] Speaker 00: 1063 is the same. [00:38:28] Speaker 01: Yes, I think both parties are suggesting it's the same, whether it's copyright or patent. [00:38:35] Speaker 01: And yes, I think that sale should be given its ordinary meaning under the Copyright Act, just like it has been given under 271A in the Patent Act. [00:38:46] Speaker 02: OK, thank you. [00:38:47] Speaker 01: Thank you, Your Honors. [00:38:48] Speaker 02: Counsel, we'll give you your full five minutes for rebuttal, since we let your friend on the other side go over. [00:38:57] Speaker 03: I'd like to try to attempt to answer some of your questions. [00:39:01] Speaker 03: With respect to what's on page 36, the only answer I can give you, Your Honor, is apparently that was a mistake on our part not to actually cite, put into this appendix. [00:39:11] Speaker 03: We do have a reference on page A1062. [00:39:15] Speaker 03: We do reference... I don't mind then. [00:39:18] Speaker 04: mistake. [00:39:19] Speaker 04: I just want the reference. [00:39:20] Speaker 03: Okay, yes, I do have the reference. [00:39:22] Speaker 03: It's to docket number 39. [00:39:23] Speaker 03: 10-1062. [00:39:24] Speaker 03: Page 1062, I believe we make reference to a docket number in the proceedings below. [00:39:33] Speaker 03: Unfortunately, that page did not make it into the appendix that was submitted to the court. [00:39:38] Speaker 03: I apologize for that, but I think that's the explanation for... I realize that doesn't do you any good without having that in front of you. [00:39:45] Speaker 03: None whatsoever. [00:39:46] Speaker 03: But I want to do explain that that's what occurred in that respect, Your Honor, and I do apologize for that. [00:39:52] Speaker 03: With respect to page 16, what we're referring to is, you see the other references we have here of A2132, that is answers that Mr. Pode gave, I believe, on direct examination by Mr. Hughes, where he said, [00:40:12] Speaker 03: You know, every product on Amazon's website has a page like this. [00:40:15] Speaker 03: We call it project, project detail page. [00:40:18] Speaker 03: Later on, he says, so in this case, you can see that the item is sold. [00:40:22] Speaker 03: It's offered for sale by Amazon itself. [00:40:25] Speaker 03: So you can see the ships from and sold by Amazon, et cetera, et cetera. [00:40:28] Speaker 03: And then I think the other references we have here, A259, A2129, A213840, that is, [00:40:42] Speaker 04: Where does he say that Amazon's acting as the seller? [00:40:48] Speaker 02: Well, that was for the soccer. [00:40:50] Speaker 03: That is sort of our characterization of this. [00:40:52] Speaker 03: That is not meant to be a direct quote. [00:40:54] Speaker 03: What we were saying is this is a summary of what his testimony is. [00:40:57] Speaker 03: What we were trying to say in our brief here is if you look at what he testifies to, he confirms that Amazon does everything in a sale except for transfer title. [00:41:09] Speaker 03: puts it on their website, Amazon collects the money, Amazon ships it from the warehouse, Amazon stores it in the warehouse, Amazon puts it in their box, Amazon puts a label on it. [00:41:17] Speaker 03: What doesn't Amazon do? [00:41:22] Speaker 02: Do you concede that we should treat sale under the Copyright Act the same way as we treat sale under the patent law? [00:41:32] Speaker 02: I would respectfully disagree that they should be treated exactly the same. [00:41:36] Speaker 02: The reason for that- Have you ever argued that they shouldn't be treated the same? [00:41:39] Speaker 03: Well, I think they're different language. [00:41:41] Speaker 03: There's different, well, it's different analysis. [00:41:44] Speaker 03: What it says is sale or other transfer of ownership. [00:41:46] Speaker 03: That's language of copyright. [00:41:47] Speaker 02: Well, aside from the other transfer of ownership, did you argue anywhere in your briefs to us or in your briefs below that sale is different under 106 and Ninth Circuit copyright law than it is under patent law? [00:42:02] Speaker 03: No, Your Honor, we did not. [00:42:03] Speaker 03: Our position