[00:00:32] Speaker 03:
Mr. Oak, whenever you're ready.

[00:00:49] Speaker 04:
Good morning, Your Honors, and may it please the Court.

[00:00:51] Speaker 04:
My name is Robert Oak, and I represent New World International and National Auto Parts on this appeal.

[00:00:57] Speaker 04:
I'd like to reserve five minutes for rebuttal.

[00:01:00] Speaker 04:
This is a patent

[00:01:01] Speaker 04:
declaratory judgment action that involves two issues on appeal.

[00:01:06] Speaker 04:
The first is whether the district court erred in dismissing the case for lack of specific personal jurisdiction.

[00:01:13] Speaker 04:
And then the second issue is whether the district court abused its discretion in refusing to allow a motion for leave to amend the complaint after the case was dismissed.

[00:01:26] Speaker 04:
So first, the jurisdictional issue.

[00:01:28] Speaker 04:
This court uses a three-part test

[00:01:31] Speaker 04:
for determining whether specific personal jurisdiction exists in the case.

[00:01:36] Speaker 04:
First, the defendant must purposefully direct activities toward the forum.

[00:01:40] Speaker 01:
We're familiar with the test.

[00:01:42] Speaker 01:
You might want to get right to the core issue here, which is really, as I see it, and you can argue it the way you want, but is whether the series of cases starting with acrogenetic implant systems, Breckenridge and Avacent, really help you, or whether they're distinguishable in a way that helps your opponent.

[00:02:01] Speaker 04:
Yes, Your Honor, I agree that is the key issue of the case.

[00:02:07] Speaker 04:
In this case, cease and desist letters were sent and those would satisfy the two first elements of the three-part test, the so-called minimum contacts test.

[00:02:24] Speaker 04:
However, under this court's policy, under the Red Wing case, because

[00:02:31] Speaker 04:
a patentee is allowed to provide a notice, as a matter of policy, this court says the demand letters are not enough.

[00:02:41] Speaker 04:
So what this court is looking for is something more than the demand letters.

[00:02:46] Speaker 04:
And that is why we have such focus on the exclusive license agreement in this case, because in Breckenridge, this court said that when you have demand letters sent and you have an exclusive license agreement,

[00:03:00] Speaker 03:
There are distinctions between this case and Breckett, right, in terms of the nature of the exclusive license that was introduced?

[00:03:10] Speaker 04:
In terms of the facts, the facts are not exactly the same.

[00:03:14] Speaker 04:
However, the underlying principles are the same.

[00:03:18] Speaker 04:
In Breckett rates, I said that the license agreement should be closely examined.

[00:03:22] Speaker 04:
So the question is, for what?

[00:03:25] Speaker 04:
Why should the license agreement be closely examined?

[00:03:30] Speaker 04:
It must be examined for whether it obligates the defendant beyond the mere receipt of royalty income that relates to the enforcement or defense of the patent.

[00:03:43] Speaker 03:
That is what this court says.

[00:03:45] Speaker 03:
But the whole thing isn't there for anything and everything that's beyond that means that there's jurisdiction, right?

[00:03:53] Speaker 03:
I mean, that seems to beg the question.

[00:03:56] Speaker 04:
It can't be anything and everything.

[00:03:59] Speaker 04:
It must relate to the enforcement and defense of the pact.

[00:04:03] Speaker 04:
But what this court is looking for is a continuing obligation.

[00:04:09] Speaker 01:
Particularly an obligation, as in Breckenridge and discussed in Everson, an obligation to

[00:04:19] Speaker 01:
bring suit against infringers or a provision in the contract that allows the licensee to bring suit.

[00:04:28] Speaker 01:
And neither of those is present in this case except to the extent that there is this reasonableness

[00:04:35] Speaker 01:
requirement that goes along with the decision by the patentee not to bring suit for any reasonable reason.

[00:04:42] Speaker 01:
So that, when you look at the language of Breckenridge, Breckenridge talks about if the license agreement requires the defendant licensor and grants the licensee the right to litigate infringement, that's not present here as far as I can see.

