[00:00:00] Speaker 01:
America's Inc.

[00:00:01] Speaker 01:
16-1585

[00:00:47] Speaker 01:
Mr. Parker?

[00:00:57] Speaker 01:
Thank you, Your Honor.

[00:00:58] Speaker 01:
May it please the court?

[00:00:59] Speaker 01:
You reserved three minutes for rebuttal, correct?

[00:01:02] Speaker 01:
Correct.

[00:01:03] Speaker 01:
You may proceed.

[00:01:04] Speaker 04:
Thank you.

[00:01:06] Speaker 04:
Your Honor, in this case, the district court found that over 100 of Everlight's LED models infringed Nietzsche's patents.

[00:01:13] Speaker 04:
There is abundant evidence on the record, including in the district court's own opinion,

[00:01:17] Speaker 04:
that Everlight and Nietzsche are direct competitors.

[00:01:19] Speaker 04:
Yet the district court denied Nietzsche an injunction.

[00:01:23] Speaker 01:
You're competitors, but you're really not.

[00:01:27] Speaker 01:
The competition between the two companies is not significant.

[00:01:32] Speaker 01:
At least that's what I gather from the record.

[00:01:35] Speaker 04:
Judge, the district judge in this case applied a standard that he called meaningful competition, which may be the same as significant competition,

[00:01:43] Speaker 04:
I don't know that, because it's a new standard that's never been applied.

[00:01:48] Speaker 01:
But what does- But you didn't introduce any evidence of that competition.

[00:01:51] Speaker 01:
Market share, price erosion.

[00:01:56] Speaker 04:
We provided abundant direct evidence of direct competition between the parties.

[00:02:02] Speaker 04:
For example, in the court's opinion, there's discussion of the battle between Nietzsche and Everlight for the lights of America sale.

[00:02:09] Speaker 04:
There's the battle between Nietzsche and America

[00:02:11] Speaker 04:
for the sale to Nietzsche's biggest US customer, General Electric.

[00:02:16] Speaker 04:
What the district court found in conclusions of laws 61 and 62 on page 133 was that Nietzsche had not shown that but for Everlight's competition, Nietzsche suffered past economic harm.

[00:02:31] Speaker 04:
That is a standard that this court has never applied.

[00:02:35] Speaker 04:
This court has said that direct competition is

[00:02:40] Speaker 04:
evidence of irreparable harm.

[00:02:42] Speaker 04:
It's the direct competition standard that this court has looked to.

[00:02:46] Speaker 04:
The court has never applied a meaningful, quote, meaningful competition standard, which requires a patent owner to show a but for economic loss in the past.

[00:03:00] Speaker 00:
By contrast, direct competition alone is not sufficient, is it?

[00:03:04] Speaker 00:
I'm sorry?

[00:03:05] Speaker 00:
Is direct competition alone, in your view, sufficient under the eBay standard?

[00:03:09] Speaker 04:
The court has held, and the answer to your question, Your Honor, is the court has held that direct competition between the patent owner and the infringer is important evidence of irreparable harm.

[00:03:23] Speaker 04:
It may not be sufficient because the court has to analyze all four of the eBay factors.

[00:03:29] Speaker 04:
But I submit that this court's guidance is to the district courts to look to direct competition and not to elevate that standard to require

[00:03:39] Speaker 04:
that the parties show past economic harm.

[00:03:43] Speaker 04:
And this is directly consistent with eBay, for example, where the... I'm still a little confused.

[00:03:52] Speaker 00:
Even if there's direct competition, don't you have to show

[00:03:55] Speaker 00:
that money damages can't suffice to remedy that.

[00:04:00] Speaker 00:
No, Your Honor, the standard.

[00:04:02] Speaker 05:
The termination you're looking at, multiple different factors, and then you have to balance those factors, right?

[00:04:09] Speaker 04:
That's correct.

[00:04:09] Speaker 04:
But what the result of the district court's opinion, there are two results of the district court's opinion, one broad and one specific to this case.

[00:04:19] Speaker 04:
The broad result is, first of all, there's no injunctive remedy for infringement by importation or offer for sale.

[00:04:26] Speaker 04:
And in fact, what the district court is effectively saying is that a patent owner, even facing competition for the biggest customer like GE, has to wait until they lose a threshold amount of sales before they're entitled to an injunction.

[00:04:41] Speaker 04:
The specific problem, and the reason why that's a particular problem in this case.

[00:04:46] Speaker 05:
The problem I'm having with your argument right now is that we're reviewing this for abuse of discretion.

