[00:00:07] Speaker ?:
2, 3...

[00:00:47] Speaker 04:
Okay, the next argued case is number 16, 1262, TQP Development, LLC, against Newegg, Incorporated.

[00:00:58] Speaker 04:
We have an appeal and cross-appeal.

[00:01:00] Speaker 04:
We'll start with Mr. Fenster.

[00:01:04] Speaker 01:
Good morning, Your Honors.

[00:01:05] Speaker 01:
May it please the Court?

[00:01:07] Speaker 01:
Because neither party challenges either the claim construction or the jury charge, we have to test the jury verdict

[00:01:16] Speaker 01:
the substantial evidence against the verdict against the charge that was actually given using the ordinary meaning.

[00:01:23] Speaker 01:
The infringement verdict should be reinstated because substantial evidence supports the verdict using the ordinary meaning of the charge actually given.

[00:01:32] Speaker 01:
The charge was, quote, a new key value in the first and second sequence is used each time a predetermined number of blocks

[00:01:42] Speaker 01:
have been sent from the transmitter over the communication link.

[00:01:46] Speaker 01:
That's at A4645.

[00:01:49] Speaker 01:
Dr. Jaeger testified directly to that point at 3397 to 98.

[00:01:53] Speaker 01:
The blocks, I'm quoting, the blocks now have been sent from the transmitter over the communication link.

[00:02:02] Speaker 01:
So the predetermined number of blocks is satisfied.

[00:02:06] Speaker 01:
The key value now in the first and second sequence is used when

[00:02:11] Speaker 01:
the predetermined number of blocks have been sent from the transmitter over the communication link.

[00:02:17] Speaker 03:
We have a series of cases where we have said that while a trial court can't post-trial add new limitations to its claim construction, it certainly has the authority to clarify its claim construction.

[00:02:32] Speaker 03:
How do you get around our decisions in Cortis and Mformation and Weland?

[00:02:39] Speaker 03:
But we specifically said that that's authorized.

[00:02:41] Speaker 01:
So first, the court didn't purport to clarify its claim construction in this case.

[00:02:49] Speaker 01:
The court simply misapplied it.

[00:02:51] Speaker 01:
The court in its JMAAL said it was applying the court's claim construction in the jury charge.

[00:02:57] Speaker 01:
However, the JMAAL focused on the wrong and misapplied, misquoted the jury charge.

[00:03:04] Speaker 01:
It focused on whether there was substantial evidence of whether there was generation

[00:03:09] Speaker 01:
at the transmitter or receiver, the generation of keys versus each time a key, a data block was received.

[00:03:18] Speaker 03:
Well, he did use the word generation a few times, but he came back around and made it clear that he was talking about the use.

[00:03:26] Speaker 01:
I disagree, Your Honor.

[00:03:27] Speaker 01:
He specifically says in the Jamal order at 16 that the

[00:03:38] Speaker 01:
Court's conclusion is centered on the lack of substantial evidence showing a direct causal link between the generation of a new key and either transmission or receipt.

[00:03:47] Speaker 01:
And then three other places on page A16, the court always compares to the generation.

[00:03:54] Speaker 01:
That is directly contrary to the district court's claim construction.

[00:04:01] Speaker 01:
Now, that, I think, led him to overlook substantial evidence.

[00:04:05] Speaker 01:
And the key point that he overlooked

[00:04:07] Speaker 02:
Why do you think it's contrary to his construction?

[00:04:10] Speaker 01:
Because the courts claim construction at specifically held otherwise.

[00:04:20] Speaker 01:
It's specifically rejected.

[00:04:21] Speaker 02:
It's specifically held.

[00:04:22] Speaker 02:
There's a new encryption when a predetermined number of blocks have been sent from the transmitter.

[00:04:28] Speaker 05:
Your Honor.

[00:04:28] Speaker 02:
So he is only giving life and meaning to what he meant by his timing requirement in the construction that this occurs after something has been sent.

[00:04:36] Speaker 01:
Your Honor.

[00:04:37] Speaker 01:
841 of the record, which is the court's claim construction, the court in the claim construction order specifically addressed whether produce means generate or use.

