[00:00:26] Speaker 08:
There are two fundamental errors committed by the District Court this morning I want to focus on.

[00:00:51] Speaker 08:
First is the unsupported summary judgment order rejecting Briggs's invalidity defenses.

[00:00:57] Speaker 08:
The second is allowing the plaintiff to apply the entire market value rule when none of the factors were attempted and proven.

[00:01:06] Speaker 08:
There are many avenues to begin the discussion of the summary judgment order.

[00:01:10] Speaker 08:
This is the sole cited basis for the order is the re-exam, the ex parte re-exam.

[00:01:16] Speaker 08:
Let's start there and talk about the history of the re-exam.

[00:01:20] Speaker 08:
In the re-exam, the examiners rejected the claim at issue under simplicity under the district court's construction.

[00:01:28] Speaker 08:
So if we stop there historically, it would make no sense for the district court to say, well, based on the re-exam, I find no reasonable jury.

[00:01:37] Speaker 08:
This is summary judgment we're talking about.

[00:01:39] Speaker 08:
No reasonable jury could find these claims invalid in light of simplicity when an examiner found, based on the district court's construction, that very claim invalid in light of simplicity.

[00:01:50] Speaker 08:
So then what happens?

[00:01:51] Speaker 08:
We go up to the appeal, the PTAB appeal.

[00:01:54] Speaker 08:
PTAB appeal says, examiner, you've got the claim construction wrong.

[00:01:58] Speaker 08:
It's too broad.

[00:02:00] Speaker 08:
I'm going to narrow it.

[00:02:01] Speaker 08:
Under the narrower construction, simplicity doesn't in and of itself anticipate.

[00:02:07] Speaker 08:
And since the examiner didn't do the obvious analysis, it didn't know it had to because it was operating under a different claim construction, we're going to kick this ex parte re-exam.

[00:02:17] Speaker 08:
We're going to say the claims are OK.

[00:02:19] Speaker 08:
All right.

[00:02:20] Speaker 08:
Well, of course, what we stood ready to do at trial, if the district court had changed its construction to adopt what the PTAP appellate board did, was argue the facts under this revised claim construction.

[00:02:35] Speaker 08:
One of two things must be true.

[00:02:37] Speaker 07:
The parties here agreed on a claim construction for a flow control baffle, right?

[00:02:42] Speaker 08:
And under that construction, that's right, Your Honor, under that construction, the examiner found the claims invalid.

[00:02:48] Speaker 08:
So how could the district court have turned around and said,

[00:02:50] Speaker 00:
Based on the re-exam, I'm going to find no reasonable jury to find them in doubt.

[00:03:11] Speaker 00:
whether there's a genuine issue of material facts.

[00:03:14] Speaker 00:
That's kind of teed up for us in Greece.

[00:03:16] Speaker 08:
Understood, Your Honor.

[00:03:18] Speaker 08:
And there is a line here that a district court crosses where it's throwing its work in your lap and it's a jurisprudential or at least discretionary matter, you could say, at least tell us what limitation you found missing in the prior art.

[00:03:33] Speaker 08:
I mean, I'm here trying to prove a negative today because I don't know what limitation the district court reportedly found wasn't in the art.

[00:03:39] Speaker 03:
Well, let me just throw a housekeeping question.

[00:03:42] Speaker 03:
Supposing we agree with you as to the summary judgment, do we need to address the damages arguments?

[00:03:51] Speaker 08:
Your Honor, I think it would be worth reminding the District Court of the rules, because it so clearly did not apply the... No, there are two reasons, two times you apply the entire market value rule.

[00:04:03] Speaker 08:
You know the two standards, and it's admitted here that they didn't try to do that.

[00:04:07] Speaker 08:
We know your argument.

[00:04:08] Speaker 03:
I'm just asking as a housekeeping matter.

[00:04:11] Speaker 08:
We would suggest that it vacate and remind the District Court of the damages standard.

[00:04:16] Speaker 08:
I don't think you need to find a specific yes or no.

[00:04:20] Speaker 08:
But if we went back just on obviousness and the jury found we were wrong on obviousness or anticipation, we think it would still be error for the courts to say, all right, well then we're going to reinstate the prior damages award.

[00:04:31] Speaker 00:
What would happen at that point?

[00:04:33] Speaker 00:
I mean, so let's say there was a trial and the patent was found to be valid.

[00:04:38] Speaker 00:
What would happen at that point with that damages award?

[00:04:40] Speaker 00:
Would there be another appeal here on damages?

[00:04:46] Speaker 08:
district if your honor's believe that the district court got it right, or at least didn't abuse its discretion in allowing 5% on the entire royalty, then the district court would be free to say, I'm just reinstating.

[00:04:57] Speaker 08:
But with the admonition I'm asking from Judge Wallach to say, no, no, do this right the next time, we'd see.

[00:05:03] Speaker 08:
Hopefully it would do it right.

[00:05:05] Speaker 08:
You know, they argued 3% based on Georgia-Pacific and the Wright-Erikson standard, and it wasn't an abuse of discretion.

