[00:00:35] Speaker 02:
Mr. Ratner, whenever you're ready.

[00:00:54] Speaker 03:
Thank you, Chief Judge Brust, and may it please the court

[00:01:02] Speaker 03:
The district court made a series of legal errors in this case.

[00:01:04] Speaker 03:
And I'd like to focus on the most important three of them.

[00:01:07] Speaker 03:
Together, they require reversal.

[00:01:09] Speaker 02:
But just to clarify that, so you need to prevail on all three of the issues you've raised in order to?

[00:01:14] Speaker 03:
We need to prevail on both materiality and intent, Your Honor.

[00:01:17] Speaker 03:
We think that the expert issue is sort of an outgrowth of her wrongful exclusion of the ITC determination.

[00:01:22] Speaker 03:
But yes, we need to win all the issues.

[00:01:25] Speaker 00:
Well, let me follow up on the chief judge's question.

[00:01:29] Speaker 00:
Suppose you should win.

[00:01:31] Speaker 00:
on the ALJ, the 8038 issue, but lose on the expert opinion issue.

[00:01:40] Speaker 00:
Where does that leave us?

[00:01:42] Speaker 03:
Well, Your Honor, what the judge in this court never considered was a record that included the ITC determination.

[00:01:48] Speaker 03:
We think that the ITC determination resolves any complexity.

[00:01:52] Speaker 03:
And that what the district court actually did here was say, we have complex patents

[00:01:56] Speaker 03:
There's a rigid requirement that where the patents are complex, I need an expert.

[00:01:59] Speaker 00:
Well, let's suppose for argument's sake that we disagree with you that it was a rigid requirement and that all she was saying was, in this case, this is sufficiently complex that I think you needed an expert.

[00:02:13] Speaker 00:
If we agree with that decision, but we disagree with her on excluding the ALJ opinion,

[00:02:22] Speaker 00:
What results?

[00:02:23] Speaker 03:
If you agree that it's a failure of proof that expert testimony is required, then we would lose, Your Honor.

[00:02:28] Speaker 03:
But the question that the district court was asking for expert testimony on is not necessary to this court's disposition.

[00:02:35] Speaker 03:
There is no reason for this court to worry about the complexity of the patents.

[00:02:38] Speaker 04:
Is that because if the ALJ decision comes in, there's sufficient factual findings in that to create a genuine issue on the same issues the district court wanted an expert for?

[00:02:52] Speaker 03:
That's one possible explanation, but the real explanation, Your Honor, is that the question here is but for materiality, not invalidity.

[00:02:59] Speaker 03:
What we don't have to do is show that these patents are invalid.

[00:03:02] Speaker 03:
That is, admittedly, the most common way of showing but for materiality.

[00:03:06] Speaker 03:
But it can also be done by showing what the PTO would have done.

[00:03:09] Speaker 03:
And here we have other evidence of that.

[00:03:11] Speaker 03:
And that's exactly what this court said in Transwap, Your Honor, when its materiality analysis was a single paragraph.

[00:03:17] Speaker 03:
And it said, because we know what the PTO would have done, regardless of any invalidity findings, regardless of any expert testimony, we don't need to dig any deeper.

[00:03:25] Speaker 03:
And this court said that was a definitional case of but for materiality.

[00:03:28] Speaker 03:
And that's the situation here.

[00:03:30] Speaker 03:
We have probative evidence that what would have happened in the PTO, had it been aware of these prior art references, is it would have said these patents are insufficient.

[00:03:37] Speaker 03:
These patents cannot be issued.

[00:03:39] Speaker 03:
And that applies to both patents, even though they're only considered 517.

[00:03:43] Speaker 00:
So your answer to the question of whether losing on the expert testimony issue would be fatal to you is no.

[00:03:51] Speaker 03:
Well, it depends what this court understands the requirement to be.

[00:03:54] Speaker 03:
If this court agreed that expert testimony is required simply because of complexity, then we would lose.

[00:03:59] Speaker 03:
Do we need a reason?

[00:04:00] Speaker 03:
No.

[00:04:01] Speaker 02:
Go ahead.

[00:04:02] Speaker 02:
I mean, no.

[00:04:03] Speaker 02:
I mean, it's not a rigid requirement necessarily to conclude.

[00:04:07] Speaker 02:
I mean, we look at this case, we look at what the issues are, how complex the prior art is, and we reach that determination.

[00:04:13] Speaker 03:
Correct, Your Honor.

[00:04:14] Speaker 03:
I think we're saying the same thing.

[00:04:15] Speaker 03:
Maybe I'm being unclear.

[00:04:17] Speaker 03:
If this court were to determine that other sufficient evidence can show but for materiality, regardless of the outcome of the expert question.

[00:04:23] Speaker 00:
Well, other sufficient evidence that was produced and put into the summary judgment record.

[00:04:29] Speaker 00:
Correct, just like the ITC determined in this case, Your Honor.

[00:04:31] Speaker 00:
But is there more than just the ITC determination that constitutes that extra evidence that you say establishes materiality?

[00:04:39] Speaker 03:
Yes, Your Honor.

[00:04:40] Speaker 03:
We also have testimony from one of Sandisk's inventors that one of the Simcoe references disclosed permanent inhibit.

[00:04:46] Speaker 03:
And that is the key to novelty on both of these patents.

[00:04:49] Speaker 03:
That's at 12,004 of the appendix, Your Honor.

[00:04:51] Speaker 03:
And that's an admission that the prior art references here would have been valid.

[00:04:55] Speaker 03:
And in that sense, Your Honor, I think what Your Honor is getting at is that we are only relying on an ALJ determination here.

[00:05:03] Speaker 03:
It's not correct, but also it's not problematic.

[00:05:08] Speaker 03:
And that's what the Second Circuit said in Henry v. Daytime, is that there are situations where an ALJ's findings can be sufficient to survive summary judgment.

[00:05:16] Speaker 03:
In that case, it was an employment discrimination case, but the factual findings were exactly the same.

[00:05:21] Speaker 03:
Exactly on point with the subsequent litigation.

[00:05:24] Speaker 03:
And that's what's going on here.

[00:05:25] Speaker 00:
Explain to me why it is, as a matter of policy, why Congress would promulgate a rule that had the following components.

