[00:00:00] Speaker 04:
This case is 2015-1532.

[00:00:31] Speaker 02:
Good morning, Your Honor.

[00:00:33] Speaker 04:
Good morning, Mr. Nelson.

[00:00:34] Speaker 02:
Yes, I'm ready, Your Honors.

[00:00:36] Speaker 02:
Good morning.

[00:00:36] Speaker 02:
May it please the court?

[00:00:39] Speaker 02:
Your Honors, this is not a typical patent case.

[00:00:41] Speaker 03:
Can I understand what your argument here with respect to imposing fees on counsel?

[00:00:48] Speaker 03:
As I understand it, you are not relying on Section 285 in that respect.

[00:00:53] Speaker 03:
Am I correct?

[00:00:54] Speaker 02:
With respect to imposing fees on joint inseverability with opposing counsel,

[00:01:01] Speaker 02:
We are relying on the court's inherent authority that those fees can also be imported.

[00:01:07] Speaker 03:
You were not relying on 285.

[00:01:09] Speaker 02:
Well, I think, Your Honor, we can rely on 285.

[00:01:13] Speaker 03:
That's not a question of whether you can.

[00:01:15] Speaker 03:
The question is whether you did.

[00:01:17] Speaker 03:
I didn't see in your brief that you did rely on 285.

[00:01:20] Speaker 03:
Am I wrong?

[00:01:22] Speaker 02:
I don't believe that it's clear from the brief that we're not relying on 285.

[00:01:28] Speaker 03:
But we are primarily- It depends on you.

[00:01:30] Speaker 03:
If you're going to raise an issue, you have to raise it.

[00:01:33] Speaker 03:
You did not raise the issue of imposing council fees under 285 in your brief, right?

[00:01:39] Speaker 02:
If that's not in the brief, Your Honor, I accept that.

[00:01:43] Speaker 03:
It strikes me as an important issue, but not raised in this case.

[00:01:47] Speaker 03:
But go ahead.

[00:01:49] Speaker 02:
But we are certainly raising it under 285.

[00:01:52] Speaker 02:
under the inherent powers.

[00:01:56] Speaker 01:
You do say in your brief that the Eastern District of Texas almost never entertains summary judgment motions that early in a case.

[00:02:08] Speaker 01:
But you don't cite any authority for that proposition.

[00:02:13] Speaker 02:
Well, the authority is, I guess I've been practicing there a long time, but also the court had a scheduling order set that I believe is in the record that

[00:02:22] Speaker 02:
permitted summary judgment on indefiniteness during claim construction.

[00:02:26] Speaker 02:
But otherwise, it has a letter brief proceeding that's set up that permits you to file summary judgments, permits you to seek permission from the court to file summary judgment via letter brief, which is precisely what we did when we had the opportunity to do so per the court's schedule.

[00:02:48] Speaker 01:
Where does that explain the almost never statement?

[00:02:52] Speaker 02:
I would expect a footnote with some history or something.

[00:02:57] Speaker 02:
OK.

[00:02:58] Speaker 02:
Well, I guess the almost never statement stems from my personal experience in practicing out there that it's difficult to get them to entertain summary judgments early in the case.

[00:03:10] Speaker 01:
You didn't put an affidavit into that effect or anything?

[00:03:12] Speaker 02:
We did not.

[00:03:12] Speaker 02:
No, Your Honor.

[00:03:16] Speaker 02:
The Eastern District of Texas had this case for two and a half years.

[00:03:19] Speaker 02:
And then it was transferred to Washington.

[00:03:22] Speaker 02:
And so this is not the typical attorney's fees case in that the conduct that we contend here is the bad faith and sanctionable conduct mostly occurred before the district court judge, who ultimately did not make the decision on fees.

[00:03:39] Speaker 02:
Despite this finding, Judge Lasnik did find this case to be exceptional.

[00:03:43] Speaker 02:
And he did find under inherent powers that there was bad faith, wanton, vexatious conduct.

[00:03:50] Speaker 02:
However, based on that finding, he awarded Nintendo only $33,000 in fees out of more than $7 million in fees sought.

