[00:00:00] Speaker 05: is fifteen one eight five six target training international versus extended disc [00:00:55] Speaker 05: Let's give your colleague a moment to settle in. [00:01:00] Speaker 05: Thank you. [00:01:01] Speaker 02: May it please the court? [00:01:02] Speaker 02: Because no jurisdictional discovery was permitted and no evidentiary hearing was held. [00:01:08] Speaker 00: You didn't raise the issue of jurisdictional discovery on appeal, correct? [00:01:12] Speaker 02: No, Your Honor. [00:01:13] Speaker 02: My point is that because no jurisdictional discovery- Well, I don't know how you can complain about it if you didn't urge that on appeal. [00:01:21] Speaker 02: I'm not complaining, Your Honor. [00:01:23] Speaker 02: I'm just suggesting that because there was no jurisdictional discovery, there was no hearings, this standard of review for this court is to look at this in light of prima facie evidence, as opposed to a preponderance of the evidence standard, Your Honor. [00:01:41] Speaker 02: Target training only needs to prove a prima facie case of personal jurisdiction. [00:01:46] Speaker 02: We submit that the facts supporting exercise of personal jurisdiction in this case far surpass that standard. [00:01:53] Speaker 02: From EDI's own website, Your Honors, it is clear that although they are a Finnish company headquartered in Finland, they are not the small Finnish company that they assert themselves to be during this litigation. [00:02:06] Speaker 00: Rather... [00:02:10] Speaker 02: We believe it doesn't make a difference, Your Honor. [00:02:12] Speaker 02: They indicate, they suggest that it does in their briefing. [00:02:15] Speaker 02: They talk about the fact that they are a small Finnish company. [00:02:18] Speaker 02: It would relate to the third prong potentially if, if we got to that point. [00:02:23] Speaker 02: We don't think we need, we don't think that they meet the standard for that. [00:02:27] Speaker 03: But they are. [00:02:27] Speaker 03: Is the third prong even relevant when the question here is prima facie showing? [00:02:32] Speaker 03: We don't believe so, Your Honor. [00:02:34] Speaker 03: I mean, the law is pretty clear on that, right? [00:02:36] Speaker 03: You just have to have purposeful activities directed to the state based on all inferences being in our favor. [00:02:44] Speaker 03: Right. [00:02:44] Speaker 03: So this is, if in fact the court had come out the other way, [00:02:48] Speaker 03: it would not have been the final word on jurisdiction, because the court chose to do it where its only obligation was to assess prima facie showing. [00:03:00] Speaker 03: Yes, Your Honor. [00:03:01] Speaker 03: So it would still leave open the ultimate question of whether, after discovery, there would be jurisdiction, right? [00:03:06] Speaker 02: Yes, Your Honor. [00:03:08] Speaker 02: Absolutely. [00:03:08] Speaker 02: In this case, we believe the showing of prima facie evidence is definitely shown here. [00:03:19] Speaker 02: touts themselves as the third largest employee assessment testing entity in the world. [00:03:26] Speaker 02: They have systems in over 50 countries, including the USA. [00:03:33] Speaker 02: On their website, they reference their North American global office. [00:03:39] Speaker 05: If there's a sale, hypothetically, if there's a sale somewhere in the US, [00:03:49] Speaker 05: that's related to EDI products. [00:03:52] Speaker 05: Does that create jurisdiction in Texas because of the franchise agreement? [00:04:00] Speaker 02: Your Honor, in this case it does because that sale that they're making according to EDI, their only customer in the United States is their exclusive franchisee. [00:04:13] Speaker 02: Their customer is EDNA. [00:04:15] Speaker 02: Therefore, their customer is that Texas company. [00:04:19] Speaker 02: So their sales are in the state of Texas. [00:04:22] Speaker 03: So that no matter where EDNA sells, it has to first purchase from EDI. [00:04:28] Speaker 03: And its purchase comes from the state of Texas. [00:04:31] Speaker 02: Correct, Your Honor. [00:04:32] Speaker 05: And that's Prompt 2, right? [00:04:35] Speaker 02: It goes to both Prompt 1 and Prompt 2. [00:04:37] Speaker 02: We submit, Your Honor. [00:04:38] Speaker 02: It goes to the fact that these are purposefully directed to the state of Texas. [00:04:46] Speaker 02: And that, of course, the sales that they make are the activities which relate to the suited issue. [00:04:55] Speaker 02: EDNA and EDI have had an exclusive relationship for, at the time of the filing of this case, EDNA and EDI had an exclusive relationship for over 15 years. [00:05:06] Speaker 00: Were the sales from EDI to EDNA an infringement of the patent, allegedly? [00:05:14] Speaker 02: Your Honor, no, we believe that the sales of the ED&I or ED&A purchases of the volumes which they then use to work with their customers and offer to their customers for sale, those are part of the infringement of the underlying action. [00:05:35] Speaker 00: Who's alleged to infringe the patent, the ultimate