[00:00:18] Speaker 03:
Absolutely.

[00:00:20] Speaker 03:
You're arguing for a justice camp, correct?

[00:00:22] Speaker 03:
For Newing.

[00:00:23] Speaker 02:
All right.

[00:00:31] Speaker 02:
Let me proceed.

[00:00:32] Speaker 02:
May it please the court.

[00:00:34] Speaker 02:
The Justice Camp filed this frivolous lawsuit against 59 defendants, not with hopes of winning the case, but solely in order to collect a nuisance value settlement.

[00:00:42] Speaker 02:
Its theory of infringement never made any sense, but it certainly made no sense to continue

[00:00:47] Speaker 02:
after its theory was explicitly rejected.

[00:00:50] Speaker 02:
Nonetheless, Justicam persisted in trying to coerce a cost of litigation settlement and did actually get 20 other defendants to pony up very small amounts, almost all in the low to mid five figures, only as it was about to lose on summary judgment

[00:01:02] Speaker 02:
did it abandon its case against New Egg without any payment or something.

[00:01:05] Speaker 03:
But how close was that abandonment to summary judgment, to the actual?

[00:01:10] Speaker 03:
You had the hearings settled for summary judgment?

[00:01:13] Speaker 02:
No, Your Honor, we were just about to start briefing.

[00:01:17] Speaker 02:
We've completed expert testimony, and we were about to start briefing the summary judgment issue.

[00:01:24] Speaker 02:
It was after the Markman hearing, and then after the Markman hearing, there was still a round of expert hearing.

[00:01:29] Speaker 03:
Was there a hearing scheduled on summary judgment?

[00:01:31] Speaker 03:
Not at that time, Your Honor.

[00:01:34] Speaker 03:
So I'm concerned about this case for the following reason.

[00:01:40] Speaker 03:
And I'm saying this to both counsels so that you can kind of help me get to the core of my concern, at least.

[00:01:48] Speaker 03:
And that is that we have a situation here that I would find exceptional.

[00:02:00] Speaker 03:
But yet, I'm faced with a very rigorous standard of review.

[00:02:07] Speaker 03:
I want you to address that.

[00:02:09] Speaker 03:
And how would we get past this abuse of discretion standard that we're faced with?

[00:02:17] Speaker 02:
Your Honor, so leaving aside the merits, of course, which I'm happy to talk about, I think the answer in this case is that what the district court did on remand from this court's first opinion was rather remarkable.

[00:02:28] Speaker 02:
Judge Gilstrap, a new judge below, was ordered to reconsider the facts under octane under the new standard, and he didn't do so.

[00:02:37] Speaker 02:
He refused to second-guess Judge Davis's old conclusions made under the old, now overruled legal standard.

[00:02:43] Speaker 02:
He afforded no weight to this court's opinion, remanding the case, even though this court went out of its way to indicate it saw significant merit in the frivolousness claim.

[00:02:51] Speaker 02:
I think that was not only an abusive discretion.

[00:02:53] Speaker 02:
I think it was a refusal even to exercise discretion.

[00:02:56] Speaker 02:
Judge Gilstrep didn't conduct his own evaluation of the facts.

[00:03:00] Speaker 02:
He block quoted and cited Judge Davis's previous determinations.

[00:03:04] Speaker 02:
And he did that because he wrongly suggested no less than four times that Judge Davis had engaged in, quote, in-person evaluations of the evidence from his unique posture of having lived with these cases in the parties.

[00:03:15] Speaker 02:
Now that, in fact, turned out to be untrue.

[00:03:17] Speaker 02:
Judge Davis had no substantive involvement in the case until the first fees motion.

[00:03:21] Speaker 02:
It was Magistrate Judge Love who decided the Markman hearing.

[00:03:25] Speaker 02:
Judge Davis's only interaction with the parties was a single one-paragraph affirmance of Judge Love.

[00:03:30] Speaker 02:
But Judge Davis adopted Judge Love's

[00:03:33] Speaker 02:
Findings, correct?

[00:03:34] Speaker 03:
He did, Your Honor.

[00:03:35] Speaker 02:
That's correct.

[00:03:36] Speaker 02:
But I think what Judge Dillstrap did, which was to say, I'm not going to go back and look at these facts on the merits on my own, because I'm going to trust Judge Davis.

[00:03:46] Speaker 02:
Judge Davis lived with this case for years and dealt with the parties.

[00:03:49] Speaker 02:
That factual premise was untrue.

[00:03:52] Speaker 01:
And I think even if that- It seems to ignore our mandate from our prior decision, where we said, look at this again.

[00:03:59] Speaker 01:
I think it does, Your Honor.

[00:04:02] Speaker 01:
My concern is even if we find that and send it back, isn't he just going to do that finally and find not exceptional and it's going to come back up here on an abuse of discretion and we're not going to find an abuse of discretion?