[00:05:12] Speaker 08:
We wouldn't be back here.

[00:05:14] Speaker 00:
Do you think that we need to address the damages issue if we vacate and remand on some of those?

[00:05:19] Speaker 08:
I do not believe you need to, Your Honor.

[00:05:22] Speaker 08:
I believe as a legal matter, as a matter of waiver, that you would not need to.

[00:05:27] Speaker 08:
What we just think would be preferable.

[00:05:29] Speaker 08:
But no, I don't believe you need to.

[00:05:30] Speaker 08:
What are his goodbyes?

[00:05:33] Speaker 08:
There have been footnotes where this court has suggested how a trial might avoid coming back up here on appeal.

[00:05:39] Speaker 08:
But I'm not in a position to tell the court how to handle its footnotes.

[00:05:43] Speaker 00:
What about the expert testimony where the expert admitted that the baffle doesn't meaningfully direct the airflow and grass cuttings at page A4510?

[00:05:52] Speaker 00:
Why isn't that sufficient for a basis for saying that there's

[00:06:01] Speaker 00:
no genuine issuer.

[00:06:03] Speaker 00:
That in and of itself makes it so no reasonable juror could find that this patent was satisfied by some person.

[00:06:10] Speaker 08:
Well, two things, Your Honor.

[00:06:13] Speaker 08:
So as a factual matter, that testimony was taken out of context.

[00:06:16] Speaker 08:
If you took, for example, a 6335, our expert, Mr. Del Ponte, who had 20 years of experience in the industry at Deere, specifically said that the flow control baffle controls flow in a meaningful way.

[00:06:27] Speaker 08:
In fact, logically, it has to because

[00:06:29] Speaker 08:
This is the wall, the front wall of the Simplicity Mower.

[00:06:34] Speaker 08:
The baffle goes lower and then out.

[00:06:37] Speaker 08:
So it actually is what's contacting the air.

[00:06:39] Speaker 08:
If anything's controlling flow, it has to be the baffle.

[00:06:42] Speaker 00:
Oh, is this at page 6, 335?

[00:06:45] Speaker 00:
Is it the same expert who's discussing who made the admission at page A, 4510?

[00:06:51] Speaker 08:
I'll look during the break, but I don't believe it is.

[00:06:55] Speaker 08:
Well, then that's not an admission, then, because our expert

[00:06:58] Speaker 08:
Mr. Del Ponte was our expert.

[00:07:00] Speaker 00:
Oh, I apologize.

[00:07:00] Speaker 00:
It is Mr. Del Ponte, page 845.

[00:07:03] Speaker 08:
I'll look at that as soon as I sit down.

[00:07:05] Speaker 08:
But he quite clearly said at 63.35 that it does control flow in a meaningful way.

[00:07:10] Speaker 08:
He said at 63.77 that it was obvious to space it apart at 58.31 that there's a motion to combine.

[00:07:17] Speaker 08:
And their own expert, Dr. Strachowski, admitted at 11.155 that it would have been obvious to space it apart.

[00:07:23] Speaker 08:
And this is when we get to the 103 analysis.

[00:07:25] Speaker 08:
We think under the district board's construction,

[00:07:27] Speaker 08:
We had a heck of a 102 case on simplicity that we don't even need to get to the meaningful flow.

[00:07:32] Speaker 08:
And again, that's the PTAF's construction, not the district court's construction.

[00:07:37] Speaker 08:
So the district court's construction doesn't require any meaningful flow.

[00:07:41] Speaker 08:
It's just the space of the plot.

[00:07:43] Speaker 00:
So even some minimal amount of flow, some negligible amount of flow, would turn it into a baffle.

[00:07:50] Speaker 08:
Your Honor, that's a really interesting question because

[00:07:53] Speaker 08:
what really the PTAB was saying, although it didn't use the languages, if you've got a wall, and this is not actually how simplicity works, but this is their understanding, if you've got a wall and put a piece of metal next to it, that piece of metal, that might be what's directing the flow, but come on, it's just mirroring the shape of what was already there.

[00:08:12] Speaker 08:
So the PTAB's construction wasn't even really just that it has to have a meaningful flow, it's that there has to be a spaced apart.

[00:08:20] Speaker 08:
In other words, there has to be a meaningful effect

[00:08:23] Speaker 08:
as opposed to its absence.

[00:08:25] Speaker 08:
So, it really wasn't the construction that was the basis of reversal, it was its construction of its construction.

[00:08:32] Speaker 07:
I realize that was a hard one.

[00:08:34] Speaker 07:
So, what's wrong with that line of thinking in terms of understanding

[00:08:40] Speaker 07:
what's really going on in simplicity.

[00:08:42] Speaker 08:
Because it's undisputed that the bolted-in baffle, and remember, you start with a mower and then you bolt in the baffle, it is undisputed that the airflow and the grass clippings are only coming into contact with and are being directed entirely by what's bolted in.

