[00:00:02] Speaker 04:
First case for argument this morning is 16-1332, Advanced Ground Information versus Life 360.

[00:00:09] Speaker 04:
Mr. Fabricant, whenever you're ready.

[00:00:19] Speaker 03:
Good morning, Your Honors.

[00:00:21] Speaker 03:
My name is Alfred Fabricant and I represent the appellate.

[00:00:25] Speaker 03:
We're here on an order granting a fee award in a patent case which was tried

[00:00:31] Speaker 03:
in the Southern District of Florida.

[00:00:34] Speaker 03:
And it's our position on this appeal that looking at octane fitness, looking at the standard, which I don't think any of us argue or dispute, that this is not an extraordinary case for many reasons.

[00:00:49] Speaker 02:
One of the arguments you make in your blue break, which disturbs me, is that you say in sum, nine months after stating in open court this was not an exceptional case,

[00:01:00] Speaker 02:
the judge went ahead and found it was an exceptional case.

[00:01:03] Speaker 02:
And you cite to the joint appendix during the pre-trial conference in which the judge said, I've got a few observations.

[00:01:12] Speaker 02:
And then said things judges say when they're trying to muscle parties to settle or whatever.

[00:01:21] Speaker 02:
And said, I don't see how this could be an exceptional case, though in terms of attorney's fees on the other side.

[00:01:30] Speaker 02:
So those probably won't happen.

[00:01:34] Speaker 02:
I haven't heard all the facts.

[00:01:36] Speaker 02:
But just looking at what I've seen so far, I don't see how those things could happen.

[00:01:40] Speaker 02:
Now how the heck does that represent anything other than a district court judge thinking out loud?

[00:01:48] Speaker 02:
Your Honor, I agree with you completely.

[00:01:49] Speaker 03:
We're not the counsel who submitted the briefs.

[00:01:52] Speaker 03:
We were retained a month or two ago after the Kenyon firm ceased operations.

[00:01:58] Speaker 03:
And I agree with your comment.

[00:01:59] Speaker 02:
OK, so there's a bunch of stuff in here, and you're going to agree with me on them.

[00:02:03] Speaker 02:
There may be.

[00:02:04] Speaker 02:
There may be.

[00:02:04] Speaker 03:
But we brought fresh eyes to this argument.

[00:02:07] Speaker 03:
We are obviously not responsible for the briefs, but we familiarize ourselves with that.

[00:02:11] Speaker 02:
OK, let me ask you about a fact then.

[00:02:13] Speaker 02:
The demand letter was sent on a particular day.

[00:02:17] Speaker 02:
And you know what day that was.

[00:02:18] Speaker 02:
It was the day that they announced the $50 million investment.

[00:02:25] Speaker 02:
and it was sent with a 72-hour deadline.

[00:02:28] Speaker 02:
Why was that?

[00:02:30] Speaker 03:
Your Honor, I only know what's in the record.

[00:02:34] Speaker 03:
I don't believe, and I believe the testimony in the record was that it was not tied to any particular event.

[00:02:39] Speaker 03:
There were other demand letters that went out to other parties.

[00:02:42] Speaker 03:
For different time periods?

[00:02:45] Speaker 03:
For different time periods.

[00:02:46] Speaker 03:
They were concerned that this particular defendant would file a declaratory judgment action.

[00:02:51] Speaker 03:
I think their concerns were

[00:02:53] Speaker 03:
as it turned out, well founded, because there was a motion to transfer.

[00:02:56] Speaker 03:
More importantly, there was a retaliatory action brought very shortly after this action started, which went on for some 11 months and was ultimately dismissed with prejudice.

[00:03:06] Speaker 03:
And it was a retaliatory action.

[00:03:07] Speaker 03:
It was an action for tortious interference, for false marking, for interference with contract.

[00:03:13] Speaker 03:
And that action was in direct response to this action.

[00:03:16] Speaker 03:
Now, one thing I think it's important for the court to understand, and we've all seen a lot of the cases that are being filed now,

[00:03:23] Speaker 03:
Aegis is not an NPE.

[00:03:26] Speaker 03:
Aegis is an operating company that has sold product for years, particularly to the United States government and first responders after 9-11.

[00:03:34] Speaker 03:
The sole inventor of this company is a former United States Marine captain.

[00:03:39] Speaker 03:
He came up with this invention.

[00:03:40] Speaker 03:
He not only has the patents that were served in this lawsuit, he has three subsequently issued patents that have been granted by the Patent Office more recently.

[00:03:48] Speaker 03:
Uh, he has never brought a patent suit in his life.

[00:03:51] Speaker 04:
What is that all about?

[00:03:52] Speaker 04:
I mean, are you trying to persuade us that the judge's reliance in some part on the fact that this was to, um, obtain a settlement.

[00:04:00] Speaker 04:
Yeah.

[00:04:01] Speaker 04:
Shouldn't is wrong or shouldn't apply.

[00:04:03] Speaker 03:
Well, I think in considering the totality of the circumstances, this is not, and there are some, some facts like that, which could raise an eyebrow.

[00:04:11] Speaker 03:
And I think, but also I have to look at who the plaintiff is.