[00:04:51] Speaker 05:
And it's based on the district court's analysis of a totality of facts.

[00:04:56] Speaker 05:
It's not making a legal pronouncement that is going to apply to every case.

[00:05:01] Speaker 05:
And so I am having a hard time understanding how you're turning all these fact findings and analysis and balancing that the district court did, how you're turning it into a legal determination that's going to apply for every case in the future.

[00:05:17] Speaker 04:
You're right.

[00:05:18] Speaker 04:
Your Honor, you're absolutely right.

[00:05:19] Speaker 04:
This is an abuse of discretion standard.

[00:05:21] Speaker 04:
But this court has held, and it must be, that the district court's discretion is not untethered.

[00:05:31] Speaker 04:
that there must be guidelines.

[00:05:33] Speaker 04:
The eBay guidelines, the eBay factors, and the application of the eBay factors must have guidelines so that the parties know what to argue and to frame the issues for the district court to exercise its discretion in an appropriate way.

[00:05:53] Speaker 04:
This court has held in, for example, the Mitie case, unfortunately not a published opinion, but this court has held

[00:06:01] Speaker 04:
It has never required a showing of past damages.

[00:06:05] Speaker 04:
This court has also held in another case that the patent owner should not be penalized for their ability to maintain their market share in the face of competition and then be deprived of an injunction.

[00:06:19] Speaker 04:
And that's very important in this case in particular, Your Honor, because we're dealing with LEDs.

[00:06:24] Speaker 04:
And one important aspect of LEDs is that they last for 5, 10, 15 years.

[00:06:31] Speaker 04:
Once Nietzsche loses the opportunity to put its LEDs into those GE light bulbs, by the time those light bulbs expire, the patents in this case may well have expired as well.

[00:06:44] Speaker 04:
So for Nietzsche to wait and lose a sale, I'm not even talking about the design win aspect of this case, which we've discussed in our briefs.

[00:06:52] Speaker 04:
Just the nature of the technology is that if you lose a sale.

[00:06:57] Speaker 01:
It seems to me, or obviously I wasn't

[00:07:01] Speaker 01:
at the court when you made these arguments.

[00:07:03] Speaker 01:
But it seems to me, I hear an echo here.

[00:07:06] Speaker 01:
And you're making attorney arguments, but there's no data here.

[00:07:11] Speaker 01:
You're having a difficulty making it even past that they're a competitor.

[00:07:20] Speaker 03:
Your Honor, let me approach it this way.

[00:07:22] Speaker 01:
You had no evidence of price erosion, lost sales.

[00:07:26] Speaker 01:
You weren't able to show even the amount of cells that you've lost to Everlight.

[00:07:33] Speaker 01:
The ones that were brought up were fairly small.

[00:07:37] Speaker 01:
They may be a competitor in that they're in the same field or a business in the same market.

[00:07:45] Speaker 01:
But competitor means that you're toe to toe.

[00:07:49] Speaker 04:
And, Your Honor, with respect to Lights of America, with respect to GE, and I can cite to numerous other documents in the record where Nietzsche, excuse me, where Everlight, for example, has described its, quote, attack plans

[00:08:07] Speaker 04:
for targeting Nietzsche customers.

[00:08:09] Speaker 01:
But so what?

[00:08:10] Speaker 01:
A little business wants to attack the big business.

[00:08:14] Speaker 04:
Your Honor, I respectfully disagree.

[00:08:17] Speaker 04:
Everlight is the eighth largest LED manufacturer in the world.

[00:08:20] Speaker 04:
At the time of trial, they had 40% annual growth.

[00:08:24] Speaker 04:
This is not a situation in which Everlight is a pipsqueak.

[00:08:29] Speaker 04:
This is a situation in which Nietzsche acted with alacrity

[00:08:33] Speaker 04:
It filed suit this lawsuit at the time of the GE battle that the district court described in its opinion.

[00:08:42] Speaker 01:
And it then... Is Nietzsche's market-based retail, is it to U.S.

[00:08:48] Speaker 01:
customers or is it to distributors?

[00:08:52] Speaker 04:
Both Nietzsche and Everlight sell directly to companies that incorporate the LEDs.

[00:09:00] Speaker 04:
Yes, but most of

[00:09:01] Speaker 01:
Most of Everlight's customers are distributors.

[00:09:04] Speaker 04:
The finding was that it's about 50-50.

[00:09:08] Speaker 04:
But even those distributors are selling infringing Everlight products to companies that are part of Nietzsche's potential market.

