[00:00:17] Speaker 03:
The next case for argument is 151919, Xilinx versus PAPS licensing.

[00:01:08] Speaker 02:
May it please the court, Matthew Silvera for Xilinx.

[00:01:11] Speaker 02:
As the three separate amicus briefs filed in support of Xilinx's position here reflect, this appeal squarely presents an issue of increasing importance over the past 20 years.

[00:01:21] Speaker 03:
So is it your view that we need to take this issue along in order to... We can only find for you if we overturn Red Wing and its progeny.

[00:01:28] Speaker 02:
I think there is a path to rule in Xilinx's favor without taking this case on bonk.

[00:01:32] Speaker 02:
I think there would be a great deal of relief by the patent bar generally if the court did take the case on bonk to provide further clarity regarding Red Wing Shoe and whether it still holds validity at this stage in the game.

[00:01:47] Speaker 03:
What are precisely the factors in your case that you think can't be presented or can't be persuasive under Red Wing Shoe but ought to be under a revised

[00:01:59] Speaker 02:
Frankly, I think the only factors that cannot be considered under Red Wing Shoe are cease and desist letters alone.

[00:02:06] Speaker 02:
I think that's what Red Wing Shoe is squarely focused on.

[00:02:10] Speaker 02:
And that's what it says.

[00:02:11] Speaker 02:
It says cease and desist letters are enough for minimum contacts

[00:02:16] Speaker 02:
But when you switch to the second prong.

[00:02:18] Speaker 03:
So that would lead you to say you can win here because you've got some stuff arguably other than cease and desist letters.

[00:02:24] Speaker 02:
Yes, we have quite a bit of stuff.

[00:02:26] Speaker 03:
But a lot of the stuff has to do with the subsequent cases, which have arguably gone broader than Red Wing Shoe, particularly the cases that say that you need some defense or enforcement of the actual patent.

[00:02:41] Speaker 03:
Here you have PAPS coming in and doing other licenses,

[00:02:45] Speaker 03:
and doing some litigation, but not with respect to the patented issue.

[00:02:49] Speaker 02:
Well, I think we do.

[00:02:50] Speaker 02:
We have, perhaps, flying into California, driving to Altera, one of its prospective licensees, on this patent, and saying, you need to pay us money and take a license to this patent, or we're going to sue you.

[00:03:03] Speaker 02:
And then they drive down the road.

[00:03:04] Speaker 04:
Does it make a difference that they're a non-practicing entity and that their business is suing people to collect damages or to get licenses?

[00:03:14] Speaker 02:
I do think that makes a difference, particularly when you're looking at the way the second prong of the analysis is supposed to track, which is looking at all the facts and circumstances.

[00:03:23] Speaker 02:
Would it be unreasonable and unfair

[00:03:25] Speaker 02:
to subject perhaps to jurisdiction in California.

[00:03:28] Speaker 03:
But don't we have precedent that says that whether or not the patent is commercialized is irrelevant to the analysis?

[00:03:35] Speaker 02:
I don't think so.

[00:03:35] Speaker 02:
I think what this court's precedent says is that when you come into a forum to commercialize your product, those contacts are not relevant to the personal jurisdiction analysis in the declaratory judgment context.

[00:03:47] Speaker 02:
And I think that's pretty clearly what Avicent says and what Radio System says as well in Judge Dyke's opinion.

[00:03:54] Speaker 04:
So the question is,

[00:03:55] Speaker 04:
The prong we're talking about is a fairness prong.

[00:03:58] Speaker 04:
Yes.

[00:03:58] Speaker 04:
And is the argument that there's a different fairness analysis with respect to a company that's not in the business of commercializing it but just in the business of suing and at the center of gravity or whatever is in California for this company?

[00:04:17] Speaker 04:
Is that the idea?

[00:04:18] Speaker 02:
I don't think it's a separate analysis.

[00:04:20] Speaker 02:
I think that the way that this court's jurisprudence

[00:04:23] Speaker 02:
has gone, has almost created a carve out for these types of patent assertion entities.

[00:04:28] Speaker 02:
Because there is some press out there that suggests... Wait, a carve out suggesting that there is DJ jurisdiction over that?

[00:04:35] Speaker 02:
No.

[00:04:36] Speaker 02:
It has said essentially patent assertion entities are almost immune from jurisdiction because of the fact that their only business is to, as PAP says on page six of its brief, to monetize and license intellectual property.

[00:04:49] Speaker 02:
Now, if you read some of the language in this court's opinions, which talks about licensing negotiations, mere licensing attempts, not being sufficient for personal jurisdiction, that really does seem to provide this blanket insulation for patent assertion entities.

[00:05:04] Speaker 00:
You're talking only about immunity from jurisdiction in California.

[00:05:08] Speaker 00:
Is that right?

[00:05:09] Speaker 00:
That's correct.

[00:05:10] Speaker 00:
As the initial proponent, not in response to the actions that were brought

[00:05:15] Speaker 00:
by pastor not in response to consent to jurisdiction in Virginia.

[00:05:19] Speaker 00:
Whatever.

[00:05:20] Speaker 00:
You're talking only about jurisdiction in the California court?

[00:05:24] Speaker 02:
Yes.

