[00:01:02] Speaker 00: Our next case is Murata Machinery USA versus Daifuku Company Limited, 2015-2094. [00:01:33] Speaker 04: the court my name is david then you're on behalf of the marauder palance i'm gonna start with uh... [00:02:03] Speaker 04: addressing the denial of Morata's motion for preliminary injunction and then I'll address the denial of its motion to lift the state. [00:02:15] Speaker 04: Starting with the preliminary injunction motion. [00:02:19] Speaker 04: The district court committed a clear legal error when it denied Morata's preliminary injunction motion without considering [00:02:30] Speaker 04: any of the required four preliminary injunction factors. [00:02:35] Speaker 00: That decision directly contravenes this Court's holding in P and G. Just as a preliminary matter, what law would you say that we were applying in this case, that of the [00:02:51] Speaker 00: regional circuit in which the court sits? [00:02:54] Speaker 00: And if so, what would you say is our standard of review? [00:02:57] Speaker 04: Well, the regional circuit applies, but this court has its own body of evidence, a body of law, that it applies to these kinds of cases for the standard of review. [00:03:08] Speaker 04: And for this issue, the question is abuse of discretion by the district court. [00:03:18] Speaker 04: So going forward, as I said, [00:03:21] Speaker 04: the P&G case controls here, because in that case, as in this one, the district court below denied a preliminary injunction motion on the basis of a stay of the case. [00:03:35] Speaker 01: Can I ask you, the whole time I was reviewing and preparing for this argument, I kept on thinking, why did you make the decision to add these three patents to a case that was already stayed? [00:03:49] Speaker 04: There are two patents that we added. [00:03:51] Speaker 04: Two patents. [00:03:53] Speaker 04: When we moved to add these two patents, there was not even a motion to stay the case at the time. [00:04:01] Speaker 04: We moved before. [00:04:02] Speaker 04: There was ever a stay. [00:04:03] Speaker 01: But the motion was granted. [00:04:05] Speaker 01: The motion to stay was granted. [00:04:07] Speaker 01: And then, as I understand it, you had moved to add your patents, and you got the opportunity to add them, and you went ahead and did so. [00:04:16] Speaker 04: Let's get the history correct, though, on this. [00:04:19] Speaker 04: In September of 2014, we moved to add these patents. [00:04:24] Speaker 04: The case was continuing at the time. [00:04:26] Speaker 04: Several weeks later, Daifuku moved to stay the case as to the original patents. [00:04:32] Speaker 04: At that time, the additional patents, the additional patents that we wanted to add, were not in the case yet. [00:04:39] Speaker 04: Discovery continued on the original patents because the additional patents, again, were still not in the case. [00:04:45] Speaker 04: And then, several months later, the district court [00:04:48] Speaker 04: stayed the case. [00:04:51] Speaker 04: The issue of the stay originally was about... I guess it did two things simultaneously, right? [00:04:57] Speaker 02: It granted your motion to add the additional two patents and then at the same time it likewise granted the other side's motion to stay the entire proceeding given the then pending petitions for IPRs on the first three patents. [00:05:12] Speaker 02: Correct. [00:05:12] Speaker 02: That's exactly right. [00:05:14] Speaker 02: What's the status of those three IPRs? [00:05:17] Speaker 04: They are going to... We're anticipating a final written decision on those three patents by May 4th. [00:05:25] Speaker 04: Right. [00:05:26] Speaker 04: Okay? [00:05:26] Speaker 04: So that's where we are. [00:05:27] Speaker 04: We're past the oral hearing at this point. [00:05:29] Speaker 04: Did you amend any of the claims? [00:05:30] Speaker 04: No. [00:05:31] Speaker 04: Okay. [00:05:32] Speaker 04: We have... There's pending applications relating to those patents, and so the decision was made not to bother amending the claims. [00:05:38] Speaker 00: So all the IPRs, had they been instituted before the motion for a stay was submitted? [00:05:47] Speaker 04: Well, we have two motions relating to stays. [00:05:50] Speaker 04: We have the original motion to stay by Daifuku in 2014. [00:05:54] Speaker 04: The court later grants that motion in February 2015. [00:05:58] Speaker 04: In that same order, it invites Morata to move to lift the stay under appropriate circumstances after a decision on institution relating to the original patents. [00:06:13] Speaker 04: There's an institution decision on those three of the five [00:06:17] Speaker 04: petitions are granted, and so IPR proceedings proceed starting in May of 2015 on the original patents. [00:06:24] Speaker 04: We then move to lift the stay as to the additional patents, which have been stayed from the beginning because they were stayed as part of the rest of the case. [00:06:34] Speaker 04: And so we move forward with the additional patents, and in fact, indeed, to just catch up with the discovery, 10 months of discovery that had been already taken on the original patents. [00:06:46] Speaker 00: When you filed a motion for an injunction, were all the IPRs that we're concerned with, had they already been instituted? [00:06:56] Speaker 00: No. [00:06:56] Speaker 00: So what happened is that... On what pens had it not been instituted? [00:07:03] Speaker 04: OK. [00:07:04] Speaker 04: So we filed our motion to lift the stay. [00:07:08] Speaker 04: We filed our preliminary injunction motion. [00:07:11] Speaker 04: And at some point, Daifuku ultimately filed [00:07:16] Speaker 04: petitions for IPR on the additional patents. [00:07:21] Speaker 04: Months later, I believe it was the beginning of this year, or late last year, late last year, the PTAB finally instituted, actually, let me correct myself, Your Honor. [00:07:36] Speaker 04: It was of this year. [00:07:38] Speaker 04: The PTAB instituted on two of the three petitions that had been filed. [00:07:47] Speaker 04: but left one of the claims that we've asserted in our