[00:00:36] Speaker 03:
Okay, the next argued case is number 171302, cardiac valve technologies against neovask.

[00:00:45] Speaker 03:
Mr. Wolfe.

[00:00:47] Speaker 01:
May it please the court.

[00:00:49] Speaker 01:
The primary challenge facing someone designing a mitral valve replacement is how to keep the valve where it's supposed to be through all of the stresses and strains it faces each time the heart beats.

[00:01:03] Speaker 01:
Neovask came up with a novel approach.

[00:01:06] Speaker 01:
based on anchoring the implant to the fibrous scaffolding of the heart itself, as opposed to the valves.

[00:01:13] Speaker 01:
That was a novel feature deserving of a patent.

[00:01:16] Speaker 01:
And indeed, they got a patent.

[00:01:18] Speaker 01:
The district court's decision that cardiac acute deserves a stake in that patent, a share of that patent, was based on a plain legal error.

[00:01:28] Speaker 01:
In Lilly versus Eridyne, this court said,

[00:01:30] Speaker 01:
Contribution of information in the prior art cannot give rise to joint inventorship.

[00:01:35] Speaker 02:
Can I ask, at least as to, was it the Chao reference?

[00:01:42] Speaker 02:
Yes.

[00:01:44] Speaker 02:
The prior art here is 102E, prior art?

[00:01:48] Speaker 02:
Correct, Your Honor.

[00:01:49] Speaker 02:
Have any of the joint inventorship cases that you rely on for the prior art

[00:01:58] Speaker 02:
contribution idea, argument that you make involve 102E prior art?

[00:02:04] Speaker 02:
No, your honor, but I... So why doesn't that actually, A, make this distinctive and B, make a substantive difference?

[00:02:11] Speaker 02:
Because the prior art that you're talking about maybe is in fact, or was prior art for legal purposes, but was not in fact publicly available.

[00:02:25] Speaker 02:
It's this 102E has its own policies.

[00:02:28] Speaker 02:
that there's certain kind of non-publicly available secret art that constitutes prior art so as not to punish people for delays in the battle.

[00:02:35] Speaker 01:
I think, Your Honor, Levin summed it up best, and this is at 73, where the court said, we find it implausible to say that a person who contributed only to the non-novel and or obvious elements of a claim can be called an inventor.

[00:02:49] Speaker 01:
But not in a 102E context.

[00:02:52] Speaker 01:
Your Honor, but the point is prior art has one meaning in the statute.

[00:02:58] Speaker 01:
question implies is that we will have one definition of prior art for purposes of things like 102 and 103 analyses, and another definition of prior art for purposes of inventorship.

[00:03:09] Speaker 04:
But isn't it pertinent that the point in time at which the information was disclosed was before Chao was published?

[00:03:19] Speaker 01:
Not in the patent context.

[00:03:20] Speaker 01:
I believe what the district court did here is conflate the trade secret analysis with the patent analysis.

[00:03:26] Speaker 01:
If you didn't invent something... I don't understand.

[00:03:30] Speaker 03:
You're saying that if someone tells you something that you didn't know, and tells you under a non-disclosure agreement, and it ends up in a patent that schools out none of the restrictions apply?

[00:03:44] Speaker 01:
No, Your Honor, trade secret restrictions certainly apply.

[00:03:47] Speaker 01:
That's what trade secret law is for.

[00:03:48] Speaker 01:
But the question is, are you an inventor?

[00:03:51] Speaker 01:
And in deciding whether or not someone's an inventor or not, we have to decide did they come up with something that is patentable, that is different than the prior art, known or unknown, public or not public.

[00:04:02] Speaker 01:
And as Levin suggests, if it's something you wouldn't have gotten a patent on in the first place, if it's something you couldn't have said, this is my patented invention, then why should you be able to claim a stake

[00:04:14] Speaker 01:
in something that is a patentable invention.

[00:04:16] Speaker 02:
To be a co-inventor, you don't have to come up with something that's outside the prior art.

[00:04:21] Speaker 02:
You simply have to contribute to the collective arrival at something that is novel and not obvious.

[00:04:29] Speaker 01:
Your Honor, the cases take two lines on that.

[00:04:31] Speaker 01:
And we, again, not to use the word again, but we have to avoid conflation here.

[00:04:36] Speaker 01:
Two ways you can be a joint inventor.

[00:04:38] Speaker 01:
One is you can contribute something novel.

[00:04:40] Speaker 01:
Let's assume

[00:04:41] Speaker 01:
that claim has limitations A, B, and C. Limitation C is new and novel.

[00:04:47] Speaker 01:
You contribute solely C. The other inventors contribute A and B. You're entitled to be a joint inventor in that context.

[00:04:54] Speaker 01:
The other way is, and this is in Nartron, where you talk about the claimed invention as a whole.

[00:05:07] Speaker 01:
So if you have a vision of A, B, and C,

[00:05:10] Speaker 01:
but only contribute to B, well, you've contributed as a whole to A, B, and C. But here, where C is the novel part, and you had nothing to do with C, you only at best contributed to A and B, which were known in the priority.

[00:05:24] Speaker 04:
So you argued to the PTO that there were other features that were also novel and patentable, and contributed to the patentability.

[00:05:30] Speaker 04:
Did you not?

[00:05:31] Speaker 01:
Your Honor, the district court cited the discussion of Nguyen.

[00:05:35] Speaker 01:
But those arguments, the district court didn't match those up.

