[00:00:00] Speaker 03:
Guarding Protection Services.

[00:01:03] Speaker 03:
We ready?

[00:01:04] Speaker 03:
Mr. Bailey.

[00:01:05] Speaker 00:
May it please the court.

[00:01:07] Speaker 00:
This court has noted on multiple occasions that a patent litigation is an expensive proposition.

[00:01:13] Speaker 00:
When forced with this fact, accused infringers often do not expend the resources necessary to defend against a patent infringement litigation and instead simply pay to just go away.

[00:01:25] Speaker 00:
But justice dictates that those who are forced to bear their own fees should be compensated

[00:01:31] Speaker 00:
Section 285 of the Patent Act.

[00:01:33] Speaker 03:
Let me just interrupt you, because this is all background.

[00:01:36] Speaker 03:
So let's get into this case.

[00:01:38] Speaker 03:
It seems to me that your main argument is the justification for 285Bs is the lack of a presuit investigation, right?

[00:01:46] Speaker 03:
Yes, Your Honor.

[00:01:47] Speaker 03:
Well, what I'm hung up on is that the district court made a finding, or at least said, that you didn't present any evidence that patent owner knew or should have known about

[00:01:59] Speaker 03:
were they 12 or 42 or however many prior references that you think you know clearly established the invalidity.

[00:02:08] Speaker 00:
Is he wrong?

[00:02:09] Speaker 00:
Well your honor section 285 as the Supreme Court has stated just requires that we show that a case stands out from others and we can do that.

[00:02:18] Speaker 03:
Well why don't you answer my question though?

[00:02:20] Speaker 03:
It seems to me you're relying heavily on the fact that there was no pre-suit investigation.

[00:02:25] Speaker 03:
There were these pieces of prior art out there, and they were very probative.

[00:02:30] Speaker 03:
And given those, he should have known.

[00:02:32] Speaker 03:
But are you saying it's not up to you to establish that Patent Owner knew or should have known about those to make the argument that that influenced conclusions with regard to the adequacy of the pre-suit investigation?

[00:02:46] Speaker 00:
No, Your Honor.

[00:02:46] Speaker 00:
I think it is our burden.

[00:02:48] Speaker 00:
We did present that evidence with respect to Section 101 and also with respect to Section 102.

[00:02:54] Speaker 00:
We believe the case is exceptional with respect to Section 101 alone.

[00:02:58] Speaker 00:
The Section 102 references are just added and additional to show that the substantive strength of this case was very weak.

[00:03:06] Speaker 00:
And so we did brief the 101 issue and we argued that the claim was not patent eligible underneath Alice.

[00:03:14] Speaker 03:
So your argument with respect, I still haven't

[00:03:16] Speaker 03:
I haven't heard an answer to my question, but leaving that aside for a moment, 101 is something different, right?

[00:03:23] Speaker 03:
Because in that regard, you're not talking about prior art references.

[00:03:26] Speaker 03:
You're just saying on its face, he should have known that this claim had no subject matter eligibility under 101.

[00:03:37] Speaker 00:
Yes, Your Honor.

[00:03:38] Speaker 00:
It's our position that no reasonable litigant would have believed that they would have succeeded looking at the merits of this case.

[00:03:44] Speaker 00:
If you look at the claim in light of 101,

[00:03:46] Speaker 00:
And then additionally, in light of 102, that nobody would have believed that they would have succeeded in this case.

[00:03:52] Speaker 03:
OK, so let's move back to 102, which was my earlier question.

[00:03:56] Speaker 03:
102 would rest on the fact that there were slew of prior art references out there that established anticipation.

[00:04:05] Speaker 03:
That's what you're alleging, right?

[00:04:08] Speaker 03:
How do we know that the patent owner knew those, or you're saying that

[00:04:12] Speaker 03:
any reasonable person conducting an investigation would have come across these pieces of prior art and therefore known about them?

[00:04:19] Speaker 03:
I just want to answer my question.

[00:04:20] Speaker 00:
We believe any reasonable person that would have done just an adequate pre-suit investigation would have not only found the references, potentially the references that we cited, the 14, what we believe were one or two references, but several other references that were out there that would have invalidated this patent claim, this one claim under 102.

