[00:00:00] Speaker 05:
Good morning, everybody.

[00:00:05] Speaker 05:
The first argued case this morning is number 16, 1104, Nobel Bits Incorporated against Global Connect LLC.

[00:00:13] Speaker 05:
Mr. Duke.

[00:00:17] Speaker 03:
Thank you, Your Honor.

[00:00:19] Speaker 03:
May it please the Court.

[00:00:21] Speaker 03:
We've asked this Court to do several things, including one, to provide constructions of claim terms that were disputed as to the scope.

[00:00:29] Speaker 03:
as an O2 micro in this court.

[00:00:31] Speaker 03:
Two, to find that no reasonable jury could find infringement given a proper claim construction as an eon court.

[00:00:38] Speaker 03:
And three, to find that the district court abused its discretion in not excluding the damages expert of noble biz, Mr. Hoffman, without providing an analysis.

[00:00:50] Speaker 02:
Could I understand what claim constructions affect which claims here?

[00:00:56] Speaker 02:
As I understand it,

[00:00:58] Speaker 02:
replacement telephone number is pertinent to the 122 patent claims and the outbound call limitation is pertinent to the 399 claims.

[00:01:09] Speaker 02:
Is that correct?

[00:01:10] Speaker 02:
That's correct, Your Honor.

[00:01:11] Speaker 02:
So at this point you're not arguing that in the 122 the preamble is limiting?

[00:01:19] Speaker 03:
We did not appeal that decision, Your Honor.

[00:01:21] Speaker 02:
Okay, so as I understand it, you moved for Jane Wall with respect to literal infringement, but not doctrine of equivalence, is that correct?

[00:01:38] Speaker 02:
Yes, Your Honor.

[00:01:39] Speaker 02:
So with respect, if we were to agree with your claim constructions, we could hold that there is no literal infringement, but with respect to doctrine of equivalence,

[00:01:50] Speaker 02:
Wouldn't there have to be a new trial under those circumstances?

[00:01:57] Speaker 03:
That very well could be the case, Your Honor.

[00:02:00] Speaker 03:
On the other hand, we did discuss doctrinal equivalence in the jury verdict being inconsistent, because the jury found infringement only under the doctrinal equivalence with respect to every claim.

[00:02:14] Speaker 03:
even though it was only argued that there was infringement under the doctrine of equivalence with respect to some claims of the 122 patent.

[00:02:23] Speaker 02:
OK.

[00:02:23] Speaker 02:
All right.

[00:02:24] Speaker 02:
So maybe you can address the two main claim construction issues, the replacement telephone number and outbound call.

[00:02:32] Speaker 03:
OK.

[00:02:33] Speaker 03:
The replacement telephone number was specifically referenced when the district court discussed 02 Micro.

[00:02:43] Speaker 03:
And hopefully this gets to your point.

[00:02:46] Speaker 03:
But the district court noted that although he gave it a plain and ordinary meaning, that the parties were, quote, diametrically opposed as to what the plain and ordinary meaning actually is.

[00:03:00] Speaker 03:
And this is exactly the type of case where plain and ordinary meaning is not appropriate, according to 02 Micro.

[00:03:07] Speaker 03:
So moving to replacement telephone number,

[00:03:12] Speaker 03:
It was argued by Appelli's expert on infringement that, quote, there's nothing in the claim language that says it has to replace something else.

[00:03:25] Speaker 03:
By definition, it's a replacement number.

[00:03:29] Speaker 03:
He also said it just says, quote, it just says it's a telephone number.

[00:03:33] Speaker 03:
It doesn't say it has to be a dialable telephone number.

[00:03:37] Speaker 03:
And when he was asked, do you have to replace something for a replacement number,

[00:03:42] Speaker 03:
He answered no.

[00:03:44] Speaker 03:
So under the Plain and Ordinary Reading, even appellants argue that a replacement telephone number has to A, be a telephone number, and B, has to replace something else.

[00:03:55] Speaker 03:
Arguing otherwise either reads out the word telephone from telephone number or replacement from replacement telephone number.

[00:04:02] Speaker 04:
Did you move to strike that testimony?

[00:04:04] Speaker 03:
No, Your Honor, we did not.

[00:04:06] Speaker 04:
Well, why not?

[00:04:06] Speaker 04:
I mean, it does seem that there's a tension here between words that do seem to have a plain and ordinary meaning and expert testimony that just isn't at all admissible to that topic when it's so contrary to what that meaning is.

[00:04:20] Speaker 03:
I agree, Your Honor.

