[00:00:23] Speaker 01: Hirshhorn? [00:00:30] Speaker 01: You want to reserve five, Mr. Hirshhorn? [00:00:33] Speaker 02: Yes, Your Honor. [00:00:58] Speaker 01: May I proceed, sir? [00:01:00] Speaker 02: Morning, Your Honors. [00:01:03] Speaker 02: If we're ready, Philip Hirshhorn, Buchanan, Ingersoll, and Rooney on behalf of Appellant's Ethox Chemicals, and James Tanner. [00:01:11] Speaker 02: In 2009, Ethox and Coca-Cola Company entered into a confidential collaboration. [00:01:18] Speaker 02: And as part of that, Dr. James Tanner conceived of and provided to Coca-Cola [00:01:26] Speaker 02: a molecule that they were previously unaware of called PEM, or P-E-M, we're going to call it PEM today, as a gas barrier additive to be used in polyester composition. [00:01:36] Speaker 02: Several months later, unbeknownst to Ethox, unbeknownst to James Tanner, Coca-Cola decided covertly to file four patent applications, two domestic, two foreign. [00:01:50] Speaker 02: And at that point in time, they took control of the invention. [00:01:53] Speaker 01: Both sides in this case, [00:01:56] Speaker 01: provide conflicting statements of facts. [00:02:01] Speaker 01: They're directly conflicting. [00:02:04] Speaker 01: But neither side identifies any errors in the district court's findings of fact. [00:02:10] Speaker 01: Do you contest any of the district court's factual findings appearing at JAA 1-4, 20-32? [00:02:17] Speaker 02: Your Honor, I think we're not contesting that because I think the rulings that the judge made were not dependent on those facts. [00:02:26] Speaker 02: The NDA or the non-disclosure agreement rulings were based on his view that there was an unambiguous interpretation of the agreement. [00:02:34] Speaker 02: That's a matter of law. [00:02:35] Speaker 02: It's not a matter of fact. [00:02:36] Speaker 02: And with respect to the preemption argument, we did contest that at the time. [00:02:41] Speaker 02: We contested it in the summary judgment opinions [00:02:44] Speaker 01: Because it was premised on one item, which was... I understand, but we have to write opinions, and we like to nail things down. [00:02:51] Speaker 01: So you're not contesting the statement of that. [00:02:53] Speaker 02: Well, we're contesting that PEM was... In fact, we have contested that PEM is or is not in the prior art. [00:03:00] Speaker 02: As a linchpin to the judge's preemption argument, the determination was made at appendix page 10 that because PEM was in the prior art as a molecule, that was sufficient to bring about preemption. [00:03:14] Speaker 02: Our argument is, no, that's not the case. [00:03:17] Speaker 02: And the judge subsequently found that, in fact, PEM as a gas barrier additive was not in the prior art. [00:03:23] Speaker 02: It was not something that was there. [00:03:25] Speaker 02: And therefore, there's an error in that. [00:03:28] Speaker 02: And it knocks out the linchpin for the preemption determination. [00:03:31] Speaker 01: What did Dr. Tanner mean when he said, probably it will not work? [00:03:35] Speaker 02: Self-effacing. [00:03:36] Speaker 02: He's a chemist just like all chemists. [00:03:38] Speaker 02: And he knows that things require testing. [00:03:40] Speaker 02: So he's providing the molecule that he believes is going to be the gas barrier additive. [00:03:45] Speaker 02: He understood that that was the type of the project that he was working in. [00:03:48] Speaker 02: He had already worked on a molecule called BPO-1 that had been provided by Coke. [00:03:54] Speaker 02: And so he understood what BPO-1 was, what it was supposed to be used for. [00:04:00] Speaker 02: He came up with something better. [00:04:01] Speaker 02: And this is really getting to the inventorship arguments, but something that was better and something that was known. [00:04:08] Speaker 02: So I think when we're looking at our errors of law, we have an error of law associated with the NDA and the purpose and scope of those NDAs, and we have an error related to the preemption, which I've already talked about. [00:04:20] Speaker 02: When we look at the purpose and scope of the NDAs, it's very clear there's a single purpose, a single purpose, and that's to protect Coca-Cola's information flowing to Ethox and the other company that was involved at that time. [00:04:34] Speaker 02: And when you look at that, [00:04:35] Speaker 01: You understand the subject matter. [00:04:37] Speaker 01: Let me clarify something, just for the record, because maybe it was my hearing. [00:04:42] Speaker 01: You said something that was better and something that was known. [00:04:47] Speaker 02: I'm not sure I remember saying that exactly. [00:04:50] Speaker 02: Something that was unknown to Coca-Cola. [00:04:52] Speaker 01: So you meant unknown. [00:04:54] Speaker 02: If I said known, it was known to Dr. Tanner, who came up with the idea. [00:04:58] Speaker 02: But it was unknown to Coca-Cola, unknown to Ethox. [00:05:01] Speaker 02: And at the time... Why I asked you that question. [00:05:03] Speaker 02: Thank you very much. [00:05:05] Speaker 02: But going back to the NDA, we look at it. [00:05:07] Speaker 02: It was signed in April 2009. [00:05:09] Speaker 02: At that point in time, Ethox and Coca-Cola had not sat down. [00:05:14] Speaker 02: They hadn't broken bread. [00:05:15] Speaker 02: They hadn't talked about what was going to happen. [00:05:18] Speaker 02: At that point in time, the only thing that agreement could cover was the one thing that was in the contemplation of the parties, which was a protection