[00:00:47] Speaker 04:
Okay, the next case is number 161115, Romag Fasteners Incorporated against Fossil Incorporated.

[00:00:55] Speaker 04:
Mr. Burkini.

[00:00:56] Speaker 02:
Good morning.

[00:00:57] Speaker 02:
May it please the court.

[00:00:59] Speaker 02:
Viewed in the totality of the circumstances, Fossil's defense of this hard fought and high stakes litigation was completely unexceptional.

[00:01:09] Speaker 02:
Without Fossil's knowledge, a third party put non-genuine Romag snaps in Fossil handbags.

[00:01:15] Speaker 02:
infringement was not willful.

[00:01:17] Speaker 01:
Well, it's not for us to evaluate the totality of the circumstances, but we can look to see whether the district court made errors of law or fact in its analysis.

[00:01:29] Speaker 01:
And both sides have contended that there are such errors here.

[00:01:33] Speaker 01:
So I suggest that you address the specific errors that you're complaining about.

[00:01:39] Speaker 02:
Certainly, Your Honor.

[00:01:40] Speaker 02:
There are errors both in omission and in what the district judge actually found to make the case exceptional.

[00:01:48] Speaker 02:
And let me focus first on the circumstances that she did not take any consideration of, which is both Fossil's conduct and Romag's bad faith conduct, which, as you have recognized, is something that is relevant.

[00:02:02] Speaker 02:
In both the Gamar case and Stragent, this court said that

[00:02:05] Speaker 02:
You should look also.

[00:02:07] Speaker 02:
No, this court didn't say it in stragen.

[00:02:09] Speaker 02:
I apologize.

[00:02:09] Speaker 02:
You said it in stragen.

[00:02:11] Speaker 02:
You gave some guidance to the bar, I think, in terms of what the totality of the circumstances should involve.

[00:02:19] Speaker 02:
And in terms of the totality of the case, looking at Fossil's conduct first, we see that Fossil was a non-welfare infringer, which is, I think, a pretty important thing.

[00:02:29] Speaker 02:
We did not participate at all in the infringement

[00:02:33] Speaker 02:
And we, in addition, did not benefit from it.

[00:02:36] Speaker 02:
And if you look at our overall conduct that the district court did not pay attention to, you see that we were the party that really acted reasonably.

[00:02:43] Speaker 02:
We were the party that withdrew claims.

[00:02:46] Speaker 02:
We had a patent false marking claim early in the case.

[00:02:49] Speaker 02:
When the statute was amended, we withdrew that counterclaim.

[00:02:53] Speaker 02:
ROMAG, on the other hand, made five applications, all of which were denied, to amend to assert that.

[00:03:00] Speaker 02:
In addition, we see that

[00:03:01] Speaker 02:
Fossil moved for summary judgment when it reasonably believed that it had support and that it could win and narrow the cases for trial.

[00:03:09] Speaker 02:
Romag, on the other hand, made no motions for summary judgment and now comes into the court and says, you know, all these things that Fossil was doing were completely unreasonable and we should get sanctions for them when they didn't even have the confidence in those.

[00:03:24] Speaker 02:
As you noted in Strajan, Judge Dyke, that the fact that a party doesn't move for summary judgment on issues

[00:03:30] Speaker 02:
suggests that they didn't believe that they were so unreasonable previously.

[00:03:35] Speaker 02:
In addition, as you noted, the fact that they were allowed issues to proceed to trial and didn't move for summary judgment, it's not unfair in those circumstances to require them to pay their own attorney's fees since they didn't try to narrow the issues for cases.

[00:03:53] Speaker 02:
for trial.

[00:03:53] Speaker 01:
But in one respect she seems the district court seems to have made a mistake by saying the fact that she refused to grant Jamal prevented her from finding that the position was unreasonable.

[00:04:11] Speaker 01:
I'm not sure that's true because I think as a general matter Jamal being different from summary judgment there's a reluctance on the part of district courts

[00:04:22] Speaker 01:
to grant Jamal in the middle of the trial as opposed to waiting to the end of the trial.

[00:04:28] Speaker 01:
So I'm not sure that it's correct to say that her refusal to grant Jamal during the trial indicates necessarily that the position was reasonable.

[00:04:41] Speaker 02:
If it was what I would call a prudential grant of Jamal, a denial of Jamal, if it was a situation where, with respect to one of our positions actually,

[00:04:51] Speaker 02:
a position of the willfulness of certain of the retailer defendants.

[00:04:55] Speaker 02:
She said, I'm going to deny your J-Mall, but I'm doing it because we want to let the jury try it.

[00:05:00] Speaker 02:
I'm very skeptical about that position.

[00:05:03] Speaker 02:
She did not make that qualification with regard to the non-infringement position.

[00:05:07] Speaker 02:
And in fact, Romag initially moved for a Rule 50.

[00:05:11] Speaker 02:
She denied it.

[00:05:12] Speaker 02:
And then they raised the issue with her.