[00:04:22] Speaker 03:
Given the Court's claim construction, the Court also said when it was discussing O2 microbe, quote,

[00:04:31] Speaker 03:
Defendants could attempt to persuade the jury using essentially the same arguments used here for claim construction.

[00:04:38] Speaker 03:
And that providing a plain and ordinary meaning construction provides both parties, quote, equally strong arguments regarding the infringement issues.

[00:04:47] Speaker 03:
It was made clear that the district court was punting claim construction to the jury.

[00:04:52] Speaker 03:
And we were left really with not much of an option other than to argue, as we did.

[00:04:58] Speaker 04:
I'm just concerned about where the line is on O2 micro between construction issues and factual issues that should be left for the jury.

[00:05:08] Speaker 04:
And it seems like if we push O2 micro the way you're doing, it almost reads out the possibility of having plain and ordinary meaning for certain claim terms.

[00:05:18] Speaker 04:
On the other hand, the experts testimony in this case that a replacement number could replace nothing

[00:05:24] Speaker 04:
seems absolutely unsupportable to even a plain and ordinary meaning.

[00:05:28] Speaker 04:
And I'm wondering, why isn't it better resolved at the factual stage that the district courts are better with expert witness testimony that shouldn't be admitted than construing what every term that's disputed that has what should be a plain and ordinary meaning?

[00:05:47] Speaker 03:
If I understand your honor correctly, why should we push this so far so as we never use plain and ordinary meaning?

[00:05:54] Speaker 03:
I believe that O2 micro makes a pretty clear case that if the parties agree there's a plain and ordinary meaning, or if it's clear that there's a plain and ordinary meaning, but they have completely different understandings of what that plain and ordinary meaning is, then that evidences a difference in perception of scope, not really a difference as to the factual issue.

[00:06:21] Speaker 03:
This case I don't think approaches that because in this case the parties agree on how the accused features operate.

[00:06:29] Speaker 03:
There was no dispute as to factually how the accused features work.

[00:06:36] Speaker 03:
Only whether the claims were broad enough to encompass them.

[00:06:40] Speaker 03:
Which is why we have testimony going to replacement doesn't mean replace and then contrary testimony saying replacement doesn't mean replace.

[00:06:49] Speaker 03:
Does that answer your question your honor?

[00:06:51] Speaker 03:
Thank you very much.

[00:06:53] Speaker 03:
Any other questions on O2 Micro?

[00:07:00] Speaker 03:
The outbound call issue, and this is a very important one for the 399 patent.

[00:07:08] Speaker 03:
The 399 patent requires handling of an outbound call.

[00:07:13] Speaker 03:
The Northern District of California in its claim construction

[00:07:17] Speaker 03:
stated that an outbound call is a call made from a originator to a target, and clarified that an outbound call has to be extant or existing.

[00:07:26] Speaker 03:
There has to be a call existing for an accused infringer to handle it.

[00:07:32] Speaker 03:
It's undisputed how the accused features work.

[00:07:37] Speaker 03:
Again, these two patents are directed to a process by which a system can handle a call.

[00:07:46] Speaker 03:
And this is something that Noblebiz could do because it was a telecom provider and has access to the telecom lines, as is shown in those figures at the beginning of our reply brief.

[00:07:59] Speaker 03:
It intercepts a call that has been made by an originator, takes the information in that call, takes out the caller ID information, and puts in a replacement telephone number, and then sends it on its way.

[00:08:13] Speaker 03:
And we've referred to this as a catch and release model.

[00:08:16] Speaker 03:
It's undisputed that TCM and Global Connect are nothing more than dialers that operate over a VoIP or voiceover internet protocol.

[00:08:25] Speaker 03:
They initiate calls or send invites to initiate calls.

[00:08:30] Speaker 03:
Even Noble Business Expert talked about these SIP invites.

[00:08:37] Speaker 03:
They stand for Session Initiation Protocol Invite Messages.

[00:08:41] Speaker 03:
These are kind of like emails that are sent.

[00:08:43] Speaker 03:
You have a form.

[00:08:45] Speaker 03:
that has a to line and a from line and a body and a subject.

[00:08:48] Speaker 03:
In the to line is the telephone number of the target.

[00:08:52] Speaker 03:
In the from line is the caller ID information.

[00:08:56] Speaker 03:
What TCN and Noble Biz do is simply fill in the information, namely they fill in the caller ID information, if it's custom then it's custom, in this from line, put in the rest of the information for the call to go out, and send this invite along just like an email.