[00:04:00] Speaker 02:
Less than one half of 1% of the requested amount.

[00:04:06] Speaker 01:
He awarded you 10% of the total fees relating to the infringement contentions.

[00:04:11] Speaker 02:
Well, he awarded 10% of the total fees that he deemed to be related to the plaintiff's failure to investigate

[00:04:19] Speaker 02:
and acquire 1,700 products.

[00:04:23] Speaker 01:
Doesn't seem to be much in the record to indicate that you spent a lot of time on those 1,700 products.

[00:04:32] Speaker 02:
There isn't much necessarily in the time records that precisely call out investigating 1,700 products.

[00:04:40] Speaker 02:
There is a lot in the record relating to the effort made to obtain discovery from the retailers, to work with the retailers on figuring out

[00:04:49] Speaker 02:
which products they sold, how those products were bundled, all of those things, which was made much, much more difficult with respect to because of the additional products.

[00:05:00] Speaker 02:
But Judge Lasnik, he made an error with respect to this aspect of the case in that he concluded that the infringement contentions were amended with respect to the products that were actually investigated only with respect to claim construction.

[00:05:16] Speaker 02:
And that's footnote four of his order.

[00:05:18] Speaker 02:
And that's simply not the case.

[00:05:21] Speaker 02:
This is a case where the infringement contentions were amended six times, only once.

[00:05:26] Speaker 02:
Only contentions number four were amended based on claim construction.

[00:05:31] Speaker 02:
All of the other amendments were based on either letters that we wrote forcing them to try again on infringement contentions, or three times based on Judge Davis's orders.

[00:05:44] Speaker 02:
What's your point?

[00:05:45] Speaker 02:
My point is that that

[00:05:47] Speaker 02:
makes Judge Lasnik's ruling here with respect to excluding fees regarding the infringement contentions clearly erroneous.

[00:05:56] Speaker 02:
He abused his discretion.

[00:05:57] Speaker 02:
Why?

[00:05:58] Speaker 02:
Because he did not understand that fact, that the infringement contentions here for the products they did investigate were not amended based on claim construction in good faith.

[00:06:10] Speaker 02:
They were amended based on the plaintiff's inability and failure to articulate

[00:06:17] Speaker 02:
PR 3.1 compliant contentions repeatedly.

[00:06:20] Speaker 03:
I'm not understanding your point.

[00:06:23] Speaker 02:
Well, that is conduct that Judge Davis certainly indicated in his last opinion on contentions that would be considered under 285.

[00:06:32] Speaker 02:
And in our view is that because Judge Lasnik did not understand that fact that he erred on only awarding the $33,000 in fees as opposed to looking at

[00:06:45] Speaker 02:
all of the fees relating to getting the amended contentions, briefing the contentions issue, and forcing plaintiff ultimately to disclose what their actual theories were.

[00:06:58] Speaker 02:
This is a case where the last set of contentions wasn't filed until after expert reports issued.

[00:07:04] Speaker 02:
We didn't know their final fees and final theories, and Judge Davis found we didn't know their final theories until expert reports were filed.

[00:07:14] Speaker 02:
And in our view, that is certainly something that warrants more than $33,000 in fees.

[00:07:20] Speaker 02:
The other thing here that I want to get to is that the failure to investigate the products issue that Judge Lasnik did find to be exceptional and oppressive, that also directly relates to the venue issue here.

[00:07:35] Speaker 02:
Judge Davis issued his opinion transferring this case

[00:07:39] Speaker 02:
And he talked about plaintiff's conduct after sitting on this case for two and a half years was contrary to the interest of justice.

[00:07:47] Speaker 02:
And plaintiff takes that statement and says, well, he's only talking about the 1404A transfer prong when he's saying that.

[00:07:54] Speaker 02:
And I submit that although it's in that part of its opinion, he is talking about more than that.

[00:08:00] Speaker 02:
Plaintiff, when this case was filed, as this court has found, the complaints, this was about Nintendo's products.

[00:08:07] Speaker 02:
We filed a proper sever transfer motion and to try to stay the retailers to simplify this case.