[00:04:57] Speaker 01:
So why isn't that case at least distinguishable on that ground?

[00:05:01] Speaker 04:
Well, actually, I believe in Breckenridge, the duty on enforcement between the licensor and the licensee was to discuss in good faith and cooperate reasonably.

[00:05:14] Speaker 01:
That is what the license agreement says.

[00:05:16] Speaker 01:
But the authority to sue was in the licensee.

[00:05:21] Speaker 01:
It is, the licensee could bring the action subject to the duty of good faith of the patentee to cooperate with the licensee, which is necessary in any case when you have an exclusive licensee.

[00:05:36] Speaker 01:
You've got to have the patentee and you've got to have the licensee.

[00:05:40] Speaker 04:
But in this license agreement we have in this case, you also have authority for both the licensor and licensee.

[00:05:47] Speaker 01:
Where's the authority for the licensee to enforce?

[00:05:50] Speaker 01:
I didn't see that.

[00:05:51] Speaker 01:
I thought that Wright was entirely in the patentee to enforce, subject to the reasonableness clause.

[00:06:00] Speaker 01:
Am I wrong about that?

[00:06:01] Speaker 04:
Yes, Your Honor.

[00:06:03] Speaker 04:
I am wrong.

[00:06:03] Speaker 04:
With respect, yes, I believe you are.

[00:06:06] Speaker 04:
Paragraph 8.2,

[00:06:07] Speaker 04:
It states with Ford Global's prior written consent, LKQ may handle the suits as agreed upon.

[00:06:14] Speaker 04:
And that would certainly include, as I've argued in the brief, that would embrace a counterclaim for patent infringement.

[00:06:21] Speaker 04:
What provision are you?

[00:06:23] Speaker 04:
Paragraph 8.2.

[00:06:24] Speaker 01:
Those are suits by third parties, as I understand it, against LKQ, not

[00:06:37] Speaker 01:
suits by LKQ on the patent.

[00:06:41] Speaker 01:
That's what I'm talking about is what powers, if any, does LKQ have to enforce the patent?

[00:06:49] Speaker 01:
And I don't think LKQ has any such power except to the extent that you say, well, the reasonableness clause gives it some control over the decision of the patent D, whether it's due or not.

[00:07:02] Speaker 01:
Am I wrong about that?

[00:07:04] Speaker 01:
I think I'm not.

[00:07:05] Speaker 01:
I think you have to... Let's make sure we are on the same page with respect to the facts.

[00:07:11] Speaker 01:
Is that true that that's the limit of LKQ's power to sue for infringement?

[00:07:17] Speaker 01:
That is to say it can't.

[00:07:19] Speaker 01:
And the only thing it has is the reasonableness clause to hang its hat on.

[00:07:23] Speaker 01:
Is that right?

[00:07:24] Speaker 04:
Well, I would interpret 8.2 as including the right to bring a counterclaim in the context of that provision.

[00:07:32] Speaker 04:
I mean, if somebody is suing LKQ related to the products that it's selling and LKQ is handling that situation, I would argue that in the context that LKQ could bring a counterclaim for patent infringement based on the Ford Global Patents.

[00:07:49] Speaker 04:
I would argue that 8.2 is broad enough to encompass that, but you also have 10.1.

[00:07:54] Speaker 03:
It says with Ford's prior written consent.

[00:08:00] Speaker 03:
Correct.

[00:08:03] Speaker 01:
But that wouldn't even come up unless somebody else was suing LKQ for infringing their patent.

[00:08:10] Speaker 01:
And it would seem to me an unusual case to say the least that LKQ would then say, well, you know, we're not infringing your patent, but oh, by the way, you're infringing Ford's patent.

[00:08:22] Speaker 01:
Well, but it's all embraced in

[00:08:26] Speaker 02:
these PAPs, you also have... Zelnick's from last month?

[00:08:30] Speaker 02:
Yes, Your Honor.

[00:08:32] Speaker 02:
Okay.

