[00:00:15] Speaker ?: Okay. [00:01:38] Speaker ?: Thank you very much. [00:02:37] Speaker ?: The United States Court of Appeals for the Federal Circuit is now open and in session. [00:02:42] Speaker 01: God save the United States and this honorable court. [00:02:45] Speaker 00: Good morning. [00:02:46] Speaker 00: Please be seated. [00:02:51] Speaker 00: First case for argument this morning is 15-2082 Intercontinental Great Brands versus Kellogg North American Company. [00:03:00] Speaker 00: We're ready whenever you are. [00:03:04] Speaker 01: Good morning and may it please the court, Katie Crosby-Lehmann for Intercontinental Great Brands. [00:03:10] Speaker 01: At the time of the invention, the company was a craft company, now it is owned by Mondalis International. [00:03:16] Speaker 01: Starting with obviousness, the district court erred by using hindsight and common sense without supporting evidence to render the claims obvious. [00:03:25] Speaker 01: The district court found a prima facie case of obviousness based on comparing the prior combination [00:03:32] Speaker 01: and only then considered whether the secondary considerations rebut that finding. [00:03:37] Speaker 02: Counselor, did it make a finding, a prima facie finding, or did it make the final conclusion on obviousness? [00:03:47] Speaker 01: It made a prima facie finding, and then it considered the secondary considerations to see if the evidence rebuts that finding. [00:03:54] Speaker 00: And don't we have dozens and dozens of cases that counsel on doing it precisely the same way? [00:04:01] Speaker 00: And isn't the pushback on our cases where there was a determination, an ultimate determination of obviousness before you look at the objective indicia, but not when you go through doing a prima facie case and then consider an attentive prima facie finding of obviousness and then the secondary considerations? [00:04:20] Speaker 00: That's what our case law talks about. [00:04:21] Speaker 01: Well, here it is unique in that the prima facie case was based only on comparing it to [00:04:27] Speaker 01: a prior combination that was created by the court. [00:04:32] Speaker 01: If the court would have looked and treated all factors equally, the combination and the motivation to combine would not be so obvious. [00:04:41] Speaker 01: So it turns on the valuing secondary considerations to show that there was no simple common sense motivation to combine. [00:04:49] Speaker 00: I don't quite understand your answer. [00:04:53] Speaker 00: attacking or questioning the prima facie determination of obviousness based on the combination of references? [00:05:00] Speaker 01: I'm doing both. [00:05:01] Speaker 00: Or are you just saying it's weak and therefore the secondary consideration should have carried more weight? [00:05:07] Speaker 01: I'm saying that the prima facie case was done without considering the secondary considerations. [00:05:14] Speaker 01: So if the secondary considerations would have been treated as a co-equal factor, it would not have been so obvious to make that combination. [00:05:21] Speaker 01: So the core of our argument is that the court used common sense to get to a motivation to combine. [00:05:27] Speaker 01: And none of the secondary considerations were considered when the court was making that combination. [00:05:35] Speaker 00: Are you saying that the analysis of motivation to combine requires or includes a consideration of the secondary considerations? [00:05:44] Speaker 00: I'm really just trying to understand your argument. [00:05:48] Speaker 01: So the court made a prima facie case. [00:05:50] Speaker 04: Can you answer that very specific question, which seems to me at the heart of it, and then that is, does a court, before finding, and this is a factual issue, a motivation to combine, have to consider the secondary considerations? [00:06:04] Speaker 01: Yes. [00:06:05] Speaker 01: The court should consider secondary considerations as an equal factor when making its obviousness determinate. [00:06:11] Speaker 04: Let me try to separate things. [00:06:15] Speaker 04: Obviousness as a whole, [00:06:17] Speaker 04: is a conclusion of law based on a whole bunch of facts. [00:06:20] Speaker 04: Yes. [00:06:20] Speaker 04: Motivation to combine, we've said, is a fact traditionally done in thinking about the art traditionally before one considers the non-art factors. [00:06:33] Speaker 04: Also lots of facts. [00:06:34] Speaker 04: And it's absolutely true that one cannot draw the legal conclusion of obviousness until you've considered everything. [00:06:40] Speaker 04: Right. [00:06:42] Speaker 04: That's for us, and it doesn't really matter what the district court did because that's a legal conclusion. [00:06:46] Speaker 04: But on the factual component of what we have traditionally done in the art part of the case, the Parna Fasci case, there's a motivation to combine question, which we have said repeatedly is a fact question. [00:07:00] Speaker 04: Can a district court decide that fact question, here actually not decide the fact question, but decide it under a summary judgment standard, without considering the secondary considerations? [00:07:14] Speaker 01: No. [00:07:15] Speaker 04: Have we said that? [00:07:16] Speaker 01: The motivation to combine, you have said that the secondary consideration should all be treated equally. [00:07:23] Speaker 04: For purposes of the overall legal conclusion of obviousness, is that right? [00:07:29] Speaker 04: Or tell me, have we said that in reaching the factual determination of motivation to combine, the secondary considerations must be taken into account? [00:07:43] Speaker 01: For a motivation to combine, the secondary considerations are often what highlight why the prior art is not so obvious, is not so common sense. [00:07:53] Speaker 01: So let me break down into two things. [00:07:56] Speaker 01: One error is that the court decided a prima facie case, and the prima facie case was based on the motivation to combine references, that when you look at the secondary considerations, [00:08:07] Speaker 01: It is not so obvious as the primary on the case. [00:08:09] Speaker 02: But counsel, at that point, the legal conclusion of obviousness has not been made, correct? [00:08:14] Speaker 01: Right. [00:08:14] Speaker 02: I mean, so the analysis is still in progress at that point. [00:08:18] Speaker 01: Let me turn to motivation to combine, because