[00:04:16] Speaker 02:
Well, Your Honor, I guess I would suggest this Court has the evidence before it that it can conclude that this case is frivolous, that it was litigated in bad faith, that it justifies an award of fees,

[00:04:29] Speaker 02:
Judge Gilstrap had an opportunity to apply Octane Fitness.

[00:04:32] Speaker 02:
He did not, in fact, go back and make fact findings.

[00:04:35] Speaker 02:
Well, if we reverse, what choice would he have?

[00:04:39] Speaker 02:
I think, Your Honor, that that's precisely what you should do.

[00:04:42] Speaker 02:
You should reverse and say that a word of fees is appropriate.

[00:04:44] Speaker 02:
It would then be up to him to set the amount of the fees.

[00:04:47] Speaker 02:
I understood Judge Hughes' question to be, if we just say, please now go back and try again to make findings, that he might do them.

[00:04:54] Speaker 01:
But this is my problem with the new standards, because

[00:04:58] Speaker 01:
Not that I have a problem with the new standards, but what we do with this case, because even if we all agree that it was clear error to find post-claim construction, that there was any reasonable position here, even if that's a baseline, that their post-claim construction conduct was unreasonable, that alone doesn't entitle you to an award of the fees.

[00:05:21] Speaker 01:
After Opting Fitness,

[00:05:23] Speaker 01:
The district courts get large discretion to look at the case and say, does this stand out from all the others?

[00:05:30] Speaker 01:
And so I don't understand how we could look at this and say, even if we agree with you that there's no reasonable basis for this litigation after claim construction, that it's our job to look at the whole thing and decide whether fees are warranted, that it stands out from the others.

[00:05:46] Speaker 01:
And it still seems like it needs to go back.

[00:05:48] Speaker 02:
Well, Your Honor, I think it is absolutely right that the octane standard gives wide discretion to the district court.

[00:05:54] Speaker 02:
But I do think that that comes with an obligation by the district court to actually exercise that discretion.

[00:06:00] Speaker 02:
And what happened here is that the district court didn't exercise that discretion.

[00:06:04] Speaker 02:
And at that point, I think it is appropriate for this court to say,

[00:06:07] Speaker 02:
We looked at this.

[00:06:08] Speaker 02:
We previewed that we thought the case was actually a frivolous one.

[00:06:13] Speaker 02:
We think it is appropriate to find the word vizier.

[00:06:16] Speaker 02:
And we send it back to the court.

[00:06:18] Speaker 03:
How can you say that the court didn't exercise its discretion?

[00:06:21] Speaker 03:
I mean, it's got an opinion.

[00:06:23] Speaker 03:
It adopted verbatim the findings of the magistrate court.

[00:06:28] Speaker 03:
And he kind of walked through everything that had happened with Judge Davis.

[00:06:36] Speaker 03:
I mean, that seems to me to get past the level of whether he exercised discretion or not.

[00:06:42] Speaker 02:
Well, Your Honor, I mean, I believe, I think here's the problem.

[00:06:45] Speaker 02:
Judge Davis' opinion was decided under a now-defunct legal rule that this Court has acknowledged was significantly harder to meet and had a significantly higher burden of proof.

[00:06:55] Speaker 02:
Judge Gilstrep did not say, let me reconsider the facts under the new lower standard of proof and the lower burden.

[00:07:02] Speaker 02:
He simply said, Judge Davis found these 11 things.

[00:07:05] Speaker 02:
I block quote them and put them in.

[00:07:07] Speaker 02:
And then he said, in a single line, I've considered the totality of the circumstances, and I don't need to change it.

[00:07:14] Speaker 02:
I would note, Your Honor, also that in responding to this court's order,

[00:07:19] Speaker 02:
What he said was that he thought it would be inappropriate to, quote, circumvent by hindsight the judgments and in-person evaluations that the trial judge who dealt with this case in the court arena was best positioned to have made.

[00:07:30] Speaker 03:
But he did that, didn't he?

[00:07:31] Speaker 03:
I mean, didn't he accept a supplemental declaration and rely on it?

[00:07:35] Speaker 02:
Well, no, Your Honor.

[00:07:36] Speaker 02:
They submitted a supplemental declaration, and indeed most of their argument on appeal was a new argument in that supplemental declaration.

[00:07:42] Speaker 02:
He didn't actually accept it, and indeed,

[00:07:46] Speaker 02:
uh... what he said when it was presented uh... in open court was that he would quote not reopen the record on the road uh... so i think that only fair interest that is that he didn't consider that supplemental evidence at all that's in the record eight forty three points that seem to me he considered it he just didn't incorporate it into his decision uh... it's hard to know your honor precisely because his decision dot has very little other than the uh... uh... a copy of this is why i don't believe you that circumstance i mean we

[00:08:16] Speaker 03:
So let's just, for argument's sake, let's say that we're of the opinion that the arguments up to this point in time, up to the point in time of summary judgment, were frivolous.