being offered for Coca-Cola's information passing through. [00:05:29] Speaker 02: And they knew what they had. [00:05:32] Speaker 02: Ethox didn't. [00:05:33] Speaker 02: They knew it was chemical. [00:05:34] Speaker 02: That was it. [00:05:35] Speaker 02: And so when we look at what the judge did, the judge said, well, the scope is very broad and it covers everything. [00:05:41] Speaker 02: And effectively said that PEM, PEM samples, PEM activities, PEM testing, all of the things that undergird what eventually became part of the patent applications, that that for some reason should be excluded because that's part of the subject matter of this agreement. [00:06:01] Speaker 02: When we look at the opening provision, it is very clear. [00:06:03] Speaker 02: It's Coca-Cola. [00:06:05] Speaker 02: It's its information. [00:06:07] Speaker 02: Now, they talk about the purpose being to use those disclosures for purposes of maybe considering a commercial relationship. [00:06:15] Speaker 02: But there are no terms associated with it in any way, shape, or form. [00:06:19] Speaker 02: And so what the judge has basically done is saying this non-disclosure agreement, which is that's what it is. [00:06:25] Speaker 02: It's a non-disclosure agreement. [00:06:27] Speaker 02: somehow now relates to activities that are going to go beyond that related to chemical structures, research and development, other things, none of which are contemplated in the parties. [00:06:37] Speaker 02: And the cases that we've cited at page 44 to 45 of our brief are clear, that if you have something that is not the subject matter in the contemplation of the parties at the time, you cannot have deemed to have contracted those rights away. [00:06:54] Speaker 02: And effectively, that's what the judge said. [00:06:57] Speaker 00: If I may ask you one question. [00:06:58] Speaker 00: I realize that the inventorship issue was on the cross-appeal, and I'm not going to get into that. [00:07:04] Speaker 00: That will come up when the other side presents its side of the case. [00:07:09] Speaker 00: But at page 34 of your brief, you say, the district court aired by finding an ongoing royalty is preempted. [00:07:19] Speaker 00: What would be the effect on that issue [00:07:24] Speaker 00: obviously we can either reverse or affirm on the inventorship issue, but assuming, just for purposes of argument, there was an affirmance on the inventorship issue, what happens to this point? [00:07:36] Speaker 02: I think, Your Honor, we still would be seeking unjust enrichment award, and that's what was the forward-looking royalty on whatever happens with PEM worldwide, because when we look at what happened, the net effect is [00:07:49] Speaker 02: Ethos lost control of the technology. [00:07:52] Speaker 02: And whatever rights it should have had, it doesn't. [00:07:55] Speaker 02: It has something much more truncated, even if Dr. Tanner is put onto the patent as an inventor, as he should be. [00:08:01] Speaker 00: So you're saying it wouldn't go away, this issue? [00:08:03] Speaker 02: It wouldn't go away. [00:08:04] Speaker 02: The domestic side, I mean, again... The courts takes us back to the purpose of the agreements. [00:08:08] Speaker 02: Right. [00:08:09] Speaker 02: And I think that's right. [00:08:10] Speaker 05: And the purpose of the agreement is... Well, the other side and the district court took the position that the purpose of the agreement was to have [00:08:16] Speaker 05: your client and Coke engage in activity to see if the two of them could come to a business arrangement. [00:08:23] Speaker 02: I agree with that. [00:08:26] Speaker 05: That's the view of the NDA that cost you the case. [00:08:30] Speaker 05: Because if that's true, if the purpose was to engage in conduct with one another looking to developing a business relationship, part of that, once your client had [00:08:41] Speaker 02: Identified them with coke says we'll make some of that and send this to us and have a look at see if we're going to develop a real supply relationship But I understand what you're saying your honor But I think what we look at is we look at what the contract says and does the contract is related to one thing one thing only and that's the confidential information Well, that's because it was unilateral this agreement was unilateral protected coping didn't protect you the second one protected you and what I would argue your honor and I think what we've argued in our brief is that effectively there was a confidential [00:09:10] Speaker 02: understanding between the parties. [00:09:12] Speaker 02: And in fact, it was kept in confidence. [00:09:14] Speaker 05: And that, when we get back... Your argument really is that one who's entering into an arrangement to share information with one another to see whether or not you can get to a goal line over here, with a lot of information going back and forth, you're saying someone would have to be insane to unilaterally sign agreements that only protected one party's information? [00:09:35] Speaker 02: Well, I think part of it is also what the understanding of the parties are. [00:09:38] Speaker 02: And I think when we're going forward into this, we were entitled at the district court level to prove facts to demonstrate that. [00:09:45] Speaker 05: Why didn't you protect your information in the second year agreement? [00:09:48] Speaker 05: Why didn't you do it in the first? [00:09:50] Speaker 02: Excuse me? [00:09:51] Speaker 05: Your information is protected in the second agreement. [00:09:53] Speaker 02: It's