[00:00:05] Speaker 01: The next case for argument is 15-15-52, Princeton Digital Image Corporation versus Hewlett-Packard. [00:00:46] Speaker 00: Good morning. [00:00:48] Speaker 00: May it please the court. [00:00:51] Speaker 00: I preliminarily note that there were originally two appellees in this case, Hewlett Packard or HP and Fujifilm. [00:01:02] Speaker 00: The appeal as to Fujifilm has been resolved by agreement of the parties. [00:01:09] Speaker 00: And so the appeal is only proceeding as to HP. [00:01:15] Speaker 00: There are some differences in the record as between Fujifilm and HP. [00:01:22] Speaker 00: And I think a lot of those things were addressed in the briefs. [00:01:27] Speaker 00: We obviously will focus only on the HP record. [00:01:32] Speaker 00: The initial issue before the court is the propriety of dismissing a case on summary judgment based on a highly factual defense. [00:01:44] Speaker 00: that was not pled or even discussed or even substantiated until after discovery was over. [00:01:57] Speaker 00: In fact, the summary judgment in this case was based on the arguments by HP and a decision by the court that the [00:02:14] Speaker 00: HP printers, scanners, and cameras utilize or incorporate and utilize certain Microsoft technology, specifically the so-called catalog or .cat files and the so-called FAT32 file format. [00:02:38] Speaker 00: In fact, neither of those arguments [00:02:41] Speaker 00: Regarding the dot cap files or the fat 32 files was even raised by the HP until [00:02:53] Speaker 00: after Discovery was closed. [00:02:55] Speaker 02: What about the disclosure? [00:02:57] Speaker 02: What about the declaration that's at page A524? [00:03:01] Speaker 02: This is the declaration where it says that a partner at ELA Piper had a conversation. [00:03:09] Speaker 02: And in other words, you learned of the licensed defense before the close of Discovery, even if it wasn't formally fled. [00:03:17] Speaker 02: It's paragraph 15 on page A524. [00:03:23] Speaker 00: There are two things. [00:03:25] Speaker 00: One is back when the case was originally filed and HB originally answered, it pled a generic license defense. [00:03:36] Speaker 00: This is even before the Microsoft license was entered into or years before. [00:03:42] Speaker 00: They just pled a generic license defense, and in further discovery, they never expanded on it. [00:03:49] Speaker 00: So it just lay there. [00:03:52] Speaker 00: After the Microsoft license was entered into, for the next eight months, HP did nothing. [00:04:03] Speaker 02: But you're aware of that license, of course, since you're a party to it, right? [00:04:07] Speaker 02: Your client was aware of the license since it's a party to that license, right? [00:04:11] Speaker 02: Sure, of course. [00:04:12] Speaker 02: And doesn't that license expressly refer to this litigation? [00:04:16] Speaker 00: Yes, and it does. [00:04:18] Speaker 00: And that's actually an important point. [00:04:20] Speaker 00: because the license says that any products that fall within the license will be withdrawn from the case. [00:04:30] Speaker 00: And that's what we did. [00:04:32] Speaker 00: The PBIC, once it entered into the license, it disclosed the license to HB, withdrew all the products that it deemed to be within the scope of the license, and the case continued. [00:04:48] Speaker 00: And for the next eight months, HP did nothing. [00:04:54] Speaker 00: Then 30 days before Discovery was over, HP, for the first time, says, oh, but we're licensed because of Microsoft agreement. [00:05:06] Speaker 02: And it was before the close of Discovery. [00:05:08] Speaker 00: 30 days before the close of Discovery. [00:05:11] Speaker 00: But they did not explain it. [00:05:14] Speaker 00: In other words, the arguments that were ultimately made [00:05:18] Speaker 00: That is, that the license is based on this .CAT files and FAT32. [00:05:26] Speaker 00: That was never raised until after discovery. [00:05:29] Speaker 01: Can I ask you, where does this all take you in terms of this case? [00:05:34] Speaker 01: I mean, your arguments, maybe they did something, should have done something sooner. [00:05:39] Speaker 01: What does that all lead us to? [00:05:41] Speaker 00: Well, it goes to the Rule 56B declaration. [00:05:47] Speaker 00: that was filed in the case in response to the summary judgment motion, pointing out that PDIC never had any opportunity to take full and complete discovery of this licensed defense. [00:06:05] Speaker 00: a defense on which, of course, HP admittedly bears the burden of proof. [00:06:08] Speaker 01: But if we view this declaration in the context of the case law and what's required