[00:08:28] Speaker 03:
And then after it comes up to us, it goes back, and at that point in time, there's another declaration that's followed.

[00:08:35] Speaker 03:
And you ain't just forced to respond to that, correct?

[00:08:38] Speaker 03:
Yes.

[00:08:38] Speaker 03:
That's right.

[00:08:40] Speaker 02:
Yeah, so I think, well, I think two things.

[00:08:42] Speaker 02:
The relevant question of frivolousness in the underlying case is, what were the arguments they made and did they have any merit?

[00:08:50] Speaker 02:
Coming up with a new argument after the first fees appeal on remand shouldn't be able to help them escape the frivolousness of the original argument.

[00:08:59] Speaker 03:
I will say that it helps them.

[00:09:01] Speaker 03:
I'm just saying, would it add to the depth of frivolousness, a new argument that's being made?

[00:09:12] Speaker 03:
I like that answer from your opponent as well.

[00:09:15] Speaker 02:
Yes, your honor, I think it does.

[00:09:16] Speaker 02:
This court has made clear in the past that one of the things that can constitute a basis for an award of fees is making arguments that are a, quote, constantly moving target.

[00:09:27] Speaker 02:
And I think that's a fair characterization of what happened here, where the appeal brief in this case cites this new declaration 50 times and does not cite the original declaration with the original arguments even once.

[00:09:39] Speaker 02:
And I take it that they have abandoned

[00:09:41] Speaker 02:
the argument that we contend is frivolous, which is that the ball and socket camera could only overturn in one direction.

[00:09:49] Speaker 02:
So I think it would, in fact, be appropriate to consider that as a factor that supports a finding that this case is exceptional.

[00:09:57] Speaker 02:
And it adds together the totality of the circumstances with the frivolousness of the infringement finding, with the frivolousness of the invalidity arguments,

[00:10:06] Speaker 02:
and with the litigation strategy, the fact that they weren't actually ever interested in litigating the merits of this case.

[00:10:13] Speaker 02:
They were interested in nuisance value silence.

[00:10:17] Speaker 03:
If Your Honor had any more further questions, I'm happy to answer them.

[00:10:20] Speaker 03:
I've had a couple of cases from the court in the Eastern District, and they seem to put a lot of value on the extent to which the

[00:10:33] Speaker 03:
the cases of lawsuits represent a nuisance value situation.

[00:10:40] Speaker 03:
But the Supreme Court doesn't clearly address that particular factor.

[00:10:46] Speaker 02:
So that's correct.

[00:10:48] Speaker 02:
The Supreme Court doesn't explicitly address that, although it does make clear, I think, both that the way in which you litigate and the substantive merits can themselves be the basis for a finding.

[00:10:58] Speaker 03:
But the way you litigate, isn't that more too vexatious litigation?

[00:11:03] Speaker 03:
I mean, it is.

[00:11:04] Speaker 02:
Well, I think certainly it can be, and often is.

[00:11:07] Speaker 02:
But it is worth noting that the Supreme Court in Commal v. Cisco went out of its way to identify a business model of nuisance value settlements and then said district courts have the authority and responsibility to ensure frivolous cases are dissuaded in those cases by applying Section 285.

[00:11:24] Speaker 02:
So I think the Supreme Court has, in fact, firmly in mind the idea that this can be an inappropriate litigation strategy.

[00:11:31] Speaker 02:
So does this court.

[00:11:32] Speaker 02:
In SFA Systems, it said the repeated filing of patent infringement actions for the sole purpose of forcing settlements with no intention of testing the merits of one's claims is relevant to a district court's exceptional case determination.

[00:11:44] Speaker 02:
And in EONnet, where the settlements were of comparable value to the ones here, and the district court referred to those as having indicia of extortion, this court noted that the problem with those settlements is precisely that.

[00:11:58] Speaker 02:
There's no incentive for a party to actually litigate the merits, even of a frivolous claim to judgment, because they can go in a way for a nuisance value settlement.

[00:12:08] Speaker 02:
I'll reserve the rest of my time for a vote.

[00:12:10] Speaker 02:
OK.

[00:12:10] Speaker 03:
Thank you, Your Honor.

[00:12:17] Speaker 03:
Mr. Emmons.

[00:12:19] Speaker 00:
Thank you, Your Honor.

[00:12:21] Speaker 00:
The starting point, there was a mention of abuse discretion standard.

[00:12:24] Speaker 00:
That's certainly the standard.

[00:12:25] Speaker 00:
And the district court is certainly entitled to proper deference on that standard.