[00:04:14] Speaker 03:
This is not a plaintiff who has engaged

[00:04:16] Speaker 03:
in any prior litigation in patent cases.

[00:04:19] Speaker 03:
This is not a plaintiff who's ever extracted or extorted settlements from anyone.

[00:04:23] Speaker 03:
And I think taking in the context of everything that the record reflects about who this plaintiff is, it speaks to the issue of whether this was a coincidence, whether this was calculated.

[00:04:34] Speaker 03:
And we don't believe it was calculated.

[00:04:36] Speaker 03:
We believe that this was an honest company, an honest man who brought a lawsuit, who, by the way, hired a top law firm,

[00:04:43] Speaker 03:
relied on that law firm because he had no experience with patent litigation.

[00:04:47] Speaker 03:
He relied on his counsel throughout the proceeding.

[00:04:50] Speaker 04:
So what do you want us to do?

[00:04:52] Speaker 04:
We've got a very deferential standard of review here.

[00:04:55] Speaker 04:
And so you're giving us one snippet and you're saying, well, this should have been interpreted more this way than this way.

[00:05:02] Speaker 03:
Yes, sir.

[00:05:03] Speaker 04:
Where does that leave us as an appellate court?

[00:05:05] Speaker 03:
Well, one error I think the district judge made.

[00:05:08] Speaker 03:
Nowhere in his decision does it even mention or refer to

[00:05:12] Speaker 03:
the bad conduct of the defendants throughout that litigation.

[00:05:15] Speaker 04:
And by the way, in my 37 years of experience... Well, the answer to that, I'm sorry to interrupt, but the time is limited, so I just want to get to it.

[00:05:22] Speaker 04:
We understand that argument was made in the briefs.

[00:05:24] Speaker 04:
Yes.

[00:05:25] Speaker 04:
But the pushback for that is that this is extrajudicial conduct.

[00:05:30] Speaker 04:
And in Octane and in everything we've seen about attorney's fees, the references to litigation misconduct and not to this outside activity.

[00:05:39] Speaker 04:
And there's probably a very good reason for that, because if you start opening up, I mean, these attorney of fees cases have become extreme in some instances where there's more resources put into that than necessarily the merits case.

[00:05:53] Speaker 04:
So where does that leave us?

[00:05:54] Speaker 04:
I mean, do you acknowledge, at least, that you're asking us to look at a factor that is not one that's referenced in the cases we're required to follow?

[00:06:03] Speaker 03:
Well, not exactly.

[00:06:05] Speaker 03:
I do think you crossed the line from when

[00:06:10] Speaker 03:
a party in a litigation writes counsel on the other side directly, buys websites in their name, gives out their personal phone numbers, gives out their personal email addresses, and then writes them and says, I will give you a graceful exit from the litigation if you stop this.

[00:06:27] Speaker 03:
Otherwise, I'm going to escalate this and even do worse things.

[00:06:30] Speaker 03:
That's in the record.

[00:06:31] Speaker 03:
I think when you do that, that is the kind of egregious conduct, Your Honor.

[00:06:35] Speaker 03:
And if it's not falling within octane, then it surely falls within unclean hands.

[00:06:39] Speaker 03:
Does this court want to reward a defendant that engages in that kind of conduct against an adversary?

[00:06:47] Speaker 04:
Are there any cases that you can point to where the notion of unclean hands has introduced itself into the analysis of attorney's fees?

[00:06:59] Speaker 03:
We did cite a case in our briefs with respect to unclean hands and how in a fee motion, the court has the ability in its discretion

[00:07:08] Speaker 03:
to deny fees that might otherwise be entitled if that party has engaged in conduct.

[00:07:13] Speaker 03:
And we've cited that case in our briefs.

[00:07:16] Speaker 03:
That's not an octane fitness case, but it's an attorney fee case.

[00:07:20] Speaker 04:
So because the district court has discretion to consider that, it's an abuse of discretion when he did not consider that?

[00:07:27] Speaker 03:
I believe to totally not consider it.

[00:07:30] Speaker 03:
When the court did consider other factors with respect to the plaintiff,

[00:07:35] Speaker 03:
such as whether or not this was timed and calculated and other factors dealing with the plaintiff's behavior.

[00:07:43] Speaker 03:
For example, I found it extraordinary that the judge, in his 13 lines, addressed the substance of this litigation in his four-page decision that actually addressed the weakness or the strengths of this case, 13 lines.

[00:07:57] Speaker 03:
And he devoted one or two of those lines to the fact that plaintiff had sought injunctive relief in the complaint.

[00:08:03] Speaker 03:
You know, it used to be that you're entitled to injunctive relief if you want a patent case.

[00:08:06] Speaker 03:
We now, of course, know that the law is different.

[00:08:08] Speaker 03:
But this was a real company, an operating company, that had every right to seek injunctive relief based on the balancing and all of the factors that are required.

[00:08:17] Speaker 03:
But to find that as one of the 13 lines of reasons to award attorney fees and yet at the same time to ignore the conduct.

[00:08:25] Speaker 03:
Well, well, of the defendant.

[00:08:27] Speaker 02:
You've got a district court judge who's reviewing these facts.

[00:08:31] Speaker 02:
And I can't put myself inside the judge's head, but in essence what you've got is something like the man with the eggshell skull that we learned in first year law school.