[00:08:56] Speaker 08:
Now, their argument is, well, if you hadn't bolted it in, it would be affected by the outer wall, but that's not the point.

[00:09:02] Speaker 07:
Well, I think the line of thinking that PTO had was, what if you just lined the

[00:09:09] Speaker 07:
interior front wall of the mower deck with a long sticker.

[00:09:15] Speaker 07:
So that now, as a technical matter, the air and grass clippings aren't coming in contact with a sticker and not the actual interior surface of the front wall.

[00:09:25] Speaker 07:
Nobody would really in their right mind think the sticker is a baffle or a control flow baffle.

[00:09:32] Speaker 08:
Your Honor, first of all, I would respond that that's not what happens here.

[00:09:36] Speaker 08:
We have sections of the simplicity

[00:09:39] Speaker 08:
that jut out and form part of the claim language.

[00:09:43] Speaker 08:
The V-shaped part of the simplicity is the straight of curve-straight-curve that in a chord-like fashion forces the error.

[00:09:50] Speaker 08:
So this isn't a tricky way to avoid infringement or get it in validity.

[00:09:55] Speaker 07:
But the second point of that is that that still would raise an obviousness question because... I'm sorry, those pieces that stick out, the V-shaped pieces, those are part of your curve-straight-curve?

[00:10:08] Speaker 07:
Yes, I was under the impression it's really the brackets or whatever you want to call them that go along the interior of the front wall that there's a curve, there's a straight portion, and then finally there's a curve that kind of gets you around or a little bit around the second cutting area.

[00:10:25] Speaker 08:
Let me respond to that directly, but first let me note that Dr. Strachowski admitted at 11159 and 9445 that there's a curved straight curve in the soliciting.

[00:10:36] Speaker 08:
But with respect, if I may turn my back just so I get the orientation right.

[00:10:40] Speaker 08:
So you've got this curve that is part of the baffle that also parallels the wall.

[00:10:47] Speaker 08:
And then it comes out.

[00:10:48] Speaker 08:
And that's the straight that pushes the air and the- Do you think you could actually refer to the photo?

[00:10:55] Speaker 00:
Yeah, absolutely.

[00:10:55] Speaker 00:
I think that might be helpful.

[00:10:57] Speaker 01:
I was trying to find a board with some listening on it that I'm planning to use.

[00:11:01] Speaker 07:
If you would like to use it.

[00:11:02] Speaker 07:
That's OK.

[00:11:02] Speaker 07:
That's OK.

[00:11:02] Speaker 07:
Thanks.

[00:11:04] Speaker 08:
Yeah, I'm happy to.

[00:11:04] Speaker 07:
You're talking about the V-shaped

[00:11:06] Speaker 07:
part that sticks out into the interior.

[00:11:09] Speaker 08:
So this is curved, this is straight, and that's the V-shaped part that sticks out.

[00:11:15] Speaker 08:
And that's what the chord limitation, meaning that if you imagine a line of force or a line of airflow, it cuts into the circle of the next blade.

[00:11:25] Speaker 08:
So that's curved and that's straight.

[00:11:27] Speaker 08:
And the straight is not, if you took out the baffle,

[00:11:30] Speaker 08:
There wouldn't be straight there.

[00:11:33] Speaker 07:
What's the second arcuate portion, under your understanding?

[00:11:36] Speaker 08:
This is now arcuate.

[00:11:37] Speaker 08:
So to the left, it starts with the other part of the V and then continues around to the front.

[00:11:44] Speaker 08:
And that's what Dr. Strachowski admitted.

[00:11:47] Speaker 08:
Again, this is undisputed testimony.

[00:11:50] Speaker 08:
Curved, straight, curved.

[00:11:55] Speaker 00:
So you're including, that includes part of the triangular piece, which simplicity itself refers to as a baffle.

[00:12:01] Speaker 08:
That's correct.

[00:12:02] Speaker 08:
That's correct, Your Honor.

[00:12:04] Speaker 08:
So I'm already a little on time.

[00:12:06] Speaker 08:
Do we want to talk about it for a minute, or should we continue to focus on this?

[00:12:10] Speaker 08:
Because I would note that just in terms of, to get in the record, there is more than ample evidence that there are both in baffles.

[00:12:17] Speaker 08:
This is at 1040.

[00:12:18] Speaker 08:
I talked about the admission of curve, straight curve.

[00:12:21] Speaker 07:
I want you to talk about the damages, the expert report.

[00:12:25] Speaker 08:
So there is no dispute that Exmark never tried to prove that the particular baffles at issue drove demand.

[00:12:31] Speaker 08:
In fact, they never proved that baffles as a whole drove demand.

[00:12:35] Speaker 00:
Do they have to do that when the claims are directed to a blind mower?

[00:12:38] Speaker 00:
And there's various elements in the claims, a baffle, a power source, I think, a cutting blade.

[00:12:45] Speaker 08:
So Your Honor, I think this court has a chance to make clear what has been implicit in many cases before.