[00:12:29] Speaker 00:
There is not, I mentioned, a clear error standard, which is also clear.

[00:12:33] Speaker 03:
That's a really hard standard.

[00:12:35] Speaker 03:
It's a high level, isn't it?

[00:12:37] Speaker 03:
And the concern I have is that it could be that we may never find an exceptional case under that standard, that being so high.

[00:12:52] Speaker 03:
So I'm looking at this case to see

[00:12:56] Speaker 03:
If there's any point where this court could say that there's been an abuse of discretion, this is why I asked the question.

[00:13:02] Speaker 03:
And I gave your opponent the opportunity to address that issue, and I'd like for you to defend the court on that point.

[00:13:13] Speaker 00:
It's hard to see without there being clear error in factual findings how there could be an abuse of discretion, given the wide discretion of the opting courts.

[00:13:20] Speaker 03:
But your opponent's saying that the court didn't even exercise any discretion.

[00:13:24] Speaker 00:
Well, that's just an incorrect spin on Judge Gilstrap's order.

[00:13:30] Speaker 00:
Judge Gilstrap's order starts by saying that the facts haven't changed.

[00:13:34] Speaker 00:
And so he goes on and recites the facts.

[00:13:36] Speaker 00:
The statement that Judge Gilstrap cut and pasted the facts is not correct.

[00:13:40] Speaker 03:
So when he says that the facts haven't changed, in a way he's also saying, therefore the arguments remain the same.

[00:13:48] Speaker 03:
Now, I don't think so, because... The reason I'm saying that is because there was something else that happened, and that's the filing of the supplemental declaration and the attempt to have that weigh in.

[00:13:59] Speaker 00:
Well, on the issue of infringement, in the proceedings, the first proceedings, most of the support for the briefing came from the deposition of the plaintiff's expert.

[00:14:12] Speaker 00:
And deposition is necessarily muddy, and it was cleaner to put that into a declaration.

[00:14:18] Speaker 00:
The infringement position, there's been no retrenchment from the infringement position that was in the initial briefing.

[00:14:25] Speaker 00:
So that's not a factor.

[00:14:26] Speaker 00:
That's not correct.

[00:14:28] Speaker 00:
The main things that were added were additional examples for the court to consider.

[00:14:34] Speaker 00:
The example of the earth spinning on its axis, that's rotation.

[00:14:38] Speaker 00:
The wrist example, how the elbow example, how that's a compound joint, the two independent movements.

[00:14:45] Speaker 00:
There was discussion of how in theory... Right, so there was supplemental argument.

[00:14:51] Speaker 03:
There was argument, but not in... So when I'm looking at this, and I'm viewing that, litigation stopped right before summary judgment.

[00:15:01] Speaker 03:
Apparently there was a decision made, let's dismiss this with prejudice.

[00:15:06] Speaker 03:
Litigation comes to a halt right before summary judgment, and then suddenly it continues again on remand.

[00:15:14] Speaker 00:
Well, it's not right before summary judgment.

[00:15:15] Speaker 00:
That was a misstatement there.

[00:15:17] Speaker 00:
So the way that works is letter pre-surfile, the court can decide whether to allow briefing on summary judgment or not.

[00:15:23] Speaker 00:
There was no decision to allow briefing.

[00:15:25] Speaker 03:
The facts are that- Well, it was after discovery, after you proffered and responded to experts, and you were headed towards the summary judgment.

[00:15:36] Speaker 03:
That was next.

[00:15:38] Speaker 03:
I don't know, in terms of time, how far away it was, but that was the next step.

[00:15:43] Speaker 00:
Well, the next step that the court didn't need to entertain summary judgment.

[00:15:48] Speaker 00:
It's not required to.

[00:15:49] Speaker 00:
That's why the letter read procedure's there.

[00:15:50] Speaker 00:
The next step was trial.

[00:15:52] Speaker 00:
And there are declarations that are in the record of why New Egg was dropped.

[00:15:57] Speaker 00:
New Egg was dropped because its suppliers had settled out.

[00:16:00] Speaker 00:
Ten of its suppliers had settled out.

[00:16:02] Speaker 00:
Its last two suppliers, HP and Gearhead, had settled out.

[00:16:07] Speaker 00:
And at that point, the damages against Gearhead were small.

[00:16:09] Speaker 00:
They were less than 1 tenth of the damages against its co-defendant, Sikhar.

[00:16:14] Speaker 00:
Sikhar had been riding New Egg's coattails for the entire case.

[00:16:19] Speaker 00:
And Sikhar had no damages expert to challenge the damages theories of the plaintiff.

[00:16:23] Speaker 00:
New Egg had a damages expert.

[00:16:25] Speaker 00:
Sikhar did not.