[00:09:19] Speaker 04:
What I hear from the court is the possibility of a possible concern that this is kind of a standardless situation, but it's not, I submit.

[00:09:28] Speaker 04:
The court in W.T.

[00:09:30] Speaker 04:
Grant, the Supreme Court case, said that the question is not whether there's been past harm, but that an injunction is a forward-looking remedy and the question is where there's a cognizable danger of recurrent violations.

[00:09:45] Speaker 04:
In the Acorda case, this court said that an injunction is to prevent a defendant's planned, non-speculative, harmful conduct before it occurs.

[00:09:57] Speaker 04:
That's why Nietzsche brought this suit.

[00:10:01] Speaker 01:
And again, there are documents in the record showing competition between Nietzsche and... That may be so what you're saying, but when you're talking about harmful conduct, the law is clear.

[00:10:12] Speaker 01:
It's called irreparable harm.

[00:10:15] Speaker 01:
And there's a number of standards that need to be met.

[00:10:19] Speaker 01:
It's not easy to get a permanent injunction, correct?

[00:10:23] Speaker 01:
So you have a high hurdle.

[00:10:25] Speaker 01:
The district court said you didn't

[00:10:27] Speaker 01:
pass a hurdle for a whole host of reasons.

[00:10:31] Speaker 01:
Another one is that you do have a significant number of licenses out in the market.

[00:10:38] Speaker 04:
If I may, Your Honor, with two aspects to that comment, I will finish up on the competition issue, and then I'll shift over to the license issue.

[00:10:49] Speaker 04:
In eBay, the Supreme Court said, let's apply standard principles of equity in patent cases.

[00:10:59] Speaker 04:
Standard principle of equity, if I say to the court, my neighbor is about to chop down my apple tree, the court doesn't say, how far has the blade gone in?

[00:11:09] Speaker 04:
Has he made the first chop yet?

[00:11:10] Speaker 04:
Has he made the second chop yet?

[00:11:12] Speaker 04:
The court enjoins the harm before it occurs.

[00:11:16] Speaker 04:
Same situation here.

[00:11:17] Speaker 04:
If Everlight gets into GE, Lights of America, Cooper, Osram, all the other companies that are nichias customers where Everlight has engaged in direct competition, then the blade is in the trunk of the tree and there's no reversing that.

[00:11:39] Speaker 05:
Again, not only because of the- Your argument, I understand what your argument is.

[00:11:43] Speaker 05:
But I think what I read the district court to have held is that that is not likely.

[00:11:48] Speaker 05:
That is not likely to happen based on the evidence that it has analyzed before it.

[00:11:55] Speaker 04:
I read the district court's opinion literally.

[00:11:58] Speaker 04:
And I specifically read conclusions of law 60 and 61, excuse me, 61 and 62, where the district court summarized

[00:12:08] Speaker 04:
what the direct competition between Nietzsche and Everlight in the lights of America and GE situations, of which there are two of many.

[00:12:16] Speaker 04:
And what it said is, Nietzsche did not show past harm to a but for level of causation.

[00:12:23] Speaker 04:
Again, a patent on it.

[00:12:25] Speaker 01:
No, no.

[00:12:27] Speaker 01:
At 61, the court said plaintiff admitted and made no attempt to establish the relevant market share for Nietzsche Corporation.

[00:12:34] Speaker 01:
And it seems to me that unless you establish relevant market share,

[00:12:39] Speaker 01:
your arguments about the axe and even how deep the axe is, it's difficult to undertake in a relevant fashion.

[00:12:50] Speaker 04:
Well, I'm referring, Your Honor, to the last sentence on each paragraph.

[00:12:55] Speaker 01:
But I directed your attention to this sentence.

[00:12:58] Speaker 04:
Oh, you're absolutely right, Your Honor, because we had to... You made no attempt to show market share.

[00:13:03] Speaker 04:
We had shown, no we didn't.

[00:13:05] Speaker 04:
There's no dispute that Nietzsche is the number one company in the world.

[00:13:10] Speaker 01:
What we had said was- It didn't sell, but what's the market?

[00:13:13] Speaker 01:
How much of the market share do you have, a total market?

[00:13:17] Speaker 04:
I don't have those data with me right now, Your Honor.

[00:13:19] Speaker 01:
But if you don't have the data, how does the district court to know what losses you're going to sustain in the future?

[00:13:28] Speaker 04:
Because the evidence was clear and unrebutted.