[00:05:37] Speaker 00:
Number one, assuming collateral estoppel is not applicable, you cannot introduce the decision of a court

[00:05:46] Speaker 00:
for purposes of admission in a later proceeding.

[00:05:50] Speaker 00:
So you can't get Judge Fogel's opinion in, but you can introduce the decision of his administrative agency that's doing exactly the same thing, presumably, as the court is doing.

[00:06:02] Speaker 00:
What sense does that make?

[00:06:04] Speaker 03:
Well, Your Honor, that's explained in the advisory committee notes.

[00:06:06] Speaker 00:
The focus of 803- I read them, and I didn't find the explanation to be the same, other than history.

[00:06:12] Speaker 03:
The 803-8 exception, Your Honor, targets executive agency.

[00:06:16] Speaker 03:
It's agency actions that we're concerned about.

[00:06:19] Speaker 03:
Whether the agency conducts its investigation through a hearing or through a more traditional on-the-ground investigation, the point is that those investigations are presumed to be reliable.

[00:06:28] Speaker 00:
And that's what every court to consider this question has said, Your Honor, is that ALJ determinations... But focusing on the difference between a court decision and an ALJ's decision, why is the ALJ's decision given more credence than a fully adjudicated determination by a court?

[00:06:46] Speaker 00:
The process before the ITC-ALJ is very similar to what would happen before a court.

[00:06:52] Speaker 03:
That's correct, Your Honor, but that's also true in all these other cases.

[00:06:55] Speaker 00:
I know, but what's the policy-based reason for that distinction?

[00:06:59] Speaker 03:
The reason is that we presume that investigations conducted by executive agencies or federal agencies charged with those investigations were done correctly.

[00:07:08] Speaker 00:
And when we apply collateral estoppel, we make exactly that same projection.

[00:07:13] Speaker 03:
Correct, Your Honor.

[00:07:13] Speaker 03:
And that's a much more potent pill than is miscibility.

[00:07:17] Speaker 00:
It is.

[00:07:17] Speaker 00:
But why don't we then say, well, and therefore, decisions of courts are applicable the same way as the decisions of ALJs for purposes of miscibility under Article 33.

[00:07:31] Speaker 00:
Why not?

[00:07:32] Speaker 03:
I believe, Your Honor, that it goes to the specialization.

[00:07:37] Speaker 03:
What we're dealing with here is agencies that are charged specifically with investigating these very questions.

[00:07:42] Speaker 03:
Courts of general jurisdiction are not like that.

[00:07:44] Speaker 03:
And so it's true that this feels very much like a district court opinion, but that's the same question that the court wrestled with in Zeus' enterprise.

[00:07:50] Speaker 00:
So if this were coming from the Court of International Trade,

[00:07:53] Speaker 00:
a specialized court, you would take a different view of it.

[00:07:57] Speaker 03:
I'm not as familiar with the Court of International Trade, Your Honor, but if it's not an investigation, as that is the trigger here, then it wouldn't get this treatment.

[00:08:04] Speaker 03:
That's right.

[00:08:05] Speaker 03:
I do think it's important to note that every court that has grappled with this question has said ALJ determinations are investigations.

[00:08:12] Speaker 03:
even though they are presided over by someone with Judge in the title, and they look like hearings.

[00:08:17] Speaker 03:
That Zeus Enterprises in the Fourth Circuit wrestled with it expressly.

[00:08:21] Speaker 03:
It's Henry versus Daytop in the Second Circuit, Imre Paducah in the Sixth Circuit, the Lloyd case in the Third Circuit.

[00:08:26] Speaker 03:
This would be the first court to say otherwise, Your Honor.

[00:08:29] Speaker 03:
And I think this court should address this question as a question of federal circuit law.

[00:08:33] Speaker 03:
And the reason, Your Honor, is that there is no dispute here that what the district court did is wrong.

[00:08:37] Speaker 03:
Sandisk is not here defending the issue preclusion rule.

[00:08:41] Speaker 03:
The question is whether it's admissible under 8038 and the admissibility of the ITC's determinations to show but for materiality.

[00:08:51] Speaker 04:
Did you cite that exception anywhere in the summary judgment briefing?

[00:08:56] Speaker 03:
Your Honor, we didn't because we didn't have an opportunity to do so.

[00:08:59] Speaker 04:
I think the way this was presented is... You didn't, but I mean, I looked at your brief and I mean, you've excerpted it, but I pulled the whole thing up.

[00:09:07] Speaker 04:
The problem to me is

[00:09:09] Speaker 04:
that I don't even read them as suggesting that you were relying on 803 for this.

[00:09:16] Speaker 04:
Because most of the times when you were citing the ITC decision, you were also string citing Judge Fogel's decision in parallel.

[00:09:25] Speaker 04:
And so it seems to me that basically what you were doing was saying, here were two tribunals, one a court and one an administrative body that reached these conclusions.

[00:09:36] Speaker 04:
You don't need to go any further.

[00:09:37] Speaker 04:
And you agree now that Judge Fogel's decision can't provide evidence.

[00:09:42] Speaker 04:
So it seems to me that you've done very little to preserve this 803 argument in the sense that you never really specifically said this is factual evidence.

[00:09:53] Speaker 04:
You were citing them, at least the way I read it,

[00:09:56] Speaker 04:
as a decision, not as an investigation.

[00:09:59] Speaker 03:
Your Honor, we cited it in the factual background.

[00:10:01] Speaker 03:
You also cited Judge Fogel's decision in the factual background.

[00:10:04] Speaker 03:
We cited that in the relevant procedural history.

[00:10:05] Speaker 00:
When you say you cited, you mean you cited the ALJ's opinion?

[00:10:09] Speaker 00:
You didn't ever cite 803A.

[00:10:11] Speaker 00:
No, no, no.

[00:10:11] Speaker 03:
I'm sorry.

[00:10:11] Speaker 03:
We cited the ALJ's opinion.

[00:10:13] Speaker 03:
And that's at 11-8-79, I believe, of the appendix, where we cited in the background section.

[00:10:19] Speaker 03:
And in fact, the district court noted that.

[00:10:20] Speaker 04:
Sure, but when you're talking about

[00:10:22] Speaker 04:
in your argument section about sufficient facts to impose summary judgment, you're not just citing the ALJ decision.

[00:10:28] Speaker 04:
You're citing Judge Fogel's decision, usually first, and then the ALJ decision.