bilateral. [00:09:55] Speaker 02: Why wasn't it protected in the first one? [00:09:56] Speaker 02: The answer is Ethox believed that their information was protected at all times, and that they cinched it when they did the second agreement. [00:10:03] Speaker 02: But when we look at that agreement, that's after the harm being done. [00:10:06] Speaker 05: They didn't need to be bilateral the second time if they believed in the unilateral agreement and protected their interests. [00:10:11] Speaker 02: Well, I think they believed that there was a confidential communication undertaken with Coca-Cola, that they were working in collaboration, that they were going to do something together. [00:10:20] Speaker 02: that they were co-inventors eventually when these things came forward. [00:10:24] Speaker 02: They weren't given that opportunity. [00:10:25] Speaker 02: And that's really the problem. [00:10:26] Speaker 02: That's the unjust enrichment issue. [00:10:28] Speaker 05: And with respect to the appeal. [00:10:30] Speaker 05: If you would agree that, I mean, on this particular point, the strongest argument for your appeal is that the nature of the NDA was mischaracterized by the district court. [00:10:41] Speaker 02: I think that's right, Your Honor. [00:10:42] Speaker 05: The purpose and scope was broad and well beyond. [00:10:44] Speaker 05: If we agree with the district court, it's a hard case for you. [00:10:48] Speaker 01: Mr. Hirshhorn, you have to listen a little. [00:10:50] Speaker 01: more carefully and not try to talk over the judge. [00:10:53] Speaker 02: I apologize for that, Your Honor. [00:10:56] Speaker 02: I don't know if I answered your last question, though. [00:10:57] Speaker 05: Well, I just said, I mean, if we disagree with you and we agree with the characterization of the NDA that was the initial one that was given by the district court, it's a hard case for you. [00:11:08] Speaker 02: I agree that it's a hard case. [00:11:09] Speaker 02: I don't think it's someone's case. [00:11:18] Speaker 01: Thank you. [00:11:18] Speaker 01: Mr. Garrett. [00:11:24] Speaker 03: Good morning, Your Honors. [00:11:25] Speaker 03: May it please the Court? [00:11:26] Speaker 03: You've been 10 and 5 as well. [00:11:28] Speaker 03: Yes, thank you, Your Honor. [00:11:29] Speaker 03: John Gerritsen of Shook, Hardy & Bacon on behalf of the Coca-Cola Company. [00:11:35] Speaker 03: In response to some of the comments made by counsel, the agreements are not ambiguous. [00:11:41] Speaker 03: The language is clear. [00:11:43] Speaker 03: There's an attempt to sort of get around the language and say that there has been repudiation or that there was an unstated [00:11:51] Speaker 03: confidentiality obligation in the 2009 agreement that flowed both ways, not only with respect to Coca-Cola Company's confidential information, but also information that Ethox alleges was confidential. [00:12:03] Speaker 03: But the provisions are clear, they're not ambiguous, and there is no basis to try to go outside of those agreements. [00:12:11] Speaker 05: Point us to the provisions that you're relying on. [00:12:17] Speaker 05: You were talking generalities at the moment. [00:12:19] Speaker 03: There is a first that the purpose is not just to confidential information. [00:12:26] Speaker 03: It states explicitly in the introduction that the purpose is to investigate whether to enter into a commercial relationship. [00:12:34] Speaker 03: There is an integration clause, paragraph 10. [00:12:37] Speaker 03: This is page 634, appendix 634 of the 2009 agreement that says that this is the entire agreement in writing. [00:12:47] Speaker 03: There's no other understandings. [00:12:49] Speaker 03: You can only modify this in writing so that the parties expressly agree in writing that there is no understanding apart from what's in the agreement. [00:12:59] Speaker 05: Any other features of the 2009 NDA that you believe support your reading and the district court's reading of the purpose of the contract? [00:13:10] Speaker 03: Also, there's paragraph seven [00:13:14] Speaker 03: Page 633, in fact, also the 2010 agreement has a similar paragraph, 8, at Joint Appendix, page 2055. [00:13:24] Speaker 03: These provisions preclude payment. [00:13:27] Speaker 05: It's a little odd to hear that the only purpose of the 2009... What's the text exactly when you say they preclude payment? [00:13:36] Speaker 05: I didn't remember the word preclude. [00:13:45] Speaker 03: I don't believe the word preclude is in the paragraphs. [00:13:50] Speaker 05: That's why I asked. [00:13:54] Speaker 05: Your adversary has very candidly, and I'm helpful to the court, agreed that the appeal on this issue turns on the characterization of the 2009 NDA. [00:14:05] Speaker 05: And so when I'm asking you for data points from you, [00:14:09] Speaker 05: to support your argument. [00:14:11] Speaker 05: And I would be grateful in the court where you benefited if you quote the exact language rather than characterizing it. [00:14:18] Speaker 03: Certainly, Your Honor. [00:14:19] Speaker 03: Paragraph 7. [00:14:20] Speaker 03: What page are you on in the appendix? [00:14:22] Speaker 03: Yes, I'm at the appendix page 633. [00:14:24] Speaker 03: 633. [00:14:31] Speaker 05: How far down the page? [00:14:33] Speaker 03: It's paragraph 7, Your Honor. [00:14:34] Speaker 05: Paragraph 7. [00:14:37] Speaker 05: OK. [00:14:39] Speaker 03: And it says, no party will be obligated to A, pay or otherwise provide a benefit to any other party, B, take or refrain from taking any action