motion for plenary injunction untouched by any IPR review. [00:07:55] Speaker 04: And now that claim is completely free and clear of any IPR review going forward. [00:08:01] Speaker 04: It's a claim, of course, of the 184 patent that's going to expire, unfortunately, in June of next year. [00:08:07] Speaker 04: So we've lost almost 18 months since we originally moved to add these patents into the case. [00:08:15] Speaker 04: And now we're left with about 14 months left on this patent and this claim. [00:08:19] Speaker 04: But that institution decision occurred in January of this year, five months after the court stayed the case, and months after we moved for a preliminary injunction. [00:08:31] Speaker 02: At the time the district court denied your motion to lift the stay, these additional IPR petitions on the new patents [00:08:42] Speaker 02: were already filed and pending, and the district court relied in part on the fact that there were pending IPR petitions on those two additional patents, right? [00:08:57] Speaker 02: I believe the district court order references the fact that there are pending petitions on the two additional patents, two added patents. [00:09:07] Speaker 04: By the time of the district court's order, I believe the petitions have been filed by Defu. [00:09:11] Speaker 01: They were filed in July. [00:09:12] Speaker 04: Yes, and the date of the order was September. [00:09:19] Speaker 04: So it's within a few months, but our motion to lift the stay preceded those petitions, certainly. [00:09:26] Speaker 01: But your motion to lift the stay, that came after your motion to provide the additional patents. [00:09:33] Speaker 04: Well, this motion to add the additional patents had been [00:09:36] Speaker 04: in September of 2014, the motion to lift the stay was controlled by the district court's order saying that we are invited to move to lift the stay after an institution decision on the original patents. [00:09:52] Speaker 04: When that institution decision came out, we moved to lift the stay. [00:09:55] Speaker 04: So that motion was filed in late May of 2015, so we're talking about [00:10:03] Speaker 04: eight months after we had moved to add those patents into the case. [00:10:07] Speaker 01: I want to go back for a minute to my original question about why these two patents were added, because as I understand the record, the district court has a single order in which it both granted the motion to stay and granted a motion to allow you to file an amended complaint to add the two patents. [00:10:25] Speaker 03: Right. [00:10:26] Speaker 01: And in that, at page A9, it specifically says, if you're going to add those patents, [00:10:31] Speaker 01: it's going to stay the entire case. [00:10:34] Speaker 01: And then you went ahead and filed your first amended complaint to add the patents. [00:10:38] Speaker 01: Do I misunderstand that? [00:10:40] Speaker 04: No. [00:10:41] Speaker 04: Well, our understanding was we can file this case, we can amend the complaint, and the case will be stayed. [00:10:51] Speaker 04: Frankly, at the time, we didn't see it as a choice now that we had to make as to whether we were going to add the patents or not. [00:11:00] Speaker 04: We thought that [00:11:02] Speaker 04: We thought that we were going to get a lift of the state of the case when the institution decisions came out. [00:11:09] Speaker 01: Presumably that would be if it was an institution decision where the PTO said we're not going to institute. [00:11:16] Speaker 01: Instead they said we're going to institute. [00:11:18] Speaker 04: But we were talking about different patents now. [00:11:21] Speaker 04: We're talking about patents that weren't the subject of any institution decision. [00:11:24] Speaker 04: We're talking about an institution decision on the original patents, not the patents here, [00:11:29] Speaker 04: We wanted to go forward on a different set of patents, different and not related to the original patents at all. [00:11:35] Speaker 04: And it was our view that these additional patents should be allowed to proceed and catch up with discovery and everything else that had been done in the case on the original patents. [00:11:44] Speaker 04: There was no decision on institution relating to these patents that we wanted to add at the time. [00:11:49] Speaker 01: It says on page A9, the complicating issue is whether to say litigation on the new claims this court has now permitted plaintiffs to act. [00:11:58] Speaker 04: Right. [00:11:58] Speaker 01: And then it says, accordingly at this juncture, the court will stay the entire litigation, with the exception of lying plaintiffs to properly file their first and many complaint, that being the complaint that would add the two months. [00:12:09] Speaker 04: Right, which we had moved to add many months earlier. [00:12:14] Speaker 01: So in other words, I read this as the court saying, we're going to stay the entire litigation. [00:12:19] Speaker 04: Right. [00:12:20] Speaker 01: Including those two new patents that you were going to add. [00:12:24] Speaker 04: That's what it was saying. [00:12:24] Speaker 04: It was going to stay the entire case, inviting us to [00:12:29] Speaker 04: lift, move to lift the stay at the point when there was going to be an institution decision on the original patents. [00:12:36] Speaker 02: But do you see how the basis for staying the entire litigation actually got strengthened by the fact that the PTO actually granted the IPR petitions a few months after his initial stay order? [00:12:52] Speaker 02: Because now the judge really knows that these three patents [00:12:58] Speaker 02: are in jeopardy and he doesn't know what those patents are going to look like a year from now by the time that the IPRs are completed. [00:13:06] Speaker 02: And so it very well may be there's, with respect to these three patents, there's nothing left to litigate. [00:13:14] Speaker 02: Moreover, as a basis for agreeing to grant your motion to amend the complaint to add two additional patents, he relied on the fact that [00:13:24] Speaker 02: Your position was that these two new patents