[00:10:33] Speaker 03:
That's correct, Your Honor, but I do think the way this was presented to the district court is relevant here.

[00:10:37] Speaker 04:
Well, I think it is, and I think it's very confusing to the district court the way you've set this up, which is here's Judge Fogel, here's the ITC.

[00:10:46] Speaker 04:
We don't need to put on any more evidence

[00:10:49] Speaker 04:
without kind of separating them out.

[00:10:51] Speaker 04:
I mean, I understand your point on 803.

[00:10:54] Speaker 04:
It seems to be a good one, but I think you didn't do enough in a sense that you led the district court down.

[00:11:02] Speaker 04:
this path and let yourself open to the notion that you were citing these for preclusive effects, which she, I think you now agree, correctly rejected.

[00:11:12] Speaker 03:
Well, she correctly rejected that they're not issue preclusive, Your Honor.

[00:11:15] Speaker 03:
But we were citing this as evidence.

[00:11:17] Speaker 03:
And I really would like the court to understand the way in which this came to pass.

[00:11:20] Speaker 03:
What happened was we cited it as evidence in our background section.

[00:11:23] Speaker 03:
And then in its opposition brief, Sandisk, in a footnote, said it's inadmissible as evidence because of issue preclusion.

[00:11:30] Speaker 03:
And the district court did consider its admissibility.

[00:11:33] Speaker 03:
It's true that it didn't consider 803 expressly, because you'll see on footnote one at page one, she decided it without argument.

[00:11:39] Speaker 03:
I don't know when we could possibly have made the, there's no burden to expressly argue that this admissible document is admissible for reason X or Y. But you were also citing Judge Fogel's decision for evidence.

[00:11:51] Speaker 04:
Well, I agree.

[00:11:52] Speaker 04:
Don't you see how that's confusing to the district court when you're citing two different decisions of tribunals

[00:11:57] Speaker 03:
as evidence and one of them is clearly not evidence.

[00:12:14] Speaker 03:
The district court recognized that we were citing it as evidence and said it's not evidence for the reason that sand has proposed, which is issue preclusion.

[00:12:21] Speaker 03:
And that's wrong.

[00:12:22] Speaker 00:
I would like to turn, if you don't mind, to the intent issue.

[00:12:26] Speaker 00:
Sure.

[00:12:27] Speaker 00:
As you know, you're looking down the barrel of a very vigorous standard for proving the kind of intent that's necessary for the Walker process.

[00:12:39] Speaker 00:
It's in theory, at least, there is sense on steroids.

[00:12:43] Speaker 00:
So what have you got?

[00:12:45] Speaker 00:
I've looked at Judge Fogel's bases, concluding that there was a submissible case of intent.

[00:12:52] Speaker 00:
But several of those seem to me to be questionable in light of Judge Armstrong's conclusions, such as inconsistencies in testimony and pointing out that, for example, one of the prior patents, I think the 560 patent,

[00:13:09] Speaker 00:
was, as far as she could see, not shown to be related to the patents ensued.

[00:13:16] Speaker 00:
Also, the database that you rely on heavily, apparently it had many, many entries, I think at least 1,319.

[00:13:23] Speaker 00:
I think that was one of the numbers.

[00:13:29] Speaker 00:
That's a lot of entries, and apparently, according to the testimony, the database was not electronically searchable at the time of the 338 re-exam or the 517 prosecution.

[00:13:40] Speaker 00:
What's left?

[00:13:41] Speaker 03:
So, Your Honor, a couple points on that.

[00:13:43] Speaker 03:
The first is, as between the evidence that Judge Fogel considered and the evidence here, there's really only one difference.

[00:13:48] Speaker 03:
The misrepresentation issue that you're talking about did not go to omission of

[00:13:54] Speaker 03:
of our withholding relevant patents.

[00:13:56] Speaker 03:
And he said that there was sufficient evidence.

[00:13:58] Speaker 00:
But you're not arguing here misrepresentation.

[00:14:00] Speaker 00:
You're purely arguing.

[00:14:01] Speaker 03:
Correct.

[00:14:01] Speaker 03:
Correct, Your Honor.

[00:14:02] Speaker 03:
And that one can't have supported his conclusion on intent as to the withholding of material references.

[00:14:07] Speaker 03:
So the only difference has to do with a prior patent being rejected on the basis of JP100.

[00:14:12] Speaker 03:
And that, we agree, is not here.

[00:14:14] Speaker 03:
But all the other evidence is in this case, Your Honor.

[00:14:16] Speaker 03:
And our single best piece of evidence is Sandisk's retention of Simcoe in the 338 re-examination.

[00:14:21] Speaker 00:
I looked carefully at the testimony on that and I don't see that that testimony says he was hired in connection with the 338.

[00:14:29] Speaker 00:
It says he was hired in connection with the ITC 382 investigation.

[00:14:36] Speaker 00:
What is there that says he was a consultant for purposes of the 338 re-exam?

[00:14:42] Speaker 03:
Your honor, that's a finding of fact that the district court made.

[00:14:44] Speaker 03:
It's in the opinion at 24.

[00:14:46] Speaker 03:
She says he was retained as a consultant.

[00:14:48] Speaker 03:
I agree with you that that's correct in the 338 re-exam.

[00:14:52] Speaker 03:
She says specifically at age 24.

[00:14:54] Speaker 00:
Does she expressly say it in the 338?

[00:14:55] Speaker 03:
Yes, we're recording her opinion when we cite that.

[00:14:57] Speaker 03:
All right.

[00:14:59] Speaker 03:
I see that I only have a minute left.

[00:15:01] Speaker 03:
I'd love to reserve whatever I have left for you.

[00:15:04] Speaker ?:
OK, fine.

[00:15:15] Speaker 01:
May it please the court, Raoul Kennedy, Skadden Arts on behalf of Sandisk.

[00:15:20] Speaker 01:
I'd like to address two points today.

[00:15:23] Speaker 01:
One, to touch on something that's already been addressed.

[00:15:26] Speaker 01:
Why the plaintiff's failure to offer any admissible evidence on the subject of intent to deceive in and of itself defeats any showing of a material dispute.

[00:15:38] Speaker 01:
And even if the ALJ's determination were to be found admissible,

[00:15:44] Speaker 01:
That would not establish a tribal issue of fact.