[00:08:14] Speaker 02:
The response to that was to blow this case up, to accuse 1,700 plus other products that were never investigated and say, no, the retailers, they are proper parties.

[00:08:27] Speaker 02:
They shouldn't be stayed.

[00:08:28] Speaker 02:
The case shouldn't be transferred.

[00:08:30] Speaker 02:
And we then had the job of trying to put that genie back in the bottle.

[00:08:34] Speaker 03:
The district court has a lot of discretion

[00:08:37] Speaker 03:
under Octane and Highmark, right?

[00:08:39] Speaker 03:
The district court does, Your Honor.

[00:08:41] Speaker 03:
So how can we second guess the district court on these things?

[00:08:45] Speaker 02:
Well, I think the district court's opinion here on the venue issue indicates that the court didn't analyze it.

[00:08:58] Speaker 02:
It's three sentences long.

[00:09:00] Speaker 02:
Venue was proper in Texas, and plaintiff's claims against various defendants were not meritless.

[00:09:06] Speaker 02:
That wasn't what we were ever contending.

[00:09:08] Speaker 02:
The bad faith conduct that we're contending here is plaintiffs' failure to investigate these products that kept the retailers in this case and kept the district court from severing the Nintendo and staying the retailers for two plus years.

[00:09:23] Speaker 02:
During that time, we defended 10 plus retailer depositions, did discovery and answered discovery on behalf of 10 plus retailers.

[00:09:32] Speaker 02:
The fact that the retailers ultimately got dismissed out, that's great.

[00:09:39] Speaker 02:
But they shouldn't have been in the case for that whole two and a half year period to begin with.

[00:09:43] Speaker 02:
They should have been stayed.

[00:09:45] Speaker 02:
And that's where the bad faith conduct was, is that it delayed that resolution.

[00:09:51] Speaker 02:
And just to kind of beat this horse a little bit more, at the end of the case, there were horse.

[00:09:58] Speaker 02:
I hope it's not a dead horse, Your Honor.

[00:09:59] Speaker 02:
If you believe so, I hope to convince you otherwise.

[00:10:02] Speaker 02:
But at the end of the case, there were eight retailers left in the case.

[00:10:11] Speaker 02:
Six of those retailers plaintiff didn't seek damages on other than joint and several liability damages.

[00:10:16] Speaker 02:
So we've litigated a case at that point through expert reports for eight total retailers that are left.

[00:10:23] Speaker 02:
And they don't even seek damages for six of them other than the joint and several damages for the sale of the Nintendo products that were accused to begin with.

[00:10:32] Speaker 02:
And that's just, in my view, Judge Lasnik's opinion here and the fact that it's so sparse and he doesn't clearly reconcile Judge Davis's decision and Judge Davis's statements.

[00:10:46] Speaker 02:
The judge who lived with this case for two and a half plus years, that to me is an abuse of discretion, and it should be remanded.

[00:10:53] Speaker 02:
And just to close here, we'll stand on our brief with respect to the direct pointing and image sensor claim construction issues.

[00:11:02] Speaker 02:
But the last point I want to make is the sanctions for attorney's fees awards, they're twofold.

[00:11:09] Speaker 02:
They're for compensating for money spent and for deterrence.

[00:11:14] Speaker 02:
And $33,000 in this case does not accomplish either of those goals.

[00:11:18] Speaker 02:
And therefore, the case should be remanded back.

[00:11:21] Speaker 02:
I'll reserve the rest of my time.

[00:11:22] Speaker 04:
Thank you, Mr. Nelson, Mr. Rogers.

[00:11:31] Speaker 04:
Welcome back.

[00:11:33] Speaker 00:
Thank you.

[00:11:36] Speaker 00:
The first point is referring to the question of whether or not Nintendo had the ability to file early summary judgment motion.

[00:11:43] Speaker 00:
What is in the record is that the scheduling order and the standing order from the judge, district judge in the eastern district, didn't bar an early summary judgment motion.

[00:11:55] Speaker 00:
So that's what's in the record.

[00:11:57] Speaker 00:
And I'm not going to tell you what my personal experience is with the Eastern District, because that's not in the record.

