[00:00:20] Speaker 03:
Okay, is counsel here for Golden Bridge Technology and Apple?

[00:00:25] Speaker 03:
Please come forward.

[00:00:44] Speaker 03:
Okay, this case is number 16, 1537,

[00:00:49] Speaker 03:
Golden Bridge Technology, Incorporated against Apple, Incorporated.

[00:00:53] Speaker 03:
Mr. Russo.

[00:00:54] Speaker 00:
Thank you, Your Honor.

[00:00:57] Speaker ?:
Good morning.

[00:00:59] Speaker 00:
I'd ask to reserve five minutes, Your Honor, for rebuttal.

[00:01:04] Speaker 00:
Must there be only one and always just one prevailing party in patent litigation?

[00:01:09] Speaker 02:
Mr. Russo, it seems a primary argument in your opening brief is that we should reverse Shambhi Intel.

[00:01:17] Speaker 02:
You know perfectly well that it's well established that a prior presidential decision on a point of law by a panel of this court is binding unless it's overruled by the court in bank.

[00:01:30] Speaker 02:
So what are you asking us to do?

[00:01:32] Speaker 02:
Do you think we have authority to overrule it?

[00:01:34] Speaker 00:
No, Your Honor.

[00:01:34] Speaker 00:
In fact, it's pretty clear we have to take this step to ask for en banc review or to go to the Supreme Court on this.

[00:01:41] Speaker 00:
Respectfully, Your Honor, we think the decision is wrong.

[00:01:44] Speaker 00:
It can be modified by this court or it can be explained.

[00:01:50] Speaker 00:
And the explanation is very simple.

[00:01:53] Speaker 00:
In litigation, as in war, there can be winners and there can be losers, clearly.

[00:01:58] Speaker 00:
There can also be lose-lose outcomes.

[00:02:01] Speaker 00:
We like to talk about in mediation of cases before they get to your court or before they get to the district court.

[00:02:07] Speaker 00:
That's the only way to get to a win-win outcome.

[00:02:10] Speaker 00:
Well, there are win-win outcomes that do occur, typically not in litigation.

[00:02:15] Speaker 00:
There are also lose-lose outcomes that occur in litigation.

[00:02:18] Speaker 00:
This is such a case.

[00:02:20] Speaker 02:
Are you arguing for apportionment for each party to bear its own cost or for district courts to have the discretion to choose either one?

[00:02:30] Speaker 00:
District courts, respectfully, Your Honors, have to have that discretion under most recent Supreme Court authority and even under the logic of the original decisions made by this court

[00:02:43] Speaker 00:
that said, look, we think that we should establish special circuit law on costs.

[00:02:49] Speaker 00:
At that time, the regional circuits were in disarray.

[00:02:53] Speaker 00:
The regional circuits, particularly in light of recent Supreme Court cases, are in complete uniformity, that the district judge has total discretion.

[00:03:03] Speaker 00:
What happened here is the district court was constrained.

[00:03:07] Speaker 04:
Are you saying that we should overturn Shum because its interpretation of Rule 54 is wrong, or we should overturn Shum because we shouldn't be applying federal circuit law to that particular procedural question?

[00:03:23] Speaker 00:
I think it's actually both, Your Honor.

[00:03:26] Speaker 00:
In truth, the original underlying basis of Shum is a decision from some 20 years earlier in 1996 that seemed to say,

[00:03:35] Speaker 00:
Well, we have to go one way or the other.

[00:03:37] Speaker 00:
Should we go with the regional circuits, or should we go in a different direction?

[00:03:41] Speaker 00:
And ultimately, it decided, although it sort of indicated it could go either way, that it was going to establish a special rule for patent cases.

[00:03:49] Speaker 00:
What we now see in the Supreme Court is these special rules for patent cases are not the way the Supreme Court jurisprudence is looking at things.

[00:03:57] Speaker 04:
Well, that's certainly true on a broad scale basis.

[00:04:00] Speaker 04:
But I have a hard time.

[00:04:03] Speaker 04:
Concluding that you're correct when you say octane fitness overrules Shum, because octane fitness was an analysis of 285, which is a special statutory provision relating to patent cases.

[00:04:15] Speaker 04:
I agree, Your Honor.

