[00:00:08] Speaker 02: The United States Court of Appeals for the Federal Circuit is now open and in session. [00:00:13] Speaker 02: God save the United States and this honorable court. [00:00:16] Speaker ?: Thank you. [00:00:17] Speaker 05: Be seated. [00:00:27] Speaker 05: We shall start with an admission, Mr. Hovey, when you approach the podium. [00:00:33] Speaker 05: It is my great pleasure to move the admission of Patrick Charles Hovey [00:00:38] Speaker 05: to the bar of this court. [00:00:39] Speaker 05: He is a member of this bar in good standing with the highest courts of California and the District of Columbia. [00:00:47] Speaker 05: I have knowledge of his credentials. [00:00:49] Speaker 05: I'm satisfied that he possesses the necessary qualifications. [00:00:54] Speaker 05: Mr. Holby has been my law clerk for the past months and has conducted himself with distinction. [00:01:03] Speaker 05: So it is my pleasure to move his admission [00:01:07] Speaker 05: And I invite Judge Lurie to decide whether or not to grant the motion. [00:01:13] Speaker 04: I must consult my colleague, Judge Hughes. [00:01:16] Speaker 04: Do we grant the motion? [00:01:17] Speaker 04: Yeah. [00:01:17] Speaker 04: We do. [00:01:19] Speaker 05: Thank you. [00:01:20] Speaker 05: Please approach the mic. [00:01:21] Speaker 05: The clerk who will administer the oath. [00:01:24] Speaker 01: Please raise your right hand. [00:01:25] Speaker 01: Do you solemnly swear or affirm that you will comport yourself as an attorney and counsel of this court, uprightly and lawfully, and that you will support the Constitution of the United States? [00:01:34] Speaker 01: I do. [00:01:35] Speaker 01: Thank you. [00:01:36] Speaker 01: Welcome to the bar of the Senate. [00:01:39] Speaker 05: Thank you. [00:01:41] Speaker 05: Welcome to the bar of the Senate. [00:01:45] Speaker 05: Thank you. [00:01:45] Speaker 05: There we are. [00:01:47] Speaker 05: We will continue with the scheduled arguments for this morning. [00:01:54] Speaker 05: The first argued case is No. [00:01:56] Speaker 05: 16-1047, Icahn Health and Fitness against Uptain Fitness, Ms. [00:02:03] Speaker 05: Maynard. [00:02:03] Speaker 07: Thank you, Judge Newman. [00:02:05] Speaker 07: And may it please the Court, D.N. [00:02:07] Speaker 07: Maynard for Icahn Health and Fitness. [00:02:09] Speaker 07: This was a routine patent case. [00:02:12] Speaker 07: Hard fall, to be sure, but that's typical. [00:02:15] Speaker 07: In patent cases, especially competitor on competitor suits, there were reasonable arguments on both sides. [00:02:22] Speaker 07: Although the courts ultimately sided with Octane, that's not enough to make a case exceptional. [00:02:28] Speaker 04: Ms. [00:02:28] Speaker 04: Maynard, the court did more than just ultimately side with the other side. [00:02:34] Speaker 04: The court said she's presided as a judge for over 22 years, and the arguments here were in no relation to [00:02:44] Speaker 04: to what the patent disclosed and covered. [00:02:47] Speaker 04: She said this stands out as a particularly and unusually weak case of the merits. [00:02:53] Speaker 07: She did say that, Your Honor. [00:02:54] Speaker 07: But that conclusion is after she assesses the substantive strength of the arguments. [00:02:59] Speaker 07: And that substantive assessment has both legal error and is based on clearly erroneous factual findings. [00:03:05] Speaker 07: And I'd like to start addressing the substantive strength of ICON's arguments, if I may. [00:03:09] Speaker 07: They were, Your Honor, based on the text of the statute, the specification, [00:03:14] Speaker 07: and this Court's case law. [00:03:17] Speaker 07: The District Court believed erroneously and states in its fees opinion that ICON's argument depended on proving that a stroke rail consists of a limitless number of parts. [00:03:27] Speaker 07: But the District Court agreed with ICON that that structure was a multi-part piece. [00:03:33] Speaker 07: It says so in its summary judgment opinion. [00:03:35] Speaker 07: And in its first fees decision, it said, the specification clearly indicates it is comprised of more than one part. [00:03:43] Speaker 07: Linguistically, there's no difference between more than one part and one or more parts. [00:03:48] Speaker 07: That's not the reason ICON lost a stroke rail element. [00:03:51] Speaker 07: So that is clear error on the judge's part and an error of law. [00:03:55] Speaker 07: ICON's argument did not depend on that. [00:03:57] Speaker 07: Significantly, Octane conceded for more than nine months in this litigation that its Q47 accused product had a stroke rail. [00:04:05] Speaker 07: How can it be an exceptionally weak argument when the other side concedes for nine months the element is present? [00:04:13] Speaker 07: The district court also found, wrongly found, that the merits ICON's arguments regarding the means for connecting element were exceptionally weak and not based on the patent. [00:04:26] Speaker 07: In fact, Your Honor, they were based on this Court's precedent, as this Court is well aware, often a dispute, very reasonable disputes in means plus function claims about what is the function and what is the structure. [00:04:38] Speaker 07: And here, ICON relied on the text of the limitation [00:04:43] Speaker 07: and the text of the specification, which expressly identified the structure that performed the noted function. [00:04:51] Speaker 07: Word for word, Your Honor. [00:04:53] Speaker 07: So if I could point the Court to column 4 of the patent. [00:04:56] Speaker 07: So first, I should start with the limitation at issue, which is on page A-50, and it's limitation 1D. [00:05:05] Speaker 07: And it says, means for connecting each stroke rail to the frame. [00:05:10] Speaker 07: such that linear reciprocating displacement of the first end of each stroke rail, and on and on. [00:05:16] Speaker 07: That exact phrasing, that exact phrasing, such that linear reciprocating displacement of the first stroke rail, is present in column four. [00:05:26] Speaker 04: But it wasn't, isn't your client asserting this claim against something that would circulate rather than linear? [00:05:35] Speaker 07: Yes, Your Honor, and I can address that point. [00:05:37] Speaker 07: But, but the [00:05:39] Speaker 07: The primary assertion that