[00:16:26] Speaker 00:
So there were legitimate reasons, strategic reasons, unrelated to the merits of the case of why New Egg was dropped.

[00:16:32] Speaker 00:
And those are reasonable reasons that plaintiffs encounter in litigation.

[00:16:36] Speaker 00:
But it had nothing to do with summary judgment.

[00:16:39] Speaker 00:
It had nothing to do with the merits of the case.

[00:16:41] Speaker 00:
It was a small amount of damages in another defendant who was ill-prepared for trial and who the plaintiff had a very good chance of failing.

[00:16:50] Speaker 03:
If the other parties, the ones that you mentioned, had not dropped out or they hadn't refused to settle, would the case come on to trial from your perspective?

[00:16:58] Speaker 00:
If New Inc.

[00:16:59] Speaker 00:
suppliers had stayed in the case, then there

[00:17:03] Speaker 00:
Yes, there's no reason.

[00:17:04] Speaker 00:
Ultimately, the claims were canceled in re-examination before we got there.

[00:17:08] Speaker 00:
So that's the way the case ended.

[00:17:10] Speaker 00:
But the strategic decision was the supplier's route.

[00:17:14] Speaker 00:
It's in the record as well.

[00:17:17] Speaker 00:
Other defendants had not filed summary judgment briefing.

[00:17:20] Speaker 03:
That strategic decision seems to feed into Judge Davis's view of whether these were nuisance cases or not, nuisance boundary cases.

[00:17:30] Speaker 00:
Well, other than just

[00:17:33] Speaker 00:
rhetoric by Newegg, the evidence is overwhelming that there was a reasonable basis for the settlement numbers in this case.

[00:17:40] Speaker 00:
And that was a metric of $1.25 to $1.50 per webcam.

[00:17:44] Speaker 00:
It was established prior to the case.

[00:17:47] Speaker 00:
The largest licensee has ended up paying over $3.7 million in unit royalties.

[00:17:55] Speaker 00:
It's just that some of these defense had very, very small unit royalties.

[00:17:58] Speaker 00:
And so there was a licensing put in place.

[00:18:02] Speaker 00:
And the evidence is uncontested.

[00:18:04] Speaker 00:
And there's sworn evidence to support it that the benchmark for the negotiations was this royalty benchmark.

[00:18:11] Speaker 00:
These defendants had small sales.

[00:18:13] Speaker 00:
And so they had a capped rate.

[00:18:15] Speaker 00:
Some of them had it to where if they exceeded that, then they'd pay an additional unit of royalty.

[00:18:19] Speaker 00:
Some were likely to receive the cap.

[00:18:21] Speaker 01:
But the reasonableness of all this presumes that you had a reasonable claim of infringement.

[00:18:28] Speaker 01:
And post-claim construction,

[00:18:30] Speaker 01:
How can you possibly show any reasonable claim of infringement?

[00:18:34] Speaker 00:
Well, so the reason was the settlement.

[00:18:41] Speaker 00:
I'll just speak to your question, because I think it's a more important question.

[00:18:43] Speaker 00:
But I don't think it presupposes that every settlement, they're flawed because the amounts are small.

[00:18:50] Speaker 00:
There was an explanation for the amounts at the small sales.

[00:18:53] Speaker 01:
Sure, I don't understand how we would overturn that kind of fact-finding on an abuse of discretion standard.

[00:19:00] Speaker 01:
But it seems to me that what's the problem here is that post-claim construction, and this was part of the last appeal, there is no reasonable basis for an infringement claim.

[00:19:12] Speaker 01:
And we didn't make that finding because we ordered the court to look at it all again under the new standards, under octane.

[00:19:21] Speaker 01:
And the court didn't do that.

[00:19:23] Speaker 01:
It said, I'm just wholesale adopting these factual findings, and I'm not going to change the outcome.

[00:19:28] Speaker 00:
Well, respectfully, we disagree.

[00:19:30] Speaker 00:
That isn't what the court said that it did.

[00:19:33] Speaker 00:
And I'd also disagree that it wholesale adopted him.

[00:19:35] Speaker 00:
If you look at finding one, it left off the first half of the finding, which Newey had complained about, which tells me that the court was well aware of these facts and was trying to get it right.

[00:19:48] Speaker 00:
I take the court's opinion at face value that he did carefully consider.

[00:19:52] Speaker 01:
So do you think the court looked at this post-claim construction issue and said,

[00:19:56] Speaker 01:
I think that there's still a reasonable claim for interest.

[00:20:00] Speaker 01:
Absolutely.

[00:20:00] Speaker 01:
Where in that opinion does it show that he actually addressed that?

[00:20:05] Speaker 00:
Well, it says have to carefully review the entirety of the record as well as the party's argument.

[00:20:10] Speaker 00:
So there's no explicit discussion.