except as expressly set forth herein, or C, disclose any information. [00:15:00] Speaker 03: That's one paragraph. [00:15:01] Speaker 03: Another paragraph is at page 634 of the joint appendix. [00:15:07] Speaker 03: It's paragraph 10. [00:15:09] Speaker 03: of the agreement, it states, this agreement represents the entire agreement of the parties and supersedes all prior communications, agreements, and understandings between the parties relating to the subject matter hereof. [00:15:23] Speaker 03: The agreement may not be modified, amended, or waived except by a written agreement signed by the representatives of the parties signing below. [00:15:34] Speaker 00: Those are the two provisions you rely on. [00:15:36] Speaker 03: Those are the primary provisions, also the purpose [00:15:40] Speaker 03: The purpose expressly states in the first paragraph of the letter that encompasses this agreement, it's joint appendix page 632, it's about four or five lines down, it says the purpose of these disclosures will be to determine whether our company and your companies may enter into a commercial relationship. [00:16:00] Speaker 03: And then it gives a capital definition purpose. [00:16:04] Speaker 03: And also, and then paragraph 12 parenthetically also says- [00:16:10] Speaker 05: purpose take on even a little more importance for us in the court with regard to construing the contract because they create a convention called purpose and then they use purpose, for example, in paragraph 1C. [00:16:31] Speaker 05: Parties are assisting you for the purpose. [00:16:34] Speaker 03: Yes, Your Honor. [00:16:34] Speaker 05: The purpose being to see if you can find a commercial relationship. [00:16:40] Speaker 03: That's right. [00:16:40] Speaker 05: As opposed to, from your adversary's view, the purpose would have been for the Coca-Cola company to protect its information. [00:16:49] Speaker 05: That's right. [00:16:50] Speaker 05: We're talking purpose. [00:16:51] Speaker 05: Is there any place else? [00:16:54] Speaker 05: Well, in 2A, we also see the purpose cited again. [00:17:01] Speaker 03: It's 2A, and then it's throughout. [00:17:05] Speaker 03: It appears in 2C as well. [00:17:10] Speaker 03: only using the confidential information. [00:17:12] Speaker 03: The confidential information is the Coca-Cola. [00:17:14] Speaker 05: I'm not trying to help you here, sir, but I mean, as you will notice, I am helping you. [00:17:20] Speaker 05: The task for the court is to come to the correct, we believe, true interpretation of what the NDA is. [00:17:31] Speaker 03: Yes. [00:17:32] Speaker 03: And then there is, I should also say, for completeness, apart from the purpose, paragraph 6 also [00:17:39] Speaker 03: states that the agreement is not a grant of any right or a license under any intellectual property rights of any of the parties. [00:17:50] Speaker 03: And then paragraph 12 talks about some of the provisions that we just discussed, including paragraph 7 on payment and paragraph 10 on being the entire agreement of the parties will survive the termination of this agreement indefinitely. [00:18:09] Speaker 03: So this [00:18:10] Speaker 03: Taken as a whole, this document covers what happened when Ethox said to the Coca-Cola company, here is a molecule that probably won't work. [00:18:26] Speaker 03: Probably a reasonable molecule. [00:18:34] Speaker 03: If I may, I don't know if your honors have any other questions about the agreements and the preemption. [00:18:40] Speaker 03: I'll say briefly on the preemption issue, we believe that the TAVERI, the NTP case with respect to the part of the damages request that is looking for forward-looking royalties is on point. [00:18:54] Speaker 03: Essentially, that EFox is attempting to circumvent the statute that says there is no accounting for joint inventors, even if, and I'll get to the inventorship question in a second, [00:19:05] Speaker 03: But even if, assuming hypothetically, Dr. Tanner were entitled to be named as a co-inventor, there is no dispute that the Coca-Cola inventors are properly named as co-inventors on that patent. [00:19:18] Speaker 03: There should be no accounting or attempt to restrict Coca-Cola Company from freely exercising the patent. [00:19:26] Speaker 03: With respect to inventorship, very briefly, the issue that we have is that district court [00:19:35] Speaker 03: applied a standard looking at the conception of chemical compounds. [00:19:41] Speaker 03: Is the compound, have you disclosed the compound, have you disclosed a method of making it? [00:19:46] Speaker 05: What Ethox has now claimed... Isn't the truth of the matter on that issue that you all disagreed with what the legal standard was? [00:19:56] Speaker 05: for purposes of this, that your adversary was arguing in essence for the more rigorous standard, the compound standard, and you were arguing for a product standard, which was odd, but it was true. [00:20:10] Speaker 05: But then we find fact findings made by the district court that cover both bases. [00:20:17] Speaker 05: And it seemed to me that the problem with your argument is, oh, we should have used the product standard [00:20:23] Speaker 05: which the test would be whether or not there was a significant contribution to conception. [00:20:30] Speaker 05: And the district court has findings of facts where they say they referenced a substantial contribution test at page 20 of the decision, A36, and they decide the issue. [00:20:43] Speaker 05: So it looked to me like [00:20:44] Speaker 05: The magistrate judge, I