customers? [00:05:39] Speaker 02: ED&A and EDI together, Your Honor, are alleged to infringe the patent. [00:05:45] Speaker 03: I mean, conceivably, the ultimate customers could also be defendants, correct? [00:05:50] Speaker 02: They could be, Your Honor. [00:05:51] Speaker 02: What are these volume units exactly? [00:05:54] Speaker 02: So essentially, it's just a method of payment, essentially, as I understand it, Your Honor. [00:06:00] Speaker 02: They purchase the volume units, the volume units allow them the access to the disk system. [00:06:06] Speaker 02: They go on to a website through access of those volume units. [00:06:11] Speaker 02: From there they can download the reports, they can acquire the information [00:06:16] Speaker 03: For the for the assessments and then those can be then given out to the employers For once the personality tests have been taken and our NSP review of those surveys or personality tests done via computer or Does someone else independently? [00:06:34] Speaker 05: My understanding is that it is done via computer your honor Well, maybe it would help me because I guess this I was going to ask this in connection with the second case, but I guess it's really can you just [00:06:46] Speaker 05: Tell me in English what the gist of this invention is, what the claims are. [00:06:49] Speaker 02: Sure, it's essentially a system for utilizing personality tests that are, if you have an employee and you're trying to figure out where they fit in the company or if you want to figure out if you want to hire an employee, the skill sets that they might need, those personality, not can you do math or can you read. [00:07:11] Speaker 02: but more the underlying personality assessments. [00:07:14] Speaker 02: Do you know how to work well with others kind of things? [00:07:18] Speaker 02: Those are the system. [00:07:20] Speaker 02: And then the invention relates to the transporting of that information from the testing company to the relevant entities that need that information. [00:07:32] Speaker 02: So it's a process of the networking. [00:07:35] Speaker 05: Somebody has made assessments of its employees, and then you send them [00:07:40] Speaker 05: over the internet to a receiver. [00:07:43] Speaker 02: Correct. [00:07:43] Speaker 05: And how is that patentable at all? [00:07:46] Speaker 05: What is this invention? [00:07:48] Speaker 02: It is a process by which that information is maintained in secret so that only certain people can access information for one period of time. [00:07:58] Speaker 02: So employees can only get information that they're permitted. [00:08:03] Speaker 02: to the employers only have certain access to the information. [00:08:07] Speaker 02: The testing, the individual that does the testing may only have access to certain information. [00:08:11] Speaker 02: So it's the networking between. [00:08:15] Speaker 05: And the claim says what in that regard? [00:08:18] Speaker 05: That you need a password to get to certain documents? [00:08:21] Speaker 05: You send certain documents and different people need passwords to get through that into those documents? [00:08:26] Speaker 02: That is part of the claim. [00:08:27] Speaker 05: And that's the invention? [00:08:28] Speaker 05: Okay. [00:08:28] Speaker 00: is how they connect together. [00:08:30] Speaker 00: I don't understand how EDI and EDNA can infringe. [00:08:33] Speaker 00: I just don't understand that. [00:08:36] Speaker 00: How can there be infringement without a participation by the ultimate customer, given the claim limitation? [00:08:42] Speaker 02: There is participation by the ultimate customer. [00:08:45] Speaker 00: So it's joint infringement by the three of them? [00:08:47] Speaker 02: No, it is infringement by the... because they set up the system on how the passwords are utilized. [00:08:53] Speaker 02: Who's they? [00:08:54] Speaker 05: EDNA or EDI? [00:08:55] Speaker 02: Together, they do that. [00:08:57] Speaker 02: EDI is the [00:08:59] Speaker 02: background of it, EDNA is their affiliated entity, their licensee that utilizes the system with the end users. [00:09:10] Speaker 00: Well, I don't understand how EDNA is infringing the patent as opposed to EDNA causing end users to infringe the patent. [00:09:21] Speaker 00: What is the EDNA infringement? [00:09:24] Speaker 02: Your honor, the Edna infringement has to do with how they have, I'd have to go back and look at the summary judgments on those. [00:09:32] Speaker 02: There were multiple summary judgments that were filed in the EDNA case. [00:09:37] Speaker 02: asserting non-infringement and the district court at that time had held that there were certainly questions of fact with respect to it. [00:09:44] Speaker 02: I don't have those, Your Honor. [00:09:46] Speaker 00: I'm just trying to understand the allegations. [00:09:49] Speaker 00: It's not our job to decide whether there was infringement or not. [00:09:52] Speaker 00: I'm trying to understand the allegations of infringement because that relates to the issue of personal jurisdiction. [00:09:58] Speaker 00: And I don't