[00:05:39] Speaker 01:
The district court didn't, in her opinion, say that what you argued was novel was what was contributed purportedly by cardiac cue in the discussions prior to the patenting.

[00:05:51] Speaker 01:
So at a minimum, what the district court should have done is accepted Chao as prior art, accepted Solem as prior art, which she didn't discuss at all, and say, all right, now I'm going to compare and see what was novel in the claim

[00:06:05] Speaker 01:
these in light of the prior art and compare that to what Cardiac-Q purportedly disclosed to Neovask in the relevant time frame.

[00:06:14] Speaker 01:
That analysis was never done.

[00:06:17] Speaker 01:
She talked about when in the prosecution, but didn't do the relevant comparison.

[00:06:23] Speaker 01:
But more importantly, she didn't address Chao or, again, Solem at all because of this legal error.

[00:06:30] Speaker 01:
Prior art is prior art, whether it's in the 102E context or the 102B context.

[00:06:34] Speaker 01:
And I suggest we invite mischief if we start saying that it means different things in different statutory contexts.

[00:06:43] Speaker 02:
Is 102E gone?

[00:06:45] Speaker 02:
Is this issue of historical interest?

[00:06:48] Speaker 01:
That would be my best guess, Your Honor.

[00:06:49] Speaker 01:
I haven't done the exegesis completely, but I think so.

[00:06:52] Speaker 01:
Historical mischief may be different from... Yes.

[00:06:55] Speaker 01:
Your Honor, post-AIA, I believe that this is a creature of pre-AIA law.

[00:07:01] Speaker 01:
And Giacomini, which recognizes that,

[00:07:03] Speaker 01:
102e kind of evaporates as a problem in light of the AIA.

[00:07:08] Speaker 01:
So with that, Your Honor, I think that at a minimum, what should be done is that the district court should be told to go back, look at what was prior art, and say, all right, was there anything that was truly novel that would have been patentable that was not disclosed in prior art as properly construed, and do that analysis?

[00:07:27] Speaker 01:
Now, of course, since cardiac you bore the burden of proof,

[00:07:31] Speaker 01:
We don't think this either needs to go back, that this is simply a case of reversal, that the arguments they make were not made below.

[00:07:37] Speaker 01:
They have to prove they're entitled to be named as co-inventors.

[00:07:41] Speaker 01:
And you don't get to do that in light of this record.

[00:07:45] Speaker 01:
So with that, if I could turn to the trade secret issues.

[00:07:48] Speaker 01:
As the trade secrets are defined, they are legally flawed as a matter of liability.

[00:07:53] Speaker 01:
And just as importantly, cannot support the damages requested.

[00:07:56] Speaker 04:
But with respect to the trade secrets, you didn't object to any of the jury instructions regarding trade secrets, did you?

[00:08:03] Speaker 01:
Your Honor, I'm not aware that trial counsel objected to the jury instructions.

[00:08:07] Speaker 04:
So absent any objection to the jury instructions, we have to assume that the legal standard that the jury employed is the correct one.

[00:08:16] Speaker 01:
Well, let's work backwards from trade secret six.

[00:08:19] Speaker 01:
The jury instructions were correct.

[00:08:21] Speaker 01:
were not objected to, at least by trial counsel.

[00:08:25] Speaker 01:
The question then on new trial was, did the evidence elicited support the verdict?

[00:08:31] Speaker 01:
And in saying that it did, the district court then misstated the law.

[00:08:35] Speaker 01:
The district court said... Okay, can I ask this?

[00:08:37] Speaker 02:
Yes.

[00:08:39] Speaker 02:
If you had made a JMOL argument, which you didn't, it would be clear under Boyle against United Technologies, Flipnote 5 or something of R. Markman,

[00:08:50] Speaker 02:
that the law that you're comparing the evidence to is the actual law irrespective of whether of whatever the law was described as being in the jury instructions.

[00:09:01] Speaker 02:
I have been unable to find whether that same principle work is in operation when it's a new trial motion for this is a verdict against the weight of the evidence or whatever and at least

[00:09:19] Speaker 02:
Do you have authority about that?

[00:09:21] Speaker 01:
No, Your Honor, and I'm not aware of any such authority, but that's in some ways beside the point, because we have an unusual circumstance here where the instruction given was correct.

[00:09:32] Speaker 01:
This is as to trade secret six.

[00:09:34] Speaker 01:
But then in the new trial denial, the district court restated her own instruction and restated it incorrectly.

[00:09:42] Speaker 01:
She correctly argued the standard of Massachusetts law that something had to be in continuous use.

[00:09:48] Speaker 01:
She then turned around and the new trial said, well, but the evidence supports the verdict because, quote, they know what to do and what not to do.

[00:09:57] Speaker 01:
Well, the instruction she gave had nothing to do with what not to do.

[00:10:00] Speaker 02:
Yeah, but why, it seems to me that if you did not ask for an instruction that said what not to do is outside the protectable trade secrets, then you can't complain about that now if,

[00:10:18] Speaker 02:
The answer to my earlier question is for new trial, as opposed to JMOL, you take the instructions as the law.

[00:10:26] Speaker 01:
Your honor, the instruction given called for continuous use.

[00:10:33] Speaker 01:
By definition, if something is not being done, it is not in continuous use.

[00:10:37] Speaker 02:
I don't see why that's true.

[00:10:41] Speaker 02:
That is, every day I learn, I know, don't touch that button.

[00:10:48] Speaker 02:
I mean, I'm constantly deciding, don't put in this chemical, don't do this, don't do that.