[00:12:53] Speaker 08:
In the Alice case,

[00:12:54] Speaker 08:
Many others, this court has said, form doesn't rise over substance when it comes to how we're going to deal with damages.

[00:13:01] Speaker 08:
And we cited four or five district court cases that have said that you don't get the value of the entire car for a new cup holder by saying a car comprising a brand new cup holder.

[00:13:14] Speaker 00:
What about our cases that say things like, you definitely need to think about just the improved feature.

[00:13:23] Speaker 00:
and account for it, but why can't you do that with the, why do you have to do it with both the base and the rate?

[00:13:29] Speaker 00:
I mean, here you've got an argument that their expert didn't do it with the base or the rate, but why does it have to be the base?

[00:13:36] Speaker 08:
Your Honor, that's what Erickson directly dealt with.

[00:13:38] Speaker 08:
Erickson, D-Link, some people call it D-Link, I call it Erickson, specifically said, look, as a mathematical matter, one times five equals five times one.

[00:13:46] Speaker 08:
But we find, the Federal Circuit finds as a matter of law, that it is too likely to lead to juror confusion, to try to do apportionment with rate as opposed to base.

[00:13:55] Speaker 08:
That is a decided issue of law that you have to do apportionment.

[00:14:00] Speaker 00:
And I want to make one thing.

[00:14:01] Speaker 00:
Possibly in a standards context, though.

[00:14:03] Speaker 00:
Do you think that applies to all contexts?

[00:14:06] Speaker 08:
I am not aware of any case that said you can permissibly, obviously you can mathematically, but as a matter of charging the jury,

[00:14:16] Speaker 08:
or accepting expert testimony.

[00:14:18] Speaker 08:
I'm not aware of any case that says you are permitted to apportion through the rate, not the base.

[00:14:24] Speaker 08:
And particularly here, I'm not sure this is as clear in the briefing as I would have liked, but the baffle was actually separately sold.

[00:14:31] Speaker 08:
Now, counsel argued that that sales price was not an accurate reflection of its value.

[00:14:35] Speaker 08:
Fine, we can fight that out in front of the jury.

[00:14:37] Speaker 08:
But there's no dispute here that the curve-straight-curve baffle was actually separately sold.

[00:14:47] Speaker 08:
18048, for example.

[00:14:49] Speaker 08:
And so we don't have to get into the vernetics question of whether we're going to small assailable unit or whether we have to parse that out.

[00:14:57] Speaker 08:
The question was, you sold this thing.

[00:14:59] Speaker 08:
What's the proper royalty?

[00:15:00] Speaker 08:
If they want to say that because they were making accommodations to customers, they artificially depressed the price, fine, that's a fact issue for the jury.

[00:15:07] Speaker 08:
But what's not a fact issue, what shouldn't have gone to the jury, is we need to know what your expert's view of the baffle is.

[00:15:15] Speaker 08:
not a percentage of them over as a whole.

[00:15:18] Speaker 00:
Can you cite to a single federal circuit case where the claim was directed to something, you know, that was the same as the infringing product.

[00:15:28] Speaker 00:
And we said, nonetheless, even though the claim is directed to the product, because what you really have here when we look at the spec and we look at the claim and maybe even admissions is just an improvement of one feature

[00:15:44] Speaker 00:
you should be limited to that feature.

[00:15:45] Speaker 08:
Remarkably, your honor, this court has not decided that precise issue one way or the other.

[00:15:51] Speaker 08:
A number of district courts have read your advice, your guidance that you look at form, not substance of claim drafting, including in the Alice case and others.

[00:16:03] Speaker 08:
But you're being asked for the first time, I think, to say one way or the other at this level.

[00:16:10] Speaker 08:
And with that, I think my initial time is up.

[00:16:11] Speaker 08:
I'll give you a couple of minutes.

[00:16:21] Speaker 01:
Good morning, Your Honors.

[00:16:22] Speaker 01:
May it please the Court?

[00:16:24] Speaker 01:
Unless you want to direct me somewhere else, I'm going to jump right into the issues of Mr. Wolf.

[00:16:28] Speaker 07:
How about where did Ms.

[00:16:29] Speaker 07:
Bennis come up with the 5% number?

[00:16:31] Speaker 07:
I mean, I think the other side, Mr. Wolf's side, has a point to make that when you start with your base as being the ultimate end product, this big tractor mower that has a lot of different features, a lot of different things that go into making an effective one, and one of them is

[00:16:50] Speaker 07:
what's going on in the business and underneath the mower deck.

[00:16:56] Speaker 07:
We've said over and over again, if you're going to pick that as the base, you have to be hyper vigilant that you're going to do the apportionment exercise through the rate.

[00:17:08] Speaker 07:
And we are going to scrutinize that.

[00:17:11] Speaker 07:
And here, what I saw when I read the expert report was something that was more on a qualitative level of

[00:17:19] Speaker 07:
how nice it is to have improved cut quality.

[00:17:23] Speaker 07:
And there are advantages to having improved cut quality.