to be spelled out, you fail on several problems, do you not, in terms of explaining explicitly how additional discovery would impact the core question of whether the accused products were incorporated, et cetera, et cetera. [00:06:25] Speaker 01: So the district court's declining [00:06:29] Speaker 01: to grant your 56D motion is based on the procedural defects of that motion. [00:06:36] Speaker 01: How did he err under an abuse of discretion in rejecting the motion? [00:06:40] Speaker 00: Well, I'm not sure why your honor suggests that there was some defect in the 56D motion. [00:06:50] Speaker 00: In fact, it's the 56D declaration [00:06:56] Speaker 00: It's a 15-page declaration. [00:06:58] Speaker 00: It is of record. [00:07:00] Speaker 00: And it goes through in detail, demonstrating why precisely there was no opportunity for discovery as to these FAC 32 and .cat files. [00:07:14] Speaker 00: The declaration points out that HP's declarants never cite a single document. [00:07:25] Speaker 00: And the summary judgment has literally no documents associated with the declarations that support HB's conclusions. [00:07:39] Speaker 00: So apparently, those documents were never produced because they're not cited in the motion. [00:07:47] Speaker 00: But the main thing, that declaration, which is my declaration, in fact, [00:07:54] Speaker 00: over 15 pages, I detailed why PDIC could not address these arguments about FAT32. [00:08:06] Speaker 00: We can't say the HP argued that this is Microsoft FAT32. [00:08:15] Speaker 00: Well, why is it Microsoft FAT32? [00:08:18] Speaker 00: That's a label that HP applied and the court accepted. [00:08:24] Speaker 00: But why is it a Microsoft? [00:08:26] Speaker 00: Did you get it from Microsoft? [00:08:29] Speaker 00: Apparently not, because there's no record of that. [00:08:33] Speaker 00: Is it based on some particular technology of Microsoft? [00:08:41] Speaker 00: We don't know. [00:08:42] Speaker 00: There's no record of that. [00:08:44] Speaker 00: All we have is a conclusory declaration that this is a Microsoft file format. [00:08:52] Speaker 00: How has that become a Microsoft technology that's incorporated in the accused devices? [00:09:00] Speaker 00: As to the cataloger.cat files, again, the declaration pointed out, we have no evidence that these catalog files came from Microsoft. [00:09:14] Speaker 00: We never had discovery on it. [00:09:17] Speaker 00: But even if it came from Microsoft, [00:09:21] Speaker 00: What do these catalog files do? [00:09:24] Speaker 00: As far as we know, these .cat files sit on a CD. [00:09:31] Speaker 00: And then if the CD is put into a computer, not one of the accused printers, scanners, or cameras, but is put onto a computer, all those catalog files do is authenticate [00:09:49] Speaker 00: that these are legitimate files. [00:09:52] Speaker 00: It's a hash, nothing more. [00:09:55] Speaker 00: So how does that become Microsoft technology? [00:10:00] Speaker 00: It's an authentication. [00:10:03] Speaker 00: And that authentication never touches any of the accused products, because it just sits on a CD. [00:10:12] Speaker 00: We pointed all of this out in the declaration, and we said we need some more discovery about how all of these things are supposedly Microsoft and where they're found. [00:10:25] Speaker 00: And that is what we were denying. [00:10:29] Speaker 02: Isn't your question really more going to the scope of the license rather than how the products operate? [00:10:37] Speaker 02: Is it required that they have to actually come from Microsoft? [00:10:39] Speaker 02: These kinds of questions. [00:10:41] Speaker 00: There are multiple issues. [00:10:44] Speaker 00: And because we had no discovery, it was hard to make arguments. [00:10:49] Speaker 00: But yes, we have issues as to the process, which is that this is [00:10:55] Speaker 00: dumped on us, we file a Rule 56D declaration, and the court ignores it. [00:11:01] Speaker 00: But then we have more substantive issues. [00:11:04] Speaker 00: And that is how the court construed and interpreted the agreement so that these undetermined, vague arguments about cat files and FAT32 suddenly become [00:11:25] Speaker 00: technology that's incorporated or used with the accused act? [00:11:30] Speaker 01: Well, just following up on Judge Still's point, I mean, you read the release here, 1.8 of the agreement, and it's enormously broad. [00:11:40] Speaker 01: I don't have to tell you. [00:11:41] Speaker 01: You wrote it. [00:11:42] Speaker 01: But any past, present, future technology software equipment method or offering of Microsoft or any Microsoft release parties, including without limitation, it