I appreciate the issue that the court made a prima facie case, but not a final legal determination. [00:08:28] Speaker 01: The court here erred in making its motivation to combine by relying on common sense. [00:08:34] Speaker 01: And under Arendy, the court erred in three ways. [00:08:37] Speaker 01: The common sense finding was done contrary to the evidence of record. [00:08:42] Speaker 01: So the court decided motivation to combine was entirely based on common sense. [00:08:47] Speaker 01: It was logical. [00:08:48] Speaker 01: It was predictable. [00:08:49] Speaker 01: But the court did not provide any evidence as to why that was so. [00:08:53] Speaker 01: In fact, there's evidence to the contrary. [00:08:56] Speaker 01: Kellogg confronted this exact combination. [00:08:59] Speaker 02: So are you saying the court made a finding, a final finding on motivation to combine [00:09:06] Speaker 02: before going to the objective criteria? [00:09:10] Speaker 01: Yes. [00:09:12] Speaker 01: The court made a finding on motivation to combine. [00:09:16] Speaker 01: And that's how he reaches combination and then considered the secondary considerations. [00:09:20] Speaker 00: But what he did was, I mean, he first, motivation to combine, I think, traditionally, if you can tell me cases that don't do that, I'm interested, becomes part of the prima facie case of obviousness. [00:09:32] Speaker 00: tentative conclusion if you conclude that there is some level of prima facie case and then you turn to the secondary considerations and there's no question and there's no dispute that you have to consider those before you reach your ultimate conclusion of obviousness. [00:09:48] Speaker 00: It seems to me that's what the district court did here. [00:09:52] Speaker 00: I mean there might be other problems but he established a prima facie case and then he correctly turned to and credited [00:10:00] Speaker 00: the secondary considerations. [00:10:02] Speaker 00: So you're trying to make sort of like the stage has been set wrongly, kind of a legal error in the way he considered it. [00:10:10] Speaker 00: And I'm not seeing it. [00:10:14] Speaker 00: I mean, maybe you might have an argument as to why the motivation was insufficient. [00:10:19] Speaker 00: And you might have an argument about why the secondary considerations should have carried the day over the prima facie case, because they were so overwhelming. [00:10:29] Speaker 00: Is that what you're trying to say, or are you making another, a different argument? [00:10:33] Speaker 01: Power integration said that the secondary considerations often show that the combination was far less obvious than the prior art may suggest. [00:10:41] Speaker 01: Yes. [00:10:41] Speaker 01: So under that line of thinking, it's helpful to consider the secondary considerations when drawing them, when collecting the references to make the prior art combination. [00:10:51] Speaker 01: That's the intersection I'm trying to highlight. [00:10:53] Speaker 01: And the court had no evidence to pick the different prior art references and make that combination. [00:10:58] Speaker 01: That combination, that motivation to combine, was only based on common sense and conclusions. [00:11:04] Speaker 00: Well, what motivation are we talking about? [00:11:06] Speaker 00: We're talking about combining... I keep forgetting what... Machinery update. [00:11:11] Speaker 01: There are two packages in machinery update. [00:11:13] Speaker 00: And combining that with gram. [00:11:14] Speaker 01: With gram, which is the traditional cookie package. [00:11:16] Speaker 00: Because the only one thing missing is the frame. [00:11:20] Speaker 01: The frame was missing, but remember, this combination goes to the very core, the very heart of the invention. [00:11:26] Speaker 01: The problem that we were facing was that cookie packages, you have to tear open the side and pull the frame out. [00:11:33] Speaker 01: This invention was a significant and revolutionary change on that because rather than accessing the cookies by pulling the frame out horizontally, now you can access the cookies vertically. [00:11:44] Speaker 04: Why is that in any, I'm going to use a non-legal term here, significant way? [00:11:52] Speaker 04: different from accessing the sushi or, I forget what the other thing was, meats? [00:11:57] Speaker 04: Was there like salamis or something? [00:11:59] Speaker 01: The salamis were sliced meat. [00:12:00] Speaker 01: They were stacked or shingled with no frame. [00:12:03] Speaker 01: Right. [00:12:03] Speaker 01: And so think of a bacon package. [00:12:05] Speaker 01: And so you would access the food that way. [00:12:07] Speaker 01: In the sushi, it was a very shallow tray. [00:12:11] Speaker 01: And so there was no frame and the claims require the frame to protect the cookies and elevate the wrapper. [00:12:17] Speaker 04: Right, but why isn't, I gather that the prior art, I think this is accepted, tell me if I'm wrong, the prior art recognized that there was this problem. [00:12:26] Speaker 04: I mean, probably everybody in this room knew the problem of tearing the damn package and not being able to close it and then the cookies get stale. [00:12:35] Speaker 04: It's a terrible problem. [00:12:36] Speaker 04: I mean, it really is. [00:12:38] Speaker 04: So once you have machinery update or even packaging news, it's kind of counterpart saying, here's a way to access the food and reseal it really easily, including in one instance in a little shallow frame. [00:12:58] Speaker 04: I guess we can't really call it a frame, but a shallow tray. [00:13:02] Speaker 04: What's left but to say, oh, there's a problem? [00:13:06] Speaker 04: Here is a solution. [00:13:07] Speaker 04: So the tray, we need one with higher edges. [00:13:14] Speaker 04: Go ahead. [00:13:14] Speaker 01: We have actual evidence here that Kellogg had all that information, rejected it, considered it for its cookie packages and rejected it. [00:13:22] Speaker 01: That is evidence that it was not common sense. [00:13:24] Speaker 01: It was not believable. [00:13:26] Speaker 01: There is evidence that Kellogg was skeptical. [00:13:29] Speaker 01: So less than a year before the patent was filed, [00:13:32] Speaker 01: Kellogg went to Germany to a trade show, obtained a Fuji package, brought it back, kept it confidential to Kellogg, and had a meeting with five packaging engineers. [00:13:43] Speaker 