[00:00:00] Speaker 02:
her staff for their assistance in putting this program together and making it a delight and very easy for us to sit here this morning.

[00:00:08] Speaker 02:
And now I'd like to call on the Dean for a couple moments.

[00:00:17] Speaker 01:
May it please the Court, I'm Danielle Taha and I have the great privilege of serving as Dean here and I simply want to thank the Court

[00:00:24] Speaker 01:
for this amazing opportunity for our students, and welcome you and all our guests to this great law school.

[00:00:32] Speaker 01:
And if there's anything I can do, or any of my staff can do to make the day better, we look forward to it.

[00:00:39] Speaker 01:
And I thank counsel for being here.

[00:00:42] Speaker 01:
We have a lovely spot on the face of the earth, and it's a pretty darn good law school.

[00:00:47] Speaker 01:
So thank you all very much, and have a wonderful day here in Mountain.

[00:00:53] Speaker 02:
Thank you.

[00:00:53] Speaker 02:
Once again, thank you all for accommodating us.

[00:00:57] Speaker 02:
Calling our first case this morning is 151410 Universal Electronics versus Universal Remote Control.

[00:01:06] Speaker 02:
Mr. Kang, whenever you're ready.

[00:01:08] Speaker 04:
Good morning, Your Honor.

[00:01:09] Speaker 04:
May it please the Court.

[00:01:09] Speaker 04:
My name is Peter.

[00:01:10] Speaker 02:
We still have a live case, right?

[00:01:11] Speaker 04:
Yes, Your Honor.

[00:01:13] Speaker 04:
Last I checked right before the hearing started.

[00:01:16] Speaker 04:
May it please the Court.

[00:01:17] Speaker 04:
I'm Peter Kang.

[00:01:18] Speaker 04:
I represent the appellate.

[00:01:19] Speaker 04:
Could you speak up a little, please?

[00:01:20] Speaker 04:
I'm sorry, Your Honor.

[00:01:21] Speaker 04:
I have a sore throat, so I apologize.

[00:01:24] Speaker 04:
I'm Peter Kong.

[00:01:24] Speaker 04:
I represent the Appellate Universal Remote Control.

[00:01:27] Speaker 04:
Your Honors, the district court's post-trial rulings in this case should be reversed for three basic reasons.

[00:01:33] Speaker 04:
First, at the final pre-trial conference, the court put the burden on the appellee, UEI, to make a choice as to whether or not to bifurcate the case during trial.

[00:01:44] Speaker 04:
and UEI made the decision during trial not to ask for bifurcation and by its actions consented to a binding jury verdict.

[00:01:53] Speaker 04:
Second, the court's post-trial declaration that the jury verdict was merely advisory was too late and ineffective under Rule 39 when there was no discussion of using advisory verdict at any point during the final pretrial conference or during trial.

[00:02:09] Speaker 04:
And finally, the district court's reconsideration of

[00:02:13] Speaker 04:
overlapping factual issues that overlapped between the equitable defenses and the legal defense of improper inventorship, that reconsideration by the district judge deprived my client, URC, of its seventh amendment right to have a jury decide those overlapping facts.

[00:02:30] Speaker 04:
What's the standard of review here?

[00:02:35] Speaker 04:
The first two.

[00:02:37] Speaker 04:
Abusive discretion.

[00:02:38] Speaker 04:
It's an issue of law.

[00:02:40] Speaker 02:
Well, on the abuse of discretion question, what we've got up here is a long record that we're reviewing cold.

[00:02:47] Speaker 02:
And I know you pull snippets and your friend on the other side pulls snippets about what was said and when to go on your side.

[00:02:53] Speaker 02:
It's just hard for me.

[00:02:55] Speaker 02:
It's difficult.

[00:02:55] Speaker 02:
What is your best argument?

[00:02:57] Speaker 02:
What was your best site in the record to establish that this well-known longstanding jurist abused his discretion by calling it as he saw it, having sat through the trial and all of the proceedings.

[00:03:10] Speaker 04:
The fact that the appellee UEI filed Rule 50A Jamal motions on the equitable issues indicates during trial they believed, they consented, that this would be a binding jury verdict.

[00:03:24] Speaker 04:
One only files a Jamal motion

[00:03:27] Speaker 04:
under Rule 50A when it is going to a binding jury verdict.

[00:03:31] Speaker 03:
But consent here isn't required just by the parties but also by the court, correct?

[00:03:35] Speaker 03:
And didn't the District Court make it clear during the second day of trial that it was going to decide the equitable issues?

[00:03:42] Speaker 04:
Not exactly, Your Honor.

[00:03:44] Speaker 04:
The procedure the District Court established at the final pretrial conference was that the burden was on the plaintiff, UEI below, to decide and declare whether during trial it wanted to go into

[00:03:56] Speaker 04:
a bifurcated judge-only mode on the equitable issues.

[00:04:00] Speaker 04:
The district court gave the plaintiff below that choice and that burden, and the plaintiff below never exercised that right and never exercised that burden, made the deliberate choice to have a hometown jury decide the equitable issues instead of the court.

[00:04:15] Speaker 05:
Well, the record's a bit unclear on that.

[00:04:18] Speaker 05:
I think what we're trying to figure out is what happened

[00:04:21] Speaker 05:
what was agreed upon or not agreed upon before the jury began.