[00:13:32] Speaker 04:
and I'll just take the one example again, that General Electric was Nietzsche's largest U.S.

[00:13:37] Speaker 04:
customer, a vital U.S.

[00:13:39] Speaker 04:
customer.

[00:13:40] Speaker 04:
The district court describes direct competition and then at the end of paragraph 62 says that doesn't count towards an injunction because Nietzsche did not show price erosion to a buck four level of causation.

[00:13:57] Speaker 04:
Again, so the district court held for the first time, there is no precedent for this in any decision of this court certainly, where a patent owner has been put to the burden of showing past harm by but for causation.

[00:14:12] Speaker 04:
And I repeat once again, the effect of this is to say there is no injunction under the statute for importation or offer for sale of infringing products.

[00:14:24] Speaker 01:
May I talk about it?

[00:14:26] Speaker 04:
May I?

[00:14:28] Speaker 04:
Go ahead.

[00:14:29] Speaker 04:
I didn't get a chance to talk about the license aspect of your question.

[00:14:34] Speaker 01:
Make it quick.

[00:14:35] Speaker 04:
One minute.

[00:14:36] Speaker 04:
First of all, I think the district judge started off with an arithmetic error.

[00:14:40] Speaker 04:
He overstated the extent of Nietzsche's licensing by 50%.

[00:14:43] Speaker 04:
That's undisputed.

[00:14:45] Speaker 05:
So it's 27%, right?

[00:14:47] Speaker 04:
He said 41%.

[00:14:49] Speaker 04:
The actual number, which the parties agree based on the evidence, is 27%.

[00:14:55] Speaker 04:
Each of those licenses is a technology cross license.

[00:15:00] Speaker 04:
If Nietzsche doesn't get an injunction in this case, actually what it will have to do now and what Nietzsche is willing to do is to file another lawsuit.

[00:15:10] Speaker 04:
But in the ordinary course, if a patent owner doesn't get an injunction in a case like this, its only recourse, its only remedy is effectively a compulsory license with a royalty.

[00:15:23] Speaker 04:
That's devastating in the LED industry for the reasons I mentioned.

[00:15:27] Speaker 04:
LEDs last so long that you don't get a chance to recapture that business with your patented technology.

[00:15:34] Speaker 04:
Number two, Nietzsche has never licensed its technologies for royalty.

[00:15:42] Speaker 04:
Never licensed its technologies for royalties alone.

[00:15:46] Speaker 04:
Each of those licenses is a technology cross license and most of them are royalty free.

[00:15:53] Speaker 04:
And even where there are royalties, they're in specific circumstances and essentially not important.

[00:16:01] Speaker 04:
Your Honor, thank you for giving me some extra time.

[00:16:03] Speaker 04:
I know I ate up my time.

[00:16:04] Speaker 04:
That's all right.

[00:16:05] Speaker 04:
Thank you very much.

[00:16:06] Speaker 04:
Thank you.

[00:16:11] Speaker 01:
Mr. Schellinger, did I say that correctly?

[00:16:13] Speaker 02:
Yes, you did, Your Honor.

[00:16:16] Speaker 02:
Good morning, and may it please the Court.

[00:16:19] Speaker 02:
I plan to focus first on non-infringement

[00:16:23] Speaker 02:
in validity issues relating to the 250 patents and then respond to the court's discretionary refusal to award a permanent injunction.

[00:16:34] Speaker 02:
I intend to rely on the briefs of the 589 and 870 patents.

[00:16:41] Speaker 01:
So you're saving two minutes for your cross appeal, is that correct?

[00:16:45] Speaker 01:
Yes, your honor.

[00:16:47] Speaker 01:
And you're devoting 13 minutes to

[00:16:51] Speaker 01:
to rebuttal here.

[00:16:53] Speaker 02:
I'm sorry.

[00:16:56] Speaker 02:
I plan to use the time both on the merits of my cross-appeal case in chief and also to respond to counsel's arguments on the injunction.

[00:17:14] Speaker 02:
But I'm going to limit my argument to just 250 patents and just to some of the issues.

[00:17:21] Speaker 02:
First, the district court committed legal error in rejecting our constructive claim of lease.

[00:17:36] Speaker 05:
What is the basis for adding the requirement that the lead must go have the electricity conduct from the outside in?

[00:17:45] Speaker 05:
What is the basis for that?

[00:17:46] Speaker 05:
Where is that in the stack or the prosecution history?

[00:17:49] Speaker 02:
Let me start with the spec.