[00:08:32] Speaker 02:
I want you to discuss the distinctions that were drawn by that case where they looked at, for example, the burden on PAPs mitigated by

[00:08:51] Speaker 02:
older, and specifically that it had filed suit seven times in the California judicial system.

[00:09:02] Speaker 02:
That's an awful lot.

[00:09:04] Speaker 04:
Well, yes, Your Honor, but that goes back to the framework of how this court deals with personal jurisdiction.

[00:09:10] Speaker 04:
Once the two minimum contacts are satisfied, then the burden shifts to the defendant to prove

[00:09:19] Speaker 04:
a compelling case that it's not fair and reasonable.

[00:09:23] Speaker 04:
And in the Pabst case, you only had, again, and I would argue the Xilinx case supports the argument that we're arguing for here.

[00:09:34] Speaker 04:
You're just looking for an additional factor, because the only additional factor that related to the enforcement and defense of the particular patents in Xilinx was the trip

[00:09:48] Speaker 04:
And the status as a non-practicing entity did not directly relate to the patents in suit.

[00:09:55] Speaker 04:
And also the prior suits that were filed, those were filed on different patents.

[00:10:01] Speaker 04:
And they did not specifically relate to the patents in suit.

[00:10:05] Speaker 04:
So you only had one additional factor in Xilinx.

[00:10:08] Speaker 04:
You only had the trip into the state.

[00:10:13] Speaker 04:
And that's what we're saying.

[00:10:14] Speaker 04:
You're just looking for one additional factor.

[00:10:16] Speaker 04:
You should not look at the test that the district court tried to use, which we believe is error, is overall, you're looking for overall business integration and coordination.

[00:10:31] Speaker 04:
That is too much.

[00:10:33] Speaker 04:
You're just looking for one additional factor, which satisfies the minimum contacts, triggers the burden on the defendant then to come forward with a compelling case, which they have not done in this case.

[00:10:46] Speaker 04:
Um, and, and I would, I would go back to, we also have an indemnification agreement, uh, in the, uh, licensing agreement.

[00:10:56] Speaker 01:
Cause you didn't raise that until your reconsideration motion, if I recall correctly, isn't that right?

[00:11:01] Speaker 01:
Your honor, the kind of the timeline of this case, uh, let's see if we can get an answer first and then you can explain it.

[00:11:09] Speaker 04:
Okay.

[00:11:11] Speaker 04:
I raised.

[00:11:12] Speaker 04:
In the response, I raised the licensing agreement, the issue of the licensing agreement.

[00:11:19] Speaker 04:
And the problem was it was, I explained in the brief, it was attorney eyes only, I referenced it in support of the, in support of personal jurisdiction, but we did not get into the specifics.

[00:11:38] Speaker 04:
So again, in this case,

[00:11:41] Speaker 04:
We do have the continuing obligations in the licensing agreement.

[00:11:45] Speaker 04:
We have the must not unreasonably refuse, which we believe brings it within the context of Breckenridge.

[00:11:51] Speaker 04:
We have the indemnity obligation, brings it within the context of genetic implant.

[00:11:57] Speaker 04:
And so we believe the court should just be looking for an additional factor rather than this overall relationship.

[00:12:07] Speaker 04:
So in addition to the Xilinx case, which we've talked about, I would also point out that in the accurate... I fail to see how it supports you.

[00:12:17] Speaker 02:
Pardon me?

[00:12:18] Speaker 02:
I said I fail to see how it supports you.

[00:12:21] Speaker 02:
You're going to have to convince me more.

[00:12:23] Speaker 02:
Don't say we've talked about it because you're not there yet.

[00:12:28] Speaker 04:
Well, then let me say that to my direct point,

[00:12:33] Speaker 04:
that you're just looking for an additional factor.

[00:12:36] Speaker 04:
And, of course, what we're trying to do is satisfy due process.

[00:12:39] Speaker 04:
It's in Burger King.

[00:12:40] Speaker 02:
We're looking for something that is not... That an additional factor was seven times they utilized the federal courts in California.