[00:04:26] Speaker 05:
We can't have a district judge after a jury trial declare whether or not a verdict by a jury was merely advisory versus main finding.

[00:04:36] Speaker 05:
But the judge here wrote an opinion that tried to explain why

[00:04:41] Speaker 05:
under the circumstances, in the context of everything that was happening in the lead up to the jury trial, really signaled that if the verdict was, if the jury was going to get the equitable issues it was going to be advised with.

[00:04:55] Speaker 05:
As I recall, the proposed final pretrial order, we had one party that had a very specific conception on what to do with the equitable issues.

[00:05:06] Speaker 05:
They don't go to the jury.

[00:05:08] Speaker 05:
Then we had another party, which was your side, that said, well, we certainly want the jury to hear all the...

[00:05:15] Speaker 05:
issues or the facts regarding the equitable issues.

[00:05:19] Speaker 05:
And then your side proposed that the judge would have the discretion, if he wanted to, to get an advisory verdict from the jury.

[00:05:28] Speaker 05:
So maybe what was going on was there was a choice between two options.

[00:05:34] Speaker 05:
Option A, the jury doesn't hear it, doesn't issue a verdict at all.

[00:05:38] Speaker 05:
Or option B, the jury does give a verdict, but it's merely advisable.

[00:05:45] Speaker 05:
And so maybe under those circumstances, given the lead up to the actual jury trial,

[00:05:51] Speaker 05:
That is what the district judge below is communicating to us as to what happened, and those are the two choices.

[00:05:58] Speaker 05:
And so under those circumstances, nobody at all contemplated a finding jury verdict.

[00:06:05] Speaker 05:
What's wrong with that basic understanding of what happened below?

[00:06:09] Speaker 04:
Under Pratier and the other cases cited, if there's going to be an advisory jury verdict, the court has to declare ahead of time under Ninth Circuit law that it is in fact an advisory jury verdict.

[00:06:20] Speaker 04:
There is nothing in the final pre-trial conference transcript

[00:06:24] Speaker 04:
where anyone talks about advisory verdict.

[00:06:27] Speaker 04:
The statement that my client made in the proposed pretrial order, which was never entered, was preceded by, in context, by a very clear statement that our side did not want bifurcation and wanted everything to go to the jury.

[00:06:41] Speaker 04:
And we were, at that point, we didn't know what was going to happen.

[00:06:44] Speaker 04:
And so we're talking about one possible alternative.

[00:06:47] Speaker 04:
We were not advocating it.

[00:06:48] Speaker 04:
And we did not advocate it at the final pretrial conference.

[00:06:51] Speaker 04:
The court never discussed it.

[00:06:52] Speaker 04:
at the final pre-trial conference.

[00:06:54] Speaker 04:
In fact, the district court specifically withheld judgment on this issue.

[00:06:58] Speaker 05:
The procedure, the district... But hypothetically, there's a lot of discussion going on, a lot of debate, and the debate is revolving around whether the jury's going to hear the evidence at all and issue any kind of verdict versus the jury's going to hear the issue on equitable matters and then issue an advisory verdict.

[00:07:19] Speaker 05:
If those are the only two choices that are actually ever expressed,

[00:07:24] Speaker 05:
then why wouldn't the understanding, why wouldn't it be fair for the judge to do what he did here, which is to conclude, because the jury did get to hear the evidence, because the jury did issue a verdict, it was understood by everybody, given the two limited choices that were being actually discussed, that it was just going to be an advisory verdict, and nobody at any time ever said a thing about the verdict being binding.

[00:07:50] Speaker 04:
Well, Your Honor, our position was that it should be binding, that everything should go to the jury.

[00:07:55] Speaker 04:
I think that was clear.

[00:07:55] Speaker 04:
We made it clear on the record.

[00:07:57] Speaker 05:
Is there anything in the record where your side ever used the term binding?

[00:08:04] Speaker 04:
I don't know if we used the word binding, but we certainly advocated that everything should go to the jury.

[00:08:08] Speaker 04:
And, Your Honor, under rule 39, the status quo is unless the district court specifically declares ahead of trial before the jury is impaneled that it is, in fact, advisory.

[00:08:19] Speaker 04:
The status quo is that it is a non-advisory jury verdict.

[00:08:22] Speaker 04:
That's what the case law teaches us.

[00:08:24] Speaker 02:
Didn't he consistently in various contexts call himself the trier of fact and make various references to suggest that indeed the jury was advisory?

[00:08:33] Speaker 04:
Again, context is very important.

[00:08:35] Speaker 04:
That colloquy happened on only the second day of trial when it was still possible for UEI to ask for bifurcation and so it was still technically possible for the court to sit as a partial trier of fact if UEI chose

[00:08:47] Speaker 04:
to exercise the burden that he put on them.

[00:08:50] Speaker 04:
Furthermore, if you look in the context of that colloquy, the district court was admonishing the parties about deposition designations.

[00:08:57] Speaker 04:
This was not a colloquy on the equitable issues at all.

[00:09:00] Speaker 04:
It was about the amount of objections on depot designations with regard to prior art.

[00:09:04] Speaker 02:
I think the district court here at some point relied on your silence or your failure to react shortly after trial, where he made absolutely clear he viewed the verdict as advisory.