[00:09:13] Speaker 03:
and instruct the dialer and instruct the call engine how to send out this call.

[00:09:19] Speaker 03:
Global Connect in the default form has several zeros.

[00:09:25] Speaker 03:
TCN in its default form, sorry, Global Connect has all zeros.

[00:09:30] Speaker 03:
TCN in its default form has nothing.

[00:09:32] Speaker 03:
And so that's where the replacement telephone number comes in.

[00:09:35] Speaker 03:
As to outbound call, there is no call that

[00:09:41] Speaker 03:
is in existence when TCN and Noble Biz do their thing.

[00:09:45] Speaker 03:
Because the call is not extant, because no call exists, they're simply filling out an invite that would initiate a call.

[00:09:54] Speaker 03:
Outbound call cannot be found as well.

[00:09:58] Speaker 03:
Does that address that as well, Your Honor?

[00:10:05] Speaker 03:
Yeah.

[00:10:05] Speaker 03:
If the court doesn't have an objection, I'd like to discuss Mr. Hoffman very quickly.

[00:10:11] Speaker 03:
Mr. Hoffman should not have been allowed to present his opinions on damages to the jury.

[00:10:16] Speaker 03:
His methods were not appropriate, and the evidence he relies on were not sufficiently related to the damages issue that it should have been accepted.

[00:10:26] Speaker 05:
What was wrong with his method of calculation?

[00:10:30] Speaker 03:
So his method of calculation was really a black box, honestly.

[00:10:34] Speaker 03:
All of the Georgia Pacific factors were recited and addressed to some extent.

[00:10:41] Speaker 03:
But I would say or I would argue that this is close to the Whitserv case where the court said reciting each factor and making a conclusory remark about its impact before moving on only tells the jury what the factors may be, not really how they affect.

[00:10:59] Speaker 03:
So we have Mr. Hoffman addressing factors or at least reciting factors and then coming up with a royalty number in no way

[00:11:10] Speaker 03:
Did he provide some kind of starting number that he could actually calculate on?

[00:11:15] Speaker 03:
And when he asked for a calculation, when he was pushed, he referred to marketing material that touted increase in productivity, and basically said in his deposition, look, you tout that you have a 50 to 100% increase, and you sell your entire platform for a certain amount of cents per minute.

[00:11:41] Speaker 03:
add a premium of somewhere in the 50 to 100 percent, I should get a sizable increase in what you can charge.

[00:11:51] Speaker 03:
This doesn't really apply using or this shouldn't use the marketing statistics.

[00:12:00] Speaker 03:
So and maybe I'm moving on.

[00:12:02] Speaker 03:
Does that answer your question about the methodology?

[00:12:05] Speaker 05:
Well, did you propose an alternative expert calculation?

[00:12:11] Speaker 03:
Global Connect's expert did propose an alternative calculation.

[00:12:16] Speaker 03:
TCN's expert did not propose an alternative, but showed several rates that could be more applicable, but did not provide an expert opinion.

[00:12:29] Speaker 05:
The issue is these factual questions were presented at trial and to decipher where the error might have been.

[00:12:38] Speaker 03:
Yes, Your Honor.

[00:12:39] Speaker 03:
But we argue that the court didn't exercise its gatekeeping role and prevent this expert from presenting an unsupportable opinion to the jury.

[00:12:54] Speaker 03:
Which then was adopted by the jury and the court.

[00:13:00] Speaker 03:
It was not strictly adopted by the jury from what we could tell in trying to apply some reverse calculations to the jury verdict.

[00:13:09] Speaker 03:
the jury applied a 0.3 cents royalty rather than the 1.5 cents that Mr. Hoffman advocated.

[00:13:16] Speaker 05:
OK.

[00:13:17] Speaker 05:
Let's save your rebuttal time.

[00:13:18] Speaker 05:
Let's hear from the other side.

[00:13:20] Speaker 03:
Thank you, Your Honor.

[00:13:29] Speaker ?:
Mr. Dana Luke.

[00:13:37] Speaker 00:
Good morning, Mr. Jones.

[00:13:38] Speaker 00:
Judge Hughes, Judge Dyke, Judge Newman, may it please the court.

[00:13:44] Speaker 00:
After five years of litigation.

[00:13:46] Speaker 02:
So they asked for specific claim constructions with respect to replacement telephone number and outbound call.

[00:13:56] Speaker 02:
And the district court refused to adopt those claim constructions.

[00:14:02] Speaker 02:
wrong with the claim constructions that they urged with respect to those two claim terms?