[00:05:15] Speaker 02:
And they said, Judge, look, we know you denied our Rule 50,

[00:05:19] Speaker 02:
We do not think that Fossil can make this argument to the jury because it would require them, the jury, to impermissibly speculate.

[00:05:28] Speaker 02:
There's no way that the jury could find for Fossil on that point.

[00:05:34] Speaker 02:
And the court said, well, let me hear both sides' evidence on it.

[00:05:39] Speaker 02:
She listened to both sides on it.

[00:05:40] Speaker 02:
And then she came to a conclusion about that.

[00:05:43] Speaker 02:
And she said, basically, I'm going to let you make that argument.

[00:05:47] Speaker 02:
OK, so this was not a prudential grant, a denial of a Rule 50.

[00:05:52] Speaker 02:
She expressly went further and said, I'm going to allow Fossil to make that argument to the jury.

[00:05:59] Speaker 02:
And she said, I'm not persuaded that we have such an absence of testimony, of evidence, that a jury couldn't conclude, even if an expert did not opine that the similarities and the snaps, and the description of how long the stampers used or should be used,

[00:06:16] Speaker 02:
totally negates the idea that the jury conclude that the plaintiff has not met its burden, which is far from saying what the proper weight is to be courted to this.

[00:06:25] Speaker 02:
So I think that Mr. Cass, who's Fossil's counsel, can make his argument as to what this particular evidence shows.

[00:06:33] Speaker 02:
And the plaintiff will now be forearmed to shoot it down.

[00:06:37] Speaker 02:
I'm not going to preclude it.

[00:06:38] Speaker 02:
So here we're in a situation where it's now being alleged that we were making an argument that was completely unreasonable.

[00:06:46] Speaker 02:
when the judge said, it's reasonable.

[00:06:48] Speaker 02:
I'm going to let you make that argument.

[00:06:51] Speaker 02:
So it's not simply, I know she talked in terms of granting it, in terms of the Stenberg case, and she looked to the fact that it was a Rule 50.

[00:06:58] Speaker 02:
But if you look to the record, the record clearly shows that she went well beyond that and examined the evidence and said, you can make this argument.

[00:07:09] Speaker 02:
Keep in mind also that we're talking here on an issue that Romag had the burden of proof on.

[00:07:16] Speaker 02:
Romag had to prove that we infringed and that we used non-genuine snaps.

[00:07:22] Speaker 02:
Romag now says it's so clear from certain documents produced by a third-party supplier that we did use non-genuine snaps.

[00:07:31] Speaker 02:
Yet they never moved for summary judgment on that point.

[00:07:34] Speaker 02:
Instead, they went to trial, they introduced that evidence, and they introduced other evidence in order to meet their burden of proof.

[00:07:41] Speaker 02:
We then cross-examined it.

[00:07:43] Speaker 02:
We then presented evidence against that.

[00:07:46] Speaker 02:
How could it be an exceptional case that when they did not move for summary judgment on an issue, it was tried, they presented evidence, we cross-examined it, and then we made an argument that the judge said, yeah, I hear the argument.

[00:07:58] Speaker 02:
I don't think it's the greatest argument in the world, but I'll let you make it.

[00:08:02] Speaker 02:
How could that be exceptional?

[00:08:04] Speaker 02:
And that's really what the facts are in this case, Judge.

[00:08:11] Speaker 01:
How about the land?

[00:08:12] Speaker 01:
I know this has to do with the Crossfield.

[00:08:16] Speaker 01:
how could it be that the Lanham Act is construed differently with respect to the Octane issue than 285?

[00:08:24] Speaker 02:
Well Judge, we don't think that's an issue you need, I'll address that, but that's not an issue that this court needs to address because Judge Arterton found under both Octane and the Patent Act and under the Second Circuit Lanham Act precedent that

[00:08:40] Speaker 02:
the argument that we're talking about now, the argument that the snaps were not genuine, the non-infringement position, she found under both those standards that it was not exceptional.

[00:08:51] Speaker 02:
So as the Second Circuit did recently in a case called Penzhurst, since under either standard she was correct, you don't need to get to that issue.

[00:09:00] Speaker 02:
Now, if you want to talk about why the Lanham Act should be interpreted differently,

[00:09:07] Speaker 02:
Certainly, if you look at the Knoxville case, which was cited in Octane, which was Judge Ginsburg and Judge Scalia before they were on the court, they put great weight in the fact that that's mentioned.

[00:09:19] Speaker 02:
But if you look at that, Judge Ginsburg makes clear that the legislative history on the Lanham Act has a dual standard, a standard for prevailing plaintiffs, which is this case.

[00:09:32] Speaker 02:
And the legislative history says,

[00:09:36] Speaker 02:
In that case, it's only going to be if it's fraud or malice or something more.

[00:09:41] Speaker 02:
And also, if you're a prevailing defendant, in an exceptional case, you can get it.