[00:04:16] Speaker 04:
Because D4D is a broadly applicable rule of procedure.

[00:04:20] Speaker 00:
I agree.

[00:04:20] Speaker 00:
We may have amplified in saying overruled.

[00:04:23] Speaker 00:
It's a policy question, ultimately.

[00:04:25] Speaker 00:
It's a policy question for the federal courts.

[00:04:28] Speaker 00:
How should the federal?

[00:04:29] Speaker 02:
Wait, wait.

[00:04:30] Speaker 02:
So you don't think that we're bound

[00:04:33] Speaker 02:
to follow octane?

[00:04:35] Speaker 00:
No, you are bound to follow octane.

[00:04:37] Speaker 00:
The question is, is the reasoning in octane and the premise of octane that the district judges are to be given wide discretion in these areas?

[00:04:47] Speaker 00:
They clearly have been given.

[00:04:49] Speaker 00:
They'd be given wide discretion on attorney's fees, wide discretion on damages.

[00:04:53] Speaker 00:
They should have that same discretion on costs.

[00:04:55] Speaker 00:
They shouldn't try to

[00:04:57] Speaker 00:
figure out, well, I have to go through this methodology where first the Federal Circuit says it's a Federal Circuit decision whether someone is, and there must be, a prevailing party.

[00:05:09] Speaker 04:
There aren't always prevailing parties.

[00:05:11] Speaker 04:
Even if you're right that Shum made a few errors in its analysis, doesn't Shum leave open the very kind of discretion that you're talking about?

[00:05:24] Speaker 04:
I mean, it drops a footnote to say, of course

[00:05:27] Speaker 04:
even if you have a prevailing party, you still balance the level of wins for each side, and you still can ultimately award zero across if you want.

[00:05:37] Speaker 04:
So what's the difference?

[00:05:38] Speaker 00:
Well, the difference is this, Your Honor.

[00:05:40] Speaker 00:
In the Ninth Circuit, and this is where these rules seem to go at odds with each other, we have a Federal Circuit rule that says first you have to decide under Rule 54 who is, and there must be only one, prevailing party.

[00:05:54] Speaker 00:
Then you go to regional circuit law, which in the Ninth Circuit says once you decide that someone is a prevailing party, you should award them costs.

[00:06:03] Speaker 00:
And then you drill down to the bill of cost to figure out what goes one way and what goes another.

[00:06:08] Speaker 00:
That gating decision with the Ninth Circuit rule makes sense when the Ninth Circuit rule exists that the judge can decide there's no prevailing party.

[00:06:20] Speaker 00:
There are often cases that are lose-lose.

[00:06:22] Speaker 00:
There are often cases where both parties lose as a result on significant issues.

[00:06:26] Speaker 03:
So here, the district judge took the straightforward approach and said, there's only one prevailing party.

[00:06:35] Speaker 03:
And what has occurred to me is, would there be a difference if, for instance, here a suit was brought for infringement, there was an affirmative defense of invalidity?

[00:06:50] Speaker 03:
The example, and there's a prevailing party, there's no infringement.

[00:06:53] Speaker 03:
That ends it as far as this judge is concerned.

[00:06:57] Speaker 03:
Had a declaratory judgment action been brought for let's say invalidity within a counterclaim for infringement, I can see that there would be an interesting question raised.

[00:07:15] Speaker 03:
But it is really hard to overcome the reasoning

[00:07:19] Speaker 03:
of this court where there was a simple case brought for infringement and a simple affirmative defense, several affirmative defenses.

[00:07:30] Speaker 03:
So where is the distinction whereby the affirmative defense would, on your theory, be treated the same way as either a counterclaim or a contrary judgment?

[00:07:42] Speaker 02:
To add to that, suppose the district court said, ah, we decide the question of invalid

[00:07:50] Speaker 02:
No infringement.

[00:07:52] Speaker 00:
That would have made this easier and wouldn't be up here.

[00:07:54] Speaker 00:
Clearly, Your Honor.

[00:07:55] Speaker 00:
But Apple went the other way.

[00:07:56] Speaker 00:
In this case, Apple, after losing on its invalidity defense in front of the jury, made a motion for a new trial.