[00:09:14] Speaker 02:
and New Year's side waited a while to come forward and dispute what he had said.

[00:09:18] Speaker 02:
Is that your view of it?

[00:09:20] Speaker 04:
No, Your Honor.

[00:09:20] Speaker 04:
That was, if you recall, again, context is important.

[00:09:23] Speaker 04:
The verdict had, this was not an oral argument, the verdict had just been read, the jury had just been dismissed, and the court, immediately after making that comment about him being an advisory verdict,

[00:09:34] Speaker 04:
dismissed us and said, come up with a briefing schedule on what we're going to do.

[00:09:38] Speaker 04:
And there was no reason, he was certainly not inviting oral argument on whether it was advisory or not and whether or not the equitable issues should be reconsidered or not.

[00:09:47] Speaker 04:
In fact, he told us to come up with a briefing schedule to lay out exactly what our positions were.

[00:09:51] Speaker 03:
And there was not an appropriate time.

[00:09:53] Speaker 03:
I certainly recall that the court at that point said that the equitable issues it was going to take on itself

[00:10:00] Speaker 03:
And it was going to leave alone the other jury, the jury board, as to the other issues.

[00:10:09] Speaker 03:
And the court said, is there any problem with that?

[00:10:11] Speaker 03:
It's an objection.

[00:10:12] Speaker 03:
And you did not say, I object.

[00:10:15] Speaker 04:
Your Honor, there was not a request for objections at that point in the hearing.

[00:10:19] Speaker 04:
He said, in fact, everyone in his view, he said that all the parties that he believed it was

[00:10:29] Speaker 04:
He said, we all know those were advisory.

[00:10:32] Speaker 04:
And then again, he asked us to come up with a briefing schedule to talk about this very issue.

[00:10:36] Speaker 04:
There was no reason to stand up and re-object and object at that point if he was asking for a briefing on that very issue.

[00:10:43] Speaker 02:
What's at stake in this case?

[00:10:45] Speaker 04:
Your Honor, our client is a small privately held company.

[00:10:48] Speaker 04:
The attorney's fees issue and the attorney's fees decision here was precisely predicated on the error of law of taking away the defenses on the other patents that were found against them.

[00:11:00] Speaker 02:
Now, you've already received attorney's fees on a large portion of this case, correct?

[00:11:04] Speaker 04:
About half the case, yes, Your Honor.

[00:11:05] Speaker 04:
And so for our client, the remaining attorney's fees portion is a not insignificant amount of money as compared to the larger publicly traded company.

[00:11:19] Speaker 05:
what you gain by succeeding in getting this case back in front of Judge Guilford, given that he's already weighed the strength of the other side's argument with respect to the patent this year's defense.

[00:11:34] Speaker 05:
In fact, he is specifically found in their favor in disagreement with the jury verdict.

[00:11:40] Speaker 05:
So even if the jury verdict ultimately

[00:11:43] Speaker 05:
is deemed to be binding.

[00:11:46] Speaker 05:
To get attorney's fees, you have to really show the judge and convince the judge that their position on the balance was really unreasonable.

[00:11:55] Speaker 05:
It's down now from all the other ordinary litigation positions someone can take.

[00:12:00] Speaker 05:
And we already have, on the record, a very full analysis by the judge below on the strength of the matter.

[00:12:11] Speaker 05:
There's a practical, functional matter you're going to win.

[00:12:14] Speaker 04:
Well, first of all, the attorney's fee's decision is premised on the judge being able to be a trier of fact on those issues.

[00:12:21] Speaker 04:
If we're correct and there was an error of law in the juries, very... Right, but there's no rule that a prevailing party always gets attorney's fees.

[00:12:28] Speaker 04:
No, Your Honor.

[00:12:28] Speaker 04:
But there's also the Seventh Amendment issue, right?

[00:12:31] Speaker 04:
As under the case law cited,

[00:12:33] Speaker 04:
Our client is entitled to binding jury findings, both express and implicit, that overlap the legal defenses with the equitable defenses.

[00:12:43] Speaker 04:
And here, the improper inventorship directly overlaps the patent misuse and unclean hands defenses.

[00:12:49] Speaker 04:
And if the court did not reconsider those facts... Sorry, you're talking about a different issue.

[00:12:56] Speaker 04:
But it plays into the attorney's fees because if the court is bound under the Seventh Amendment to accept the jury's findings as to improper inventorship, which all overlap the equitable defenses just under the unique facts of this case,

[00:13:08] Speaker 05:
then the court is not in a position to reconsider and re-evaluate the facts that underlie patent misuse and unclean hands.

[00:13:29] Speaker 04:
But it's clear from the attorney's fees order that the court just re-decided those issues and did not

[00:13:36] Speaker 04:
treat the jury's verdict itself as binding in any way on the court.

[00:13:39] Speaker 04:
It is at least at a minimum imperative that you allow the district court to reconsider the issue.

[00:13:44] Speaker 02:
So it's a do-over, and you don't necessarily disagree that the arrows point against you in the do-over.

[00:13:51] Speaker 04:
We're willing to take our chances below, Your Honors.

[00:13:53] Speaker 03:
Judge Raina, I have a further question.