[00:12:05] Speaker 00:
What is in the record is they had the ability, and they were not barred from filing an early summary judgment motion.

[00:12:15] Speaker 00:
The district court, the Washington District Court, granted this $34,000 in attorney's fees.

[00:12:24] Speaker 00:
And it is based on findings.

[00:12:27] Speaker 00:
which we can't tell whether they're 285 or the inherent powers, but regardless of which ones they are, no doubt the district court has discretion and the standard is abusive discretion.

[00:12:42] Speaker 00:
So I want to tell you why you should second guess the district court and reverse that finding and granting of attorney's fees.

[00:12:52] Speaker 00:
It was based upon

[00:12:54] Speaker 00:
If you look in the joint appendix or the addendum at A3, that's the portion, the second half of the page, the bottom half of the page, is the portion of Judge Lastnick's order that made these findings.

[00:13:09] Speaker 00:
And the findings of what they refer to, what the court refers to as bad faith, is based upon a non-testing

[00:13:21] Speaker 00:
of 1700 products.

[00:13:22] Speaker 00:
So we have accusations against 1900 games and we tested 200 of them.

[00:13:28] Speaker 00:
So the criticism is we should have tested more.

[00:13:32] Speaker 00:
And... Did you test 200 or you acquired 200?

[00:13:35] Speaker 00:
We acquired and tested 200.

[00:13:38] Speaker 00:
And there were 1700 that at some point in the case were accused products that we neither acquired nor tested.

[00:13:45] Speaker 00:
And the reason why is of the 200 we tested, 100% of them

[00:13:50] Speaker 00:
had the we pointing feature that we were asserting infringement in.

[00:13:55] Speaker 00:
And so there was no need to test the remainder.

[00:13:58] Speaker 00:
It's not required under the law.

[00:14:00] Speaker 00:
And it's not sanctionable conduct.

[00:14:01] Speaker 00:
And if you take a look at what the court found, you say, well, what was the result of not testing?

[00:14:07] Speaker 01:
And what you would expect to see is, well, the court said as a factual matter that the remaining 1,700 were

[00:14:18] Speaker 01:
substantially different than the ones you acquired.

[00:14:21] Speaker 00:
Yes, and I'm going to tell you why you should second-guess that.

[00:14:26] Speaker 00:
And the finding was, and so what this tells us is this finding that they were substantially different, that's an implication, or almost explicit, that if we'd only acquired and tested those others, we would have found that they didn't have this feature.

[00:14:39] Speaker 01:
Well... No.

[00:14:42] Speaker 01:
It's a statement that they were substantially different.

[00:14:45] Speaker 00:
Yes, and... And might have.

[00:14:48] Speaker 00:
If they were substantially different than if we tested them, we would have found, or at least we might have found, they were substantially different.

[00:14:56] Speaker 00:
But we know that's not the case, because the allegation, or the finding of what is different is there's two things.

[00:15:06] Speaker 00:
One is that certain games had never been released to the market, and the other were that these were older game systems that were incompatible with the pointing features of the remote.

[00:15:19] Speaker 00:
I'll address the first one, products have never been released to the market.

[00:15:24] Speaker 00:
I think it's true that if we had made an attempt to test all 1900, we probably would have discovered that we could not have acquired the products because they weren't released.

[00:15:36] Speaker 00:
But the reason why that isn't sanctionable conduct is we were relying upon, the reason why we named these products is because we tested 200 of the ones required, 100% had this feature,

[00:15:49] Speaker 00:
We believe that all Wii games therefore infringe, and so we looked and found a Nintendo published list of all Wii games, and that's what we used.

[00:15:58] Speaker 00:
And what that resulted in, this is not intentional naming of products that weren't released into the market.

[00:16:04] Speaker 00:
This was an honest mistake, and it was based upon reasonable reliance upon a published list.

[00:16:08] Speaker 00:
And so then you want to look to what did we do when we were shown that these products hadn't been released?

[00:16:16] Speaker 00:
As soon as we found out, as soon as we were notified,

[00:16:19] Speaker 00:
And Nintendo filed a motion complaining about it.