01: At that meeting, it was considered to use that resealable label for cookie packages. [00:13:48] Speaker 01: It was rejected, discarded. [00:13:49] Speaker 01: They never used the technology. [00:13:52] Speaker 01: They then considered many options. [00:13:53] Speaker 01: This was not even one of those options. [00:13:56] Speaker 01: This is exactly the situation where it seems today that it's commonsensical. [00:14:00] Speaker 01: But when you look back at what happened at the time, it's not commonsensical. [00:14:05] Speaker 04: Why does that little episode with Kellogg support an inference that Kellogg didn't see the technological point, as opposed to didn't see that it was worthwhile economically? [00:14:25] Speaker 01: Well, we can look at what happened today too. [00:14:28] Speaker 01: So at that time we're evaluating whether it's common sense and predictable. [00:14:32] Speaker 01: And so Kellogg's treatment, they were looking for a solution to the Kellogg to the cookie package. [00:14:38] Speaker 01: They were presented with the resealant label adding to a traditional cookie package and they rejected it. [00:14:43] Speaker 01: And these are packaging engineers looking for the solution. [00:14:46] Speaker 01: So they have knowledge of the problem, trying to solve it, and they couldn't solve it. [00:14:50] Speaker 01: If it was so commonsensical and predictable, they would have used it then. [00:14:54] Speaker 01: It didn't even make their list of considerations on a go-forward basis. [00:14:58] Speaker 01: This is not a situation where we have one or two solutions. [00:15:01] Speaker 01: We have tin ties. [00:15:02] Speaker 01: We have zipper strips. [00:15:03] Speaker 01: They could be on the top. [00:15:04] Speaker 01: They could be on the sides. [00:15:06] Speaker 01: It could be a container. [00:15:07] Speaker 01: You could have a lid. [00:15:08] Speaker 01: There are many different options. [00:15:10] Speaker 01: And the option had to be cost effective and acceptable to consumers. [00:15:13] Speaker 01: Kellogg rejected that idea within one year of the patent being filed. [00:15:18] Speaker 01: Also, look at the secondary considerations. [00:15:21] Speaker 01: They're incredible here. [00:15:22] Speaker 01: Crafted a one-to-one comparison. [00:15:23] Speaker 02: So on the secondary considerations, is it your argument that the court made a legal conclusion as to sufficiency of summary judgment without adequately considering factual issues raised by the secondary considerations? [00:15:41] Speaker 01: Yes, specifically as to motivation to combine. [00:15:44] Speaker 01: So in reaching its conclusion to motivation to combine, the court had no evidence. [00:15:49] Speaker 02: So that's why you keep going back to the motivation to combine. [00:15:52] Speaker 02: The district court found the motivation to combine based on common sense, whereas here's all this other evidence backed by expert testimony that goes directly to that issue. [00:16:05] Speaker 02: And that's part of the secondary. [00:16:07] Speaker 02: considerations or the objective indicia, let's say. [00:16:12] Speaker 01: And that was that power integration case that I cited that oftentimes you look at it. [00:16:16] Speaker 02: It seems to me you're getting caught up in this argument as to the prima facie case. [00:16:21] Speaker 02: And I realize that there's a dispute going on about that. [00:16:25] Speaker 02: But I think this court is pretty clear that you cannot reach a legal conclusion on obviousness without consideration of the objective indicia. [00:16:37] Speaker 02: And it seems to me that the court did that, looked at the objective indicia before making that final legal conclusion. [00:16:45] Speaker 02: The question I have is whether the objective indicia was given sufficient weight. [00:16:52] Speaker 01: And here it's argued it was not. [00:16:57] Speaker 00: OK. [00:16:57] Speaker 00: Well, you're well into your rebuttal, so why don't we hear from the other side? [00:17:14] Speaker 03: Your honors, counsel, may it please the court, with or without the KSR, even pre-KSR, the court in this particular case found a strong striking case of obviousness. [00:17:27] Speaker 02: Counsel, let me bring up like an administrative issue. [00:17:33] Speaker 03: Certainly. [00:17:33] Speaker 02: Have you looked adequately at the word count of your brief, your red brief? [00:17:38] Speaker 02: He certified a 1,400 word count, more or less. [00:17:43] Speaker 02: 1494. [00:17:44] Speaker 02: And my word count is, it's over 18,000 words in your brief. [00:17:54] Speaker 02: And I'd like for you to take a look at that particular issue and report back as to the adequate word count and what we should do about that. [00:18:07] Speaker 02: It's not a question of having [00:18:09] Speaker 02: a couple hundred or 50 words, but we're talking about several thousand. [00:18:15] Speaker 02: And also, take a look at the very end of the brief. [00:18:19] Speaker 02: I'll point the pages. [00:18:20] Speaker 02: Just look at page 71 and 72, especially 72. [00:18:24] Speaker 02: You have arguments there. [00:18:28] Speaker 02: You make a statement, and then you refer us to numerous pages in the record as if to say, here's my position. [00:18:39] Speaker 02: Now, you court, go find it. [00:18:41] Speaker 02: And there's no argument, there's no analysis there. [00:18:46] Speaker 02: It's just citations back to the... And I'm kind of concerned about that. [00:18:50] Speaker 02: It's your job to state your position fully and thoroughly before this court. [00:18:58] Speaker 02: And I don't like to see this type of argument. [00:19:02] Speaker 02: It's not an argument. [00:19:04] Speaker 03: I understand, Your Honor. [00:19:06] Speaker 03: We will do that. [00:19:06] Speaker 03: We'll address both the page count, the word count, as well as what apparently happened. [00:19:13] Speaker 02: I thank you, Counselor, for that. [00:19:15] Speaker 03: We will get back to it. [00:19:15] Speaker 03: If we could do that within, say, five days, would that be all right for the Court? [00:19:19] Speaker 02: Yes. [00:19:19] Speaker 03: Thank you, Your Honor. [00:19:21] Speaker 03: Getting back to the objective considerations that the Court relied upon, this was a case of strong [00:19:30] Speaker 03: uh... issues of invalidity uh... in the areas of obvious well why don't you address specifically your friends argument with