[00:20:13] Speaker 00:
I take the court in its word that it carefully reviewed the record and came up with the opinion, and the facts are the same.

[00:20:19] Speaker 01:
So I find it very hard to think that he actually explicitly thought about that post-claim construction issue that was at the heart of the appeal the last time around with that one line throwaway sentence.

[00:20:29] Speaker 01:
The court, particularly when the tenor of this opinion is, I'm not changing Judge Davis's result because he saw this case.

[00:20:39] Speaker 01:
And we explicitly told the court to set that aside and look at it anew again.

[00:20:45] Speaker 01:
That seems to be a violation of our mandate, which is an abuse of discretion.

[00:20:50] Speaker 00:
Well, respectfully, we disagree.

[00:20:52] Speaker 00:
I mean, even if Judge Gilchamp had gone back and said, you know, I think that the plaintiff was unreasonable.

[00:20:59] Speaker 00:
He said the plaintiff could reasonably argue the products meet the limitation.

[00:21:03] Speaker 00:
Even if he said they're unreasonable, within his discretion, he could still find it not to be an exceptional case.

[00:21:08] Speaker 00:
And that would be acceptable.

[00:21:09] Speaker 01:
Well, certainly.

[00:21:09] Speaker 01:
That's why I think I'm a little dismayed by this whole thing, because he didn't do it right the first time.

[00:21:14] Speaker 01:
But if we send it back, he's probably going to go back and deny fees again.

[00:21:17] Speaker 01:
And it's all going to be a big waste of time.

[00:21:19] Speaker 01:
He'll be up here again.

[00:21:20] Speaker 01:
You'll be up here again.

[00:21:21] Speaker 01:
And it won't be under an abusive discretion.

[00:21:24] Speaker 01:
But I mean, it really seems that what he did here was pay lip service to our mandate.

[00:21:31] Speaker 01:
And it's very frustrating.

[00:21:33] Speaker 00:
Well, the court had a lengthy hearing on this.

[00:21:35] Speaker 00:
He allowed the parties to be heard.

[00:21:37] Speaker 00:
He allowed the parties to be briefed.

[00:21:38] Speaker 00:
It took a considerable amount of time to rule on this.

[00:21:41] Speaker 00:
I just take it at face value that he

[00:21:44] Speaker 00:
He did exactly what he said, but the facts that he thought that Judge Davis had adequately stated them, except for the correction that he made, the revision that he made, and that there was no better way to state them.

[00:21:54] Speaker 00:
And he did that.

[00:21:54] Speaker 00:
So we just see that as differently.

[00:21:56] Speaker 01:
Let me ask you just one more time.

[00:21:58] Speaker 01:
Suppose we find it was clear error to rely on a fact finding that there was a reasonable infringement position after claim construction.

[00:22:09] Speaker 01:
So there's clear error in that fact finding.

[00:22:12] Speaker 01:
Then we still, do we send it back because he relied on clear error and that that's an abusive discretion?

[00:22:19] Speaker 00:
Well, you're saying, because he said one could reasonably argue it.

[00:22:23] Speaker 00:
So you're saying it's clear error that one could reasonably argue?

[00:22:26] Speaker 00:
That there was infringement post-claim construction, yes.

[00:22:30] Speaker 00:
I would say that if you look at the conclusion of the court, it says, Justicane's infringement of the arguments, they were not so weak

[00:22:40] Speaker 00:
or its conduct so poor to make the case stand out from the others.

[00:22:43] Speaker 01:
Did he base that on a pre-claim construction and a post-claim construction position, or just overall?

[00:22:51] Speaker 01:
It doesn't say, does it?

[00:22:52] Speaker 00:
Well, it says the reason we argue defendants' products meet the, quote, rotatively attached, unquote, limitation.

[00:22:59] Speaker 00:
So at a minimum, he considered a post-claim construction.

[00:23:01] Speaker 00:
I mean, in the hearing on this matter, all this was hearing.

[00:23:04] Speaker 03:
There's another part in our remand order where we say that,

[00:23:09] Speaker 03:
Newing defendants arguments, and this is now, quote, had significant merit, particularly the argument that adjusted camps continued pursuit of his infringement claims after the district court construed the claim term, rotebly attached, was baseless.

[00:23:28] Speaker 00:
I think the language was, appears to have, but I thought you read it correctly.

[00:23:31] Speaker 00:
But Judge Gilstrap was aware of that.

[00:23:35] Speaker 00:
He asked the parties their views on the import of that.

[00:23:39] Speaker 00:
He mentions it in his order to show he was aware of it.

[00:23:43] Speaker 00:
He is the trial judge, and it's the trial judge's province of discretion under octane.

[00:23:48] Speaker 00:
He took it into consideration what this court had said, and he came to his conclusion as the trial judge.