[00:17:27] Speaker 07:
And then all of a sudden, out of a hat comes the 5% number.

[00:17:32] Speaker 07:
And so that, I'm telling you, really concerned me and worried me about the legitimacy of this verdict.

[00:17:42] Speaker 01:
Well, let's start with the Georgia Pacific.

[00:17:45] Speaker 01:
as George Pacific factors has been applied for decades and is accepted as a way to come up with the value of the invention.

[00:17:54] Speaker 07:
It doesn't directly suggest- I understand that, but let me make it clearer to you.

[00:17:59] Speaker 07:
What I saw was a qualitative discussion of the merits of the invention and then a number picked, five percent, that

[00:18:10] Speaker 07:
If she had said 2% or 11% or 6.4%, there would be just as strong a connection to everything that she had said in the first 40 pages as the number 5%.

[00:18:23] Speaker 07:
And so that's where everything got very random for me.

[00:18:27] Speaker 07:
Please explain.

[00:18:28] Speaker 01:
But her analysis ultimately wasn't the result of a mathematical calculation.

[00:18:34] Speaker 01:
Clearly not.

[00:18:35] Speaker 01:
But it was based in mathematical quantitative data.

[00:18:39] Speaker 01:
And we go through a number of these in our brief, but let me hit on a couple of the high points.

[00:18:44] Speaker 01:
One, of course, is the SCAD license, the settlement of the earlier litigation involving this very same patent, at 3.25%.

[00:18:55] Speaker 07:
Wasn't there more than one patent involved in the settlement?

[00:18:59] Speaker 01:
But the agreement at 3.25% was on any patent that was used by SCAD.

[00:19:06] Speaker 01:
So that is a very specific quantitative data point that, you know, certainly 5% is higher than 3.25.

[00:19:14] Speaker 01:
But of course, in that case, there was validity was a real relationship.

[00:19:19] Speaker 01:
We all know that in the hypothetical negotiation, we presume the patent is both valid and infringed.

[00:19:24] Speaker 01:
So that is an important data point.

[00:19:26] Speaker 00:
The problem with this, that I hear what you're saying, but the problem is your expert did not undertake the analysis that you're doing now.

[00:19:34] Speaker 00:
Yes, she mentioned all the Georgia-Pacific factors, but then she just said, voila, 5%.

[00:19:41] Speaker 00:
She didn't say, let's say that the lowest amount possible is 3.25 or 3.64, whatever those different licenses show.

[00:19:51] Speaker 00:
And then from there, based on different Georgia-Pacific factors, I'm going to go upward to account for this, or I'm going to go down a little bit to account for that.

[00:20:01] Speaker 00:
There's no discussion at all of how apportionment is taken into account with actual real numbers.

[00:20:08] Speaker 00:
In reviewing expert reports previously, I've seen that the experts don't just have an accounting of all the Georgia Pacific factors and just say, here it is.

[00:20:19] Speaker 00:
Instead, there's some sort of extra analysis that goes in there where they actually will say something like,

[00:20:26] Speaker 00:
I'm going to start with this, and then I'm going to go through all these different factors to explain how I go up a little, go down a little, and come up with what is my ultimate suggested number.

[00:20:37] Speaker 00:
But there is nothing here.

[00:20:38] Speaker 01:
But that would suggest that that's the only way to do it, and certainly she doesn't explain it.

[00:20:43] Speaker 00:
It's not an only way.

[00:20:44] Speaker 00:
I mean, it's just providing a rational explanation.

[00:20:47] Speaker 00:
I'm not saying that we have to do it that way, but there's no explanation to go from this is my view on each of these factors to here is 5%.

[00:20:56] Speaker 01:
But what she did say she did was she took into account all this evidence, and then she checked.

[00:21:03] Speaker 01:
I mean, at some point, she doesn't have to go through all our mental process.

[00:21:06] Speaker 01:
But OK, 2%, 3%, 4%, 5%, is that reasonable in view of the evidence that I have looked at?

[00:21:13] Speaker 01:
She doesn't explain that.

[00:21:15] Speaker 01:
She put together roughly a 60-page report.

[00:21:18] Speaker 01:
I don't know if we put the entire thing in our appendix, but I guess I believe she did.

[00:21:22] Speaker 01:
And if I could, I'd like to point to some of the other

[00:21:25] Speaker 01:
quantitative evidence that fits very well and supports her conclusion that, again, she took you into account in that process.

[00:21:34] Speaker 05:
Point to the quantitative evidence where she says, I relied on this to reach this.

[00:21:41] Speaker 01:
When I come back up, I can come up with the exact same pages where she said she relied on this.

[00:21:47] Speaker 01:
But let me, if I could, I've got another board that is selling value dot.

[00:21:52] Speaker 05:
Relyed on this to reach this.

[00:21:56] Speaker 05:
Both.

[00:21:58] Speaker 05:
Just so you have it in mind.

[00:21:59] Speaker 01:
Right, right.

[00:22:01] Speaker 01:
And again, we don't dispute that she didn't conduct a mathematical formula that spit out 5%.