respect to motivation because we want to uh... first of all at the very outset of this court uh... judge cannelly uh... ruled the exact same way in addressing the prima facie case of of obviousness as just about every other court that's had to address that issue before considering uh... the fourth prong of the job [00:19:58] Speaker 03: But with regard to motivation, here's what we've got. [00:20:03] Speaker 03: We've got two elements on this purported incredible invention. [00:20:08] Speaker 03: We've got an existing 50-year-old cookie bag, a flow-wrap cookie bag, that's been around forever. [00:20:13] Speaker 03: And I'm a big cookie fan myself, Your Honor. [00:20:16] Speaker 03: That was a problem that was well-known, getting into the bag, getting out and keeping things fresh, as it has been for other food products. [00:20:24] Speaker 03: You've got that on prior art. [00:20:26] Speaker 03: This product was not, the prior that was combined with that cookie bag, was not some obscure piece of equipment or some package that was being used to address nuts and bolts packaging somewhere in some industrial complex somewhere. [00:20:41] Speaker 03: This was being marketed and the court has seen three separate magazine articles, the two machinery update articles as well as the packaging news, the one with the misprint. [00:20:52] Speaker 03: Three separate articles back at late 2001 [00:20:56] Speaker 03: early 2002 long before this purported invention that was geared with trade shows. [00:21:02] Speaker 04: Long before that? [00:21:04] Speaker 04: Right, I would actually think that the closeness in time is rather important to discounting the objective considerations, rather than if it was long before and still nobody was doing it, that really helps craft. [00:21:18] Speaker 03: Well, actually, Your Honor, when I say long before, I'm talking in terms of months, it was a long-felt need [00:21:24] Speaker 03: that won a notice until, by the way, both Kraft and Kellogg attended trade shows where the actual packages were shown and samples were given. [00:21:34] Speaker 03: One of those samples is the subject of a cross appeal. [00:21:37] Speaker 02: The problem, though, of freshness, of opening up a package of cookies and not having to take them all out and reseal them in another container or something, that had existed for quite a long time, hadn't it? [00:21:50] Speaker 03: It had, Your Honor. [00:21:51] Speaker 03: However, 11 months, 10 and a half, 11 months before the trade show, that both parties were at and saw this equipment. [00:21:59] Speaker 03: Before that, we had three articles come out. [00:22:01] Speaker 03: All right? [00:22:02] Speaker 03: One of them was seven months before. [00:22:03] Speaker 03: The other two were from late 2001, about 10 or 11 months before. [00:22:08] Speaker 03: And in those articles, rather than being some obscure piece of prior art in some warehouse or some plant somewhere, these particular articles address [00:22:20] Speaker 03: what it takes to keep your food fresh in the way of discrete food products. [00:22:27] Speaker 03: And by the way, one of the pictures, the third one, the 2002 machinery update, shows a tray. [00:22:35] Speaker 03: But the court did not consider anticipation here. [00:22:38] Speaker 03: But ignoring that, they talk about what it takes to make something reclosable. [00:22:44] Speaker 03: In essence, a ceiling layer, a flap, that's adhesively attached to the top [00:22:50] Speaker 03: of a pre-perf package that when you pull it back, it either opens it or if there's a separate hole. [00:22:55] Speaker 00: What about your friend tells us that you were well aware of that and Kellogg was and Kellogg rejected it? [00:23:00] Speaker 03: That's not the case, Your Honor. [00:23:02] Speaker 03: While both companies were aware of this technology out there, Kellogg simply did not go ahead and attempt to put it together. [00:23:12] Speaker 03: It ends up that Kraft had their plastics supplier [00:23:18] Speaker 03: go ahead and put together. [00:23:19] Speaker 03: They had a vendor actually designed it for them. [00:23:22] Speaker 03: Kellogg did not. [00:23:24] Speaker 03: All right, it was just a choice of who was going to jump into it and who was not. [00:23:27] Speaker 03: But this particular invention was designed for the whole world and primarily the food market to utilize to keep product fresh. [00:23:36] Speaker 03: It described exactly what to do, to put it on your existing packaging. [00:23:40] Speaker 03: The whole concept is if you're using flow wrap for a wrapper, this will work on flow wrap. [00:23:45] Speaker 04: Get back, please, to the [00:23:47] Speaker 04: Kellogg saw this, decided not to go forward with it. [00:23:51] Speaker 04: Why does that not communicate something of evidentiary significance about why, in fact, this really wasn't an obvious solution to a well-recognized problem? [00:24:03] Speaker 03: Well, Your Honor, they simply, Kellogg's and Keebler are not nearly as big and do not have as sophisticated plastic suppliers [00:24:13] Speaker 03: and design vendors as Kraft had at the time. [00:24:16] Speaker 03: Kraft is making Oreo and Chips Ahoy. [00:24:20] Speaker 03: Sandies, Pecan Sandies, and things of that nature are much smaller brands. [00:24:25] Speaker 03: There was not justification for going ahead with the design. [00:24:28] Speaker 04: So what happened is... Right, but is that... I mean, we are, and I guess I do want to actually ask you about this. [00:24:34] Speaker 04: We're on summary judgment here. [00:24:36] Speaker 04: One of the things that I found actually mystifying about your brief is that you [00:24:43] Speaker 04: 15 times or something invoke the clear error standard, clearly erroneous. [00:24:48] Speaker 04: I don't understand what that standard of review is doing in this case. [00:24:51] Speaker 04: This is on summary judgment. [00:24:53] Speaker 04: So to put it another way, the district court did not make any factual findings. [00:24:58] Speaker 04: The district court found that the record [00:25:01] Speaker 04: would not support certain factual findings. [00:25:04] Speaker 04: That's correct, Your Honor. [00:25:05] Speaker 04: What is this clear error standard doing throughout your brief? [00:25:08] Speaker 03: That should not be posed. [00:25:09] Speaker 03: In this case, the court found that there were no material issues of fact remaining. [00:25:14] Speaker 