[00:13:55] Speaker 03:
So go back to my prior question, and I'm trying to probe and see where we are on the issue of consent and how that

[00:14:02] Speaker 03:
the consent of the court, the consent of the parties as to which equitable issues are going to be decided by the jury.

[00:14:09] Speaker 03:
And I quoted to you just out of my own recollection of the record.

[00:14:13] Speaker 03:
I kind of found a citation here on the same day that the jury returned its verdict.

[00:14:19] Speaker 03:
The district court said, among other things, in light of this verdict, to the extent that there were equitable issues, we all know that those were advisable.

[00:14:29] Speaker 03:
The last thing, of course, that there any objection to doing that, and the parties actually responded, no objection.

[00:14:37] Speaker 03:
So it seems going into the trial, and immediately after the trial, the status quo, as the district court framed the circumstance, was that there was no consent.

[00:14:49] Speaker 04:
Your Honor, the question for immediately proceeding any objection to that was, may I release the jury?

[00:14:53] Speaker 04:
The court was asking whether there was an objection to releasing the jury.

[00:14:56] Speaker 04:
And then immediately right after that said, any objection to that.

[00:14:59] Speaker 04:
Of course, we didn't object to him releasing the jury.

[00:15:01] Speaker 04:
And there's a sentence even preceding that where he talks about setting the schedule for briefing on the equitable issues, which precedes all that.

[00:15:10] Speaker 04:
Again, there was no reason for us to stand up and object to his comment on advisory.

[00:15:15] Speaker 03:
There's a statement by the court on this very important issue.

[00:15:19] Speaker 03:
And you took his question, any objection to doing that, in light of everything else he had said,

[00:15:26] Speaker 03:
He took that only to refer to whether he should release a jury or not?

[00:15:30] Speaker 04:
There was a statement that he made that he thought it was an advisory verdict.

[00:15:37] Speaker 04:
He was not inviting oral argument at that point.

[00:15:39] Speaker 04:
Immediately after that statement, he said, come up with a briefing schedule.

[00:15:42] Speaker 04:
Immediately after that, he says, I'm going to release the jury.

[00:15:45] Speaker 04:
Is there any objection to that?

[00:15:47] Speaker 02:
Well, lawyers are not known for being shy.

[00:15:52] Speaker 02:
Wouldn't it have just been proper at that point for the lawyers at least to try to make sure they preserve the argument by saying, Your Honor, if you may excuse us, I'd just like to make one point about your statement.

[00:16:04] Speaker 02:
Wouldn't that be the norm rather than the exception?

[00:16:07] Speaker 04:
This court had, the court below had admonished both parties about over-lawyering.

[00:16:12] Speaker 04:
Don't release the jury, because we still think there's work for the jury to be had.

[00:16:17] Speaker 04:
No, Your Honor, there was no more work.

[00:16:18] Speaker 04:
The jury had delivered its verdict on the equitable defenses.

[00:16:21] Speaker 04:
If I may go to this point in standing, Your Honor, there is also parallel malicious prosecution litigation going on in state court between the parties.

[00:16:30] Speaker 04:
And it is clear that reinstating the jury verdict in this case on equitable issues will have or could have evidentiary impact in that state court action.

[00:16:40] Speaker 04:
And therefore, putting aside the attorney's fees issue, which we believe there is something at stake, there's also something at stake there.

[00:16:47] Speaker 04:
And of course, there is also ongoing second patent litigation filed by the plaintiff against my client involving similar patents, similar products.

[00:16:55] Speaker 04:
And again, that case, until recently, was stayed.

[00:16:58] Speaker 04:
We believe reinstating the jury verdict in this case would, again, could have evidentiary impact in that second patent case.

[00:17:05] Speaker 04:
Okay.

[00:17:05] Speaker 02:
We're out of time here.

[00:17:06] Speaker 02:
We'll restore two minutes of your time.

[00:17:10] Speaker ?:
Thank you.

[00:17:24] Speaker 00:
Thank you, Your Honor, and may it please the Court.

[00:17:26] Speaker 00:
Good morning.

[00:17:26] Speaker 00:
Until about five minutes in my friend's argument, you wouldn't have known that this was an attorney's fees dispute.

[00:17:35] Speaker 00:
It is an attorney's fees dispute, and that's all it is.

[00:17:38] Speaker 00:
The judgment here should be affirmed for two basic reasons.

[00:17:40] Speaker 00:
First, high mark.

[00:17:43] Speaker 00:
The Supreme Court established that the standard of review is abuse of discretion.

[00:17:47] Speaker 00:
And yes, footnote two says that abuse of discretion often subsumes issues of law and findings of fact.

[00:17:52] Speaker 00:
But the issue of law that they say exists here, which is who was the proper trier of these issues, does not go at all to the second point that I'm going to make, which is that in Octane, the Supreme Court established that the substantive strength of a party's litigating position is the standard for determining whether or not fees should be awarded.

[00:18:17] Speaker 00:
And in this case, as Chief Judge Prost recognized,

[00:18:20] Speaker 00:
earlier, a very well-regarded jurist made a very careful and granular evaluation of the record in this case.

[00:18:28] Speaker 02:
But the real question is whether or not he did so properly, that whether or not there was a binding jury verdict that he was required to follow, whether or not at the end of the day you go to grand attorney's fees is sort of related to Judge Chen's later question.