ICON made with respect to the, the, this, this element, Your Honor, was that the means for connecting need only convert linear reciprocating displacement to an elliptical path. [00:05:53] Speaker 07: It didn't need to cause it. [00:05:55] Speaker 07: Now, to be sure, this Court disagreed with that conclusion, but it did so, Your Honor, only by reading in additional structure. [00:06:04] Speaker 07: So in this Court in Bebron said, when you look [00:06:07] Speaker 07: to the specification, and whereas here, the function that's expressly identified is expressly identified by a particular structure, that's the end of the inquiry. [00:06:16] Speaker 07: You don't look elsewhere. [00:06:18] Speaker 07: And here, word for word, the claim limitation language is set forth at line, column four, lines 26 to 30. [00:06:28] Speaker 07: The present invention includes connecting means for connecting each stroke rail, 66 and 68, to frame 12. [00:06:35] Speaker 07: such that linear reciprocating displacement of first end of each stroke rail and 66 and 68 results in displacement of the second end and so on. [00:06:43] Speaker 07: It's exactly the same claim language in the limitation I just read you. [00:06:47] Speaker 07: And then it goes on to say, the structure is the crank. [00:06:51] Speaker 07: This Court disagrees with that, Your Honor. [00:06:52] Speaker 07: And I understand that. [00:06:53] Speaker 07: And we're not here to be arguing the merits. [00:06:54] Speaker 07: I'm only arguing that ICON's argument was grounded in the text of limitation and the text of specification. [00:07:01] Speaker 04: As you said, that issue was decided earlier. [00:07:04] Speaker 04: And that relates to the reasonableness of your continuing argument, and the district court found it was unreasonable. [00:07:13] Speaker 07: I'm sorry, the district court found it was unreasonable to continue? [00:07:17] Speaker 04: Yes, but to continue arguing what you had lost before. [00:07:21] Speaker 07: She did say, in her summary judgment opinion, she said that, but she recognized that the doctrine of equivalence argument was not foreclosed, Your Honor. [00:07:28] Speaker 07: So this isn't a case like a justicam. [00:07:30] Speaker 07: where it was clear that there could be no infringement after the claim construction and the patentee persisted. [00:07:39] Speaker 07: In fact, that's not the basis, Your Honor. [00:07:42] Speaker 07: That's not the basis for the fees award here. [00:07:44] Speaker 07: So the basis for the fees award was that our argument was not grounded in the claim language and the specification, but it clearly is. [00:07:52] Speaker 07: And this court's opinion on the merits the first time around [00:07:56] Speaker 07: expressly recognized. [00:07:57] Speaker 07: And at page A-3174, which is the slip-up of the opinion, this Court's opinion on the merits, this Court recognized, quote, that second connection is not specifically identified as a means for connecting. [00:08:11] Speaker 07: In other words, this Court recognized that although the crank was the structure expressly identified, it also went on and looked at it and relied on another cardiac pacemaker, relied on cardiac pacemakers. [00:08:24] Speaker 07: I'm just saying this was [00:08:25] Speaker 07: a typical common patent dispute, Judge Laurie, not unusual, not extraordinary, not rare, very common, like many that this court sees every day. [00:08:37] Speaker 07: What is the structure? [00:08:38] Speaker 07: What is the function? [00:08:39] Speaker 03: And the district court... I might agree with you about the claim construction, but the district court also made a number of findings of that. [00:08:47] Speaker 03: about the manner in which it was litigated in the filing in California and the fact that this patent wasn't commercialized and the like. [00:08:54] Speaker 03: And so it suggests to me, at least, that she thought that this wasn't typical of every patent case. [00:09:02] Speaker 03: This is not, even though this is two competitors, it's not two competing products. [00:09:06] Speaker 03: It's a patent that was never commercialized. [00:09:10] Speaker 03: How does that alter the analysis, at least for an abuse of discretion standard? [00:09:15] Speaker 07: Judge Hughes, if you were to agree with us that these were run-of-the-mill, regular patent arguments that were not extraordinary were weak, in fact, reasonable arguments that just didn't prevail, which is not enough, I think you would have to remand at least, because it colored the district court's view of the conduct she found. [00:09:33] Speaker 07: But I don't think you have to remand, because I think the conduct she found is not, does not warrant an exceptional case finding. [00:09:42] Speaker 07: It is almost identical to conduct this court has recently rejected as sufficient in the checkpoint decision. [00:09:49] Speaker 07: So the emails here, the emails, nothing, nothing improper about the content of the emails. [00:09:56] Speaker 07: If they had been sent by the decision maker, which they weren't, they were sent by a salesman. [00:10:00] Speaker 07: of a subsidiary, but even if they had been sent by the decision maker who decided all they did was express eagerness at suing a competitor to enforce patent rights, which at this point in court and checkpoint said there's nothing wrong with that motive, and express confidence that ICON would prevail. [00:10:16] Speaker 07: Nothing about abusive. [00:10:18] Speaker 07: This pales in comparison to the emails in checkpoint where the general counsel said, we're going to make you bleed and put you into bankruptcy. [00:10:27] Speaker 07: Nothing like that. [00:10:28] Speaker 07: Nothing at all. [00:10:29] Speaker 07: Nothing about causing them economic harm. [00:10:31] Speaker 03: Can I go back to your notion that this isn't different from typical patent cases? [00:10:36] Speaker 03: I mean, I get that, but what I struggle with a little bit is all those typical patent cases arise from a regime in which it was incredibly hard to get attorney fees beforehand. [00:10:50] Speaker 03: And so we don't have a baseline yet of what is the new standard. [00:10:55] Speaker 03: So how do we know whether this complies with the new standard or not by comparing it to pre-octane cases? [00:11:03] Speaker 07: Well, even comparing it to cases