03: Everything was conceded or known. [00:25:17] Speaker 03: The only thing that wasn't conceded was whether or not there was this motivation, and the court found strong motivation. [00:25:24] Speaker 04: So get back to the Kellogg sees the technology and decides not to use it episode. [00:25:31] Speaker 04: Why is it not the case that there are two stories to tell, one on each side about whether that's significant or not? [00:25:38] Speaker 04: You have your story and they have their story. [00:25:41] Speaker 03: The problem is that both stories revolve around the fact that this product, this addition to the priority, whether it was in the notion of common sense or not, was there and it was being shown and marketed to at least craft an IGB [00:26:02] Speaker 03: the larger of the cookie companies to put in with their product. [00:26:06] Speaker 03: It was there expressly for the purpose. [00:26:08] Speaker 02: And in fact, one of the articles, the 2002 article says, as a preface to the disclosure... If there's two stories, if there's two stories that we're dealing with here, and each story has a factual basis to it, and there's different, they're conflicting stories, and we're dealing with summary judgment, why doesn't that tell me [00:26:30] Speaker 02: That there's a genuine issue maturifying. [00:26:32] Speaker 03: You raise a good fact. [00:26:33] Speaker 03: There are two stories about who decided to jump ahead with it and who didn't. [00:26:38] Speaker 03: That's one story. [00:26:40] Speaker 03: The story here, however, is whether or not it was obvious to one of skill in the art. [00:26:45] Speaker 03: And the fact that one party went ahead with it and another party waited and didn't and ended up using something different to avoid any potential patent infringement [00:26:55] Speaker 03: That's a completely separate story. [00:26:57] Speaker 02: So if we go with that story and take a look, if we look at that story, the latter one that you just raised, and we think about that in terms of motivation to combine. [00:27:10] Speaker 02: And the court says common sense. [00:27:13] Speaker 02: And the objective indicia indicate otherwise, indicate long-filled need, industry applause or recognition. [00:27:25] Speaker 02: and other aspects of objective indicia, don't we have battling facts there? [00:27:31] Speaker 02: Aren't those facts, aren't they situated contrary to each other? [00:27:37] Speaker 03: There is an argument between the parties as to, gee, who was wiser going ahead and using it first? [00:27:46] Speaker 02: Well, why does that argument not go to the jury? [00:27:48] Speaker 03: Because the fact is, is that looking at the claims, looking objectively at the claims of the inventions here, and not who made a business decision to jump with it and who didn't after seeing it at a show, that's inconsequential. [00:28:03] Speaker 03: The question is whether the claims are obvious or not. [00:28:07] Speaker 03: And that is the question that the court found overwhelmingly supportive of finding of a prima facie case [00:28:14] Speaker 03: of obviousness, which after considering, and the court spent three or four pages going through the issues of secondary consideration, one by one checking them off. [00:28:25] Speaker 02: I don't understand. [00:28:26] Speaker 02: Did the court find that the facts that favor you was overwhelming superior or just overwhelming the facts on the other side? [00:28:39] Speaker 03: No. [00:28:39] Speaker 03: What the court found was the court looked strictly at the invention. [00:28:43] Speaker 03: The court looked obviously at the secondary considerations, although I have to tell you, Your Honor, this is the first time I'm hearing today that one of the factual considerations, excuse me, one of the secondary considerations was who went into it first. [00:28:59] Speaker 03: That is news to me here today. [00:29:02] Speaker 03: They went into sales, they went into skepticism, they went into things like that. [00:29:06] Speaker 03: But who went into it first I think is being raised for the first time today. [00:29:10] Speaker 03: But what the court looked at before it looked at any of the secondary considerations, the court looked at the claims after properly construing them and looked to see exactly what the prior art disclosed and saw what everyone in this courtroom could see, that there are two things that were being combined there where the one, the additional aspect of what was disclosed by the Fuji Resila technology was made specifically to apply to that very bag that was being used. [00:29:38] Speaker 03: It was an overwhelmingly strong case that supported the prima facie finding of obviousness. [00:29:45] Speaker 03: Then the court went back and carefully looked at all the secondary considerations that the court must do under a proper Graham v. Deere analysis. [00:29:54] Speaker 03: And only after doing that did the court reach its conclusion. [00:29:58] Speaker 03: Whether or not a business decision was made on the basis of who's selling the most cookies and whether to make an investment on that, [00:30:06] Speaker 03: That was something that I don't think the court had before, number one. [00:30:10] Speaker 03: And number two, that was something that the court looked at solely and exclusively after the court looked at the patent itself. [00:30:21] Speaker 03: The court spent all its time on the patent. [00:30:23] Speaker 04: I'd interrupt you to switch topics. [00:30:25] Speaker 04: Two things. [00:30:27] Speaker 04: One is, why is there not a factual issue on literal infringement for the following reason? [00:30:36] Speaker 04: I can't think of a reason that the little collar that you guys put under the opening is not part of the top. [00:30:46] Speaker 03: OK. [00:30:47] Speaker 03: If it was part of the top, then you would have the top ceiling to the top, which can't be done. [00:30:53] Speaker 04: No, you have the flap, or what do you call it? [00:30:56] Speaker 04: Extra layer or something, ceiling to the top, ceiling, in fact, to the collar. [00:31:01] Speaker 03: Here was our concern with that part, Your Honor. [00:31:04] Speaker 03: Number one, the court made it clear from its claim construction and the court repeated again in its opinion that the fact that the accused structure did not have a ceiling layer, it's only got one layer on top, was a material difference from what's described in the