[00:05:24] Speaker 02:
I'm talking about jurisdiction in the California court, which is the only forum in the US that this case, that the claims, the declaratory judgment claims, arise from PAPS acts.

[00:05:33] Speaker 02:
It's acts of sending cease and desist letters into California, flying into California, and telling Xilinx and Altera that you need to take a license to this patent, or we're going to sue you.

[00:05:44] Speaker 02:
So that's the forum.

[00:05:45] Speaker 02:
And we think that's absolutely the appropriate forum for suit to be brought.

[00:05:49] Speaker 02:
That's why we brought suit in California.

[00:05:51] Speaker 02:
And that's why I believe that the district court erred in several ways in concluding that there was not personal jurisdiction over Pabst in California.

[00:06:00] Speaker 02:
And I think that the first part where the court really erred does go to this burden shifting issue.

[00:06:07] Speaker 02:
The court never addressed burden.

[00:06:09] Speaker 02:
The court never held that Pabst met its burden to show that this is one of those rare cases where the exercise of jurisdiction over it would be unfair and unreasonable.

[00:06:19] Speaker 03:
Is it clear to you that under the cases it's their burden to show it's unfair and unreasonable and not yours to show it's fair and reasonable?

[00:06:26] Speaker 03:
Absolutely.

[00:06:27] Speaker 02:
I think that's the precedent in this court, and it's the precedent in the Supreme Court, quite frankly.

[00:06:33] Speaker 02:
There is a burden shifting once you have established minimum contacts.

[00:06:36] Speaker 02:
And I think it's really important to note here, there is no dispute over minimum contacts.

[00:06:41] Speaker 02:
At page 21.

[00:06:42] Speaker 03:
No, I understand that.

[00:06:44] Speaker 03:
But I'm still not finding in this case under our current precedent

[00:06:49] Speaker 03:
what activities that perhaps engaged in would be allowable to consider.

[00:06:54] Speaker 03:
There's no direct, there's no defense or enforcement actions with respect to this patent.

[00:07:00] Speaker 02:
Well, on reasonableness, once you've switched over to the reasonableness problem, you have to look beyond just the patent itself.

[00:07:07] Speaker 02:
And if we flip over... Well, that's not what our cases say.

[00:07:09] Speaker 02:
That might be the right answer, but that's not what our binding precedent says.

[00:07:13] Speaker 02:
Well, I think that's binding precedent of the Supreme Court, where the Supreme Court, in cases like Keaton, in cases like Burger King,

[00:07:19] Speaker 02:
When you look at the reasonableness prong of this, then you are looking at things beyond just these case-specific facts, just beyond enforcement of a patent in this context.

[00:07:29] Speaker 02:
And you know that because the very first of the five Asahi factors on reasonableness is burden on the defendant.

[00:07:37] Speaker 02:
And what better way to show whether there is a burden on the defendant than whether the defendant repeatedly enters the forum to file suit in other cases.

[00:07:46] Speaker 02:
That speaks to burden.

[00:07:47] Speaker 02:
And that doesn't necessarily have to do with enforcement of the patents in suit as here.

[00:07:51] Speaker 02:
That's something that I think Supreme Court precedent tells us we have to look at.

[00:07:54] Speaker 02:
That's something that I think this court's decision, the recent Ocorta decision, shows that you can look at the litigation activities of the defendant in that same forum, even if it's not on the exact same infringement action in the context of a court, obviously.

[00:08:11] Speaker 02:
So I think that's the first major flaw in the district court's opinion, is this problem with burden shifting, where it never truly addressed the burden that was on Pabst from the outset.

[00:08:21] Speaker 02:
once we shifted past minimum contacts, which we clearly did here.

[00:08:26] Speaker 02:
The second major flaw in the district court's decision was that it seemed to announce this bright-line rule that any licensing efforts, even in-person threats in licensing negotiations, simply cannot be considered under this court's precedent, even though perhaps sole business is, as it says at page six of this brief,

[00:08:47] Speaker 02:
to monetize and license intellectual property.

[00:08:50] Speaker 02:
There is just no way that there can be a bright line rule.

[00:08:54] Speaker 02:
I think under... Why is that?

[00:08:54] Speaker 03:
I mean, that deals with Red Wing, and Red Wing seems to... Well, says that because these licensed activities, they promote settlement, and that's a good thing.

[00:09:03] Speaker 03:
And so it intertwined policy as well as legal reasons to say those should be immune.

[00:09:08] Speaker 03:
Well, why would it be less immune if someone took a trip over there?

[00:09:13] Speaker 03:
as opposed to engaging in an email or phone contact or a letter that was casing Red Wing.

[00:09:18] Speaker 03:
What's the difference?

[00:09:20] Speaker 02:
Well, first of all, Red Wing Shoe only says it repeatedly.

[00:09:24] Speaker 02:
Cease and desist letters alone.

[00:09:25] Speaker 02:
And it uses the word alone over and over again.

[00:09:28] Speaker 02:
So that's Red Wing Shoe.

[00:09:29] Speaker 02:
And that's the ground that we're walking on there.

[00:09:31] Speaker 03:
But I do think that the reason the underlying reason was that they said that this is what promotes settlement And this is a good way of practicing patent law, right?