[00:08:44] Speaker 02:
You've got a 20, I think 25 year old defendant, president of this entity, who's a puppy and who gets this letter and reacts in an hysterical and immature fashion.

[00:09:00] Speaker 02:
District court chose to just treat it like it was.

[00:09:04] Speaker 02:
It's a puppy.

[00:09:05] Speaker 02:
And this puppy is being swatted across the nose by a mature business person who should have known better.

[00:09:14] Speaker 02:
I mean, that's one way of looking at it.

[00:09:17] Speaker 03:
Your Honor, also in this case, this is a case, and that's why I'm asking the court to look at the totality when we consider whether or not this was an abusive discretion.

[00:09:24] Speaker 03:
This is a case where some re-judgment on the precise issues that are before this court

[00:09:29] Speaker 03:
the precise issues of whether this was divided infringement.

[00:09:32] Speaker 03:
And I've read the record of everything that was before the district judge.

[00:09:36] Speaker 03:
And I believe that the record reflects he clearly understood what the issue was.

[00:09:40] Speaker 00:
Whether this admittance... I'm going to interrupt you for a minute and go back to the unclean hands point.

[00:09:45] Speaker 00:
I presume that that was made to the district court below.

[00:09:48] Speaker 00:
That argument was made to the district court, right?

[00:09:51] Speaker 00:
That attorney fees are not appropriate because you could consider the other party's conduct.

[00:09:55] Speaker 00:
Now that the district court then didn't specifically address it in his opinion, does that mean that he didn't consider it at all?

[00:10:04] Speaker 00:
Because we as an appellate court affirm judgments, not opinions, right?

[00:10:09] Speaker 03:
Yes.

[00:10:10] Speaker 03:
Although, and we've cited the cases in our brief, the more reasoned that decision is, the more

[00:10:15] Speaker 03:
comment and reasoning and analysis that the district judge gives, the better that the federal circuit judges have to decide whether there's an abuse of discretion.

[00:10:23] Speaker 00:
I agree with you.

[00:10:23] Speaker 03:
When you set forth 13 lines with conclusions, there's one sentence which says a single party could not have performed these steps, even though on summary judgment he found to the contrary.

[00:10:32] Speaker 02:
And that one discussion of why... Well, on that summary judgment, the judge says later that the court considered granting summary judgment in favor of Life 360

[00:10:45] Speaker 02:
but did not because of an argument that the claim method steps were performed automatically as a result of sending an invitation to join the circle.

[00:10:52] Speaker 02:
And that proved to be false.

[00:10:54] Speaker 02:
Well, I disagree with that, Your Honor, that it was false.

[00:10:57] Speaker 03:
I agree that the court said that.

[00:10:59] Speaker 03:
But remember, the steps here that were at issue, providing, storing, displaying, and transmitting, none of those were construed

[00:11:09] Speaker 03:
None of those was the district court asked to construe.

[00:11:12] Speaker 03:
They were basically given their plain and ordinary meaning, and they went to the jury on the issue of whether or not those steps had taken place by this administrative user.

[00:11:21] Speaker 03:
So that was a key to this entire summary judgment.

[00:11:25] Speaker 03:
And Your Honor, hang on a minute.

[00:11:27] Speaker 03:
I'm sorry?

[00:11:28] Speaker 02:
In response to Life 360's motion for summary judgment, Aegis stated, quote, by following the link provided by the admin,

[00:11:38] Speaker 02:
The software and data is downloaded and stored on the invitees' phone automatically.

[00:11:45] Speaker 02:
And the district court denied the summary judgment motion by Life360 because of that statement.

[00:11:53] Speaker 02:
Aegis's own expert admitted later that any invited user is, I'm quoting again, free to decline or ignore the invitation.

[00:12:03] Speaker 02:
and that, quote, by accepting the invitation, you all so have to do some things like agree to terms of service and so forth.

[00:12:10] Speaker 02:
So the prior statement simply wasn't true.

[00:12:13] Speaker 03:
Well, Your Honor, in the record, on summary judgment, the judge specifically refers to expert report, to testimony of the deposition of two of Life360's witnesses, and to emails of Life360 users, which make clear

[00:12:29] Speaker 03:
One of them recently installed Life360 on my Samsung aviator and both my son's phones.

[00:12:35] Speaker 03:
Whenever Zach deletes the app, Suzanne makes him download it again before he's allowed out.

[00:12:43] Speaker 03:
Okay, that was evidence that the judge understood, the judge cited to this email, evidence that the judge understood that when an invitation is sent, there still had to be active steps taken to download and install the software.

[00:12:56] Speaker 03:
And I think at the time of the summary judgment, the district judge understood that.

[00:12:59] Speaker 03:
Now, perhaps by the end of the case, the judge wasn't that thrilled with the strength of the evidence that came in.

[00:13:05] Speaker 03:
But at the time of summary judgment, this issue was on the table.

[00:13:08] Speaker 03:
This issue was before him.

[00:13:09] Speaker 03:
He cited to the extensive record.

[00:13:11] Speaker 03:
He even pointed out an example where it's not automatic.

[00:13:14] Speaker 03:
So yes, I agree with what I understand.