[00:04:50] Speaker 01:
And the court specifically rejected defendant's argument that produce means generate.

[00:04:57] Speaker 01:
He said,

[00:04:58] Speaker 01:
Nothing in the 730 patent precludes generating a sequence in advance and then using the keys at an appropriate time.

[00:05:05] Speaker 03:
Well, that had to do with whether or not they could be stored.

[00:05:08] Speaker 03:
That didn't have to do with whether or not that they had to be used at the time they were set.

[00:05:15] Speaker 01:
That's right.

[00:05:15] Speaker 01:
So what he said, what the claim construction was that was applied and should have been applied on de novo by this court is that the new key value

[00:05:28] Speaker 01:
has to be used each time a predetermined number of blocks have been sent.

[00:05:36] Speaker 01:
And Dr. Yeager testified exactly that, that a new key value is used at the receiver each time a new block has been transmitted.

[00:05:50] Speaker 01:
That new key value

[00:05:53] Speaker 01:
This is at 3397 and 3398.

[00:05:56] Speaker 01:
He testified to that directly.

[00:06:01] Speaker 01:
He further said that because the sequences at the transmitter and the receiver are identical, the key value is, that's used at the receiver, is in the first and second sequence.

[00:06:19] Speaker 01:
So reviewing de novo, you have to,

[00:06:23] Speaker 01:
apply the ordinary meaning of the charge actually given.

[00:06:27] Speaker 03:
But there was nothing in that charge that even implied that the key values could be used after transmission.

[00:06:39] Speaker 03:
The key values had to be used before transmission, right?

[00:06:43] Speaker 01:
Okay.

[00:06:46] Speaker 01:
No.

[00:06:48] Speaker 01:
The key values are used at the transmitter.

[00:06:50] Speaker 01:
So this is a method of transmitting from a transmitter to a receiver.

[00:06:53] Speaker 01:
At the transmitter side, the keys are used to encrypt prior to transmission.

[00:07:00] Speaker 01:
Then encrypted data is sent to the receiver and the received encrypted data is counted and advanced keys are used at the receiver to decrypt it.

[00:07:11] Speaker 02:
I don't understand why you... I mean, I feel like this receiver-centric thing is completely out of the blue as far as I can tell.

[00:07:18] Speaker 02:
I mean, yes, it's sort of

[00:07:19] Speaker 02:
gives you a basis to make your substantial evidence arguments with regard to your expert.

[00:07:23] Speaker 02:
But the plain text expressly requires action at the transmitter through the use of said first and said second sequences being produced.

[00:07:33] Speaker 02:
You've wanted to change the perspective to receiver-centric to then be able to point to your expert and say, see, he justified this.

[00:07:39] Speaker 02:
There's a substantial evidence.

[00:07:42] Speaker 02:
I feel like this is claim construction.

[00:07:44] Speaker 02:
You want the world to be receiver-centric.

[00:07:45] Speaker 02:
That's not what the district court construed the claim as.

[00:07:49] Speaker 01:
So first, the court's claim construction doesn't say at the receiver or at the transmitter.

[00:07:56] Speaker 01:
It says a new key value in the first and second sequence is used.

[00:08:04] Speaker 03:
But wait, let's look at the language of the claim, which both judges were looking at.

[00:08:09] Speaker 03:
A new one of said key values is said first and said second sequences

[00:08:15] Speaker 03:
being produced each time a predetermined number of said blocks are transmitted over said link.

[00:08:20] Speaker 01:
Yes.

[00:08:22] Speaker 03:
So why is it that the new key value can not show up until the receiver side?

[00:08:35] Speaker 01:
So first, this is in paragraph 1E of the claim, which is talking about what happens at the receiver.

[00:08:41] Speaker 01:
And if you look at the prosecution history,

[00:08:44] Speaker 01:
I can explain how this element got into this claim.

[00:08:49] Speaker 01:
But the way this claim is structured is you provide a seed to both sides.

[00:08:54] Speaker 01:
In one C, you generate a first sequence at the transmitter.

[00:08:57] Speaker 01:
It says at the transmitter.

[00:08:59] Speaker 01:
In one D, you encrypt at the transmitter.