[00:09:41] Speaker 02:
What PAPST is doing is not seeking a settlement what PAPST has done is

[00:09:45] Speaker 02:
is go to California to acquire patents from California, and then to assert those against other people.

[00:09:50] Speaker 02:
That's slightly different than just settling.

[00:09:52] Speaker 03:
Well, we're talking about them going over and trying to secure a license, right?

[00:09:55] Speaker 02:
Right.

[00:09:55] Speaker 02:
And that's their entire business model.

[00:09:57] Speaker 02:
Their entire business is to seek to negotiate a license.

[00:10:01] Speaker 02:
So if you take settlement out, then you've just taken patent-assertion entities out of the due process analysis for personal jurisdiction.

[00:10:10] Speaker 03:
I'm not sure I understand what you're saying.

[00:10:12] Speaker 02:
Well, what other context is a company like PAPS ever going to have when their entire business is focused on trying to monetize and license their patents?

[00:10:19] Speaker 03:
But what difference does it make, or what difference should it make in our analysis of Red Wing Shoe under Burger King, et cetera, whether or not there's a firm that has some patents that they don't intend to commercialize and others that they do?

[00:10:34] Speaker 03:
Well, because we have.

[00:10:35] Speaker 03:
And so we're dealing with, in this case, patents that they do.

[00:10:38] Speaker 03:
Let's assume that they're not completely

[00:10:40] Speaker 03:
a patent assertion entity, but they do commercialize some of their patents and others they don't.

[00:10:46] Speaker 02:
Stipulating that that is actually not their business, that their business is purely monetizing, licensing their patents.

[00:10:53] Speaker 02:
If that were the case, we still have to look at it as part of the overarching, uh, reasonable analysis.

[00:10:58] Speaker 04:
Isn't the point here that if a company has its center of business someplace else, it's unfair to drag it, in this case, into California simply because it's asserted its patent against somebody in California.

[00:11:14] Speaker 04:
There's another

[00:11:15] Speaker 04:
logical place to sue that company.

[00:11:18] Speaker 04:
And what you're saying is that there isn't such another logical place to sue this company.

[00:11:23] Speaker 04:
The center of gravity doesn't exist in some other state or some other location where it could be sued.

[00:11:29] Speaker 04:
That's correct Judge.

[00:11:30] Speaker 03:
That's partly because it's a foreign entity.

[00:11:32] Speaker 03:
And as a foreign entity there is a place to sue when it's ED Virginia.

[00:11:37] Speaker 02:
Certainly, and I think actually the fact that they're a foreign entity is something that does speak to Burger King settlement analysis, not Burger King, pardon, Red Wing Shoe settlement analysis.

[00:11:46] Speaker 02:
Red Wing Shoe grounded that concept that we want to promote settlement in the fourth of the Asahi factors, which speaks to the interstate judicial systems interest in promoting the efficient resolution of disputes.

[00:12:01] Speaker 02:
Now, one could understand why there would be a promotion of the efficient resolution of disputes when you have two US companies that are engaged in settlement negotiations or licensing negotiations.

[00:12:12] Speaker 02:
When you have a foreign entity, however, the interstate judicial system's interest in promoting the efficient resolution of disputes does not require

[00:12:19] Speaker 02:
Xilinx, the American company, would have to travel across the country to the Eastern District of Virginia to clear the air of infringement allegations that were levied against it in California.

[00:12:30] Speaker 02:
And that's the only place that levied those infringement allegations.

[00:12:33] Speaker 02:
Particularly here, where PAPST acquired these patents from what it refers to as its predecessor in interest, Rambus, a California company, and with which it still owes obligations to

[00:12:46] Speaker 02:
in connection with the enforcement of the PAPS.

[00:12:47] Speaker 02:
Well, not necessarily, right?

[00:12:48] Speaker 02:
Those are kind of contingent obligations.

[00:12:51] Speaker 02:
Well, Rambas is obligated to only offer assistance to PAPS.

[00:12:56] Speaker 02:
So Rambas is precluded from offering assistance to anyone else.

[00:12:59] Speaker 02:
But it's unclear, it's speculative, whether or not they would ever offer assistance to PAPS, or would they have, right?

[00:13:06] Speaker 02:
It's certainly speculative, but if we look at Burger King and the other cases that deal with contracts, all you're looking at is a continuing obligation or a continuing relationship.

[00:13:16] Speaker 02:
There is plainly a continuing relationship here.

[00:13:19] Speaker 02:
I see I'm going into my rebuttal time.

[00:13:20] Speaker 02:
OK.

[00:13:21] Speaker 02:
Thank you.

[00:13:29] Speaker 01:
May I please the court?

[00:13:30] Speaker 01:
The district court lacked specific jurisdiction over PAPST under this court's holdings in Red Wing Shoe and its progeny.

[00:13:37] Speaker 01:
And it didn't abuse its discretion by deciding.

[00:13:40] Speaker 04:
The issue is whether the fairness brought precludes jurisdiction, right?

[00:13:44] Speaker 01:
Yes.

[00:13:46] Speaker 01:
And here, it does preclude jurisdiction.

[00:13:48] Speaker 01:
It precludes jurisdiction under Red Wing Shoe and its progeny.

[00:13:52] Speaker 01:
And it does that even though PAPST is a non-practicing entity.