believe it was. [00:20:47] Speaker 03: The magistrate judge, yes, Your Honor. [00:20:48] Speaker 03: It was tried before. [00:20:49] Speaker 05: The magistrate judge was looking at the situation and said, these parties can't agree on what the conception standard is, so guess what? [00:20:54] Speaker 05: All decided on both standards. [00:20:56] Speaker 05: And all decided in favor of Dr. Tanner on both standards. [00:21:00] Speaker 05: And that's what he did. [00:21:03] Speaker 05: I believe that's... And so you not only have to convince us that it was the wrong standard, but you'd have to convince us that the fact findings on the substantial contribution test were fairly honest. [00:21:13] Speaker 03: Under the correct standard. [00:21:14] Speaker 03: We believe there is no evidence to support conception of that which was not in the prior art. [00:21:20] Speaker 03: The compound. [00:21:22] Speaker 01: So there's no evidence to support the judge's fact-finding? [00:21:25] Speaker 03: The corroboration. [00:21:26] Speaker 03: The corroboration requirement. [00:21:27] Speaker 03: There is no evidence to support the corroboration requirement under the correct standard. [00:21:32] Speaker 03: And just very briefly, running down. [00:21:34] Speaker 05: The notebook entries? [00:21:35] Speaker 05: I'm sorry? [00:21:36] Speaker 05: His notebook entries? [00:21:38] Speaker 05: All he's talking about is he made a substantial contribution to using PIM for a particular purpose. [00:21:44] Speaker 05: Not that he invented PEM. [00:21:47] Speaker 05: PEM is a useful compound for purposes of helping to prevent the release of gas through the plastic. [00:21:55] Speaker 03: Dr. Tanner. [00:21:56] Speaker 05: I'm sorry, Your Honor, were you finished? [00:21:58] Speaker 05: And he says, this is what I'm looking for. [00:22:01] Speaker 05: This is the substance, the compound I found, PEM. [00:22:05] Speaker 05: I have my notebooks. [00:22:06] Speaker 05: I've showed you how to make this stuff. [00:22:09] Speaker 05: And I'm the one that is saying, I think we ought to give PEM a try. [00:22:14] Speaker 05: And so the district court said, well, he doesn't have to have conceived the whole thing. [00:22:18] Speaker 05: He has to make a substantial contribution to conception. [00:22:21] Speaker 05: And since he's the one that popped him off the shelf, that's a contribution because nobody else did it. [00:22:29] Speaker 05: And then he went in the lab and played with the stuff and figured out how he could make it and entered it in his notebooks. [00:22:36] Speaker 05: His notebooks are corroborative, right? [00:22:39] Speaker 03: His notebooks are corroborative of the molecule and the method of making it. [00:22:42] Speaker 03: Under the Eli Lilly case, [00:22:44] Speaker 03: That is not an inventive contribution, because that material was in the prior art, and it's undisputed. [00:22:51] Speaker 05: The material was in the prior art, but the use of it for this purpose was not known. [00:22:57] Speaker 05: Your geniuses down in Atlanta couldn't come up with this. [00:23:03] Speaker 05: And so the whole notion that one ordinary skill in the art was, I mean, Dr. Tanner was like a bozo if anybody could have done this. [00:23:10] Speaker 05: That's not so. [00:23:10] Speaker 05: The record doesn't show that. [00:23:12] Speaker 05: And the finding of facts supports what I'm saying. [00:23:16] Speaker 03: Your Honor, with respect to what Ethox is now claiming they invented, this is not what happened at the outset of the case. [00:23:22] Speaker 03: The invention report was simply the molecule and method of making. [00:23:26] Speaker 05: They overshot. [00:23:27] Speaker 05: They said, you know, we invented him. [00:23:29] Speaker 05: Well, fine. [00:23:30] Speaker 05: That's not true, apparently. [00:23:33] Speaker 05: But they were the ones that, you know, how many million molecules were there out there that fit within your category? [00:23:41] Speaker 05: and that your people had come up with five, not including Pam. [00:23:46] Speaker 05: And Dr. Tanner, for one reason, goes into the inventory where they keep this stuff and says, hmm, give this one a try. [00:23:55] Speaker 03: There was a pre-existing Formula 2 genus claim that covered this compound before Coca-Cola ever met with Dr. Tanner. [00:24:03] Speaker 03: There are no unexpected results alleged to have come out as a result of this. [00:24:08] Speaker 05: And there is no... And the law says that the species isn't obvious in the light of the disclosure of the genus. [00:24:14] Speaker 03: And there's no corroboration for the gas barrier additive. [00:24:18] Speaker 03: Dr. Tanner admitted... You know you're running up against your time. [00:24:21] Speaker 03: Thank you, Your Honor. [00:24:22] Speaker 03: And I would just finish with this, and I reserve my two minutes for a vote, if I may. [00:24:26] Speaker 03: There is... Dr. Tanner admitted on cross-examination that everything with respect to the gas barrier additive [00:24:33] Speaker 03: function of that he got from the Coca-Cola Company. [00:24:35] Speaker 03: His patent application copied, with respect to that portion of the evidence, everything that was in the Coca-Cola Company's prior patent application. [00:24:44] Speaker 03: He did not contribute to that. [00:24:45] Speaker 03: Thank you, Your Honor. [00:24:58] Speaker 01: You do agree that the molecule was known in the prior art? [00:25:04] Speaker 02: Absolutely. [00:25:05] Speaker 02: We've conceded that that was part of the trial evidence that was