claim. [00:31:21] Speaker 04: OK, you're running out of time, so let me ask you. [00:31:25] Speaker 04: The inequitable conduct, do we need to decide that if you win on validity? [00:31:37] Speaker 04: We believe that... It's a counterclaim, so unfortunately, for that purpose, it's not just an affirmative... We believe that you do, Your Honor. [00:31:44] Speaker 03: We believe that we're entitled to a hearing on the issues. [00:31:47] Speaker 03: And if I can go back for just one quick second, when the court looked at the doctrine of equivalence, it did so on the basis of completely ignoring the all elements rule. [00:31:57] Speaker 03: It just said, well, these products both keep things fresh and everything. [00:32:00] Speaker 03: It didn't go element by element, nor could it, because the number one element was a material element. [00:32:05] Speaker 03: There is no [00:32:06] Speaker 03: in material or in substantial equivalence to it. [00:32:09] Speaker 03: It's a material distinction over what was listed in the claim. [00:32:13] Speaker 03: Getting back to inequitable conduct, on that particular case, Your Honor, we believe, from Kellogg's perspective, that the court considered the inferences to be drawn against Kellogg. [00:32:27] Speaker 03: Kellogg did not bring the motion. [00:32:29] Speaker 03: It was brought by Kraft, IGB, and yet [00:32:33] Speaker 03: The suggestions that well, this could be explained away. [00:32:36] Speaker 03: Perhaps there was a reasonable explanation for this or that and everything in view of all. [00:32:42] Speaker 03: I'm sorry, Kraft brought what motion? [00:32:44] Speaker 03: IGB is the party that brought the motion for summary judgment on the issue of inequitable funding. [00:32:50] Speaker 00: They wanted summary judgment of no... That's right. [00:32:53] Speaker 03: And yet the inferences were held against the non-moving party. [00:32:57] Speaker 03: it was the exact opposite of how it should be and we believe that we should have an opportunity to do that. [00:33:02] Speaker 04: On the intent element, which in the inequitable conduct world has a kind of super high standard. [00:33:08] Speaker 03: That's correct. [00:33:10] Speaker 03: That's correct. [00:33:10] Speaker 03: But in this case, in view of five to seven things that occurred here, not just some shrug of the shoulder, gee, the patent office had a copy of the typo, the misstated document. [00:33:22] Speaker 03: They could have read it and everything. [00:33:25] Speaker 03: That pales in comparison to what was actually done here with regard to representations to the administrative law judges at the PTAP. [00:33:34] Speaker 03: When they ask, wait a second, this looks like a wrapper around it, and they're told no. [00:33:38] Speaker 03: No, that's not a wrapper. [00:33:40] Speaker 03: In view of those things, we believe that Kellogg is entitled to a hearing on inequitable conduct. [00:33:48] Speaker 02: Yeah, I have another question here, and this goes back to [00:33:54] Speaker 02: the summer judgment. [00:33:57] Speaker 02: It seems to me, or at least your opponent is arguing, that the court made a construction of ceiling layer, made one construction at the Markman hearing, and then applied a different one at summer judgment. [00:34:11] Speaker 02: And can you address that issue? [00:34:17] Speaker 03: During claim construction, the court said, look, the ceiling layer has got to be a separate layer. [00:34:21] Speaker 03: Now there has since been embodiments during at the markman at the markman claim construction. [00:34:27] Speaker 03: That's correct. [00:34:28] Speaker 03: He said it's got to be a separate layer, but whether that layer is laminated to another ply, whether it's laminated. [00:34:36] Speaker 02: Did he say it's got to be a separate or a distinct layer? [00:34:39] Speaker 03: It's got to be a distinct layer. [00:34:40] Speaker 02: He didn't say separate. [00:34:42] Speaker 02: I mean, and that's the point. [00:34:43] Speaker 02: That's the point of dispute here. [00:34:45] Speaker 02: He said separate later. [00:34:47] Speaker 02: But Ed Markman, he said distinct, didn't he? [00:34:49] Speaker 03: He said it's got to be a distinct layer. [00:34:51] Speaker 03: I just want to make sure that... Actually, you raise a good point. [00:34:53] Speaker 03: He said Ed Markman's got to be a distinct layer. [00:34:56] Speaker 03: But he also noted, even at the Markman, and he repeated again, in his opinion, that it could still, nonetheless, be laminated to the top of the wrapper, so that they can come together. [00:35:07] Speaker 03: But you can't seal one to the other if they're one and the same. [00:35:11] Speaker 03: Now, during the briefing, there was another suggestion to say that [00:35:16] Speaker 03: The court said it could be a different type of material as opposed to a distinct or separate material. [00:35:23] Speaker 03: The court said type of material. [00:35:25] Speaker 03: It could be a different plastic. [00:35:27] Speaker 03: It could be a non-flow rate. [00:35:28] Speaker 03: It could be something else, a patch that's laid out like the label in the original embodiments. [00:35:33] Speaker 03: He said it could be made of a different type of material, but he didn't say that it [00:35:40] Speaker 03: It could be the same exact material. [00:35:42] Speaker 03: He was talking in the context of what it was made out of. [00:35:45] Speaker 02: He said it had to be separate. [00:35:48] Speaker 03: He said it had to be a distinct layer. [00:35:50] Speaker 03: It could be laminated, though. [00:35:52] Speaker 02: Well, let's get clear on this, because you've offered two different arguments here. [00:35:57] Speaker 02: At Markman, the conclusion was that that ceiling layer was a distinct layer. [00:36:03] Speaker 02: Then later, at summary judgment, [00:36:07] Speaker 02: the district court ruled that distinct ceiling layer was separate, that distinct meant separate. [00:36:16] Speaker 03: Now that you pointed out, I believe that the court was using them interchangeably. [00:36:23] Speaker 03: It has to be a separate layer of material. [00:36:26] Speaker 03: Whether or not it's bonded to it, it's laminated. [00:36:29] Speaker 03: It's still a separate, distinct layer. [00:36:33] Speaker 03: He didn't mean, the court didn't mean separate as, oh no, it's got to be separated across the entire kind of ruined area. [00:36:40] Speaker 03: The court is simply saying