[00:04:40] Speaker 00:
But in addition,

[00:04:41] Speaker 00:
They did know about one of those references.

[00:04:44] Speaker 00:
We do know for sure there's a reference that was cited in OnStar's answer to its counterclaim on May 29th.

[00:04:51] Speaker 00:
And in that counterclaim, OnStar addressed that reference on a limitation by limitation basis, looking at claim one of the 090 patent.

[00:05:01] Speaker 00:
And the judicial court did not discuss in its opinion any assessment of that particular reference.

[00:05:09] Speaker 03:
A lot of, we have a lot of one-on-one cases now and a large number of those, the patent owner loses when they raise that here.

[00:05:16] Speaker 03:
But as you know, there's some cases on one side of the issue and on the others.

[00:05:20] Speaker 03:
Can you tell us a little more about 101?

[00:05:22] Speaker 03:
I mean, you're saying that it was just on its face.

[00:05:25] Speaker 03:
The judge didn't have to do anything.

[00:05:26] Speaker 03:
We didn't have to show that the patent owner knew anything.

[00:05:29] Speaker 03:
But it was, I mean, we have them in every case, in every 101 case.

[00:05:33] Speaker 03:
The patent owner will use the cases that have come out in terms of 101 eligibility and the other side will use the other cases.

[00:05:39] Speaker 03:
So it's, why is this something that you look at the claim and it's a slam dunk.

[00:05:44] Speaker 03:
There's no way, no how that this would have passed Mustard and there was nothing more from district court to do other than just read the claim.

[00:05:50] Speaker 00:
If I could focus, Your Honor, on the two arguments that the district court stated were plausible in his opinion.

[00:05:57] Speaker 00:
If you look at the district court's opinion at page 19, it identified two arguments.

[00:06:01] Speaker 00:
The first was that the claim recites a computer system.

[00:06:05] Speaker 00:
And then second, that the claim recites a solution to a problem specifically arising in computer-based communication networks.

[00:06:13] Speaker 00:
And neither one of these arguments have any merit.

[00:06:16] Speaker 00:
The Supreme Court's made clear in Alice that recitation of a computer is not enough.

[00:06:22] Speaker 00:
This court has echoed that in multiple cases, including buy, save, ultramortual, and content extraction.

[00:06:29] Speaker 00:
Then with respect to the second argument that was made by Rothschild, that they had some kind of a solution to a problem that specifically arose in computer-based communication networks.

[00:06:43] Speaker 00:
There is nothing in the limitations of the claim.

[00:06:46] Speaker 00:
that solve any particular problem that was known.

[00:06:49] Speaker 00:
There's no identification of a problem in the specification.

[00:06:52] Speaker 00:
The claim recites two generic components.

[00:06:55] Speaker 00:
It recites a communication module and a remote server.

[00:06:58] Speaker 00:
The remote server has three functions.

[00:07:01] Speaker 00:
It transmits, receives, and stores data.

[00:07:04] Speaker 00:
That's it.

[00:07:05] Speaker 00:
The communication module only has one function.

[00:07:08] Speaker 00:
It receives data.

[00:07:10] Speaker 00:
And this court has made clear that that type of conventional computer activity and function

[00:07:16] Speaker 00:
is not enough to confer patent eligibility to a claimant.

[00:07:22] Speaker 03:
Can I ask you, the New Egg case is one in which the court didn't award 285 fees, where there was arguably vexatious litigation.

[00:07:30] Speaker 03:
There's been several New Egg cases, and I don't remember which one this was.

[00:07:33] Speaker 03:
But in that case, didn't we rely on the fact that they had, at least in one case, the Amazon case, pursued the case, at least to trial or pursue the case?

[00:07:43] Speaker 03:
Are you familiar with what I'm talking about?

[00:07:45] Speaker 03:
In this case, I know we've got an, I don't know how many suits, 42 or something like that.

[00:07:50] Speaker 03:
Has any, has any assertion of this claim or this patent against a defendant been pursued past the motion to dismiss Sage or past the?

[00:08:01] Speaker 00:
The only case that I'm aware of are a few cases that made it to the Markman briefing stage.

[00:08:07] Speaker 00:
And I don't think there has been ever been a decision on Markman in any of the cases that I'm aware of.