[00:08:05] Speaker 00:
Remember, they didn't have to do that.

[00:08:07] Speaker 00:
They didn't have to carry out the proceedings to say, and we actually want a new trial on invalidity.

[00:08:13] Speaker 00:
Now, why?

[00:08:15] Speaker 00:
This patent is still alive.

[00:08:17] Speaker 00:
This patent affects their product line.

[00:08:19] Speaker 00:
This patent does have an impact on other iPhone products.

[00:08:24] Speaker 00:
So it's not, your honor makes a good point, both of you do that.

[00:08:28] Speaker 00:
Well, there could be different procedural contexts that perhaps sharpen this issue.

[00:08:33] Speaker 00:
But in this case, the issue was just as sharp because Apple pursued the invalidity defense through every mechanism possible.

[00:08:41] Speaker 00:
The only thing it didn't do

[00:08:43] Speaker 00:
nor did our client, is take an appeal on the ultimate jury verdict here.

[00:08:48] Speaker 00:
They accepted the fact.

[00:08:49] Speaker 03:
But you made post trial motions.

[00:08:52] Speaker 00:
They did.

[00:08:53] Speaker 03:
And so did yourself, did you not?

[00:08:55] Speaker 00:
We did.

[00:08:57] Speaker 03:
And so you think that that's sufficient to turn the tide as to who prevails?

[00:09:04] Speaker 00:
No, it's not about turning the tide, Your Honor.

[00:09:07] Speaker 00:
It's really about who has the power to decide what.

[00:09:10] Speaker 04:
Well, if the district court had the discretion, and we were here with the district court not having cited Schaman, said, I first have to decide if there is a prevailing party at all.

[00:09:21] Speaker 04:
And in this case, I decide that Apple's the prevailing party, and then went ahead and awarded costs.

[00:09:28] Speaker 04:
Would you argue that that was error for the trial court?

[00:09:30] Speaker 00:
No.

[00:09:31] Speaker 00:
No, I think, Your Honor, then we would be clearly in a situation where the judge said, I have complete discretion to decide.

[00:09:39] Speaker 00:
if there's no prevailing party.

[00:09:42] Speaker 00:
In this case, perhaps it's, Your Honor, Judge Newman's dissent in Shum that best explains when you say when plaintiff as well as a defendant have lost on significant issues, courts have generally awarded no costs.

[00:09:57] Speaker 00:
That's a decision that could have been made if Shum were not in the way of it.

[00:10:03] Speaker 00:
Shum was in the way of making that decision.

[00:10:06] Speaker 00:
And it's pretty clear from the district court's opinion

[00:10:08] Speaker 00:
that he saw that as constraining him in what he could do.

[00:10:14] Speaker 00:
We think that constraint makes no sense under current Supreme Court law, no sense under regional circuit law, and no sense as a matter of policy when district judges are in the best position to decide if it's lose-lose.

[00:10:29] Speaker 00:
There are cases that are lose-lose, both parties lost on significant issues.

[00:10:35] Speaker 00:
And that patent is still alive, and that patent still has vitality.

[00:10:39] Speaker 00:
The invalidity loss was a loss for Apple, albeit the judge felt constrained by some, as other judges do.

[00:10:47] Speaker 00:
As you see, sometimes they do.

[00:10:50] Speaker 00:
They sort of shoehorn around.

[00:10:52] Speaker 00:
The reality is we have a body of regional circuit law that goes in one direction, and we have this court that's going in another in the face of Supreme Court authority that would suggest that district judge discretion

[00:11:05] Speaker 00:
is really paramount.

[00:11:06] Speaker 04:
Is it your position that no other circuit agrees with Shum?

[00:11:11] Speaker 00:
You know, Your Honor, we went through all that we could find, ninth, eighth, seventh, sixth, second, and I think even the first.

[00:11:19] Speaker 00:
And we couldn't find decisions that cited Shum in other circuits.

[00:11:23] Speaker 00:
So we think Shum is out there pretty much as a lone ranger at this point.

[00:11:27] Speaker 04:
When you say cited Shum, that they don't have to cite Shum to come out the same way.

[00:11:31] Speaker 00:
That's true.

[00:11:31] Speaker 00:
That's true, Your Honor.