[00:09:45] Speaker 02:
So if you look at the legislative history, clearly, the Supreme Court has said if there's a legislative history that suggests a different interpretation, the normal rule, of course, being that similar language should be interpreted similarly.

[00:10:00] Speaker 02:
But if there is reference in the legislative history,

[00:10:04] Speaker 02:
In the Senate report, there's a statement that in exceptional cases, i.e., in infringement cases where the acts of infringement can be characterized as malicious, fraudulent, deliberate, or willful, attorney's fees would be available.

[00:10:23] Speaker 02:
It then goes on to say, as to prevailing defendants, in the case of exceptional cases, they can get it.

[00:10:30] Speaker 02:
And Judge Ginsburg in Naxal says she highlights this differentiation.

[00:10:36] Speaker 02:
Now, Romag comes back and says, well, IE in that case really didn't mean IE.

[00:10:40] Speaker 02:
It really means EG.

[00:10:42] Speaker 02:
But we then have testimony by the Commissioner of Patents.

[00:10:45] Speaker 02:
And he says his understanding is that for infringers, a prevailing plaintiff case, that recovery would be permitted from infringers only.

[00:10:59] Speaker 02:
when the acts are malicious, fraudulent, deliberate, or willful.

[00:11:04] Speaker 02:
So we do have record evidence in the legislative history as to exactly, for prevailing defendants and prevailing plaintiffs, what the Congress meant.

[00:11:15] Speaker 02:
So again, I don't think you need to decide that issue, because she did decide, the district court did decide under the Patent Act that the claim, that the position was not unreasonable or exceptional.

[00:11:28] Speaker 02:
But if you do, I think there is a basis in Knox Allen and the legislative history for a differing interpretation.

[00:11:35] Speaker 01:
Are you saying the only argument for attorney's fees under the Lanham Act related to the genuineness issue?

[00:11:41] Speaker 02:
I beg your pardon, sir?

[00:11:41] Speaker 01:
Are you saying that the only argument that Romag made for attorney's fees under the Lanham Act was the unreasonableness of the infringement business?

[00:11:51] Speaker 02:
Yes, that's absolutely true.

[00:11:59] Speaker 02:
I see that I'm in my rebuttal time, so unless there are other questions, I'm going to reserve some time.

[00:12:02] Speaker 02:
Thank you.

[00:12:03] Speaker 04:
No, let's proceed.

[00:12:04] Speaker 04:
Let's hear from the other side.

[00:12:13] Speaker 04:
Mr. Friedman.

[00:12:14] Speaker 03:
Good morning, Your Honors.

[00:12:15] Speaker 03:
May it please the Court?

[00:12:17] Speaker 01:
I'm having a very hard time seeing how the District Court was correct in finding that they didn't withdraw their invalidity defenses before trial, because she herself said that.

[00:12:30] Speaker 01:
I think it was at the March 28th pre-trial conference.

[00:12:34] Speaker 03:
She did, Your Honor.

[00:12:35] Speaker 03:
That's correct.

[00:12:36] Speaker 03:
And she noted in her decision when she was finding the facts here that there had been some indications, in fact, that these defenses were withdrawn, but that there were two indications that the claims, in fact, were not fully withdrawn.

[00:12:49] Speaker 03:
One was the witness remaining on the witness list, and the other is the fact that the defense was not, in fact, formally withdrawn.

[00:12:55] Speaker 01:
Why do they have to formally withdraw?

[00:12:59] Speaker 01:
She says, I got the date wrong, it's not March 28th, it's March 18th.

[00:13:06] Speaker 01:
The court says since we clarified in our last hearing that there's no invalidity defense being advanced.

[00:13:12] Speaker 01:
She said that specifically.

[00:13:14] Speaker 01:
So that seems to be pretty much a finding at that time, what it was two years earlier, something like that, there's no invalidity defense.

[00:13:22] Speaker 03:
the correction she didn't think that they were going to be pressing the uh... the invalidity defenses at that point but your honor what did they do wrong what they did wrong was they left the witness on the witness list and they did not formally withdraw the claim this is in the context of scorched earth i don't understand that what if they are you asking magic words or particular piece of document i mean if at the pre-trial conference the court says we're not going to try invalidity and everybody agrees and everybody did agree

[00:13:52] Speaker 00:
Isn't that enough?

[00:13:54] Speaker 03:
Well, Judge Arterton found it was not enough, Your Honor.

[00:13:56] Speaker 03:
She found it was not enough, again, for these two reasons.

[00:13:58] Speaker 03:
But even if that were enough, I have to point out that that pre-trial conference is six days before trial.

[00:14:04] Speaker 03:
And her finding of the exceptionality of the case, as Judge Duck, you pointed out, and Strajan, the question is the exceptionality of the case as a whole.

[00:14:12] Speaker 03:
And she's looking at the exceptionality of having pressed these invalidity defenses, which the other side acknowledges are a waste of everybody's time.

[00:14:19] Speaker 03:
I mean, that's their phrase.

[00:14:21] Speaker 03:
If they were a waste of everybody's time on March 28th.