were very similar to the three patents that were already in the litigation. [00:13:32] Speaker 02: And based on your arguments, your statements that those two added patents are very similar to these three patents, he was willing to allow you to amend the complaint. [00:13:43] Speaker 02: Therefore, whatever happens in those three IPRs could very well have impact on these two patents, which you have told the court. [00:13:53] Speaker 02: which you stood up and told the court that are very related. [00:13:56] Speaker 04: Well, we didn't view them as related in the sense that these two sets of patents must necessarily track together. [00:14:07] Speaker 04: We didn't view it that way. [00:14:08] Speaker 04: Frankly, in that time frame of February of 2015, we were between a rock and a hard place in the sense that we have two patents that we believe are infringed. [00:14:17] Speaker 04: They don't have a lot of life left on them. [00:14:20] Speaker 04: And we have a choice of whether to [00:14:22] Speaker 04: proceed and with the belief that these two patents deserve to go forward. [00:14:28] Speaker 04: But if we don't go forward with these, then we have to reassess and somehow figure out a way to bring these... Couldn't you have filed a separate lawsuit? [00:14:37] Speaker 04: We could have filed potentially a separate lawsuit, but our calculus was that time was of the essence and that our best chance to get these patents addressed, the infringement of these patents addressed, was through [00:14:51] Speaker 04: the existing litigation, including the fact that so much of the discovery, and really this was the basis for bringing these additional patents into the case in the first place, so much of the discovery, although not directed to the additional patents, there was a lot of commonality there, which we felt was going to have to be completely redone if we filed a separate complaint in a different case. [00:15:13] Speaker 04: And so our view was that because timing, time was of such of the essence, we were caught in a position of having to [00:15:20] Speaker 04: accept the situation and hope that it was going to recognize that the discovery benefits were the real reason for having these patents in the case, but it wasn't a reason to necessarily have them track completely through that one case and that there were good reasons to have the additional patents proceed forward, even if the [00:15:43] Speaker 04: The original patents remain state because there was still some discovery that we could take on them. [00:15:48] Speaker 01: It's the discovery that had occurred so far. [00:15:50] Speaker 01: Was it just document exchange? [00:15:52] Speaker 01: No, no, your honor. [00:15:53] Speaker 04: No, it was, we, Marotta had produced over 2 million pages. [00:16:00] Speaker 04: Most of it in Japanese. [00:16:02] Speaker 04: Most of it had to be reviewed. [00:16:04] Speaker 04: Daifuku produced over 300,000 pages. [00:16:06] Speaker 04: Also, most of it in Japanese, all of that had to be reviewed. [00:16:09] Speaker 04: We had to review that before depositions. [00:16:12] Speaker 04: We took 30 B6 depositions in Los Angeles. [00:16:14] Speaker 04: We spent two weeks in Osaka for depositions of Daifuku. [00:16:19] Speaker 04: We had inventor depositions in Boston. [00:16:23] Speaker 04: Millions of dollars were spent on this case before the case was stayed. [00:16:27] Speaker 04: We were going to be in a position of having to repeat a lot of the things that were common to these patents in terms of the background of the technology, in terms of the parties involved, in terms of the industry. [00:16:38] Speaker 04: even though these patents are directed to different aspects of an automated material handling system. [00:16:44] Speaker 04: They're different patents. [00:16:45] Speaker 01: Do indicators rely on the discovery and different things that have occurred in other related legal proceedings involving those same parties? [00:16:53] Speaker 04: Your Honor, there are a lot of limitations on our ability to necessarily do that. [00:16:59] Speaker 04: As a matter of fact, we have been hampered by our ability to use any discovery from this case in any other proceeding, including the IPRs. [00:17:08] Speaker 04: It was a far from a certain answer that we were going to be able to use discovery from this ongoing case in any other case. [00:17:16] Speaker 04: Not to mention the fact that we were going to have to serve a foreign defendant all over again, potentially which would draw out for many months for sure, particularly if we had to go through the Hague. [00:17:27] Speaker 04: So we were facing a time crunch and a decision whether to stay the course with respect to this case or completely start fresh on patents that [00:17:38] Speaker 04: We're already long in the tooth. [00:17:40] Speaker 01: Thank you. [00:17:40] Speaker 01: Thank you for letting me know. [00:17:41] Speaker 02: Let me take you back to your legal argument. [00:17:45] Speaker 02: Sure. [00:17:45] Speaker 02: Your legal argument is Procter & Gamble controls this case. [00:17:50] Speaker 02: Procter & Gamble, of course, the case at that moment when the district judge was deciding these various motions in front of him, the case was active. [00:18:00] Speaker 02: Here, your case, the case is inactive. [00:18:04] Speaker 02: It was stayed already. [00:18:06] Speaker 02: Correct. [00:18:06] Speaker 02: So, I mean, to me, [00:18:08] Speaker 02: that's a potential pivot point. [00:18:11] Speaker 02: And I guess what I'm trying to understand is, is it your position that any time a case has been stayed, and then sometime thereafter, the plaintiff files a motion for preliminary injunction on one of the patents in the state litigation, that the district court is required to consider that preliminary injunction, even though [00:18:37] Speaker 02: the case has been stayed? [00:18:40] Speaker 02: Your Honor, absolutely. [00:18:43] Speaker 02: Absolutely. [00:18:43] Speaker 02: So basically what that means is whenever there's these litigations going on and these IPRs get granted and now well over 100 litigations have been