understand how there's an allegation here [00:10:01] Speaker 00: that EDNA by itself infringes the patent. [00:10:07] Speaker 00: If EDNA itself infringes the patent, maybe EDI's contract with EDNA causes EDNA to infringe the patent. [00:10:16] Speaker 00: Maybe there's a theory of personal jurisdiction in Texas under those circumstances. [00:10:20] Speaker 00: But I don't see how EDNA can infringe the method steps of this patent, because it's not performing well. [00:10:32] Speaker 02: That is why, Your Honor, we believe that EDI needs to be a part of this. [00:10:40] Speaker 00: And you haven't identified any ultimate customers in Texas, correct? [00:10:44] Speaker 02: Correct. [00:10:44] Speaker 00: All right. [00:10:45] Speaker 00: So the question is, if there's no infringement by a combination of EDI and Headnet, how is it that there's jurisdiction, purposeful availment with respect to Texas? [00:10:58] Speaker 00: I could understand if you'd established that there were ultimate customers here, but you didn't. [00:11:04] Speaker 00: And so how is it that there can be jurisdiction [00:11:08] Speaker 00: in Texas when the infringement doesn't take place in Texas under your proof. [00:11:17] Speaker 02: Your Honor, the answer that I have for that today is simply that we had gone down that route in the district court in the EDNA case. [00:11:28] Speaker 02: And the district court in its summary judgment rulings where EDNA had asserted non-infringement, the court denied that motion. [00:11:40] Speaker 02: So there is a factual underpinning, at least according to the district court, [00:11:46] Speaker 02: in Texas that... I'm just going to ask you to tell me. [00:11:48] Speaker 00: I mean, here are these method claims. [00:11:50] Speaker 00: I look at these things, and a lot of the steps are seemingly performed by the ultimate end user. [00:11:58] Speaker 00: And in order to have infringement of a method claim, you have to perform all the steps. [00:12:03] Speaker 00: I don't understand how EDNA and EDI together can be alleged to perform all the steps. [00:12:09] Speaker 00: What am I missing? [00:12:10] Speaker 02: My understanding is that EDNA is the entity that performs the steps on behalf of its customers. [00:12:17] Speaker 02: And so its customers go to EDNA. [00:12:19] Speaker 02: EDNA goes to EDI, accesses the system through their system, through the DISC system on EDI's website. [00:12:30] Speaker 02: And that is how the infringement occurs, Your Honor. [00:12:32] Speaker 02: It's EDNA utilizing those steps. [00:12:35] Speaker 05: But I'm looking here at the complaint. [00:12:38] Speaker 05: Which is it SA1? [00:12:41] Speaker 05: Yes. [00:12:41] Speaker 05: OK, is that the right one? [00:12:42] Speaker 05: Well, the allegations of infringement in the complaint, I think, are like in paragraph 10, where it says, the infringing acts or steps occur in the United States and are performed either by EDI or by EDI's customers. [00:12:57] Speaker 05: There's no mention of EDNA other than under the venue section. [00:13:09] Speaker 05: I mean, there's a sentence in the venue section that says, as an owner of EDNA, EDNA customers are also EDI customers. [00:13:19] Speaker 05: That's the only reference to EDNA in the complaint. [00:13:26] Speaker 02: Your Honor, I don't have an additional answer with that for right now. [00:13:30] Speaker 02: If I could. [00:13:31] Speaker 05: But is it true that all of the allegations of infringement are against EDI or EDI customers and not EDNA? [00:13:38] Speaker 05: Or am I missing something? [00:13:40] Speaker 02: No, Your Honor, the factual background of this case is that when we filed the case against EDNA, it was only through discovery, nine months into discovery of that case, that we found out that they actually worked with EDI in order to do their business, which is what is asserted to infringe. [00:14:01] Speaker 02: And therefore, we attempted to interplead to bring in EDI at that point in time in the court [00:14:09] Speaker 02: indicated that it was too late in discovery, the case was ongoing too long, and thus denied that right. [00:14:16] Speaker 02: And so we filed a separate action against EDI. [00:14:20] Speaker 03: So are we supposed to be, in your view, looking at the question of specific jurisdiction based on the original claims or the amended claims? [00:14:30] Speaker 03: Aren't these two cases related in the absence of allowing the amended claims to go forward against either defendant that we have to assume we're looking at the original claims? [00:14:44] Speaker 02: We are looking at the original claims for purposes of this jurisdictional issue. [00:14:50] Speaker 02: If the court denies our request with respect to the EDNA case, [00:14:59] Speaker 02: We still believe the issue of jurisdiction comes up again because we believe that there is infringement of the amended claims and we are going to be back here or back at the court again addressing the issue with respect to jurisdiction for EDI. [00:15:13] Speaker 02: due to its relationship and its interactions in