[00:09:02] Speaker 01:
In one E, you generate a second sequence at said receiver.

[00:09:07] Speaker 01:
You encrypt, you decrypt at said receiver.

[00:09:11] Speaker 01:
And then the key language that was added

[00:09:14] Speaker 01:
by amendment is a new one of said key values in said first and second sequences being produced each time a predetermined number of blocks are transmitted over said link.

[00:09:26] Speaker 01:
It doesn't say at the transmitter or the receiver.

[00:09:29] Speaker 01:
I note to the court that that is in the block that's talking about what happens at the receiver.

[00:09:34] Speaker 01:
The court's construction said a new key value in the first and second sequence is used

[00:09:42] Speaker 01:
each time a predetermined number of blocks have been set.

[00:09:45] Speaker 01:
It does not say at the transmitter.

[00:09:48] Speaker 01:
It does not say at the receiver.

[00:09:50] Speaker 01:
Now, looking grammatically at it, because we have to apply only the ordinary meaning of the actual charge given.

[00:09:56] Speaker 01:
Grammatically, what that sentence means is a new key value is used.

[00:10:04] Speaker 02:
Do you doubt at this point in the proceeding that the district court rejected your receiver-centric view of the claim construction for 1E?

[00:10:13] Speaker 02:
with regard to this.

[00:10:14] Speaker 02:
You do?

[00:10:15] Speaker 01:
I do.

[00:10:15] Speaker 02:
Really?

[00:10:16] Speaker 02:
Because I think the opinion seems very clear that he made it clear that it was at transmission and that that's what he was looking at.

[00:10:28] Speaker 02:
And in fact, that's what the claim language says, are transmitted over said link.

[00:10:32] Speaker 02:
So while some portions of 1E might have to do with actions that occur at the receiver, this, i.e.

[00:10:39] Speaker 02:
when you're going to have a new one of said key values, is after

[00:10:43] Speaker 02:
or at transmitted, basically.

[00:10:46] Speaker 02:
So that's the way I interpret his opinion.

[00:10:48] Speaker 02:
I really see all of your arguments as claim construction arguments.

[00:10:52] Speaker 01:
OK.

[00:10:52] Speaker 01:
So first, I'll refer the court to footnote four of the court's Jamal at A-15, where he specifically says he's not resolving the question.

[00:11:03] Speaker 01:
The court therefore does not determine whether either interpretation is solely correct or whether the claim supports both interpretations.

[00:11:11] Speaker 01:
He specifically left it open.

[00:11:15] Speaker 01:
This court should not be doing claim construction.

[00:11:18] Speaker 01:
I'm asking you to apply only the ordinary meaning of the claim language as charged.

[00:11:24] Speaker 01:
And the plain meaning of the charge was a new key value is used.

[00:11:29] Speaker 01:
That key value is in the first and second sequence.

[00:11:32] Speaker 03:
Now, we have a problem in that trial.

[00:11:36] Speaker 03:
It was clear that you thought the plain meaning was A, and your opponent thought it was B.

[00:11:43] Speaker 03:
So the court gave you an opportunity to seek a clarification of the claim construction during trial, and you specifically chose not to do that.

[00:11:51] Speaker 03:
Isn't that right?

[00:11:54] Speaker 01:
The court, both sides objected to either side's interpretation, either side's expert testifying in a way that they believed was inconsistent.

[00:12:06] Speaker 01:
The court at A3827 specifically says,

[00:12:10] Speaker 01:
This is an issue for the jury.

[00:12:12] Speaker 01:
All right, counsel, the court understands that different experts may have different reading of the court's claim construction.

[00:12:17] Speaker 01:
That doesn't mean I'm going to reopen claim construction.

[00:12:20] Speaker 01:
You both have experts.

[00:12:21] Speaker 01:
If your witnesses can explain why the other's explanation is faulty, that's what this trial is about.

[00:12:27] Speaker 01:
So the court recognized that this was an issue and said it should go to the jury.

[00:12:34] Speaker 01:
It was Newig that requested a supplemental construction.

[00:12:38] Speaker 01:
We were fine with the construction.

[00:12:40] Speaker 01:
They objected to the construction saying you need a different construction.