[00:11:32] Speaker 00:
We could not find a case in other circuits that seemed to have this gating approach that the Federal Circuit has decided to put in the way of district court discretion.

[00:11:43] Speaker 00:
It's really as simple as that.

[00:11:44] Speaker 00:
I don't have much more to argue.

[00:11:46] Speaker 00:
I know that there's arguments that were made that somehow we were supposed to make all these same arguments that we've made on appeal to the district judge.

[00:11:53] Speaker 00:
It's pretty clear the district judge was going to follow Shum.

[00:11:56] Speaker 00:
The district judge was very careful to explain what its reasoning was.

[00:12:02] Speaker 00:
The district judge, just as perhaps this panel is bound, but at some point, somewhere, somehow, this is going to get reviewed.

[00:12:10] Speaker 00:
And we believe the appropriate outcome is district court discretion.

[00:12:14] Speaker 00:
We reinstate it fully.

[00:12:16] Speaker 00:
If there are no other questions, I'll reserve them.

[00:12:18] Speaker 02:
I have a question.

[00:12:19] Speaker 02:
Sure.

[00:12:21] Speaker 02:
In the red break at note two, Apple says that GBT is a New Jersey corporation required to maintain an active registered agency.

[00:12:31] Speaker 02:
but that it, quote, has essentially vanished with the exception of this appeal.

[00:12:36] Speaker 02:
Is that true?

[00:12:38] Speaker 00:
No, Your Honor.

[00:12:38] Speaker 00:
I think it's amazing for the largest company, largest public company in the world, to take the position that a small company that it knows owns a portfolio of patents.

[00:12:50] Speaker 00:
In fact, it has since placed liens on GBT's patents to say somehow that there are no assets and it vanished.

[00:12:58] Speaker 00:
The company still exists.

[00:13:00] Speaker 00:
The company is a New Jersey corporation.

[00:13:03] Speaker 00:
It has, unfortunately, had financial stress.

[00:13:07] Speaker 00:
There's no question about that.

[00:13:08] Speaker 02:
Is there still a registered agent in existence?

[00:13:10] Speaker 00:
We believe there is, Your Honor.

[00:13:11] Speaker 02:
What do you mean you believe?

[00:13:13] Speaker 00:
Well, I don't have the data in front of me because I'm not the corporate lawyers.

[00:13:16] Speaker 00:
I'm just here as the counsel on this appeal.

[00:13:19] Speaker 00:
But I think we could supplement and provide you that data, Your Honor.

[00:13:23] Speaker 00:
We don't think that GBT's financial distress

[00:13:27] Speaker 00:
somehow create some sort of abandonment argument or somehow that it doesn't have rights to pursue the appeal that it's pursuing here.

[00:13:38] Speaker 03:
OK, let's hear from the other side.

[00:13:40] Speaker 00:
Thank you, Your Honor.

[00:13:49] Speaker 03:
Mr. Mead.

[00:13:50] Speaker 01:
Thank you, Your Honors.

[00:13:51] Speaker 01:
Lowell Mead with Cooley LLP on behalf of Apple.

[00:13:55] Speaker 01:
So I think, Your Honors, we're hitting on

[00:13:57] Speaker 01:
All the many points why that this record should be affirmed here.

[00:14:01] Speaker 02:
You know let me just back you up to my last housekeeping matter I let your opposing counsel go through before I raise it and then we'll break this is sequence all I won't break your sequence What's your basis for having?

[00:14:16] Speaker 01:
Made that statement Well, so the essentially vanished is so there's been a long history since the proceedings that are now at issue here in the record of

[00:14:27] Speaker 01:
Apple, so first, it moved actually to execute the judgment.

[00:14:31] Speaker 01:
So GBT did not post a supersedious bond to stay execution of the judgment.

[00:14:37] Speaker 01:
So as it was entitled to do, so Apple filed a motion with the court.

[00:14:43] Speaker 01:
The court ended up issuing an order.

[00:14:46] Speaker 01:
Apple also moved to take discovery of GBT.

[00:14:50] Speaker 01:
So if GBT has not vanished,

[00:14:52] Speaker 01:
Where are they?