this case. [00:15:17] Speaker 02: So we will be coming back again. [00:15:18] Speaker 00: But we believe it's applicable either. [00:15:21] Speaker 00: How can it be that we're looking at the original claims? [00:15:23] Speaker 00: They're gone. [00:15:24] Speaker 00: If this suit is going to go forward, there has to be personal jurisdiction with respect to the amended claim. [00:15:29] Speaker 02: We believe there is, Your Honor. [00:15:31] Speaker 02: But when this case was filed and these motions were filed, they were in relation to the original claims. [00:15:40] Speaker 02: We believe the same issues arise with respect to the amended claims. [00:15:45] Speaker 05: But in order to decide jurisdiction, don't we need to be deciding jurisdiction based on the amended complaint, since the original complaint no longer has any life? [00:15:57] Speaker 02: We didn't have the opportunity to file that amended. [00:16:00] Speaker 02: It wouldn't be an amended complaint, Your Honor. [00:16:03] Speaker 02: We believe it would be an amended contentions of infringement, because the complaint had alleged infringement of the patent as a whole and not with respect to any specific claim. [00:16:13] Speaker 02: So we believe that is the [00:16:15] Speaker 02: infringement contentions that need to be amended, Your Honor. [00:16:20] Speaker 02: And the district court didn't provide the opportunity for that in the initial, or in the EDNA case. [00:16:29] Speaker 05: Okay, we're way out of your time. [00:16:31] Speaker 05: Will we start some rebuttal running here from the other side? [00:16:56] Speaker 05: Mr. Pfeiffer? [00:16:58] Speaker 01: Yes, ma'am. [00:17:00] Speaker 01: May it please the court, I am Justin Pfeiffer of the law firm of Ajami LLP in Houston, Texas. [00:17:06] Speaker 01: I represent Extended Disc International, which the parties in this case refer to as EDI. [00:17:12] Speaker 01: There are three reasons fully supporting the record to affirm the district court's judgment. [00:17:18] Speaker 01: Jurisdiction is lacking because the patent's original claims were canceled in reexamination. [00:17:24] Speaker 05: But your friend just told you on that point that the complaint, what we're looking at here is the complaint, and the complaint still stands. [00:17:30] Speaker 05: Now, what are these infringement contentions? [00:17:32] Speaker 05: Are they an addendum to the complaint, or are they separate and distinct from the complaint? [00:17:38] Speaker 01: The infringement contentions, I mean, the original, this is the Fresenius argument that the original 11 claims, which is what [00:17:46] Speaker 01: the claims constituted in the patent and suit have been canceled by the PTO, and that determination was affirmed by this court. [00:17:57] Speaker 00: They're not arguing the original claims stand. [00:18:00] Speaker 00: Their whole theory is based on the new claims that came out of the reexamination. [00:18:06] Speaker 01: Sure, the patent as a whole. [00:18:09] Speaker 01: Right. [00:18:09] Speaker 01: That's right. [00:18:10] Speaker 01: But still, it has to be restarted. [00:18:14] Speaker 01: They have to refile. [00:18:15] Speaker 01: again in the district court, because the original claims have been canceled. [00:18:21] Speaker 05: What do they have to refile? [00:18:22] Speaker 05: I mean, they've got the complaint, and they have to just file amended infringement content, right? [00:18:30] Speaker 01: Correct. [00:18:31] Speaker 01: They have to file amended. [00:18:32] Speaker 01: But under the court's case law, under Fresenius, they would have to file it again, because- File what again? [00:18:44] Speaker 01: file an additional complaint, an additional complaint alleging the patent, and with specificity, which claims of the new patent, which reissued claims, are actually actionable. [00:19:00] Speaker 05: So is your position that this particular case, I know we've got another one coming, so I've got to then confuse my brain, but that this case isn't properly before us? [00:19:09] Speaker 05: I mean, what's the thing? [00:19:11] Speaker 01: Yes, that's my contention. [00:19:12] Speaker 01: That it's moot. [00:19:14] Speaker 01: as to us. [00:19:15] Speaker 01: And the argument is going to be substantially identical to the argument in the companion case. [00:19:22] Speaker 00: In this case, have they moved to amend the infringement extensions? [00:19:26] Speaker 00: They have not. [00:19:28] Speaker 04: Well, can we get a question? [00:19:32] Speaker 03: Yeah, I'm just confused, because clearly there's an overlap between these two cases. [00:19:36] Speaker 01: Yes. [00:19:36] Speaker 03: And so you're saying that the reason there's no specific jurisdiction is because we have to look at the original claims, and the claims are gone. [00:19:45] Speaker 03: Therefore, there's nothing to sue you over? [00:19:48] Speaker 01: That really goes, Your Honor, to the reasonableness problem. [00:19:51] Speaker 01: It doesn't. [00:19:52] Speaker 01: It's an additional reason. [00:19:53] Speaker 01: That's not even an issue. [00:19:54] Speaker 