[00:12:49] Speaker 02:
Now, you can say that's on different patents.

[00:12:51] Speaker 02:
That's irrelevant.

[00:12:54] Speaker 04:
Your Honor, with respect, I believe that the court was looking at that issue on the overall reasonableness and fairness.

[00:13:02] Speaker 04:
In the Xilinx case,

[00:13:04] Speaker 04:
I believe the court was focusing in on, in fact the court states the issue in this case is whether it's fair and reasonable.

[00:13:10] Speaker 04:
When you look at the fair and reasonableness prompt, you can look at all the other factors that are not just directly related to the patent suit.

[00:13:18] Speaker 04:
You can look at all the other factors.

[00:13:23] Speaker 04:
So I would also state that in the Acro case, really the first case that started, the series of cases, you had demand letters

[00:13:33] Speaker 03:
In ACRO, the licensee was a resident of the forum state, right?

[00:13:38] Speaker 03:
That's not close to being the case here, right?

[00:13:42] Speaker 04:
But in later cases, this court has held that that doesn't matter.

[00:13:46] Speaker 03:
It just matters that the licensee is doing business in this... I know, but you were just talking about ACRO, so I just thought I'd remind you why I think ACRO is really not supportive of your position here.

[00:13:58] Speaker 04:
Right.

[00:13:59] Speaker 04:
And I was citing ACRO just for the simple

[00:14:04] Speaker 04:
factor and cited the obligation to enforce in the license agreement and did not focus on the overall relationship between the parties.

[00:14:14] Speaker 01:
Just very briefly, and this is sort of off point and I realize that, but just this is a case in which you have not, your cause of action has not been extinguished.

[00:14:24] Speaker 01:
Judge Lynn has just said go somewhere else, specifically I suppose the Eastern District of Michigan, and yet you've spent a lot of time and presumably money

[00:14:33] Speaker 01:
fighting over whether it's Judge Lynn or equally, well, she's very good, so maybe not equally capable, but a very capable judge in the Eastern District of Michigan.

[00:14:44] Speaker 01:
Why is that so important to you?

[00:14:48] Speaker 04:
Well, Your Honor, there are a lot of factors that go into choice of form.

[00:14:54] Speaker ?:
And there are a lot of issues in this case.

[00:14:57] Speaker ?:
There are other companion cases that are pending that are focusing in on different areas of law.

[00:15:03] Speaker 04:
But ultimately, what this case is about is addressing whether repair parts for vehicles should be covered by design patents, and whether design patents on those parts are valid and enforceable, and whether my clients have willfully infringed these patents.

[00:15:25] Speaker 04:
So obviously, and again, citing some of the reasonableness factors, the state of

[00:15:32] Speaker 04:
The state of Texas probably purchases more of these Ford F-150 repair parts than any other state in the union.

[00:15:39] Speaker 04:
And the state of Texas has a real interest in determining whether these patents are valid or not.

[00:15:45] Speaker 01:
Do you think you can get a better jury in the northern district of Texas?

[00:15:49] Speaker 01:
Is that it?

[00:15:52] Speaker 01:
You prefer the jury you get?

[00:15:54] Speaker 01:
Is that it?

[00:15:55] Speaker 04:
Well, Your Honor, again, there are many factors.

[00:16:00] Speaker 04:
Okay, it really isn't.

[00:16:02] Speaker 04:
directly relevant.

[00:16:03] Speaker 04:
Okay, well my client is located in the northern district of Texas.

[00:16:06] Speaker 04:
All right.

[00:16:08] Speaker 04:
And yes.

[00:16:08] Speaker 04:
Okay.

[00:16:10] Speaker 04:
All right.

[00:16:10] Speaker 03:
So I didn't get to the other issues, but I will just rest on the brief.

[00:16:13] Speaker 03:
Okay.

[00:16:13] Speaker 03:
And we'll always do a couple minutes of rebuttal from the other side.