goes on and on and on and on. [00:11:54] Speaker 01: And then it contains a phrase, does it not, that to the extent that there's an ambiguity, you lose. [00:12:02] Speaker 01: It's construed against you for any ambiguity in that regard. [00:12:06] Speaker 00: That's correct, Your Honor. [00:12:08] Speaker 00: But at the end of the line, you still have to have a combination of an HP scanner or printer or camera with [00:12:23] Speaker 00: a Microsoft technology. [00:12:26] Speaker 02: But if the cat file or whatever it is, if that is a Microsoft technology, then what does it matter whether it's just authenticating or not, given the broad language of the license? [00:12:40] Speaker 00: It's not. [00:12:41] Speaker 00: I don't think it is. [00:12:42] Speaker 00: There's no evidence that the FAT32 in HP's products is from Microsoft. [00:12:47] Speaker 00: None. [00:12:49] Speaker 00: Not a single word. [00:12:51] Speaker 00: And if you [00:12:52] Speaker 00: Take a look at HP's brief. [00:12:54] Speaker 00: Nowhere do they suggest that there is any evidence that they submitted in the district court that demonstrated that FAT32 is a Microsoft technology other than their conclusory declarations that called it Microsoft. [00:13:17] Speaker 00: And that is exactly what we were denied discovery on. [00:13:21] Speaker 01: Okay, we're into your rebuttal. [00:13:22] Speaker 01: Why don't we save that and hear from the other side. [00:13:25] Speaker 01: You're into your rebuttal time. [00:13:26] Speaker 01: Yes. [00:13:26] Speaker 01: Thank you. [00:13:30] Speaker 03: Good morning. [00:13:31] Speaker 03: May it please the court? [00:13:37] Speaker 03: Your Honor, referred to the language of section 1.8 in the Microsoft agreement is enormously broad. [00:13:44] Speaker 03: I had in my outline breathtakingly broad, so I'll take either word. [00:13:50] Speaker 03: The key question here is that all of the HP accused products qualify as Microsoft products under this enormously broad language. [00:14:02] Speaker 03: And no amount of additional discovery is going to change that fact. [00:14:07] Speaker 01: But how do we know that fact? [00:14:08] Speaker 01: I mean, you know, they're saying that they didn't have the ability to ascertain whether that fact is correct or not. [00:14:13] Speaker 01: And that's what discovery was necessary for. [00:14:15] Speaker 03: And let me explain to you why they did. [00:14:17] Speaker 03: They had all of the accused products in their possession. [00:14:20] Speaker 03: They had all of the source code that runs on those accused products in their possession. [00:14:25] Speaker 03: They had documents that describe the use of the FAT32 file system in the accused products. [00:14:31] Speaker 03: They had depositions of witnesses who were designated as 30 v 6 witnesses on the function, structure, and operation of each of the accused products. [00:14:41] Speaker 03: They had those depositions after we served an interrogatory response that said, [00:14:49] Speaker 03: Because all of HP's accused instrumentalities incorporate use or are used with Microsoft technology, software equipment, methods or services, they're licensed. [00:15:01] Speaker 03: And so they had an interrogatory response that told them, we believe every single one of the products you're accusing is subject to this license. [00:15:08] Speaker 03: And it was subject to the license. [00:15:11] Speaker 03: They took 10 depositions after that, including three of the folks who submitted declarations on this motion. [00:15:18] Speaker 03: and didn't ask a single question about Microsoft, about how this license might apply to the products that these witnesses were designated to testify about. [00:15:26] Speaker 03: No testimony was elicited during these depositions. [00:15:30] Speaker 03: And they all occurred after we had the conversation that Your Honor referred to where we said we're asserting this defense. [00:15:37] Speaker 03: We issued the interrogatory response saying we're asserting this defense against all of our accused products. [00:15:42] Speaker 03: And let's keep in mind that, as one of the panel members pointed out, [00:15:48] Speaker 03: PDIC had an affirmative obligation to go out and withdraw infringement contentions against HP that were subject to the license. [00:15:58] Speaker 03: Now, counsel says, we removed the products that we deemed to be covered by the license. [00:16:04] Speaker 03: I think that's not enough. [00:16:05] Speaker 03: I think that the agreement required them to affirmatively go out, investigate, and figure out which one of these products were Microsoft compliant and therefore subject to the license. [00:16:17] Speaker 03: And