[00:13:16] Speaker 04:
Do you realize the ramifications of what you're saying kind of as a more global policy thing?

[00:13:20] Speaker 04:
My recollection is that we've actually had attorneys' fees cases where the reverse happened.

[00:13:25] Speaker 04:
where the case went down on a motion to dismiss on a summary judgment motion and the plaintiff who was against whom attorney's fees was assessed, was using that factor to say no attorney's fees here because this case went down, no fuss, no muss.

[00:13:42] Speaker 04:
We backed off right away, et cetera.

[00:13:44] Speaker 04:
So now you're kind of asking for the reverse.

[00:13:47] Speaker 04:
Didn't this district court judge do exactly what plaintiffs would want a district court to do?

[00:13:54] Speaker 04:
which is to bend over backwards if there really is some question, some doubt in his mind made upon representations by the plaintiff that he would go forward and allow a jury trial and allow the evidence to go forward.

[00:14:06] Speaker 04:
And under your rule, if a district court would be compelled or feel compelled that he or she is always going to have to err on the side of going the other way because otherwise they're going to lose their discretion to do what they think is right in terms of attorney's fees.

[00:14:21] Speaker 03:
Well, and we do, Your Honor, see more and more cases where the plaintiff would rather have summary judgment granted against them and be able to stipulate to a judgment and take an appeal to the Federal Circuit rather than go through.

[00:14:31] Speaker 03:
I think we've seen a lot of that now.

[00:14:33] Speaker 03:
And so I don't think it's always in the plaintiff's benefit to have that happen.

[00:14:37] Speaker 03:
But the law of this circuit is clear that denial of summary judgment on the very issue which is before the court is certainly a factor that the court should consider when it looks to determine whether there's been a case of discretion.

[00:14:49] Speaker 00:
This goes back to my point.

[00:14:52] Speaker 00:
I don't think it's fair.

[00:14:53] Speaker 00:
I mean, the court specifically considered your denial of summary judgment and responded to that argument.

[00:14:59] Speaker 00:
I think it also must have considered the other argument of unclean hands.

[00:15:04] Speaker 00:
And so it's hard for me to sit here and have you say that the court didn't consider it when in fact it's addressed in its opinion or the argument was raised to the court.

[00:15:13] Speaker 00:
So maybe the better thing would be to say that the district court should have analyzed it differently.

[00:15:18] Speaker 03:
Well, I do believe the district court should have analyzed it and put enough of a record in its decision in order to allow an appellate court to do a real review as to abuse of discretion.

[00:15:29] Speaker 03:
But there's not a word about the defendant's conduct in that.

[00:15:32] Speaker 03:
And while it's true that that point was made in the submission to oppose the attorney fee award, I do think it was an important enough factor.

[00:15:39] Speaker 03:
I don't think dismissing the conduct of the defendants throughout the litigation as trash talk

[00:15:45] Speaker 03:
was a sufficient analysis and reasoning to determine whether this was on clean hands.

[00:15:50] Speaker 00:
And with respect to the summary judgment, your point would be that anytime there's a general summary judgment, a court could not later award attorney fees?

[00:15:57] Speaker 03:
No, I don't take that position.

[00:15:59] Speaker 03:
I do think it's a factor.

[00:16:00] Speaker 03:
I think this court should have the opportunity to read a well-reasoned decision, which addressed what the judge didn't do in that summary judgment decision.

[00:16:09] Speaker 03:
He made a statement that one person cannot perform all the steps of the method.

[00:16:12] Speaker 03:
But then he did not address any of the reasons or issues.

[00:16:16] Speaker 03:
Why isn't providing the software to the cell phone by invitation?

[00:16:21] Speaker 03:
Why isn't that sufficient in light of the fact that there was no claim construction on who were providing, that the expert for the plaintiff testified that that was providing?

[00:16:30] Speaker 03:
So in light of that record, which is part of the not only summary judgment record, but the trial record, why didn't the court discuss that and then reason why that wasn't a step?

[00:16:41] Speaker 03:
that could be performed by one user.

[00:16:43] Speaker 03:
That's my only point.

[00:16:44] Speaker 04:
Okay, we're beyond our time.

[00:16:46] Speaker 04:
We'll restore two minutes of rebuttal.

[00:16:48] Speaker 04:
Let's hear from the other side.

[00:16:49] Speaker 03:
Thank you very much.

[00:17:01] Speaker 01:
May it please the court, I'm Daniel Breen, counsel for Life360.

[00:17:05] Speaker 01:
I'd like to just

[00:17:07] Speaker 01:
invite the court to ask any questions beyond this, but I'd like to focus on what my opposing counsel has said.

[00:17:13] Speaker 01:
First and foremost, I believe Judge Wallach said it correctly, that the comment early on that this was not believed to be an exceptional case at the time based on what the district court knew is thinking out loud.

[00:17:23] Speaker 04:
The district court clearly learned a great deal about the case and the merits as the court's... I wanted to address the point about unclean hands or so-called expanded litigation misconduct.

[00:17:34] Speaker 04:
Why isn't that at least

[00:17:36] Speaker 04:
relevant to the inquiry.

[00:17:38] Speaker 04:
I mean, this is stuff that nobody's denying.

[00:17:40] Speaker 04:
This is part and parcel.