[00:16:27] Speaker 00:
Thank you, Your Honor, and may it please the Court, Sean Morata for Ford Global Technologies.

[00:16:32] Speaker 00:
I'll jump right into the cases.

[00:16:34] Speaker 00:
And this probably just jump right into Breckenridge.

[00:16:37] Speaker 00:
Absolutely.

[00:16:37] Speaker 00:
It seems to be the closest.

[00:16:39] Speaker 00:
Absolutely.

[00:16:40] Speaker 00:
So Breckenridge was one of those cases that courts often see where it says, you know what, we have a lot of prior case law that points in different directions.

[00:16:47] Speaker 00:
So let's try to crystallize it.

[00:16:49] Speaker 00:
Let's try to break it down and come up with some sort of standards of law that are going to help cases in the future.

[00:16:54] Speaker 00:
And here's what the court said.

[00:16:56] Speaker 00:
The inquiry requires close examination of the licensing.

[00:17:00] Speaker 00:
In particular, our case law requires that the license agreement contemplate a relationship beyond royalty or cross-license payment, such as granting both parties the right to litigate infringement cases, or granting the licensor the right to exercise control over the licensee sale and marketing activities.

[00:17:17] Speaker 00:
We have none of that here.

[00:17:19] Speaker 00:
As was discussed earlier, LKQ does not have the right to enforce the patents in suit.

[00:17:25] Speaker 00:
And what Section 8.2 says is pretty clear.

[00:17:27] Speaker 00:
It says that the claim, demand, or suit is

[00:17:30] Speaker 00:
is asserted against LKQ based on the use of the design patents, LKQ, with Ford Global's written consent, may handle such claim, where such claim refers back to the claim that is asserted against LKQ in a manner, you know, being consistent between... Wait a minute.

[00:17:47] Speaker 03:
Am I wrong?

[00:17:48] Speaker 03:
In Breckenridge, didn't the licensee have to meet the license's source consent?

[00:17:54] Speaker 00:
Yes, but needed the licensor's consent to bring an infringement suit.

[00:17:58] Speaker 00:
In this case, what LKQ needs is Ford Global's written consent to even defend a suit asserted against it based on its use of the design patent.

[00:18:07] Speaker 00:
Under the license, LKQ has no right to bring infringement.

[00:18:10] Speaker 00:
Ford Global is the only one who can bring an infringement suit.

[00:18:14] Speaker 01:
But there is a limitation on Ford Global's

[00:18:17] Speaker 01:
complete discretion whether to sue or not.

[00:18:19] Speaker 01:
And it's the reasonableness limitation.

[00:18:21] Speaker 01:
And to me that seems to be a hook that you need to explain why that doesn't make the two parties effectively partners in the enterprise of deciding whether to sue.

[00:18:34] Speaker 00:
Sure.

[00:18:34] Speaker 00:
So I think there's two things.

[00:18:36] Speaker 00:
One is that Breckinridge says that both parties have to have the right to assert patent infringement.

[00:18:40] Speaker 00:
So we say

[00:18:41] Speaker 00:
LKQ doesn't have the right to institute infringement to stop there.

[00:18:45] Speaker 00:
But what if you want to look at 8.1?

[00:18:46] Speaker 01:
I think that's maybe a little bit of an aggressive reading of Breckenridge, because as I understand the way the law is developed, if the patentee gives the licensee the authority to sue with an agreement to consent, then that's the equivalent of the patentee and the licensee both having the right

[00:19:10] Speaker 01:
to sue.

[00:19:10] Speaker 01:
You wouldn't disagree with that, I don't think.

[00:19:13] Speaker 00:
I would agree that if the licensor says, licensee, you may sue with our written consent.

[00:19:19] Speaker 00:
Yes, that would be a power in the law.

[00:19:21] Speaker 01:
Okay, so it really is only the licensee that needs to have the power to sue.

[00:19:25] Speaker 01:
Yes.

[00:19:27] Speaker 01:
So we don't have to worry about whether the licensor has retained the right.

[00:19:32] Speaker 01:
So the question then is, what about this reasonableness requirement?