[00:22:11] Speaker 01:
But keep in mind, this court has also approved of a hypothetical negotiation

[00:22:18] Speaker 01:
And in the real world of hypothetical negotiations, people don't agree on a mathematical formula.

[00:22:24] Speaker 00:
We're not asking for a mathematical formula.

[00:22:26] Speaker 00:
I just want to make sure that's abundantly clear.

[00:22:27] Speaker 00:
No one is suggesting that a mathematical formula is required.

[00:22:31] Speaker 00:
Instead, just a discussion of how those factors, which she analyzed, support or show or relate to showing that she ended up with 5%.

[00:22:43] Speaker 04:
We're not asking for a mathematical formula.

[00:22:45] Speaker 04:
We're asking for a principled analysis

[00:22:48] Speaker 01:
Well, again, it's been accepted law for 40 years that Georgia-Pacific is a principled analysis.

[00:22:57] Speaker 01:
And it doesn't lend itself to, again, this sort of, you know, I don't want to say nothing out of the format, because I know you're saying that it doesn't require that.

[00:23:07] Speaker 00:
Well, just to be clear, what we're saying is maybe the Georgia-Pacific analysis is missing something.

[00:23:12] Speaker 00:
At least that's what I'm saying.

[00:23:14] Speaker 00:
I'm asking you, it seems to me as if it's missing something.

[00:23:17] Speaker 00:
Because there is an analysis of factors, and then, boom, here's 5%.

[00:23:21] Speaker 04:
Missing something here.

[00:23:23] Speaker 00:
Yes.

[00:23:24] Speaker 01:
Well, let's talk about some of this quantitative stuff.

[00:23:29] Speaker 01:
I do want to put up a selling value back.

[00:23:31] Speaker 01:
Well, let me start with that.

[00:23:32] Speaker 01:
Because, again, it fits very well.

[00:23:39] Speaker 07:
Did the report rely on this?

[00:23:41] Speaker 01:
Yes, yes.

[00:23:42] Speaker 01:
And I will.

[00:23:42] Speaker 01:
I don't have the exact page for evidence.

[00:23:45] Speaker 01:
Littles can get at for me while I'm up here.

[00:23:48] Speaker 01:
But this is one of those things where this is Briggs itself putting value on various features of its moles.

[00:23:55] Speaker 00:
Can you show me in the expert report citing to a specific appendix page where this is referred to?

[00:24:01] Speaker 01:
Yes, I will get to that in a moment.

[00:24:03] Speaker 07:
I don't remember seeing this in her report when I read it.

[00:24:10] Speaker 01:
We're putting this up as a visual so that you can see.

[00:24:13] Speaker 01:
She didn't put a picture of this in her report.

[00:24:16] Speaker 01:
But I will get to the page where she talked about these documents.

[00:24:20] Speaker 01:
Because this is a document that shows that what she ended up with, in a trial, it wasn't about 5% versus $10.

[00:24:28] Speaker 01:
It was about $250 per molar versus $10.

[00:24:31] Speaker 01:
Everybody converted her 5% to an average per molar grade.

[00:24:37] Speaker 01:
And when you're talking about $250 per molar,

[00:24:40] Speaker 01:
And you've got all these things that are 100, 200, all the way up to 750.

[00:24:46] Speaker 01:
And then, again, we have to tie that to the other evidence at trial.

[00:24:51] Speaker 01:
We seem to have this belief that you can't have a reasonable royalty without an expert.

[00:24:56] Speaker 01:
That's not necessarily true.

[00:24:57] Speaker 01:
We did have one.

[00:24:58] Speaker 07:
Does one of these correlate with the baffle?

[00:25:01] Speaker 01:
Well, in some of them, they all do.

[00:25:03] Speaker 01:
But one very closely breaks, makes a big deal about their

[00:25:10] Speaker 01:
independent suspension.

[00:25:12] Speaker 01:
For them, that's what they considered to be an important patent to feature their mowers.

[00:25:16] Speaker 01:
They twice added 200, 250, 750, depending on the particular type.

[00:25:22] Speaker 01:
There was extensive evidence at trial that the jury was entitled to believe that said that these flow control battles and the advantages that they provide to a mower are more important than independent suspension.

[00:25:36] Speaker 01:
The jury's entitled to believe that.

[00:25:38] Speaker 01:
And so that puts a quantitative data point on the use of 250 eta molar if Briggs itself values that feature at that level.

[00:25:49] Speaker 02:
Now go back and tell us where in the record.

[00:25:53] Speaker 01:
A1445152.

[00:25:57] Speaker 06:
A1445152.

[00:26:07] Speaker 01:
At the bottom of page 14451, the documents produced by Briggs, and it goes on to talk about added value features, suggest values from 200 to 750.

[00:26:21] Speaker 01:
I understand from talking to Exmark, and this was before trial, but of course then this evidence came in at trial, that the importance of this invention was higher than that of independent suspension.