01: Yeah, right. [00:19:55] Speaker 01: The additional issue is, I mean, [00:19:57] Speaker 01: I kind of am going to talk more about personal jurisdiction. [00:20:00] Speaker 01: I just was pointing out that that's an additional reason. [00:20:03] Speaker 01: OK, I'm sorry. [00:20:04] Speaker 05: Then I just cut you off before you finish. [00:20:07] Speaker 03: So should we assume that the personal jurisdiction question is looking at the new claims, or should we assume they're looking at the old claims? [00:20:15] Speaker 01: Well, Your Honor, it's the time of filing the controls, the time of filing of the suit. [00:20:20] Speaker 01: is what is being reviewed. [00:20:22] Speaker 03: But the judge did these things collectively, denied the motion for leave to amend and then denied the personal jurisdiction at the same time. [00:20:31] Speaker 01: No, there was never a motion for leave to amend in our case. [00:20:34] Speaker 01: That is in the other case. [00:20:36] Speaker 01: That would be in Judge Miller's court rather than in Judge Gilmore's court. [00:20:43] Speaker 01: So what we have here is a match. [00:20:44] Speaker 05: Maybe we'll get some clarity on this point in the next case. [00:20:48] Speaker 05: I didn't know that there was a motion to amend in either case, frankly. [00:20:51] Speaker 05: But on the issue of jurisdiction, why is prong to, at least, not met? [00:21:00] Speaker 05: Let's leave aside the question of what the claim is. [00:21:04] Speaker 05: Sure. [00:21:04] Speaker 05: Let's assume the appropriate claim is before us. [00:21:07] Speaker 05: It arises out of or relates to the defendant's activities within the forum state. [00:21:13] Speaker 05: And go ahead. [00:21:15] Speaker 01: But prong one is not meant because EDI did not purposely avail themselves of the foreign state. [00:21:24] Speaker 00: Well, but they contracted with the company there. [00:21:28] Speaker 00: affidavit says their sole customer in the United States is Edna. [00:21:32] Speaker 00: So they contracted with a Texas company. [00:21:34] Speaker 00: This seems to be a different situation from Burger King. [00:21:39] Speaker 00: You contract with a Texas company which perhaps is alleged to be infringing the patent as a result of things that Edna, EDI is participating in. [00:21:54] Speaker 00: Why isn't that sufficient connection with Texas? [00:21:58] Speaker 01: In such cases, Your Honor, there is a requirement that in the exclusive licensee, and this was not really developed in the briefing because TTI did not make an issue of it, the exclusive licensee line of cases indicate that the crux of the matter is the duty to defend within the license agreement. [00:22:19] Speaker 01: And there is no against patent infringement suits and against or initiate to defend one's patent. [00:22:26] Speaker 00: I'm sorry, I don't understand what you're saying. [00:22:28] Speaker 00: This doesn't have to do with exclusive licensees or anything like that. [00:22:34] Speaker 00: PDI is contracted with a Texas company, which is intended to be its sole customer in the United States. [00:22:42] Speaker 00: Correct. [00:22:44] Speaker 00: And if there were an allegation, I'm not sure there is, but if there were an allegation that Edna infringed the patent as a result, that would be sufficient for Texas jurisdiction, right? [00:22:58] Speaker 01: No, Your Honor, I would disagree under, if we look at the Breckenridge case, Breckenridge Pharmaceutical versus MedBly Labs. [00:23:10] Speaker 03: Exclusive licensees as it relates to the patent holder is a totally different animal. [00:23:14] Speaker 03: Here, we're not talking about the fact that you have a patent holder that then allows someone else to make a sale. [00:23:21] Speaker 03: What we have here is we have a manufacturer [00:23:24] Speaker 03: who not only has this agreement that says you can make all of these sales, and you have the right to make these sales, but it has an 11% interest, which even the SEC would find to be meaningful and reportable, and it's an entity that you all describe as your North American presence. [00:23:43] Speaker 03: I don't understand how this is a situation in which you haven't directed any activities toward the state of Texas. [00:23:51] Speaker 03: Put aside whether there's [00:23:52] Speaker 03: Sure, sure. [00:23:53] Speaker 03: An allegation of infringement. [00:23:55] Speaker 01: But in the franchise agreement, and I'm at the joint appendix 73 through 80, paragraph 7 of the, which is on JA75, says the franchisee carries alone the responsibilities of its activities. [00:24:12] Speaker 01: Turning further in the franchise agreement, at paragraph 11, the franchisee is the one who builds their own marketing organization. [00:24:23] Speaker 03: Well, you would agree, though, would you not, that every sale that EDI makes to EDNA is a sale to the state of Texas, right? [00:24:33] Speaker 01: Correct. [00:24:35] Speaker 01: But that's not a sale to any end users. [00:24:42] Speaker 00: Suppose the allegation were here that EDI contracts with EDNA to conduct