[00:13:56] Speaker 01:
Red Wing Shoe was a case in which the DJ defendant, the patentee, was a non-practicing entity.

[00:14:05] Speaker 01:
The DJ plaintiff argued in that case that the court should fine jurisdiction because the defendant's sole business was patent licensing.

[00:14:13] Speaker 00:
So is your position that paths could not be sued anywhere in the United States?

[00:14:20] Speaker 00:
We have, of course, where they came into court as a plaintiff.

[00:14:23] Speaker 00:
There they subjected themselves.

[00:14:25] Speaker 00:
to personal jurisdiction.

[00:14:27] Speaker 00:
But are you saying that other than that, that the activities, the licensing activities, whatever they are that took place, none of them would have subjected PAPS as a foreign company to the jurisdiction of any United States court?

[00:14:45] Speaker 01:
The facts in this case would not have subjected PAPS to the jurisdiction in the Northern District of California.

[00:14:51] Speaker 01:
They would have been subjected to jurisdiction in the Eastern District of Virginia.

[00:14:55] Speaker 04:
But that's just because of the special statute as to foreign companies.

[00:15:00] Speaker 04:
They don't have any operations in the Eastern District of Virginia.

[00:15:03] Speaker 01:
No, it is specifically because of Section 293.

[00:15:06] Speaker 03:
Why does it make any sense to have everybody go over to the Eastern District of Virginia with all of your activities in the United States, whether you say they rise to the level of Red Wing Shoe or not?

[00:15:16] Speaker 03:
but all the activities are predominantly the activities you have with respect to licenses, etc.

[00:15:22] Speaker 03:
are all in California.

[00:15:24] Speaker 01:
That's specifically the point of the personal jurisdiction analysis.

[00:15:28] Speaker 01:
It goes to the individual liberties of the non-resident defendant.

[00:15:34] Speaker 01:
That's exactly right.

[00:15:35] Speaker 01:
And so in this case, it's not fair to subject PAPS to jurisdiction in the Northern District of California

[00:15:41] Speaker 01:
when it's only activities related to offers to license.

[00:15:45] Speaker 03:
Why is it less fair to subject them to jurisdiction in California than in Eastern District of Virginia where they have no activities?

[00:15:53] Speaker 03:
In California, they have a substantial amount of activities.

[00:15:56] Speaker 03:
They may not fall in our cases, but they've had litigation.

[00:16:00] Speaker 03:
They've got numerous licenses.

[00:16:01] Speaker 03:
They've got the relationship with Rambas.

[00:16:04] Speaker 03:
They've traveled there.

[00:16:05] Speaker 03:
Why does it make sense under a fair and reasonable interpretation

[00:16:09] Speaker 03:
to say, yes, you have to go to ED Virginia, where there are no contacts, rather than to California.

[00:16:15] Speaker 01:
It makes sense, because part of the consent of being a foreign patentee is subjecting yourself to jurisdiction in Virginia.

[00:16:23] Speaker 01:
That's the contract that you make by becoming a foreign patentee by the statute.

[00:16:28] Speaker 01:
And it's known when you become a foreign patentee.

[00:16:32] Speaker 01:
Here, Pabst was operating under the jurisprudence of this court and Red Wing Shoe that you have the ability

[00:16:39] Speaker 01:
to offer a license to a resident of a forum without subjecting yourself to that forum's jurisdiction.

[00:16:46] Speaker 04:
But do you agree that the fairness promise are comparative?

[00:16:51] Speaker 04:
Is it fair to make them defend in this jurisdiction rather than another one, right?

[00:16:59] Speaker 04:
The fairness promise is that kind of comparative analysis, right?

[00:17:03] Speaker 01:
It can be.

[00:17:04] Speaker 01:
However, it can also be that it is not fair to subject them to that jurisdiction based solely on these activities.

[00:17:12] Speaker 04:
Yeah, but if you apply a comparative analysis here, I'm having difficulty in seeing why it is unfair to let them be sued in one jurisdiction where they have activities and say that instead you have to sue them in a jurisdiction where there are no activities.

[00:17:28] Speaker 01:
I think the reason is because part of styling's argument is that businesses like Pabst would be insulated from a DJ action.

[00:17:37] Speaker 01:
But that's not true, and we know that's not true because of section 293.

[00:17:40] Speaker 04:
We know that, but that's a different question.

[00:17:43] Speaker 04:
The question is, why is it unfair that they be sued in California when all their activities are there instead of in ED Virginia where there are no activities?

[00:17:52] Speaker 01:
Because the only activities that occurred in California were unsuccessful licensing attempts,

[00:17:58] Speaker 01:
Whereas Pabst knew by statute that becoming a foreign patentee and continuing with that patent, it would be subjected to jurisdiction in Virginia.

[00:18:09] Speaker 03:
But they can sue the other side anywhere, right?

[00:18:13] Speaker 01:
Well, they could sue the other side anywhere where they were subjected to jurisdiction also.

[00:18:18] Speaker 01:
And in fact, that's exactly what happened in this case, is that Pabst filed a patent infringement action against Xilinx in Delaware.

[00:18:26] Speaker 01:
And that action was ultimately transferred from Delaware to the Northern District of California.

[00:18:32] Speaker 03:
Can I ask you, do you read our cases?