[00:08:13] Speaker 00:
And so none of these cases have made it very far.

[00:08:16] Speaker 00:
In the New Egg case that you're speaking of, Your Honor, there was a trial.

[00:08:21] Speaker 00:
It went all the way to trial, and the case lasted for quite some time.

[00:08:24] Speaker 00:
And New Egg lost on summary judgment.

[00:08:26] Speaker 00:
Here there was not a summary judgment, but we presented arguments we believe would have won on 101.

[00:08:32] Speaker 00:
And with respect to 102, had we filed a summary judgment motion, we think we also would have been successful.

[00:08:38] Speaker 00:
But I don't think that necessarily means that we have to.

[00:08:42] Speaker 00:
or that you would look back and state that because you want a summary judgment motion, that you would then be entitled to fees.

[00:08:49] Speaker 00:
I believe the school has to assess the substantive strength of the party's positions, regardless of the stage of the case, and regardless of what the ultimate outcome of the case is.

[00:08:59] Speaker 00:
And in New Egg, there were several nuisance value settlement offers, like there are in this case.

[00:09:03] Speaker 00:
But in oral argument in the New Egg case, it came out that several of those were much higher than it had appeared, I guess, in the briefing.

[00:09:10] Speaker 00:
Here, there are no high nuisance value settlements.

[00:09:15] Speaker 00:
Every nuisance value settlement is minimal, less than 1% of the cost of what it would be to actually have to defend a case like this.

[00:09:26] Speaker 00:
And when ADS was faced with having to look at a percentage that Rothschild was asserting of gross revenues in terms of the license and looking at the revenues that ADS had, there was a significant number

[00:09:40] Speaker 00:
It was shocked to receive a nuisance value settlement offer in the amount that it did.

[00:09:46] Speaker 00:
But it rejected that and continued to defend itself because it did not believe that it should be the subject of extortion.

[00:09:54] Speaker 00:
And I think, Your Honor, if you look at the nuisance value settlements in this case, particularly the 13 agreements that are summarized in the appendix, I believe, at page

[00:10:17] Speaker 00:
at page 130 in the appendix is a summary of those 13 nuisance value settlements.

[00:10:23] Speaker 00:
If you look at those, you'll see that they're very minimal amounts.

[00:10:27] Speaker 00:
But also, there are 25 zeros that this court has to consider.

[00:10:32] Speaker 03:
Let me ask you about that.

[00:10:33] Speaker 03:
I mean, this case involves kind of an interesting question about the intersection of Rule 11 and Rule 285, or the absence of an intersection between the two.

[00:10:42] Speaker 03:
And we know the Supreme Court has referred to one of the components, one of the elements,

[00:10:45] Speaker 03:
an attorney's thesis being vexatious litigation.

[00:10:49] Speaker 03:
If Rule 11 we view as a deterrent or punishment to somebody and 285 is purely compensating a defendant as a prevailing party, why doesn't vexatious litigation belong in the Rule 11 bucket rather than the 285 bucket?

[00:11:08] Speaker 03:
Do you understand my question?

[00:11:09] Speaker 00:
Yes, Your Honor.

[00:11:10] Speaker 00:
I think that it in fact does.

[00:11:12] Speaker 00:
And I think that it would be proper to bring a Rule 11 motion for vexatious litigation.

[00:11:18] Speaker 03:
So why does it belong under 285?

[00:11:20] Speaker 03:
Why is it an important component of 285?

[00:11:22] Speaker 03:
Because that's your main thing here, right, on 285, is the repeated litigation.

[00:11:27] Speaker 00:
And if I could just finish earlier what I was stating, I would think it would be able to be brought underneath Rule 11 if it was a vexatious litigation that was continued after an offending pleading was not withdrawn.

[00:11:40] Speaker 00:
and there was a rule 11 motion that was served.

[00:11:44] Speaker 00:
And with respect to 285, there's not any authority anywhere that indicates that rule 11 sanctions and 285 are mutually exclusive.

[00:11:56] Speaker 00:
I think that a party would be able to achieve sanctions.

[00:11:59] Speaker 02:
But Octane says they're not necessarily overlapping either.

[00:12:03] Speaker 00:
It does, Your Honor.