infringing activity. [00:24:54] Speaker 00: And EDNA is located in Texas. [00:24:56] Speaker 00: That would be sufficient for specific jurisdiction, wouldn't it? [00:25:01] Speaker 01: I'm sorry, Your Honor. [00:25:02] Speaker 01: If EDNA was located in Texas. [00:25:04] Speaker 00: EDNA is located in Texas. [00:25:06] Speaker ?: Yes. [00:25:06] Speaker 00: If EDI contracted with EDNA to engage in infringing activity, there would be personal jurisdiction, specific jurisdiction in Texas, would there not? [00:25:19] Speaker 01: Well, not if the contract didn't, if there was a duty to defend, a duty to litigate in cooperation within the agreement. [00:25:28] Speaker 00: I don't understand what that has to do with it. [00:25:30] Speaker 00: If you contract with somebody, [00:25:32] Speaker 00: in Texas and ask that person to engage in infringing activity, why doesn't that create specific jurisdiction in Texas? [00:25:42] Speaker 01: If you're asking them to engage in infringing activities, it would. [00:25:46] Speaker 00: Okay, so the question is, is there an allegation that EDI has asked EDNA under this contract to engage in infringing activity? [00:25:58] Speaker 00: Chief Judge Crost pointed you to the complaint. [00:26:02] Speaker 00: It's not clear whether there is such an allegation or whether considering the amended claims here, whether there could be such an activity. [00:26:13] Speaker 00: Could you address whether Edna is alleged to be engaged in infringing activities? [00:26:20] Speaker 01: We would submit that the allegations are not sufficient based on the complaint, based on Mr. Cease's declaration. [00:26:27] Speaker 01: and the declaration of Mr. Sapinin, who's EDI's only employee. [00:26:35] Speaker 03: Why not? [00:26:36] Speaker 03: Because you're saying there's no obligation to defend. [00:26:39] Speaker 01: Yes. [00:26:40] Speaker 03: But let's assume that this claim, even though it's a method claim, only claims the whole exercise of going back and forth with the customer and that it doesn't actually contain a claim that says the customer has to do anything. [00:26:53] Speaker 03: So in other words, what you're selling and what is infringing [00:26:57] Speaker 03: is the access to the website, the receipt of the documentation, and that the claim is thus limited so that you don't have to have a joint infringement. [00:27:09] Speaker 03: If the claim is limited in that way, isn't that exactly what EDI is selling to EDNA and then authorizing EDNA to also sell? [00:27:23] Speaker 01: But the action still would be against EDNA. [00:27:27] Speaker 01: not against EDI. [00:27:30] Speaker 01: To separate out the formalities, putting these together would disrespect corporate formalities. [00:27:37] Speaker 01: And the case law and the brief that they cite about control, this [00:27:41] Speaker 01: level of control does not come anywhere close. [00:27:44] Speaker 00: But that's not the theory. [00:27:45] Speaker 00: The theory is not control, it's not piercing the corporate veil. [00:27:50] Speaker 00: The theory is that you contract with somebody who's located in Texas and ask that person to infringe these methods. [00:27:58] Speaker 00: That is basically the statement of the theory. [00:28:01] Speaker 00: And you've agreed that if that's what EDI did, was to ask Edna to engage in infringing activity under the contract, that that would create personal jurisdiction. [00:28:12] Speaker 00: So we need to ask whether there is a horrible allegation here in the complaint that EDI asked Edna to engage in infringing activity. [00:28:28] Speaker 01: I understand your Honor's points. [00:28:32] Speaker 01: indicate that there would not be enough allegations, and there would not be enough commonality between the two entities to demonstrate that. [00:28:45] Speaker 05: Well, do you have any comment on whether the complaint does or does not, in response to Judge Dyke's question, whether the complaint is sufficient, accepting Judge Dyke's premise? [00:28:57] Speaker 01: Accepting his premise, the complaint is vague on that point. [00:29:03] Speaker 01: going through the declarations and the unrebutted declarations of Mr. Sapienin, it also does not shed light on that question. [00:29:18] Speaker 01: Because it's hard to pin down even what patent claims are at issue. [00:29:24] Speaker 05: Can I just go back, because someone other than yourself is arguing on the other side of the second case. [00:29:30] Speaker 05: Sure. [00:29:30] Speaker 05: I just want to, and I apologize for [00:29:32] Speaker 05: conflating these two, but they're just conflated in my mind, and I can't get around that. [00:29:37] Speaker 05: If we were to affirm the second case, in other words, where the district court said that the other complaint is she dismissed as moot in light of the reexamination results, is it your view that the same thing necessarily would happen in this case? [00:29:55] Speaker 05: Yes. [00:29:55] Speaker 05: And therefore, even leaving the jurisdictional question aside, it would just be moot. [00:30:02] Speaker 01: Yes. [00:30:03] Speaker 