[00:14:08] Speaker 02:
Take replacement telephone number first.

[00:14:11] Speaker 02:
Why are they not correct if there has to be a replacement telephone number that replaces an extant number?

[00:14:18] Speaker 00:
Thank you, Your Honor.

[00:14:19] Speaker 00:
What's wrong or erroneous with what Defendants urged and are trying to adopt from the California court is that they are parsing the terms

[00:14:29] Speaker 00:
They are importing limitations, and they are ignoring express limitations in the claims.

[00:14:35] Speaker 02:
Focusing on the replacement... I have no idea what you're saying.

[00:14:37] Speaker 02:
I mean, the replacement telephone number on its face suggests that there's an extant number that's being replaced, doesn't it?

[00:14:45] Speaker 00:
It does not, Your Honor, because the replacement telephone number needs to be read in the context of the claim.

[00:14:51] Speaker 04:
It can't be parsed under this... Well, if that's your argument, then why don't we need a claim construction?

[00:14:57] Speaker 04:
because you're arguing to us a counterintuitive definition of replacement telephone number.

[00:15:02] Speaker 04:
You may be right about your claim construction, but you can't argue for plain and ordinary meaning when you argue a construction that doesn't seem to have a plain and ordinary meaning.

[00:15:12] Speaker 00:
We believe we can, Your Honor, because the replacement telephone number limitation needs to be read, again, in the context of the claim itself under Hockerson, Halberstadt, and related precedent.

[00:15:23] Speaker 00:
Because in context, the replacement telephone number

[00:15:26] Speaker 00:
modifies the caller identification data.

[00:15:28] Speaker 00:
It doesn't necessarily modify a first telephone number.

[00:15:33] Speaker 00:
And that's where the defendants err and where the California court did as well.

[00:15:37] Speaker 02:
Claim one.

[00:15:38] Speaker 02:
I don't understand what you're saying.

[00:15:39] Speaker 02:
What are you saying?

[00:15:41] Speaker 00:
Your Honor, the claim limitation is replacement telephone number.

[00:15:46] Speaker 00:
Right.

[00:15:46] Speaker 00:
Defendants attempt to parse out replacement.

[00:15:49] Speaker 00:
And you say if you have the adjective replacement,

[00:15:51] Speaker 00:
you have to be replacing something.

[00:15:53] Speaker 00:
But the claim terms here, the limitation here is replacement telephone number.

[00:15:58] Speaker 00:
And it's got to be read within the context of the claim itself, which is select a replacement number from the plurality of outgoing telephone numbers based on at least the area code of the call target.

[00:16:09] Speaker 00:
So in context, replacement telephone number modifies the caller identification data.

[00:16:15] Speaker 00:
It doesn't mean that you necessarily have to have a first original telephone number.

[00:16:19] Speaker 00:
And that's where the defendants aired, as did the California court.

[00:16:22] Speaker 04:
But if that's your position, why didn't you argue that on claim construction?

[00:16:27] Speaker 04:
Because that's not the common and ordinary meaning of replacement telephone number.

[00:16:31] Speaker 04:
That's something that you're suggesting you are the lexicographer on based upon your particular claims and specification.

[00:16:39] Speaker 00:
Your Honor, we're not asking to be our own lexicographer.

[00:16:42] Speaker 00:
We argued in the lower court that replacement telephone number had its plain and ordinary meaning.

[00:16:49] Speaker 00:
and that that plain and ordinary meaning would be understood, clearly understood, by one of ordinary skill in the yard.

[00:16:55] Speaker 00:
And that's what moves this case outside of the O2 micro realm, which was Geron's concern earlier.

[00:17:01] Speaker 00:
And it does not fit into the O2 micro rubric.

[00:17:03] Speaker 00:
It better fits under Summit 6.

[00:17:04] Speaker 02:
We're not talking for the moment about O2 micro.

[00:17:06] Speaker 02:
We're simply talking about what this claim term means.

[00:17:09] Speaker 02:
And replacement on its face means you're replacing something that exists.

[00:17:14] Speaker 02:
And you're trying to give it a meaning that is contrary to that.

[00:17:20] Speaker 00:
Your Honor, again, I don't believe it's contrary because the whole limitation is replacement telephone number, or that phrase.

[00:17:26] Speaker 00:
And that's got to be read in the context of the rest of the claim limitations and the claim itself, which is select the replacement telephone number from the plurality in that database of the outgoing telephone numbers.

[00:17:39] Speaker 00:
So again, in context, replacement telephone number is modifying the caller identification data and not necessarily a first number.