[00:19:36] Speaker 00:
What do you say about that?

[00:19:37] Speaker 00:
Sure.

[00:19:37] Speaker 00:
What we say about it is you need to read the reasonableness clause in light of everything that comes before.

[00:19:42] Speaker 00:
It's that Ford Global has the absolute discretion, except that it shall not unreasonably refuse.

[00:19:50] Speaker 00:
So in other words, it's a reason giving requirement.

[00:19:53] Speaker 00:
It says that Ford Global, if you don't want to bring suit on these patents, that's fine.

[00:19:58] Speaker 00:
You just can't do it as a matter of personal whim or caprice, or you can't say, well, it's Tuesday and we don't feel like suing on these patents.

[00:20:05] Speaker 00:
You have to give some sort of commercial reason for not bringing suit.

[00:20:08] Speaker 00:
And one of the reasons that Ford Global might not want to do that is it doesn't want to engage in enforcement activities in the Eastern District or Northern District of Texas, which as my friend pointed out, has certain attributes attached to it, that license source, which by the way, Ford Global doesn't think it's worth spending the money.

[00:20:24] Speaker 00:
Absolutely.

[00:20:25] Speaker 00:
I mean, there are any number of commercial reasons, but I point out that Ford Global is quite often more a patent defendant than it is a patent plaintiff.

[00:20:33] Speaker 00:
So it might reasonably say, particularly by the way, in light of Zillnick's, you know what?

[00:20:38] Speaker 00:
the Federal Circuit is going to hold against us if we start bringing suits in Texas.

[00:20:41] Speaker 00:
So you know what?

[00:20:42] Speaker 00:
We don't want to enforce our patents there.

[00:20:44] Speaker 00:
And therefore, under ACRO and under ADD% where you look for enforcement-related obligations in the forum, not just in gross, but in the forum, Section 8.1 gives Ford Global all sorts of discretion to decide that it does not want to enforce its patents in

[00:21:01] Speaker 00:
in Texas, particularly when it forces patents anywhere that the products are being sold?

[00:21:07] Speaker 01:
Well, if that's true, it really does seem to suggest to me that this really isn't an exclusive license, notwithstanding the name, and notwithstanding Judge Lin's characterization of it as an exclusive license, because if Ford can freely indulge infringement, then it has complete authority in effect to create licensees in everything except name.

[00:21:30] Speaker 00:
So two parts to that, Your Honor.

[00:21:32] Speaker 00:
First, I agree that this is... Certainly, I would agree that, you know, exclusive is said in many ways, I think, in this court's case law.

[00:21:40] Speaker 00:
And, you know, the exclusiveness that's mentioned in ACRO, for instance, is, does it bar Fort Global from giving a license to New World?

[00:21:47] Speaker 00:
Yes, it's exclusive in that sense, because if New World comes and says, can we license the patent, we can say, no, you can't, because we've promised LKQ.

[00:21:55] Speaker 00:
But it's not exclusive in the sense that, which you see in a lot of the other cases,

[00:21:59] Speaker 00:
like Breckenridge, like Genetic Implant, where essentially the licensor and licensee have joined together in business to develop the market for the product, to go out and defend and enforce patent infringement suits together.

[00:22:11] Speaker 00:
In fact, what this license does, it creates sort of two separate and equally important areas of the license.

[00:22:18] Speaker 00:
Patent enforcement and defense rests in pretty much entirely with Ford Global.

[00:22:22] Speaker 00:
And on the other side, marketing and sales rests entirely with LKQ.

[00:22:27] Speaker 00:
Ford Global doesn't have any control over that or power over that.

[00:22:30] Speaker 00:
So this is a more arm's length relationship than we see in all the other cases.

[00:22:35] Speaker 00:
So whether you attach the label of exclusive to it, what Breck and Rich says is you look closely at the language of the agreement.

[00:22:42] Speaker 00:
All patent licensing agreements differ.