[00:14:53] Speaker 01:
The court actually ordered GBT to appear for discovery.

[00:14:55] Speaker 02:
Do we have that in the record by any chance?

[00:14:58] Speaker 01:
It's on the docket and pacer.

[00:15:02] Speaker 01:
I don't think it's in the joint appendix, all of these.

[00:15:04] Speaker 01:
That's all right.

[00:15:05] Speaker 02:
So it is in the record.

[00:15:06] Speaker 01:
And there have been additional proceedings after that.

[00:15:08] Speaker 01:
So the court ordered it to appear.

[00:15:09] Speaker 01:
The GBT didn't appear.

[00:15:11] Speaker 01:
And actually, in order to assign the patents as partial satisfaction, this patent and other patents, the court ordered that.

[00:15:20] Speaker 01:
GBT didn't even file anything.

[00:15:22] Speaker 01:
So the essentially vanished is you have court orders in the case that you were a party to, and you don't respond and don't appear.

[00:15:29] Speaker 04:
Is that judgment debt or exam?

[00:15:32] Speaker 01:
Exactly, judgment debt or exam.

[00:15:35] Speaker 04:
And the court didn't do anything when its order was violated?

[00:15:38] Speaker 01:
Well, the court ultimately ended up entering an order for GBT to assign this patent and other patents to Apple in partial satisfaction

[00:15:50] Speaker 01:
and also basically prohibit GBT from assigning other financial interests.

[00:15:57] Speaker 01:
There are some other terms of the order.

[00:16:00] Speaker 01:
In that respect, yes.

[00:16:02] Speaker 03:
Let's proceed to the merits of this dispute.

[00:16:06] Speaker 03:
Let's get to the substance of it.

[00:16:08] Speaker 04:
Do you agree that no other circuit agrees with our circuit in how to interpret 54D?

[00:16:14] Speaker 01:
No.

[00:16:15] Speaker 01:
So we disagree with the characterizations on the other side, that this court is a, quote unquote, lone ranger.

[00:16:21] Speaker 01:
GBT doesn't cite one circuit court of appeals a decision from any other circuit that actually holds that, contrary to the Shum Rule,

[00:16:30] Speaker 01:
that two opposing parties can both be the prevailing party under Rule 54.

[00:16:34] Speaker 04:
So do you have cases where courts have specifically said you can only have one prevailing party?

[00:16:41] Speaker 01:
So in the cases we've seen and decided by GBT, we didn't see that particular issue teed up where there was a dispute and resolved in the same way.

[00:16:51] Speaker 04:
OK, well, I'm talking about the cases you found.

[00:16:53] Speaker 01:
So we did not know.

[00:16:55] Speaker 01:
I haven't seen that particular issue teed up in the other district courts.

[00:16:59] Speaker 01:
The language of the rule, and actually I'll point you in a moment to GBT keeping it below, agreed with that reasoning of what the rule means.

[00:17:09] Speaker 04:
Right, I understand that.

[00:17:11] Speaker 04:
So you're saying that you didn't search to see if any other Court of Appeals ever actually expressly addressed this question?

[00:17:18] Speaker 01:
The searching we've done, we didn't see that issue.

[00:17:21] Speaker 01:
I can't prove the negative that that issue hasn't been

[00:17:24] Speaker 01:
addressed and resolved.

[00:17:26] Speaker 01:
But in the cases that we're aware of, we haven't seen that.

[00:17:29] Speaker 04:
What about other district court decisions?

[00:17:31] Speaker 01:
So the only district court decision that we've seen was cited by GBT.

[00:17:35] Speaker 01:
So there's a Central District of California case, the Anderson case cited in GBT's blue brief.

[00:17:42] Speaker 01:
So in that case, there's very unique facts where essentially it was not disputed.

[00:17:45] Speaker 01:
So you had multiple different plaintiffs all had various claims against the defendant.

[00:17:50] Speaker 01:
One of the plaintiffs

[00:17:52] Speaker 01:
prevailed was essentially not only for $8,000 judgment and then submitted costs in addition to the defendant submitting its own costs.

[00:17:59] Speaker 01:
And in that case, the defendant didn't dispute the amount of costs of that plaintiff.