[00:17:52] Speaker 02:
And what the spec says is that the light emitting element 10 is electrically connected with the leads through wires 50.

[00:18:00] Speaker 02:
Now the spec doesn't disclose a battery in these.

[00:18:05] Speaker 02:
It doesn't disclose any self-powering.

[00:18:07] Speaker 02:
So one would expect a person of ordinary skill in the art would understand and expect that the power is going to come from an external source.

[00:18:18] Speaker 02:
And indeed, that's consistent with stipulation 87, which is at A2107.

[00:18:25] Speaker 02:
The various, quote, the various components within the LED package permit several functions, including one, supplying electrical input.

[00:18:35] Speaker 05:
Is that describing the patent, that stipulation, or is it describing the accused product?

[00:18:40] Speaker 05:
What is it describing?

[00:18:41] Speaker 02:
It's a general stipulation about an LED package, Your Honor.

[00:18:47] Speaker 02:
And it dovetails with the patent because an LED package by itself is useless.

[00:18:58] Speaker 02:
You can't excite the LED chip without putting power on it.

[00:19:03] Speaker 02:
So if without a way to connect the LED to a source of power, you've got a very small boat anchor.

[00:19:15] Speaker 02:
And that's why

[00:19:17] Speaker 02:
That's why everyone admitted, the witnesses from both sides agreed that the chips were connected, our chips were connected to an external source.

[00:19:30] Speaker 02:
And if LEED has the meaning only ascribed to it by the district court, which is to conduct, the portion that conducts electricity, there are wires

[00:19:45] Speaker 02:
inside the LED package.

[00:19:47] Speaker 02:
There's a chip itself.

[00:19:49] Speaker 02:
They also conduct electricity.

[00:19:51] Speaker 02:
That's too broad a construction.

[00:19:54] Speaker 02:
And it's so broad as to be effectively meaningless.

[00:20:00] Speaker 02:
But that's the purpose of a lead, correct?

[00:20:03] Speaker 02:
The purpose of the lead is to conduct electricity from an external source to excite the LED chip.

[00:20:14] Speaker 02:
That's where it comes from.

[00:20:16] Speaker 02:
But the purpose of the lead is to conduct electricity, but not that broadly.

[00:20:23] Speaker 02:
It actually, the lead connects the LED to the external source on one end and then through the wire to the chip to excite it.

[00:20:35] Speaker 02:
And that is the proper function of a lead.

[00:20:43] Speaker 05:
The district court relied on the common understanding of the word and the way the word was used in the specification, and didn't read this additional requirement in.

[00:20:54] Speaker 05:
And your point is, I guess, that with respect to LEDs in particular, everybody born of ordinary skill would understand that a lead has that additional requirement?

[00:21:06] Speaker 02:
That's correct, Your Honor.

[00:21:09] Speaker 02:
And that's why I point to stipulation 87,

[00:21:13] Speaker 02:
And let me also mention in connection with our products, the stipulation 23 is agreement that our chips are bottom, are surface mounted.

[00:21:30] Speaker 02:
So the bottoms sit on something that connects.

[00:21:34] Speaker 05:
But we can't consider that with respect to claim construction.

[00:21:37] Speaker 05:
It feels to me as if that were, you know, conflating infringement with claim construction.

[00:21:43] Speaker 05:
When we start looking at your accused device to determine how to interpret the claim, we certainly are conflating the two.

[00:21:49] Speaker 02:
Right?

[00:21:51] Speaker 02:
Your Honor, I don't know that I'm conflating.

[00:21:54] Speaker 02:
I'm using extrinsic evidence.

[00:21:57] Speaker 02:
But let me put 23 to a side.

[00:21:59] Speaker 02:
91 doesn't talk about any particular device.

[00:22:04] Speaker 02:
It's a general stipulation about how LEDs function generally.

[00:22:10] Speaker 02:
And that's consistent with Your Honor's question about what a person of ordinary skill in the art would understand.

[00:22:24] Speaker 02:
The reason this construction dispute is important is because Nechia's expert took the judge's construction, which was the portion that conducts electricity,

[00:22:39] Speaker 02:
did a laboratory experiment where he had someone put a probe on these tie bar remnants on the side, got the chip to light up and said, see, it conducts electricity.

[00:22:52] Speaker 02:
The problem with that is that's not how it works in the real world.

[00:22:59] Speaker 02:
There's no dispute that Everlight doesn't intend its devices to be used that way.

[00:23:09] Speaker 02:
There's no dispute that the tie bar remnants actually serve any purpose in the LED after the chips have been cut into single devices, after singulation.