[00:10:55] Speaker 02:
I have been shown in a secret confidential process that that would be a very bad thing to do.

[00:11:03] Speaker 01:
I think that's a gloss on the Massachusetts articulation that Massachusetts itself doesn't abide by.

[00:11:09] Speaker 01:
But again, this is not in the jury instructions.

[00:11:11] Speaker 04:
Well, understood.

[00:11:14] Speaker 04:
And there was no motion for

[00:11:16] Speaker 04:
Jamal on the substantive issue of the trade, whether it was qualified as a trade secret.

[00:11:22] Speaker 01:
That's correct, Your Honor.

[00:11:24] Speaker 04:
So you are under a very deferential standard here, and you have to say no reasonable jury could find that it's a trade secret.

[00:11:31] Speaker 04:
And as Judge Toronto says, if my trade secret to you is do it this way, but make sure you don't do it this way, then why is that

[00:11:40] Speaker 04:
not in continuous use, if you're following that guideline.

[00:11:43] Speaker 01:
Because the materials development case at 97 says that continuous use means positive know-how, not negative know-how.

[00:11:53] Speaker 01:
That's my reading of that.

[00:11:54] Speaker 02:
Materials development is... A Massachusetts Superior Court case.

[00:11:58] Speaker 02:
1971.

[00:11:58] Speaker 01:
Well, that's the only... There hasn't been an argument to be superseded.

[00:12:01] Speaker 01:
I mean, this is... 48 of 50 states have moved to pass the restatement.

[00:12:05] Speaker 01:
48 of 50 states used the Uniform Trade Secret Act.

[00:12:09] Speaker 01:
So this is restatement law that we're dealing with here, not UTSA law.

[00:12:11] Speaker 01:
And this is restatement second, not restatement first?

[00:12:14] Speaker 01:
That's correct, Your Honor.

[00:12:16] Speaker 01:
I think it continues to this day.

[00:12:19] Speaker 02:
You cited restatement of torts, right?

[00:12:22] Speaker 02:
Which is like 1938, and restatement second of torts is 1965.

[00:12:27] Speaker 02:
I didn't double check, but I assume you meant the second.

[00:12:30] Speaker 01:
Yes, Your Honor, but the case was from post-restatement second.

[00:12:33] Speaker 02:
Right.

[00:12:33] Speaker 02:
Does that have precedential

[00:12:36] Speaker 02:
affect an unpublished superior court, state court decision as the best evidence of the state's law?

[00:12:43] Speaker 01:
Your honor, there's no dispute.

[00:12:45] Speaker 01:
Certainly the appellees did not argue that we were anything other than restatement law.

[00:12:50] Speaker 01:
They didn't challenge our assertion of what the restatement was.

[00:12:54] Speaker 01:
I mean, the UTSA has unambiguously changed that law, but I don't believe it's

[00:12:59] Speaker 01:
It's hoary, but it's not incorrect.

[00:13:01] Speaker 01:
It's H-O-A-R-Y.

[00:13:05] Speaker 01:
But I don't believe it's an incorrect articulation.

[00:13:08] Speaker 01:
If we could talk briefly about trade secret four, the fundamental problem is that we don't know which one or more of the 60-plus combinations the jury found misappropriated, and thus can't test whether they were actually trade secrets under the relevant law.

[00:13:24] Speaker 01:
But you didn't ask for any special verdict in that regard.

[00:13:27] Speaker 01:
That's the trial counsel did not ask for a special verdict.

[00:13:30] Speaker 04:
That's correct, Your Honor.

[00:13:33] Speaker 04:
You're really in a position of trying to retry this case, and there's nothing we can do about that.

[00:13:38] Speaker 04:
If trial counsel made some mistakes in terms of what they asked for or didn't ask for, there's nothing we can correct.

[00:13:44] Speaker 01:
Your Honor, at A85 Note 6, the district court criticized, expressed some frustration that the challenge to trade secret four wasn't raised on summary judgment.

[00:13:55] Speaker 01:
But the final sentence,

[00:13:57] Speaker 01:
suggests that she considered the issue on the merits, rejected the physician that Neovast took pillow.

[00:14:07] Speaker 01:
And under Massachusetts law, that is sufficient to preserve the issue.

[00:14:11] Speaker 01:
And so we believe that, as a practical matter, we don't know whether the jury found that it was component two and five, that that was the trade secret.

[00:14:21] Speaker 01:
We don't know whether it's one, three, and six.

[00:14:24] Speaker 01:
We do know that each of them individually was acknowledged to be well known in the prior art.

[00:14:29] Speaker 01:
And the judge said when that was challenged on the new trial, well, that's taking it out of context.

[00:14:34] Speaker 01:
Well, unfortunately, the way it was presented and analyzed by the judge, we need the context to know what the new trial motion is being tested against.

[00:14:43] Speaker 01:
I only have a minute or so, Your Honor, and I'd like to talk about this most importantly in the context of damages.

[00:14:50] Speaker 03:
Proceed for a minute, and then we'll leave.

[00:14:52] Speaker 01:
On the other side.

[00:14:53] Speaker 01:
Thank you, Your Honor.

[00:14:54] Speaker 01:
There are two fundamental problems with the damages analysis.

[00:14:57] Speaker 01:
The first flows from what I was just talking about.

[00:15:00] Speaker 01:
Remember, the jury split.

[00:15:02] Speaker 01:
The jury accepted neovast defenses as to the primary trade secret claims, one, two, and three.