all along, and we believe this is consistent with not only intellectual property law, but also securities law, is that sale is given its ordinary meaning, what typical contract provisions. [00:42:15] Speaker 03: In essence, sales should be given its colloquial meaning, what most people mean by sale. [00:42:21] Speaker 03: I hand you something, you give me something, and I hand you something in value, you hand me something in return. [00:42:26] Speaker 03: It doesn't turn [00:42:28] Speaker 03: on peculiarities of title and so forth. [00:42:30] Speaker 03: I think that's consistent. [00:42:32] Speaker 03: I forget the exact language, but I think this court's precedent says that sale should be given its ordinary meaning. [00:42:39] Speaker 03: The Supreme Court case we cited, Pinnit v. Dahl, says that, again, sale is given its ordinary meaning. [00:42:46] Speaker 03: It's what layman would view as a sale. [00:42:49] Speaker 03: So in that sense, yes, whether we're talking about copyright law, whether we're talking about 43A, whether we're talking about 271A, [00:42:58] Speaker 03: Generally, the sale is the same. [00:43:00] Speaker 03: I think when Congress passed these various laws, what they intended was that sales should be given the ordinary meaning and shouldn't turn on technicalities such as who transfers title, where title is transferred, that sort of thing. [00:43:16] Speaker 03: I know it's a long answer to your question, but the general answer is yes. [00:43:20] Speaker 03: For purposes of all these laws, a sale is a sale. [00:43:27] Speaker 02: Okay. [00:43:29] Speaker 02: Anything else? [00:43:31] Speaker 03: Can I just make one more? [00:43:32] Speaker 03: Yes. [00:43:32] Speaker 03: I strongly disagree. [00:43:34] Speaker 03: We never conceded that Amazon did not sell anything. [00:43:38] Speaker 03: I just want to simply point out that before the trial, very late in this, there was a motion in limine filed by Amazon. [00:43:44] Speaker 03: asking us and court granted us for us not to argue that there was a sale. [00:43:49] Speaker 03: If we had conceded, if we had agreed that Amazon doesn't sell anything, why would there be a need for a motion to eliminate shortly before trial? [00:43:56] Speaker 03: Why would we oppose that? [00:43:57] Speaker 03: I just want to make that point. [00:43:58] Speaker 03: Thank you, Your Honor. [00:44:01] Speaker 04: Where's your opposition? [00:44:02] Speaker 04: I want to take a look at that. [00:44:04] Speaker 04: Where's your opposition in the record to the motion to eliminate? [00:44:12] Speaker 03: I believe we may just reference to the motion of elimination, we did not cite our actual opposition to it, but there was an opposition obviously. [00:44:41] Speaker 03: And that was it. [00:44:41] Speaker 03: Their motion is 1126. [00:44:42] Speaker 03: A 1126. [00:44:43] Speaker 03: Okay. [00:44:45] Speaker 03: Anything else? [00:44:48] Speaker 03: And thank you, Your Honor. [00:44:59] Speaker 02: Just a second. [00:45:00] Speaker 02: I want to make sure Judge Wallach is done. [00:45:02] Speaker 04: Yeah. [00:45:02] Speaker 04: Well, I'm not finding 1126 in the appendix. [00:45:10] Speaker 04: It should be in there. [00:45:12] Speaker 00: Sometimes things get A numbers that don't appear in the bound-join appendix because you put numbers on a vast universe of material and then bind only the stuff that's second. [00:45:23] Speaker 03: Is this, maybe this is... This may be another snafu, Your Honor. [00:45:26] Speaker 03: I know we cited it to A 1126 if it's not in the submitted volume. [00:45:31] Speaker 03: I'm looking at our reply brief. [00:45:36] Speaker 03: Page 22 of our reply brief. [00:45:40] Speaker 03: We made reference to page 1126, twice on that page. [00:45:44] Speaker 03: It did not appear in the bound volume of the pages. [00:45:47] Speaker 03: I have no explanation for that, but I apologize. [00:45:52] Speaker 02: Okay. [00:45:53] Speaker 02: Thank you. [00:45:53] Speaker 03: Thank you, Your Honor. [00:45:55] Speaker 02: Cases will be taken under advisement. [00:45:59] Speaker 02: This Court is adjourned. [00:46:02] Speaker 01: All rise.