[00:16:23] Speaker 00:
And as soon as we were notified, we withdrew those games from our contentions.

[00:16:28] Speaker 00:
And so this was not some intentional naming of products that hadn't been released.

[00:16:34] Speaker 00:
And it's very relevant to look at what we did when we found out.

[00:16:37] Speaker 00:
And we immediately removed those.

[00:16:39] Speaker 00:
We didn't ask for any further evidence.

[00:16:41] Speaker 00:
We took them at their word, and we removed them.

[00:16:43] Speaker 00:
So this is not sanctionable conduct to name this naming of it was 60 products.

[00:16:49] Speaker 00:
That's not intentional conduct, that's not sanctional conduct.

[00:16:52] Speaker 00:
The next one, this finding, this is an erroneous fact finding where it says, others were used with older game systems that were incompatible with the pointing features of the Wii remote.

[00:17:02] Speaker 00:
We did not accuse old game systems that were in their configuration prior to the Wii coming out.

[00:17:09] Speaker 00:
These were older games for the game systems before the Wii that were re-released as Wii games.

[00:17:16] Speaker 00:
And when they were re-released as Wii games,

[00:17:19] Speaker 00:
But we confirmed, we have confirmed, and we put the evidence in the record that these games all use the pointing feature.

[00:17:26] Speaker 00:
These claims that we were asserting were Beauregard claims.

[00:17:29] Speaker 00:
So it's computer software that it's instructing, it's software instructing the computer to perform functions.

[00:17:36] Speaker 00:
And that's exactly what these games do, the re-released games.

[00:17:40] Speaker 00:
They have the startup procedure that has the direct pointing feature that we accused of infringement.

[00:17:46] Speaker 00:
And the allegations that we hear from Nintendo is, well, that's just a startup procedure.

[00:17:51] Speaker 00:
It's part of the menu.

[00:17:53] Speaker 00:
It's not part of the game.

[00:17:54] Speaker 00:
Well, that's not the issue for infringement.

[00:17:57] Speaker 00:
And furthermore, the Wii Menu, we've confirmed it and we have it in the record, the Wii Menu, all that software is on the discs.

[00:18:04] Speaker 00:
And so whether it's the gameplay or the menu or the startup, it's all on the discs.

[00:18:09] Speaker 00:
All those game discs fall within the features that we asserted for infringement.

[00:18:16] Speaker 00:
This finding, others were used with older game systems that were incompatible with the pointing features of Wii Remote.

[00:18:22] Speaker 00:
We have absolute evidence in the record that that is an erroneous fact finding.

[00:18:27] Speaker 00:
It should not be upheld, no matter what the level of discretion is that the court has.

[00:18:32] Speaker 00:
It is abuse of discretion to sanction attorneys based on this faulty fact finding.

[00:18:39] Speaker 00:
We have proven this to be wrong in the record.

[00:18:42] Speaker 03:
The attorneys haven't been sanctioned, correct?

[00:18:45] Speaker 00:
It's a sanction against the party, so you're correct.

[00:18:50] Speaker 00:
But it's certainly a blot on the attorney's record.

[00:18:54] Speaker 00:
But the relevant issue, the legal issue, is there should be no sanctions for this conduct that is based upon a faulty fact finding.

[00:19:08] Speaker 00:
And it's more than just the finding

[00:19:13] Speaker 00:
of these facts, there's the follow-up that says the court finds that the unnecessary and supported addition of over 1,700 accused products with no attempt to substantiate the accusations was in bad faith.

[00:19:27] Speaker 00:
But we did substantiate the accusations.

[00:19:29] Speaker 00:
We did it in the district court, and we've done it here, where we show our justification and reason, reasonable reliance upon this published list.

[00:19:36] Speaker 00:
That's one of those 60 games that weren't released ended up in the claim, in the infringement contentions for a brief time.

[00:19:44] Speaker 00:
this inclusion of what they refer to as older game system, these are re-release game systems, those, we maintain those, and even after they complain, we showed that those had the infringing features.

[00:19:57] Speaker 00:
The infringing features, use of the Wii Remote for pointing that we accused of infringement.