that this court has decided since the Supreme Court's decision, Your Honor, this is not rare and extraordinary. [00:11:10] Speaker 07: There's no evidence of a multitude of strike suits settled for nuisance value. [00:11:16] Speaker 07: There's no evidence of extraordinary conduct lying to the court. [00:11:21] Speaker 07: There's no evidence. [00:11:22] Speaker 07: And in the checkpoint, the evidence, as I say, was [00:11:27] Speaker 07: was we are going to, you know, inflict economic harm. [00:11:30] Speaker 07: There's no evidence to that effect here. [00:11:32] Speaker 07: And yet this Court held that didn't mount to bad faith. [00:11:36] Speaker 07: So even looking at that, but if you, if this Court were to find that this kind of conduct does use a competitor suing a competitor on a patent where there are perfectly reasonable arguments on, on claim construction, can, you know, post hoc, looking back on it, you can say, well, you lost. [00:11:54] Speaker 07: you lost, and now I'm going to look at these things like your choice of venue, which are, this court regularly sees venue disputes, the attitude of your pre-suit investigation, which ironically here, because we did so much, she questioned it. [00:12:06] Speaker 07: What is a competitor supposed to do? [00:12:07] Speaker 07: A competitor, a successful competitor in the marketplace, not surprisingly, often has a large patent portfolio, often looks, monitors what its competitors are doing, and if it sees a new competitor in the marketplace, [00:12:18] Speaker 07: who seems to be copying their invention, sues them. [00:12:21] Speaker 03: Well, I get your arguments. [00:12:22] Speaker 03: But isn't the problem that the Supreme Court largely gave that decision to the district courts and not to us, given the extremely deferential standard of review we have? [00:12:32] Speaker 07: No, Your Honor, because it is an abusive discretion review for the whole circumstances. [00:12:36] Speaker 07: But the Supreme Court made clear in Highmark that legal error is still legal error. [00:12:40] Speaker 07: It's reviewed de novo. [00:12:41] Speaker 07: And if the court is to base its exercise of discretion on clearly erroneous factual findings, [00:12:48] Speaker 07: which it did hear repeatedly because it misstates our expert's testimony. [00:12:52] Speaker 07: It misstates the inventor testimony. [00:12:55] Speaker 07: These things, it says we made arguments we didn't make. [00:12:58] Speaker 07: This Court is, to review it, and as the Supreme Court said in the Curbside decision, courts see reasonable arguments all the time that come to nothing. [00:13:08] Speaker 07: That does not warrant fees. [00:13:09] Speaker 07: And if a district court awards fees, that's an abuse of discretion and it should be reversed. [00:13:14] Speaker 07: That's what's happened here. [00:13:16] Speaker 07: This is a ex ante. [00:13:18] Speaker 07: This is a perfectly reasonable suit to bring. [00:13:20] Speaker 07: It didn't win. [00:13:21] Speaker 07: But that's not the test. [00:13:23] Speaker 07: That's not the test. [00:13:24] Speaker 07: And you're going to over deter suits if you word on facts like these. [00:13:29] Speaker 07: There is no showing of any improper conduct. [00:13:32] Speaker 07: The court speculated and made findings of things for which there is no proof. [00:13:37] Speaker 07: And fees not warranted in this situation. [00:13:43] Speaker 07: You ask about the linear displacement, Judge Lurie. [00:13:46] Speaker 07: I would like to address that, if I may, really quickly. [00:13:48] Speaker 07: Because this Court held that our position was reading linear out of the claim. [00:13:54] Speaker 07: But with respect, ICON's claim construction for that limitation was based on the text of that limitation, which included both the word displacement and the word path. [00:14:05] Speaker 07: And under this Court's case law, when two words are in the same limitation, you usually do not read them to mean the same thing. [00:14:12] Speaker 07: Our experts said linear displacement is a term of art, and the definitions [00:14:18] Speaker 07: The definitions that we submitted in support of that show that it is a term of art, and it distinguishes it from other kinds of displacement, like angular displacement. [00:14:28] Speaker 07: So one of the definitions is like A1160, and it defines displacement. [00:14:32] Speaker 07: When a body moves from one location to another, we measure the linear displacement in a straight line from the starting position A to the ending position B, regardless of the path taken. [00:14:44] Speaker 07: That was the, that was the [00:14:46] Speaker 07: construction that we propose. [00:14:49] Speaker 07: And it goes on, say, a body rotating about an axis experiences angular displacement. [00:14:53] Speaker 07: So angular displacement is like, from my shoulder here, if I move my arm out from my body, from the perspective of my shoulder, this is angular displacement. [00:15:01] Speaker 07: From the perspective of my wrist to my hip, it's linear displacement. [00:15:05] Speaker 07: The use of word linear was clarifying. [00:15:07] Speaker 07: It was distinguishing it from other types of displacement. [00:15:10] Speaker 07: It did not mean path, and our expert never said it meant path. [00:15:14] Speaker 05: That's a misquotation. [00:15:15] Speaker 05: But it looks as if that was the [00:15:16] Speaker 05: particular limitation that got the district court's attention, that that was such a strange construction that it should have made an impression once it was determined that it was in fact arcuate and not linear. [00:15:32] Speaker 07: I missed the beginning of your question Judge Neumann, I apologize. [00:15:36] Speaker 05: To understand what really seemed to make an impression on the district court seemed to be this limitation of linear. [00:15:44] Speaker 05: that the construction that was being offered when it plainly was not linear was just so extreme that this case stood out from other patent cases. [00:15:55] Speaker 07: That's only one of many reasons she gave, Your Honor. [00:15:57] Speaker 07: But my point is that even if that were the, so my overall point is if you, she said she was considering a totality of circumstances. [00:16:05] Speaker 07: I think if this Court pulls out even one, but certainly if you pull