[00:17:41] Speaker 04:
All of this happened only and exclusively in the context of the litigation of this patent claim.

[00:17:48] Speaker 04:
So why isn't that conduct relevant to the assessment here?

[00:17:52] Speaker 01:
Well, I think the first answer, and we can almost stop there, is that octane fitness limits the discussion to the strength of the parties' litigating positions and the conduct by the parties in the litigation.

[00:18:03] Speaker 01:
I think if we do open the door to conduct that parties engage in that goes well beyond what takes place in the courtroom or related to what's happening in the courtroom is something that simply isn't part of what Octane Fitness envisioned.

[00:18:16] Speaker 00:
How is it not related to what was happening in the courtroom?

[00:18:19] Speaker 00:
Excuse me?

[00:18:20] Speaker 00:
How is that conduct not related to what was happening in the courtroom when it involved the patent itself and the allegations that were being made in the courtroom?

[00:18:30] Speaker 01:
Well, it was not related to any action that was required by Life360 or by Aegis to take with respect to the case as it was proceeding.

[00:18:38] Speaker 01:
This was simply Life360 reacting very strongly to a case that it felt was abusive, bullying, and meritless.

[00:18:46] Speaker 01:
And Life360 was told by two different law firms, the jury agreed it was meritless, and the judge agreed it was meritless.

[00:18:53] Speaker 01:
So for Life360 to go out, try to rally some public support against what it saw as a patent bully.

[00:18:57] Speaker 04:
Well, I don't understand this.

[00:18:59] Speaker 04:
Isn't it correct that the district court here and other district courts have relied on the notion, the motivation for bringing the suit, which is to just extract settlement and litigation costs, right?

[00:19:10] Speaker 04:
I mean, that's a factor that's considered.

[00:19:12] Speaker 04:
Well, that's all stuff that's outside of what's going on in the courtroom too.

[00:19:17] Speaker 04:
So how is that probative of the attorney's fees criteria and not the stuff on the other side?

[00:19:25] Speaker 01:
Well, I think in terms of, because it directly relates to why the claim is being brought against the defendant.

[00:19:33] Speaker 01:
So if the motivation for why this claim is being pursued is not for purposes of resolving a legitimate infringement pursuit, but appears designed to sort of force a defendant to abandon its good defenses and simply pay, then I think that directly relates to... Well, what about if a defendant, I understand, not your case, but what about if a defendant outside of the litigation process sends letters out to

[00:19:55] Speaker 04:
customers or to competitors and says, we know we're infringing, but this guy never deserved his patent because he's undeserving of a patent, et cetera.

[00:20:03] Speaker 04:
So there's this outside communication that's used with other people on the outside.

[00:20:08] Speaker 04:
Would that be appropriate to use in the context of litigation misconduct?

[00:20:13] Speaker 01:
Well, I still think that's extrajudicial.

[00:20:15] Speaker 04:
Well, why isn't that closer to the

[00:20:18] Speaker 04:
other-side motivation for why they're bringing the case?

[00:20:23] Speaker 01:
Well, no, because I don't think that's anything that's intended to directly affect what actually happens in the litigation.

[00:20:29] Speaker 01:
It's meant to rally some public support.

[00:20:32] Speaker 04:
Why?

[00:20:32] Speaker 04:
Maybe your client was acting because he was trying to subtly intimidate the other side and wanted them to back off and realize that their reputation would be at risk if they persisted in pursuing this claim.

[00:20:43] Speaker 01:
Well, certainly, Life360 did want the client to back off.

[00:20:47] Speaker 04:
And they were doing this as their motivation.

[00:20:52] Speaker 04:
So why isn't that as related to the litigation going on as the stuff on the other side?

[00:20:58] Speaker 01:
Well, I mean, I think the district court had the right attitude about it.

[00:21:01] Speaker 01:
It's just trash talking at some point.

[00:21:03] Speaker 01:
It's one thing if you're pursuing the claim in court for a particular reason, namely to subdue a client despite baseless claims that you're asserting.

[00:21:13] Speaker 01:
And it's another thing to, outside of the judicial context,

[00:21:16] Speaker 02:
to express yourself, express your views about the case, to complain about... Well, it may cross other lines, interference with potential advantage, and so on.

[00:21:30] Speaker 02:
It may constitute a tort.

[00:21:32] Speaker 01:
Well, certainly, Your Honor.

[00:21:34] Speaker 01:
And I think that's right.

[00:21:35] Speaker 01:
There are other rights and remedies at play if there was something in the Life 360 that crossed other lines.

[00:21:40] Speaker 01:
But here, in terms of an exceptional case determination,

[00:21:43] Speaker 01:
We're looking at the case.

[00:21:44] Speaker 01:
This is the exceptional case.

[00:21:45] Speaker 01:
What's happening within the case?

[00:21:47] Speaker 01:
I don't think what Life360 did with respect to commenting very loudly and very publicly about what it felt was an injustice is something that makes the case itself exceptional.

[00:22:01] Speaker 01:
I'm happy to answer further questions on that, but there are some other issues I'd like to address.

[00:22:07] Speaker 01:
I've talked about how Life360 felt this was bullying.