[00:20:01] Speaker 00:
And those claims remained in the infringement contentions all the way up until we removed all the games after there was a claim construction on claim 47.

[00:20:10] Speaker 00:
So these are

[00:20:14] Speaker 00:
It is an abuse of discretion for this sanction to be awarded when it's based upon erroneous fact findings.

[00:20:20] Speaker 00:
And I'll reserve the rest of my time for rebuttal.

[00:20:25] Speaker 04:
We will do that.

[00:20:25] Speaker 04:
And that will be only on the cross appeal.

[00:20:27] Speaker 00:
Correct.

[00:20:30] Speaker 04:
Mr. Nelson.

[00:20:42] Speaker 02:
So I want to address

[00:20:44] Speaker 02:
counsel's point with respect to their theories on the unaccused games, or the uninvestigated games.

[00:20:54] Speaker 02:
So in the record, at A7411 are the third amended infringement contentions.

[00:21:00] Speaker 02:
And the claim 47, which is the claim that involved almost all of these products, is the contentions related to that claim began at A7463.

[00:21:13] Speaker 02:
Planoff had four separate theories of infringement for the games.

[00:21:18] Speaker 02:
The first one was this, quote, they call it a game startup.

[00:21:22] Speaker 02:
But it's actually not a game startup at all.

[00:21:25] Speaker 02:
It's the Wii menu which resides on the Wii system as firmware.

[00:21:30] Speaker 02:
It's not a game.

[00:21:32] Speaker 02:
It never was.

[00:21:34] Speaker 02:
And the best evidence here of what's going on is we have sort of a theory shift as

[00:21:42] Speaker 02:
this case progressed, plaintiff discovered this Wii Menu aspect and actually accused the Wii Menu as being Nintendo's infringement at the end of the case.

[00:21:53] Speaker 02:
And that's shown by the expert report that their experts, Brogioli and Hooper, put forth at A14967 and A14979 and 80.

[00:22:04] Speaker 02:
There, in opposing summary judgment, plaintiff cites to the exact same

[00:22:09] Speaker 02:
evidence as evidence of Nintendo's infringement, that it's citing for now to support its theory that all these games, that their failure to investigate really didn't have any effect.

[00:22:23] Speaker 03:
Does the record show that the 1,700 games that weren't investigated did not have the same features as the 200 games that were investigated?

[00:22:35] Speaker 02:
I think the record is silent with respect to that, Your Honor.

[00:22:39] Speaker 02:
That's their burden.

[00:22:40] Speaker 02:
The record is silent.

[00:22:41] Speaker 02:
I don't think it shows it one way or the other.

[00:22:44] Speaker 02:
But to your point further, their second infringement theory and what they went on for the games.

[00:22:50] Speaker 03:
So we don't know on this record whether their assumption that the 1700 games had the same features as the 200 was right or wrong, right?

[00:23:00] Speaker 02:
That's correct, Your Honor.

[00:23:02] Speaker 02:
But in particular,

[00:23:05] Speaker 02:
We can, with respect to their second theory, which is the in-game operation, these games did not.

[00:23:12] Speaker 02:
They sought the source code for all of these games, and their theory for game infringement, for example, Claim 47, which has a first point element, and at A5103, they're talking about hundreds or thousands of first points that these games could have.

[00:23:29] Speaker 03:
Suppose they'd come in and they'd shown that the 1700 that weren't investigated did have the same

[00:23:35] Speaker 03:
features as the 200.

[00:23:36] Speaker 03:
Where would we be then?

[00:23:37] Speaker 02:
I don't think they can.

[00:23:39] Speaker 02:
They never investigated them.

[00:23:41] Speaker 03:
You have to accept my hypothetical.

[00:23:43] Speaker 02:
Can you repeat it?

[00:23:44] Speaker 03:
The hypothetical is suppose they showed that the 1700 that weren't investigated did have the same features as the 200 that were investigated.

[00:23:54] Speaker 03:
Where would we be?

[00:23:55] Speaker 03:
Would it be appropriate under those circumstances to sanction them?