[00:15:08] Speaker 01:
And based on those, the damages expert said, well, you get 50% of the value.

[00:15:12] Speaker 01:
Well, if one component out of the 30 is all that the jury found, or even six components out of the 30 was all the jury found,

[00:15:22] Speaker 01:
were misappropriated, then that cannot possibly be substantial evidence to support the damages finding.

[00:15:28] Speaker 01:
And this was preserved, this was challenged in the new trial motion.

[00:15:33] Speaker 04:
But again, only as a new trial motion.

[00:15:37] Speaker 01:
Well, yes, but it was a Daubert motion originally, Your Honor.

[00:15:40] Speaker 01:
So that was preserved in the context of the evidentiary issue on the front end, and then a new trial motion on the back end.

[00:15:48] Speaker 01:
Unlike some of the earlier issues, I'm not sure that

[00:15:51] Speaker 01:
a directed verdict would have been appropriate.

[00:15:52] Speaker 01:
In this case, I really do think.

[00:15:53] Speaker 01:
I mean, to be blunt, looking at the record as a relative newcomer to the case, it seems that both parties tried this as if they thought it was going to be an either or, that all the trade secrets were misappropriated or none of them were.

[00:16:06] Speaker 01:
And it doesn't seem that anyone really contemplated that only trade secrets four, five, and six could be misappropriated, because Mr. Wagner, the damages expert, offers nothing but Ipsa Dixit as to how, say, a different strut

[00:16:20] Speaker 01:
with could justify 50% damages.

[00:16:23] Speaker 03:
There's no analysis.

[00:16:25] Speaker 03:
You can't rewrite the testimony and the trial evidence.

[00:16:29] Speaker 03:
Let's hear from the other side.

[00:16:31] Speaker 03:
We'll save you some time for rebuttal.

[00:16:32] Speaker 04:
Thank you, Your Honor.

[00:16:37] Speaker 00:
Thank you, Your Honors, and good afternoon.

[00:16:39] Speaker 00:
On inventorship, Judge Burroughs did not clearly err.

[00:16:44] Speaker 00:
That's the standard here.

[00:16:45] Speaker 00:
We don't believe appellant has met his burden of showing a mistake by yet.

[00:16:50] Speaker 00:
definite and firm conviction.

[00:16:53] Speaker 02:
He didn't discuss Solem at all.

[00:16:55] Speaker 02:
Isn't that a problem?

[00:16:57] Speaker 00:
Well, no, Your Honor.

[00:16:59] Speaker 00:
Again, the way that a lot of this evidence was presented was simply in post-trial motions.

[00:17:05] Speaker 00:
But what appellants have not shown is that Solem had any disclosure with respect to anchoring against the trigone.

[00:17:15] Speaker 00:
And there were a number of claimed elements in claim one

[00:17:20] Speaker 00:
that appellants didn't disagree were missing, for example, the atrial skirt, the ventricular skirt.

[00:17:26] Speaker 00:
They didn't address these in their reply.

[00:17:30] Speaker 00:
No evidence that there would actually be a contact on the trigone itself.

[00:17:36] Speaker 00:
That's something that the Cardia-Q Rev-E device did do, and the district court correctly found.

[00:17:46] Speaker 00:
I realize that's a very peculiar term.

[00:17:49] Speaker 00:
Yeah, I think that may be overstating it a little bit in that we had these 12 anchors and the only thing we couldn't say is which of the 12 would necessarily... Because it would rotate and it was basically symmetric.

[00:18:03] Speaker 00:
Correct, Your Honor.

[00:18:04] Speaker 00:
And so there was enough of the circumference of this annulus around the valve that was this trigon, this more rigid tissue.

[00:18:14] Speaker 02:
And there wasn't any argument

[00:18:16] Speaker 02:
At least I didn't see any that, if I remember your figures, you've got these, what, 12 things that are spaced 30 degrees in the trigons.

[00:18:26] Speaker 02:
And there wasn't any argument that those could actually fit exactly between trigons so that you never, by necessity, hit one of them?

[00:18:35] Speaker 00:
No, Your Honor.

[00:18:36] Speaker 00:
The testimony from Dr. Bavaria was that these trigons extended about a 60-degree arc.

[00:18:43] Speaker 00:
around the circumference.

[00:18:44] Speaker 00:
So imagine, say 10 minutes on your clock face, and we had these anchors at 12 spaces every five minutes.

[00:18:53] Speaker 00:
So you were always going to have some overlap by virtue of how closely spaced those anchors were 30 degrees apart versus the two trigons each 60 degrees.

[00:19:05] Speaker 00:
And the district court acknowledged this correctly at A93 in her memorandum and order.

[00:19:12] Speaker 00:
Looking at that contribution, Alan has said there was nothing novel that we provided.

[00:19:18] Speaker 00:
Well, we did present evidence that all of the elements of claim one of the patent were, in fact, present in our revie.

[00:19:28] Speaker 00:
Mr. Ratz testified to that at 2609 through 14.

[00:19:33] Speaker 02:
But I thought his key point is that they may have been present, but they weren't novel.

[00:19:40] Speaker 00:
Not certainly, not going to be the case when Neovask itself argued for the novelty of the claim as a whole.

[00:19:48] Speaker 00:
So we're in a position to say everything in that claim we had, the only thing allegedly missing is this one word, trigonal.

[00:20:00] Speaker 02:
Right.

[00:20:00] Speaker 02:
Construed to mean by design.

