[00:00:00] Speaker 03:
2015-1422, Neve versus Alcon.

[00:00:06] Speaker 03:
Is it Mackman?

[00:00:08] Speaker 03:
Mackman, yes.

[00:00:09] Speaker 03:
Yes, Mr. Mackman, please proceed.

[00:00:14] Speaker 00:
Good morning, and may it please the court.

[00:00:15] Speaker 00:
My name is David Mackman, and I'm here on behalf of Dr. Joseph Neve.

[00:00:19] Speaker 00:
I'm asking you to vacate an arbitration award.

[00:00:22] Speaker 00:
And there are three issues that I'm going to address.

[00:00:25] Speaker 00:
in that connection.

[00:00:26] Speaker 00:
One is the completely irrational or manifest disregard standard, which I believe I meet.

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Another is the fact that the arbitrator exceeded his powers by awarding costs contrary to the language of the agreement.

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And finally, I'm going to talk about evident partiality.

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I'm going to start and spend most of my time on the issue of manifest disregard of the law.

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What I have here that is relatively unique is dispositive evidence.

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The Ninth Circuit case law

[00:00:54] Speaker 00:
acknowledges that there are cases where the evidence, the undisputed facts cannot be reconciled with an arbitrator's award.

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And that's what I have here.

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It relates to claim five of the patent.

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Claim five is an open-ended.

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It uses the word comprising.

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It's a method claim.

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It has six steps.

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Five of the steps are admitted by defendants to be performed.

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The only step that is challenged is step A.

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which requires the providing a continuous wave source, a source that is capable of meeting continuous wave of electromagnetic radiation.

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Alcon's expert acknowledged that the accused device has such a source.

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So there is no dispute that there is a continuous wave source in the accused device.

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And in order to avoid this dispositive evidence,

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the arbitrator fabricated a claim construction, recognizing that claim five starts with a continuous wave and ends with a pulsed wave, and that the accused product starts with a continuous wave and ends with a pulsed system.

[00:02:08] Speaker 00:
The arbitrator knew that he couldn't, on the evidence, having asked the expert for the defendant whether there was a continuous source, he couldn't rule that there was no continuous source.

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So he made up a concept.

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the continuous pulse and said, there is no continuous pulse here.

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That concept, there's no error of fact.

[00:02:28] Speaker 00:
He's correct.

[00:02:28] Speaker 00:
There is no continuous pulse in the accused device.

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And the reason is because there's no such thing as a continuous pulse.

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Continuous and pulsed are diametrically opposed concepts.

[00:02:40] Speaker 03:
That is to say, the set of things that are- Your argument boils down to, if I understand it, that the arbitrator erred in his claim construction.

[00:02:49] Speaker 00:
Correct.

[00:02:50] Speaker 03:
Well, that's an error of law, not a manifest error of fact.

[00:02:54] Speaker 03:
It's an error of law, because claim construction is a question of law.

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And this isn't an issue of relying on extrinsic evidence or something like that.

[00:03:02] Speaker 03:
So it's an error of law.

[00:03:03] Speaker 03:
And you know what?

[00:03:04] Speaker 03:
I may completely agree with you that he erred on that claim construction.

[00:03:09] Speaker 03:
But that doesn't seem to me, under Ninth Circuit law, to be enough to get you over the hurdle of the great amount of discretion I have to give to the arbitrator.

[00:03:18] Speaker 00:
So I don't view it as an error of law, because he did not issue any specific construction of that claim prior to the hearing.

[00:03:27] Speaker 00:
Under the plain language of the claim, the admission is that the source, as understood by those that skilled in the art, Alcon, with all the money in the world, could not find an expert who would deny that there's a continuous wave source here.

[00:03:40] Speaker 01:
Let's go back a little bit.

[00:03:43] Speaker 01:
So the argument is that the claim construction is erroneous.

[00:03:47] Speaker 00:
My argument is that he did not apply the claim as construed.

[00:03:53] Speaker 01:
That is to say... Okay, so he erred in the claim construction in the process and analysis that he undertook.

[00:03:59] Speaker 01:
How can that be a manifest disregard of the law?

[00:04:02] Speaker 01:
He didn't disregard the law.

[00:04:04] Speaker 01:
I mean, he provided a claim construction.

[00:04:06] Speaker 01:
And apparently, from what I can tell, he followed the normal steps for construing a claim.