[00:22:45] Speaker 00:
And this is one in which you don't have that close relationship, which is what Judge Lynn was talking about below in her decision.

[00:22:50] Speaker 01:
Well, there is some control by Ford, I guess, over the manufacturing and distribution process, right?

[00:22:55] Speaker 01:
In section 10.1,

[00:22:57] Speaker 00:
So section 10.1, and some of this is under seal, so I'm gonna be careful about how I say it.

[00:23:04] Speaker 00:
The word manufacturer.

[00:23:05] Speaker 00:
Whoa, whoa, it's under seal.

[00:23:06] Speaker 00:
Oh, sorry, some of the particular five words in it, I just wanted to make sure.

[00:23:11] Speaker 01:
Right, but I don't think this is part of it.

[00:23:13] Speaker 00:
Right, so just to say that.

[00:23:15] Speaker 01:
Let me be sure I understand.

[00:23:18] Speaker 01:
The only things that are confidential are the ones that are highlighted in the brief.

[00:23:23] Speaker 00:
It's just a couple words, but they're in 10.1, so I want to be careful.

[00:23:27] Speaker 00:
The word manufacturer that is used in 10.1 is not all manufacturers.

[00:23:32] Speaker 00:
It's a defined term in the license and refers to the manufacturers that are being used to produce these parts.

[00:23:39] Speaker 00:
So it's not as if there's an obligation on LKQ to stop infringement by anyone in the world.

[00:23:45] Speaker 00:
And manufacturer is a defined term and it doesn't carry its generic sense, which I think is what New World is claiming.

[00:23:51] Speaker 00:
But also I point out, section 10.1 was never brought up until the reconsideration.

[00:23:56] Speaker 00:
And when Judge Lynn addressed that in her decision on reconsideration, she said, look, you could have brought 10.1 to me sooner, you didn't do it, and I'm not going to consider it at this point.

[00:24:05] Speaker 00:
And that was perfectly within her discretion.

[00:24:08] Speaker 00:
And that's part of what happened in this case is that every time an argument was rejected,

[00:24:12] Speaker 00:
New World came back and said, well, how about this instead?

[00:24:14] Speaker 01:
Was that on reconsideration or was that in connection with the motion to amend?

[00:24:18] Speaker 00:
So 10.1 was on reconsideration.

[00:24:20] Speaker 00:
The extrajudicial patent enforcement claims, which is essentially, you're calling our suppliers, you're trying to get out of this case.

[00:24:26] Speaker 00:
That was on amend.

[00:24:28] Speaker 00:
And there are two separate things where they sort of travel hand in hand in the sense that Judge Lynn said,

[00:24:33] Speaker 00:
This has been on my docket for four months.

[00:24:35] Speaker 00:
You've gone through dozens of docket entries on this.

[00:24:37] Speaker 00:
At some point, this just has to stop.

[00:24:39] Speaker 00:
I'm not going to forever keep entertaining new theories of personal jurisdiction over Ford Global, because that gets to, I think, the point you were talking about in closing, which is these claims could be brought in the Eastern District of Michigan.

[00:24:50] Speaker 00:
Ford Global agrees it is subject to general jurisdiction there.

[00:24:53] Speaker 00:
and they can be resolved as part of the other cases.

[00:24:56] Speaker 00:
But plaintiffs feel ardently about venue.

[00:24:58] Speaker 00:
They do feel ardently about venue in the sense that they filed a suit in the Eastern District of Texas.

[00:25:02] Speaker 00:
They was transferred.

[00:25:03] Speaker 00:
They tried to mandamus it.

[00:25:05] Speaker 00:
They lost.

[00:25:06] Speaker 00:
They petitioned for certiorari.

[00:25:08] Speaker 00:
They lost.

[00:25:09] Speaker 00:
They then filed a second suit in the Eastern District of Texas, but didn't serve it when they drew the first judge.

[00:25:14] Speaker 00:
And then only then- Was that Judge Mazan?

[00:25:16] Speaker 00:
I believe that's right, Your Honor.