[00:18:34] Speaker 03:
You said unsuccessful licensing activities.

[00:18:37] Speaker 03:
If there are licensing activities that were successful but deal with other patents, do you view our cases as foreclosing those from consideration under the Fair and Reasonable Problems?

[00:18:46] Speaker 01:
Absolutely.

[00:18:48] Speaker 01:
Under this court's decisions, it has said that the only relevant activities that can make an exercise of jurisdiction comport with the fairness requirements are activities that relate to the enforcement or defense of validity

[00:19:02] Speaker 01:
of the patents at issue in the DJ action.

[00:19:05] Speaker 03:
Does that have any hook to anything the Supreme Court has told us about specific jurisdiction?

[00:19:10] Speaker 01:
I believe that it does.

[00:19:11] Speaker 01:
Under the Supreme Court's jurisdictional analysis, it has said that you must consider fairness factors.

[00:19:17] Speaker 01:
It has outlined five factors, but those are not exhaustive, exclusive factors.

[00:19:23] Speaker 01:
And as a result, we are in a situation where under this court's precedent, exercising jurisdiction based on a licensing offer

[00:19:32] Speaker 01:
is deemed unfair or not reasonable.

[00:19:36] Speaker 01:
The Supreme Court has not addressed what you do once you are in that situation.

[00:19:42] Speaker 01:
And thus, it was within this court's ability to decide that in order to make the exercise of jurisdiction fair, the other activities must meet the minimum contacts requirements of international shoe.

[00:19:57] Speaker 01:
And that makes sense.

[00:19:58] Speaker 03:
Well, we're not talking about the minimum contacts.

[00:19:59] Speaker 03:
We're talking about the fair and reasonable as a prop, right?

[00:20:02] Speaker 01:
That's correct, except this court's jurisprudence says that once you cannot base jurisdiction on letters, notice letters, or licensing offers, that that would be unreasonable.

[00:20:14] Speaker 04:
Yeah, but those cases are all in situations where there's another forum where there are other activities conducted by the patentee, which make that a more appropriate forum, a fairer forum in which to require that the suit be brought.

[00:20:30] Speaker 01:
I don't think that's correct.

[00:20:31] Speaker 01:
For example, in Deprenil, there it was a foreign non-practicing entity.

[00:20:37] Speaker 01:
And although this court decided that exercising jurisdiction would be fair, it didn't do so because it decided that there wasn't another better forum.

[00:20:46] Speaker 01:
It decided that jurisdiction existed because Deprenil had entered into an exclusive license with regard to the patent net issue, and that created continuing obligations.

[00:20:57] Speaker 04:
That seems to be trying to get.

[00:20:58] Speaker 04:
something out of the case that's not there.

[00:21:00] Speaker 04:
Have we ever said that the fairness prong requires you to be bored from suit in a jurisdiction where all your US activities occur?

[00:21:15] Speaker 01:
It has not made that statement, but the jurisprudence has definitively made the statement that the other activities may not be solely unsuccessful licensing attempts.

[00:21:26] Speaker 01:
and instead must relate to some other enforcement or defensive validity of the relevant patents.

[00:21:34] Speaker 00:
So you're saying that the other factors that were told are present here, such as all of the potential licensees, the identity of the inventors, the various visits, the residents of council that are representing initially the patentee are now passed,

[00:21:54] Speaker 00:
None of that is to be considered either as a matter of initial jurisdiction or to transfer if initially the suit had been filed in the Northern District of Virginia or in Delaware as the infringement suit was taken.

[00:22:16] Speaker 01:
No.

[00:22:17] Speaker 01:
We are saying the first part of that, which is that the other activities alleged by Xilings aren't sufficient here.

[00:22:24] Speaker 00:
to make jurisdiction comport with fair play.

[00:22:26] Speaker 00:
You're saying that there's no activity that could be sufficient in that case.

[00:22:29] Speaker 00:
It's hard to imagine more extensive, I'd use the word contacts, and without trying to put that in its legal sense, than what existed here in terms of the licensing activity and negotiation, the origins of these inventions, again, the inventorship, the potential witnesses.

[00:22:53] Speaker 00:
validity is at issue.

[00:22:57] Speaker 00:
And so I just want to be clear that the position is that because the current owner is a foreign entity, that suit could only be brought under the statute in the Northern District of Virginia?

[00:23:14] Speaker 01:
Based on the facts present here, yes.

[00:23:17] Speaker 00:
And that's because to touch... I'm trying to understand when you say based on the facts, are you talking about the facts of contacts?

[00:23:23] Speaker 00:
or the fact that it's a foreign owner?

[00:23:25] Speaker 01:
I'm talking about the other activities that are alleged here.

[00:23:29] Speaker 01:
The other activities alleged here are a candidate license list.

[00:23:32] Speaker 01:
If licensing offers, actual offers, aren't sufficient to make jurisdiction fair and reasonable, then a potential list of licensees shouldn't make it fair or reasonable.

[00:23:43] Speaker 01:
If an offer in a letter to license doesn't make jurisdiction fair or reasonable, then merely traveling to meet with Xilinx in its home forum

[00:23:54] Speaker 01:
shouldn't make jurisdiction fair or reasonable.