[00:04:12] Speaker 01:
How can that be a manifest disregard of the law?

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He did not provide a claim construction.

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The original claim language stuck.

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After the hearing, when he saw that under the testimony of the witness, we have what I call the Sesame Street test.

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the exact language of the claim the defendant's expert admitted is present.

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So it is clear that under these facts it is undisputable that this element is met.

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And it's the only met challenged.

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It's the only element challenged, so there's infringement.

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And making up a concept of a continuous pulse after the fact that's not anywhere, that's completely irrational, has to be a manifest disregard of the law.

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The patent is the law.

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It has the force of law.

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It's issued by the executive branch of the government as an exclusive right under the Constitution.

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And if, in the plain language of the patent, it's clearly met in the accused device, you can't say, I don't think it infringes.

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You can't just say, I'm not going to apply the patent.

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You have to read the patent.

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You have to put your analysis.

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It has to be based in the patent.

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And there's no defense of the continuous pulse concept.

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It's not in the claims.

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It's not in the spec.

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It's not in the file history.

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It's not in the evidence.

[00:05:29] Speaker 01:
It's not in the art.

[00:05:30] Speaker 01:
It seems to me that perhaps a manifest disregard of the law would have been had the arbitrator refused to undertake any claim construction whatsoever.

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As opposed to refusing to apply the claim as he construed it.

[00:05:44] Speaker 01:
Maybe he got it wrong.

[00:05:46] Speaker 01:
Maybe he got claim construction wrong.

[00:05:48] Speaker 01:
But does that amount to a manifest disregard of the law?

[00:05:51] Speaker 01:
Not only just a disregard of the law, but a manifest disregard of the law.

[00:05:55] Speaker 00:
Yeah, I think it's irreconcilable with the facts.

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I've got clear facts.

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I mean, you understand what happened here.

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I've got the facts.

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The pure testimony says there's infringement.

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He made things up to avoid the dispositive evidence of record.

[00:06:08] Speaker 04:
Do you see manifest disregard as being a higher standard than clear ever?

[00:06:15] Speaker 04:
I do.

[00:06:17] Speaker 04:
But how would you characterize it other than simply repeating manifest disregard?

[00:06:22] Speaker 04:
I'm looking for the standard in some way that I can apply.

[00:06:25] Speaker 04:
I mean, clear error is a standard we're fairly familiar with.

[00:06:30] Speaker 04:
But how much more must there be than clear error in order for it to be manifest disregard?

[00:06:37] Speaker 00:
Well, the language I've been quoting in my argument has been irreconcilable with undisputed facts.

[00:06:42] Speaker 04:
Well, but that would be a description of certainly some

[00:06:47] Speaker 04:
class of clear error, right?

[00:06:50] Speaker 04:
The question is, what characterized for me, if you would, the subset that you think this case falls into that's more egregious than simply something that would be clear error?

[00:07:03] Speaker 00:
Well, first, it's completely irrational in that he's construed the claim after the fact without providing notice to us as a null set.

[00:07:13] Speaker 00:
So that's an irrational construction.

[00:07:15] Speaker 00:
It's contrary to the essence of the agreement, which is something they use in discussing a completely irrational test.

[00:07:21] Speaker 00:
Contrary to the essence, because the essence was they would use our patented technology, and they would pay for it.

[00:07:28] Speaker 00:
And so if they're using it, and the undisputed testimony is that they're using it, the arbitrator chose not chose an irrational method of avoiding that testimony.

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But that's the testimony.

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He had a ruling that he wanted to reach, regardless of the language of the patent.

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There has to be some level

[00:07:44] Speaker 00:
of quality control in arbitration.

[00:07:47] Speaker 00:
We paid $160,000 to this guy, you know, to not read the bat.

[00:07:52] Speaker 04:
Do you want to address the issue of costs?

[00:07:59] Speaker 04:
I'd be interested in hearing them.

[00:08:01] Speaker 00:
Well, sure.

[00:08:02] Speaker 00:
So we'll move on to the issue of costs.

[00:08:04] Speaker 00:
The issue of costs is covered in the arbitration agreement.

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We did plead a request for costs.

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which, in my view, we could get to if the contract was breached and if there was willful infringement.

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And I think there is willful infringement.

[00:08:17] Speaker 00:
I'm here on irration manifest disregard of the law and irrationality because their defenses are completely baseless, objectively baseless.