[00:17:47] Speaker 00:
And that's where the defendants err as, again,

[00:17:49] Speaker 00:
you mentioned before, that the California court did.

[00:17:52] Speaker 00:
So the urging by Noble Biz was that the Planned Ordinary Meeting does apply here, and that the terms were understandable.

[00:17:58] Speaker 00:
They were understandable, and there was trial evidence adduced that the defendant's witnesses understood what the term meant by replacement telephone number.

[00:18:06] Speaker 00:
It was actually even in one of TCN's documents.

[00:18:09] Speaker 00:
So going back to that Summit 6 would make this case distinguishable from the 02 micro realm, the term was clear and understandable.

[00:18:16] Speaker 00:
So we're outside of the realm of EON,

[00:18:18] Speaker 00:
where there had to be significant trial testimony devoted back and forth to what does that term mean.

[00:18:24] Speaker 00:
That was not the case here.

[00:18:25] Speaker 00:
And as Judge Hughes honed in on, the defendants did not object to the testimony that was elicited.

[00:18:30] Speaker 02:
If they objected to the claim construction, they proposed a specific construction which is consistent with the construction that they're urging now, correct?

[00:18:40] Speaker 00:
You're right.

[00:18:40] Speaker 00:
In the lower court, they did.

[00:18:42] Speaker 00:
But what I'm stating is that they did not object when the expert

[00:18:46] Speaker 00:
I gave some testimony and in fact the defendants elicited much of that testimony.

[00:18:49] Speaker 02:
Why do they have to object to the expert when they've already objected to the claim construction?

[00:18:54] Speaker 00:
Because the claim construction was already governing the case for the trial and going to and utilizing that claim construction and the factual issue that stemmed around it.

[00:19:04] Speaker 00:
How does the system operate?

[00:19:06] Speaker 00:
How does Global Connect system operate?

[00:19:07] Speaker 02:
Are you suggesting they didn't preserve their objection to the district court's failure to give their construction?

[00:19:13] Speaker 00:
No, Your Honor, I'm not suggesting that.

[00:19:14] Speaker 00:
They did preserve that.

[00:19:15] Speaker 00:
But in response to Judge Hughes' question earlier about why did you not object if you're complaining about what the expert said or didn't say at trial, under this court's cytologic decision, they waived that argument because they did not object.

[00:19:28] Speaker 00:
But following through with respect to the Summit Six analysis, which is more apt here, there is no scope issue here because also the Texas District Court

[00:19:40] Speaker 00:
the improper limitations by the defendants that were suggested.

[00:19:45] Speaker 00:
So that puts this case more, again, into the realm of Summits 6 and the Court's recent decision in PRISM, where the exclusion of sports.

[00:19:53] Speaker 00:
What about an outbound call?

[00:19:54] Speaker 00:
Your Honor, outbound call also adds in an improper limitation, namely, namely the already extant temporal limitation that, that counsel just argued about.

[00:20:04] Speaker 00:
There is no requirement that the call already be extant.

[00:20:07] Speaker 00:
And as a matter of fact, if that construction were adopted, it would fully read out the call originator embodiment.

[00:20:15] Speaker 02:
Why is that the case?

[00:20:16] Speaker 00:
Your Honor, that's the case because looking at claim one, for example, of the 122 patent, it recites the system operating in the call originator.

[00:20:24] Speaker 00:
The call originator is taught as, for example, a call center, a person, or an organization.

[00:20:32] Speaker 00:
Defendants' catch and release system, or their catch and release embodiment,

[00:20:35] Speaker 00:
where the process is within the carrier network, telecommunications network, would read out the call originator limitation and would also violate claim construct.

[00:20:45] Speaker 02:
Why does it read out the call originator?

[00:20:47] Speaker 02:
I don't understand that.

[00:20:48] Speaker 00:
Your Honor, because in claim one focuses on the call originator.

[00:20:51] Speaker 00:
The claim says that it's a system operating in the call originator.

[00:20:56] Speaker 00:
Dependent claims two and four then recite the system of claim one, so the system of the call originator,

[00:21:01] Speaker 00:
wherein the system is embedded in one of a carrier network, a private branch exchange, and a communications device.

[00:21:07] Speaker 00:
That's in claim two, the dependent claim.

[00:21:09] Speaker 00:
Dependent claim four, also relying on claim one, says that the system is embedded in a corporate phone system.

[00:21:18] Speaker 00:
So independent claim one cannot be limited to the carrier network embodiment, as the defendants are suggesting with their catch and release construction.