[00:26:34] Speaker 01:
And so she used that

[00:26:37] Speaker 01:
as part of her analysis to ultimately come to a figure that equated to $250 or more.

[00:26:53] Speaker 00:
So this is under Georgia Pacific Factor 11.

[00:26:56] Speaker 00:
It's sent to a change figure as an induce of the invention and any evidence probative of the value of that use.

[00:27:02] Speaker 00:
The thing is that she never, in coming up with the five,

[00:27:07] Speaker 00:
doesn't say that this is how I relied on this information.

[00:27:14] Speaker 01:
But ultimately, a way to come to an answer is to look at all of the evidence and test out a number and see which one fits best with all of that evidence.

[00:27:25] Speaker 00:
With that analysis of testing out the number and seeing which one fits, that seems to be the very thing that's lacking.

[00:27:32] Speaker 01:
I guess that's where I feel like, I would say, she ended up at 5% because, as she said, I can't find, I don't know if I can find these afterwards.

[00:27:43] Speaker 00:
But ultimately, that was the number.

[00:27:46] Speaker 00:
She says, as a result, I believe the parties would agree on a royalty of 5%.

[00:27:56] Speaker 01:
And I mean, after she's gone through all these factors, she's discussed all the quantitative data.

[00:28:01] Speaker 01:
She's discussed things like profits.

[00:28:04] Speaker 01:
And I do want to talk about the profits because it's an important feature here or aspect when you're talking about competitors.

[00:28:12] Speaker 01:
This court has dealt with a lot of cases lately where we have licensing company and defendant.

[00:28:19] Speaker 00:
And in that situation... How did she deal with apportionment?

[00:28:23] Speaker 00:
Where did she deal with apportionment in this expert report with respect to the

[00:28:27] Speaker 00:
Because I think one of your arguments is that you don't have to deal with apportionment for the base because it can be taken care of with the rate.

[00:28:35] Speaker 00:
She did apportion.

[00:28:37] Speaker 00:
And we know that she apportioned.

[00:28:38] Speaker 00:
Where is that in the expert report?

[00:28:41] Speaker 01:
Again, I don't think that she used the words I am apportioning.

[00:28:44] Speaker 01:
She did analyze the features of Georgia Pacific that relate to apportionment.

[00:28:50] Speaker 01:
And that's, I believe, factor 13.

[00:28:55] Speaker 01:
which deals with the portion of the realizable profit that should be credited to the invention is distinguished from non-patent elements.

[00:29:02] Speaker 01:
Again, not necessarily a mathematical analysis, but is one that this part has said addresses apportionment.

[00:29:09] Speaker 01:
And then also I believe it's factor, is it 10?

[00:29:14] Speaker 01:
I think we're missing some pages.

[00:29:23] Speaker 01:
Oh no, there it is.

[00:29:24] Speaker 01:
The nature of the patent invention

[00:29:29] Speaker 01:
Well, she combines 9 and 10, I'm sorry, and the utility of an advantage is the patented property of her old mother.

[00:29:34] Speaker 01:
So she goes through those elements right there.

[00:29:39] Speaker 01:
Also, look at the real world evidence, the profits and what happened when there is an actual competitive situation between these two competitors.

[00:29:50] Speaker 01:
The evidence that when faced with a competitive situation involving a large customer,

[00:29:58] Speaker 01:
that Exmark lowered its price by $639.

[00:30:01] Speaker 01:
That supports the idea of $250 or more.

[00:30:06] Speaker 01:
Now again, it doesn't say there's a calculation, that I started at $639 and I cut it in half for this reason and I cut a little more for that.

[00:30:14] Speaker 01:
That's not the sort of mathematical analysis that makes sense.

[00:30:19] Speaker 01:
But when you're looking at what number does make sense as she settles on 5%, she would know and did take into account

[00:30:28] Speaker 01:
that by licensing, Exmark's risking losing profits, losing sales where they lose $639 per molar.

[00:30:38] Speaker 01:
Again, it's not just that specific situation.

[00:30:42] Speaker 01:
But if there was an actual lost sale, she indicated that Exmark would lose $1,800 per molar in distinguishing the situation from that where you have a licensing company who only makes money if the defendant sells products.

[00:30:57] Speaker 01:
So again, there was not a up or down, I'm going to start at a number and I'm going to do the plus minus.

[00:31:05] Speaker 01:
This court in some sense rejected that when it rejected the rule of thumb that we would start at a third and then go to the up or down.

[00:31:11] Speaker 00:
There has to be a reason basis for the starting point, obviously.

[00:31:14] Speaker 00:
Well, a reason basis for the starting point would be... I mean, rather than like 25% rule, there has to be...

[00:31:23] Speaker 00:
I think that you're saying that you're not supposed to come up with a starting point and go up and down all because of this court's rejection of the 25% poll.

[00:31:30] Speaker 00:
And I don't think that's the case.

[00:31:32] Speaker 00:
If one were to start, for example, with... And I'm not saying starting with a starting point is the only way to do it.