[00:18:41] Speaker 02:
But on that question, I mean, there's a real

[00:18:44] Speaker 05:
issue is there not I don't think there's a live issue at all because the only because none of those

[00:18:59] Speaker 05:
form of patent misuse by deceptively changing the inventorship of the patent.

[00:19:07] Speaker 05:
And he's bound by the finding of the jury that the other side proved by clear and convincing evidence that your team, with deceptive intent, misled the PTL in believing that the inventors were these people that were actually not the inventors.

[00:19:27] Speaker 05:
Then all of a sudden, that becomes compelling evidence, isn't it, that they went a pretty far way in proving a serious fact that now the judge on potential remand would have to be found by and consider and evaluate in trying to assess the relative strength of your litigation position.

[00:19:47] Speaker 05:
That maybe now, under that scenario, you didn't have a very strong position to defend.

[00:19:53] Speaker 00:
So Judge Chen, if I can offer you two responses to that.

[00:19:59] Speaker 00:
First, this court's decision in SFA systems, which we briefed and which my friend here did not mention in his argument, says, and I quote, in octane fitness, the Supreme Court made clear that it is the substantive strength of the party's litigating position that is relevant to the exceptional case determination, not the correctness or eventual success of that position.

[00:20:23] Speaker 00:
And my second response to you is let's imagine that hypothetical remand that we're imagining together here.

[00:20:30] Speaker 00:
What does that look like?

[00:20:31] Speaker 00:
Well, that remand says, well, OK, the jury verdict is binding instead of advisory.

[00:20:38] Speaker 00:
But then, if it's a binding verdict, then we're going to have a certain period of time

[00:20:43] Speaker 00:
now that we know that it's a binding verdict, to bring our 50B motion and renew the 50A motion, which I'll be happy to talk about why that's not any kind of waiver or consent in a moment.

[00:20:54] Speaker 00:
But then, what is the judge likely to do?

[00:20:57] Speaker 00:
Well, based on his independent equitable ruling, he's either likely to give us JMAW on this now binding verdict or, at the very least, a new trial.

[00:21:07] Speaker 00:
This is the sort of satellite litigation that SFA Systems was concerned about.

[00:21:11] Speaker 00:
Remember that in that case, Newegg appealed

[00:21:14] Speaker 00:
a case that where the issues were of claim construction and I think indefiniteness, if I remember correctly in that case, were completely unnecessary.

[00:21:22] Speaker 00:
The case was over.

[00:21:23] Speaker 00:
The party had dismissed, but they wanted to appeal those things to show that the judge was wrong.

[00:21:29] Speaker 00:
And this court's decision said, we don't care about that.

[00:21:31] Speaker 00:
We're not going to take this up because that's just going to invite this sort of satellite litigation on

[00:21:38] Speaker 00:
issues that have no bearing to the ultimate result of the case.

[00:21:41] Speaker 02:
Yeah, but I'm a little hard pressed to accept what sounds to me like more of a policy issue.

[00:21:47] Speaker 02:
I mean, there's no real mootness.

[00:21:48] Speaker 02:
I mean, it's not really, we can't say as a matter of law that it doesn't matter.

[00:21:52] Speaker 02:
And this case is moot because we are certain that the district court judge, even if we say the binding, the verdict was binding.

[00:22:00] Speaker 02:
the district court judge is not going to award attorney's fees.

[00:22:03] Speaker 02:
We might speculate about the likelihood of that, but we can, as a matter of law, say, no, we don't have to send it back if we think he was wrong.

[00:22:12] Speaker 00:
Well, we certainly haven't argued, Chief Judge Prost, that the cases moot, because there is a live dispute with regard to attorney's fees that our friend has brought to this court.

[00:22:21] Speaker 00:
Our point is quite different one.

[00:22:23] Speaker 00:
That is that the inquiry about correctness is under SFA systems,

[00:22:27] Speaker 00:
Not relevant.

[00:22:28] Speaker 00:
It's under octane.

[00:22:29] Speaker 00:
What's relevant is the substantive strength of a party's litigating position.

[00:22:34] Speaker 00:
And even if in our hypothetical remand that were to be upheld, nothing in Judge Guilford's careful decision in this case depended on or relied upon the failures of these defenses.

[00:22:47] Speaker 00:
It was an evaluation of the substantive strength.

[00:22:50] Speaker 00:
And you've got to think at this point when you're under a very deferential abuse of discretion standard as you are here.

[00:22:57] Speaker 00:
that the judge's careful findings about the substantive strength of the litigating positions of this case are not going to change.

[00:23:04] Speaker 00:
And they couldn't change because the issue here has to do not with the strength of the position.

[00:23:10] Speaker 05:
The strength is still... So you are, in essence, making type of a move in this argument that it doesn't matter here, either way, whether we agree with the other side that verdict was binding versus advisory, because in your view,

[00:23:27] Speaker 05:
That's a side show that the judge has already made its ruling on the substantive strength of your side of the position, and so therefore there can never in any mathematical way be a chance where the judge is going to change his mind on that score.

[00:23:43] Speaker 00:
I don't think that that's my burden or that that's on abusive discretion.

[00:23:48] Speaker 00:
You don't have to believe that there's an absolute metaphysical certainty that under an alternate world the result would be different.