[00:08:25] Speaker 00:
And so I thought that's where I was going to end up in this case.

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That's why we pled it.

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He has no case law that he's relying on that says, just by pleading, you waive the protections of the contract.

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So if there was an analysis that got us from,

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This is the contract language.

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The contract is no longer in place.

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And now I'm awarding costs for these reasons, which you would have gotten to in my theory, in Plato's theory, because I would have had willful infringement or fraud.

[00:08:51] Speaker 00:
If that analysis existed, then we could have gotten to what we pled.

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And we couldn't have gotten there unless we pled it.

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So we shouldn't be put in the unreasonable position of having to waive the cost provision in order to

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in order to plead it.

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And none of the case law that he cites supports that position.

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None of it is that extreme.

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It's a trap for the unwary.

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And then finally, I'll talk about the partiality issue.

[00:09:23] Speaker 01:
Your side also submitted for costs, correct?

[00:09:27] Speaker 00:
We requested costs.

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Yes, that was in the pleading.

[00:09:29] Speaker 00:
That's correct.

[00:09:30] Speaker 01:
So both sides, you have an agreement that you're going to bear your own costs in this proceeding.

[00:09:35] Speaker 01:
Correct.

[00:09:37] Speaker 01:
At a certain point in the proceeding, both sides request for costs that were not envisioned within the agreement.

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We request the opportunity to argue whether costs are available.

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And in our view, the contract after breach is different from his ruling, which kept the contract in place.

[00:09:56] Speaker 01:
Had you won an arbitrator awarded you costs, would you be appealing this issue today?

[00:10:04] Speaker 00:
If I'd wanted, he awarded me costs.

[00:10:07] Speaker 00:
And he had found willful infringement.

[00:10:09] Speaker 01:
Well, no.

[00:10:10] Speaker 00:
We're talking about costs.

[00:10:12] Speaker 00:
That's the theory of law that I was trying to preserve with that pleading.

[00:10:15] Speaker 01:
So I guess what I'm getting at is that the problem you have is that you were not awarded costs.

[00:10:23] Speaker 01:
It's not that whether the arbitrator could have considered whether to award costs is to begin with.

[00:10:29] Speaker 00:
I respectfully disagree.

[00:10:31] Speaker 00:
I think that on the theory under which he made his award,

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Contracts stayed in place.

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We were entitled to rely on the provisions of the contract.

[00:10:39] Speaker 00:
That's my argument.

[00:10:41] Speaker 00:
And last partiality, I know we're running low on time, but we have this website.

[00:10:49] Speaker 00:
The arbitrator's name was on the website of the law firm that wrote the contract in being arbitrated.

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They've submitted a declaration saying that it's just a list of judges they've appeared before.

[00:11:00] Speaker 00:
Whether that's true or not, I don't know.

[00:11:02] Speaker 00:
In looking at things,

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of the three of you.

[00:11:06] Speaker 00:
Judge Bryson is on there.

[00:11:07] Speaker 00:
He has a clerk that works now for Fish and Richardson.

[00:11:10] Speaker 00:
Neither of you are on there.

[00:11:11] Speaker 04:
I have something like six.

[00:11:13] Speaker 04:
When you say a clerk that works for Fish and Richardson, I have former clerks.

[00:11:17] Speaker 00:
Former, correct.

[00:11:18] Speaker 04:
At least one of whom.

[00:11:19] Speaker 04:
I mean, it would be a breach of ethics if I had a current clerk.

[00:11:23] Speaker 04:
Correct.

[00:11:23] Speaker 04:
Just to be clear.

[00:11:24] Speaker 04:
But I have something like 65 former clerks.

[00:11:27] Speaker 04:
The odds are pretty good that at least one of them will work for some of the patent

[00:11:32] Speaker 04:
firms in the country, and that's not a basis for recusal, right?

[00:11:36] Speaker 00:
But you're not arbitrating a case where you're on the website and you're a sitting judge where there are... But I am sitting here today hearing this case.

[00:11:46] Speaker 04:
Do you think that that's inappropriate?

[00:11:47] Speaker 04:
Should I recuse myself?

[00:11:48] Speaker 00:
No, you have a rule.

[00:11:50] Speaker 00:
I have a rule?

[00:11:50] Speaker 00:
You have a rule, yeah, that says if they're not currently a clerk, then it's disposable.