[00:31:38] Speaker 00:
But I can't tell.

[00:31:40] Speaker 00:
I mean, you're asking us, I think, to accept 5% sounds really good because there's all this evidence to support it.

[00:31:47] Speaker 00:
But I think what we're supposed to analyze is methodology.

[00:31:50] Speaker 00:
And the question is whether the methodology, whether I can even tell what that is, when all she's done is list all the Georgia Pacific factors and then say, that's five.

[00:32:01] Speaker 01:
I submit that if we go back through the 40 years of Georgia Pacific cases, that is exactly what experts have done for decades.

[00:32:10] Speaker 01:
And this court has approved those analyses.

[00:32:13] Speaker 01:
And we can cite the cases in our brief that talk about Georgia Pacific analysis.

[00:32:20] Speaker 01:
Your Honor, I didn't get a chance to talk at all about prior invalidity.

[00:32:24] Speaker 01:
Would you like me to talk about that?

[00:32:25] Speaker 02:
I'd like you to run over, because I'm giving an extra two minutes to your closing counsel, so I'll give you another minute.

[00:32:32] Speaker 01:
OK.

[00:32:34] Speaker 01:
The bottom line is this, Your Honor.

[00:32:36] Speaker 01:
They have the burden of proving invalidity by clearing convincing evidence.

[00:32:42] Speaker 01:
And here, they face an extra high burden, because the PTO not just reexamined the patent, reexamined it three times,

[00:32:50] Speaker 01:
and addressed the same issue that he now wants to argue gives them a fact question and a reason to go to the jury on the validity.

[00:33:00] Speaker 01:
If you're going to ask a jury to simply disagree with the patent trial and appeal board, you better have pretty strong evidence on the other side.

[00:33:09] Speaker 01:
And that's what was missing here.

[00:33:10] Speaker 01:
And that's what the judge said.

[00:33:11] Speaker 01:
He said, on this record, showing he's considered all the evidence, the evidence that they have come forward with is simply insufficient

[00:33:19] Speaker 01:
to meet their burden of immolidity by clearly convincing evidence.

[00:33:36] Speaker 08:
At the risk of redundancy, let me be clear.

[00:33:39] Speaker 08:
The examiners found under the district court's claim construction that these claims were invalid.

[00:33:44] Speaker 08:
Only when the PTAB changed that claim construction where they found valid, we were never given a chance.

[00:33:50] Speaker 08:
This is expressly stated in the PTAB appeal, that there was no evidence.

[00:33:55] Speaker 08:
We were never given a chance to prove that even if the district court changed its claim construction, which it explicitly refused to do, the claims were obvious under that different claim construction.

[00:34:06] Speaker 08:
Under the meaningful effect claim construction, we still would have been able to put more than ample evidence, as laid out in our brief,

[00:34:13] Speaker 08:
that the claims were obvious.

[00:34:16] Speaker 08:
The claim was obvious.

[00:34:18] Speaker 08:
That was what we were deprived of the opportunity to do.

[00:34:21] Speaker 08:
And the PTAB appeal board itself said, the reason we are upholding the validity of this claim in light of our changed claim construction is because you, the examiners, didn't put forward evidence under the revised claim construction.

[00:34:32] Speaker 08:
We would do that in front of a jury.

[00:34:34] Speaker 08:
And we've laid out the evidence in our brief.

[00:34:37] Speaker 08:
Couple more points just to answer specific things.

[00:34:39] Speaker 08:
Your Honor, as of 4510, the quote you

[00:34:42] Speaker 08:
read from me and asked me to respond.

[00:34:44] Speaker 08:
Two observations.

[00:34:45] Speaker 08:
One is that was under the PTABS construction, not the district course construction.

[00:34:49] Speaker 08:
More importantly, that was a hypothetical.

[00:34:51] Speaker 08:
Totally disregarded the V part that we had the discussion about.

[00:34:55] Speaker 08:
That created the limitations.

[00:34:57] Speaker 08:
That created the curve, straight curve shape.

[00:35:00] Speaker 08:
Your Honor, on the SCAG, you were absolutely right.

[00:35:02] Speaker 08:
The 3.25%, which obviously is lower than five in any event, was for all the claims of four patents.

[00:35:07] Speaker 08:
Here we're talking about one claim of one patent.

[00:35:10] Speaker 08:
And finally, on this chart, I won't belabor it, but we discussed it at length, 25 to 26.

[00:35:16] Speaker 08:
Council said we should look at the real world.

[00:35:20] Speaker 08:
I'll conclude with this.

[00:35:21] Speaker 08:
In the real world, they sold their baffles for between $26 and $49.

[00:35:27] Speaker 08:
That's at page 7022 of the appendix.

[00:35:30] Speaker 08:
That's the real world, not 5%, not $250.

[00:35:32] Speaker 08:
Thank you.

[00:35:33] Speaker 08:
Thank you, Council.

[00:35:38] Speaker 05:
The matter stands submitted.

[00:35:39] Speaker 05:
We are adjourned.