[00:21:26] Speaker 00:
That would violate claim differentiation under this court's inter-digital communications case.

[00:21:31] Speaker 00:
Similarly, and again, just walking through the intrinsic evidence, we've looked at the claim as the outbound call.

[00:21:36] Speaker 00:
The specification similarly supports noble business plan and ordinary meaning and cuts against the defendant's outbound call requirement that has a temporal limitation.

[00:21:46] Speaker 02:
How does the specification support your view?

[00:21:48] Speaker 00:
Your Honor, this is at 8PPX388 in column two.

[00:21:52] Speaker 00:
The system and method may operate in originators 100 PBX, e.g.

[00:21:58] Speaker 00:
corporate phone system, predictive dialer,

[00:22:00] Speaker 00:
call distribution system, or may be attached or embedded within originator 100 communication device, e.g., telephone VOIP, voice over internet protocol, soft phone.

[00:22:13] Speaker 00:
So defendant's catch and release argument would seek to limit the scope here to the figures, and it would exclude that express embodiment of claim one, which is the call originator's embodiment.

[00:22:26] Speaker 00:
Also, on their appeal, for the first time, defendants raised that the summary invention somehow limits to the catch and release as well.

[00:22:34] Speaker 00:
They did not make that argument below, so it's waived.

[00:22:37] Speaker 02:
It's not waived.

[00:22:38] Speaker 02:
They're arguing for the same claim construction.

[00:22:40] Speaker 02:
They're just coming up with different arguments for it.

[00:22:43] Speaker 02:
There's no waiver of arguments.

[00:22:45] Speaker 02:
They're a waiver of issues.

[00:22:47] Speaker 00:
Well, Your Honor, but they didn't raise that as such in the lower court.

[00:22:52] Speaker 02:
So we believe that in pursuant to this court's con... But Your Honor, you can make new arguments on appeal as long as you're directed to the same issue.

[00:22:59] Speaker 05:
Well, Your Honor, we believe that under the Conoco decision of this court... Assume the argument is before us and let's respond to it.

[00:23:05] Speaker 00:
Yes, Your Honor.

[00:23:06] Speaker 00:
So even taking their reliance on the specification at face value, that portion of the specification somebody mentioned does not mention outbound call, nor was there any clear and unmistakable disavowal of claim scope.

[00:23:20] Speaker 00:
such that the defendant's limitations should be read in.

[00:23:23] Speaker 00:
So therefore, again, it's erroneous to rely on the defendant's construction or the California Court's construction if the court were to adopt it.

[00:23:33] Speaker 00:
If there are no further questions regarding claim construction, we urge that the Texas Court's claim construction be adopted.

[00:23:39] Speaker 00:
I'd like to now turn and respond briefly to the arguments about the damages expert.

[00:23:44] Speaker 00:
Mr. Hoffman's analysis was robust.

[00:23:50] Speaker 00:
it followed directly the methodology of Georgia Pacific.

[00:23:53] Speaker 00:
In fact, the defendant's expert, the one that did actually consider Georgia Pacific, actually agreed or found neutral 9 of 15 of the Georgia Pacific factors.

[00:24:04] Speaker 00:
So while defendants may wish to argue that this was not a reliable methodology, in fact, Mr. Hoffman went through in detail at the considering all the record evidence and going through each of the Georgia Pacific factors by item, considering the evidence under each of those,

[00:24:19] Speaker 00:
and getting to the royalty.

[00:24:21] Speaker 00:
Pursuant to this court's Erickson decision, the royalty that he relied on or that he arrived at reflected the value attributable to the accused feature and nothing more.

[00:24:32] Speaker 00:
He considered what the defendants charged to their customers for their entire system.

[00:24:36] Speaker 00:
So for the entire system, it was slightly over 3.2, 3.3 cents for Global Connect and slightly over 4 cents for TCM.

[00:24:46] Speaker 00:
He weighed that

[00:24:47] Speaker 00:
He weighed the fact that all of the documentary evidence in the record that was not refuted at trial, it was not minimized at trial whatsoever, even though the defendants wish to say it's marketing puffery, it was just advertising statistics, they don't have any bearing here, did not carry the day.

[00:25:02] Speaker 00:
And in fact, he considered that this was one feature of many that the defendants offered.

[00:25:08] Speaker 00:
Global Connect only 10 percent of their clients actually used the accused feature, only 5 percent of TCNs.