[00:14:23] Speaker 01:
They say it's a waste of everybody's time because the patent claim is so small.

[00:14:28] Speaker 01:
They didn't say it's a waste of everybody's time because they're frivolous.

[00:14:32] Speaker 03:
They never acknowledged that they were frivolous.

[00:14:33] Speaker 03:
That's absolutely correct, Your Honor.

[00:14:34] Speaker 03:
But if they were a waste of everybody's time, from a financial perspective, six days before trial, they were a waste of everybody's time three years before trial as well.

[00:14:42] Speaker 03:
And they were pressed.

[00:14:43] Speaker 03:
Of course, the judge found in the context of this case where a former customer

[00:14:47] Speaker 03:
a much larger former customer was caught red-handed with these counterfeits.

[00:14:51] Speaker 01:
Yeah, but the trouble is that we have to review her decision here with respect to what she said.

[00:14:58] Speaker 01:
And what she said was, contrary to her earlier finding, that they continued to press the map trial.

[00:15:05] Speaker 01:
That's one of the bases for the attorney's fees award.

[00:15:09] Speaker 01:
And if we conclude that she was wrong about that, don't we have to set it aside?

[00:15:14] Speaker 03:
I know, Your Honor, you can still find that under the totality of the circumstances, she exercised her discretion correctly.

[00:15:21] Speaker 01:
But if she made a mistake, then she hasn't exercised her discretion properly, right?

[00:15:26] Speaker 03:
Well, there were obviously several prongs for her determination.

[00:15:32] Speaker 00:
But she didn't make independent findings that one or two of these was sufficient.

[00:15:37] Speaker 00:
She looked at all of them together.

[00:15:38] Speaker 00:
How can we know that this

[00:15:41] Speaker 00:
Mistaken finding was not the basis for the field.

[00:15:45] Speaker 03:
Well, it's well established that you can affirm for any basis in the records.

[00:15:48] Speaker 00:
We have to be sure that that's what she would have done.

[00:15:51] Speaker 00:
This is within her discretion, not ours.

[00:15:54] Speaker 03:
In that event, Your Honor, if you thought that this court could not look at the question of discretion as a whole and determine whether there were still sufficient factors to uphold, then the proper remedy would be to remand to her for a determination as to whether, without this factor,

[00:16:11] Speaker 03:
How does she exercise her discretion?

[00:16:12] Speaker 03:
What does she do?

[00:16:12] Speaker 01:
Okay, so let's talk about some of the other factors.

[00:16:14] Speaker 01:
Now, what about her suggestion that Judge Young found the indefinite misdefense to be frivolous?

[00:16:20] Speaker 01:
I've read that transcript or the opinion that Judge Young issued on summary judgment.

[00:16:27] Speaker 01:
I don't see that in there.

[00:16:28] Speaker 01:
Can you show me where Judge Young says that?

[00:16:31] Speaker 03:
Judge Young does not say himself that it borders on the frivolous.

[00:16:35] Speaker 03:
Judge Arderton is taking from Judge Young's decision from his saying that

[00:16:38] Speaker 03:
it was nothing more than ipsa dixit that it was groundless that there are several phrases all of which we cite in our briefs from which she takes as a whole the notion that this indefiniteness argument bordered on the frivolous.

[00:16:51] Speaker 01:
But she didn't make her own finding that it was frivolous, right?

[00:16:54] Speaker 03:
Well, she is making her own finding that that argument was frivolous.

[00:16:57] Speaker 01:
I thought she was relying on Judge Young's finding, supposed finding.

[00:17:01] Speaker 03:
No, Your Honor, in terms of her predicate findings that ground her overall exercise.

[00:17:06] Speaker 01:
Where does she make her own finding that it's frivolous?

[00:17:08] Speaker 03:
She says it bordered on the frivolous.

[00:17:10] Speaker 03:
I'm sorry, Your Honor, I don't have the precise sight in her opinion from the Joint Appendix with me.

[00:17:16] Speaker 03:
You don't have the Joint Appendix?

[00:17:18] Speaker 03:
I do have the Joint Appendix, but I don't have that sight with me.

[00:17:22] Speaker 03:
It is in Judge Rotherton's fee decision where she finds that it bordered on the frivolous.

[00:17:27] Speaker 01:
No, I don't think she found that it bordered on the frivolous.

[00:17:30] Speaker 01:
I think she found that Judge Young said that, and I don't see that Judge Young said that.

[00:17:40] Speaker 01:
Okay, let's continue while your colleague searches the site.

[00:17:43] Speaker 01:
Yes, thank you.

[00:17:43] Speaker 01:
Thank you, Your Honor.

[00:17:44] Speaker 01:
You're supposed to come to argument with better knowledge of the record.

[00:17:49] Speaker 03:
Your Honor, I'm sorry I don't have that specific citation.

[00:17:52] Speaker 03:
I should say that one of the major arguments raised by the other side is the notion that somehow the timing of the claim construction and the summary judgment processes made it such that they really didn't have a chance, and their argument really wasn't that frivolous in the end.