[00:12:04] Speaker 00:
It says that, in fact, activity doesn't necessarily have to be sanctionable in order to

[00:12:11] Speaker 02:
You cited the, as to 130 in the appendix for a list?

[00:12:18] Speaker 00:
Yes, Your Honor, there should be a summary in the appendix at 130.

[00:12:22] Speaker 02:
I'm looking and I don't see it.

[00:12:28] Speaker 00:
I will check that and address that.

[00:12:31] Speaker 02:
Please, thank you.

[00:12:33] Speaker 03:
It looks like I am eight months on.

[00:12:35] Speaker 03:
Yes, mine only here from the other side.

[00:12:36] Speaker 03:
Thank you.

[00:12:45] Speaker 03:
Mr. Johnson.

[00:12:46] Speaker 03:
Good morning.

[00:12:54] Speaker 01:
Good morning.

[00:12:54] Speaker 01:
Thank you.

[00:12:54] Speaker 01:
Your Honors, we're here for one purpose and one purpose only.

[00:12:57] Speaker 01:
It asks to determine whether the District Court judged abuse of discretion in denying ADS's motion for attorney's fees.

[00:13:03] Speaker 02:
You stated in an affidavit that you had not conducted an analysis of any of the prior art asserted in ADS's cross-motion for attorney's fees to form a belief as to whether there was

[00:13:14] Speaker 02:
whether that prior art would invalidate the patent and suit.

[00:13:20] Speaker 02:
Correct.

[00:13:20] Speaker 02:
Your client's founder echoed that in another affidavit.

[00:13:23] Speaker 02:
In the same affidavits, each of you asserted that you possessed a good faith belief that the patent and suit is valid.

[00:13:31] Speaker 02:
How can you reasonably have believed that claim one is valid if you didn't analyze the purportedly invalidating prior art provided by ADS?

[00:13:42] Speaker 01:
Your Honor, the district court judge raised this exact issue.

[00:13:45] Speaker 01:
And our response there is the same as my response now.

[00:13:47] Speaker 01:
What we were saying in an affidavit was that we did not analyze the references to reach a conclusion that the references invalidated the patent suit.

[00:14:01] Speaker 01:
We didn't say that we didn't analyze the references or didn't look at them or ignored the references.

[00:14:08] Speaker 01:
We didn't reach a conclusion that those references rendered the patent suit valid.

[00:14:13] Speaker 02:
So you did, the chief judge asked some questions, 102 questions.

[00:14:20] Speaker 02:
You did review those other prior art patents.

[00:14:24] Speaker 01:
We looked at any reference that came to us at any point that came to us.

[00:14:29] Speaker 01:
Now, did we go get a validity opinion based on those references?

[00:14:35] Speaker 01:
I wouldn't carry it so far as to say that, but we looked at the references and didn't reach any conclusion that any of those references invalidated the patent.

[00:14:42] Speaker 01:
And the only reference that was at issue at the time of filing was the one reference that was discussed earlier, which was the one that was raised in a related suit.

[00:14:53] Speaker 01:
And not these 14 references or the other 13 of the 14 references that were raised after the complaint was filed.

[00:15:04] Speaker 02:
One of the problems I have with both your affidavit and your clients is that you included no evidence to corroborate any of your assertions, meaning that the statements in your affidavit lack foundation.

[00:15:18] Speaker 02:
You're telling me you did these things.

[00:15:20] Speaker 02:
I don't see it in your affidavit.

[00:15:23] Speaker 02:
Does the record contain any evidence

[00:15:26] Speaker 02:
demonstrating that you did what you say you did.

[00:15:29] Speaker 01:
I don't think the record contains any evidence other than the affidavits themselves, which are affidavits.

[00:15:36] Speaker 02:
Well, OK.

[00:15:37] Speaker 02:
I'm sorry.

[00:15:38] Speaker 02:
I apologize.

[00:15:39] Speaker 02:
I meant competent evidence.

[00:15:42] Speaker 02:
It's cognizable by a court as a matter of law.

[00:15:46] Speaker 01:
I think possibly what you're speaking to is something along the lines of an opinion or statement.

[00:15:52] Speaker 02:
No, I'm speaking to things like lack of foundation

[00:15:56] Speaker 02:
Where in your affidavit is your statement that on this date, I reviewed this document?