[00:15:47] Speaker 01:
Let me start first with the evidence of intent.

[00:15:51] Speaker 01:
As Judge Armstrong pointed out, the only evidence that was offered was Judge Fogel's opinion.

[00:15:59] Speaker 01:
She ruled that is not evidence.

[00:16:02] Speaker 01:
That ruling has not been appealed from.

[00:16:04] Speaker 01:
So I submit that for purposes of today, we have a binding, unappealed finding that the essential element of intent to deceive is absent.

[00:16:16] Speaker 01:
And it isn't even close.

[00:16:18] Speaker 01:
It's because there's no evidence whatsoever.

[00:16:20] Speaker 01:
We submit it.

[00:16:22] Speaker 01:
At page 27, footnote 4.

[00:16:24] Speaker 00:
Wait, wait, wait, if you would.

[00:16:28] Speaker 00:
Did I understand you to say that the plaintiff's opposition to the summary judgment did not

[00:16:35] Speaker 00:
rely on the ALJ's opinion as opposed to, or in addition to, Judge Focal's opinion?

[00:16:42] Speaker 00:
That's exactly what I'm saying.

[00:16:43] Speaker 00:
Well, I'm looking at, I think it's page 13 of the plaintiff's opposition.

[00:16:53] Speaker 00:
And it says, the references Sandtist withheld from the PTO were material

[00:16:59] Speaker 00:
Because the ALJ in the 560 investigation found that they invalidated one claim of the 517 patent.

[00:17:06] Speaker 00:
That seems to be relying on the ALJ's opinion, not just Judge Focals.

[00:17:12] Speaker 01:
Your Honor, at page 14 of the opinion.

[00:17:15] Speaker 01:
Do you see the material I'm quoting?

[00:17:17] Speaker 01:
I do.

[00:17:18] Speaker 01:
OK.

[00:17:19] Speaker 01:
However, the discussion of intent to deceive starts at page 14, line 3.

[00:17:26] Speaker 01:
Yeah.

[00:17:26] Speaker 01:
On the same version.

[00:17:28] Speaker 04:
Where are you?

[00:17:30] Speaker 04:
You've all divided up these different parts of these briefs into different pages.

[00:17:35] Speaker 04:
It's a little confusing.

[00:17:37] Speaker 01:
Where are you in the appendix?

[00:17:40] Speaker 01:
The version I have is not in the appendix.

[00:17:44] Speaker 01:
Well, I don't have that.

[00:17:45] Speaker 01:
I have it.

[00:17:46] Speaker 01:
You know, sometimes it's page 13, sometimes it's page 42.

[00:17:51] Speaker 00:
So you're saying, if I understand it, that the portion that I just read went to materiality, not to intent.

[00:17:58] Speaker 00:
Correct.

[00:17:59] Speaker 01:
Your honor, if you turn to the next page with the five bullet points, I have extra copies if it would be of any help.

[00:18:06] Speaker 01:
That's okay.

[00:18:06] Speaker 01:
That's all right.

[00:18:08] Speaker 01:
Section B, the jury is entitled to infer fraud and intent to deceive.

[00:18:13] Speaker 01:
They list five bullet points, which are the five forms of evidence we've talked about.

[00:18:18] Speaker 01:
And the reference for those is footnote 26.

[00:18:21] Speaker 01:
And if we go down to the bottom of the page, footnote 26 is Fogel opinion at 12.

[00:18:27] Speaker 01:
And in her opinion, that's exactly what Judge Armstrong said.

[00:18:30] Speaker 01:
You didn't cite any evidence.

[00:18:32] Speaker 01:
What you did was on page 14 of your brief... Sorry, I think I misunderstood you.

[00:18:37] Speaker 04:
I thought you were saying they didn't rely on the ALJ decision for materiality, but you're talking about... You're saying intent.

[00:18:44] Speaker 01:
...the intent portion.

[00:18:44] Speaker 01:
I apologize if I misspoke.

[00:18:46] Speaker 04:
But you agree that they relied on it for the materiality portion?

[00:18:50] Speaker 04:
Yes.

[00:18:51] Speaker 04:
Okay.

[00:18:51] Speaker 01:
No question about that.

[00:18:52] Speaker 01:
Okay.

[00:18:53] Speaker 01:
We're square.

[00:18:54] Speaker 01:
Okay.

[00:18:54] Speaker 01:
I understand.

[00:18:55] Speaker 01:
So purely on intent to deceive,

[00:18:57] Speaker 01:
All they relied on was Judge Fogel.

[00:19:00] Speaker 01:
Judge Armstrong found that wasn't evidence.

[00:19:02] Speaker 01:
They did not appeal in that ruling.

[00:19:05] Speaker 01:
However, in their reply brief at footnote four, they now say that they did present evidence.

[00:19:15] Speaker 01:
And I would submit that they then cite to some of the early pages back down material in their brief.

[00:19:22] Speaker 01:
which don't contain any citations of authority.

[00:19:25] Speaker 01:
It's a discussion.

[00:19:27] Speaker 01:
But when we get down to what Judge Fogel was given and told, here is the evidence... Judge Armstrong.

[00:19:33] Speaker 01:
Excuse me.

[00:19:33] Speaker 01:
Yes, Judge Armstrong was told, here is what the evidence of intent to deceive is.

[00:19:39] Speaker 01:
It was exclusively on Judge Fogel.

[00:19:43] Speaker 01:
And I don't think they can back off from that.

[00:19:46] Speaker 01:
Unless there are questions there, let me turn to why

[00:19:49] Speaker 01:
regardless of the admissibility of the ALJ report.

[00:19:53] Speaker 00:
Let me ask you about it.

[00:19:55] Speaker 00:
I could not find the reference just quickly looking through her opinion.

[00:20:00] Speaker 00:
But is it correct, as your opposing counsel has said, that the district court found that Simcoe was hired in connection with the 338 re-exam?

[00:20:15] Speaker 01:
Your Honor, I was just leafing through.

[00:20:17] Speaker 01:
That's the first I heard of that.

[00:20:19] Speaker 01:
I thought he was just hired with regard to the re-examination.

[00:20:24] Speaker 00:
Yeah, the testimony does not refer to the 338, unless there's some testimony that I didn't find, but nobody aside it.

[00:20:35] Speaker 00:
But the testimony refers to the 382, not the 338.