[00:18:06] Speaker 01:
So it was essentially undisputed points.

[00:18:08] Speaker 01:
It didn't address and resolve this shunt issue.

[00:18:10] Speaker 04:
What about the threshold question?

[00:18:11] Speaker 04:
Should this be a patent-specific rule when we're talking about the interpretation of Rule 54D?

[00:18:19] Speaker 04:
Or should we be following the regional circuits?

[00:18:22] Speaker 01:
So in this particular case, in the fact pattern in this case, this was just straightforward, as clean and simple.

[00:18:29] Speaker 04:
I get that.

[00:18:30] Speaker 04:
Let's assume we're just talking hypothetically.

[00:18:33] Speaker 04:
We're going to write a law review article.

[00:18:35] Speaker 04:
Should we be applying regional circuit law or federal circuit law to interpretation of a procedural rule?

[00:18:42] Speaker 01:
So in the case of the only claim is patent infringement claim,

[00:18:48] Speaker 01:
Then the prevailing party issues, that would be specific to patent law.

[00:18:52] Speaker 01:
How do you determine who prevails?

[00:18:53] Speaker 01:
And this court's weighed in on that.

[00:18:55] Speaker 01:
The Kenselbaugh case, the Brooks Furniture case cited by the district court, that would be a federal.

[00:19:00] Speaker 01:
So in a case where you only have a patent infringement claim and that's it, like this case, it does make sense that it's a federal circuit issue that this court is equipped to provide uniformity on the patent-specific decision of

[00:19:16] Speaker 01:
to have prevailed, because as this court is well aware, claim destruction, invalidity, and not infringement can be intertwined, as they actually were in this case.

[00:19:24] Speaker 04:
But you had a DJ for invalidity.

[00:19:27] Speaker 04:
It wasn't just a defense, right?

[00:19:28] Speaker 04:
So the trial court had to decide it.

[00:19:32] Speaker 01:
So we did have a DJ.

[00:19:34] Speaker 01:
And just like this court has addressed in the Brooks Furniture case, it was actually not only a DJ, but the accused infringer was the one who filed the lawsuit,

[00:19:43] Speaker 01:
with a DJ claim of invalidity, as well as non-infringement, ultimately prevailed only on the non-infringement.

[00:19:51] Speaker 01:
The patent was left valid.

[00:19:52] Speaker 01:
So filed the lawsuit, lost the claim.

[00:19:54] Speaker 04:
But you could have walked away from your invalidity request.

[00:19:58] Speaker 01:
So in this case, as in probably most cases of this nature, so the invalidity issue was simply a response.

[00:20:06] Speaker 01:
So the issue in the case was, is Apple liable for infringing this patent, yes or no?

[00:20:12] Speaker 01:
And so Apple raised various defenses, also counterclaims, essentially as a procedural point, and different ways to get to that outcome of no liability.

[00:20:22] Speaker 01:
And I'll note that, as counsel for the other side noted, Apple did file a motion for a judgment as a matter of law after the trial.

[00:20:32] Speaker 01:
And that illustrates what's going on here is not seeking to

[00:20:38] Speaker 01:
bring its own claim, Apple's not seeking to bring its own claim to just reach out and invalidate this patent, other than securing no liability.

[00:20:46] Speaker 01:
So while when GBT didn't appeal the non-infringement verdict, and so the merits are basically done, Apple has no liability in this case, that's settled.

[00:20:55] Speaker 01:
There's no reason for Apple to then essentially burden this court in itself, and GBT, with an appeal on the validity, because... You gonna auction that thing off?

[00:21:06] Speaker 01:
So the claim on the patents.

[00:21:11] Speaker 01:
So I can't speak to the plans, but that's been recorded with the patent office, the ownership claim.

[00:21:19] Speaker 01:
So happy to answer any other questions.

[00:21:22] Speaker 01:
I did want to address a few points that were raised just to make sure they're covered in the record here.

[00:21:29] Speaker 01:
So one of which is on the waiver issue.

[00:21:32] Speaker 01:
multiple levels, really, of waiver here.

[00:21:35] Speaker 01:
One is, as Your Honor pointed out, there's a procedure for en banc review that no petition was filed here until 35.

[00:21:43] Speaker 01:
Of course, we're all aware of that.