they didn't do that. [00:16:18] Speaker 03: They left that burden to us to get the license from them, figure out which of our products were subject to the license, provide them discovery and access to witnesses who could explain that, and then we file their summary judgment motion. [00:16:32] Speaker 03: That's how the timeline goes. [00:16:34] Speaker 03: And if you read their briefs, you won't see a timeline because the timeline doesn't work for them. [00:16:49] Speaker 03: The issue of the Microsoft cat files, I want to be clear that the undisputed evidence was that the Microsoft cat files are sent by Microsoft to Hewlett Packard once each product passes their what's called WICL testing. [00:17:04] Speaker 03: Funny acronym, but it's called WICL testing. [00:17:08] Speaker 03: And we provided evidence that for each accused product, Microsoft provided those cat files, and those cat files were shipped out with the product so that the products would work [00:17:18] Speaker 03: with Microsoft platforms. [00:17:21] Speaker 03: As to the FAT32 file system, the evidence was undisputed that the products, especially the printers, use it as their main file transfer system. [00:17:30] Speaker 03: And so we had declarations sworn testimony that all of the products used the FAT32 file system as their primary means to exchange information between the peripherals that were accused of infringement and Microsoft computers. [00:17:49] Speaker 03: The district court took all of this information and made the correct decision. [00:17:53] Speaker 03: Even in the pre-motion conference we had with his honor below, he looked at this language and said, this is incredibly broad. [00:18:01] Speaker 03: You, PDIC, need to explain to me when you oppose this summary judgment motion how it's possible that these products aren't covered by the license. [00:18:10] Speaker 03: And we still haven't heard. [00:18:12] Speaker 03: We still haven't heard why these products aren't covered. [00:18:15] Speaker 03: What we've heard is, we don't understand, [00:18:18] Speaker 03: We didn't get discovery. [00:18:20] Speaker 03: We had no access to it. [00:18:21] Speaker 03: This was dropped on us. [00:18:22] Speaker 03: This is an agreement that PDIC negotiated and signed and then sent to us as part of discovery. [00:18:31] Speaker 03: It was not our agreement. [00:18:32] Speaker 03: It's not an agreement we found from a third party and are asserting some licensed defense based on it. [00:18:38] Speaker 03: It was their agreement. [00:18:40] Speaker 02: Was there any statement by Microsoft interpreting the agreement? [00:18:46] Speaker 03: Not that I am aware of. [00:18:48] Speaker 03: I believe there was an email attached to the declaration of Mr. Botts that's in the record where Microsoft expressed the view that they never wanted to hear from PDIC again, either by way of a lawsuit or through an indemnity request from one of its customers. [00:19:07] Speaker 03: And I believe that's the only statement of any intention that there is in the record from Microsoft. [00:19:13] Speaker 02: Do you know the site for that in the record? [00:19:14] Speaker 03: I can get it. [00:19:15] Speaker 03: Yes, Your Honor. [00:19:32] Speaker 03: It is A-677. [00:19:38] Speaker 03: And it's just a reference in the declaration of Mr. Botts, who's also counsel for PDIC. [00:19:57] Speaker 03: So Your Honors, we believe the correct reading of this agreement is exactly as the district court found, and that is that the agreement unquestionably covers Microsoft third parties, of which HP is one. [00:20:10] Speaker 03: And in fact, as you noted, HP is called out in the agreement by name, and the litigation is called out in the agreement by name. [00:20:18] Speaker 03: And the Microsoft product definition includes combinations, hybrids, aggregations of something [00:20:26] Speaker 03: whatever it be, and a Microsoft offering. [00:20:29] Speaker 03: Now, that Microsoft offering language, I keep going back to it because it's software, technology, product, equipment, method, or service. [00:20:40] Speaker 03: So it's anything that Microsoft uses, distributes, sells, imports, licenses, et cetera. [00:20:48] Speaker 03: The list goes on. [00:20:49] Speaker 03: So this definition could not be broader in my view. [00:20:56] Speaker 03: And so I haven't heard anything in this appeal, either in the briefs or from counsel today, that disputes that fundamental point. [00:21:08] Speaker 03: It's simply, well, if we were to go back and take further discovery, we might learn something. [00:21:15] Speaker 03: Well, that's precisely what Blandi and the other cases we've cited don't permit a plaintiff, especially one with the