[00:16:06] Speaker 01:
That is not in the record, Your Honor.

[00:16:07] Speaker 02:
Isn't that necessary to establish a foundation for your statement?

[00:16:14] Speaker 01:
In hindsight, yes.

[00:16:15] Speaker 01:
I'm sure it would strengthen the value of that affidavit.

[00:16:19] Speaker 02:
It's not a question of strengthen.

[00:16:21] Speaker 02:
It's a question of federal rules of evidence and evidentiary foundations.

[00:16:27] Speaker 01:
We simply don't have that in there.

[00:16:31] Speaker 03:
Maybe I'm missing this understanding.

[00:16:33] Speaker 03:
So you're saying you knew about the prior art references, pre-suit.

[00:16:37] Speaker 01:
We knew about one pre-suit.

[00:16:40] Speaker 03:
Is that one of the 14 we were talking about?

[00:16:43] Speaker 01:
I believe it is.

[00:16:44] Speaker 03:
So how come the district court at appendix 20 says, instead, defendant's contention seems to be that a reasonable pre-suit investigation should have been brought to these references to plaintiff's attention.

[00:16:55] Speaker 03:
But defendant presents no evidence

[00:16:57] Speaker 03:
that plaintiff knew or should have known, oh, with the exception of that, okay.

[00:17:02] Speaker 03:
Well, let me ask you, if the district court begins its analysis by, the district court judge begins his analysis by talking about the safe harbor rule and concludes that 285, the suggestion that 285 shouldn't be applied in a manner that contravenes the aims of rule 11, right?

[00:17:21] Speaker 03:
You're familiar with what I'm talking about.

[00:17:23] Speaker 03:
If we conclude that that's just not right,

[00:17:26] Speaker 03:
And it's just not correct as a matter of law that even though Rule 11 says we're trying to deter it, that somehow application of 285 under these circumstances would be in tension with Rule 11.

[00:17:40] Speaker 03:
Is there a reason why we wouldn't have to vacate this opinion?

[00:17:43] Speaker 03:
Or is your argument that there's enough else with respect to the district court's findings to support the result?

[00:17:50] Speaker 01:
I think there is enough.

[00:17:51] Speaker 01:
else with respect to the district court's findings, Your Honor.

[00:17:54] Speaker 01:
And the district court so much has acknowledged expressly that Rule 11 didn't supplant 285.

[00:18:01] Speaker 01:
The district court's point on Rule 11 and our client's withdrawal of his motion in response to the service of the Rule 11 motion was mainly his take that our client was acting reasonably during litigation.

[00:18:18] Speaker 01:
I think he was looking at that as a

[00:18:20] Speaker 01:
litigation conduct issue, looking at our client's conduct as being reasonable in the context of 285.

[00:18:29] Speaker 01:
And as your honors were saying, I think earlier, it's not that 285 and Rule 11 can't coexist, but that they can't overlap either.

[00:18:40] Speaker 01:
I think the district court judge did that exactly and said,

[00:18:47] Speaker 01:
Here's 285.

[00:18:48] Speaker 01:
Here's rule 11.

[00:18:51] Speaker 01:
Here's what the plaintiff did with respect to rule 11.

[00:18:56] Speaker 01:
And here's how it should impact my analysis under section 205.

[00:19:03] Speaker 03:
If we are to review under 285 conduct outside of this particular proceeding, suits involving other entities, et cetera,

[00:19:14] Speaker 03:
Why isn't the evidence in this case with respect to your client's conduct and bringing other suits and those settlements engaged in those and all the stuff that's part of this record, why isn't that overwhelming evidence of vexatious litigation?

[00:19:30] Speaker 01:
It's just as the district court looked at it at the hearing and in writing his opinion, that absolutely can be a factor.

[00:19:42] Speaker 01:
district court judge didn't say ignore the evidence of what goes on in other related lawsuits, the district court judge said, in his opinion, in this case, that it was not persuasive that there was any unreasonable conduct, or that it was a factor that should weigh in favor of awarding fees under section 285.

[00:20:09] Speaker 02:
Take seven of your briefs.