[00:20:38] Speaker 00:
Correct.

[00:20:39] Speaker 00:
That's what I understand.

[00:20:42] Speaker 00:
So it would be helpful if we could

[00:20:45] Speaker 00:
establish for sure whether she made any kind of, I guess it's not really a finding because it's on summary judgment, but said that it was in connection with the 338.

[00:20:56] Speaker 04:
Understood that we're working on it.

[00:20:58] Speaker 04:
It seems to me that I think your friend cited page 24 of her opinion, but what I see on page 24 is not her finding, but the fact that plaintiffs are relying on Judge Fogel's determination

[00:21:13] Speaker 04:
And one of those, I think number three, is that SanDisk had retained Simcoe as a consultant in connection with the 338 package.

[00:21:22] Speaker 00:
That's what I understood.

[00:21:23] Speaker 00:
That's certainly what Judge Fogel said.

[00:21:25] Speaker 00:
But I didn't understand, and maybe I'm mistaken in this, that Judge Armstrong had embraced that finding.

[00:21:32] Speaker 01:
I do not find that she embraced it.

[00:21:35] Speaker 01:
And the discussion is there on the next page after she says, this isn't evidence, but I'm going to consider what she euphemistically calls the circumstantial evidence.

[00:21:45] Speaker 01:
And I'm not aware of any further discussion beyond those pages.

[00:21:49] Speaker 01:
And I won't say which page numbers are minor mispaginated from yours.

[00:21:54] Speaker 01:
But unless there's anything further, moving on to the ALJ report,

[00:22:00] Speaker 01:
As you will recall, the ALJ found that the domestic industry requirement wasn't satisfied as to the 338.

[00:22:08] Speaker 01:
So therefore, there were never any invulnerability or other substantive findings made as to the 338.

[00:22:15] Speaker 01:
Without expert testimony, I submit there is no way that a lay jury is going to be able to determine whether the basis for finding the 517, a method patent, have claims were invalid.

[00:22:29] Speaker 01:
can be imported over and applied to 338, which as we know is a means plus function pattern, with not one, but as I count it, five separate means plus functions.

[00:22:41] Speaker 00:
But suppose the 338 drops out and all we're left with is the 517.

[00:22:45] Speaker 00:
What is your argument as to why the ALJ's opinion on the 517 would not be admissible and sufficient to get over summary judgment?

[00:22:55] Speaker 01:
If I can get back to admissibility in a second, but first, as I said, even if you were to find it admissible, the undisputed evidence is plaintiffs' economists only analyzed antitrust injury with regard to the 338, never looked at the 517.

[00:23:12] Speaker 01:
In fact, interestingly, the damage figures start before the 517 ever even gets issued.

[00:23:20] Speaker 01:
So we have a complete and total failure of antitrust injury on the 517.

[00:23:26] Speaker 01:
So I submit again, without more, there's no need for this court to reach the ALJ admissibility issue since if you were to find it was admissible and remand it back to Judge Armstrong for reconsideration of either the 338 without an expert witness or reconsideration in line to the 517, it's going to be a pointless exercise since we don't have any antitrust injury on the 517 at all.

[00:23:54] Speaker 00:
Well, what about the 8038?

[00:23:57] Speaker 00:
issue on the merits as opposed to whether it's been preserved?

[00:24:00] Speaker 01:
One, Judge Armstrong did not exclude on hearsay grounds.

[00:24:06] Speaker 01:
There is no discussion whatsoever of hearsay.

[00:24:10] Speaker 01:
What she was excluded on was the basis that it was a different record than the one that was before her, and she did that after

[00:24:19] Speaker 01:
citing this court's opinion in Texas Instruments, where the court instructed that when confronted with an ALJ's opinion, you're supposed to read it and give it whatever weight you think it's entitled to.

[00:24:31] Speaker 01:
Clearly, she did that.

[00:24:33] Speaker 01:
She gave it the weight to which she thought it was entitled.

[00:24:36] Speaker 01:
And I submit on an abuse of discretion standard, that can't be said to be error.

[00:24:41] Speaker 01:
But let me go on further as to why the submission of the ALJ report would probably have been error.

[00:24:50] Speaker 01:
In order to accept the ALJ's report, you've got to accept the ALJ's claim construction.

[00:24:56] Speaker 01:
Remember, plaintiffs told Judge Armstrong, there are no terms here that need to be construed.

[00:25:01] Speaker 01:
They all will be given their ordinary meaning.

[00:25:05] Speaker 01:
And in reliance on that, we didn't have a market hearing.

[00:25:08] Speaker 01:
The ALJ construed at least 15 different terms, including what it would take to be one of ordinary skill, and the constructions

[00:25:19] Speaker 01:
Well, they clarify, certainly or not, in everyday language.

[00:25:23] Speaker 01:
But the point is, nobody ever asked Judge Armstrong, please adopt the ALJ's claim construction.

[00:25:30] Speaker 01:
They told Judge Armstrong, there is no need for claims construction here.

[00:25:35] Speaker 01:
But having said that, we now like to offer a report based on 15 claims constructions.

[00:25:42] Speaker 01:
And as we know, an opinion or evidence that's based on a faulty claims construction

[00:25:49] Speaker 01:
is prejudicial error, here I submit admitting the ALJ's report would have been faulty claims construction, and it certainly wouldn't have been claims construction that Judge Armstrong ever agreed to.

[00:26:01] Speaker 00:
Do you take issue with the broad proposition?

[00:26:04] Speaker 00:
I understand you're making very case-specific arguments, which is fine.

[00:26:08] Speaker 00:
Do you disagree with the broad proposition that an ALJ opinion in general, including an ITC ALJ opinion, is admissible under 8038?

[00:26:22] Speaker 01:
I don't know enough to answer the question globally for ITC investigations, which I think is what we're concerned with here.

[00:26:30] Speaker 01:
I submit the answer is no, because the rationale for admitting the ALJ's opinions in cases like Paducah towing, where we're talking whether a barge was tied up properly, is there are factual findings that are made from which inferences are then drawn.

[00:26:47] Speaker 01:
When we talk about an ITC proceeding, by definition, where patents are concerned, we're going to be starting with legal determinations, definitions of the claims,

[00:26:57] Speaker 01:
So rather than just sitting out to see whether the barges were correctly tied up, the ITC is going to start with a number of legal conclusions.