kind of discovery that the plaintiff has had here, to do. [00:21:24] Speaker 03: And that is to speculate, to make conjecture about what might be obtained from further discovery. [00:21:31] Speaker 03: I can tell you that the three witnesses who submitted declarations in support of my summary judgment motion were each deposed, three of the four were deposed, and each of their depositions lasted between an hour and an hour and a half. [00:21:45] Speaker 03: So these were not depositions where they were exploring the intricacies of how this license agreement, the PDIC itself signed, [00:21:53] Speaker 03: might apply to the products. [00:21:54] Speaker 03: They were never asked that question. [00:21:57] Speaker 03: And despite that, one of the witnesses did testify about this WICL testing, this Windows Hardware Quality Labs testing that each HP product has to go through to be certified as Microsoft compliant. [00:22:11] Speaker 03: No follow-up. [00:22:12] Speaker 03: So in my view, this is Belondi. [00:22:16] Speaker 03: This is the Accent Packaging case where PDAC has been given more than an opportunity [00:22:23] Speaker 03: to discover the basis for what is now our licensed defense based on the Microsoft agreement, a licensed defense that was pledged at the initial pleading. [00:22:34] Speaker 03: And they failed to discover the facts that we set forth in our summary judgment motion. [00:22:40] Speaker 03: But setting that aside, the fact is that there are no facts that they can uncover that are going to change the result here. [00:22:47] Speaker 03: And they've not identified any. [00:22:49] Speaker 03: And so ultimately, [00:22:51] Speaker 03: Since we're in an abusive discretion standard on the discovery point, I would submit that we're nowhere close to Judge Sullivan having abused his discretion in granting summary judgment and denying the Rule 56D request. [00:23:08] Speaker 03: I have nothing further. [00:23:09] Speaker 00: Thank you. [00:23:22] Speaker 00: I come back because apparently it's still not clear. [00:23:29] Speaker 00: Regarding FAT32, we say it's not a Microsoft technology. [00:23:36] Speaker 00: We say there's no evidence that it's a Microsoft technology. [00:23:40] Speaker 02: What about page A422 through 423, for example, that has this hardware white paper, and it's titled Microsoft Extensible Firmware Initiative, FAT32 file system specification? [00:23:53] Speaker 00: That was submitted by Fuji, not by HP. [00:23:58] Speaker 00: HP's declarants never referred to it. [00:24:02] Speaker 02: So it's part of the record, right? [00:24:05] Speaker 02: So it's something that shows that this is an offering by Microsoft. [00:24:09] Speaker 00: Now, it's a record presented by Fuji. [00:24:13] Speaker 00: Fuji arguably said, hey, we feel that this is Microsoft technology because Fuji got its FAT32 from this white paper and we claim a license. [00:24:28] Speaker 00: But we don't have that from HP. [00:24:31] Speaker 00: All we have from HP is that they use [00:24:36] Speaker 00: FAT32, but there's nothing in HP's record that ties their FAT32 file formatting to Microsoft. [00:24:49] Speaker 00: And that is a huge difference. [00:24:52] Speaker 00: And this is counsel that mentioned that white paper in his presentation. [00:25:00] Speaker 00: I think for that reason, they can't rely on it. [00:25:03] Speaker 00: All counsel has said, [00:25:05] Speaker 00: is we use FAT32. [00:25:08] Speaker 00: Fine, you use FAT32, but how is it a Microsoft FAT32? [00:25:14] Speaker 00: No evidence. [00:25:16] Speaker 00: As to the .cat files, we say it's not in combination with the accused products because .cat files appear only on the CD and [00:25:29] Speaker 00: All they do is authenticate files on a CD when they are put onto a computer. [00:25:36] Speaker 00: That's all they do. [00:25:39] Speaker 00: The accused products never touch it, never see it, never rely on it, don't do anything. [00:25:45] Speaker 00: So your honor has mentioned that this is a broad agreement. [00:25:50] Speaker 00: Council argues this is a broad agreement. [00:25:53] Speaker 00: Good, it's an extremely broad agreement. [00:25:56] Speaker 00: But you still have to have [00:25:59] Speaker 00: a Microsoft technology that is combined with the accused products. [00:26:06] Speaker 00: And in one case, there's no evidence that it's a Microsoft technology. [00:26:12] Speaker 00: In the other case, there's no evidence that even if it was a Microsoft technology, that it's combined with the accused products. [00:26:21] Speaker 00: OK. [00:26:22] Speaker 00: Your time is expired. [00:26:24] Speaker 00: Thank you, Your Honor. [00:26:25] Speaker 01: Thank you, Your Honor.