[00:20:03] Speaker 00:
Correct.

[00:20:04] Speaker 02:
I'm not entirely sure whether yours is by design or not by design, if it

[00:20:09] Speaker 02:
And it was designed in a way that as a matter of fact, it will always happen, but I'm not sure if that comes.

[00:20:17] Speaker 00:
But our point is that it's such a small step from saying, here's 12 anchors.

[00:20:22] Speaker 00:
Some of them will necessarily contact a trigonal to what's claimed is to add this word trigonal to say, well, we're going to pre-design which of those.

[00:20:34] Speaker 00:
Now, when we compare that in the context of the whole invention, which is what the district court

[00:20:38] Speaker 00:
correctly did.

[00:20:39] Speaker 00:
At the time, no one had ever made a working transcatheter mitral valve implantation device.

[00:20:47] Speaker 00:
Mr. Lane, the named inventor, had never worked on designing one himself before he started working with the Cartier-Q inventors.

[00:20:55] Speaker 00:
And in the context of the prior art, we weren't simply explaining to the Neovask inventors, here's what's been done before, start with this.

[00:21:06] Speaker 00:
Uh, this information, for example, Chow, as your honor noted, it was, wasn't even known, uh, was secret at that point in time.

[00:21:12] Speaker 00:
So against that whole background, the contribution was qualitatively quite significant.

[00:21:19] Speaker 00:
And we did contribute.

[00:21:20] Speaker 02:
Did the district court find some claimed elements missing from Chow or simply conclude that Chow doesn't matter because it was secret at the time?

[00:21:31] Speaker 00:
I don't believe that the district court, uh, addressed those specifics.

[00:21:34] Speaker 00:
And again, nor was there.

[00:21:36] Speaker 00:
trial testimony that Chow did disclose specific elements or not.

[00:21:42] Speaker 00:
It was something that was addressed only, it was put into the record at the close of trial and no witnesses described it.

[00:21:47] Speaker 00:
At no point did we have anything other than attorney argument by Neovask counsel.

[00:21:53] Speaker 02:
Is this all a matter on which you have the burden, including the burden of showing at least as to showing that your

[00:22:04] Speaker 02:
Allegedly significant contribution was not in the prior art.

[00:22:08] Speaker 00:
We certainly have the ultimate burden of persuasion on the issue of having contributed qualitatively to the invention.

[00:22:18] Speaker 00:
And again, that is measured in part against whether we were simply conveying well-known principles in the prior art.

[00:22:25] Speaker 00:
That's the Panou standard.

[00:22:28] Speaker 00:
And we believe we met our initial burden of production.

[00:22:31] Speaker 02:
Right, but this is something where one of the formulations, simply conveying well-known formulations, quite easily excludes secret prior art.

[00:22:42] Speaker 02:
But there's this other formulation in some of the cases about excluding contributions that appear in the prior art, which at least raises a question whether the special kind of 102E prior art is an exception to that.

[00:22:55] Speaker 00:
Well, and I would say several things to that, Your Honor.

[00:22:58] Speaker 00:
First off, Chao wasn't 102E art at the time that this collaborative co-inventive process occurred, number one.

[00:23:06] Speaker 00:
Number two, we know from other areas that we can have two sets of inventors.

[00:23:13] Speaker 00:
For example, in an interference context, we could have one group of inventors and another group of inventors both invent the same thing.

[00:23:21] Speaker 00:
That doesn't make them any less inventors that they're working on it at the same

[00:23:25] Speaker 00:
time.

[00:23:26] Speaker 00:
And we don't need to decide whether this lane patent is valid under 102E, under Chow.

[00:23:33] Speaker 00:
That wasn't the issue here.

[00:23:34] Speaker 00:
And in fact, prima facie, the earliest priority date that Chow could be entitled to is its provisional filing date, which was in December of 09.

[00:23:46] Speaker 00:
And we showed that we provided the breakthrough design, this Rev-D design, in October of

[00:23:54] Speaker 00:
two months prior, and that's at A2564 through five.

[00:23:59] Speaker 00:
So we certainly have rebutted, to the extent we need to rebut Chao as being prior, we have rebutted it.

[00:24:08] Speaker 00:
We show conception, reduction to practice, and communication to the knee of asking vendors all before the earliest possible Chao priority date, which appellants never even presented a record that Chao was entitled

[00:24:24] Speaker 00:
to that provisional date.

[00:24:25] Speaker 00:
The provisional application was never of record.

[00:24:29] Speaker 00:
So if I could turn to the trade secret issues, I think it's important again to look at the standard of review here.

[00:24:38] Speaker 00:
There was reference to evidence supporting the jury verdict.

[00:24:44] Speaker 00:
Well, we're here on the new trial standard here, and appellants have to show that

[00:24:51] Speaker 00:
The verdict was against the clear weight of the evidence, so much so that there was a miscarriage of justice.

[00:24:56] Speaker 02:
Do you know the answer to the question I asked about whether, for the purposes of this new trial, the correct legal standard being used to assess as the metric for assessing the evidence is the one given in the jury instructions, where that's not objected to, or the correct law, if that happens to be different,

[00:25:22] Speaker 02:
because it is the correct law in the JMOL context.

[00:25:26] Speaker 02:
Is the new trial different?

[00:25:27] Speaker 00:
I don't have authority.

[00:25:28] Speaker 00:
I can cite on that, Your Honor.

[00:25:29] Speaker 00:
I do think that it makes sense that the jury instruction, which was not objected to, be the operative legal standard.