[00:11:53] Speaker 04:
No, but I'm talking about my name being on the list.

[00:11:57] Speaker 04:
Yes.

[00:11:57] Speaker 04:
Which presumably, I guess, I don't know, I was never consulted,

[00:12:02] Speaker 04:
is because Fisher Richardson people have appeared before me?

[00:12:06] Speaker 00:
I think it's because they're Fisher Richardson clerks.

[00:12:09] Speaker 00:
But they said it's because they said first, it's on our website by accident.

[00:12:13] Speaker 00:
Second, it's because we appeared in front of, this is the judges we appeared in front of.

[00:12:17] Speaker 00:
But they're a 150-year-old firm.

[00:12:18] Speaker 00:
They've been in front of the Supreme Court.

[00:12:20] Speaker 00:
None of those without justices are listed, except for the one who they.

[00:12:24] Speaker 04:
Justice Alito.

[00:12:24] Speaker 00:
Yes.

[00:12:26] Speaker 04:
But I'm trying to get at what it is that you think

[00:12:31] Speaker 04:
triggered an obligation by the arbitrator to get off the case.

[00:12:36] Speaker 00:
Oh, it's the appearance.

[00:12:36] Speaker 04:
That wouldn't trigger, for example, an obligation for me to get off this case.

[00:12:41] Speaker 00:
Oh, because the standard of appeal and the standard of appointment are completely different.

[00:12:48] Speaker 00:
So a sitting judge has both gone through the presidential appointment process, but also we have, I'm not stuck with this manifest disregard of the law if it were a district court judge.

[00:13:01] Speaker 00:
If it were an appellate judge, of course, it's difficult to take that to the Supreme Court, but that's not the situation we're faced with here.

[00:13:13] Speaker 00:
What I have is a client that called me up just in shock when he saw this because of the... And so I think there's genuinely appearance of impartiality.

[00:13:22] Speaker 04:
Well, but the appearance of impartiality would apply to me.

[00:13:26] Speaker 04:
So if the name of Judge Rosenbaum on the list

[00:13:30] Speaker 04:
is enough to create an appearance of impartiality, then I don't see why my name being on the list doesn't also create an appearance of impartiality.

[00:13:39] Speaker 00:
Because there's an established practice.

[00:13:42] Speaker 00:
Everybody knows that the rule with the Federal Circuit is if it's a case that you worked on while you were clerking, you can't be involved in it.

[00:13:49] Speaker 00:
Otherwise, you're OK.

[00:13:50] Speaker 00:
That's the rule, right?

[00:13:51] Speaker 00:
Am I wrong?

[00:13:53] Speaker 00:
That's my understanding of the rule.

[00:13:55] Speaker 04:
Well, yes.

[00:13:55] Speaker 04:
That's certainly true.

[00:13:58] Speaker 00:
And it's much more public than an arbitration.

[00:14:00] Speaker 04:
Okay.

[00:14:01] Speaker 00:
So I guess I'll reserve.

[00:14:05] Speaker 03:
Okay.

[00:14:05] Speaker 03:
Very good.

[00:14:06] Speaker 03:
Mr. Matsui.

[00:14:11] Speaker 02:
Thank you, your honor.

[00:14:12] Speaker 02:
And may it please the court.

[00:14:14] Speaker 02:
Brian Matsui on behalf of Alcon Lenzex.

[00:14:17] Speaker 02:
Dr. Neeb is treating this appeal like it's a straight up patent appeal from a district court's determination of non-infringement.

[00:14:25] Speaker 02:
But that's not the posture of this case.

[00:14:27] Speaker 02:
This court's review is extremely limited under the Federal Arbitration Act.

[00:14:32] Speaker 02:
The Supreme Court has held that Section 10 of the FAA provides the exclusive grounds in which an arbitration award can be vacated.

[00:14:41] Speaker 01:
What is that standard?

[00:14:43] Speaker 02:
Here, it exceeds his authority.

[00:14:45] Speaker 02:
Dr. Neve must show that the arbitrator exceeded his authority, that he committed manifest disregard of the law.

[00:14:50] Speaker 03:
What if he construed a statute in a way that was inconsistent with how that same statute was construed by other courts?

[00:14:57] Speaker 03:
That's a question of law.