[00:23:24] Speaker 02:
The Everlight's expert testified without dispute, without disagreement, that those tie bar remnants during operation don't conduct electricity.

[00:23:39] Speaker 02:
And he explained why.

[00:23:42] Speaker 02:
And on page six of our reply brief, we have a figure of the device.

[00:23:52] Speaker 02:
And if you look at the right-hand figure on page six of the reply brief, witnesses from both sides were consistent that the large black portions on the bottom surface are the leads

[00:24:07] Speaker 02:
that provide the electrical connection between an external power source and the LED chip.

[00:24:14] Speaker 01:
So within the specification, would I find something that teaches me that leads references to the conduction of electricity outside of the device?

[00:24:31] Speaker 02:
Your Honor, those words are not in

[00:24:35] Speaker 02:
the specification of the 250 patents.

[00:24:39] Speaker 02:
But what I submit to the court, I'm sorry.

[00:24:44] Speaker 01:
Where would a posita then?

[00:24:45] Speaker 01:
Why would a posita understand that a lead is limited to conducting electricity outside of the device?

[00:24:53] Speaker 02:
Because the 250 patent doesn't describe in the specification a power source anywhere, not within the four corners of the device.

[00:25:04] Speaker 02:
and it's got an LED chip, the purpose of which is to light up when it gets electricity.

[00:25:12] Speaker 02:
And so one of ordinary school in the art would understand from looking that if you have a device, there's no internal power source, the lead is intended to conduct electricity to excite the chip, the power has to come from outside.

[00:25:31] Speaker 02:
And that again is consistent with stipulation

[00:25:34] Speaker 02:
87.

[00:25:34] Speaker 01:
So your construction appears to be prompting us to find a use limitation.

[00:25:47] Speaker 01:
Because you say the specification doesn't require it, but that the use does.

[00:25:55] Speaker 02:
It's not so much a use limitation as... You're arguing that it is a use limitation.

[00:26:03] Speaker 01:
He said that that's not how these devices are used in the real world.

[00:26:08] Speaker 02:
And I apologize.

[00:26:10] Speaker 02:
Let me separate my two points.

[00:26:13] Speaker 02:
For infringement, the question is, and the court has held that an experiment sort of out of the ordinary, where that's not how devices are ordinarily used,

[00:26:32] Speaker 02:
doesn't prove infringement.

[00:26:35] Speaker 05:
And that's the point of... Claims are method claims, right?

[00:26:38] Speaker 05:
Claims in the 250PAT and a method of manufacture and lighting meeting device?

[00:26:43] Speaker 02:
Independent claim one is a method claim.

[00:26:45] Speaker 02:
Independent claim 17 is a device claim, Your Honor.

[00:26:49] Speaker 02:
And so in use, the way they proved infringement was this laboratory experiment that

[00:26:57] Speaker 02:
There's no evidence it's ever actually been done in the real world.

[00:27:01] Speaker 02:
No evidence it was done by any actual user.

[00:27:05] Speaker 02:
And where our expert says, in fact, if you ran this in its ordinary way, the tie bar remnant would not carry electricity, would not be conducting.

[00:27:18] Speaker 02:
It goes straight through.

[00:27:20] Speaker 02:
And so I guess the point of it, I don't think it's a use

[00:27:26] Speaker 02:
I think it's part of what a lead is.

[00:27:29] Speaker 02:
A lead is something that conducts from point A to point B. And here, where there's no internal power source, that point B is somewhere outside.

[00:27:41] Speaker 05:
It doesn't expressly talk about the power source, right?

[00:27:45] Speaker 05:
The claims?

[00:27:46] Speaker 02:
Neither the claim nor the specification describes power source.

[00:27:51] Speaker 02:
That's correct.

[00:27:56] Speaker 01:
Could you address the injunction issue?

[00:27:58] Speaker 01:
I can, Your Honor.

[00:28:00] Speaker 01:
Unless there's something else you want.

[00:28:01] Speaker 01:
You have a number of other issues.

[00:28:06] Speaker 02:
Let me just say briefly, I do want to address invalidity.

[00:28:10] Speaker 02:
And I'll be brief, and then I'll adjust the injunction.

[00:28:14] Speaker 02:
The district court committed clear error in finding no motivation to combine.

[00:28:25] Speaker 02:
It's the, again, there's a finding effect 23, which is based on stipulation 86, is the field relevant to the inventions, field singular, relevant to the inventions of the Pattinson suit, is light emitting, diode, and semiconductor technology, including packaging.