[00:12:45] Speaker 01:
The court rejected the supplemental construction.

[00:12:48] Speaker 01:
They moved for a new trial for failure to give the supplemental instruction.

[00:12:53] Speaker 01:
That's not on appeal anymore.

[00:12:55] Speaker 01:
Now they're changing their tune saying, oh, the claim construction always meant this.

[00:13:01] Speaker 01:
The way this claim is structured is there's action at the transmitter and then action at the receiver.

[00:13:07] Speaker 01:
And we have to focus on the actual claim language, the actual charge.

[00:13:13] Speaker 01:
And if they're drawing all inferences in favor, if the substantial evidence supports it, the verdict should be reinstated.

[00:13:24] Speaker 01:
The claim construction that was given to the jury was a new value is used.

[00:13:31] Speaker 01:
That new value is in the first and second sequence.

[00:13:35] Speaker 01:
It doesn't say at the transmitter, it doesn't say at the receiver.

[00:13:39] Speaker 01:
It just says that the new value is in the first and second sequence.

[00:13:43] Speaker 01:
Dr. Yeager testified that in RC4 and the accused systems, the value used at the receiver is in the first and second sequence because it's symmetric.

[00:13:54] Speaker 01:
Because it has to be the same key value that's used to decrypt the block that was used to encrypt the block.

[00:14:01] Speaker 01:
So when we look at the actual ordinary language of the instruction that was actually given, it is a block or a new key value is used each time a predetermined number of blocks has been transmitted.

[00:14:15] Speaker 01:
Dr. Yeager testified and showed that that's exactly the case.

[00:14:19] Speaker 01:
Substantial evidence supports that.

[00:14:22] Speaker 03:
If, in fact, we were to believe that the trial courts

[00:14:26] Speaker 03:
clarification of its claim construction, and I'm going to use that word for now, but if we believe that the claim construction that showed up at the JMO is the correct one, do you agree that there was an absence of evidence to satisfy that construction?

[00:14:45] Speaker 01:
That claim construction would be erroneous, and I'll explain why.

[00:14:48] Speaker 03:
Assuming we don't think it was erroneous.

[00:14:52] Speaker 03:
Would there be evidence to support it?

[00:14:54] Speaker 01:
I'm not sure exactly what

[00:14:56] Speaker 01:
it is because there was no clarification set forth in the JML.

[00:15:00] Speaker 01:
So if you ask if JML... Well, if the timing aspect that you're complaining about... Well, it's specific.

[00:15:08] Speaker 03:
...was correct.

[00:15:10] Speaker 01:
So if it requires that the next key value is not used at the transmitter to encrypt a block until after an encrypted block has been sent, then

[00:15:25] Speaker 01:
I think then I'm not sure that substantial evidence supports that.

[00:15:31] Speaker 01:
Here's why that claim construction is wrong.

[00:15:33] Speaker 03:
I'll let you get there, because you've already told us why you think it's wrong.

[00:15:38] Speaker 03:
But my point is, if that had been the clear claim construction from the very beginning, would this have been a circumstance where you would have had to stipulate to non-infringement and send it up here to challenge the claim construction?

[00:15:54] Speaker 01:
The reason I'm not sure is there may be situations.

[00:15:59] Speaker 01:
This was not in evidence at trial.

[00:16:02] Speaker 01:
In discovery, if we had known about this, there may be situations where they are sent one block at a time.

[00:16:08] Speaker 01:
If there's only one block to send, it would be rare.

[00:16:12] Speaker 01:
So I don't know the answer.

[00:16:14] Speaker 01:
In general.

[00:16:14] Speaker 03:
Because I thought it was undisputed that the way that the allegedly infringing system works is that it was all sent collectively.

[00:16:22] Speaker 01:
It is undisputed that.

[00:16:25] Speaker 01:
Units are sent in packets when there are packets to send.

[00:16:28] Speaker 01:
There may be situations where a packet was so small that it was one block.

[00:16:31] Speaker 01:
I don't know that.

[00:16:33] Speaker 01:
I think it doesn't matter.

[00:16:34] Speaker 01:
So one, the court should not do claim construction because neither party appealed claim construction.