[00:22:11] Speaker 01:
The demand made of Life360 did have an exceptionally short timeframe, one that was not imposed on the much, much larger companies at play.

[00:22:22] Speaker 01:
This was a young startup just on the verge of making it.

[00:22:28] Speaker 01:
At the same time, we have Aegis complaining of what it deemed irreparable harm from the outset of the lawsuit.

[00:22:34] Speaker 01:
that was never substantiated in the district court's view.

[00:22:38] Speaker 01:
There are no customers that overlap.

[00:22:39] Speaker 01:
There was no intent to seek the same customers and possibly have some sort of competitive relationship with the respective products until that is, excuse me, Aegis's product that had been supposedly in the works for a full decade magically gets launched the day before trial to sort of fabricate an appearance of

[00:22:59] Speaker 02:
But it's not workable, as I recall the record.

[00:23:02] Speaker 01:
Well, it was said to have been available for download.

[00:23:06] Speaker 01:
That turned out not to be true either.

[00:23:07] Speaker 01:
A trial that came out on cross-examination.

[00:23:10] Speaker 01:
So all of these things together, I think the district court was well within its discretion to make the judgment call that, hey, this doesn't really seem like, on top of the weakness of the claims themselves, this doesn't seem like Aegis is trying to press an infringement dispute

[00:23:23] Speaker 01:
uh... because of this alleged irreparable harm and because there's actually infringement.

[00:23:27] Speaker 04:
But let me clarify, I'm not, this is just a straight up question, which I don't know the answer to, which is, I thought, didn't the judge refuse to grant attorney's fees for an earlier point of time?

[00:23:38] Speaker 04:
And would that not have included, I guess, my question is, so the attorney's fees you actually were awarded did not include, did they, the conduct and the

[00:23:49] Speaker 04:
funds expended, the litigation funds expended to defend against the preliminary injunction?

[00:23:56] Speaker 01:
Yes, that's right.

[00:23:56] Speaker 04:
So why would he do that?

[00:23:58] Speaker 01:
Well, I think it's, actually I don't recall off the top of my head, I don't believe they just moved for a preliminary injunction.

[00:24:03] Speaker 01:
So there weren't any proceedings in that respect.

[00:24:05] Speaker 01:
It was simply a threat held over our head the entire time.

[00:24:08] Speaker 04:
A threat held over that wasn't really part of litigation that

[00:24:13] Speaker 01:
Right.

[00:24:13] Speaker 01:
There wasn't really part of litigation.

[00:24:15] Speaker 04:
So again, isn't that going to the first point we were discussing a few minutes ago, which is it's okay.

[00:24:21] Speaker 04:
If that had been part of the litigation, they had pursued a preliminary injunction and the court thought that was frivolous because of that.

[00:24:29] Speaker 04:
That's one thing, but why does the court get to assess threats that are made outside of the context of litigation?

[00:24:35] Speaker 04:
Whereas you're what you term trash talking.

[00:24:40] Speaker 04:
I hate because it sounds like my kids and not about anything we do in the courtroom.

[00:24:44] Speaker 04:
But that's off the table.

[00:24:46] Speaker 01:
Well, I mean, the threat of the injunction was it was in the complaint.

[00:24:50] Speaker 01:
It was never stricken from the complaint.

[00:24:52] Speaker 01:
So it was part of the case.

[00:24:53] Speaker 01:
We had to defend ourselves against it.

[00:24:54] Speaker 01:
We had to take discovery on it.

[00:24:56] Speaker 01:
We had to deal with it all the way through trial because a just maintained that it would be entitled to that relief if and when it was able to succeed on the marriage.

[00:25:03] Speaker 04:
So you're talking about a permanent injunction now, not a preliminary injunction.

[00:25:06] Speaker 01:
Right, right.

[00:25:07] Speaker 01:
But the threat of any injunction, having been made many times throughout the course of this litigation, was something that we were stuck having to deal with and defend against from the outset.

[00:25:17] Speaker 01:
So I think it's very much part of the case whether they chose to move for a preliminary injunction or not.

[00:25:23] Speaker 02:
Did you assert Rule 11 in this as well?

[00:25:27] Speaker 01:
No, we did not file any Rule 11 motions.

[00:25:29] Speaker 01:
There were some correspondence in order to force Aegis to drop some claims.

[00:25:36] Speaker 01:
particularly the ones that this court invalidated for indefiniteness on appeal last year, we sent some letters to that effect, but there was no motion.

[00:25:44] Speaker 02:
I should think that the harm claim, the harm element of the preliminary injunction, which the court found had no basis, would have drawn

[00:26:02] Speaker 02:
Councils are required as under role 11 to assess the elements of a cause of action and then to assess its evidence which supports that cause of action and failure to do so seems to me to draw a role 11 demand.

[00:26:19] Speaker 01:
What we certainly could have, part of the problem with a claim of injunctive relief is that it requires a lot of information about the market and about the company's businesses.

[00:26:28] Speaker 01:
That's information that you don't have access to

[00:26:30] Speaker 01:
until usually later in the case through discovery.

[00:26:33] Speaker 02:
So by the time we'd had all of that information and we're- The plaintiff has information about what it's irreparable harm it thinks is before it files the action.

[00:26:44] Speaker 02:
That's counsel's duty.