stayed to await the outcome of the respective IPRs, plaintiffs can undo those stays throughout the country [00:19:04] Speaker 02: by filing a preliminary injunction motion, thereby forcing the district court to crack open the case and have an evidentiary hearing and do claim construction, take witness testimony, and figure out the likelihood of infringement and likelihood of validity or invalidity every single time. [00:19:21] Speaker 04: What we're saying is that a district court, regardless of whether or not there's a stay, must consider the preliminary injunction motion. [00:19:29] Speaker 04: It doesn't have the discretion to say, oh, I've stayed the case. [00:19:34] Speaker 04: So I'm not going to consider this motion. [00:19:36] Speaker 04: Preliminary injunction motions are different from other motions. [00:19:40] Speaker 02: The answer is yes, then. [00:19:43] Speaker 02: Yes, that under all these hundreds of state litigations in light of the thousands of IPRs that have been granted, that plaintiffs can undo all those states by filing a preliminary injunction motion, thereby [00:20:00] Speaker 02: taking up a lot of cost, time, and resources of the courts and the parties to resolve those pending preliminary injunction motions. [00:20:08] Speaker 04: Inherent in a preliminary injunction motion is the notion that there is some kind of irreparable harm going on, that there's something that needs to be redressed immediately. [00:20:17] Speaker 04: It's the very reason why these motions are immediately appealable, interlocutory. [00:20:22] Speaker 04: That's what sets them apart from other motions. [00:20:24] Speaker 04: And so what we're saying is that a district court has to consider it, has to at least look at it. [00:20:29] Speaker 04: If you say, if the court's holding here is that, well, a stay obviates that requirement, then you're saying that 28 USC 1292A1 is basically not really, doesn't really apply, and that Morata doesn't have any actual interlocutory right of appeal with respect to a motion where there are exigent circumstances that require it to be considered. [00:20:54] Speaker 04: We're not saying that it's required to be granted. [00:20:57] Speaker 04: We're saying it needs to be at least considered. [00:20:58] Speaker 02: So what were the exigent circumstances that came around by July of 2015 that didn't exist, say, in May 2015? [00:21:07] Speaker 02: We filed your motion to lift the stay in May 2015, but you didn't give any indication that you were going to be... You needed a preliminary injunction right away. [00:21:15] Speaker 02: That's right. [00:21:16] Speaker 02: You waited, and then you made an indication [00:21:20] Speaker 02: that you were planning on filing a preliminary injunction, and then you ultimately filed a preliminary injunction. [00:21:23] Speaker 02: That's right. [00:21:24] Speaker 02: And so I'm trying to figure out what happened all of a sudden. [00:21:28] Speaker 04: Well, it's not all of a sudden. [00:21:29] Speaker 04: What you have is you have a business, an industry, that is not like Apple, Samsung, where you're selling ubiquitous products all over the world. [00:21:40] Speaker 04: What we're talking about are AMHS systems. [00:21:43] Speaker 04: These are automated material handling systems for the semiconductor manufacturing industry specifically. [00:21:50] Speaker 04: where these contracts happen once in a while. [00:21:54] Speaker 04: There aren't that many customers for this. [00:21:56] Speaker 00: What made it urgent for you is that there was going to be a solicitation for this type of business and it was a rather big order and you wanted to capture it. [00:22:03] Speaker 04: Yes, and we certainly didn't want to be hampered by offers by Daifuku, its sole competitor, of infringing products and potentially lose those opportunities. [00:22:14] Speaker 04: When we become aware of an opportunity and they don't come along all the time, [00:22:18] Speaker 04: We find out about it, and that's what was the basis for bringing the motion. [00:22:21] Speaker 04: It was something tangible that we had identified that made the motion relevant and exigent at that time. [00:22:28] Speaker 00: I've let you go way over your time, but let's stop here. [00:22:32] Speaker 00: Let's hear the other side. [00:22:33] Speaker 00: When you come back, we'll give you some more time for rebuttal. [00:22:36] Speaker 00: Thank you. [00:22:43] Speaker 03: Good morning, Your Honors. [00:22:44] Speaker 03: Sir, what? [00:22:45] Speaker 03: Thank you, Your Honor. [00:22:46] Speaker 03: Jeff Sherwood for the Daifuku defendants. [00:22:49] Speaker 03: The issue, as I think I heard a few minutes ago for this court to consider, is whether the district court committed abuse of discretion in its ruling with respect to these motions. [00:23:01] Speaker 03: And that would be a clear error of judgment, a decision outside the boundaries of permissible choice, or an error of law. [00:23:10] Speaker 03: none of those things happen. [00:23:11] Speaker 03: In fact, I didn't even hear that the argument was much consumed with demonstrating that to Your Honors. [00:23:17] Speaker 02: Well, the point the other side's trying to make is anytime there's a preliminary injunction motion that's been filed, it needs to be considered. [00:23:24] Speaker 02: And if you look at Procter and Gamble, at least in that particular instance, when there were copending motions for preliminary injunction and stay, this court said you've got to consider the motion for preliminary injunction. [00:23:35] Speaker 03: So I understand that, Your Honor. [00:23:37] Speaker 03: Thank you. [00:23:39] Speaker 03: And going straight to P&G, let me just say that I think that the facts in that case are different than the facts in this case. [00:23:48] Speaker 03: In that case, this court looked specifically at the hearing transcript before the district court where the district court was asked to consider the harms and declined. [00:24:01] Speaker 03: And that is not the situation that happened here. [00:24:04] Speaker 03: Here, the district court made a finding with respect to harms [00:24:08] Speaker 03: made a finding that there would be no undue prejudice if the stay continued. [00:24:14] Speaker 00: And so having determined that there was no- Did the district court consider the exigent circumstances that Murata was citing? [00:24:22] Speaker 03: Yes, your honor. [00:24:23] Speaker 03: In fact, it did. [00:24:24] Speaker 03: That was before the district court. [00:24:26] Speaker 03: The Murata filed several pleadings that related to its harm. [00:24:31] Speaker 03: It first filed an opposition to the original stay motion. [00:24:36] Speaker 00: Let's go to the decision of the district court where they address those exigent circumstances. [00:24:46] Speaker 03: So, Your Honor, there is no explicit discussion of that. [00:24:49] Speaker 00: What I was going to say was that... That's a problem here, isn't it? [00:24:54] Speaker 00: We have a preliminary injunction and we don't have a specific discussion as to or rationale as to why it was denied other than it was just simply denied. [00:25:05] Speaker 03: Well, Your Honor, I don't think it was a problem. [00:25:07] Speaker 03: And let me explain why I don't think it was a problem. [00:25:09] Speaker 03: The district court made a finding in both the first order and in the second order. [00:25:14] Speaker 03: And I can refer the court to page A4 in the appendix, where it says near the top of the page, accordingly, the court finds, as it previously found, that all four factors militate in favor of a stay. [00:25:29] Speaker 03: Now, Your Honor is absolutely correct that there's no analysis there. [00:25:34] Speaker 03: The district court doesn't go through these exigent circumstances. [00:25:37] Speaker 03: But in fact, they were set forth in Murata's pleadings, both with respect to its original motion to lift and in its reply. [00:25:47] Speaker 03: And in fact, if you make a comparison between the harm that was presented in the PI motion, which was subsequently filed in violation of the state, because I think Murata got to the point where it felt like it didn't want to wait any longer, you'll see there is no difference in the harm that was presented [00:26:03] Speaker 03: with respect to the motion to lift the stay and the harm that was presented subsequently in the PI motion. [00:26:11] Speaker 03: So in both, they talked about loss of customers and goodwill. [00:26:16] Speaker 03: They talked about upcoming opportunities. [00:26:19] Speaker 03: They talked about impact on personnel and hiring. [00:26:24] Speaker 03: All of those things were before the district court when it made this finding, Your Honor. [00:26:29] Speaker 03: And the other thing I want to be sure to point out here [00:26:32] Speaker 03: is what is the record on these market opportunities that Mr. Ben Mir referred to. [00:26:37] Speaker 03: And that is on page A1716 of this record, where Mr. Ben Mir, counsel for Mirada, testifies that he and his law firm learned of opportunities at some point earlier on for their client. [00:26:55] Speaker 03: That is not the kind of immediate exigent circumstance under which [00:27:02] Speaker 03: a court should grant a preliminary injunction. [00:27:06] Speaker 03: So what happened was the district court had all of this before it. [00:27:11] Speaker 03: It saw that these were not the circumstances that would constitute an irreparable harm, that there was no undue prejudice, that there was no need to take the motion up at the time. [00:27:24] Speaker 03: And so what he says at the end is, again, on A4, [00:27:29] Speaker 03: Because the court has now declined to lift the stay, meaning he didn't find any undue prejudice, the motion for the PI is denied. [00:27:40] Speaker 03: Without prejudice be renewed at a later date if, and I'm adding here parenthetically, if they come forward and they show something that is an exigent circumstance, that is an undue prejudice, that is an irreparable harm, that would justify the court moving forward. [00:27:58] Speaker 03: That's not what happened in P&G. [00:28:00] Speaker 03: In P&G, and I looked at the hearing transcript that this court cited to, P&G tried to argue harm. [00:28:07] Speaker 03: And the judge said, no, no, no, I don't want to hear it. [00:28:10] Speaker 03: This is just going to be about scheduling and simplifying issues and so forth. [00:28:17] Speaker 03: It's not in the court's opinion, but it is in the transcript. [00:28:20] Speaker 03: And that's where this court went when it decided P&G. [00:28:24] Speaker 03: What it says in P&G is you can't refuse [00:28:27] Speaker 03: consider harm at all. [00:28:29] Speaker 03: I agree with that. [00:28:30] Speaker 03: I'm not taking a contrary position with respect to that. [00:28:33] Speaker 03: But if the harm's not there, does the district court then have to go through the four factor injunction analysis and do all the balancing? [00:28:41] Speaker 01: It does not. [00:28:42] Speaker 01: I think I understood you to be saying that the only thing in the record about this opportunity was counsel's declaration. [00:28:52] Speaker 01: Wasn't there a declaration from an employee as well? [00:28:55] Speaker 03: There is a declaration from Mr. Van Orman as well, Your Honor, that says the same thing. [00:29:00] Speaker 03: In other words, it says, we think there might be something coming up within the next year. [00:29:05] Speaker 03: And I can give the court a record. [00:29:06] Speaker 01: That's not just counsel's opinion. [00:29:08] Speaker 01: There's an employee declaration, right? [00:29:10] Speaker 03: Well, they're two separate opportunities, actually. [00:29:13] Speaker 03: OK. [00:29:13] Speaker 03: And it was this declaration by counsel that is what was connected to the P.I. [00:29:21] Speaker 03: motion. [00:29:22] Speaker 01: Got it. [00:29:23] Speaker 01: I thought that this other declaration, that's at page A, 1899, I thought that that was actually attached to the preliminary injunction motion. [00:29:34] Speaker 01: Am I wrong about that? [00:29:35] Speaker 03: I think they were both attached, Your Honor. [00:29:36] Speaker 03: I'm sorry if I misstated that. [00:29:38] Speaker 03: Yes. [00:29:41] Speaker 03: So my point here is that if one of those first two elements in the PI analysis is missing, likelihood of success on the merits or lack of irreparable harm, [00:29:53] Speaker 03: then that's enough for a district court to go no farther in terms of deciding whether a PI motion needs to be decided. [00:29:59] Speaker 03: You have cases that say that, so does the 10th Circuit. [00:30:02] Speaker 02: Well, what is the daylight, do you think, if any, between a finding that there's no undue prejudice and then what is required for determining that there is or is not irreparable harm? [00:30:15] Speaker 02: Because you seem to be obviously marrying the two together. [00:30:18] Speaker 02: If you find there's no undue prejudice, you necessarily find there's no irreparable harm. [00:30:23] Speaker 02: and in kind of backing your way into concluding that the district court appropriately denied the preliminary injunction motion. [00:30:31] Speaker 02: But as just a legal matter, what's the difference between those two concepts? [00:30:37] Speaker 03: Well, Your Honor, that's not something that I would say we have found a lot of cases to flesh out. [00:30:43] Speaker 03: The case that we cited in our brief, Maury versus Sado, relates to securities fraud reform. [00:30:50] Speaker 03: And the court there, Southern District of New York, says that undue prejudice is a lower standard than irreparable harm. [00:30:58] Speaker 03: I'm not here to really try to figure out which one is low. [00:31:01] Speaker 03: Well, I am saying that undue prejudice is not a higher standard than irreparable harm. [00:31:07] Speaker 03: On the record in this case, though, if we look at the harm and the prejudice they argued, it's all the same. [00:31:15] Speaker 03: It is an irreparable harm type analysis that they're making here. [00:31:19] Speaker 03: They criticize us for conflating undue prejudice and irreparable harm. [00:31:24] Speaker 00: But if you look at their papers... So show me in the court's decision where the court made a irreparable harm analysis. [00:31:32] Speaker 03: Your Honor, I have. [00:31:33] Speaker 00: What I've showed you... Well, what you pointed to, I'm looking at it again at A4, and it seems to me that where the court says the court agrees that the motion for a P.I. [00:31:42] Speaker 00: was filed prematurely while this action was state, although plaintiffs had filed a motion to lift the state, [00:31:48] Speaker 00: the court had not decided the motion. [00:31:51] Speaker 00: Because the court has now decided to decline to lift the stay, the PI motion is denied. [00:31:57] Speaker 00: Looks like it says, you filed a PI motion prematurely because there was a stay in the proceedings. [00:32:04] Speaker 00: I hadn't ruled on the stay, but I am now. [00:32:09] Speaker 00: And I'm going to decline the motion to lift the stay. [00:32:13] Speaker 00: And because of that, I'm going to decline the preliminary injunction. [00:32:17] Speaker 00: There's no analysis. [00:32:18] Speaker 00: There's no preliminary injunction analysis there. [00:32:21] Speaker 03: Your Honor, I mean, I agree with everything you've said, but I would like to add to it. [00:32:28] Speaker 00: But I need to review the district court decision. [00:32:33] Speaker 03: I understand, Your Honor. [00:32:34] Speaker 00: And I can't review district court decision on preliminary injunction if the court doesn't say anything other than the fact that you filed this untimely. [00:32:45] Speaker 03: Your honor, what he says is on A4, he finds, as he previously found, all four factors. [00:32:53] Speaker 03: And if we go back and look at his earlier decision, which starts on A6, he lists those specifically on A8. [00:33:02] Speaker 03: One of those is undue prejudice. [00:33:04] Speaker 03: And what he says on A4 is, I find those four factors listed on A8 all militate against a stay. [00:33:15] Speaker 03: He does not do more textual analysis. [00:33:17] Speaker 03: The court's absolutely right with respect to that. [00:33:20] Speaker 03: But your cases say that it's not simply a matter of him having to list every reason in support of his decision. [00:33:29] Speaker 03: If the record shows that the ruling was correct and can be sustained and was not an abuse of discretion, then it must be affirmed. [00:33:39] Speaker 03: In ACS Hospital, for example, the court wrote... [00:33:43] Speaker 00: That would be our job as far as I see is to look at the court's decision with respect to the preliminary injunction and determine whether there was an abuse of discretion or not. [00:33:53] Speaker 00: But where the district court has no analysis, has no findings for preliminary injunction other than to say it was untimely filed, which then I don't see how we can do our job at that point. [00:34:13] Speaker 03: I don't like to repeat myself. [00:34:14] Speaker 03: So I apologize for that. [00:34:16] Speaker 03: I can't offer anything more than what he says in these two orders, which is, which is no undue prejudice. [00:34:24] Speaker 03: Therefore they can't meet. [00:34:26] Speaker 03: This is my addition. [00:34:28] Speaker 03: This is what the record reveals to me, at least no undue prejudice. [00:34:33] Speaker 03: Therefore there can't be any irreparable harm. [00:34:36] Speaker 03: Therefore I don't have to take up the PI motion. [00:34:39] Speaker 03: And so the logic is, I read A4 is the first thing he does is he says near the top of the page, accordingly, this is after he's gone through some analysis, but not on home. [00:34:51] Speaker 00: Well, sir, it would have been good had the court even stated the logical step that you're arguing now. [00:34:57] Speaker 00: I mean, that would have been better than what they did. [00:34:59] Speaker 00: I'm not sure that would have been enough. [00:35:01] Speaker 00: But you're saying something that the court did not. [00:35:06] Speaker 03: I am adding something to his opinion. [00:35:10] Speaker 03: Yes, you're right, your honor. [00:35:12] Speaker 03: No question. [00:35:13] Speaker 03: We can all see what the words are on the page. [00:35:15] Speaker 