[00:25:37] Speaker 00:
And I do believe it is consistent with the standard that Judge Burroughs did apply in the new trial context.

[00:25:44] Speaker 00:
And it was all in the context of this continuous use requirement for trade secrets under Massachusetts law.

[00:25:52] Speaker 00:
And there was an instruction to that effect, which did make clear that we needed to show that we had something other than a single ephemeral event.

[00:26:05] Speaker 00:
The jury instruction had examples of things like bid information or salaries that would be valuable for just a moment in time, but not in the future.

[00:26:17] Speaker 00:
And in contrast to that,

[00:26:19] Speaker 00:
We did present significant evidence that the history was built upon throughout the development of the project and that it was used in later versions.

[00:26:36] Speaker 00:
In fact, the first in-human sample of this TMVI device was testified by Dr. Quadri as using the same anchoring method

[00:26:47] Speaker 00:
as in the prototypes shared with Neovask in that testimony.

[00:26:52] Speaker 02:
As to Neovask's point about the unavailability under Massachusetts law of negative trade secrets based on the 1971 Superior Court decision, I don't remember whether you, in your red brief,

[00:27:14] Speaker 02:
disputed that that was a correct view of Massachusetts law.

[00:27:21] Speaker 00:
Well, yeah, our view is that the correct Massachusetts law was incorporated in the jury instruction.

[00:27:27] Speaker 00:
It derives from the restatement.

[00:27:29] Speaker 00:
And we don't have a Massachusetts case, which does anything other than that materials development case in dicta, making a passing reference to

[00:27:41] Speaker 00:
what it called, mistakes to be avoided as distinguished from valuable practices.

[00:27:48] Speaker 02:
I don't remember your saying in your red brief.

[00:27:53] Speaker 02:
The Materials case from 1971 is not the best view of Massachusetts law as it would now properly be understood.

[00:28:03] Speaker 02:
It was dictated there.

[00:28:04] Speaker 02:
It was unpublished.

[00:28:05] Speaker 02:
It was a trial court decision.

[00:28:07] Speaker 02:
It has not

[00:28:08] Speaker 02:
ever been followed and if you're asking the question what would Massachusetts Supreme Judicial Court now decide on the question it would now decide what everywhere else is going to go off.

[00:28:21] Speaker 00:
Well I think we did point out it was dicta and we did point out that ultimately the trade secret was upheld in that case.

[00:28:27] Speaker 00:
I don't think that case so strongly supports the view appellants want to present which is that there is this bright line rule no negative know-how can ever

[00:28:38] Speaker 00:
be protected.

[00:28:39] Speaker 00:
What the court in that case did, somewhat, I think we've got a better case than happened in that case.

[00:28:45] Speaker 00:
There, the defendant worked on a trade secret for a metal coating process.

[00:28:52] Speaker 00:
He never quite perfected it.

[00:28:53] Speaker 00:
He never quite got it to work.

[00:28:55] Speaker 00:
But he then left the plaintiff, joined up with the defendant shortly after, makes the final few steps in the R&D process, and it is successful.

[00:29:06] Speaker 00:
The plaintiff sues him and prevails.

[00:29:09] Speaker 00:
And the ultimate outcome in that case is that that was a protectable trade secret, even though at the time he hadn't finalized it.

[00:29:17] Speaker 00:
And again, I think this might be an easier case for the appellants if they could say, well, all we did is we showed up with a burnt offering of here's a prototype that doesn't work.

[00:29:29] Speaker 00:
We don't know why it doesn't work and we've given up.

[00:29:31] Speaker 00:
We gave it the one shot and now we're done.

[00:29:35] Speaker 00:
That might create a more interesting issue under what does continuous use mean and what does that material development case mean in terms of not protecting simply mistakes to be avoided.

[00:29:49] Speaker 00:
Here we've got both the learning from that experience in terms of what to do as we go forward.

[00:29:57] Speaker 00:
We've got the testimony that that experience is drawn upon still to this day.

[00:30:03] Speaker 00:
And so we have met the continuous use requirement as instructed.

[00:30:08] Speaker 00:
And like I said, I think we've got a stronger case than even materials development, which did support the trade secret owner.

[00:30:17] Speaker 03:
Okay.

[00:30:17] Speaker 03:
Are you ready to turn to the cross appeal?

[00:30:20] Speaker 03:
Any more questions?

[00:30:22] Speaker 03:
Okay.

[00:30:23] Speaker 03:
Is the cross appeal still valid?

[00:30:26] Speaker 03:
The judge referred to the public interest and you have a good deal of experience between

[00:30:32] Speaker 03:
the time of that decision.

[00:30:35] Speaker 03:
And now, are you still pressing the cross-appeal?

[00:30:38] Speaker 00:
Yes, we are, Your Honor.

[00:30:39] Speaker 00:
And the parties are in a similar posture in that they are still in the early stage of these clinical trials.

[00:30:47] Speaker 00:
No one has obtained regulatory approval for the product.

[00:30:50] Speaker 00:
It's uncertain when or if they will.

[00:30:53] Speaker 03:
Well, if it's not approved, what good would a cross-appeal 18 months from the date of the district court judgment do you any good?

[00:31:02] Speaker 00:
Well, the trade secret is our intellectual property, and we believe we're entitled to exclusivity with respect to that.

[00:31:11] Speaker 03:
To stop the clinical trials?