[00:18:06] Speaker 01:
Now you're talking about the infringement issue?

[00:18:08] Speaker 03:
No, I'm talking about the indefiniteness argument.

[00:18:13] Speaker 03:
Their argument is that it could not have been frivolous because, in fact, it depended on claim construction, and claim construction happened after the summary judgment briefs had been filed.

[00:18:24] Speaker 03:
And so they make the argument that they couldn't know how claim construction was going to go, and as a result of that, it was not a frivolous argument that they made or did not order on the frivolous.

[00:18:38] Speaker 01:
What about the finding that the district court made that she couldn't consider Romag's misconduct in connection with the TRO in awarding fees here because that had already been sanctioned?

[00:18:53] Speaker 01:
What's the basis for that?

[00:18:55] Speaker 01:
I don't understand that that's the rule.

[00:18:57] Speaker 01:
You're supposed to consider the totality of the circumstances.

[00:19:00] Speaker 01:
Why wouldn't you consider misconduct by a party even if it had been sanctioned otherwise?

[00:19:06] Speaker 03:
well you're right but she did consider that is she directly i can consider it she said no such she said she did not watch it she she said it it was not a factor that weighed against her findings except because that could we see what she said yes uh... because it had already in fact because that already in fact been taken care of in her previous words uh... her languages her language is that uh...

[00:19:35] Speaker 03:
She had already provided sanctions and that this particular conduct did not bear on the case as a whole.

[00:19:40] Speaker 01:
It had to do with... Show me where she said it doesn't bear on the case as a whole.

[00:19:48] Speaker 03:
These issues were limited in scope and have already...

[00:20:03] Speaker 03:
There was no need.

[00:20:04] Speaker 03:
I'm getting the page, Your Honor, but she said these issues were limited in scope, have already been addressed.

[00:20:08] Speaker 03:
There was no need for further sanction.

[00:20:11] Speaker 01:
Okay, but that's not the same thing as saying it's irrelevant to the totality of the circumstances, other than that it's already been addressed.

[00:20:19] Speaker 01:
But that's not a correct reason for failing to consider it as part of the totality of the circumstances.

[00:20:26] Speaker 03:
Well, Your Honor, she indisputably considered it.

[00:20:27] Speaker 03:
I mean, she confronted and addressed the arguments that were made by the other side in her decision.

[00:20:33] Speaker 03:
She simply found in the exercise of her discretion that they did not make it a non-exceptional case.

[00:20:44] Speaker 01:
What about the argument with respect to the Lanham Act?

[00:20:48] Speaker 01:
Let's assume that you're correct, that the Lanham Act should receive the same construction as 285 with respect to the standard for awarding attorney's fees and that that's the octane standard.

[00:20:59] Speaker 01:
Let's assume you're correct about that.

[00:21:01] Speaker 01:
They say, well, the only argument for attorney's fees under the Lanham Act was that our infringement position was frivolous, and the district court has already rejected that.

[00:21:11] Speaker 01:
What's the answer to that?

[00:21:13] Speaker 03:
The district court found that their infringement position was phantasmagorical, but it was backed only by paltry evidence as against overwhelming evidence on the side of Romack.

[00:21:23] Speaker 03:
The district court very clearly said she was not applying what she called the more lenient standard.

[00:21:29] Speaker 03:
of octane fitness, so she wasn't applying that.

[00:21:32] Speaker 03:
Under what she thought to be the harsher, the older standard, obviously, of the circuit, which is very similar to the Lanham Act standard before octane fitness, she found that there was not willfulness, and she had not granted the Rule 50 motion, and on the basis of those things, and those things alone, she denied fees under the Lanham Act.

[00:21:50] Speaker 03:
If this court thought that the octane fitness standard governed under the Lanham Act,

[00:21:56] Speaker 03:
which we believe it does, then it ought to be remanded to Judge Arterton in order to determine whether the non-infringement position of fossil, in fact, does make this an exceptional case under octane fitness.

[00:22:08] Speaker 03:
That, of course, again, is a matter for discretion in the first instance.

[00:22:11] Speaker 03:
So if the legal standard is octane fitness, then it does need to be remanded for her determination on that.

[00:22:18] Speaker 03:
And I do want to just take a moment to go to the question of whether it is the proper standard.

[00:22:23] Speaker 03:
First of all,

[00:22:24] Speaker 03:
Obviously, the language is identical in the Lanham Act and the Patent Act.

[00:22:28] Speaker 03:
And moreover, the language in the Lanham Act was directly borrowed from the Patent Act.

[00:22:32] Speaker 03:
So if we're to assume anything, we assume that Congress meant it to have the same meaning.

[00:22:37] Speaker 03:
The legislative history, though, shows that Congress meant it to have the same meaning.