[00:25:15] Speaker 00:
So he weighed all of this and he

[00:25:17] Speaker 00:
He apportioned the value of the system based on that.

[00:25:22] Speaker 00:
He also apportioned the base and then applied that royalty rate to that royalty base to arrive at his ultimate damages.

[00:25:29] Speaker 00:
His damages actually were much higher than the jury actually found.

[00:25:33] Speaker 00:
His damages were close to $3 million as to Global Connect and just under $850,000 for TCN.

[00:25:39] Speaker 00:
And in fact, the expert for Global Connect was on the $100,000 or so order.

[00:25:45] Speaker 00:
And as the damages verdict bore out here, the jury found in between those ranges.

[00:25:52] Speaker 00:
So there was nothing excessive here.

[00:25:54] Speaker 00:
There wasn't the type of sheer surmise or conjecture that the Whitserv case spoke to.

[00:26:00] Speaker 00:
Rather, this case is more in line with Talcordia, where there was not a rate put onto the verdict form.

[00:26:07] Speaker 00:
And the district court, who observed the trial, observed all of the evidence and the fact-finder's

[00:26:13] Speaker 00:
was able to discern what the actual royalty was and whether the damages were proper.

[00:26:18] Speaker 00:
So there was no abuse of discretion here by the district court in finding that the verdict was solid and it was in fact supported by legally sufficient evidence.

[00:26:29] Speaker 00:
Ultimately, Mr. Hoffman's methodology was reliable.

[00:26:32] Speaker 00:
He apportioned the rate, he apportioned the base, and came out to his royalty properly.

[00:26:37] Speaker 00:
If there are no questions with respect to damages,

[00:26:39] Speaker 02:
I'd like to briefly... I have a question with respect to the status of the execution of the judgment.

[00:26:44] Speaker 02:
We granted a stay as to... TCN, sir.

[00:26:49] Speaker 02:
TCN.

[00:26:50] Speaker 02:
Yes, sir.

[00:26:50] Speaker 02:
So what's happened?

[00:26:52] Speaker 00:
Your Honor, as to that, there's been no activity with respect to TCN other than... For Global Connect either?

[00:26:58] Speaker 00:
Pardon me, sir?

[00:26:59] Speaker 02:
What is the activity with respect to Global Connect?

[00:27:02] Speaker 00:
As to Global Connect, Your Honor, Noble Biz has filed to register the judgment as to Global Connect and Global Connect only.

[00:27:09] Speaker 00:
in New Jersey, which is where Global Connect is based.

[00:27:12] Speaker 00:
Global Connect was not stayed, as the court was aware, under that emergency motion that was brought.

[00:27:18] Speaker 00:
As the TCN, Noble Biz has not.

[00:27:20] Speaker 02:
So the only thing that's happened is the registration?

[00:27:22] Speaker 00:
Yes, Your Honor.

[00:27:23] Speaker 00:
The registration was made.

[00:27:25] Speaker 00:
Global Connect brought a motion to stay the registration itself, largely based on the argument that this appeal to the Federal Circuit was pending, and that the Superior Court of New Jersey should just wait

[00:27:38] Speaker 00:
until this appeal runs its course before it picks up the registration.

[00:27:42] Speaker 02:
And the New Jersey court has not done anything?

[00:27:45] Speaker 00:
It has not done anything yet, Your Honor.

[00:27:46] Speaker 00:
The reply brief was basically submitted about a week ago, and that closed out the briefing period.

[00:27:53] Speaker 00:
And we learned from the court, the court's clerk, that they're not requesting any oral argument.

[00:27:58] Speaker 00:
It will be decided on the papers.

[00:28:02] Speaker 00:
If there's no further questions regarding the emergency stay, I'd like to briefly turn my remaining time to the California Court construction.

[00:28:08] Speaker 00:
As I indicated, the California Court's construction is erroneous.

[00:28:14] Speaker 00:
The California Court characterized its claim construction that it could be on a rolling basis, subject to alteration and revision, as the Court's understanding of the technology developed.

[00:28:27] Speaker 00:
So we feel that on a number of levels, it's improper for the defendants to rely on that California construction.

[00:28:33] Speaker 00:
Number one, again, considering that it was on a rolling basis and it's subject for revision, it's not quite right.

[00:28:39] Speaker 02:
They're just arguing that the California court came to a different conclusion and that we should pay attention to that.

[00:28:46] Speaker 02:
Nobody's suggesting the California court's construction is binding in this proceeding.

[00:28:50] Speaker 00:
Correct, Your Honor, but the defendants are tempted to rely on it to say that they don't infringe here.