01: Yes, that is my position. [00:30:05] Speaker 01: And that is essentially, and the cancellation of the claims causing pending suits to fail has been the rule since the Civil War. [00:30:14] Speaker 01: I mean, that is a much easier basis upon which to affirm. [00:30:19] Speaker 01: That is a much cleaner basis. [00:30:24] Speaker 01: to affirm under Fresenius and not have to deal with some of the tricky personal jurisdictional questions. [00:30:30] Speaker 03: Then do you agree that based on the new claims, they could simply institute new actions against both EDI and EDNA, and then they could revisit questions of personal jurisdiction? [00:30:45] Speaker 01: They could. [00:30:45] Speaker 01: If this court were to find personal jurisdiction in this matter over EDI, then they could. [00:30:54] Speaker 00: I think the question is, if we were to dismiss this case as loop, because the old claims are gone, whether they could institute a new suit and attempt to establish personal jurisdiction in that suit. [00:31:10] Speaker 01: Yes, they could attempt, because there are new claims that would have to be examined to a new complaint. [00:31:17] Speaker 05: but they would not be precluded from doing so just simply based on the district court's adjudication here. [00:31:23] Speaker 05: I mean, we'd be here again probably two years from now arguing about personal jurisdiction, but the argument would be new. [00:31:32] Speaker 01: And it would be based on the claims and based on the complaint perhaps with different claims that maybe would be more specific and showing the jurisdictional nexus. [00:31:45] Speaker 01: Because on the records it stands right now, [00:31:47] Speaker 01: we would submit this insufficient. [00:31:51] Speaker 04: Thank you. [00:31:52] Speaker 01: Ma'am, one point on the reasonableness. [00:31:56] Speaker 01: I just wanted to make the point that EDI only has one full-time employee. [00:32:01] Speaker 01: It would take him 17 hours to fly from Finland to Houston. [00:32:05] Speaker 01: There is an eight-hour time difference. [00:32:08] Speaker 01: And the franchise agreement here has a finished choice of law provision, which would make it very difficult for the district court [00:32:16] Speaker 01: And that any dispute on this matter would be better handled by the fortunate Finland Okay, thank you. [00:32:25] Speaker 01: Thank you [00:32:31] Speaker 02: I just have a couple quick points. [00:32:34] Speaker 00: It really seems to me that you're asking us to decide a very difficult jurisdictional issue because you didn't conduct some rather simple discovery which would have established that there were end users of this system or method in Texas. [00:32:51] Speaker 00: And why is it that you are resisting [00:32:55] Speaker 00: filing a new complaint and conducting appropriate discovery to establish specific jurisdiction. [00:33:01] Speaker 00: Why are you going through this? [00:33:03] Speaker 00: I don't understand. [00:33:05] Speaker 00: What is the disadvantage of doing that? [00:33:06] Speaker 02: Sure. [00:33:07] Speaker 02: The disadvantage, which I can discuss now, or later, or both, but is with respect to our concern, Your Honor, is that there is a potential of claim preclusion, excuse me, and that if you [00:33:22] Speaker 02: affirm the EDNA dismissal, we will be in the position of not being able to file any case. [00:33:29] Speaker 02: And it's not that we necessarily don't. [00:33:30] Speaker 02: And you're basing that on Senju? [00:33:32] Speaker 02: Yes. [00:33:33] Speaker 02: Yes, Your Honor. [00:33:34] Speaker 03: Now, doesn't Senju presuppose a dismissal on the merits? [00:33:40] Speaker 02: As I read Senju, Your Honor, my understanding was that in that case, there was essentially similar facts that they were looking at the decision [00:33:50] Speaker 02: with respect to the substantial identicalness of the claims. [00:33:53] Speaker 02: They concluded that they were not substantially the same. [00:33:57] Speaker 02: They were narrower. [00:33:59] Speaker 02: And therefore, because everything was encompassed, everything in the new claims was encompassed in the old claims, that there was no ability to go back and refile a case against. [00:34:09] Speaker 00: But that case, I understand your concern about that case. [00:34:13] Speaker 00: But the concern seems misplaced here. [00:34:15] Speaker 00: We're talking potentially about a dismissal for want of personal jurisdiction. [00:34:19] Speaker 00: or on grounds of mootness, and neither one of those leads to claim preclusion. [00:34:29] Speaker 02: I hope that if that's accurate, Your Honor, that's wonderful. [00:34:34] Speaker 03: Even under Senju's broad view of claim preclusion, it presupposes a judgment on the merits where the issue was actually litigated. [00:34:45] Speaker 02: And in this case, you're saying that because we never got to the substance of whether there was infringement of the first claims, it would not apply in that situation. [00:34:55] Speaker 02: Well, I'm asking you. [00:34:57] Speaker 02: My concern is that it