[00:22:41] Speaker 03:
We cited the colloquy between Tetmire and Kastenmire, who was the head of the relevant House subcommittee and the father of the Copyright Act, who was saying,

[00:22:50] Speaker 03:
We're looking for symmetry in all of these fields, the three fields being, of course, patent, trademark, and copyright.

[00:22:57] Speaker 03:
Every circuit to have addressed the issue since Octane Fitness has determined that Octane Fitness is the standard under the Lanham Act.

[00:23:04] Speaker 03:
And there's no bar to this court doing so because the Second Circuit has very recently acknowledged that it has not addressed the question in the Penshurst case.

[00:23:13] Speaker 03:
It has acknowledged that it hasn't decided the issue.

[00:23:15] Speaker 03:
And so it is up to this court to, of course,

[00:23:18] Speaker 03:
what the Second Circuit would do if it needed to address the question, which this Court does need to do here.

[00:23:41] Speaker 03:
If there are no further questions, I'll preserve the remainder of my time for review.

[00:23:48] Speaker 04:
Thank you.

[00:23:48] Speaker 03:
Thank you, Your Honor.

[00:23:56] Speaker 00:
Can you address the Lanham Act issue?

[00:23:58] Speaker 00:
Because when you were up before, you told me she made the same alternative findings under both the Octane Standard and the Second Circuit Standard.

[00:24:07] Speaker 00:
Just pulling up these pages in her opinion, I don't see that.

[00:24:17] Speaker 00:
I'm on page 9.

[00:24:27] Speaker 02:
On page 4, ADD 4, Judge Arterton, that's the Section Patent Act, and she says, with respect to plaintiff's characterization of the defendant's groundless argument, that the snaps of the accused handbags were genuine.

[00:24:44] Speaker 02:
Okay, that's the argument that we're talking about.

[00:24:48] Speaker 02:
The infringement, the SNAPs were one entity, one device.

[00:24:52] Speaker 02:
They had the ROMAG name trademark on it, and that's why it was a trademark case.

[00:24:56] Speaker 02:
And they said that it copied their patent, so it was a patent case.

[00:24:59] Speaker 02:
So the question under both the Lanham Act and the Patent Act was, are the SNAPs genuine or not?

[00:25:06] Speaker 02:
And so here at the bottom of four, she says, they're making this argument.

[00:25:10] Speaker 02:
We're making the argument that they were genuine.

[00:25:14] Speaker 02:
They're saying, the plaintiffs are saying that argument was groundless.

[00:25:18] Speaker 02:
And if you turn over to the next page, she then decides, under the Patent Act analysis, and remember that Octane Fitness were trying to judge whether there was a lack of a reasonable argument on our part.

[00:25:31] Speaker 02:
They're looking to the substantive strength of our position.

[00:25:34] Speaker 02:
Here she's saying, by virtue of the fact that I granted the rule 50, the argument could not have been groundless, could not have been unreasonable.

[00:25:42] Speaker 02:
And so this is in the context of Octane Fitness that she's making that determination.

[00:25:49] Speaker 00:
We've already discussed why, really her... But then she goes on and nevertheless finds the case exceptional under Octane Fitness for the Patent Act claims.

[00:26:00] Speaker 02:
But she doesn't cite that as one of the reasons for it.

[00:26:03] Speaker 01:
You're saying that her... She didn't find frivolousness as to the infringement defense to be a ground under 285 and that you're saying that was the only argument for fees under the Lanham Act.

[00:26:16] Speaker 01:
Yes sir, exactly.

[00:26:18] Speaker 02:
She rejected that argument.

[00:26:19] Speaker 02:
Her only grounds under the Patent Act were the indefinite misposition and the withdrawal of the remaining invalidity defenses.

[00:26:25] Speaker 00:
I find it very hard to plug that out of a section where she's not talking about the Lanham Act.

[00:26:30] Speaker 00:
But no, on page eight, she specifically recites the old standard and says they don't get attorney's fees under the Lanham Act because there's no bad faith fraud or willfulness.

[00:26:42] Speaker 00:
I mean, it's pretty clear to me that she's applying that standard

[00:26:46] Speaker 00:
and not making an alternative finding.

[00:26:49] Speaker 00:
You're trying to make us predict from what she said on the Patent Act part that she would come up with the same reasoning, but I don't see how we can do that.

[00:26:57] Speaker 02:
If we assume that the Patent Act standard and the Lanham Act standard are exactly identical, and she has already determined under the Patent Act standard, Octane Fitness, that this argument that the stamps were not genuine is reasonable and therefore does not support an award of fees,

[00:27:16] Speaker 02:
which I think that's clearly what it reads here.

[00:27:19] Speaker 02:
I think everybody agrees.

[00:27:21] Speaker 02:
If she then goes on and says, well, I'm also going to analyze it under the Second Circuit's old, I shouldn't say old, continuing.

[00:27:28] Speaker 00:
Wait, wait, wait, wait.

[00:27:30] Speaker 00:
I'm confused because I still think what you're trying to do is to get us to infer from a finding under an entirely different section of the opinion that she would make the same finding, not that she did make the same finding.