[00:23:55] Speaker 00:
That's what octane allows, and that's just not an abuse of discretion.

[00:23:59] Speaker 00:
Again, had Judge Gilstrap come up with different factual findings, it would still be within his discretion to say it's not an exceptional case.

[00:24:08] Speaker 00:
Most of New Act, just focused on the infringement issue, New Act's other arguments have all been debunked.

[00:24:15] Speaker 00:
Judge Davis debunked them.

[00:24:16] Speaker 00:
Judge Gilstrap agreed they were debunked.

[00:24:19] Speaker 00:
And it comes down to the infringement issue.

[00:24:21] Speaker 00:
And with the infringement issue, there is a reasonable basis to say that this restricted joint has two independent movements.

[00:24:27] Speaker 00:
And that one of ordinary skill in the art could see that as rotating about a single axis at a certain vector or

[00:24:37] Speaker 00:
at a certain tilt angle.

[00:24:38] Speaker 00:
And we respectfully submit that's a reasonable position, or a minimum, that it was within the province of the trial judge to consider these matters fully.

[00:24:47] Speaker 03:
If we were to find in favor of Nuber, what would be the appropriate thing to do to reverse?

[00:24:53] Speaker 00:
No, the only thing the court could do would be to remand it again for more findings.

[00:24:59] Speaker 03:
We remanded once, and we said,

[00:25:01] Speaker 03:
I thought we had clear instruction there that this case was acceptable, but we're going to wait to see what the Supreme Court says.

[00:25:09] Speaker 00:
Well, your interpretation of your order would be yours, but the order seemed to say it needs to be reweighed under octane because it had been weighed under the Brooks Furniture Standard.

[00:25:22] Speaker 00:
It didn't say that there was clear error.

[00:25:24] Speaker 00:
I might remind the court that Newegg didn't

[00:25:27] Speaker 00:
didn't claim clear error on appeal.

[00:25:29] Speaker 00:
And we've also pointed out that under the waiver rule and the mandate rule, that it is too late for them to claim clear error.

[00:25:36] Speaker 00:
So the court reweighed the facts as this court told it to.

[00:25:40] Speaker 00:
And under octane, it came to the same conclusion that it wasn't an exceptional case, which is exactly what this court asked it to do.

[00:25:49] Speaker 00:
So again, I want to make sure the courts understand, as far as the new evidence that was submitted,

[00:25:55] Speaker 00:
The fundamental infringement theory has not changed.

[00:25:59] Speaker 00:
It's fundamentally sound or, at minimum, fundamentally reasonable.

[00:26:03] Speaker 00:
And the things that were added were pointing out other things.

[00:26:05] Speaker 00:
For example, that Newegg's Invalidity Contentions had made a similar argument where the camera was rotating about two axes, and it claimed that that was invalidating the Dementia claim element.

[00:26:17] Speaker 00:
And that Newegg's expert report had the W reference.

[00:26:21] Speaker 00:
That was the MA reference.

[00:26:22] Speaker 00:
Newegg's expert report had the W reference, which had a ball joint.

[00:26:26] Speaker 00:
and which New Age said was anticipatory.

[00:26:28] Speaker 03:
Am I correct that Judge Gielstrak does not address the supplemental declaration in this New York?

[00:26:34] Speaker 00:
He says he considered all of the filings, I believe, and that was one of the filings.

[00:26:42] Speaker 00:
He doesn't single it out?

[00:26:44] Speaker 00:
He does not single it out individually, no.

[00:26:47] Speaker 00:
Nor does he necessarily need to evaluate the infringement decision.

[00:26:53] Speaker 03:
Aside from the merits, I'm just wondering,

[00:26:55] Speaker 03:
If you have a frivolous case up to the point of after claim construction, up to the point of summary judgment, then you have additional, whether this is a continuation of a frivolous case.

[00:27:10] Speaker 03:
That's what I'm looking at.

[00:27:12] Speaker 00:
No, I think he addressed it from the perspective of, is the case exceptional or not?

[00:27:19] Speaker 00:
Would you look at the totality of the circumstances

[00:27:21] Speaker 00:
which is the entirety of the case.

[00:27:24] Speaker 03:
Seems like to me that he not addressing this particular declaration, he missed it, didn't consider it?

[00:27:33] Speaker 00:
No, from his assessment of the facts, the fundamental facts, the facts at issue had not changed.

[00:27:41] Speaker 00:
So it wasn't necessary for him to further point out or consider the fact that they had invalidated theories that were similar to the infringement theory that they were now criticizing as frivolous.

[00:27:51] Speaker 00:
He already concluded that it was reasonable to assert infringement, and it wasn't necessary to address those additional things.

[00:27:59] Speaker 00:
Again, the fundamental infringement position and the argument they're making that our invalidity positions were frivolous as well, those were all addressed in the original proceedings, and those fundamental facts did not change.