[00:27:07] Speaker 00:
But didn't Beach Aircraft really answer that question?

[00:27:10] Speaker 00:
Didn't Beach Aircraft by the Supreme Court said, you're really not going to draw these nice distinctions between facts and law.

[00:27:18] Speaker 00:
We're going to allow the adjudication or investigation, whichever it is, of the administrative agency to come in.

[00:27:27] Speaker 00:
Correct.

[00:27:28] Speaker 01:
They didn't do so in context of something like the 560 investigation where we have 15 claims constructions.

[00:27:36] Speaker 01:
And as we know, a case is not authority for an issue not considered.

[00:27:39] Speaker 00:
But you're coming back to the sort of case-specific question.

[00:27:45] Speaker 00:
For now, I'm more interested in the general question.

[00:27:48] Speaker 00:
Just if you have an ITC ALJ opinion, just in the abstract, is that

[00:27:56] Speaker 00:
say inadmissible, always admissible, or as you're suggesting with the argument about claim construction, sometimes admissible.

[00:28:05] Speaker 01:
I think under this court's authority in terms of considerate for whatever you think it's worth, that's left to the sound discretion of the district judge to do it.

[00:28:15] Speaker 01:
However, I'm unaware of any case where a district judge has actually admitted an ITC ALJ's opinion.

[00:28:23] Speaker 01:
And as I was listening earlier, I share your concerns as to

[00:28:26] Speaker 01:
Why is it that, as in Mendenhall, we don't let the work of Article 3 judges be admitted, but we somehow let the work of Article 1 judges be admitted?

[00:28:37] Speaker 01:
And I know in the Zeus case, cited by the opposition, the Fourth Circuit goes through their analysis of why it should be.

[00:28:44] Speaker 01:
But I don't think if you're... It wasn't very convincing to me, to tell you the truth.

[00:28:47] Speaker 01:
Let's see, if you're trying to explain to somebody in a bar why it works this way, I think you'd have a difficult time explaining why Article 3 opinions are of lesser value than Article 1 opinions.

[00:28:58] Speaker 01:
So globally, I'm troubled by that.

[00:29:02] Speaker 01:
Again, going back to cases like Paducah barge,

[00:29:05] Speaker 01:
I don't know whether we have to have a rule for all purposes on those, but for anything that starts with claims construction, we're not talking about a factual investigation.

[00:29:16] Speaker 01:
We're talking about starting with legal interpretations, then applying those to the facts, and then coming up with ultimately... But there are still factual determinations.

[00:29:26] Speaker 04:
I mean, that's what I find kind of troubling about this argument you're making.

[00:29:30] Speaker 04:
is the ITC certainly makes underlying factual determinations in reaching all of its conclusions.

[00:29:36] Speaker 04:
And if ALJ decisions are admissible in other areas for those kinds of factual conclusions, why shouldn't they be here?

[00:29:43] Speaker 01:
As I say, in other areas, somebody goes out in the field and starts investigating the facts.

[00:29:50] Speaker 01:
Here in the 560 investigation, the ALJ starts by saying, here is where I think the law should be.

[00:29:57] Speaker 01:
and then goes and investigates the facts and then decides under his or her version of what the law should be, here is what the legal inferences are that should be drawn from it.

[00:30:09] Speaker 01:
If you think about it here, the only thing the plaintiffs want the 560 investigation for are the legal conclusions.

[00:30:16] Speaker 01:
They aren't interested in the factual background history of the patent law.

[00:30:20] Speaker 01:
They want the ultimate conclusions of infidelity.

[00:30:24] Speaker 01:
That's the only thing they're looking for.

[00:30:26] Speaker 01:
And those are only as good as the interpretive findings on which they're based.

[00:30:32] Speaker 01:
But yet Judge Armstrong didn't get any say in that whatsoever.

[00:30:36] Speaker 01:
We let the ALJ report in.

[00:30:39] Speaker 01:
We completely do an end runaround mark.

[00:30:43] Speaker 01:
An ALJ gets to decide what the terms are going to be.

[00:30:46] Speaker 01:
And we get to do a runaround rule 26, an expert witness disclosure.

[00:30:51] Speaker 01:
Because we never get to cross-examine Dr. Pashley.

[00:30:55] Speaker 02:
What about, we haven't touched on one other aspect of this, which we did with your friend, which is if we're only left with the expert, her decision with regard to the expert, whether you read that as being independent of allowing or not allowing the ALJ opinion in, or if the two are so mushed together that we can't disentangle them.

[00:31:17] Speaker 01:
Thank you.

[00:31:18] Speaker 01:
I see those as two completely separate issues, because even if you let the ALJ's opinion in,

[00:31:23] Speaker 01:
There may then not be any need for interpretation, but there's sure need for explanation.

[00:31:30] Speaker 01:
And only an expert witness is going to be able, I mean, what are we going to do?

[00:31:33] Speaker 01:
Just give the jury the ALJ's report and say, have at it, and figure out?

[00:31:38] Speaker 01:
It's kind of interesting, I think, what this trial would have looked like if summary judgment hadn't been entered.

[00:31:43] Speaker 01:
Put in the patents, put in the ALJ's report, put in some cases.

[00:31:48] Speaker 01:
No, to answer your question directly, Your Honor, without experts,

[00:31:52] Speaker 01:
How is anybody going to determine what the scope of these patents are?

[00:31:56] Speaker 01:
I mean, the quote that Judge Armstrong offers about the mind-numbing complexity of what's involved, how are we going to take the prior references, the prior art, and have a lay jury interpret what they mean, particularly with a means plus function patent?

[00:32:15] Speaker 01:
A lay jury is going to determine whether the prior art has equivalent structure for each of those.

[00:32:21] Speaker 01:
And in terms of what the PTO would have done, that would they have found that there was a material basis for denying the patents in this case without expert explanation, what's a lay jury to do?

[00:32:34] Speaker 01:
So I submit they're two completely separate issues.

[00:32:38] Speaker 01:
And in fact, that now provides a third reason why even if you were to find the ALJ report admissible, there still wouldn't be a basis for reversal because of a total act

[00:32:48] Speaker 01:
of expert testimony to explain to somebody what it meant.

[00:32:54] Speaker 02:
Thank you.

[00:32:54] Speaker 01:
Thank you very much.