out multiple of her reasons, you would have to at least remand. [00:16:11] Speaker 07: But I think all of her reasons fall. [00:16:13] Speaker 07: My point on linear displacement, Your Honor, is that the linear displacement definition that we offered was supported by the text of the patent, by our expert, and by the extrinsic definitions that we offered. [00:16:25] Speaker 07: That is a commonplace mode of claim construction. [00:16:28] Speaker 07: It's certainly not extraordinarily weak. [00:16:30] Speaker 07: I think it's a very good argument. [00:16:33] Speaker 07: And it does not warrant fees. [00:16:36] Speaker 07: If I may, I'd like to. [00:16:37] Speaker 05: Yes, we will save you rebuttal time. [00:16:39] Speaker 05: Thank you so much. [00:16:48] Speaker 05: Thank you, Judge Newman. [00:16:51] Speaker 00: May it please the court. [00:16:53] Speaker 00: In 2012, when this court affirmed the district court's decision on the merits in full, but denied fees, our client was out 1.5 million, roughly. [00:17:03] Speaker 00: In view of the district court's order that stands now, our client, with costs through appeal, is still going to be out about 1.5 million, even with her award. [00:17:12] Speaker 00: Do we appreciate that award? [00:17:13] Speaker 00: We, of course, do. [00:17:14] Speaker 00: But we're still out $1.5 million, which means the net effect is our client has gotten no fee award. [00:17:19] Speaker 00: This occurred through a procedural anomaly, which we explained to the Court in our reply brief, in which we got no briefing before the district court judge on the denial of fees under the 120 patent and the denial of fees on fees, which resulted in our client getting basically no a fee award in this case at all. [00:17:37] Speaker 00: It occurred through two errors of law. [00:17:39] Speaker 04: On fees on fees... You're into your honesty. [00:17:42] Speaker 04: into your cross appeal. [00:17:44] Speaker 00: Yes, Your Honor. [00:17:45] Speaker 04: But there was a stipulation there where you sort of waived them. [00:17:50] Speaker 00: So, Your Honor, again, that's legal air. [00:17:53] Speaker 00: This has never been briefed to the Court. [00:17:54] Speaker 00: We've now briefed it to this Court. [00:17:56] Speaker 00: There is no Court that we're aware of, and this Court hasn't ruled on it. [00:17:59] Speaker 00: The Federal Circuit's law governs here, but we're not aware of any case from this Court that discusses whether waiver can occur where we have a fee petition in our general claim for relief, not as to the 120 patent, [00:18:12] Speaker 00: And we did not expressly waive. [00:18:14] Speaker 00: And this Court has not ruled on that issue. [00:18:17] Speaker 00: So one patent goes away. [00:18:18] Speaker 00: The case continues. [00:18:19] Speaker 00: This Court has not ruled. [00:18:21] Speaker 00: And this is an opportunity for this Court to clarify what its position on the law is. [00:18:25] Speaker 00: We're not aware of any Federal Circuit case. [00:18:27] Speaker 00: They haven't cited one. [00:18:29] Speaker 03: So this Court needs to say... Why wouldn't it be a waiver of fees for this patent that was stipulated to dismiss it? [00:18:36] Speaker 00: The U.S. [00:18:37] Speaker 00: Supreme Court says in order for there to be a waiver, there has to be an intentional relinquishment. [00:18:41] Speaker 00: If you look to the A circuit law, which is the region from which this came, which can be... Well, can we look to the stipulation first? [00:18:47] Speaker 03: It says any and all claims related to that patent. [00:18:51] Speaker 03: Why isn't that a very broad release that includes attorney fees? [00:18:56] Speaker 00: That issue has been discussed in many cases, including the Craig case that we cited to the court. [00:19:04] Speaker 00: Language just like that, where it doesn't say we're giving up attorney's fees, is not enough. [00:19:08] Speaker 00: The court has to look to the intent of the parties [00:19:11] Speaker 00: And because we didn't get to brief the issue to the court, it never considered a letter that we wrote two weeks earlier, where we said we were reserving that existence. [00:19:19] Speaker 03: I don't remember the correct case. [00:19:20] Speaker 03: Is that one of those 1983 cases? [00:19:23] Speaker 00: No, it's not. [00:19:23] Speaker 03: I mean, I know you cited some 1983 cases, and you cited an EGIA case, but those seem to me to be completely inapposite, because the fee regimes in those areas [00:19:39] Speaker 03: favor an award of fees, where that's not what the regime were operating under here. [00:19:45] Speaker 00: So Ray V. Clark, to my knowledge, is not a case in that area. [00:19:50] Speaker 00: It didn't deal with any kind of a presumption. [00:19:52] Speaker 00: What the court found is when one claim was dismissed. [00:19:54] Speaker 00: What court? [00:19:55] Speaker 00: Excuse me? [00:19:56] Speaker 03: What court? [00:19:58] Speaker 00: I'm sorry, what part? [00:19:59] Speaker 00: What court? [00:20:00] Speaker 00: Oh, it's Eighth Circuit, Your Honor. [00:20:02] Speaker 00: There's no decision from this court that deals with it. [00:20:04] Speaker 03: And what fee provision? [00:20:06] Speaker 00: Your Honor, I apologize. [00:20:07] Speaker 00: I do not know that off the top of my head. [00:20:08] Speaker 04: It's not a patent case. [00:20:14] Speaker 04: So going back to your opponent says this is plain, all-ordinary patent case. [00:20:20] Speaker 04: They lost, but that doesn't mean there should be fees. [00:20:23] Speaker 00: So the district court in a 19-page opinion has carefully analyzed all the evidence. [00:20:29] Speaker 00: I disagree. [00:20:30] Speaker 00: They suggest that her assessment of the strength of the case is a legal matter. [00:20:34] Speaker 00: It is not. [00:20:35] Speaker 00: This Court in SFA v. Newegg specifically said [00:20:39] Speaker 00: that the Court's assessment of strength is entrusted to her sound discretion. [00:20:45] Speaker 00: The footnote that they're referencing from the Highmark decision, Highmark says all aspects of a fee determination or exceptionality determination are under the clearly erroneous standard. [00:20:55] Speaker 00: In ICON's opening argument, I'm not sure that I once heard them say where the judge committed clear error in her finding. [00:21:03] Speaker 