[00:20:12] Speaker 02:
You say that ADS's behavior appeared overly aggressive and reckless because it was going to seek attorney's fees against you.

[00:20:24] Speaker 02:
What's the legal definition of overly aggressive and reckless?

[00:20:28] Speaker 02:
And what's your authority for that definition?

[00:20:33] Speaker 01:
legal definition for that, Your Honor.

[00:20:35] Speaker 02:
Does it mean standing up to a frivolous lawsuit?

[00:20:40] Speaker 01:
No, I was merely using those words to describe why we dismissed the lawsuit in response to the Rule 11 service in combination with the other things that had gone on in this case in the short time it was.

[00:20:57] Speaker 02:
You thought they were going to fight back.

[00:20:59] Speaker 01:
No.

[00:21:01] Speaker 01:
What I saw was

[00:21:03] Speaker 01:
And it's ironic that ABS uses extortion in its arguments about the other lawsuits and seeking nuisance value settlements or cost of defense settlements.

[00:21:21] Speaker 01:
We did find, and still don't believe, and I don't think the district court judge believed, that there was anything exceptional or unusual about the way those cases have been handled.

[00:21:31] Speaker 01:
But I found it ironic that

[00:21:33] Speaker 01:
ADS, when it said, we're going to file Rule 11 motion, and then said, tied that specifically to a demand that we pay its attorney's fees at that point in the litigation, where it said, we will file this Rule 11 motion, but we won't, and we'll quietly go away if you pay our, at that time, I think it was something $40,000, $45,000 worth of attorney's fees.

[00:21:58] Speaker 02:
Well, since Rule 11 seeks attorney's fees,

[00:22:01] Speaker 02:
Why is that incongruous?

[00:22:05] Speaker 01:
I just found that the pairing of we'll go away, and we won't file the Rule 11 motion if you pay our attorney's fees.

[00:22:15] Speaker 02:
Isn't that what a reasonable attorney would do in order to limit any further damages?

[00:22:23] Speaker 02:
That is, say, look, up to this point, we've incurred this amount of fees.

[00:22:29] Speaker 02:
If we have to move forward and file a Rule 11

[00:22:31] Speaker 02:
There'll be a lot more fees, but we're willing to walk away if you pay us what we've incurred to date.

[00:22:38] Speaker 02:
How is that unreasonable?

[00:22:41] Speaker 02:
Now, you can tell me that the amount of fees has been pumped up, if you have evidence to that effect, and that might be unreasonable, but you haven't shown me anything that says that.

[00:22:52] Speaker 01:
There's nothing in the record that I can point to that's going to say the amount of fees is unreasonable.

[00:22:56] Speaker 01:
I don't have anything in the record that shows that.

[00:23:01] Speaker 03:
In your brief, under a statement of related cases, you cite a number of cases that in the last two were in ED, Texas.

[00:23:09] Speaker 03:
What's the status of those cases?

[00:23:11] Speaker 03:
Are they still ongoing?

[00:23:13] Speaker 01:
I believe from this, I think it was 42 cases that were mentioned in the argument, I believe that all of those have been dispensed with.

[00:23:29] Speaker 03:
So those were included in the cases that had said old or whatever.

[00:23:33] Speaker 01:
Exactly.

[00:23:34] Speaker 03:
And there are three of them pending.

[00:23:35] Speaker 03:
So those are all gone now.

[00:23:37] Speaker 01:
I think at the time of the brief, I would hope at the time of the brief, all of that that I said was accurate.

[00:23:44] Speaker 01:
But I think that everything since then has been dispensed out.

[00:23:55] Speaker 01:
So.

[00:23:56] Speaker 01:
Unless the court has any further questions, I'd just like to conclude that, again, we're around the use of discretion standard, which is limited to determining whether the district court judge erred in the law, which I don't think there's been any argument at any point really from ADS that the judge erred in the law, or made a clear error of judgment

[00:24:25] Speaker 01:
in assessing the totality of the facts based on the law.

[00:24:29] Speaker 01:
And I think the district court judge did a proper job.

[00:24:32] Speaker 01:
And I think I've gone through and explained and hopefully answered questions as relates to that issue.

[00:24:40] Speaker 01:
Unless there are any questions, I can see the remainder of my time.

[00:24:42] Speaker 01:
Thank you.