03: I just want to make sure my point is clearly understood, which is he did make a finding. [00:35:20] Speaker 03: He did not elaborate on it, but he did make a finding and the finding was no undue prejudice. [00:35:27] Speaker 03: And that was sufficient, not an abusive discretion for him to have then decided in the record, I believe fully supports this. [00:35:37] Speaker 03: that Murata could not therefore make a showing of irreparable harm. [00:35:42] Speaker 03: And when you look at the evidence here of harm that they have presented to you, both in the motion to lift and also in the PI, you'll see there is no bid request from any potential customer. [00:35:55] Speaker 03: There is no evidence that even if a bid request was issued, that our client Daifuku would be invited to submit a response. [00:36:06] Speaker 03: There's no evidence that Daifuku would decide to submit a response. [00:36:10] Speaker 03: One of the arguments that Murata has made here is something they call lock-in, which basically says if you're the incumbent supplier, it's very unlikely that you are going to get a contract to provide more systems or new systems to a customer. [00:36:26] Speaker 03: Well, Murata is the incumbent supplier for one of the two customers at issue here, and neither of these companies are the incumbent for the other. [00:36:35] Speaker 03: So Daifuku might very well not even decide to participate if there was a bidding process because, according to Murata, it has such a poor chance of winning the bid. [00:36:46] Speaker 03: And then even if Daifuku did decide to bid, we don't know what product it would submit. [00:36:51] Speaker 03: This is a very customizable system, as Mr. Ben-Mir explained to the court. [00:36:57] Speaker 03: So we need to know what are the details? [00:36:59] Speaker 03: What are the things that are going to be in this system? [00:37:03] Speaker 03: And how do they line up with a claim in one of the assertive patents? [00:37:09] Speaker 03: We don't know. [00:37:09] Speaker 03: You've got claim charts in the briefs. [00:37:11] Speaker 03: They all relate to systems sold to another customer in the past. [00:37:16] Speaker 03: They have nothing to do with the issues that are before the court regarding harm. [00:37:20] Speaker 02: Would you say that given the grant of all the IPRs, there's a substantial issue of validity with respect to the claims? [00:37:30] Speaker 03: I would say that yes, Your Honor. [00:37:31] Speaker 03: I mean, we know after the district court has made its rulings that now all the claims but one are under review. [00:37:37] Speaker 03: So I certainly would agree with that. [00:37:40] Speaker 03: I'm not trying to suggest that the district court knew how the PTAB was going to decide the petitions for the second or the last two patents. [00:37:51] Speaker 03: I think my time has expired. [00:37:54] Speaker 03: So unless there's anything more, I'll sit down. [00:37:58] Speaker 03: Thank you. [00:37:58] Speaker 03: Thank you. [00:37:59] Speaker 03: Thank you, Monsieur. [00:38:04] Speaker 04: I'll restore your time to three minutes. [00:38:06] Speaker 04: How much? [00:38:06] Speaker 04: Three. [00:38:07] Speaker 04: Three. [00:38:09] Speaker 04: First, to address Your Honor's point, a question about the situation where we might have this rash of preliminary injunction motions. [00:38:25] Speaker 04: The P&G case has been [00:38:27] Speaker 04: on the books for eight years, and there hasn't been a rash of such motions, of such appeals to this court from state cases. [00:38:35] Speaker 04: And that's because the situation with the preliminary injunction motions are different, where there's typically an exigent circumstance. [00:38:42] Speaker 04: They're very unusual, and it's not fair to expect that we're going to see that kind of thing happen. [00:38:48] Speaker 04: On the point relating to the relationship between undue prejudice and irreparable harm, [00:38:58] Speaker 04: Council suggests that there's not a lot of cases that relate the two. [00:39:01] Speaker 04: And in fact, there really isn't, there aren't any that suggest that one is simply a lower standard of another in terms of an assessment of harm. [00:39:10] Speaker 04: Irreparable harm is often about the redressability of a harm caused by the infringement of another party. [00:39:20] Speaker 04: Undue prejudice has concerns about the tactical advantage or disadvantage gained by one party or another in the context of litigation. [00:39:28] Speaker 04: that certainly there can be underlying facts that are common to them, but to suggest that the analysis is the same, and so if you don't meet one, you don't meet the other, is simply incorrect. [00:39:39] Speaker 04: But more fundamentally, we do feel that the district court abused its discretion when it denied the stay lift motion. [00:39:50] Speaker 02: Doesn't undo prejudice necessarily incorporate notions of measuring out the potential harm to the patent owner? [00:39:58] Speaker 04: It can, but what we know for sure is that the district court actually never reached those issues because it expressly refused to consider Morata's motion. [00:40:11] Speaker 04: We know that. [00:40:12] Speaker 04: It says in his own order. [00:40:13] Speaker 04: He's not going to consider it. [00:40:15] Speaker 04: So whatever issues we raised there were not something of concern, clearly, expressly by the order itself. [00:40:24] Speaker 04: And again, as a matter [00:40:28] Speaker 04: concerning the undue prejudice issue, we do view the district court's decision as an abuse of discretion. [00:40:35] Speaker 04: Morata presented facts regarding the nature of the industry and the relationship of the parties, the situation being a sole competitor situation, where you have patents that are soon to expire, and you have a state that is effectively destroying the right of exclusivity of one of the parties [00:40:57] Speaker 04: as a result of the stay. [00:41:00] Speaker 04: That very much dramatically shifts the balance of power between the two parties in the context of the case. [00:41:07] Speaker 04: That is by definition