00: I've read many of this Court's decisions following Octane. [00:21:06] Speaker 00: And this court has held that it is a highly deferential standard. [00:21:10] Speaker 00: And absent this court finding clear error, this court has not reversed. [00:21:14] Speaker 00: In this particular case, I can understand that if there was a claim construction, a fee ruling based on claim construction, and that it went up, and this court disagreed with the claim construction, that as a matter of law, that might be reversed. [00:21:26] Speaker 00: That's not this record. [00:21:28] Speaker 00: This court has affirmed the finding in full. [00:21:30] Speaker 00: Not only did it affirm, but as to the C channel argument, this court called it without merit. [00:21:36] Speaker 00: It's a matter of black letter law that where you say linear reciprocating dispute. [00:21:41] Speaker 03: But what about the errors? [00:21:41] Speaker 03: I mean, I don't think you're addressing your friend's argument specifically, that there do seem to be at least misapprehensions by the district court of what your friend was arguing, and particularly about the lines that something about there could be an endless number of parts for whatever you're calling it to slide or whatever. [00:22:02] Speaker 03: That's not right. [00:22:03] Speaker 03: That's not what they argue. [00:22:05] Speaker 00: This court found that. [00:22:06] Speaker 00: In your opinion, this Court found that they were arguing one or more parts means an infinite number of parts. [00:22:12] Speaker 00: And in this Court's opinion in 2012, affirming it, this Court recognized the District Court's argument in that regard and actually acknowledged it. [00:22:20] Speaker 00: That's in the record. [00:22:21] Speaker 00: This Court has also found it, and it's just as a matter of English language, one or more means one, 10, 20, 1,000. [00:22:30] Speaker 00: And the district court found that unreasonable. [00:22:32] Speaker 00: We're talking about a patent where one end goes in a straight line in a sea channel, and the other goes an elliptical path. [00:22:39] Speaker 00: And so the invention was the linkage. [00:22:41] Speaker 00: And their position on the merits is that their linkage can be 1, 10, 1,000 parts. [00:22:48] Speaker 00: One or more means that. [00:22:49] Speaker 00: The district court rejected it. [00:22:50] Speaker 00: She found it unreasonable. [00:22:52] Speaker 00: It is an unreasonable position where your invention is a specific thing. [00:22:56] Speaker 00: where an examiner finds the reason I'm giving you a patent is it goes up and down in a straight line and there's a C channel that causes that. [00:23:03] Speaker 00: We got their inventor to admit in deposition that yes, you need the C channel to cause the up and down. [00:23:09] Speaker 00: My invention's up and down and you need a C channel. [00:23:11] Speaker 00: And so there is no evidence to suggest that the up and down motion or the C channel was not part of the invention. [00:23:19] Speaker 00: That's all that's disclosed in the 710 patent. [00:23:23] Speaker 00: Our client doesn't have anything remote to it. [00:23:26] Speaker 00: So their position, when you add their positions up, you don't need straight line movement. [00:23:31] Speaker 00: Even though that's what the examiner said was the reason for allowance, that's all that's disclosed. [00:23:34] Speaker 00: We don't need straight line movement. [00:23:36] Speaker 00: We don't need a C channel. [00:23:37] Speaker 00: And our stroke rail is any limitless combination of parts. [00:23:41] Speaker 00: And I would ask myself, what could my client do? [00:23:43] Speaker 00: They've won. [00:23:44] Speaker 00: But if they're trying to avoid a patent where their position is that my invention is a limitless number of parts, which this court found, it's right in the Federal Circuit's opinion from 2012. [00:23:56] Speaker 00: How could Icon, or excuse me, Octane avoid a lawsuit? [00:23:59] Speaker 00: Where they say the 710 patent covers a limitless number of parts in linear movement and a C-channel is not required. [00:24:07] Speaker 00: That's basically every elliptical machine known to mankind. [00:24:12] Speaker 00: That was their position. [00:24:14] Speaker 00: And so, no, was this a rare case? [00:24:17] Speaker 00: I'm not aware of cases where not one of their people at Icon even knew how our client's machine worked. [00:24:24] Speaker 00: Not one of them. [00:24:26] Speaker 00: The in-house council, not one person knew how our machine worked. [00:24:29] Speaker 00: Our machine, which was covered under a different patent with a completely different linkage system, didn't have straight line movement, didn't have C channels. [00:24:38] Speaker 00: When you looked at the rocker link, the rocker link pivots down here. [00:24:41] Speaker 00: There's another pivotal connection to the actuator casting, which is what they call our stroke rail. [00:24:47] Speaker 00: And it went up and down in an accordion fashion. [00:24:50] Speaker 00: I mean, I'm not here to say this is a design patent case where you can look and tell. [00:24:53] Speaker 00: But when I'm sizing up a case, one of the first things I do is I look [00:24:56] Speaker 00: and say, wow, here's what we have. [00:24:58] Speaker 00: Here's what they got. [00:24:58] Speaker 00: This looks bizarre that they're going to claim this is infringement. [00:25:01] Speaker 00: Then you look to the patent, the claims. [00:25:04] Speaker 00: We didn't have one element, literally, other than foot rails and other than a frame, which all ellipticals have. [00:25:11] Speaker 00: We didn't have, literally or under the doctrine of equivalence, a stroke rail. [00:25:14] Speaker 00: We didn't have, literally or under the doctrine of equivalence, the means for connecting, which was the C channel. [00:25:19] Speaker 00: We didn't even have, literally, the means for selectively varying. [00:25:23] Speaker 00: Literally. [00:25:24] Speaker 00: She found there was an equivalence issue. [00:25:25] Speaker 05: Your friend says that their expert said that the linear and the arcuate motion were equivalent, and every other limitation was literally met. [00:25:37] Speaker 05: Isn't that enough to support a case that seems to be a more or less typical overreach, perhaps, of the