[00:23:56] Speaker 00:
Because, and I'll get to the point about why they're wrong on the law under Rule 39 in the Seventh Amendment in a second here, but with regard to the question that you're asking me, I think Judge Chen, with all respect, that SFA Systems forecloses that sort of argument here, because SFA Systems, the court could very well have decided the claim construction issues that were underlying Newegg's appeal in that case, and decided, you know, they were wrong,

[00:24:22] Speaker 00:
under de novo review like my friend once here for the rule 39 and seventh amendment issues.

[00:24:28] Speaker 00:
And let's go send it back because goodness knows maybe the judge would have made a different decision in that case.

[00:24:34] Speaker 00:
I don't think they can get over the hump of SFA systems.

[00:24:37] Speaker 00:
Now, going beyond that to the actual substance of their rule 39 and seventh amendment arguments, let me start with this.

[00:24:46] Speaker 00:
With regard to the rule 39 arguments, my friend fails to point out

[00:24:52] Speaker 00:
that Judge Guilford made a finding of fact on the entire record in this case.

[00:24:58] Speaker 00:
And that finding was, is found at A9.

[00:25:01] Speaker 00:
And it was that the court found that the parties knew at the outset that the verdict on the equitable issues was going to be advisory only.

[00:25:12] Speaker 00:
That is a finding of fact.

[00:25:13] Speaker 00:
There is no challenge on clear error grounds or abusive discretion grounds made by our friends on the other side in this case.

[00:25:20] Speaker 00:
And that finding, I think, resolves

[00:25:22] Speaker 00:
the rule 39 issue.

[00:25:24] Speaker 00:
And Judge Rainier, I think you pointed out in your colloquy with Mr. Kong all of the places in the record that amply support such a finding.

[00:25:32] Speaker 00:
So even if there had been a clear error argument

[00:25:35] Speaker 05:
There would be no clear error here.

[00:25:53] Speaker 05:
that any statements or discussions that occurred during the trial or after the trial are ultimately irrelevant on the legal question of whether a verdict should be filed.

[00:26:02] Speaker 00:
No, I can't agree with that because it really does require an evaluation.

[00:26:07] Speaker 05:
There's a case law that says, you know, the parties need to know ahead of time, before the trial begins,

[00:26:15] Speaker 05:
whether a verdict is going to be merely advisory versus binding.

[00:26:21] Speaker 05:
So everything needs to be rolled up and understood and decided before the trial even begins.

[00:26:27] Speaker 00:
Am I misremembering the cases?

[00:26:29] Speaker 00:
I think there are cases that reflect exactly that principle, and I think here on this record you have the pre-trial orders which were... So I guess therefore then the statements made by Judge Guilford during the trial are irrelevant.

[00:26:41] Speaker 05:
Oh, no, I can't... The statements he makes after the trial has been released are likewise irrelevant.

[00:26:46] Speaker 00:
Can't agree at all that they're irrelevant.

[00:26:48] Speaker 00:
That doesn't follow at all with respect, Your Honor.

[00:26:51] Speaker 05:
Where the focus really needs to be on what are the statements and agreements, concessions, or non-agreements.

[00:26:57] Speaker 00:
Let's focus on those statements that took place pre-trial.

[00:27:02] Speaker 00:
If you look at A18462, that is docket entry number 275, that is our contentions of fact and law, that was incorporated into our portion of the pre-trial order, which my friend says was never adopted, which is an A21838.

[00:27:18] Speaker 00:
That's our view.

[00:27:20] Speaker 00:
So that's our view pre-trial that these are equitable issues that are going to go to the court.

[00:27:26] Speaker 00:
And I might add, by the way, that my friend has set up this dichotomy that the only way we could have possibly preserved our right to have an equitable determination on these issues is by asking for bifurcation.

[00:27:39] Speaker 00:
Well, the judge made it pretty clear he didn't want bifurcation, but that was hardly a waiver of our position that this was always going to be equitable.

[00:27:48] Speaker 00:
Now, if you look at URC's portion of that same pretrial order, 21847, it says, and this is an alternative argument because, of course, they did want everything to be in front of the jury, although they didn't say anything about binding.

[00:28:01] Speaker 00:
I think you were the one who asked my friend about whether they used the term binding.

[00:28:05] Speaker 00:
They just said it should be presented to the jury.

[00:28:07] Speaker 00:
And they say in the alternative, the court may, in its discretion, seek an advisory verdict from the jury after the evidence of unclean hands is presented.

[00:28:15] Speaker 00:
And they cite Federal Rule of Civil Procedure 39C.

[00:28:18] Speaker 00:
I think it's very hard in light of that statement for them to now say that they thought at the outset of trial that there was an expectation that everything was going to be binding when in fact in their own portion of the joint pretrial order they're saying the court has the discretion to make this advisory.

[00:28:34] Speaker 00:
Of course Judge Guilford did exactly that.

[00:28:38] Speaker 05:
When you file a Rule 50A motion, that doesn't make any sense to me.

[00:28:43] Speaker 05:
It's not consistent with your position that it was only going to be an advisory.

[00:28:48] Speaker 05:
It actually is, Your Honor.

[00:28:49] Speaker 05:
The jury was just not really a meaningful player in the process.