before the judge, and the judge found that. [00:25:11] Speaker 02: Getting back to the preemption argument, that was the mistake. [00:25:13] Speaker 02: We had informed the judge at the time, that's not the appropriate thing to look at. [00:25:18] Speaker 02: It's the molecule as a gas barrier additive. [00:25:21] Speaker 02: And I think there's ample proof. [00:25:23] Speaker 02: The judge did a magnificent fact-finding, very thorough, starting at page 20. [00:25:28] Speaker 02: of the appendix and going through, where he looked through each and every one of these elements. [00:25:33] Speaker 02: And he found that there was collaboration, that there was conception, that there was corroboration, that there was claims. [00:25:42] Speaker 02: Claim 11 goes directly to the inventions that Dr. Tanner brought forward to the Joint Invention Group. [00:25:50] Speaker 02: And the fact is that Coca-Cola didn't do it. [00:25:53] Speaker 02: $18.5 billion. [00:25:55] Speaker 02: Sorry. [00:25:55] Speaker 05: Because the invention here, hey, [00:25:58] Speaker 05: chemical invention or is it a bottle product? [00:26:01] Speaker 02: It's a chemical invention, I think. [00:26:04] Speaker 05: I think you thought that because you strapped yourself with a higher burden in the district court. [00:26:09] Speaker 02: And I think we've talked about this time and again. [00:26:11] Speaker 02: I think the answer is we wanted to meet that higher burden because we believe that if you're taking chemicals and putting them together to form something eventually, [00:26:18] Speaker 02: You have to understand how those work. [00:26:19] Speaker 02: And I think that's what Dr. Tanner brought to this. [00:26:22] Speaker 02: And what's interesting about Dr. Tanner, he didn't forward all of it. [00:26:24] Speaker 05: That's an interesting question. [00:26:25] Speaker 05: Probably the most interesting question in the case to me is, which standard do you use in the circumstance where you have a product that's made up of compounds? [00:26:34] Speaker 05: Would you have a case that tells us which way we go on this one? [00:26:38] Speaker 02: I think when we look at what standard we're using for inventorship, you're looking at just the general inventorship standard. [00:26:44] Speaker 02: I mean, in order to have a conception. [00:26:45] Speaker 05: But you're not actually claiming PAM. [00:26:47] Speaker 05: which is what we're talking about here. [00:26:48] Speaker 02: That's right, Your Honor. [00:26:49] Speaker 02: I'm not claiming PEM. [00:26:50] Speaker 05: You can't claim PEM because PEM belongs to somebody else. [00:26:52] Speaker 05: So PEM is like it's just something on the shelf that belongs to the world. [00:26:57] Speaker 05: And you're going to stick it in and you're going to put some PEM in your bottle. [00:27:00] Speaker 01: That's correct. [00:27:01] Speaker 05: Does that make this a compound? [00:27:04] Speaker 05: PEM doesn't make it a bottle. [00:27:06] Speaker 02: It treads the line, I would say, Your Honor. [00:27:08] Speaker 02: I really think it does. [00:27:09] Speaker 05: I'm asking you, do you know a case that tells me how does Clevenger, who is not very bright about this, how does he know [00:27:16] Speaker 05: which one of the tests to use where I have a product that's got a compound in it, but it's not claiming the compound. [00:27:26] Speaker 02: I can't think of a case that actually explicitly does that. [00:27:29] Speaker 02: I can think of cases that say, this is a chemical compound. [00:27:33] Speaker 02: We have conception in this level. [00:27:35] Speaker 05: Now would you agree, you heard my characterization earlier, it looked to me like the magistrate judge realized that he had this problem, he didn't know which standard to apply, so he decided the case based on both. [00:27:48] Speaker 02: And we went before the judge with the higher standard, with the idea that we would make the proofs to that, and we did. [00:27:54] Speaker 02: So I think in this case, we've got that higher standard proof. [00:27:58] Speaker 05: Well, if I disagree with your adversary, I disagree with your good adversary, Coca-Cola, and say, well, I think there is substantial evidence to support and better ship on the test that he would apply, then we don't need in this case to decide the thorny issue as to which standard is the correct one. [00:28:17] Speaker 02: You can win on either one. [00:28:19] Speaker 02: I think I can win on either one. [00:28:20] Speaker 02: I think we've presented evidence. [00:28:21] Speaker 02: I think the district court found that. [00:28:23] Speaker 02: And so we've got [00:28:24] Speaker 05: You know, a situation where the other courts are only supposed to do what they have to do to assign cases. [00:28:29] Speaker 05: And if you have a, in this particular case, it may be that it doesn't really matter what standard was used. [00:28:36] Speaker 05: And in some other case, it may make a lot of difference what standard applies. [00:28:40] Speaker 05: So maybe I wait until that case to decide the tricky issue. [00:28:43] Speaker 02: But I think that the answer here is that when you have the significant contribution that Dr. Tanner had to claim 11 to what is claimed in the 265 patent, [00:28:55] Speaker 02: You're going to find A, he's an inventor, and that's really the important thing, whether or not he is an inventor here. [00:29:00] Speaker 02: And I think when you go through the issues of that, you kind of understand that he has done all the things necessary. [00:29:09] Speaker 02: And with