[00:27:43] Speaker 02:
She did make the finding under the Patent Act.

[00:27:45] Speaker 02:
In this section on page ADD 5, she said this argument that the snaps were not genuine is not going to support the conclusion that the case was exceptional for purposes of the Patent Act.

[00:27:58] Speaker 02:
If she never wrote a word on page 8 about the Lanham Act, she could have just said, I've already figured out that the only ground that you're asserting, Romag,

[00:28:08] Speaker 02:
doesn't equal an unreasonable position.

[00:28:12] Speaker 00:
Well, if she had said that you'd be much better off.

[00:28:15] Speaker 00:
She didn't say it in the Atlanta Mac portion.

[00:28:19] Speaker 02:
She said, she used this LeBlanc-Sternberg principle that she said that it's not so frivolous or groundless as to justify an award of fees.

[00:28:31] Speaker 02:
So she was expressly saying here this is not an unreasonable argument that they made with respect to

[00:28:39] Speaker 02:
the non-genuineness of the snaps.

[00:28:42] Speaker 02:
I think it is clearly there, Judge, and so I'm not asking you to reconstruct or figure out what she should say.

[00:28:49] Speaker 02:
I think that's exactly what she said there.

[00:28:53] Speaker 02:
I just, in terms of a couple of things, although I think the Court has clearly indicated that in terms of the timing defenses and the withdrawal,

[00:29:08] Speaker 02:
that I think it's clear that Judge Arnott can recognize that we have withdrawn them.

[00:29:12] Speaker 02:
It's not even the case that we need to have withdrawn them.

[00:29:14] Speaker 02:
Keep in mind that in a panel that Judge Newman was sitting on, Medtronic, the issue as to whether we didn't withdraw them or whether the timing of how we withdrew them was improper really goes to the question of whether it was reasonable or not.

[00:29:30] Speaker 02:
If it's a reasonable defense, we should be entitled to assert it.

[00:29:34] Speaker 02:
We had no obligation to withdraw it.

[00:29:37] Speaker 02:
I see that my time's up.

[00:29:39] Speaker 02:
I thank the court.

[00:29:40] Speaker 04:
It is.

[00:29:40] Speaker 02:
Any more questions?

[00:29:43] Speaker 04:
Thank you both.

[00:29:44] Speaker 04:
The case is taken under submission.

[00:29:49] Speaker 03:
Thank you, Your Honors.

[00:29:50] Speaker 03:
I'd like to start just by giving Judge Dyke the citation, which is JA7, to Judge Dyke, which is decisions of language that I mentioned earlier.

[00:29:59] Speaker 03:
And I also wanted to give you citations for

[00:30:02] Speaker 03:
what Judge Arderton had to say, as a matter of fact, about the non-infringement defense, that it was a phantasmagorical story.

[00:30:09] Speaker 03:
That's 3199 of the Joint Appendix.

[00:30:12] Speaker 04:
I think just give us the information that we've been searching for.

[00:30:15] Speaker 03:
Sure, Your Honor.

[00:30:16] Speaker 03:
Again, that the contrary evidence was overwhelming.

[00:30:19] Speaker 03:
Judge Arderton, let me just, Judge Hughes, in response to your earlier question, there was an error made

[00:30:29] Speaker 03:
both with respect to infringement under the Patent Act and infringement under the Lanham Act, because in both of those, Judge Arterton, in fact, applied this rigid standard, the rigid standard of LeBlanc Sternberg, saying that because she had not granted the Rule 50, she could not consider these issues for the totality of the circumstances in determining whether the case was exceptional.

[00:30:52] Speaker 03:
So that doesn't tell us, as opposing counsel said,

[00:30:55] Speaker 03:
that actually, under any standard, Judge Argiton would come to the same thing.

[00:30:59] Speaker 03:
It just tells us that Judge Argiton made the same mistake in the issue on the conditional cross-appeal as she did.

[00:31:04] Speaker 04:
We need the citations that Judge Dyke had asked for.

[00:31:08] Speaker 04:
I don't think... No, that's right.

[00:31:12] Speaker 04:
You do have the cross-appeal.

[00:31:14] Speaker 04:
My apologies.

[00:31:14] Speaker 04:
Proceed.

[00:31:15] Speaker 03:
Thank you, Your Honor.

[00:31:22] Speaker 03:
Obviously, this is an abuse of discretion context.

[00:31:26] Speaker 00:
Can I just ask, because I'm still not sure of this argument.

[00:31:29] Speaker 00:
I mean, if we agree with you that the Lanham Act standard is the same as Opting Fitness, and it seems that I would find it hard to believe that the Supreme Court would come up with two different interpretations for the same language.

[00:31:42] Speaker 00:
Why isn't your friend's argument that the only issue for the Lanham Act, as opposed to a bunch of other issues under the Patent Act, she's already said wasn't enough?

[00:31:53] Speaker 00:
to find it exceptional.