[00:16:39] Speaker 01:
But here's why that claim construction is wrong.

[00:16:42] Speaker 03:
But once you decided mid-trial that this was a dispute between you, couldn't you have asked that question of their expert or one of their witnesses?

[00:16:49] Speaker 03:
Does it ever happen?

[00:16:50] Speaker 03:
Could it possibly happen where one block is sent at a time?

[00:16:56] Speaker 01:
So it's probably a question that could be asked.

[00:17:00] Speaker 01:
I generally don't ask questions I don't know the answer to of opposing experts at trial.

[00:17:05] Speaker 01:
And under our view of the claim construction as it existed, it was not.

[00:17:09] Speaker 01:
And it was an irrelevant question.

[00:17:12] Speaker 01:
Can I tell you why the claim construction would be wrong?

[00:17:15] Speaker 01:
The claim construction would be wrong because it's inconsistent with the claims and inconsistent with the specification in a way that would exclude the preferred embodiments.

[00:17:24] Speaker 01:
So look at what we're doing.

[00:17:26] Speaker 01:
Look at what we're doing.

[00:17:28] Speaker 01:
So if you look at figure one, figure one shows that there's a block counter.

[00:17:36] Speaker 01:
The data source comes in.

[00:17:37] Speaker 01:
There's a block counter.

[00:17:38] Speaker 01:
The block counter sends an advanced signal to the pseudo-random number generator.

[00:17:43] Speaker 01:
At column three, it explains how this is working.

[00:17:48] Speaker 01:
And what it explains is that an advanced signal from the block counter

[00:17:53] Speaker 01:
at the transmitter is what is used to advance the keys.

[00:17:57] Speaker 01:
That happens prior to transmission.

[00:18:03] Speaker 01:
There is no disclosure anywhere in the specification of any feedback coming back to the transmitter or the pseudo-random generator in the transmitter of whether blocks have been sent, have been transmitted, have been received.

[00:18:19] Speaker 01:
There is no feedback, no teaching of that.

[00:18:21] Speaker 01:
The only teaching

[00:18:24] Speaker 01:
at the transmitter side is that advanced signal from the block counter that happens prior to transmission.

[00:18:33] Speaker 01:
And so it's inconsistent with the specification to read that limitation in the receiver section as applying to... I don't understand how this section relates to what occurs when a block is sent.

[00:18:55] Speaker 03:
This goes to the caveat that the magistrate judge put on the claim construction in the first instance was that it can be generated in advance and stored.

[00:19:09] Speaker 01:
I don't think so.

[00:19:10] Speaker 01:
So if I can take you to the claim, 1C says you generated first instance of pseudo-random key values at the transmitter.

[00:19:23] Speaker 01:
Then it says each new key value

[00:19:25] Speaker 01:
at the transmitter is produced at a time dependent on a predetermined characteristic of the data being transmitted over the link.

[00:19:33] Speaker 01:
So 1C tells you that you have to produce the new key value to encrypt the next block of data each time this predetermined characteristic is met at the transmitter.

[00:19:45] Speaker 01:
The specification describes that's based on the advanced signal from the block counter prior to transmission.

[00:19:52] Speaker 01:
There is no feedback.

[00:19:54] Speaker 01:
There's nothing disclosed in the specification that teaches advancing the key value at the transmitter only after a block has been transmitted over the link that has left the transmitter.

[00:20:08] Speaker 04:
OK, to move on.

[00:20:11] Speaker 04:
All right, let's hear from the other side, and we'll save you rebuttal time.

[00:20:14] Speaker 05:
Thank you, Your Honor.

[00:20:25] Speaker 00:
We agree with TQP's position that the facts are not disputed here.

[00:20:32] Speaker 00:
The district court was correct on that point.

[00:20:34] Speaker 00:
We also agree that claim construction isn't properly before the court now.

[00:20:39] Speaker 00:
We would disagree that TQP is not arguing claim construction.

[00:20:42] Speaker 00:
I think it's very clear that they are trying to reinterpret the claims

[00:20:45] Speaker 00:
in a number of ways that they were not constructed.