[00:28:54] Speaker 00:
It actually is, Your Honor.

[00:28:55] Speaker 00:
First of all, as with most Rule 50A motions during trial, it was an omnibus motion, so it was addressing all of the issues which were unquestionably going to the jury for binding resolution.

[00:29:05] Speaker 00:
But secondly, look at the text of Rule 58, look at the title.

[00:29:08] Speaker 00:
It talks about a motion in a jury trial.

[00:29:11] Speaker 00:
Right?

[00:29:12] Speaker 00:
It doesn't say in a binding jury trial.

[00:29:15] Speaker 00:
And frankly, if I were advising a client to trial, and we of course weren't the trial counsel here, but if I were advising a client to trial, how to preserve

[00:29:23] Speaker 00:
this error, I would certainly say, yeah, you can bring a Rule 50A motion.

[00:29:27] Speaker 00:
It applies to taking things out of a jury trial.

[00:29:29] Speaker 00:
And quite frankly, remember that as an advisory jury, it had to be instructed on the law.

[00:29:34] Speaker 00:
It had to reach its advisory verdict.

[00:29:37] Speaker 00:
But if we could get it out of the case, so much the better.

[00:29:39] Speaker 00:
It'll streamline the case.

[00:29:41] Speaker 03:
I would advise... Why didn't you renew your request for bifurcation?

[00:29:48] Speaker 00:
I think that, although I can't say subjectively, I can say on this record it seems quite clear

[00:29:54] Speaker 00:
Uh, that the judge was not going to, uh, bifurcate because he has allowed a limited amount of time and he had made comments on the record.

[00:30:00] Speaker 03:
He left open that issue and said, I'm going to take this up later and I'm going to leave it up to you to re-argue that I should bifurcate.

[00:30:07] Speaker 03:
You never did remake that argument.

[00:30:09] Speaker 00:
No, we didn't.

[00:30:10] Speaker 00:
And then that was quite frankly, I think, again, I can't say subjectively.

[00:30:14] Speaker 00:
I can only say objectively based on this record since I wasn't there and I wasn't the trial decision maker.

[00:30:19] Speaker 00:
But what I can say about the record here is that the judge had made very clear that he had allocated a certain number of days at trial, and he viewed the request for bifurcation.

[00:30:27] Speaker 03:
That would be the cleanest way in order to have a separation of the equitable issues and the other issues.

[00:30:33] Speaker 03:
It would have been.

[00:30:34] Speaker 03:
You didn't take the clean way.

[00:30:35] Speaker 00:
Well, we tried to take the clean way, and what I'm trying to get out and across to you, Your Honor, is that Judge Guilford made very clear that this was going to be an eight-day trial.

[00:30:45] Speaker 00:
He viewed bifurcation as an effort to try to get more trial days.

[00:30:49] Speaker 00:
and whether that was right or not, bifurcation, of course, was not the only way that we could have preserved this as an issue.

[00:30:57] Speaker 00:
There's one last remaining issue, I think, that I haven't addressed.

[00:31:00] Speaker 00:
Oh, by the way, one last point, Judge Chin, with regard to the 50A argument.

[00:31:04] Speaker 00:
We've cited copious cases in our brief, and there are more beyond that, where courts in this circumstance have converted Rule 50A motions to 52 motions to be challenges to bench findings as opposed to jury trials.

[00:31:17] Speaker 00:
But finally,

[00:31:19] Speaker 05:
I'm sorry, one more thing.

[00:31:21] Speaker 05:
When your side objected to the residue to cut a question going to the jury, it didn't at the same time object to the patent's use of the defense going to the jury.

[00:31:35] Speaker 05:
Instead, your side was working on trying to develop what would be the best kind of jury instruction there.

[00:31:43] Speaker 00:
We knew that the court was going to have an advisory jury.

[00:31:46] Speaker 00:
So we had to have an instruction.

[00:31:48] Speaker 00:
You can't have an advisory jury without a jury instruction to guide the jury.

[00:31:52] Speaker 00:
Um, but one last point that I haven't addressed yet from my friend is his seventh amendment argument.

[00:31:59] Speaker 00:
And the underlying premise of his seventh amendment argument is that the jury's improper inventorship verdict implicitly found all of the things with regard to the equitable defenses, like bad faith and proper purpose and knowing it was invalid.

[00:32:12] Speaker 00:
Look at the jury instruction.

[00:32:14] Speaker 00:
Look at the jury verdict form.

[00:32:17] Speaker 00:
The inventorship verdict question only asks, do you find that URC has proven by clear and convincing evidence that the 426 patent is invalid for improper inventorship?

[00:32:27] Speaker 00:
That was the verdict form.

[00:32:28] Speaker 00:
And the jury instruction itself said nothing about bad faith or improper purpose or knowing it was invalid.

[00:32:35] Speaker 00:
It was focused entirely on the proper question for inventorship, which was the contributions to the invention.

[00:32:41] Speaker 05:
Last question.

[00:32:41] Speaker 00:
Yes.

[00:32:42] Speaker 05:
Do you want this to be reviewed on the use of discretion standard rather than a de novo standard?

[00:32:49] Speaker 00:
I think that's what Highmark says.

[00:32:51] Speaker 05:
But what order are we supposed to look at to give deference to the judge's interpretation of that order and give discretion to that interpretation?