[00:26:45] Speaker 01:
Yes, I agree.

[00:26:46] Speaker 01:
And certainly there could have been a pre-filing investigation defect here.

[00:26:50] Speaker 01:
And I wouldn't be surprised given the way things turned out if that was the case.

[00:26:55] Speaker 01:
We did not move for rule 11 sanctions on that basis.

[00:26:57] Speaker 01:
So I can't say much more about that.

[00:27:00] Speaker 01:
I do want to comment briefly on the summary judgment issue and the fact that the district court at the time of summary judgment declined to grant our motion.

[00:27:13] Speaker 01:
We don't think that's any safe harbor for Aegis.

[00:27:15] Speaker 01:
We think that the district court clearly was relying, trying to give the benefit of the doubt to Aegis that the suggestion that once the invitation is sent, a number of steps, if the invitation is accepted, would occur automatically.

[00:27:27] Speaker 01:
There's a reason that that argument was no longer made a trial because we proved it to be conclusively false.

[00:27:32] Speaker 01:
There are many, many steps that have to be performed by each individual user on each individual phone in order for any infringement to occur.

[00:27:41] Speaker 01:
So the mere idea that a single user had so much control over all the other users' phones and their actions we think was exceptionally weak, and the district court was entitled

[00:27:51] Speaker 04:
Do you think, I mean, the district court seemed to suggest, I think, as I recall in his analysis, that irrespective, it went to the jury, the jury said no infringement.

[00:28:03] Speaker 04:
But even if the jury had gone the other way, the judge would have struck that, right?

[00:28:07] Speaker 04:
I think that's right.

[00:28:08] Speaker 04:
That's how I understand it.

[00:28:09] Speaker 04:
But wouldn't this be a different case if the jury had gone the other way?

[00:28:13] Speaker 04:
Wouldn't your hurdles be a bit higher?

[00:28:16] Speaker 04:
If the jury sat there and listened to all the evidence and they concluded there was infringement, that would be a bit of a different case, would it not?

[00:28:23] Speaker 01:
It would be a different case, but if there is no evidence from which that jury could have reasonably reached that conclusion, I don't think that should prevent the district court from determining that the arguments were exceptionally weak.

[00:28:35] Speaker 01:
I mean, that's why we have rule 50B to correct for those mistakes, those clear obvious mistakes that the jury made.

[00:28:42] Speaker 01:
or perhaps for reasons other than the evidence, they reached a conclusion that's manifestly wrong.

[00:28:49] Speaker 00:
Was the evidence that was considered by the court in responding to the summary judgment, was the evidence later at trial that was presented on the issue stronger?

[00:28:59] Speaker 00:
Did you have additional evidence that you presented on why there was no infringement?

[00:29:05] Speaker 01:
Well, there certainly was more evidence after summary judgment, but that's largely with respect to

[00:29:10] Speaker 01:
issues that we did not move for summary judgment on.

[00:29:13] Speaker 01:
We decided to strategically focus on the biggest issues that covered the most claims.

[00:29:17] Speaker 01:
So there were additional things like the public-private network, common-interest network.

[00:29:21] Speaker 01:
Those were not the subject of our summary judgment motions.

[00:29:23] Speaker 01:
There was a lot more non-infringement evidence put on later.

[00:29:27] Speaker 01:
But even as to the sort of divided problem that they have with these claims requiring actions on each

[00:29:35] Speaker 01:
There was more that came out during trial, and part of that, or I should say a large part of that, is because Aegis's story continued to shift and evolve.

[00:29:43] Speaker 01:
It was unclear exactly what their theory was going to be.

[00:29:46] Speaker 01:
Is it a single user, or does it have to be an administrative user?

[00:29:50] Speaker 01:
Are they calling a family somehow an unincorporated association?

[00:29:54] Speaker 01:
So we had to defend against all of those moving targets all at once.

[00:29:57] Speaker 01:
But the core issue that was on display at summary judgment,

[00:30:01] Speaker 01:
Namely, whether the sending of a link, the mere sending of a link, somehow causes these things to happen automatically.

[00:30:06] Speaker 01:
The evidence that we had at the time was the same, in essence.

[00:30:11] Speaker 01:
It was just not something that any one user could control.

[00:30:13] Speaker 01:
And we got the admissions that we needed from their expert at trial that there were independent steps that had to be taken by those recipients of the invitation.

[00:30:26] Speaker 01:
If the court has no further questions, we would just ask that the judgment be affirmed.

[00:30:41] Speaker ?:
Thank you.

[00:30:41] Speaker 03:
Thank you.

[00:30:41] Speaker 03:
Your Honor, just a few points I would like to make.

[00:30:44] Speaker 03:
The comments, which are true, that this was a young man in a young company.

[00:30:47] Speaker 03:
Well, not so young.

[00:30:48] Speaker 03:
It was in business for six years.

[00:30:50] Speaker 03:
It started operations in 2008.

[00:30:52] Speaker 03:
He was also represented by a very competent patent counsel.

[00:30:56] Speaker 03:
who was aware of everything that was going on with this campaign.

[00:30:59] Speaker 03:
And as I said, it wasn't just an extrajudicial campaign, if you want to look at it like that.