[00:20:47] Speaker 03:
Well, what about the fact that you actually asked for a supplemental claim construction and then said you were entitled to a new trial because you didn't get that supplemental claim construction?

[00:20:56] Speaker 03:
Doesn't that imply that the claim construction that went to the jury was missing something?

[00:21:01] Speaker 00:
I know it's TQP's position on what happened.

[00:21:03] Speaker 00:
I think the context really is that we were looking for a curative instruction from the district court at that point in time because prior to that bench conference,

[00:21:12] Speaker 00:
We had been struggling with the fact that Dr. Geiger had been offering testimony that was inconsistent with the claim construction as it already existed.

[00:21:22] Speaker 00:
Much of the testimony concerned his position that it referred to actions at the receiver only.

[00:21:27] Speaker 00:
He was implying that all that that claim requirement involved was the usage of the same key at the receiver that was used at some point earlier in the transmitter.

[00:21:37] Speaker 00:
And both of those, our view was, directly contradicted the key

[00:21:41] Speaker 00:
I should say not key, but the core requirements of the construction that have this causal relationship between using a new key and the act of transmission over the communication link.

[00:21:53] Speaker 00:
So we asked the district court to fix that, make sure that the jury understood that this isn't something just about the receiver and it requires more than just using the same key at one end or the other.

[00:22:03] Speaker 00:
So we believe the construction as applied to the district court post trial was consistent with what it meant all along.

[00:22:11] Speaker 00:
The plain meaning in our view is quite clear.

[00:22:13] Speaker 00:
The claim language itself cues the action of switching to a new key off of the active transmission.

[00:22:21] Speaker 00:
The construction emphasizes that characteristic.

[00:22:25] Speaker 00:
And the specification is very emphatic about the timing of switching from one key to the next.

[00:22:32] Speaker 00:
Because the setting in which this method would be used involved

[00:22:37] Speaker 00:
a stream of data.

[00:22:38] Speaker 00:
And if you look at the background of the patent that the district court discusses in the Markman order, it's at 839 through 41, we're talking about a stream of data blocks going across the communication link.

[00:22:48] Speaker 00:
And what mattered for purposes of this key management system in the method was that both the transmitter and the receiver knew at what point along that stream of data to switch from one key to the other.

[00:23:00] Speaker 00:
So as Mr. Fenster pointed out, the use of a block counter to monitor that data as it exited

[00:23:05] Speaker 00:
and transmitted over the communication link was the most important aspect of that so that the transmitter and receiver would know not at the same time to switch the key but at the same location along that day.

[00:23:17] Speaker 02:
Do you believe in the Jamal order in your favor that the district court modified or changed his earlier construction?

[00:23:24] Speaker 00:
No, that's not our position.

[00:23:25] Speaker 02:
What about the whole generation thing?

[00:23:26] Speaker 02:
Because that's really problematic.

[00:23:28] Speaker 02:
He should have used the word used and not generated.

[00:23:31] Speaker 02:
Is that just a simple mistake on his part?

[00:23:33] Speaker 02:
Because earlier, he did issue a construction about, I'm not adopting the generation argument.

[00:23:39] Speaker 00:
Well, yes, but I think that clarification about generation versus use was in a different setting.

[00:23:43] Speaker 02:
Let me say that clarification.

[00:23:45] Speaker 02:
I guess my issue to you is, did he clarify in the Jamal order his earlier construction?

[00:23:51] Speaker 02:
Did he change it?

[00:23:52] Speaker 02:
Did he modify it?

[00:23:54] Speaker 00:
No.

[00:23:54] Speaker 00:
I would answer no to that question.

[00:23:55] Speaker 00:
The clarification I meant, Your Honor, was in the original construction, where there was a distinction drawn between

[00:24:00] Speaker 00:
the act of transmitting and other steps that would be predicate to the encryption followed by the transmitting.

[00:24:07] Speaker 00:
The issue of generation, and I agree the district court did use that word a handful of times.

[00:24:10] Speaker 02:
And you wish you didn't, I'm sure, because it makes your case a little sloppier looking, because now you do defend his use of the word generation, or do you say he really meant used?