[00:31:13] Speaker 00:
To stop the trials, and that was what the appellant agreed to in the non-disclosure agreement, that in the event of any breach, that there would not be sufficient monetary damage.

[00:31:24] Speaker 04:
One of the things that I found most pertinent in the trial court's analysis was her thoughtful conclusion that

[00:31:31] Speaker 04:
that in carefully reading your expert's opinion with respect to how he got to his numbers, now granted the jury discounted the numbers, but that in calculating those numbers, it was because he was in part accounting for an 18 month head start.

[00:31:51] Speaker 00:
Right.

[00:31:51] Speaker 00:
Mr. Wagner did use the 18 month head start as one of the Georgia Pacific factors in his analysis.

[00:31:59] Speaker 00:
we were starting from this construct of the hypothetical negotiation where we were forced to be treated as a willing licensor when in reality the parties agreed that neither of them would have ever licensed their intellectual property in this context, number one.

[00:32:19] Speaker 00:
And number two, the

[00:32:23] Speaker 00:
Non-disclosure agreement, uncharacteristically, was not addressed by Judge Burroughs in her very thorough opinion.

[00:32:31] Speaker 02:
Maybe that's because the non-disclosure agreement goes no further than saying, yes, an injunction will be warranted, but you're asking for a particular injunction.

[00:32:45] Speaker 02:
Put a stop for 18 months.

[00:32:47] Speaker 02:
It's easy enough to read the NDA provision as in particular.

[00:32:52] Speaker 02:
as being satisfied by a bar on use injunction for some period.

[00:33:01] Speaker 02:
So it doesn't seem to me to establish that you're entitled to the

[00:33:07] Speaker 02:
shutdown for 18 months.

[00:33:10] Speaker 00:
Well, I think the 18 month shutdown is actually a temporary injunction, actually less severe than an entire bar on any use permanently, but also we did propose the alternative to the district court, which would have been an even shorter injunction, namely leave the injunction in place unless and until we are paid

[00:33:34] Speaker 00:
on the judgment.

[00:33:34] Speaker 00:
So the district court said, it's a double recovery because you're getting the damage award, which represented a hypothetical license we never would have entered.

[00:33:44] Speaker 00:
But we haven't been paid the royalties even under that.

[00:33:47] Speaker 04:
That's because it's on appeal.

[00:33:48] Speaker 04:
Is there a threat that you won't be paid?

[00:33:50] Speaker 00:
Yes, Your Honor.

[00:33:50] Speaker 00:
There certainly is.

[00:33:51] Speaker 00:
There's right now a $112 million judgment.

[00:33:55] Speaker 00:
And that judgment is stayed pending appeal.

[00:33:58] Speaker 00:
But only $70 million of that has been placed in escrow.

[00:34:03] Speaker 00:
to secure the judgment.

[00:34:05] Speaker 00:
And that was a result of a contested stay motion where we sought the full judgment.

[00:34:11] Speaker 03:
But that's not this action, is it?

[00:34:13] Speaker 03:
If there were indeed an issue of non-payment, you're saying that that's before us?

[00:34:21] Speaker 00:
It is indirectly, Your Honor, in that the district court

[00:34:25] Speaker 00:
justified denying the injunction by viewing it as a double recovery.

[00:34:30] Speaker 04:
Couldn't you go back to the district court if in fact you're not paid?

[00:34:34] Speaker 00:
Well, we could go back to the district court and certainly ask for enforcement of the judgment.

[00:34:39] Speaker 04:
But you could also ask for her to reconsider the injunction, couldn't you?

[00:34:43] Speaker 00:
I would like to be able to do that, although we raised that as the issue previously and certainly some direction from this court on that to vacate that portion of the denial would be helpful so that we're not faced.

[00:34:59] Speaker 02:
I'm not sure you quite appealed that in your red brief.

[00:35:04] Speaker 02:
Your red brief statement of the issues on the cross appeal is only about the 18 month shutdown injunction.

[00:35:12] Speaker 00:
We did address it in one of our briefs, Your Honor.

[00:35:15] Speaker 02:
I know.

[00:35:15] Speaker 02:
I think it was a different color.

[00:35:18] Speaker 00:
And I will double-check on that.

[00:35:21] Speaker 00:
I think I'm at the end of my time if I could reserve just a bit to respond on the induction.

[00:35:25] Speaker 00:
Thank you.

[00:35:26] Speaker 03:
Okay.

[00:35:26] Speaker 03:
Thank you, Mr. Zagler.

[00:35:28] Speaker 03:
Mr. Wolf?

[00:35:30] Speaker 01:
Thank you, Your Honor.

[00:35:32] Speaker 01:
A few items on inventorship issue.

[00:35:35] Speaker 01:
Your Honor asked about the happenstantial definition of the trigonal antler region.

[00:35:41] Speaker 01:
They're actually in different vertical planes, Your Honor.

[00:35:43] Speaker 01:
And if there was analysis, if this were to get sent back, this is something that could be talked about.

[00:35:49] Speaker 01:
But the trigons actually sit at a different place than the 36.

[00:35:54] Speaker 01:
So it's not about the face of a clock.

[00:35:57] Speaker 01:
It's an up-down issue.

[00:35:59] Speaker 01:
Now we thought, at least trial counsel thought, that when we won the Markman, that this issue was put to bed entirely.

[00:36:05] Speaker 01:
Apparently, they're trying to argue that even under the Markman, there's a backdoor infringement, and infringement's not quite the right word, but practicing.