[00:31:02] Speaker 03:
I do believe it was intricately related to the litigation and the threats to the lawyers, not even the company.

[00:31:08] Speaker 03:
We're not talking about the threats to ages.

[00:31:10] Speaker 03:
To threaten the Kenyan law firm and each of the attorneys, including associates, with websites posting bad information about them.

[00:31:18] Speaker 03:
And then writing that law firm and saying, if you don't

[00:31:21] Speaker 03:
I'll give you a graceful exit, but if you don't drop this case, I'm going to elevate this conduct.

[00:31:26] Speaker 03:
How can that not be related to litigation?

[00:31:29] Speaker 03:
I agree completely with the court that if a demand letter without a sufficient amount of days to respond to it is something the court can consider in a fee award, then certainly the court can consider this conduct.

[00:31:42] Speaker 03:
And I think that's very important.

[00:31:44] Speaker 03:
I do think it's also important, and it came up during this last few minutes.

[00:31:48] Speaker 02:
Oh, you find it telling.

[00:31:50] Speaker 02:
that you feel obligated to distance yourself from prior counsel?

[00:31:57] Speaker 03:
No, I do believe that I would not have put everything into the briefs the way they wrote them.

[00:32:02] Speaker 03:
And I think some of the statements, I think they made some leaps of faith in making certain comments.

[00:32:08] Speaker 03:
That's a nice way of putting it.

[00:32:10] Speaker 03:
But I do believe that the result was wrong.

[00:32:14] Speaker 03:
I do believe there's sufficient

[00:32:15] Speaker 03:
record evidence.

[00:32:16] Speaker 04:
But I'm not quite sure what we do with that.

[00:32:18] Speaker 04:
I mean, I can't remember this kind of thing happening.

[00:32:21] Speaker 04:
We get the briefs, we spend hours and hours and hours reading them one, two and three times.

[00:32:26] Speaker 04:
And that's largely the basis upon we reach our conclusions.

[00:32:30] Speaker 04:
And then we get you all up here for 30 minutes, 15 minutes on the side.

[00:32:34] Speaker 04:
So you generically have suggested some of the stuff in the brief, maybe a leap of faith, some of it may be not so

[00:32:42] Speaker 04:
kosher or tenuous to the record.

[00:32:44] Speaker 04:
We don't know what that is, so we're coming out of here listening to you for 15 minutes, and with the briefs, which we're supposed to take as being the argument of your client, and I don't quite know what to do with that when we're evaluating the case when we go into the back room.

[00:33:02] Speaker 03:
Well, I certainly don't disagree.

[00:33:03] Speaker 03:
I mean, there's record citations and record evidence, and I don't believe they made any false submission of the record or said anything that was in the record which wasn't in the record.

[00:33:12] Speaker 03:
You know, I would have certainly had a different tone.

[00:33:14] Speaker 03:
I would have written in a different way.

[00:33:16] Speaker 03:
And they're the ones who took it from day one all the way through trial.

[00:33:20] Speaker 03:
So they did what they thought was appropriate.

[00:33:22] Speaker 03:
I think very important, you're on something that came up at the end there.

[00:33:25] Speaker 03:
They didn't even move for summary judgment on many of these claims and on many of these patents.

[00:33:30] Speaker 03:
They didn't even think their own evidence was strong enough on the public versus private, on the common and shared interest.

[00:33:36] Speaker 03:
They didn't make a motion.

[00:33:38] Speaker 03:
They also, in all of the smear campaign where they attacked only one thing, the validity,

[00:33:42] Speaker 03:
They were challenging the validity that this was a troll.

[00:33:44] Speaker 03:
They didn't bring an IPR.

[00:33:46] Speaker 03:
They didn't take any of the actions that people normally take if they believe that the patent is so blatantly invalid.

[00:33:51] Speaker 03:
This is an exceptional case appeal.

[00:33:55] Speaker 03:
And I think, therefore, it's got to be an exceptional case.

[00:33:59] Speaker 03:
And I think this one stands apart from those that this court affirms because the reasoning wasn't there, the logic, the support by the district court, why these claim terms

[00:34:11] Speaker 03:
given their plain and ordinary meaning didn't satisfy their divided infringement rule, all of those questions are left for us.

[00:34:17] Speaker 02:
This is not aimed at you or at your firm.

[00:34:20] Speaker 02:
But it's difficult for you to assume the garb of a leper and then point it across the room and say, unclean hands.

[00:34:30] Speaker 03:
Well, that part of the record, I think, Your Honor, is just extremely, I mean, all of the communications, all of the websites, all of the conduct, everything that happened is not even disputed.

[00:34:40] Speaker 03:
It's not disputed.

[00:34:41] Speaker 03:
So I think on that point, my question is, should the district court have considered that?

[00:34:46] Speaker 03:
He clearly didn't consider that conduct.

[00:34:48] Speaker 03:
Should he have considered it, number one?

[00:34:51] Speaker 03:
Should he have rejected it or accepted it?

[00:34:53] Speaker 03:
None of that.

[00:34:53] Speaker 03:
I think there's a lot left out of the 13-line comments by the district judge on why this case was being awarded fees.

[00:35:01] Speaker 04:
Thank you.

[00:35:02] Speaker 04:
Thank you very much.