[00:15:00] Speaker 03:
Would that be sufficient to meet the standard under the Ninth Circuit precedent?

[00:15:04] Speaker 02:
It would not, Your Honor, because in order to be a manifest disregard of the law, the arbitrator must recognize the correct law and then ignore it.

[00:15:14] Speaker 02:
It's this ground under Section 10 is very limited.

[00:15:17] Speaker 02:
It's like the other grounds to vacate an award, whether it's fraud or corruption, bias on the part of the arbitrator.

[00:15:24] Speaker 03:
If the arbitration agreement was bound by the Ninth Circuit law, and if Ninth Circuit had spoken on the construction of a statute, and if this arbitrator did not follow that construction, you're saying that wouldn't amount to manifest disregard of the law?

[00:15:40] Speaker 02:
no it wouldn't, Your Honor, and the reason would is because the arbitrator has to recognize the correct law and then ignore it.

[00:15:47] Speaker 02:
The Supreme Court in the Stolt-Nielsen case, for example, examined when an arbitrator exceeds his authority.

[00:15:54] Speaker 03:
So suppose that the Ninth Circuit's interpretation of the statute was brought to the arbitrator's attention in the briefing.

[00:16:03] Speaker 03:
How could you say the arbitrator didn't recognize it if he disregarded it and held a contrary construction of the statute?

[00:16:11] Speaker 02:
Your Honor, because in order to show a manifest disregard of the law, the arbitrator has to basically be dispensing his own brand of industrial justice.

[00:16:20] Speaker 02:
That's what the Supreme Court said in the Stolt-Nielsen case.

[00:16:23] Speaker 02:
It said, we don't vacate arbitration awards for error, even serious error.

[00:16:30] Speaker 02:
The arbitrator has to be effectively

[00:16:32] Speaker 02:
dispensing his own brand of industrial justice.

[00:16:35] Speaker 02:
He has to be imposing his own policy decisions on the parties.

[00:16:40] Speaker 02:
That's how limited the review is under Section 10.

[00:16:43] Speaker 02:
Of course, in this case, we're nowhere near that standard.

[00:16:47] Speaker 03:
So you think even a really egregious error of law is not something we could touch under Ninth Circuit precedent?

[00:16:54] Speaker 02:
I don't think you could touch that under any court's precedent, including the Supreme Court's precedent, where it's saying a serious error

[00:17:00] Speaker 02:
is not a basis to vacate the award under section 10.

[00:17:03] Speaker 02:
And that makes sense because Congress enacted the FAA to overcome judicial hostility to arbitrations.

[00:17:11] Speaker 02:
It did not want arbitration to be a prelude to full bore legal and evidentiary analysis into arbitration awards.

[00:17:19] Speaker 02:
The parties here bargained to have the quick, efficient, and cost-effective method of dispute resolution that arbitration provides.

[00:17:28] Speaker 02:
What Dr. Neve is asking

[00:17:30] Speaker 02:
is that you do a full analysis into the correctness of the decision.

[00:17:35] Speaker 02:
And that's just not allowed under the Federal Arbitration Act in this case.

[00:17:40] Speaker 02:
In this case, the arbitrator followed the law correctly.

[00:17:43] Speaker 02:
He stated this court's claim construction principles correctly.

[00:17:47] Speaker 02:
He stated this court's infringement principles correctly.

[00:17:50] Speaker 02:
And then he applied them to the facts of this case.

[00:17:52] Speaker 02:
He took expert testimony.

[00:17:54] Speaker 02:
He weighed the expert testimony.

[00:17:55] Speaker 02:
And he found, as a matter of fact,

[00:17:57] Speaker 02:
that the accused device did not meet a limitation in claim five.

[00:18:03] Speaker 02:
Under clear error, that would be exceedingly difficult for Dr. Neve to overcome.

[00:18:08] Speaker 02:
But we're not reviewing for clear error.

[00:18:10] Speaker 02:
We're reviewing for manifest disregard of the law, whether or not the arbitrator here recognized the correct law of this court's claim construction principles and then fundamentally ignored them.

[00:18:21] Speaker 02:
There's just no basis here under that standard to disturb the arbitration award.

[00:18:26] Speaker 04:
Setting aside the standard, why don't you talk a little bit about the merits of the claim construction issue and tell us why you think, if you do, that the arbitrator was correct.