[00:23:57] Speaker 00:
But our precedent doesn't go that far.

[00:23:59] Speaker 00:
And I'm trying to understand to be clear as to the position as to how far precedent can go.

[00:24:07] Speaker 00:
Because again, it's hard to imagine more contacts on both sides in terms of a logical forum than in California for the convenience of subsequent litigation and all else that normally could transpire.

[00:24:23] Speaker 01:
to touch on the meeting portion of it, and then I'll do it as a more global perspective, no, this court has not yet specifically stated that in-person, in-forum licensing offers are insufficient.

[00:24:36] Speaker 01:
But I think that conclusion is directed by this court's case law and by the policies underlying that case law.

[00:24:43] Speaker 01:
And the reason for that is that there have been a number of cases within this jurisprudence in which the

[00:24:50] Speaker 01:
declaratory judgment defendant has traveled to the plaintiff's forum.

[00:24:56] Speaker 01:
If that were enough, that would have been the end of the inquiry, but it never has been.

[00:25:01] Speaker 01:
In I-name, they traveled to the forum, but that was based, jurisdiction was based on the finding of an exclusive license.

[00:25:07] Speaker 01:
Same in Debronil.

[00:25:09] Speaker 01:
In Campbell, they traveled to the forum, but jurisdiction was found fair and reasonable because Campbell engaged in extrajudicial enforcement activities.

[00:25:19] Speaker 03:
But everything you say ought to persuade us that you started off by talking as if they're hard and fast and rigid rules that govern our precedent.

[00:25:27] Speaker 03:
And what you're saying here sounds more reasonable, because every case stands on its own.

[00:25:32] Speaker 03:
And Judge Newman called out a few of the specific instances here that don't necessarily appear, or they don't all appear at the same time in the same way.

[00:25:41] Speaker 03:
And so every case stands on its own, viewing the fairness and reasonableness of it.

[00:25:47] Speaker 01:
I think we do need to consider the factors, the other activities that are elicited here.

[00:25:53] Speaker 01:
I think that's correct.

[00:25:54] Speaker 01:
And if I overstated it originally, I didn't mean to.

[00:25:57] Speaker 03:
And do we also consider, as Judge Dyke may have suggested, whether or not this is a non-practicing entity?

[00:26:05] Speaker 03:
Because there's no, the availability of other forms, the number of other forms, and the availability of other forms, is that a fair factor to consider?

[00:26:15] Speaker 03:
Is that something that's precluded

[00:26:17] Speaker 03:
from our precedent?

[00:26:18] Speaker 01:
I don't think it should be considered and the reason for that is that Red Wing Shoe was announced in a case in which the defendant was a non-practicing entity and it is within that case that the court decided it would not be fair.

[00:26:31] Speaker 04:
Yeah, but it wasn't a case in which the non-practicing entity didn't have a business elsewhere in the United States.

[00:26:39] Speaker 01:
That is correct, but the issue about not having a business elsewhere in the United States

[00:26:44] Speaker 01:
is a concern that this court addressed in cases like autogenomics, where it was worried that you wouldn't be able to subject, or it at least raised the concern that, yes, Red Wing Shoe may mean that a foreign entity that offers a license to a US resident is not subject to jurisdiction anywhere except the Eastern District of Virginia.

[00:27:10] Speaker 01:
And that's OK.

[00:27:11] Speaker 01:
Because the Declaratory Judgment Act doesn't give the declaratory judgment plaintiff a paramount right to choose the forum.

[00:27:20] Speaker 01:
It gives them a right to bring the cause of action.

[00:27:23] Speaker 04:
The question is whether it's unfair to require that they defend in the one place where they have activities.

[00:27:30] Speaker 04:
I mean, on the face of it, it's a little difficult to see why that's unfair.

[00:27:34] Speaker 01:
I don't think it is the policies underlying Red Wing's shoe

[00:27:38] Speaker 01:
trump the convenience.

[00:27:40] Speaker 01:
In fact, personal jurisdiction, as a general jurisprudence principle, trumps the issue.

[00:27:46] Speaker 03:
What she says is, in and of itself, sending two letters, were there two letters sent there or six letters, that, because of our policy of settlement, we're not going to say that that, in and of itself, is enough to confer a DJ jurisdiction in whatever place we're talking about.

[00:28:01] Speaker 03:
That's far different from the facts we have in this case, right?

[00:28:05] Speaker 01:
That would be correct.

[00:28:06] Speaker 03:
I mean, as you can see how that doesn't strike, I don't think that would strike any of us as compellingly unfair, but this is far different from that in terms of the facts, right?

[00:28:17] Speaker 01:
It is far different from that statement, but it's not far different from this court's jurisprudence.

[00:28:22] Speaker 01:
The court has gone beyond simply saying that letters, jurisdiction based on letters would be unfair.

[00:28:29] Speaker 01:
The court has very clearly stated

[00:28:32] Speaker 01:
that jurisdiction based on unsuccessful licensing attempts is unfair, unreasonable.

[00:28:39] Speaker 01:
And the reason for that is because a patent holder, whether that patent holder holds some patents exclusively to license them or to commercialize them.

[00:28:48] Speaker 00:
But it doesn't go that far.