does, Your Honor. [00:34:58] Speaker 02: And that's why we're one of the reasons we're very concerned. [00:35:01] Speaker 05: Do you disagree to send you with a merits dismissal, a dismissal on the merits? [00:35:05] Speaker 02: I am trying to think back, Your Honor, honestly. [00:35:08] Speaker 05: If you assume it was, then is that not distinguishable from what's going on here? [00:35:12] Speaker 02: If it was a merits decision and not [00:35:14] Speaker 02: just the issue of the amended claims being substantially indistinguishable and set aside for mootness, then I see that there is a distinction. [00:35:24] Speaker 02: The other issue that we have, though, Your Honor, and the other reason we're against the idea of just going back and filing a new complaint is that the EDNA case has been going on for, was going on for years. [00:35:38] Speaker 02: It was literally set to go to trial a week, it was a week from trial when my partner was. [00:35:44] Speaker 02: Right. [00:35:45] Speaker 02: But if that case gets dismissed and this case correspondingly gets dismissed, we're in the position of going back and having to prove up jurisdiction, go through the whole discovery process again. [00:35:56] Speaker 02: The only reason we have any evidence with respect to what their EDI's actions are in this case is based off of this agreement [00:36:07] Speaker 02: that was disclosed in the other case. [00:36:09] Speaker 02: Well, you already have that. [00:36:10] Speaker 05: I mean, the reason there was a delay in this case is because there was a re-exam, and the claims upon which the complaint was originally based no longer exist. [00:36:18] Speaker 05: That's kind of a peculiar and a set of circumstances that isn't going to recur. [00:36:23] Speaker 05: The fact that that requires, therefore, the filing of a new complaint may be unfortunate, but where does that get you? [00:36:30] Speaker 05: I mean, it's taken a long time, yes, but it's because, large part because, [00:36:36] Speaker 05: the claims, as I said, the claims no longer exist. [00:36:42] Speaker 05: So it necessitates. [00:36:43] Speaker 03: And you could ask the lower court to incorporate the prior discovery, could you not? [00:36:48] Speaker 02: We could. [00:36:49] Speaker 02: We're concerned that what we'd have is a fight from the other side with respect to the ability to just part and parcel bring everything in, the discovery that had occurred, as well as the Markman decision that came down, the summary judgment orders, so that we would be working from a [00:37:05] Speaker 02: from where we were as opposed to working from the beginning again. [00:37:10] Speaker 02: So it's concerning. [00:37:10] Speaker 05: It seems hard to imagine that a district court would not appreciate the expeditiousness of doing that rather than compelling another three years' worth of cost in expense. [00:37:21] Speaker 05: All right. [00:37:22] Speaker 05: Anything else on this issue? [00:37:23] Speaker 02: Yes, Your Honor. [00:37:24] Speaker 02: I just want to be clear with respect. [00:37:25] Speaker 02: Actually, when you're looking at the complaint, I looked back in the appendix. [00:37:31] Speaker 02: And the appendix for this case [00:37:34] Speaker 02: I don't see the complaint in there. [00:37:36] Speaker 02: I see the complaint for the EDNA case in the EDNA complaint. [00:37:41] Speaker 05: And so I'm just trying to make sure that I... Well, I may have gotten it off a pacer, but I've got a complaint. [00:37:46] Speaker 05: So, I mean, you have a... I presume you have a copy of the complaint. [00:37:50] Speaker 02: And you're looking at the EDI complaint, not the EDNA complaint. [00:37:53] Speaker 01: I don't have that... I'm looking at the EDI complaint. [00:37:55] Speaker 01: I think it is in the appendix here. [00:37:56] Speaker 01: Your Honor, since I may, it's in the supplemental appendix. [00:37:58] Speaker 02: The supplement. [00:37:59] Speaker 02: Okay, thank you. [00:38:00] Speaker 05: Thank you. [00:38:00] Speaker 05: But can you tell me where, since we're about to move on to the other case, can you just show, because I right now couldn't find the complaint in the EDNA case. [00:38:07] Speaker 05: So if you've located it, you can just give me the site for it. [00:38:13] Speaker 03: I think it's page one. [00:38:15] Speaker 03: Oh, well that would be the section. [00:38:22] Speaker 05: 001. [00:38:22] Speaker 05: Oh, the supplemental. [00:38:24] Speaker 03: Yeah. [00:38:25] Speaker 05: But the supplemental is the EDI. [00:38:27] Speaker 05: But you think the EDI. [00:38:28] Speaker 05: No, that's the EDI. [00:38:29] Speaker 05: Oh, that's the EDI. [00:38:30] Speaker 05: Yeah. [00:38:30] Speaker 05: That's the one. [00:38:31] Speaker 01: Your Honor, it's in the supplemental appendix in the other case beginning at JA 239. [00:38:35] Speaker 01: In the end, that's the case. [00:38:41] Speaker 05: Thank you. [00:38:43] Speaker 05: All right. [00:38:43] Speaker 05: We thank both counsel and the case is submitted. [00:38:46] Speaker 05: And we'll move on to the next case, which