patentee? [00:25:48] Speaker 00: In every patent case, Your Honor, somebody can find an expert that's going to cite with it. [00:25:53] Speaker 00: Every case has an expert. [00:25:54] Speaker 00: Their expert disagreed with their own inventor. [00:25:57] Speaker 00: The inventor said, my invention is up and down in a straight line in a C channel. [00:26:00] Speaker 00: And it's undisputed. [00:26:02] Speaker 00: We had nothing like it. [00:26:03] Speaker 00: When it comes to arcuate motion, I mean, they keep calling it a slight arc. [00:26:08] Speaker 00: It's not a slight arc. [00:26:09] Speaker 00: It's a rod that pivots. [00:26:11] Speaker 00: That would do an entire circle. [00:26:12] Speaker 00: It's an arc. [00:26:13] Speaker 00: I mean, our client couldn't have made their invention any more different than the 710 patent. [00:26:19] Speaker 00: And when we talk about how rare it is, [00:26:22] Speaker 00: It took them 270 hours. [00:26:25] Speaker 00: This patent you can read in an hour, and you can figure out that it's up and down in a straight line of C channel. [00:26:30] Speaker 00: It took them 270 hours to find the 710 patent. [00:26:33] Speaker 00: If you think about what is 270 hours? [00:26:35] Speaker 00: That is a lawyer working seven hours a day, 20 business days a month. [00:26:41] Speaker 00: So a lawyer worked approximately two months to find the 710 patent, which was a 10-year-old patent that they didn't even know about. [00:26:50] Speaker 00: And the principles of operation are different. [00:26:51] Speaker 00: And our client, the only reason they sued, the only reason they sent these lawyers on this 270-hour go-find-whatever-you-can is because our client was competing against them successfully with an award-winning machine. [00:27:03] Speaker 00: And at the end of the day, we're all here to believe that it was a reasonable case where they had a 710 patent. [00:27:09] Speaker 00: I have the inventor admitting it doesn't work. [00:27:12] Speaker 00: Customers didn't want it. [00:27:12] Speaker 00: It was too complicated. [00:27:13] Speaker 00: And somehow, that patent covers an award-winning machine that's licensed under a different [00:27:20] Speaker 00: When you look at that patent, you can see our client's linkage is shown right there. [00:27:23] Speaker 00: And somehow, the red flags didn't go off. [00:27:26] Speaker 00: If I was ICON's management and somebody said, yeah, we have this 10-year-old patent, it doesn't work. [00:27:30] Speaker 00: We've never used it. [00:27:31] Speaker 00: And we're going to say that's the basis for a claim against Octane, the small startup company who's taking market share with a completely different product. [00:27:39] Speaker 00: And we're going to say that that case doesn't stand out. [00:27:42] Speaker 00: Now, at the end of the day, the district court's decision is grounded firmly in the claim language. [00:27:49] Speaker 00: the specification, the inventor himself admitted what the invention was, and there's no dispute that we didn't have anything like it. [00:27:56] Speaker 00: I mean, the inventions couldn't be any different. [00:27:58] Speaker 00: And so, but at the end of the day, as this court's recognized in many decisions, I've read a lot of the decisions from this court affirming few words, the courts found it's a highly deferential standard. [00:28:09] Speaker 00: It's clearly erroneous, all aspects of it. [00:28:12] Speaker 00: Even the court's assessment of strength, this court affirmed her in full. [00:28:16] Speaker 00: All that remains on this record, which admittedly is not the normal record when it comes to this court, but here this court's affirmed everything. [00:28:23] Speaker 00: It was to the district court's sound discretion to assess the merits of this case. [00:28:27] Speaker 00: And based on this totality of facts, which are a lot, it was a bad case. [00:28:32] Speaker 00: It shouldn't have been brought. [00:28:33] Speaker 00: Does that mean it's rule 11? [00:28:34] Speaker 00: No, that's not the standard. [00:28:36] Speaker 00: This court has also found the new standard substantially lowered the threshold for getting fees. [00:28:42] Speaker 00: And if this case doesn't qualify, I'm not sure what would. [00:28:45] Speaker 00: We literally didn't have any element of the core, we didn't have the stroke rail literally. [00:28:52] Speaker 00: We didn't have the means for connecting literally. [00:28:56] Speaker 00: We didn't have the means for selectively varying literally. [00:28:59] Speaker 00: Two of them not even under the doctrine of equivalence. [00:29:01] Speaker 00: And again, I would ask myself, what would Octane do? [00:29:06] Speaker 00: If their position is, my linkage, my patented linkage is any combination of parts and [00:29:13] Speaker 00: The point of novelty as found by the examiner admitted by the inventor doesn't exist according to them and their expert who contradicts the inventor. [00:29:21] Speaker 00: They say that straight line and C channel doesn't matter. [00:29:24] Speaker 00: And my invention is any collection of parts that reads on every machine. [00:29:27] Speaker 00: If that's what the coverage of the 710 was reasonably, they could have sued anyone. [00:29:32] Speaker 00: And yet our client didn't even come close to using what they had. [00:29:36] Speaker 00: But the district court has issued a 19 page very carefully worded opinion. [00:29:40] Speaker 00: She incorporates by reference in footnote one, [00:29:42] Speaker 00: her prior claim construction, her prior ruling, this court has affirmed, this court itself found that their argument as to the C-channel was without merit. [00:29:53] Speaker 00: And it is. [00:29:54] Speaker 00: Black letter law says that if the function is linear, suffocating displacement, you gotta have structure that corresponds. [00:29:59] Speaker 00: The patent is absolutely clear. [00:30:01] Speaker 00: What causes it is the C-channel. [00:30:03] Speaker 00: Even more remarkable in this case is that the inventor admitted it. [00:30:06] Speaker 00: The inventor said, yeah, what causes the up and down movement is the C-channel. [00:30:11] Speaker 00: And it's undisputed we have nothing like that. [00:30:13] Speaker 00: A rocker link isn't close to a sea channel. [00:30:15] Speaker 00: The standard is insubstantial difference. [00:30:17] Speaker 