[00:28:15] Speaker 00:
That's why he didn't need to rewrite any factual findings, although I will point out he did rewrite factual finding number one.

[00:28:21] Speaker 00:
because Newegg had complained about that, and he rewrote it to address it, which shows that it wasn't just a cut and paste, that he had done his, that he had fulfilled his duties in terms of exactly what his order says, is that he carefully considered everything.

[00:28:35] Speaker 00:
Okay, we have your argument.

[00:28:39] Speaker 03:
Thank you.

[00:28:42] Speaker 03:
Mr. Lemley, you left time on the table.

[00:28:45] Speaker 03:
You have about 20 extra seconds, but, you know, well, how about three minutes?

[00:28:49] Speaker 03:
You get to three minutes.

[00:28:51] Speaker 02:
Very well, Your Honor.

[00:28:52] Speaker 02:
A couple of points.

[00:28:53] Speaker 02:
First, as to this idea that we've somehow waived the ability to challenge the facts, that's simply wrong for two reasons.

[00:29:00] Speaker 02:
First is Judge Davis's opinion was vacated.

[00:29:02] Speaker 02:
It is of no force and effect.

[00:29:03] Speaker 02:
There are findings here, and we are entitled to challenge them.

[00:29:07] Speaker 02:
In any event, we did appeal in Judge Davis's original findings, and that's in the record at A 3832, 3833, 3845 to 46, and 3848.

[00:29:18] Speaker 02:
A learned colleague suggests that all of our other arguments on the merits have been debunked.

[00:29:23] Speaker 02:
That's simply not true.

[00:29:25] Speaker 02:
The validity argument not only wasn't debunked, it won.

[00:29:28] Speaker 02:
The patent claim we are talking about has been invalidated in the patent office because the very argument that we made on validity, the Irofuni argument, won in the patent office and they abandoned the claim.

[00:29:38] Speaker 02:
And that argument was never addressed by Judge Davis or Judge Gilstrap.

[00:29:42] Speaker 02:
And I think it's an independent basis for a finding of frivolousness, that there's no finding whatsoever that the invalidity arguments they made were reasonable, either by Judge Davis or by Judge Gilstrap.

[00:29:54] Speaker 02:
The claim that the suppliers settled out and they dropped us because there wasn't any money, they do make that claim in their red brief at 58.

[00:30:02] Speaker 02:
But they don't cite a record citation.

[00:30:04] Speaker 02:
And there's a reason for that.

[00:30:06] Speaker 02:
That's because it isn't true.

[00:30:07] Speaker 02:
Newegg's house brand Rosewill, not any third-party brands, made up the lion's share of the profits shown in A1362-63, so settling out of suppliers wouldn't have affected that.

[00:30:18] Speaker 02:
Most of the rest of the webcams that weren't Rosewill cams that were still being accused were made by Hercules and IMC, neither of which AdjustaCam claims to have licensed.

[00:30:27] Speaker 02:
And indeed, the claim licenses HP and Yearhead, as of the time of June 25, 2012, made up only 210 out of 40,815 accused sales.

[00:30:41] Speaker 02:
That's in the record at A620.

[00:30:43] Speaker 02:
So this idea that they somehow dropped us because we were licensed, I think is simply untrue.

[00:30:49] Speaker 02:
And finally, I want to return to what this Court should do and what happens next.

[00:30:57] Speaker 02:
Judge Goldstrap said that he was not going to follow this court's indication that the case had significant merit because he didn't want to, quote, circumvent by hindsight what Judge Davis had done.

[00:31:09] Speaker 02:
We respectfully suggest that circumventing by hindsight is precisely what has to be done when the legal standard changes, when the burden of proof changes.

[00:31:17] Speaker 02:
And his refusal to do that was clearly erroneous.

[00:31:21] Speaker 02:
We do not think that this court has to remand for another determination or failure to determine the facts.

[00:31:27] Speaker 02:
We think that there's plenty of evidence that would allow this court to reach the conclusion that this case was exceptional.

[00:31:35] Speaker 02:
But I suggest that if you do choose to remand for the merits, that as much specific guidance as to specific findings of frivolousness and litigation conduct as possible would be appropriate.

[00:31:48] Speaker 02:
This case in Oplus versus Vizio remanded while saying, quote, we have reviewed the record and cannot find a basis to support the district court's refusal to award fees, unquote.

[00:31:59] Speaker 02:
That would be appropriate here.

[00:32:00] Speaker 02:
Thank you.

[00:32:01] Speaker 02:
Thank you very much.

[00:32:02] Speaker 03:
That's the conclusion of arguments today.

[00:32:04] Speaker 03:
This quote is now released.

[00:32:06] Speaker ?:
All rise.