[00:24:53] Speaker 02:
Do you want to cite me to the record, Mr. Bailey?

[00:24:56] Speaker 00:
Yes, Your Honor, it's at 878.

[00:24:59] Speaker 00:
I know I've seen it.

[00:25:04] Speaker 00:
I just want to... With respect to Chief Judge Prost's question related to the related cases, I believe that one of the IPRs is still pending and I believe that there is still a case versus Coca-Cola in the Northern District of Georgia.

[00:25:21] Speaker 03:
And then there have been some additional... Is the IPR over the claims that were in dispute?

[00:25:27] Speaker 00:
It involves all of the claims from my understanding.

[00:25:36] Speaker 00:
Okay.

[00:25:36] Speaker 00:
If I could just address the rule 11-285 issue that we've been speaking about today.

[00:25:43] Speaker 00:
Compliance with Rule 11 certainly, I believe, should be taken into account when determining whether or not Section 285 fees should be awarded.

[00:25:53] Speaker 00:
But the district court has to look at the reasons for that compliance.

[00:25:57] Speaker 00:
And in this case, when you look at the reasons for compliance with Rule 11, I think that you'll find that this is a case that stands out from others because of the weakness of the argument made by Rothschild.

[00:26:09] Speaker 00:
With respect to the email,

[00:26:11] Speaker 00:
I would just like to point out that that was an email that was by no means a model of clarity, but it sent a message, as Judge Wallach has pointed out, that ADS was not going to be the subject of extortion.

[00:26:26] Speaker 00:
And it was an email that was sent to a very sophisticated counsel who had, to that time period, filed 114 patent infringement litigations, to date, 321.

[00:26:38] Speaker 00:
and it was a typical posturing and bluster that you see in litigation and we did serve a rule 11 motion as is required and we provided Rothschild with 21 days as the safe harbor says in rule 11 so that they could withdraw their complaint and

[00:26:57] Speaker 03:
The difficulty with this issue is their attention of policy purposes one is trying to achieve.

[00:27:03] Speaker 03:
So we see all kinds of attorney's fees appeals.

[00:27:05] Speaker 03:
In some cases, when the patent owner pursues this for years and uses everything, there's more of a compelling argument for 285 fees.

[00:27:15] Speaker 03:
But the problem is it looks like the case may have had some merit because it went along for as long as it did.

[00:27:21] Speaker 03:
In your case, shouldn't there be some sympathy for the district court judge?

[00:27:27] Speaker 03:
the parties having pulled back very, very early on, which is something that the system would want to see happen, particularly with claims that are at least weak, that we then, we have a counter purpose.

[00:27:43] Speaker 03:
If we award attorney's fees, doesn't that incentivize the other side to keep pursuing the claims just because they're going to get hit by attorney's fees because they pulled back so early without an evaluation of the case?

[00:27:54] Speaker 03:
Do you understand?

[00:27:56] Speaker 03:
in the analysis here, right?

[00:27:58] Speaker 02:
I think that is the case when... Cite Rule 1 while you're answering.

[00:28:06] Speaker 00:
Rule 1 does require the just, speedy, and inexpensive determination of every action.

[00:28:12] Speaker 00:
And I had to serve the Rule 11 motion within a reasonable time period from service of the complaint, and we did that.

[00:28:22] Speaker 00:
had Rothschild withdrawn their complaint in compliance with Rule 11 and stated, we have done so because we did not see these one-on-one arguments prior to filing this case.

[00:28:33] Speaker 00:
We had done so because we did not know about this one-on-two art that you have now presented.

[00:28:38] Speaker 00:
This would be a different case.

[00:28:40] Speaker 00:
Rothschild did not do that.

[00:28:42] Speaker 00:
Rothschild instead pointed to an email that was sent two months earlier as the reason for withdrawing its complaint.

[00:28:49] Speaker 00:
They then continue to file amended complaints against multiple other defendants and are continuing to assert this patent today.

[00:28:56] Speaker 00:
And so the reasons why Rothschild withdrew this complaint, I think, are very important here.

[00:29:03] Speaker 03:
Thank you.

[00:29:04] Speaker 00:
We thank both sides.

[00:29:05] Speaker 00:
The case is submitted.