[00:28:46] Speaker 02:
The field covers both LED and semiconductor technology.

[00:28:52] Speaker 02:
That was the judge's finding.

[00:28:54] Speaker 02:
That was based on a stipulation.

[00:28:56] Speaker 02:
The patents, the three patents themselves interchangeably use the phrase semiconductors and LEDs.

[00:29:07] Speaker 02:
The parties also stipulated, stipulation 90, that LEDs are semiconductor-based devices.

[00:29:16] Speaker 02:
The plaintiff's exhibit 1114, and we quote it in the brief,

[00:29:23] Speaker 02:
is a reference book written for LED and IC packaging because, quote, knowledge learned in the past 20 years in IC packaging can be applied to LED packaging.

[00:29:36] Speaker 02:
Again, very analogous, Your Honor, as in unwired, I believe.

[00:29:42] Speaker 02:
With respect to the finding of commercial success, very briefly, appendix 10111

[00:29:53] Speaker 02:
Fenton's Exhibit 110 is a Nichia technical document about the 757 products.

[00:30:00] Speaker 02:
The first subheading says, proprietary thermoset composite outperforms plastic and ceramic.

[00:30:08] Speaker 02:
Same document, same page, next heading.

[00:30:11] Speaker 02:
Nichia reinvents LED package design with proprietary thermoset composite.

[00:30:17] Speaker 02:
Then there's text that embellishes that.

[00:30:23] Speaker 02:
The district court relied on a third party publication, one page, for industry praise.

[00:30:32] Speaker 02:
It's a 2013 document, five years after the priority date.

[00:30:37] Speaker 02:
And it says, Nechi was the first to use EMC lead frame material, the proprietary material.

[00:30:44] Speaker 02:
And the company's 757 series became a hot seller in 2013, end quote.

[00:30:52] Speaker 02:
3325.

[00:30:52] Speaker 02:
Your Honor, turning to the injunction, the district court didn't create a new standard with meaningful competition.

[00:31:05] Speaker 02:
Competition, as Your Honor asked or said, is the beginning of an analysis.

[00:31:12] Speaker 02:
It's not the end point.

[00:31:14] Speaker 02:
And what the district court did is go through Nichea's evidence of competition

[00:31:21] Speaker 02:
There are findings of FAC between 412 and 433, all dealing with these issues.

[00:31:30] Speaker 02:
Nici hasn't challenged them.

[00:31:33] Speaker 02:
Let me point to just two.

[00:31:35] Speaker 02:
Finding the FAC 416.

[00:31:36] Speaker 02:
There is no overlap between Nici and Everlight with respect to Nici's top 20 customers in the US.

[00:31:46] Speaker 02:
Four of the accused products.

[00:31:47] Speaker 02:
Finding 418.

[00:31:49] Speaker 02:
While Nachea's internal documents show that Nachea America had 516 US sales opportunities, which it claimed were in competition with Everlight, Everlight is identified in only three of such 516 sales opportunities, reflecting potential sales of $50,000.

[00:32:11] Speaker 02:
OK.

[00:32:12] Speaker 01:
Counselor, you're out of time.

[00:32:13] Speaker 01:
Thank you.

[00:32:14] Speaker 01:
Thank you, Your Honor.

[00:32:18] Speaker 04:
Your honor, I am used to all my time.

[00:32:21] Speaker 01:
May I have two minutes?

[00:32:22] Speaker 01:
Yeah, I'm going to refer you back to three minutes.

[00:32:24] Speaker 04:
Oh, thank you, your honor.

[00:32:25] Speaker 04:
I will try to be quick.

[00:32:28] Speaker 04:
I have just two points I would like to make regarding the 250 path.

[00:32:46] Speaker 04:
Regarding the claim construction of the term lead, the claim construction was not made willy-nilly.

[00:32:54] Speaker 04:
It was made in the context of the claim in which the word appears.

[00:32:59] Speaker 04:
In Finding the Fact 35, the court listed the claim elements, and the word lead appears in element 1D.

[00:33:08] Speaker 04:
And what it says is, as part of the manufacturing process, you have a lead frame

[00:33:15] Speaker 04:
which has mold on it, molding, resin molding.

[00:33:17] Speaker 04:
It's a molded lead frame.

[00:33:19] Speaker 04:
And the lead is the component of the resin package that results when that molded lead frame is simulated, that is cut into individual packages.