it's got to be two distinct layers of material, whether they're laminated or not. [00:36:47] Speaker 02: Did the issue infringement actually fall on the question of whether the two layers are separate, meaning not together? [00:36:56] Speaker 02: No. [00:36:56] Speaker 02: As opposed to distinct? [00:36:58] Speaker 03: No, no. [00:36:59] Speaker 03: I believe the way the court looked at it, the language [00:37:01] Speaker 03: My recollection of the language from the court is the fact that it's got to be a distinct layer. [00:37:07] Speaker 03: The top of the wrapper is one layer of material, the one that goes around the flow ramp material. [00:37:13] Speaker 03: The other material has got to be a different, here I'll throw a third word, distinct, separate, a different piece of material because it has to adhesively attach to the top of the layer. [00:37:26] Speaker 03: Now there are embodiments, more recent embodiments invented by others, where [00:37:31] Speaker 03: The ceiling layer and the top of the wrapper, in fact, are laminated to each other. [00:37:37] Speaker 03: And how they're cut enables what happens in the pullback. [00:37:42] Speaker 03: But there's still distinct layers, whether or not they're laminated. [00:37:46] Speaker 03: And the court caught that in both the Markman claim construction ruling as well as in the court's opinion in this case. [00:37:52] Speaker 03: We have your argument. [00:37:53] Speaker 03: Thank you. [00:37:53] Speaker 00: Thank you, Your Honor. [00:38:00] Speaker 00: Thank you. [00:38:09] Speaker 01: Starting with obviousness, I just want to address two fact issues. [00:38:12] Speaker 01: It was stated that Kellogg, excuse me, Kraft knew of the Fuji package from the 2001 Interpac packaging show and knew about it all along. [00:38:23] Speaker 01: That's not true. [00:38:24] Speaker 01: That's not supported by the evidence. [00:38:26] Speaker 01: No one involved in the invention knew about that Fuji package in 2005. [00:38:30] Speaker 01: Then it had a new label. [00:38:32] Speaker 01: It was investigated and believed to be new as of 2005. [00:38:36] Speaker 01: People in Germany, for a division of craft, may have attended the show, but they also do not have recollection of seeing the package in 2001. [00:38:44] Speaker 01: The idea that Kellogg is a smaller brand and something about the packaging companies going forward or not going forward, that's not supported by the evidence, [00:38:55] Speaker 01: Kraft hired an independent consultant who came up with a whole entire book of ideas, also did a conference at MIT where about 100 ideas were presented. [00:39:06] Speaker 01: Snack and Seal, the invention had issue, rose to the top. [00:39:08] Speaker 01: That's how Kraft invented it. [00:39:11] Speaker 01: Third, going to evidence of skepticism, A5196 is a Kellogg PowerPoint that highlights fact issues related to this motivation to combine [00:39:24] Speaker 01: and secondary considerations. [00:39:26] Speaker 00: What's the date of that? [00:39:32] Speaker 01: It's A. Well, that's OK. [00:39:45] Speaker 00: I mean, I can find it. [00:39:46] Speaker 01: I have just the page. [00:39:47] Speaker 01: I don't have the first page. [00:39:48] Speaker 00: It's A59. [00:39:49] Speaker 01: 5196. [00:39:53] Speaker 04: And in this PowerPoint... The earlier page has a July 6, 2005 date. [00:40:03] Speaker 01: I can check on that and certainly report back to the date of the PowerPoint. [00:40:10] Speaker 01: Here it highlights the issue that we discussed that the package, consumers would rebate it and it was, people were skeptical, it was not believed to be reliable for snack and seal. [00:40:22] Speaker 01: Craft testing also showed low believability at A5324, and the 36 witness for Kellogg testified to skepticism at A6342. [00:40:34] Speaker 01: Now turning to infringement, on Markman the court said that ceiling layer must be distinct, but need not be, quote, physically separated from the top of the container, or more specifically from the wrapper that forms the top of the container. [00:40:52] Speaker 01: A45 quote in other words distinct and separate have different meanings in this context end quote if we look at the claims the claims Determined and they are dispositive of how to construe ceiling layer the ceiling layer needs to do very specific things First of all the ceiling layer must seal against the top to close the access opening that key there is overlap there are also other factors that are not raised by this and [00:41:18] Speaker 01: which includes a starter portion. [00:41:19] Speaker 01: You have to be able to grab it, then access and put your hand in, and then it's reclosable. [00:41:24] Speaker 01: The first element of ceiling layer should be dispositive. [00:41:27] Speaker 01: There's no requirement that the ceiling layer be physically separate. [00:41:31] Speaker 01: The claims are not limited to any certain manufacturing process as to how to make a ceiling layer. [00:41:37] Speaker 01: The construction improperly limits it to the preferred embodiment, which did use an adhesive layer as a ceiling layer. [00:41:44] Speaker 01: That does not mean that that's required by the claims. [00:41:48] Speaker 01: In fact, physically separate ceiling layer reads out the Oreos, which was one of two embodiments shown to the PTO during the re-examination. [00:41:58] Speaker 01: Oreos makes the ceiling layer by multi-layered laminate. [00:42:02] Speaker 01: It uses a laser cut to cut the ceiling layer from the top, and a laser cut to cut the access opening from the bottom. [00:42:09] Speaker 01: This allows the ceiling layer to open and close, overlap with the top of the container, which is anything that remains flat, and perform all functions of the ceiling layer. [00:42:19] Speaker 01: There's no requirement for it to be physically separate. [00:42:22] Speaker 02: So this bottom layer, these two layers of laminate, the bottom one acts as a collar. [00:42:28] Speaker 02: I think pointing out earlier, is that the collar? [00:42:31] Speaker 01: That would be how Kellogg uses that collar. [00:42:33] Speaker 01: That's where it seals to the top. [00:42:35] Speaker 01: What Kellogg did was rather than using a physically separate adhesive label as was done in the adhesive, in the, excuse me, preferred embodiment, they used a physically separate collar that adhered to the top. [00:42:48] Speaker 01: That shrunk the size of the access