[00:28:50] Speaker 00:
When you say an unsuccessful licensing attempt, persistent visits by the would-be licensor, for example,

[00:29:01] Speaker 00:
changes the scenario a little bit.

[00:29:03] Speaker 00:
The fact that they're rebuffed doesn't mean that they may not have continuously.

[00:29:09] Speaker 00:
And again, as we mentioned before, in this case, all of the inventors are in California.

[00:29:14] Speaker 00:
All of the potential licensees appear to be in California.

[00:29:18] Speaker 00:
The concentration of activity in California, this is really where I'm interested in your reasons for analysis.

[00:29:28] Speaker 00:
You say that there is really never

[00:29:30] Speaker 00:
a point which suffices to support declaratory judgment jurisdiction when these offers are refused.

[00:29:42] Speaker 01:
I think that's correct.

[00:29:43] Speaker 01:
It is our position that under a reasonable application of this court's jurisprudence that a licensing offer, even when it's communicated in person.

[00:29:53] Speaker 00:
We have no case business on similar facts.

[00:29:56] Speaker 00:
We do have quite firm jurisdiction

[00:30:00] Speaker 00:
letters saying, here's my patent.

[00:30:03] Speaker 00:
What do you think?

[00:30:05] Speaker 00:
You can have a license if you'd like it.

[00:30:07] Speaker 00:
It does not suffice.

[00:30:09] Speaker 01:
The jurisprudence is clear that unsuccessful licensing offers aren't sufficient.

[00:30:15] Speaker 01:
That's what the court specifically set forward in Breckenridge.

[00:30:19] Speaker 01:
That's what the court set forward in Hildebrand.

[00:30:22] Speaker 01:
And it's also what was set forward in Red Wing Shoe, which did address licensing offers, not merely cease and desist or notice letters.

[00:30:31] Speaker 01:
Red Wing Shoe's entire conversation about the policy to incentivize settlement was brought up with regard to a patentee that provides notice of its patent, and in doing so may also include an offer to license.

[00:30:46] Speaker 01:
And that offer to license does not somehow make the letter

[00:30:51] Speaker 01:
a fair and reasonable basis for jurisdiction.

[00:30:54] Speaker 04:
But don't Red Wing and the other cases also rely on another policy consideration, which is that you shouldn't force somebody to come from its home base to defend declaratory judgment action somewhere else simply because you've sent letters to somebody.

[00:31:12] Speaker 01:
That is correct.

[00:31:13] Speaker 04:
OK, but that policy consideration is not implicated here, because there isn't another place where their activities are centered, and they're being forced to go from there to California to defend themselves.

[00:31:26] Speaker 01:
I think the issue, though, is that there may not be another US center of activity.

[00:31:31] Speaker 01:
But that doesn't insulate, perhaps, from jurisdiction.

[00:31:36] Speaker 01:
So this isn't the situation where if you don't find jurisdiction in the Northern District of California,

[00:31:43] Speaker 01:
then there may be no court that can exercise jurisdiction over Xilinx claims.

[00:31:50] Speaker 01:
That's not this case.

[00:31:51] Speaker 03:
Can I ask you, one of the aspects of our precedent, which wasn't Red Wing, but it was one of the progeny, seemed to limit consideration of defense and enforcement actions other than connection with the patents in suit.

[00:32:06] Speaker 03:
Is that the way you read our precedent?

[00:32:09] Speaker 03:
Absolutely.

[00:32:11] Speaker 03:
Why is that right?

[00:32:13] Speaker 03:
Why is fair and reasonable?

[00:32:15] Speaker 03:
If you've got a whole bunch of patents, you're a patent assertion entity, and you've sued other defendants repeatedly in the Northern District of California on related patents, but different patents than the patents in suit, why doesn't that establish that California has an interest and you have no fair and reasonable argument why you shouldn't be hauled in to defend another set of patents that you have?

[00:32:43] Speaker 03:
What does that make any sense?

[00:32:44] Speaker 01:
I think if we accept the premise from this court's jurisprudence that a licensing offer doesn't make jurisdiction fair or reasonable,

[00:32:53] Speaker 01:
is an extension to say once you have decided that jurisdiction would be unreasonable on that basis.

[00:32:59] Speaker 03:
But if you've availed yourself of the legal, the judicial machinery in California and all of their local rules and regulations, you have voluntarily availed yourself of that in connection with patent litigation.

[00:33:13] Speaker 03:
Why wouldn't it be fair and reasonable to say that under the other circumstances, when there's a DJ,

[00:33:19] Speaker 03:
There's no basis for you to say, no, it's unfair.

[00:33:22] Speaker 03:
No, it's unjust to bring us in here when you've been there repeatedly enforcing your own patents against defendants in California.

[00:33:30] Speaker 01:
I think the reason is because if it's unreasonable to base it on a licensing offer, you've already determined that jurisdiction would be unreasonable.

[00:33:38] Speaker 01:
In order to make it reasonable when we're speaking about specific jurisdiction, it makes sense to go back to the requirement

[00:33:47] Speaker 01:
that the other activities, and this is from I-Named, that the other activities satisfy the minimum context requirements of international shoe.

[00:33:56] Speaker 01:
This is not general jurisdiction where we are talking about a, under the new test where somebody is at home.