[00:36:13] Speaker 01:
If they want to argue that below, then we can get into the physiology of it.

[00:36:19] Speaker 01:
But this isn't a cute argument.

[00:36:20] Speaker 01:
They're very different places on the heart.

[00:36:23] Speaker 01:
One is, again, the structure itself, and the other are the vows.

[00:36:27] Speaker 01:
So let me just say that there's a difference there.

[00:36:31] Speaker 01:
Your Honor, hits on it absolutely.

[00:36:33] Speaker 01:
It was never addressed at all by the district court.

[00:36:36] Speaker 01:
And chow should be addressed in the proper light.

[00:36:41] Speaker 01:
All of this can go back for a proper consideration, a comparison of, in light of the law that we've talked about, the proper comparisons.

[00:36:51] Speaker 01:
Briefly on the damages, and then I'll get to the injunction request, we talked about the 50% issue, which is how can one or two or three equal 50% of the problem

[00:37:01] Speaker 01:
I heard nothing from counsel on that particular issue.

[00:37:04] Speaker 01:
We didn't get to the ex post argument we made in the brief, and that is a significant one.

[00:37:11] Speaker 01:
That in the window between 2010 and 2015, there were animal studies, there were cadaver studies, there was the first first demand improvement.

[00:37:18] Speaker 01:
All of that took uncertainty out of the equation.

[00:37:21] Speaker 01:
All of that uncertainty being taken out of the equation inured to their benefit from Mr. Wagner's perspective.

[00:37:27] Speaker 01:
So we think that a new trial saying, no, no, when we mean hypothetical negotiation, you can look in the Book of Wisdom as a cross check, as a double check, as a reality check, but you don't write it aside with the value of the first check should be.

[00:37:39] Speaker 01:
And that's what Mr. Wagner did.

[00:37:42] Speaker 01:
On to the injunction, just a few points.

[00:37:46] Speaker 01:
By April or May of 2010, it is undisputed that everything that was purportedly a trade secret was in the public domain.

[00:37:54] Speaker 01:
Voluntarily, they had a published patent application, they had

[00:37:57] Speaker 01:
trade show presentations, et cetera.

[00:37:59] Speaker 01:
So what they're saying is more than seven years later, not knowing which, if either of these companies' products will actually save lives, we're going to hold us back from doing clinical research for 18 months to figure out what works and what doesn't.

[00:38:13] Speaker 01:
That doesn't seem to be something that was an abuse of discretion for the district court judge to say, no, I want to see how the science plays out.

[00:38:20] Speaker 01:
It's to all of our benefits.

[00:38:22] Speaker 01:
The other thing, Your Honor rightly points out that it talks about an injunction not

[00:38:25] Speaker 01:
not a specific injunction.

[00:38:27] Speaker 01:
In fact, the court did order certain elements of injunctive relief.

[00:38:30] Speaker 01:
We had to destroy certain documents, return certain documents, et cetera.

[00:38:34] Speaker 01:
So there was equitable relief given in this case, just not this 18-month specific kind of equitable relief.

[00:38:40] Speaker 01:
The court did not abuse its discretion.

[00:38:42] Speaker 01:
I think I'm out of time.

[00:38:43] Speaker 01:
I think I'm on the back side.

[00:38:45] Speaker 01:
But I would, particularly on the damages issue, if there's anything that the court has any concerns about with regard to damages, we think that is particularly appropriate for a new trial in the light of the way

[00:38:55] Speaker 01:
split verdict caught both parties by surprise.

[00:38:58] Speaker 03:
Thank you, Mr. Wolf.

[00:38:59] Speaker 03:
Now, Mr. Skunker, you get the last word on the cross appeal, please.

[00:39:03] Speaker 03:
Just on the injunction.

[00:39:05] Speaker 00:
On the injunction, I disagree with my colleague's representation that all of the confidential information and trade secrets were made public as of shortly after the parties did business together.

[00:39:20] Speaker 00:
The actual prototypes and the sharing of the front row view, as the district court referred to it, of our development process was something that no one else participated in, either during the course of the development and collaboration or afterwards.

[00:39:37] Speaker 00:
A patent application publishing did not have the same level of detail as the kind of information that was actually being shared.

[00:39:45] Speaker 03:
But the real problem

[00:39:47] Speaker 03:
I think is the judge's emphasis on the public interest as a significant factor in allowing this to proceed.

[00:39:55] Speaker 00:
And to that, Your Honor, I would respond that this court in 2016 decided the WBIP v. Kohler case.

[00:40:03] Speaker 00:
And similarly there, the district court looked at the fact that the technology at issue could potentially be lifesaving.

[00:40:11] Speaker 00:
And this court said it was error to use that as a bright line rule.

[00:40:15] Speaker 00:
to say that the public interest in that potential safety outweighed the interest in enforcing IP rights.

[00:40:24] Speaker 00:
And in that case, Kohler, the parties actually were selling products.

[00:40:29] Speaker 00:
There was actually real product available here.

[00:40:33] Speaker 00:
We're at a much earlier stage, and the district court candidly admitted that.

[00:40:37] Speaker 00:
It couldn't know which of these products could ultimately

[00:40:43] Speaker 00:
get to market and make a difference.

[00:40:45] Speaker 00:
So I think the court went even farther towards a categorical rule than in that Kohler case and this court overturned the denial of the injunction there.

[00:40:58] Speaker 03:
Okay.

[00:40:59] Speaker 03:
Thank you.

[00:40:59] Speaker 03:
Thank you both.