[00:18:41] Speaker 02:
The arbitrator here looked at the LensX device and found what was missing was step A. And that requires

[00:18:50] Speaker 02:
a source capable of generating an output beam of continuously emitting electromagnetic radiation.

[00:18:58] Speaker 02:
And the arbitrator found, as a matter of fact, that the LensX laser didn't have a source that was capable of generating an output beam of continuously emitted electromagnetic radiation.

[00:19:10] Speaker 02:
There was testimony at the trial, at the hearing, which said that the LensX device would just turn off.

[00:19:17] Speaker 02:
it could not produce that non-pulsing beam.

[00:19:20] Speaker 02:
The source was not capable of generating an output beam that would be non-pulsing.

[00:19:24] Speaker 02:
There was a fail-safe there to prevent that from happening.

[00:19:28] Speaker 02:
So quite frankly... Is that because of the heat problem that develops inside the laser, the heat that... It's just the way that the device works, that it only uses a pulsing beam to remove the material in the ALCOM lens X device.

[00:19:45] Speaker 02:
And so there would be no way

[00:19:47] Speaker 02:
to have the device actually remove material.

[00:19:51] Speaker 02:
So I mean, the arbitrator found that as a matter of fact.

[00:19:54] Speaker 02:
So it's exceedingly difficult to overturn that, even if this was a direct review of a district court decision.

[00:19:59] Speaker 02:
Of course, it's not.

[00:20:01] Speaker 02:
And this court wouldn't review for errors of fact like that under the manifest disregard standard.

[00:20:07] Speaker 04:
What do you think the arbitrator meant by continuous pulse?

[00:20:10] Speaker 02:
So I think that if we turn to the arbitrator's decision on A879,

[00:20:15] Speaker 02:
It's very clear what the arbitrator meant here.

[00:20:19] Speaker 02:
Around the middle of that paragraph where he talks about Plane 5, he says, no source is present in the LEMSEC system.

[00:20:26] Speaker 02:
Its laser does not and cannot produce a continuous wave.

[00:20:30] Speaker 02:
It produces a series of FETMO second pulses, but there is no continuously emitted pulse.

[00:20:36] Speaker 02:
It's clear the continuous emitted pulse here means there is no non-pulsing beam.

[00:20:42] Speaker 02:
That's just what he means there.

[00:20:45] Speaker 02:
He just put the wrong word in there, which I don't think he did.

[00:20:49] Speaker 02:
That wouldn't be grounds to vacate the award.

[00:20:51] Speaker 02:
It would just be a simple mistake.

[00:20:53] Speaker 02:
Again, I don't think he did that.

[00:20:54] Speaker 04:
So what you understand, I'm sorry.

[00:20:55] Speaker 02:
Go ahead.

[00:20:55] Speaker 02:
Yes, Your Honor, I'm sorry.

[00:20:56] Speaker 04:
No, finish it.

[00:20:57] Speaker 02:
And I was just saying that that would certainly not be a manifest disregard of the law.

[00:21:01] Speaker 04:
So you think that what he meant by continuously emitted pulse is a series of pulses over an extended period of time.

[00:21:13] Speaker 02:
I think what it's saying is that the pulse is not a continuously emitted.

[00:21:17] Speaker 02:
So it's like this pulse is just not a continuous wave beam.

[00:21:20] Speaker 02:
That's what he basically means there.

[00:21:22] Speaker 04:
But didn't he say that it was a continuously emitted?

[00:21:26] Speaker 04:
Well, OK.

[00:21:31] Speaker 04:
It does seem that the words continuous and pulse are

[00:21:34] Speaker 04:
somewhat at war with one another.

[00:21:36] Speaker 04:
What do you interpret, again, the arbitrator to have meant by continuously emitted pulse?

[00:21:43] Speaker 02:
I think that if you refer back to the sentence before, this one where it says, its laser does not and cannot produce a continuous wave, that's basically what the LensX device can't do.

[00:21:55] Speaker 02:
And that's what he's saying is missing.

[00:21:58] Speaker 02:
That's what there is no.

[00:22:00] Speaker 02:
There is no, when he's saying continuously emitted pulse, he's basically meaning there is no

[00:22:04] Speaker 02:
non-pulsing beam from the accused device.

[00:22:08] Speaker 04:
So the word pulse is where the problem arises, I guess.