[00:21:45] Speaker 01:
In addition, the waiver on the facts of this case are, as Apple's Red Reef pointed out, on the facts of this case, GBT went out of its way below, right, to make clear it's not arguing it's a prevailing party or even partially prevailing.

[00:22:00] Speaker 01:
But what I want to point out in addition to that

[00:22:02] Speaker 01:
With the argument, GBT was raising that essentially everyone was constrained below, and the Shum issue never came up.

[00:22:10] Speaker 01:
So in the joint appendix on that same hearing, where the parties discussed the, or GBT made clear from the outside, hey, we're not arguing, we're prevailing.

[00:22:22] Speaker 01:
So the joint appendix pages 1186 to 1187.

[00:22:25] Speaker 01:
So first, the court was essentially asking GBT, I want to clarify,

[00:22:32] Speaker 01:
the interpretation of law you want me to apply here.

[00:22:34] Speaker 01:
So first, ask about discretion.

[00:22:37] Speaker 01:
So ask GBT.

[00:22:39] Speaker 01:
So I have within my discretion under the federal rule, I have the authority or the discretion to consider the relative success or lack of success of each party.

[00:22:47] Speaker 01:
Correct.

[00:22:48] Speaker 01:
And then continued, even though the rule clearly requires me to figure out which side prevailed, because there can be only one prevailing party under the rule.

[00:22:58] Speaker 01:
GBT responds, right.

[00:23:00] Speaker 01:
Those are two different analyses to undertake.

[00:23:02] Speaker 01:
That's correct, Your Honor.

[00:23:04] Speaker 01:
OK.

[00:23:05] Speaker 01:
And so this issue couldn't have been more squarely raised.

[00:23:09] Speaker 01:
The court said, and this is on page 1187 of the Joint Appendix, the rule requires me to figure out one prevailing party, and there can only be one.

[00:23:17] Speaker 01:
Is that correct?

[00:23:18] Speaker 01:
Correct.

[00:23:19] Speaker 01:
And so this is a classic waiver issue.

[00:23:21] Speaker 01:
If GBT wanted to argue, as it does now, just take another bite of the apple and change the law,

[00:23:28] Speaker 01:
They had the opportunity to do that.

[00:23:31] Speaker 04:
Another bite at the apple?

[00:23:32] Speaker 01:
So to speak.

[00:23:32] Speaker 04:
Feeling like Judge Laurie is in the room.

[00:23:39] Speaker 01:
Happy to address any of the other points.

[00:23:41] Speaker 01:
I think, Your Honors, we're hitting the points that we wanted to raise.

[00:23:47] Speaker 01:
The octane fitness issued in 2014, again, that's a wave.

[00:23:50] Speaker 01:
If they wanted to raise that below, by the 2015 hearing below, that should have been raised.

[00:23:57] Speaker 01:
18 months before.

[00:24:00] Speaker 01:
Right, so that's the Wrentrop case cited in Apple's red brief, right?

[00:24:05] Speaker 01:
So jury trial, KSR rulings, you need to raise it at the time before the district court.

[00:24:11] Speaker 01:
So I think we've talked about the regional circuit court.

[00:24:16] Speaker 01:
There isn't a material difference.

[00:24:17] Speaker 01:
This court is not the Lone Ranger.

[00:24:19] Speaker 01:
It's made clear that costs can be discretionarily not awarded to either party.

[00:24:27] Speaker 01:
And we haven't seen a case, at least, that is directly contrary to the Shum Rule.

[00:24:34] Speaker 01:
And so finally, with respect to if there's any interest, the Shum Rule, as Your Honor pointed out, Judge Newman, there could be hypothetical cases.

[00:24:48] Speaker 01:
So the Shum Case itself was one example where you had a much more complicated scenario, many different claims.

[00:24:55] Speaker 01:
prevailing kind of mixed bag on both sides, and Your Honor's dissent in that case pointed out, you know, there should be, you know, maybe the plaintiff was the one who should have been awarded the prevailing party status there, and the dissent, your opinion did not have any disagreement with the actual application of the statute, the interpretation.

[00:25:22] Speaker 01:
So unless there's anything else I'm happy to

[00:25:25] Speaker 03:
Anything else?