[00:24:20] Speaker 00:
No, I think he meant used, and I think the rest of the district court's opinion is very clear that Judge Gilstrap understood the issue.

[00:24:26] Speaker 00:
The key issue here, the core issue was that there

[00:24:30] Speaker 00:
a temporal requirement that triggers the usage based on transmission.

[00:24:35] Speaker 00:
He discussed the construction in a number of places.

[00:24:37] Speaker 00:
He did refer to use elsewhere.

[00:24:39] Speaker 00:
It was just an imprecise and unfortunate.

[00:24:42] Speaker 03:
Yeah, unfortunate is good on a number of levels here.

[00:24:47] Speaker 03:
I'm actually a little confused by the response to the debate that was joined at trial.

[00:24:55] Speaker 03:
it had to been pretty obvious that you all thought the construction meant one thing and they thought it meant something else.

[00:25:01] Speaker 03:
It's the court's job to clarify that construction.

[00:25:03] Speaker 03:
Why would the trial court or do you understand why the trial court said that's a question for the jury?

[00:25:09] Speaker 00:
Well, I think the main reason for that is that this discussion had happened before we even had the opportunity to cross examine TQP's expert on the issue.

[00:25:18] Speaker 00:
So given that this was being raised, you know, well before trial was even halfway done,

[00:25:24] Speaker 00:
the district court wanted to see if this was an issue that actually required intervention or not.

[00:25:30] Speaker 02:
And you don't think it was?

[00:25:32] Speaker 02:
Given that their expert was allowed to testify and you were allowed to cross-examine them on the notion that this can all be viewed receiver side and meet the claim limitations as construed.

[00:25:42] Speaker 00:
Well, I mean, our view was that the district court... No, your view is you wanted him to fix it in advance and he didn't.

[00:25:49] Speaker 02:
And now you're telling me you don't think he did anything different in the J-Mall either, i.e.

[00:25:52] Speaker 02:
fixed it, elaborated on it, expanded it, clarified it, whatever.

[00:25:55] Speaker 02:
And it's kind of confusing.

[00:25:59] Speaker 02:
And now you're standing here defending the fact that he didn't fix something that throughout you asked him to fix because you saw this problem coming with the expert being allowed to testify on something that was not within the way you viewed the claims.

[00:26:14] Speaker 00:
I don't think it's unfair to characterize what happened in the Jamal order as a clarification, but I agree with Judge O'Malley's earlier point that there's nothing wrong with that.

[00:26:22] Speaker 00:
Our view, though, is that the construction was clear on this point, and what we were trying to do during trial was... Where was it clear on this point?

[00:26:29] Speaker 02:
And if it was so clear, why wouldn't he have excluded the testimony of the expert, which clearly is to the contrary of what you assert the clear claim construction to be and what he seems to have said it is in the Jamal order?

[00:26:43] Speaker 02:
Where is it clear in the actual pre-JMOL order construction?

[00:26:48] Speaker 00:
Sure, I think it's very clear.

[00:26:49] Speaker 00:
It says a new key value in the first and second sequence is used each time a predetermined number of blocks have been sent from the transmitter.

[00:26:57] Speaker 00:
So a couple things that are very clear about that.

[00:26:59] Speaker 00:
One is the first and second sequence derive antecedent basis earlier in the claim.

[00:27:04] Speaker 00:
One is at said transmitter, and the other is at said receiver.

[00:27:08] Speaker 00:
So the idea of this receiver-centric view that TQB now advances on appeal

[00:27:12] Speaker 00:
was directly contradicted by the claim construction as it existed at the time.

[00:27:17] Speaker 02:
But one of them is at the transmitter.

[00:27:19] Speaker 02:
One's at the receiver.

[00:27:19] Speaker 02:
So your transmitter-centric view would be equally subject to criticism under that logic.

[00:27:25] Speaker 00:
I wouldn't say we tend to.

[00:27:26] Speaker 02:
And then it'd sort of sound like a fact question that maybe should have been left to the jury, if that's your argument.

[00:27:31] Speaker 00:
Well, you know, we don't have a transmitter or receiver-centric view.

[00:27:33] Speaker 00:
The claim clearly requires both.