[00:31:54] Speaker 00:
Isn't that, I mean, if she said that, that this is the only, and I don't know if you agree, maybe you don't agree that it's the only issue under the Lanham Act claims, but if it is the only issue, and she's already said it's not enough to make it exceptional under a Patent Act claim, why wouldn't that translate to a no exceptional finding under the Lanham Act?

[00:32:12] Speaker 03:
Well, because she thought she was bound by this rigid rule saying that if she had denied a Rule 50- No, no, no, I mean, that's not addressing the question, because she made the finding of

[00:32:22] Speaker 00:
this issue under the octane fitness rule is not exceptional for a patent case.

[00:32:28] Speaker 00:
If it's the same standard for a Lanham Act case, why can't we assume she would make the same finding?

[00:32:34] Speaker 03:
I guess with all due respect, I'm not sure why it's not relevant that she found herself bound by the rule 50 rule, that she thought that if she denied rule 50.

[00:32:42] Speaker 00:
Because it's the same argument.

[00:32:43] Speaker 00:
Let's say you have the same argument for patent infringement and trademark infringement.

[00:32:48] Speaker 00:
And you say under the octane fitness standard,

[00:32:51] Speaker 00:
this is not sufficient to show an exceptional case.

[00:32:54] Speaker 00:
Well, if the standard is the same for a Lanham Act case, doesn't that translate to not exceptional?

[00:33:00] Speaker 03:
Yeah, with nothing else there, Judge Hughes, I would agree.

[00:33:02] Speaker 03:
That's what I was asking.

[00:33:04] Speaker 03:
Then I agree, but there is something else here.

[00:33:07] Speaker 03:
And that something else here is that she did not properly apply octane fitness with regard to the infringement question because she thought that she couldn't look to the question of whether it was exceptional.

[00:33:16] Speaker 01:
What other arguments did she make except the one that she appears to have rejected about the infringement case?

[00:33:22] Speaker 03:
Under the Lanham Act, you mean, Your Honor?

[00:33:24] Speaker 03:
Yes.

[00:33:24] Speaker 03:
That was the main argument.

[00:33:25] Speaker 03:
There's nothing else, obviously, that's been raised on cross-appeal.

[00:33:28] Speaker 03:
Just that.

[00:33:32] Speaker 00:
So you think that she might have come up with a finding that this issue wasn't exceptional under the Patent Act, but was exceptional under the Lanham Act?

[00:33:41] Speaker 03:
Well, we think she was wrong in the way she applied Octane Fitness here, Your Honor, because she says... You mean to the Patent Act claim?

[00:33:49] Speaker 03:
Well, with regard only to the infringement issue under the Patent Act claim, and this is at page five of the Joint Appendix, she's asking whether it's frivolous or groundless.

[00:33:56] Speaker 03:
That's not the same inquiry

[00:33:58] Speaker 03:
that she is conducting with regard to the rest of the issues and that's because of the rule 50.

[00:34:03] Speaker 00:
You're saying that she erred on even in her exceptional case finding on the Patent Act part of this and that if she had applied a proper standard it would have been exceptional.

[00:34:15] Speaker 03:
That is the first issue of our cross appeal and it's a conditional cross appeal to be sure.

[00:34:18] Speaker 03:
Sorry I was a little confused.

[00:34:20] Speaker 03:
I've got it.

[00:34:22] Speaker 03:
Let me just close by saying why this is an abuse of discretion standard on the

[00:34:28] Speaker 03:
made at the very beginning that said, well, look, you know, Romag never moved for summary judgment on infringement.

[00:34:34] Speaker 03:
Why didn't it do that if it really thought this was a frivolous case?

[00:34:38] Speaker 03:
And this harkened back to the stragent decision, which, of course, involved different circumstances.

[00:34:42] Speaker 03:
But why didn't it do it?

[00:34:43] Speaker 03:
Judge Arterton knew why it didn't do it.

[00:34:45] Speaker 03:
It didn't do it because the question of willful infringement was going to be tried anyway.

[00:34:49] Speaker 03:
And all the same witnesses, all the same facts were going to be brought there for the question of infringement.

[00:34:54] Speaker 03:
So it wasn't going to accomplish anything to move for summary judgment on the infringement question.

[00:35:01] Speaker 03:
You'd still have to have the same trial that went forward after that.

[00:35:05] Speaker 03:
Those sorts of findings, knowledge, facts, not all of which, of course, appear in the written record, are beneath a district court's determination as to whether a case is exceptional.

[00:35:16] Speaker 03:
This district court did live with the case for many months, longer than many full cases in the Eastern District of Virginia.

[00:35:22] Speaker 03:
saw the entire trial, all the pre-trial, all the post-trial, and came up with this fees decision one week after resolving the post-trial motions.

[00:35:29] Speaker 03:
She knew this case, and this court should affirm her exercise of discretion.

[00:35:33] Speaker 04:
Thank you.

[00:35:36] Speaker 04:
Thank you.

[00:35:37] Speaker 04:
The case is taken under submission.