[00:25:27] Speaker 03:
Anything else?

[00:25:28] Speaker 03:
Okay.

[00:25:28] Speaker 03:
Thank you.

[00:25:29] Speaker 03:
Thank you, Mr. Yead.

[00:25:37] Speaker 02:
This is Russo.

[00:25:38] Speaker 02:
Your brother refers to Rintrop, which says, when there is a relevant change in the law before entry of final judgment, a party generally must notify the district court.

[00:25:50] Speaker 02:
If the party fails to do so, it waives arguments on appeal that are based on that change in law.

[00:25:55] Speaker 02:
And as I said, Octane was decided 18 months before.

[00:26:00] Speaker 02:
And GBT didn't raise any arguments regarding the applicability of Octane before the court.

[00:26:06] Speaker 00:
How do you deal with that?

[00:26:08] Speaker 00:
I think it was pretty clear that the district court was going to follow federal circuit law and was not going to, on its own, say Octane or Halo or other cases that were subsequently decided.

[00:26:21] Speaker 00:
That's not answering my question.

[00:26:22] Speaker 00:
We didn't.

[00:26:23] Speaker 00:
I confirm we didn't.

[00:26:25] Speaker 00:
You're right.

[00:26:25] Speaker 04:
And you conceded here that really, octane doesn't control.

[00:26:28] Speaker 00:
No, octane the policy under octane controls here.

[00:26:31] Speaker 04:
But let's go to the transcript, because that's pretty deadly for you.

[00:26:36] Speaker 04:
I mean, to say to the judge twice that you're not arguing that you're a prevailing party or even a partial prevailing party, and to say to the judge that, yeah, there only can be one,

[00:26:46] Speaker 04:
How can we say that you've preserved this argument that Shum should be reconsidered and that there should be more than one prevailing party allowed or zero prevailing parties found?

[00:26:58] Speaker 00:
Because we retain the argument, as we stated to the judge, that there can be no prevailing party, that it can be lose-lose.

[00:27:06] Speaker 00:
It's not a situation where it's they won everything, we won something, we won nothing.

[00:27:14] Speaker 00:
We've retained the point about discretion, Your Honor.

[00:27:17] Speaker 00:
You're correct that we didn't raise the policy arguments that we believe here are controlling on what happens with Shum.

[00:27:25] Speaker 00:
Nor do we say, well, we think that Shum affords an exception that perhaps now could be found that says district judges always retain the ability to say there's no prevailing party.

[00:27:36] Speaker 00:
No one clearly.

[00:27:37] Speaker 00:
Everyone lost.

[00:27:38] Speaker 00:
That's our view here.

[00:27:40] Speaker 00:
And we'd like to give, Your Honors, if you'd allow it under Rule 28, citations to the other cases in the regional circuits that we think is supportive.

[00:27:49] Speaker 00:
And we will get the support for agent for process and all of that if you need that.

[00:27:54] Speaker 02:
Why didn't you do that in your brief?

[00:27:57] Speaker 00:
Well, Your Honor, we didn't see that as really controlling on what happens on a disposition on appeal.

[00:28:02] Speaker 00:
But clearly, that's something that Apple is raising.

[00:28:05] Speaker 00:
No, you raised it.

[00:28:07] Speaker 04:
How do you get away with not paying these costs when you didn't post a bond?

[00:28:12] Speaker 00:
Your Honor, if a company doesn't have the cash to pay, what does it do?

[00:28:15] Speaker 00:
You can't afford it.

[00:28:17] Speaker 04:
Well, how are you affording an appeal?

[00:28:19] Speaker 00:
This is pro bono work by me and my firm at this point, Your Honor.

[00:28:22] Speaker 00:
That's just the fact of life.

[00:28:24] Speaker 00:
That's the reality.

[00:28:26] Speaker 00:
That happens with some litigation.

[00:28:29] Speaker 00:
That's the reality of this particular appeal and this particular litigation.

[00:28:34] Speaker 03:
OK.

[00:28:35] Speaker 03:
Any more questions?

[00:28:37] Speaker 03:
Thank you, Mr. Russell.

[00:28:40] Speaker 03:
The case is taken under submission.