that on inventorship, the one thing I would point out in reply with respect to the nondisclosure agreements is COPE was a drafter of these agreements. [00:29:18] Speaker 02: They call them nondisclosure agreements. [00:29:20] Speaker 02: It had one subject matter. [00:29:21] Speaker 02: That was the confidential information. [00:29:23] Speaker 02: The provisions that were cited, the no pay provision, or this, there is no obligation to pay and I could read the language back into the record, but that really relates to, I don't have to pay you for showing me information, you don't have to pay me for seeing and holding the information, that's it. [00:29:38] Speaker 02: That's how contextually those provisions read. [00:29:41] Speaker 02: And the subject matter that is pointed to in the merger clause is just that. [00:29:46] Speaker 02: The subject matter is post-confidential information and it's non-disclosure provision. [00:29:50] Speaker 05: Remember the member from IGOT was torts? [00:29:52] Speaker 05: When we were back in law school and they talked about the trap for the unwary. [00:29:57] Speaker 02: Yes. [00:29:58] Speaker 05: There's such a thing, you know, it's ancient in law tech, but the client entered a trap for the unwary. [00:30:06] Speaker 05: Well, I think that... You sign a contract that says there's no money is going to change hands under this contract. [00:30:12] Speaker 02: That's true. [00:30:13] Speaker 05: This is a non-disclosure agreement, like a material transfer agreement, and there are a lot of these things... You knew right away that, assuming that Dr. Tanner charged by the hour, the way good lawyers do, [00:30:22] Speaker 05: his time value of what he was doing, that whatever he was doing, that the company wasn't going to get any reimbursement from Coke. [00:30:33] Speaker 02: Doing the BPO-1 work, the lead-up work? [00:30:35] Speaker 02: That's true. [00:30:36] Speaker 05: They say no money. [00:30:37] Speaker 05: This is absolutely airtight. [00:30:40] Speaker 05: No money is being transferred from the Coca-Cola company to you, period. [00:30:44] Speaker 02: Well, but that's not the context of what the agreement is. [00:30:47] Speaker 02: That's the context of what happened between the parties. [00:30:49] Speaker 05: Well, I'm just saying, even for the time it would take to read the information they gave you, the value of the time. [00:30:56] Speaker 05: And maybe their information is hard to understand. [00:30:58] Speaker 05: And so maybe you even had to hire a lawyer to come in and look at what they gave you. [00:31:03] Speaker 05: You knew you weren't going to get any money back from that. [00:31:05] Speaker 05: Because any money expended in connection with protecting their information, you would have to admit you wouldn't get. [00:31:11] Speaker 02: And what we're seeking here is unjust enrichment. [00:31:13] Speaker 02: I'm just saying it's like walking into a bear trap. [00:31:16] Speaker 02: It could be considered that way. [00:31:18] Speaker 02: I would say that what they're doing is trying to work collaboratively with Coca-Cola and confidentially with Coca-Cola to get to an end result. [00:31:25] Speaker 02: And the fact is, unjust enrichment related to that which was not part of the contract and dealt with the kind of the activities that Coca-Cola decided to undertake [00:31:34] Speaker 02: covertly take the PEM molecule and the testing. [00:31:37] Speaker 05: Your problem on the unjust harassment is that the cases that favor you are all bad guy cases. [00:31:44] Speaker 05: They're cases like with your bilateral contract the second year where you clearly got some rights. [00:31:50] Speaker 05: It's their whole argument is we didn't steal from you because you gave us. [00:31:58] Speaker 05: what we took. [00:31:59] Speaker 05: So that distinguishes you from the body of law that had said, oh, there's no preemption problem when what you're simply trying to do is to vindicate your rights, assuming from whom things were stolen. [00:32:12] Speaker 02: And I would say, Your Honor, that when we look at this, we're looking at kind of molecular and looking at Xerox, but the idea that there's a belief that the parties are in this confidential relationship, that there's nothing that's going to happen to disturb that, and that this is enough. [00:32:27] Speaker 02: And with that, we think that with respect to the NDAs and the preemption, the judge committed legal error, and the judge should be reversed on that, partially with the finding that there is an error on finding that PEM was in the prior art. [00:32:40] Speaker 02: And with respect to inventorship, we believe that the judge got it absolutely right that Dr. Tanner is an inventor of the 265 patent, and so should be named as the district court determined. [00:32:50] Speaker 01: Thank you, Your Honor. [00:32:54] Speaker 01: Mr. Gerritsen, four and a half minutes. [00:32:57] Speaker 03: Thank you, Your Honor. [00:32:59] Speaker 03: I wanted to briefly address the question that you raised, Judge Clevenger, with respect to what is the invention here. [00:33:05] Speaker 03: This is not a compound patent. [00:33:08] Speaker 03: Claim 11 of the 265 patent, which is the only claim that Dr. Tanner asserts that he is a co-inventor of, incorporates Claim 1 because it's dependent from that claim. [00:33:19] Speaker 03: And there are a number of elements to that. [00:33:21] Speaker 03: There's a container, [00:33:23] Speaker 03: that has a polyester, a creep control agent, a gas barrier enhancing additive that has a particular