[00:33:03] Speaker 02:
Will we store four minutes to even things out here?

[00:33:07] Speaker 03:
Thank you.

[00:33:08] Speaker 03:
I'd like to clean up a few quick things that appeared to cause some confusion.

[00:33:11] Speaker 00:
Before you get to anything else, could you resolve the question of whether

[00:33:16] Speaker 00:
Judge Armstrong made a finding-a-fact, if one can make a finding-a-fact on summary judgment, with respect to the 338?

[00:33:22] Speaker 00:
Absolutely, Arnaud.

[00:33:23] Speaker 03:
That's where I was going to start out.

[00:33:24] Speaker 03:
That's both at 24 and at 26, and I'm surprised to hear it come up as somehow disputed.

[00:33:29] Speaker 03:
It is also conceded in footnote 14 at page 55.

[00:33:33] Speaker 00:
Well, show me the particular language, because I just want to make sure we have a dispute here.

[00:33:38] Speaker 03:
At page 26, Judge Armstrong refers to Simcoe's consultancy with Sandus,

[00:33:43] Speaker 03:
and says, our position is that you can infer from that.

[00:33:46] Speaker 03:
What line on 26?

[00:33:47] Speaker 03:
I'm sorry.

[00:33:48] Speaker 03:
Lines 9 to 14.

[00:33:56] Speaker 00:
Plaintiff's position.

[00:34:00] Speaker 00:
I don't see a finding there that.

[00:34:03] Speaker 04:
That's just referencing your argument you made on page 24, which is quoting your argument from Judge Fogel.

[00:34:08] Speaker 03:
Correct your argument, Your Honor.

[00:34:10] Speaker 03:
What's going on here is that

[00:34:11] Speaker 04:
This is all your argument.

[00:34:13] Speaker 04:
Where did she specifically make any suggestion that she believed you or was relying on Judge Fogel when she specifically said she wouldn't?

[00:34:22] Speaker 03:
I read that passage to me, Your Honor, that she had taken that as true.

[00:34:25] Speaker 03:
And in fact, that is conceded at page 55, footnote 14 of their briefing.

[00:34:30] Speaker 03:
There's no dispute here.

[00:34:32] Speaker 03:
They say Mr. Simcoe's retention as a consultant for the 338 re-exam doesn't extend the duty to the 517 proceedings.

[00:34:40] Speaker 03:
It's at page 55, footnote 14.

[00:34:46] Speaker 03:
There is no serious factual dispute.

[00:34:50] Speaker 04:
Well, this is a footnote in their brief on appeal.

[00:34:53] Speaker 04:
I don't know how that does anything to the evidence you presented to the district court.

[00:34:59] Speaker 03:
Well, Your Honor, the point is that the evidence, I agree with Judge Bryson that the evidence does cut both ways.

[00:35:05] Speaker 03:
But there's evidence to support that.

[00:35:07] Speaker 00:
Well, I'm not sure how it cuts in your direction at all.

[00:35:09] Speaker 00:
I mean, the evidence that I found, which was the same evidence that you cited, not coincidentally, seemed to suggest that he was hired in connection with the 382 that was in a reference to the 338.

[00:35:25] Speaker 03:
The testimony, Your Honor, is that he was hired around the time.

[00:35:27] Speaker 03:
And it is unclear.

[00:35:30] Speaker 03:
There is testimony from Dr. Harari and Mr. Marotra that he was hired around the time of the re-exam.

[00:35:38] Speaker 03:
They don't know exactly when.

[00:35:39] Speaker 03:
And Your Honor, that fuels the inference here that all they're doing is trying to act like Mr. Simcoe didn't have anything to do with this because he very likely knew of and made them aware of these material references.

[00:35:51] Speaker 04:
I mean, your real problem here is

[00:35:53] Speaker 04:
For Judge Fogel, you went through discovery.

[00:35:56] Speaker 04:
You presented a lot of things.

[00:35:57] Speaker 04:
You may have taken depositions.

[00:35:59] Speaker 04:
And here, you tried to piggyback on the proceedings before Judge Fogel.

[00:36:03] Speaker 04:
And you didn't introduce any of that evidence.

[00:36:05] Speaker 04:
And you're trying to rely on mostly what Judge Fogel, you did before him.

[00:36:10] Speaker 04:
And it's just not enough to create a genuine issue.

[00:36:12] Speaker 03:
Well, Your Honor, I do want to direct you to, we did, in fact, cite this evidence.

[00:36:15] Speaker 03:
Sanders just stood up here and said, we didn't cite the evidence.

[00:36:18] Speaker 03:
We only cited Judge Fogel.

[00:36:19] Speaker 03:
That's in our argument, where we were trying to present to Judge Armstrong

[00:36:22] Speaker 03:
how to deal with this evidence.

[00:36:25] Speaker 03:
At pages 11, 877 to 79 in our brief, it is in the background section, because that's, of course, where we would present the factual basis for our argument.

[00:36:34] Speaker 04:
I don't disagree that you definitely cited the ALJ opinion.

[00:36:37] Speaker 03:
But you didn't cite much else.

[00:36:40] Speaker 03:
And the intent evidence, Your Honor.

[00:36:41] Speaker 03:
And that's at 11, 877 to 79.

[00:36:43] Speaker 03:
We ran through it all, and we provided that's why it's on the record here.

[00:36:47] Speaker 00:
But when you get to the intent argument,

[00:36:52] Speaker 00:
We say, here's why we've established intent.

[00:36:54] Speaker 00:
There's no reference to the ALJ's opinion.

[00:36:56] Speaker 00:
So if I'm writing Judge Armstrong's opinion, I say, what do they have to say about intent?

[00:37:02] Speaker 00:
And there's no reference to the ALJ's opinion.

[00:37:05] Speaker 03:
Your Honor, the ALJ didn't consider inequitable conduct.

[00:37:08] Speaker 03:
That was just an invalidity determination.

[00:37:09] Speaker 03:
So of course we weren't citing that on the intent question.

[00:37:12] Speaker 03:
What we were citing was the evident, the freestanding evidence of intent, which we ran through, put in the record.

[00:37:17] Speaker 00:
So you're saying that the ALJ's opinion only goes to materiality.

[00:37:22] Speaker 03:
Doesn't have anything to do with intent.

[00:37:24] Speaker 03:
Okay.