[00:33:30] Speaker 04:
So in the context of what the claim is telling us, which is a lead is the portion of the lead frame that remains in the resin package after simulation,

[00:33:44] Speaker 04:
It is in fact the component that conducts electricity.

[00:33:47] Speaker 04:
It was perfectly appropriate for the court to say the word lead is used in the claim as that part of the resin package is the part of the resin package that conducts electricity.

[00:33:58] Speaker 05:
That was in the context of the method of manufacturing claim, not in the context of claim 17, which I understand is an apparatus claim.

[00:34:06] Speaker 04:
That's right.

[00:34:06] Speaker 04:
But the court found, and there's no dispute that the term lead is used.

[00:34:13] Speaker 04:
He found that it's in his memorandum on claim construction that the term lead is used the same in all the claims.

[00:34:20] Speaker 04:
So I think the judge was correct there.

[00:34:25] Speaker 04:
I would just ask the court, in connection with the term lead, if you look at Everlight's gray brief on page six, there's an x-ray of a lead that shows the extending, what Everlight calls, tie bars.

[00:34:37] Speaker 04:
The district court found, as a matter of fact, and there's no dispute, that that is all one component.

[00:34:43] Speaker 04:
That's all connected.

[00:34:45] Speaker 04:
They're not separate pieces.

[00:34:47] Speaker 04:
If you turn back to page five,

[00:34:50] Speaker 04:
You can see the side surface of the lead that we're talking about on the side.

[00:34:54] Speaker 04:
It's those brown squares.

[00:34:57] Speaker 04:
Then turn to page 10 of their brief, which is figure 1 of the 250 patent.

[00:35:01] Speaker 04:
Figure 1 of the 250 patent shows on the side a square, and it's got element 22 pointing to that square.

[00:35:10] Speaker 04:
And it says that is a lead.

[00:35:12] Speaker 04:
So if you look at page 5 of the brief and you look at those squares on the side surface of the package,

[00:35:16] Speaker 04:
and you look at figure 1 of the 250 patent, element 22, it's the same square on the side of the package.

[00:35:24] Speaker 04:
So I think the finding there was absolutely correct.

[00:35:27] Speaker 04:
Regarding the, but also let me just say that it doesn't matter because the district court made finding a fact 61 where he said the piece of metal exposed at the side of the package is the same piece of metal that conducts power from an external power source to a light emitting element.

[00:35:46] Speaker 04:
So in that respect, even under their construction, under the court's finding of fact, the infringement findings would still stand.

[00:35:55] Speaker 04:
I won't address the validity issue.

[00:35:57] Speaker 04:
We'll rely on our briefs for that.

[00:35:58] Speaker 04:
Thank you very much.

[00:35:59] Speaker 01:
Thank you, Your Honor.

[00:36:07] Speaker 02:
If I may just very briefly, Your Honor.

[00:36:11] Speaker 02:
The court never actually said it's all one thing.

[00:36:15] Speaker 02:
What the court said

[00:36:16] Speaker 02:
is that the tie bar remnants are part of the same metal as the leads.

[00:36:21] Speaker 02:
And there's no dispute about that.

[00:36:23] Speaker 02:
We're dealing with different lead frame structures.

[00:36:27] Speaker 02:
The tie bars, in the course of the manufacturing process, connect the one lead to an adjacent lead.

[00:36:36] Speaker 02:
That's the structure we use.

[00:36:39] Speaker 02:
The Nachia patent, the 250 patent, shows a very different structure for supporting them.

[00:36:47] Speaker 02:
When you go through the process and you singularly cut the chip, the tie bar has ceased serving any function.

[00:36:56] Speaker 02:
And this is where the question of, it's still part of the same metal, but it doesn't, not only doesn't it do anything, but the unrebutted evidence from Dr. Bretschneider is that in operation, it doesn't conduct electricity.

[00:37:14] Speaker 02:
at 2563.

[00:37:16] Speaker 02:
And so it's a remnant.

[00:37:21] Speaker 02:
It's the equivalent of an appendix which doesn't do anything.

[00:37:28] Speaker 02:
But for the expansive construction, nobody would be saying, which gave Dr. Schubert, the other side's expert, a chance to put those pros on.

[00:37:42] Speaker 02:
there would be no argument whatsoever.

[00:37:47] Speaker 02:
So I believe that construction has caused harmful error.

[00:37:52] Speaker 02:
If the court has no questions, I'll sit down.

[00:37:56] Speaker 01:
OK.

[00:37:57] Speaker 01:
Thank you very much.

[00:37:58] Speaker 01:
Thank you.