[00:33:04] Speaker 00:
So I think the order that we have offered in our brief, which is you are, the question you are asking is the octane question, which is whether the substantive strength of the party's litigating positions... I'm sorry, I'm talking more about whether, if we have to decide whether this verdict was binding or advisory, is that question a question of law for use of this question?

[00:33:28] Speaker 00:
Well, I think it might ultimately be a question of discretion because it in part here has to do with the judge's own interpretations of his prior orders, which is review for abuse of discretion.

[00:33:41] Speaker 00:
It has to do with what the judge understood to be the party's understanding of the beginning of trial.

[00:33:47] Speaker 00:
Is there a case that says that?

[00:33:49] Speaker 00:
I think the best thing that I can tell you is that if you look back at SFA systems, for example, where the court did not entertain the appeal on the underlying issues.

[00:34:00] Speaker 00:
But in terms of our order of hierarchy, we think that you don't have to reach the Rule 39 issues.

[00:34:04] Speaker 00:
You start with the attorney's fee issue.

[00:34:07] Speaker 00:
And if the finding, the holding, the substantive strength of the party's litigating position

[00:34:14] Speaker 00:
is not an abuse of discretion, that should be the end of the issue.

[00:34:17] Speaker 00:
If you get into the rule 39 and seventh amendment issues, there are legal questions there, but it's really the application of this entire record and what happened both on and perhaps off the record as well.

[00:34:31] Speaker 00:
the judge's finding, that the parties understood at the beginning of the trial, subject to clear error review, ultimately his determination, since there is not really any Seventh Amendment issue here, is a question of his discretion in the application of the Federal Rules of Civil Procedure.

[00:34:45] Speaker 02:
Thank you.

[00:34:46] Speaker 00:
Thank you, Your Honor.

[00:34:47] Speaker 02:
We've restored two minutes, which turns out to be exactly the extra time that Mr. Castini has had, so perfect, you've got two minutes.

[00:34:54] Speaker 04:
Thank you, Your Honor.

[00:34:56] Speaker 04:
First of all, on the standard of review, the Thompson case, the Bereta case, the Garza cases, all the cases that were cited on Rule 39, all decide those issues as a matter of law.

[00:35:06] Speaker 04:
And so we believe here that since there was an error of law... Is that what those cases actually say?

[00:35:12] Speaker 04:
They do deal with it as an issue of law.

[00:35:14] Speaker 04:
They say it's a de novo question?

[00:35:15] Speaker 04:
Yes, Your Honor.

[00:35:16] Speaker 04:
And the case law we cited makes clear that an error of law is inherently an abuse of discretion and therefore on the fee issue part of it the reason there should be a remand even under SFA systems is because... It's pretty hard to consider this as a question of law when we're talking about, as we spoke to you a few minutes ago, statements that were made and an understanding of statements that were made and the context in which they were made.

[00:35:40] Speaker 02:
I mean, somebody's got to make that decision, and certainly you would disagree.

[00:35:43] Speaker 02:
I think that the district court makes it in the first instance.

[00:35:46] Speaker 02:
So those certainly seem to me to be kinds of factual questions that would get discretion.

[00:35:53] Speaker 04:
No, Your Honor, because these are applications of a federal rule of civil procedure.

[00:35:59] Speaker 04:
There's no facts to be decided.

[00:36:01] Speaker 04:
What happened in the trial record below is what happened.

[00:36:04] Speaker 04:
There's no discussion of advisories using an advisory verdict explicitly before trial at the final pretrial conference.

[00:36:10] Speaker 04:
He never declared that.

[00:36:12] Speaker 04:
Under the controlling case law, the parties are entitled to know whether or not the jury is merely going to be advisory.

[00:36:17] Speaker 05:
Further, you're setting up a black-letter law that

[00:36:21] Speaker 05:
the judge doesn't say that it's going to be advisory expressly, then it's absolutely binding, regardless of context and circumstances.

[00:36:32] Speaker 05:
The word advisory has to come out of the judge's mouth before the trial begins.

[00:36:36] Speaker 04:
Is that the rule?

[00:36:37] Speaker 04:
Yes, Your Honor, because the other circuits that have ruled on this issue, the Ninth Circuit that have ruled on this issue, you've said, as Your Honor noted, trial counsel is entitled to know before the jury's been paneled and chosen,

[00:36:46] Speaker 04:
what kind of jury it's going to be.

[00:36:48] Speaker 04:
And that absolutely affects the trial strategy and trial presentation.

[00:36:53] Speaker 04:
Council here speculated as to what could happen upon remand.

[00:36:57] Speaker 04:
This goes to our very point that if there were somehow speculated that J-MAL could be granted, first of all that won't happen because the court here, the district court denied summary judgment on the very equitable issues we're talking about.

[00:37:09] Speaker 04:
And furthermore,

[00:37:10] Speaker 04:
the rule 50 motions were filed and no rule 52 motions were filed by UEI to try to amend the judgment.

[00:37:20] Speaker 04:
And so if they really believed it was an advisory verdict, their actions or their failure to act show that they did not believe it was a binding, that it was an advisory jury verdict.

[00:37:29] Speaker 02:
Thank you.

[00:37:29] Speaker 02:
We thank both counsel and the cases submitted.