[00:37:24] Speaker 03:
And so our position here is that what the court should have done, the reason we were citing Judge Fogel, Judge Hughes, is that what the court should have done is balance it the same way.

[00:37:32] Speaker 03:
That was the argument that we were making, that the very same evidence was present in both cases.

[00:37:37] Speaker 03:
We presented that evidence and said, you should reach the same conclusion Judge Fogel did at summary judgment.

[00:37:42] Speaker 04:
But what evidence?

[00:37:43] Speaker 04:
Are you talking about that ambiguous deposition testimony?

[00:37:48] Speaker 04:
Is there anything more specific about the hiring of the consultant?

[00:37:53] Speaker 04:
I mean, if he certainly was hired to work on that reexamination,

[00:37:58] Speaker 04:
seems like a good point for you.

[00:38:00] Speaker 04:
But the deposition testimony doesn't do it for me.

[00:38:03] Speaker 04:
Is there anything else?

[00:38:04] Speaker 03:
That's the evidence we have in the record, Your Honor.

[00:38:06] Speaker 03:
The record is not as well developed as it could be on that point.

[00:38:09] Speaker 03:
We also do have evidence that they cited the same Simcoe references in the 560 patent application, which Judge Bryson referred to.

[00:38:16] Speaker 03:
And on the face of it, it's related, Your Honor.

[00:38:18] Speaker 03:
That patent is multi-state flash EE prompt.

[00:38:21] Speaker 00:
And the prosecution attorney... It wasn't clear to me on the face of it.

[00:38:24] Speaker 00:
And I have to say, I'm not surprised it wasn't clear to Judge Armstrong, because she said it wasn't clear to her.

[00:38:29] Speaker 00:
I mean, that's one of those instances in which you sure could have benefited from an expert.

[00:38:34] Speaker 03:
Well, Your Honor, on intent, expert evidence likely would not have been admissible anyway.

[00:38:38] Speaker 03:
But you need to relate the patents.

[00:38:39] Speaker 03:
What the patent means.

[00:38:41] Speaker 03:
Well, there's further evidence of that, Your Honor.

[00:38:43] Speaker 03:
It's exhibit 37 to their summary judgment brief.

[00:38:46] Speaker 03:
There's testimony from the prosecuting attorney that the searches he ran

[00:38:49] Speaker 03:
to find material prior our references were about multi-state flash memory.

[00:38:54] Speaker 03:
That from the very title of the 560 patent suggests very strongly that it was the same searches he ran the first time around.

[00:39:01] Speaker 00:
The natural inference there is asking an awful lot of the district court to go

[00:39:06] Speaker 00:
around searching through the record to find something in Exhibit 13 that you didn't point out in your brief.

[00:39:13] Speaker 03:
Fair enough, Your Honor, but it is also taken in context with the other evidence that we have here.

[00:39:16] Speaker 03:
It has to be considered in the aggregate.

[00:39:19] Speaker 03:
If I can make two more very quick points in response to what came up.

[00:39:22] Speaker 03:
The 517 damages argument is absolutely not a basis for this court to affirm.

[00:39:28] Speaker 03:
That was not presented at summary judgment.

[00:39:29] Speaker 03:
It was not a basis on which the district court granted summary judgment.

[00:39:32] Speaker 03:
And the evidence that Sandisk cites cuts both weights.

[00:39:35] Speaker 03:
Our expert testified, if you look at the deposition testimony, he testified that it's true he didn't break out 517 and 338 in separate columns, but that there's sufficient evidence from his report, and it very well might be in his report, sufficient evidence on damages on 517 alone.

[00:39:50] Speaker 03:
That is not a basis on which this court can affirm.

[00:39:54] Speaker 03:
And finally, Your Honor, on the admissibility point, what the jury would consider, we're at summary judgment.

[00:39:59] Speaker 03:
The ITC determination is admissible evidence at summary judgment to create a genuine issue of material fact.

[00:40:05] Speaker 03:
Sandus waived all its other evidentiary arguments, and it can revisit them when we actually move the document into evidence.

[00:40:11] Speaker 03:
But for summary judgment purposes, it's just an admissibility question, and it is admissible.

[00:40:16] Speaker 00:
And, but it's not just a question of admissibility because your summary judgment evidence has to be sufficient to support a jury verdict in your favor.

[00:40:26] Speaker 00:
That's correct.

[00:40:26] Speaker 00:
All right.

[00:40:27] Speaker 00:
So is it, would it be the case that if I walked in and I took an ALJ opinion, which was on at least on one issue, exactly the same issue had been adjudicated in

[00:40:43] Speaker 00:
case involving different parties.

[00:40:45] Speaker 00:
And I slap it down on the desk and I say, there you are.

[00:40:47] Speaker 00:
That's my case on, let's say, materiality.

[00:40:51] Speaker 00:
Is that sufficient to get to a jury?

[00:40:53] Speaker 03:
It can be, Your Honor.

[00:40:54] Speaker 03:
And that's what the court said in Henry versus Dayton.

[00:40:56] Speaker 03:
The only evidence that the party in that case had was an ALJ determination and self-serving testimony.

[00:41:01] Speaker 03:
What we have is an ALJ determination and admission from one of Santa's inventors that permanent inhibitor had already been disclosed.

[00:41:07] Speaker 03:
It's the very same situation.

[00:41:08] Speaker 03:
It can be

[00:41:09] Speaker 00:
Self-serving testimony, that's independent testimony.

[00:41:12] Speaker 03:
Sure, as is the founders testimony.

[00:41:13] Speaker 00:
But my question is, could you just say, we're not going to bother with evidence.

[00:41:17] Speaker 00:
We've got evidence.

[00:41:18] Speaker 00:
We've got the ALJ's opinion.

[00:41:19] Speaker 00:
Co-op.

[00:41:20] Speaker 03:
Summary judgment in the but for materiality context, we believe you could, Your Honor, because the question is, would the PTO have not issued these patents?

[00:41:27] Speaker 03:
We have very strong probative evidence from a different body that says the PTO wouldn't have.

[00:41:32] Speaker 03:
And that is sufficient to create a genuine issue of material

[00:41:35] Speaker 03:
Thank you.

[00:41:36] Speaker 03:
We thank both sides.

[00:41:37] Speaker 03:
The case is submitted.

[00:41:38] Speaker 03:
That concludes our proceedings for this morning.