[00:28:55] Speaker 00:
And that's a change in their constructions, both by way of their underlying basis for the construction, and it would cut against this Court's conical decision.

[00:29:08] Speaker 00:
Nonetheless, and under this Court's Teleflex and Z4 Technologies cases, this Court can affirm infringement based on substantial evidence put forth by Noble Biz.

[00:29:18] Speaker 00:
that the defendant still infringe if the California construction is adopted.

[00:29:23] Speaker 05:
Based on the final construction, there's nothing wrong with the evolution of understanding of the issues as the case proceeds.

[00:29:31] Speaker 00:
Correct, Your Honor.

[00:29:32] Speaker 00:
But if this court were to adopt the California construction as it is right now, which is what defendants are asking, Noble Biz maintains that this court can affirm infringement, again, under Teleflex and Z4.

[00:29:45] Speaker 00:
Noble Biz has marshaled the evidence

[00:29:47] Speaker 00:
in its appellees brief at pages 27 through 31, which sets forth how each of the limitations that are challenged, even under the California Court's claim construction, would, in fact, be infringed.

[00:30:01] Speaker 00:
I see that my time is up, Your Honors.

[00:30:03] Speaker 00:
Thank you for your courtesies and considerations.

[00:30:05] Speaker 05:
Any questions?

[00:30:06] Speaker 05:
No questions?

[00:30:06] Speaker 05:
OK.

[00:30:07] Speaker 05:
Thank you.

[00:30:07] Speaker 00:
Thank you, Your Honor.

[00:30:11] Speaker 05:
Thank you.

[00:30:12] Speaker 05:
And add a couple of minutes to Mr. Duke's time as we run over.

[00:30:16] Speaker 03:
Thank you, Your Honor.

[00:30:18] Speaker 03:
Is there anything that the court would like me to respond to, or any questions?

[00:30:22] Speaker 03:
The counsel's description of the status of the execution is correct?

[00:30:27] Speaker 03:
Correct, with the exception that there is a lot of discovery pending, as well as Noble Biz's pushing for a 30b6 deposition of Global Connect.

[00:30:43] Speaker 03:
The context of the patent is really what the Northern District of California focused on.

[00:30:49] Speaker 03:
And I think it does give a very good summary of why its claim constructions are reasonable.

[00:30:58] Speaker 03:
What should also be taken into account is the prosecution history of the 122 and the 169 patents, where the original claims were directed to originating a phone call and setting a telephone number.

[00:31:13] Speaker 03:
It was only during prosecution that limiting amendments were added that included a replacement telephone number and handling an outbound call.

[00:31:22] Speaker 03:
And the limitation of modifying information was added out of whole cloth to get around certain objections to these claims.

[00:31:33] Speaker 03:
So looking at the prosecution history, there certainly should be some narrowing of these beyond a very, very broad scope.

[00:31:42] Speaker 03:
The embodiment that counsel referred to in the specification of the patent does speak about this system being used in different places, but it's the claims that were narrowed and may not encompass all of the embodiments that are in this spec now.

[00:32:01] Speaker 03:
With respect to Mr. Hoffman,

[00:32:05] Speaker 03:
We do argue that there was an abuse of discretion and one of our big problems is that we can't tell what the district court's discretion was because no analysis was provided.

[00:32:17] Speaker 03:
Mr. Hoffman basically used a black box analysis.

[00:32:22] Speaker 03:
When he was asked if he could provide a calculation or formula or explain his methodology, he said, quote,

[00:32:31] Speaker 03:
It's a negotiated amount based on my understanding, my experience in doing these kind of negotiations.

[00:32:38] Speaker 03:
It's not calculated.

[00:32:40] Speaker 03:
It's not, I can't give you a formula that gets you to 1.5 cents.

[00:32:45] Speaker 03:
And this is concerning to know that it's just a black box.

[00:32:49] Speaker 03:
Yes, the factors were considered, but there's nothing that points to how the end result came.

[00:32:55] Speaker 03:
You can say up or down on several factors, but unless you know what you're increasing or decreasing,

[00:33:01] Speaker 03:
The methodology is really obtuse.

[00:33:07] Speaker 03:
Thank you, Your Honors, for your time.

[00:33:08] Speaker 03:
I appreciate it.

[00:33:10] Speaker 03:
Any further questions?

[00:33:11] Speaker 03:
Thank you.

[00:33:12] Speaker 03:
Thank you.

[00:33:12] Speaker 03:
Thank you both, in case you've taken any submissions.