[00:22:12] Speaker 02:
I don't really necessarily think that there's a problem here, because he's saying this could be a beam that's a continuously emitted beam.

[00:22:20] Speaker 02:
And he may just be saying pulse rather than pulses.

[00:22:23] Speaker 02:
But taking a step back, again, this is reviewed under the highly differential standard of review.

[00:22:29] Speaker 02:
It's very clear from the context that he understands that what's missing

[00:22:34] Speaker 02:
is a non-pulsing beam from the output here.

[00:22:38] Speaker 03:
Why don't you move on to the issue of costs?

[00:22:39] Speaker 02:
Certainly, Your Honor.

[00:22:40] Speaker 02:
There's just three quick points I'd like to make about costs.

[00:22:44] Speaker 02:
The first is Dr. Neve, of course, asked for costs in this proceeding, notwithstanding the no-cost provision.

[00:22:50] Speaker 02:
All his claims, if we look at the arbitration clause itself, it basically says at A846,

[00:22:59] Speaker 02:
that basically all disputes arising between the parties here under or as a result of this agreement shall be arbitrated.

[00:23:06] Speaker 02:
So any dispute, including his fraud claims, which relate to the arbitration agreement, would be subject to this arbitration clause.

[00:23:13] Speaker 02:
And the no-cost provision applies to the entire arbitration.

[00:23:16] Speaker 02:
Yet Dr. Nieb sought costs.

[00:23:18] Speaker 02:
The second issue is the parties jointly submitted the issue of costs to be decided by the arbitrator.

[00:23:24] Speaker 02:
And no one objected to that.

[00:23:25] Speaker 02:
This was a joint submission where both parties asked for costs.

[00:23:29] Speaker 02:
The law is clear that when the parties have a submission agreement of issues to be decided, they can modify the agreement of what is going to be arbitrated.

[00:23:39] Speaker 02:
And that makes sense.

[00:23:40] Speaker 02:
Arbitration is a creature of contract.

[00:23:42] Speaker 02:
And so the parties, when they arbitrate, can decide what disputes they want arbitrated and what disputes they don't want arbitrated.

[00:23:49] Speaker 02:
And they can change their mind.

[00:23:51] Speaker 02:
That's what happened here.

[00:23:52] Speaker 02:
Dr. Neve did not object to costs until he lost, until costs were awarded against him.

[00:23:58] Speaker 02:
until the arbitrator said, Lenzex gets its costs.

[00:24:02] Speaker 02:
We can't have a situation where the parties agree to submit an issue, and then the other side waits and sees to see what happens.

[00:24:10] Speaker 02:
Maybe he thought he was going to win.

[00:24:11] Speaker 02:
But when he didn't and costs were awarded to him, it was too late for him to object to the war of costs.

[00:24:18] Speaker 02:
If there are no additional questions on costs, we would submit on partiality, unless the court has any questions.

[00:24:27] Speaker 03:
Thank you, Mr. Matsui.

[00:24:28] Speaker 03:
Mr. Meckman?

[00:24:31] Speaker 00:
Sure, I'll be quick.

[00:24:33] Speaker 00:
This morning I was reminded of Mark Twain who said he moved to work as a journalist in Nevada because he could make up the news there.

[00:24:43] Speaker 00:
He can't move to become an arbitrator because it gives you the opportunity to make up the law.

[00:24:48] Speaker 00:
If you affirm this award, you're sending the message that arbitrators do not need to follow the claims, do not need to follow the patent.

[00:24:56] Speaker 00:
A patent is an exclusive right.

[00:24:58] Speaker 00:
It has the constitutional.

[00:24:59] Speaker 00:
It has the force of law.

[00:25:00] Speaker 00:
And there needs to be some quality control in these things.

[00:25:03] Speaker 00:
This is an exceptional case, an unusual case.

[00:25:06] Speaker 00:
I've got evidence on my side.

[00:25:08] Speaker 00:
When you do the weighing, there is no legally relevant evidence on their side.

[00:25:12] Speaker 00:
It is irreconcilable.

[00:25:14] Speaker 00:
The facts, the testimony, and the opinion are not reconcilable.

[00:25:18] Speaker 00:
If this is not reversible, then nothing is reversible.

[00:25:24] Speaker 03:
Thank both counsel for their argument.

[00:25:26] Speaker 03:
The case is taken under submission.

[00:25:28] Speaker 03:
Our next case for today.