[00:23:59] Speaker 02:
Yes, it would, Your Honor, because the feature that they're talking about, the 200 that they investigate, isn't a game feature at all.

[00:24:07] Speaker 02:
It's the Wii menu which resides on the Wii console as firmware.

[00:24:10] Speaker 03:
I don't think you're accepting my hypothetical.

[00:24:12] Speaker 03:
I'm saying that the 1,700 games turn out to have the same features as the 200 games that were investigated.

[00:24:20] Speaker 02:
No, I understand your hypothetical, Your Honor, but my point is, assuming you're correct,

[00:24:26] Speaker 02:
Their whole theory with respect to that was that that was a game feature.

[00:24:32] Speaker 02:
And had they investigated this case properly, including the 200, they would have known that it wasn't a game feature.

[00:24:39] Speaker 02:
They conflate, first of all, this stuff, this wee menu feature.

[00:24:43] Speaker 03:
You're just not accepting my hypothetical.

[00:24:44] Speaker 03:
I'm saying that it's the same.

[00:24:46] Speaker 03:
They're the same.

[00:24:46] Speaker 03:
The 1700 are the same as the 200.

[00:24:49] Speaker 02:
No, I understand your hypothetical, Your Honor.

[00:24:51] Speaker 02:
And my response to that is that

[00:24:56] Speaker 02:
Their 200 that they did investigate under this, they quote, game startup theory, is actually about Nintendo.

[00:25:02] Speaker 02:
It's not about the games at all, these third party manufactured games or the Nintendo games.

[00:25:08] Speaker 02:
And so even if your premise is correct and the same Wii menu is used for all 1900 plus of them, that's not a game feature.

[00:25:18] Speaker 02:
They conflate game and disc.

[00:25:20] Speaker 03:
But that's to say that the 200 in French,

[00:25:24] Speaker 02:
That's correct, Your Honor.

[00:25:25] Speaker 03:
They weren't sanctioned for bringing the claims with respect to the 200.

[00:25:31] Speaker 03:
They were sanctioned for failing to investigate the 1700.

[00:25:35] Speaker 03:
Correct.

[00:25:35] Speaker 03:
So let's assume that there was a vulnerable case with respect to the 200 and the 1700 were the same as the 200.

[00:25:42] Speaker 03:
Would there be a basis for sanctions?

[00:25:44] Speaker 02:
I still think there would, Your Honor, because there

[00:25:47] Speaker 02:
That's one of four total theories.

[00:25:50] Speaker 02:
They had a second theory as well that we expended an extraordinary amount of money trying to figure out what it was with respect to all 1900 games.

[00:25:58] Speaker 02:
And that's that the actual in-game operation infringed, and they sought source code for these games.

[00:26:04] Speaker 02:
They subpoenaed three third parties.

[00:26:06] Speaker 03:
That's an argument that the 200 should be sanctioned for bringing the claims to the 200 as well.

[00:26:12] Speaker 02:
No, that's an argument that they didn't investigate the other 1700.

[00:26:18] Speaker 02:
Thus, we didn't have any idea what their theories were.

[00:26:22] Speaker 02:
Even if your premise is correct with respect to the first theory, with respect to the second theory, we didn't have any idea what their theory was.

[00:26:30] Speaker 02:
And they had, you know, they're saying there's thousands of these first points in every game.

[00:26:36] Speaker 02:
The games are different, you know, in-game play.

[00:26:38] Speaker 02:
Each of these games are different games.

[00:26:41] Speaker 02:
And so that failure to investigate still, in our view, is sanctionable conduct.

[00:26:46] Speaker 04:
Thank you, Mr. Nelson.

[00:26:47] Speaker 04:
I think we have your phone.

[00:26:48] Speaker 04:
Thank you.

[00:26:49] Speaker 04:
Mr. Rogers has rebuttal time on the cross appeal.

[00:26:59] Speaker 00:
I'd like for you to distinguish what's in the record versus what is attorney argument.

[00:27:03] Speaker 00:
When you hear counsel say that this startup procedure

[00:27:11] Speaker 00:
resides on the Wii system as firmware.