proportion of the creep control agent, and it also at the very end says we're in... I'll ask you the same question about the body of our precedent. [00:33:37] Speaker 05: Yes. [00:33:37] Speaker 05: Are you aware of a case that has presented this precise question, which is, how do you decide if you take clearly a product claim that is chock full of compounds, so to speak, [00:33:50] Speaker 05: Which way do you go over the standard? [00:33:53] Speaker 01: And by the way, what's your secret ingredient? [00:33:58] Speaker 03: I'm not at liberty to discuss that. [00:34:00] Speaker 03: Even if I knew, which I don't, they keep it in the vault. [00:34:04] Speaker 03: I believe, I am not aware of a case that is a chemical compound case that is directly on point. [00:34:10] Speaker 03: But I believe that the Nartron case is on point and is not limited only to non-chemical inventions. [00:34:16] Speaker 03: In that case, [00:34:17] Speaker 03: There was an adjuster for a lumbar support extender that was provided as the sole, allegedly new element of a dependent claim to the named inventors. [00:34:29] Speaker 05: And there was no... That's not quite the same setting. [00:34:32] Speaker 05: I mean, the setting we have here is that you've got... I mean, Dr. Tanner was clearly... He was a million miles away from the Coke bottle, the plastic bottle. [00:34:44] Speaker 05: He was in the laboratory playing with compounds. [00:34:48] Speaker 05: That's what he's doing. [00:34:50] Speaker 05: And he's looking at the compound. [00:34:52] Speaker 05: And although the compound isn't actually claimed as such, it is the key ingredient in at least one of the claimants' suit. [00:34:59] Speaker 05: And so what's the foul? [00:35:01] Speaker 05: Why would we assume that we have to decide this issue, which I personally don't think we have to, because I think we can allide it. [00:35:08] Speaker 05: But assume we had to, what's wrong with? [00:35:10] Speaker 05: saying we're going to treat this class of cases as compound cases or the inventorship test. [00:35:16] Speaker 05: It produces a higher test. [00:35:19] Speaker 05: It's a harder test to meet than the product test. [00:35:23] Speaker 05: So that's a good idea, right? [00:35:24] Speaker 05: We want to have strict tests. [00:35:26] Speaker 05: So what would be wrong with disagreeing with you here as a matter of law? [00:35:31] Speaker 05: And why would you, in a law school classroom, argue that we'd make a mistake by taking the higher standard? [00:35:39] Speaker 03: Because I think that the principle that is kind of applied in Nartron about whether or not somebody made a significant contribution to the invention is something that does need to be assessed on a case-by-case basis. [00:35:52] Speaker 05: I don't know that this is a good case for a bright line chemical compound patent rule, because there are... A significant contribution, recognizing that it doesn't require the complete conception of the whole gamish, [00:36:06] Speaker 05: is so much a lower standard than the notion that you have to be fully aware of the compound in your mind and the rest of the other tests. [00:36:16] Speaker 05: You're not going to argue that the test you're asserting is a less rigid test, are you? [00:36:24] Speaker 03: I think part of the disconnect is, what is the invention here? [00:36:27] Speaker 03: They are claiming that they came up with this as a gas barrier additive. [00:36:33] Speaker 03: not, their invention disclosure only supports that they came up with a compound and a method of making it. [00:36:40] Speaker 03: And so when you look at whether or not their contribution of, the only thing that they can substantiate that they actually provided... You're talking about their invention? [00:36:50] Speaker 03: No, what I'm talking about is what they can corroborate, what they can substantiate with corroboration that they came up with, which is the molecule and the method of making it, which were in the prior art and are under the Formula 2 [00:37:02] Speaker 03: pre-existing claim of coca-cola's claim one in the prior application and so that their Contribution the only contribution that there's evidence of that they made was the compound and the method of making it which was in the fire for this model for this Coca-cola column is that we have a very specific purpose in mind our Sign is probably the best in the whole world haven't able to figure it out So we're outsourcing this problem scientific problem [00:37:31] Speaker 05: And presumably the folks at Koch knew about PEM, right? [00:37:36] Speaker 05: Because it was in the prior art. [00:37:38] Speaker 05: If they had never came to their mind that PEM would be useful, why my goodness? [00:37:42] Speaker 05: If they had knew that PEM would be useful, they never would have come to these other people. [00:37:48] Speaker 05: So it's the specific use of PEM for a specific targeted purpose. [00:37:55] Speaker 05: It's what I think they're saying Tanner came up with. [00:37:58] Speaker 03: And our position is that there is no evidence in the record that corroborates that that is what he came up with. [00:38:03] Speaker 03: He came up with the molecule. [00:38:05] Speaker 03: He came up with the method of making it. [00:38:06] Speaker 03: It is the Coca-Cola company that came up with those, with that use. [00:38:11] Speaker 03: And the record is clear. [00:38:12] Speaker 03: Thank you, Your Honors. [00:38:13] Speaker 03: Appreciate it. [00:38:15] Speaker 03: Thank you, Counsel. [00:38:16] Speaker 03: Medicine submitted.