00: Was it unreasonable to contend all of these things were insubstantial? [00:30:20] Speaker 00: Yes, it was. [00:30:22] Speaker 00: We would ask this court to consider the errors of law because it's as if we have no fee award. [00:30:27] Speaker 00: I mean, our client battled this for nine years, and we're still at 1.5 million. [00:30:31] Speaker 00: We've never had a chance to brief the issues to the district court on fees on fees in 120. [00:30:37] Speaker 00: And she committed clear error. [00:30:39] Speaker 03: When you say fees on fees, what [00:30:41] Speaker 03: What portion of the litigation do you mean? [00:30:44] Speaker 00: Fees on fees, Your Honor, under the case law means all aspects of the case where we're pursuing fees. [00:30:49] Speaker 03: Do you mean the litigation about the proper standard before this Court and the Supreme Court? [00:30:54] Speaker 00: Yes, Your Honor. [00:30:56] Speaker 03: How can that be at all exceptional when it was our precedent and it took the Supreme Court to overrule it? [00:31:05] Speaker 00: That's precisely the air of law, Your Honor. [00:31:07] Speaker 00: Gene, the U.S. [00:31:08] Speaker 00: Supreme Court says [00:31:09] Speaker 00: that once you find the trigger, and if you look at Jean, once you find the trigger, that means you're entitled to fees or the court has discretion. [00:31:18] Speaker 00: I want to overstate the case, but you should be getting fees for pursuing your fees, otherwise you defeat the purpose of the statute. [00:31:24] Speaker 00: So even this court in their sense did not hold that you have to show. [00:31:28] Speaker 03: I mean, there's plenty of precedent saying the courts have discretion to apportion fees for parts of the case they find weak and parts they don't also. [00:31:38] Speaker 00: Under Jean, your honor, [00:31:39] Speaker 00: I would respectfully disagree. [00:31:40] Speaker 00: Under Jean, the U.S. [00:31:41] Speaker 00: Supreme Court says that once you prove that the underlying case was exceptional, then we should have gotten our fees and it would be up to the district court to explain why we wouldn't get all of our fees. [00:31:50] Speaker 00: I think that's the law under Jean. [00:31:54] Speaker 00: And what Jean says, Your Honor, what Jean says is that, for example, the district court would be within its discretion to not award fees if we went for like categories of fees and didn't get them, deduct that. [00:32:05] Speaker 00: He or she denied all fees. [00:32:06] Speaker 00: And we do believe that's a violation of gene. [00:32:08] Speaker 00: And we also think there was abuse of discretion, because we didn't get to brief any of the issues. [00:32:11] Speaker 05: Thank you. [00:32:13] Speaker 05: Thank you, Mr. Telstra. [00:32:14] Speaker 05: We'll save you a bit of rebuttal on the cross-appeal. [00:32:17] Speaker 05: Ms. [00:32:17] Speaker 05: Maynard. [00:32:18] Speaker 07: Thank you, Judge Newman. [00:32:20] Speaker 07: The Supreme Court's made very clear that this has not a loser pays statute. [00:32:24] Speaker 07: And counsel is re-arguing the merits. [00:32:27] Speaker 07: These were reasonable arguments that icon a surgeon on the merits. [00:32:30] Speaker 07: On the stroke rail, Octane conceded for nine months they have a stroke rail. [00:32:34] Speaker 07: On the adjustable element, [00:32:37] Speaker 07: ICON survived summary judgment, dispute of fact, the district court found, on the element E. On the means for connecting, ICON had a strong argument based on the text of that limitation and the specification that the structure was limited to the crank. [00:32:56] Speaker 07: This Court recognized, recognized in its opinion, that it was looking elsewhere and adding in structure that was not specifically called out by the specification. [00:33:07] Speaker 07: Different opinions from this Court suggest different ways to go on that, Your Honors. [00:33:12] Speaker 07: That is a reasonable argument. [00:33:14] Speaker 07: And the literal dis- the linear displacement argument, we had a strong argument based on the text of that limitation, that displacement and path were not the same. [00:33:26] Speaker 07: I invite the Court to read the inventor testimony that he's referring to you about the C Channel. [00:33:32] Speaker 07: What the inventor was asked, and it's an A332, [00:33:35] Speaker 07: I want you to assume that 76 is not attached to anything. [00:33:39] Speaker 07: It is floating in the air. [00:33:40] Speaker 07: When you adjust the length of 66, would that do anything to the elliptical path? [00:33:44] Speaker 07: And the inventor says, if you do that, you've got nothing. [00:33:47] Speaker 07: I've got a pile of steel. [00:33:49] Speaker 07: I don't have a mechanism. [00:33:50] Speaker 07: He's not saying the C channel is essential to my invention. [00:33:53] Speaker 07: He's not saying the C channel. [00:33:55] Speaker 07: Something like that. [00:33:56] Speaker 07: Something like that. [00:33:58] Speaker 07: But that, the C channel, [00:34:02] Speaker 07: Under ICON's construction, which is, again, it's the same discussion I was discussing, ICON had a strong argument, at least a very reasonable argument, that the C-channel was not required by this limitation because the limitation was about connecting in such a way. [00:34:17] Speaker 07: And the district court added words, added words to that limitation by adding to cause. [00:34:22] Speaker 07: And counsel has said, it's clear it causes. [00:34:24] Speaker 07: And this court agreed with it. [00:34:26] Speaker 07: And so I understand that we lost on the merits. [00:34:28] Speaker 07: But losing on the merits is not enough. [00:34:31] Speaker 07: The Supreme Court made that very clear. [00:34:33] Speaker 07: And that's all that happened here. [00:34:35] Speaker 07: That's all that happened here. [00:34:37] Speaker 07: The inventor, the inventor called out to, the inventor saw a machine in the marketplace and suggested to in-house counsel that it looked like something that he had invented. [00:34:50] Speaker 07: Suggested in-house counsel to look at it. [00:34:51] Speaker 07: It's a two-lawyer general counsel's office. [00:34:55] Speaker 07: They're not patent lawyers. [00:34:57] Speaker 07: They hired expert counsel. [00:35:00] Speaker 07: Expert counsel spent a long time. [00:35:01] Speaker 