[00:27:14] Speaker 00:
Look at every place in the brief where they say that.

[00:27:16] Speaker 00:
There's no record sign.

[00:27:17] Speaker 00:
It's not in the record.

[00:27:19] Speaker 00:
It's attorney argument.

[00:27:20] Speaker 00:
What is in the record is that the Wii menu, that same thing they say is on the firmware, which I don't know whether it's on the firmware or not.

[00:27:28] Speaker 00:
It's not in the record.

[00:27:30] Speaker 00:
What I do know is what the record evidence shows is that the Wii menu is on all the Wii game discs.

[00:27:39] Speaker 00:
once again, it's a question of the structure of this claim 47.

[00:27:42] Speaker 00:
We were asserting infringement against the game disks.

[00:27:45] Speaker 01:
So all of their arguments about... When you say the menu is on the disk, you mean it shows up when you insert the disk?

[00:27:53] Speaker 00:
No.

[00:27:53] Speaker 00:
The software is on the disk.

[00:27:55] Speaker 00:
And that's one of these green colored record evidence sites that they want.

[00:28:02] Speaker 00:
They designate as confidential.

[00:28:05] Speaker 00:
It's a fact.

[00:28:06] Speaker 00:
It's record evidence.

[00:28:09] Speaker 00:
When we test 200 games and 100% of them have this feature, it's more than just an assumption.

[00:28:16] Speaker 00:
It's a reasonable inference that all the other games do, too.

[00:28:20] Speaker 00:
And yes, the record is silent as to whether or not these 1,700 other games have the feature.

[00:28:28] Speaker 00:
But I think there's plenty of circumstantial evidence that there is.

[00:28:31] Speaker 00:
And it's telling the fact that the record is silent and that Nintendo, who controls all the manufacturing of these discs,

[00:28:39] Speaker 00:
hasn't brought in a single game that doesn't have that software on disk.

[00:28:45] Speaker 00:
I can guarantee you, if there is any out there, we would have seen it in the record.

[00:28:49] Speaker 00:
And that was a reasonable assumption and inference when we made the allegation, and it remains today.

[00:28:56] Speaker 00:
We still believe that all of those 1,700 games have this infringing feature.

[00:29:03] Speaker 03:
What's involved in the testing?

[00:29:05] Speaker 03:
What has it done to test the games?

[00:29:10] Speaker 00:
We insert the disc, we acquire the games, and we have a Wii system.

[00:29:17] Speaker 00:
We insert the games, and we did screenshots that we put into the record of the pointing feature, the startup menu, and even when you go into the operation of the game.

[00:29:30] Speaker 00:
And so that's why you see excerpts in the brief of these screenshots that's in the record, and we provided those as a part of the infringement contingent.

[00:29:40] Speaker 00:
So, once again, when we test 200 games, it's reasonable conduct.

[00:29:48] Speaker 00:
We shouldn't be required to test all 1700, and there's been no showing that if we had tested any more of the 1700, that things would have been any different, except, of course, for the issue where there were 16 non-release games, and that's a different issue because we relied reasonably on a published list from Nintendo.

[00:30:09] Speaker 00:
And when it was pointed out to us that we were misreading the list, we immediately withdrew those claims.

[00:30:16] Speaker 03:
Well, I guess you could have come in and chosen some examples from 1700 and shown that they had the same creatures when it came to the attorney's fees issue, and you didn't do that.

[00:30:26] Speaker 00:
Well, I think this came very late in the game.

[00:30:30] Speaker 00:
And you're talking about post-judgment proceeding on attorney's fees.

[00:30:36] Speaker 00:
And no, we were not doing discovery.

[00:30:38] Speaker 00:
We're not acquiring more games.

[00:30:40] Speaker 00:
I think it's still reasonable for us to rely upon the inferences that we made initially.

[00:30:47] Speaker 00:
And we still believe today.

[00:30:50] Speaker 00:
So we ask that you vacate and reverse sections.

[00:30:52] Speaker 04:
Thank you, Mr. Rogers.

[00:30:53] Speaker 04:
We'll take the case on revisement.