prejudice, undue prejudice. [00:41:10] Speaker 04: In fact, as we cite in ADA solutions, the prejudice in this kind of situation should be presumed. [00:41:20] Speaker 04: On the flip side, you have Daifuku not really presenting any arguments for why there's no undue prejudice. [00:41:26] Speaker 04: to Morata. [00:41:28] Speaker 04: They argue about the prejudice that it'll suffer if the stay is lifted. [00:41:31] Speaker 04: They argue about the incorrectly on the facts about the harm being something that's of its own making, but they never actually contest the facts as to why there is undue prejudice to Morata. [00:41:47] Speaker 04: The circumstances of the industry, the relationship of the parties, the expiration of the patents, none of that's contested. [00:41:55] Speaker 04: In our view, the district court had no discretion to determine that there was no undue prejudice. [00:42:00] Speaker 04: And it abuses discretion when it decided not to lift the stay. [00:42:04] Speaker 00: The matter was stayed initially on September 12, 2015. [00:42:10] Speaker 00: So months later, you filed your motion for the injunction or motion to lift the stay. [00:42:18] Speaker 00: Not quite. [00:42:19] Speaker 00: We filed the motion. [00:42:20] Speaker 00: The case was stayed on February 12, 2015. [00:42:23] Speaker 00: Yes. [00:42:24] Speaker 00: OK. [00:42:24] Speaker 04: Initially, yes. [00:42:25] Speaker 00: Initially. [00:42:26] Speaker 00: Yes. [00:42:26] Speaker 00: So when you filed your motion to lift the stay and commensurate with that, your preliminary injunction, that was during a time when the case had been stayed. [00:42:37] Speaker 00: Correct. [00:42:39] Speaker 00: Is it an abuse of discretion for the district court to not consider a motion for preliminary injunction on the basis that the [00:42:47] Speaker 00: Proceedings have been stayed. [00:42:49] Speaker 00: Yes, it is. [00:42:50] Speaker 00: It's an abusive discretion. [00:42:51] Speaker 04: It's an abusive discretion for a court to refuse to consider. [00:42:54] Speaker 04: Okay. [00:42:55] Speaker 04: Yes unequivocally and it's because of the nature of a preliminary injunction motion its immediate ability and the the Exigency and emergency that's a typical that's attached to them [00:43:09] Speaker 04: that makes them different from any other kind of motion. [00:43:11] Speaker 04: It's different from a summary judgment motion. [00:43:13] Speaker 02: What I'm wondering is, shouldn't you first have to pass through the threshold of succeeding on a motion to lift a stay, and then thereby reactivating the case before the court should be considering the merits of a preliminary injunction motion? [00:43:30] Speaker 04: No, you don't. [00:43:32] Speaker 04: A stay is not a reason to eviscerate [00:43:35] Speaker 04: effectively what would be a right of appeal if this court were to hold that way. [00:43:41] Speaker 02: I guess the point would be that a lot of the good reasons why you would prevail on a preliminary injunction motion would be included in a motion to lift the stay. [00:43:52] Speaker 04: But if you're not actually even going to consider the arguments presented in a motion for preliminary injunction relating to, for example, irreparable harm, then you're basically just not even paying attention to them [00:44:04] Speaker 04: in favor of considerations may be appropriate for considering whether or not to stay a case, like burden of litigation and other convenience factors, that simply shouldn't supersede the potential for irreparable harm that is underlying a preliminary injunction motion. [00:44:22] Speaker 00: Suppose you hadn't requested to lift the state. [00:44:27] Speaker 00: I'm sorry? [00:44:28] Speaker 00: Suppose you had not requested to lift the state. [00:44:30] Speaker 00: Then just months later, you file a motion for preliminary injunction. [00:44:34] Speaker 00: Would the district court abuse this discretion in refusing to consider the preliminary injunction on the basis that the proceedings have been stated? [00:44:42] Speaker 04: I think the answer to that is yes, Your Honor. [00:44:44] Speaker 04: I think when you're presented with a court. [00:44:47] Speaker 00: Why is that? [00:44:47] Speaker 00: Because the preliminary injunction proceeding has some special character? [00:44:52] Speaker 04: Yes. [00:44:53] Speaker 04: Because the preliminary injunction, inherent in a preliminary injunction motion is the [00:45:00] Speaker 04: the argument that there is something exigent, there is an emergency situation here that needs to be addressed immediately, which is the very reason why it's immediately appealable, because clearly the passage of time is going to prevent, potentially prevent it from being something that can actually be redressed later on. [00:45:20] Speaker 04: The stay is presuming that there can't be anything exigent involved. [00:45:24] Speaker 04: It's a preordaining, a stay is essentially preordaining [00:45:29] Speaker 04: that there can't be any emergencies. [00:45:30] Speaker 04: There can't be any exigencies. [00:45:32] Speaker 04: That can't be the rule. [00:45:34] Speaker 04: It has to be the case that if you're presented a preliminary injunction motion, which is inherently presenting some kind of urgency, that it must be considered, whether or not a case is stated. [00:45:44] Speaker 04: OK, can you give us your concluding thoughts? [00:45:49] Speaker 04: Well, I just want to emphasize that since the decision of the district court, we do have the institution decision of the PTAB, and we do have [00:45:59] Speaker 04: clarity that at least one of the claims, claim three of the 184 patent, is free and clear of any PTAB proceeding. [00:46:08] Speaker 04: We should be able to proceed on that claim. [00:46:10] Speaker 04: And in our view, we should proceed on all of the claims and allow the district court to consider Daifuku's invalidity arguments, our infringement arguments, and proceed to consideration of the preliminary injunction on all these claims. [00:46:28] Speaker 04: and to a trial of the merits of this case. [00:46:31] Speaker 04: Thank you very much.