07: They bought the machine. [00:35:03] Speaker 07: They hired a consulting expert. [00:35:05] Speaker 07: They came back and orally advised the general counsel that here is the basis for infringement, and we think we have a reasonable basis to sue. [00:35:13] Speaker 07: That is perfectly proper, reasonable, pre-suit investigation. [00:35:17] Speaker 07: Just like in Checkpoint, oral opinions are fine. [00:35:21] Speaker 07: This court has never held that more is required. [00:35:25] Speaker 05: Would you care to comment on the cross appeal? [00:35:28] Speaker 07: Really two quick points, Your Honor. [00:35:30] Speaker 07: The stipulation couldn't be any clearer. [00:35:32] Speaker 07: It says any and all claims of both parties with respect to the 120 patent. [00:35:38] Speaker 07: The district court found that they waived under the Eighth Circuit precedent, finding his waiver, whether you look at it as a matter of law or a matter of fact, they waived this claim. [00:35:47] Speaker 07: The Wray case he was referring to, Judge Hughes, is a civil rights case. [00:35:51] Speaker 07: Civil rights, the presumption is very different. [00:35:52] Speaker 07: Presumption of fees here, that's not the case. [00:35:56] Speaker 07: On the Therosense issue, the district court made really clear [00:35:59] Speaker 07: in response to their request to file a motion for reconsideration, I have great discretion, great discretion to decide the quantum of the award. [00:36:09] Speaker 07: And given that I find it was really reasonable for ICON, who had prevailed before me under this longstanding standard, prevailed in the federal circuit under this court's longstanding standard on fees, to defend that decision in the Supreme Court and not to shift the fees on that. [00:36:26] Speaker 07: And so I decide not to shift the fees on that. [00:36:28] Speaker 07: You don't have to decide whether or not you have to find it separately extraordinary or not, because the district court made clear that she was deciding it in her discretion to set the appropriate amount. [00:36:37] Speaker 07: And she indicated they've still been awarded a substantial amount of fees. [00:36:43] Speaker 07: We would request that you reverse. [00:36:45] Speaker 06: Thank you, Ms. [00:36:45] Speaker 06: Maynard. [00:36:46] Speaker 06: Thank you. [00:36:46] Speaker 06: Mr. Telcher, you get the last word. [00:36:48] Speaker 06: Just on the cross, a few minutes, please. [00:36:53] Speaker 00: So Your Honor, as to the precinct investigation, [00:36:55] Speaker 00: One of the benchmarks of patent law is that you don't get to submit a declaration that says I talked to my lawyers for a certain amount of time and then they told me it was okay. [00:37:05] Speaker 00: The minute you do that, that's advice. [00:37:06] Speaker 04: That sounds like the main appeal. [00:37:08] Speaker 00: I'm sorry? [00:37:09] Speaker 00: That sounds like the main appeal. [00:37:10] Speaker 00: Oh, I'm sorry. [00:37:10] Speaker 00: I'll go right to the cross appeal. [00:37:12] Speaker 00: Fair enough. [00:37:13] Speaker 00: So on the cross appeal, the first thing I would ask of this Court is to look carefully that we didn't get to brief any of the issues on 120 and fees on fees. [00:37:23] Speaker 00: I would think it is abusive discretion once the Court became aware of the anomaly that occurred. [00:37:28] Speaker 00: Her order, to our reading still, is that she was awarding us fees, and all that we had to do was submit our time and the reasonableness. [00:37:36] Speaker 00: That's what we did. [00:37:37] Speaker 00: In their reply to that, they took on the issues of 120 waiver and fees on fees. [00:37:42] Speaker 00: We never got a chance to respond to that, and in our view, that's abusive discretion. [00:37:46] Speaker 00: We think, as a result of that abusive discretion, there were errors of law that should be briefed to the district court in the first instance. [00:37:52] Speaker 00: The A circuit law we cited to the court, Cody. [00:37:54] Speaker 03: But if we agree with her on the law, why would we care if there's more briefing? [00:38:02] Speaker 00: If you agree with her on the law, then I would say that to me sounds like harmless error, because you've had our briefing. [00:38:08] Speaker 00: So I would agree that if you're going to say that exceptionality is required for the fees on fee stage, which is what she found, and then when she ultimately said their conduct was reasonable, that's the same thing as it not being exceptional. [00:38:22] Speaker 00: If you agree with that proposition, then I would agree if you don't need to remand. [00:38:25] Speaker 00: We think that was an error of law. [00:38:26] Speaker 00: We think it is in direct violation of the Supreme Court's Jean decision. [00:38:31] Speaker 00: As to the 120, this Court has not ruled on what happens when one claim goes away, and we did not expressly relinquish fees. [00:38:38] Speaker 00: I'm very sympathetic, Your Honor, when you say all claims. [00:38:42] Speaker 00: I understand why you're saying, well, why wouldn't that cover attorney's fees? [00:38:45] Speaker 00: We've cited to this Court many decisions in our brief that deal with that issue that say, unless you specifically waive fees, [00:38:52] Speaker 00: which we didn't, then it's not covered. [00:38:54] Speaker 00: Silence is not enough. [00:38:55] Speaker 00: So it should be remanded to the district court to determine whether we intended to waive fees. [00:38:59] Speaker 00: And my final point would be, I don't know how anybody could think that we were trying to waive 125,000 in fees applied to the 710 patent. [00:39:09] Speaker 00: And that's the net result here is that, for example, no matter if the 120 patent was in the case or not, the 710 patent was in the case the whole time. [00:39:17] Speaker 00: She deducted half of our fees for the venue transfer work, [00:39:20] Speaker 00: that she found was unreasonable. [00:39:21] Speaker 00: We clearly didn't intend to relinquish that. [00:39:23] Speaker 00: So there is an anomaly. [00:39:26] Speaker 00: We think it's based on an error law, and we would ask for a remand on that issue. [00:39:29] Speaker 00: Thank you for your time. [00:39:31] Speaker 05: Thank you. [00:39:31] Speaker 05: Thank you both. [00:39:32] Speaker 05: The case is taken under submission.