[00:25:18] Speaker 00:
And then they filed a third suit in the Northern District of Texas.

[00:25:22] Speaker 00:
when that didn't work out, trying a different theory.

[00:25:25] Speaker 00:
And yet after this was dismissed, they filed a fourth suit in the Northern District of Texas, trying to reassert the claims that Judge Lin found waived.

[00:25:33] Speaker 00:
So they do feel very ardently about venue, but I think what's important about this case, and it's different than Zelnick's, is this isn't about, you know, can they bring their claim in the United States?

[00:25:43] Speaker 00:
It's where they bring their claim in the United States.

[00:25:45] Speaker 00:
And they have a ready forum in the Eastern District of Michigan.

[00:25:48] Speaker 00:
And there's no reason to expand this court's cases

[00:25:51] Speaker 00:
pass what is already said to allow a claim that has a ready and, I think, quite able form for the resolution of what my friend talks about, which is, are these divine patents valid and enforceable?

[00:26:02] Speaker 00:
We're happy to litigate those claims.

[00:26:03] Speaker 00:
They just shouldn't be litigated in Texas in this case.

[00:26:08] Speaker 00:
Unless the court has further questions, we'd ask that you affirm.

[00:26:27] Speaker 04:
This court has focused in on Breckinridge.

[00:26:34] Speaker 04:
Let me just say that I think you have to step back and the court addressed whether this license agreement was exclusive.

[00:26:48] Speaker 04:
This license agreement is exclusive as far as my client is concerned because my client

[00:26:54] Speaker 04:
attempted to get a license from Ford Global.

[00:26:59] Speaker 04:
And that letter is in the file, I believe, Appendix 60, which was refused.

[00:27:04] Speaker 04:
And in the Acro case, I think that the compelling statement is that when you have an exclusive license agreement that has been entered into by somebody who's doing business in the foreign, that is excluding everybody else.

[00:27:22] Speaker ?:
that has excluded my client.

[00:27:25] Speaker ?:
And that is really one of the things that gave rise to this case.

[00:27:30] Speaker ?:
Well, only if the patentee elects to exercise its right to exclude.

[00:27:35] Speaker 01:
But if the patentee decides to indulge in infringement, then you're free to go about your business.

[00:27:41] Speaker 04:
Well, but I believe under the terms of this license agreement, Ford Global was not allowed contractually to enter into

[00:27:51] Speaker 01:
Not entered into an agreement, but it was allowed to decide not to sue for infringement.

[00:27:57] Speaker 01:
Subject to the reasonableness clause.

[00:27:59] Speaker 01:
Right.

[00:27:59] Speaker 01:
On any commercially reasonable basis, such as we don't like to spend a lot of money on infringement suits.

[00:28:06] Speaker 04:
Which, of course, reasonableness is a legally enforceable concept in the state of Michigan, as I indicated in the brief.

[00:28:12] Speaker 04:
And I think that's the same relative standard that the licensure was subject to in the Breckenridge case.

[00:28:20] Speaker 04:
So the key is when you look at the exclusive, and the whole purpose of an exclusive license agreement is to exclude other people.

[00:28:28] Speaker 04:
And that's why you do have the provisions in the agreement on enforcement.

[00:28:34] Speaker 04:
Because without these clauses, then of course the exclusive license agreement is meaningful.

[00:28:41] Speaker 04:
Of course, we also have the indemnification provision, which was an important provision in the genetic implant case.

[00:28:49] Speaker 04:
And that's further evidence of a continuing obligation between the license order and the licensee that we believe falls within this line of cases.

[00:29:05] Speaker 04:
On the motions for leave, yes, this has been a very procedurally complex case.

[00:29:13] Speaker 04:
We certainly have our side of the story on everything that's happened.

[00:29:22] Speaker 04:
But the matters in the amended pleading we believe also go to enforcement and defense and would support the ruling particularly in the Xilinx case for personal jurisdiction.

[00:29:38] Speaker 04:
Thank you.

[00:29:39] Speaker 04:
We thank both sides for the cases submitted.