opening, thereby allowing the sealing layer to adhere. [00:42:54] Speaker 01: So again, the ceiling layer must overlap with the top. [00:42:57] Speaker 01: You can do this in any different ways depending on how it's manufactured. [00:43:01] Speaker 01: The claims are not limited to any style of manufacturing. [00:43:05] Speaker 01: On inequable conduct, if the issue is so clear that packaging news has a typo, packaging news and machinery update were both in front of the examiner. [00:43:17] Speaker 01: In fact, Regath, the owner, [00:43:20] Speaker 01: The Regap Works of McFarland and Fuji, they're the ones who make all these Fuji embodiments, the subjects of the articles. [00:43:29] Speaker 01: If it was so obvious, why didn't they correct it? [00:43:32] Speaker 01: They never corrected it with the PTO when they did their third party request for reexamination. [00:43:37] Speaker 01: There was no correction publicly. [00:43:39] Speaker 01: If it was so obvious, the examiner had all the information in front of them under Fisker and Avery Denison. [00:43:45] Speaker 01: An applicant cannot be guilty of neckable conduct if a reference was cited to the examiner [00:43:50] Speaker 01: whether or not there was rejection on it. [00:43:52] Speaker 01: And the prior art disclosed is the content is presumed to be before the examiner. [00:43:58] Speaker 01: All of the content of machinery update and packaging news were before the examiner. [00:44:02] Speaker 01: They cannot be any inequitable conduct. [00:44:04] Speaker 04: I thought at least part of their inequitable conduct case was that at several points you all emphasized [00:44:19] Speaker 04: the particular language without conventional film? [00:44:24] Speaker 01: Wrapping film. [00:44:25] Speaker 04: Wrapping film. [00:44:26] Speaker 04: And there is just no plausible basis for believing that that was anything other than a mistake. [00:44:36] Speaker 01: We disagree with that context. [00:44:39] Speaker 04: What is the plausible basis for thinking that it in fact lacked [00:44:46] Speaker 04: conventional wrapping film. [00:44:48] Speaker 01: Three things. [00:44:49] Speaker 01: The photograph does not show film going through, going over the sides. [00:44:54] Speaker 01: If you compare the photograph from Machinery Update to Packaging News, one is a pouch where you can see that it's a bag, and one is not. [00:45:01] Speaker 01: You can't see the film going through. [00:45:03] Speaker 01: And in fact, the article says that that package was made without the expense of plastic profile. [00:45:09] Speaker 01: What does that mean if it doesn't mean that the plastic does not go all the way around to the sides? [00:45:14] Speaker 01: That still stands. [00:45:15] Speaker 01: This package does not have the expensive plastic profile. [00:45:19] Speaker 01: And also it says without conventional wrapping film. [00:45:22] Speaker 01: The typo comes from comparing two different articles with two different photographs and different content. [00:45:28] Speaker 01: The sentence might be the same, but the overall context of the articles are different. [00:45:33] Speaker 01: Both the Monteil, the lead inventor, and attorney Birmingham explained that they never recognized a typo. [00:45:40] Speaker 01: They read both articles independently for what they stood for and addressed the rejections by the examiner based on the article's reference. [00:45:49] Speaker 01: The third-party requester had briefed and did extensive claim charts on both of these. [00:45:57] Speaker 00: Thank you. [00:46:00] Speaker 00: Since we covered inequitable conduct, we'll give you one minute to respond if you need it. [00:46:10] Speaker 03: Your Honors, there are three publications that are involved here. [00:46:16] Speaker 03: If the court looks at the packaging news article, it sees a picture of a person with a fork picking out discrete food articles from a tray in a bag. [00:46:29] Speaker 03: If the court looks at the other machinery update, it sees the exact same picture, except it's in color in the ones we've got. [00:46:39] Speaker 03: With regard to that, not only, I mean, we hear the argument that the examiner, the board. [00:46:47] Speaker 04: You were the requester, right? [00:46:50] Speaker 04: No. [00:46:52] Speaker 04: Who was? [00:46:54] Speaker 03: I believe a company affiliated years ago with Fuji releasing. [00:46:59] Speaker 04: Okay, and did the requester presented all three of these articles? [00:47:07] Speaker 04: Two of them. [00:47:07] Speaker 04: Two of them. [00:47:08] Speaker 04: One of them packaging news? [00:47:09] Speaker 03: One of them was packaging news. [00:47:10] Speaker 04: And did the requester say, notice that these are actually different? [00:47:14] Speaker 04: One says X and the other says not X? [00:47:17] Speaker 03: The requester did not catch it, no. [00:47:20] Speaker 04: Doesn't that suggest that it's reasonable to believe that maybe the lawyers and others who said they didn't catch it either? [00:47:28] Speaker 03: What would happen? [00:47:29] Speaker 03: We actually took their deposition. [00:47:31] Speaker 03: They admitted that they knew about the difference. [00:47:33] Speaker 03: There was notation that they had one of their paralegals do research on contradictions between the references, the pieces of prior art, whether there was an obligation to disclose it. [00:47:45] Speaker 03: We cited that in the record, Your Honor. [00:47:47] Speaker 03: And they knew what the differences were, and yet they wrote that difference to patentability on reexamination. [00:47:55] Speaker 03: It's not just a case where these two things came in. [00:47:58] Speaker 03: The examiner, the reexamination examiner missed it. [00:48:01] Speaker 03: The other attorneys missed it. [00:48:02] Speaker 03: But the folks at Kraft at the time, they knew about it. [00:48:07] Speaker 03: They knew about the difference. [00:48:08] Speaker 03: And they had research conducted on what their obligations were to disclose it. [00:48:12] Speaker 03: And then they rode that distinction all the way up to patentability. [00:48:15] Speaker 03: Thank you. [00:48:16] Speaker 00: Thank you. [00:48:16] Speaker 00: Thank both sides. [00:48:17] Speaker 00: And the case is submitted. [00:48:19] Speaker 00: Thank you. [00:48:19] Speaker 03: And we will get back to the court within five days. [00:48:21] Speaker 00: Thank you. [00:48:22] Speaker 00: Thank you.