[00:34:05] Speaker 01:
Here we are, they are asserting jurisdiction or alleging jurisdiction under specific jurisdiction.

[00:34:13] Speaker 01:
The minimum contacts that exist here are the letters and the licensing offers.

[00:34:17] Speaker 01:
And this court has determined that those are not a fair or reasonable basis on their own to exercise jurisdiction.

[00:34:24] Speaker 01:
It then makes sense.

[00:34:25] Speaker 03:
We need to be complaining both steps, right?

[00:34:27] Speaker 03:
I mean, isn't the minimum contacts are satisfied here?

[00:34:29] Speaker 03:
And it's a question of whether or not it's fair or reasonable.

[00:34:33] Speaker 01:
Yes, but this court has specifically said that to make it fair and reasonable, there must be other activities that satisfy the minimum context requirement of international shoe.

[00:34:44] Speaker 01:
That is this court's specific holding in I named at 249 F3rd 1361.

[00:34:51] Speaker 01:
And it's been repeated by this court in at least Silent Drive and Avocet.

[00:34:57] Speaker 01:
As a basic premise, in order to exercise jurisdiction,

[00:35:02] Speaker 01:
In light of letters and licensing offers, there must be other activities, and the other activities must satisfy the minimum context requirement.

[00:35:12] Speaker 03:
Thank you.

[00:35:12] Speaker 03:
Thank you very much.

[00:35:19] Speaker 02:
Thank you, Your Honors.

[00:35:20] Speaker 02:
I'd like to briefly address four points.

[00:35:23] Speaker 02:
First, I think we have to come back to the fact that all of the facts and circumstances must be considered.

[00:35:28] Speaker 02:
on the reasonableness prong of the analysis, which is, as everyone's conceded, is all that we're dealing with here.

[00:35:34] Speaker 02:
And that has to include other litigation.

[00:35:37] Speaker 02:
And frankly, the Accorda case says that.

[00:35:38] Speaker 02:
But that's not what our cases say.

[00:35:39] Speaker 02:
Well, the Accorda case says that.

[00:35:41] Speaker 02:
And the Accorda case is in the context of infringement action.

[00:35:44] Speaker 02:
But Accorda says, on the reasonableness prong, we can look at the fact that Mylan has litigated all sorts of ANDA suits in Delaware, which was the case there.

[00:35:53] Speaker 02:
So I mean, we have to look at that.

[00:35:54] Speaker 02:
Otherwise, we have an inconsistency in this court's precedent.

[00:35:57] Speaker 02:
I think my overarching theme here is that there does need to be some clarity brought to this court's precedent, particularly in the declaratory judgment personal jurisdiction context.

[00:36:07] Speaker 02:
You know, I heard an opposing counsel refer to unsuccessful licensing offers just can't be considered.

[00:36:12] Speaker 02:
That's completely out of the analysis.

[00:36:14] Speaker 02:
Redwing Shue doesn't say that.

[00:36:15] Speaker 02:
Redwing Shue dealt with three cease and desist letters.

[00:36:18] Speaker 02:
That was it.

[00:36:19] Speaker 02:
End of story.

[00:36:20] Speaker 02:
She also referred to the Hildebrand case.

[00:36:23] Speaker 02:
Frankly, the analysis of due process in Hildebrand

[00:36:26] Speaker 02:
is all dicta because the court already found that there was not jurisdiction under the forum state's long-arm statute.

[00:36:34] Speaker 02:
And then as to Breckenridge, Breckenridge wasn't about licensing offers.

[00:36:38] Speaker 02:
It didn't address licensing officers.

[00:36:40] Speaker 02:
Breckenridge was all about an exclusive licensee in the forum.

[00:36:43] Speaker 02:
And there was some language in Breckenridge, but it was not language that was in any way consistent with the facts or required by the facts of that case.

[00:36:54] Speaker 02:
To move to another point,

[00:36:55] Speaker 02:
I kept hearing opposing counsel refer to when there are licensing offers or cease and desist letters, then the plaintiff has to make it reasonable, has to identify other activities that make it reasonable to exercise jurisdiction.

[00:37:13] Speaker 02:
That shows that that reading of this court's precedent just is completely inconsistent with Supreme Court case law.

[00:37:20] Speaker 02:
which puts the burden on the defendant once sort of the reason was pronged.

[00:37:24] Speaker 02:
So that's something that just there needs to be clarification.

[00:37:27] Speaker 02:
And then finally, I would look at the Walden Fiari case, the recent case from the Supreme Court, where it focuses on

[00:37:35] Speaker 02:
the concept of it isn't reasonable to expect to be held into that jurisdiction.

[00:37:40] Speaker 02:
And for PAPS to stand up and say it's not reasonable for us to expect to be held into California when we flew to California multiple times to enforce these patents against targets we had in mind when we acquired the patents from California, it just beggars belief.

[00:37:58] Speaker 02:
And the only answer the deposing council had for that was under this court's precedent,

[00:38:03] Speaker 02:
This court's jurisprudence required over and over again.

[00:38:06] Speaker 02:
That's precisely why we need some clarification from the court on personal jurisdiction in the declaratory judgment context.

[00:38:14] Speaker 02:
Unless the court has further questions, I have to rest.

[00:38:16] Speaker 02:
Thank you.