[00:27:36] Speaker 00:
We only needed to show that one of them was not satisfied to demonstrate there was no literal infringement in this case.

[00:27:42] Speaker 00:
And the claim language was clear that it required actions in both sequences.

[00:27:45] Speaker 00:
I mean, what TQP is arguing is that because the contents of those sequences are the same, because they have to have the same key values in them, that that's all that is required is that the same key value be used.

[00:27:58] Speaker 00:
But because we're talking about monitoring a steady stream of data and finding where in the location of that stream to make the key change, it really matters a great deal to have actions taking place in both sequences at both locations

[00:28:11] Speaker 00:
at the appropriate time based on that predetermined characteristic.

[00:28:14] Speaker 03:
Let me ask you something that I had talked with your opponent on the other side about, or your friend on the other side about, and that is the question of if, in fact, this is the claim construction that we all understood all along, is there any conceivable mechanism by which your devices could infringe?

[00:28:35] Speaker 00:
If this being the one as characterized in the J-Mall, this is the one that stands.

[00:28:41] Speaker 00:
No, no, and certainly nothing that TQP ever argued.

[00:28:44] Speaker 03:
Well, you say there's no substantial evidence in the record and we'll accept the fact that the trial court reached that conclusion based on the claim construction as he understood it.

[00:28:56] Speaker 03:
My question is, had TQP understood that to be the claim construction all along, could they have put on a different case?

[00:29:03] Speaker 00:
Oh, I think the answer is no, because RC4 works on a one-byte to one-encryption key

[00:29:09] Speaker 00:
basis.

[00:29:10] Speaker 00:
So TQP had to take the position that the predetermined number of blocks that triggers the switch is one.

[00:29:15] Speaker 00:
And there is no evidence that TQP could have offered, and Mr. Fenster wasn't even considering this theory during trial, as he discussed a moment ago, that would transmit one byte at a time.

[00:29:30] Speaker 00:
There's simply no evidence of that.

[00:29:31] Speaker 00:
And I think an argument along those lines has been long since waived.

[00:29:34] Speaker 00:
So basically, in my mind, the fundamental difference between the 730 patent and what

[00:29:39] Speaker 00:
the new egg system does is the 730 patent triggers the change based on an active transmission.

[00:29:44] Speaker 00:
The modern system triggers the encryption change based on the previous active encryption.

[00:29:49] Speaker 00:
And that's how we end up with our unmasked encryption activity, then a transmission, and then an unmasked decryption activity.

[00:29:57] Speaker 00:
So the very act that triggers the switch is an entirely different point in the cycle of communication back and forth between these devices.

[00:30:06] Speaker 00:
So under any construction, the one that was given to the jury, or as if we call it a clarification, I don't think TQP could possibly argue because they are sort of stuck with the position that the predetermined number of blocks is one.

[00:30:20] Speaker 02:
Can I ask you a question about your cross-appeal?

[00:30:23] Speaker 02:
Is it correct?

[00:30:24] Speaker 02:
Do I understand it correctly that it is just an alternative argument?

[00:30:27] Speaker 02:
If you were to prevail on the j-mall of no infringement, then we would not be deciding the validity question?

[00:30:35] Speaker 00:
Yes, that's correct, Your Honor.

[00:30:45] Speaker 00:
One more point back to Judge O'Malley had a discussion with Mr. Fenster about generation.

[00:30:50] Speaker 00:
I just want to indicate that we agree that the discussion about generation in the patent was being referred to had to do much more with the buffering concept of preparing a store of key values that could be used at some time in the future.

[00:31:03] Speaker 00:
our non-infringement position was never based on the timing of the key generation, but as given the construction, the timing of the usage of those keys.

[00:31:11] Speaker 00:
So any sort of buffering activity would be fine and doesn't really touch on the core issue that's in front of the court with this construction as it was given.

[00:31:20] Speaker 00:
So the buffering issue is fine with us.

[00:31:22] Speaker 00:
It doesn't really change our position one way or the other.

[00:31:25] Speaker 00:
Also, at the end of the day, I think what TQP offers as substantial evidence is

[00:31:32] Speaker 00:
no more than Dr. Jaeger offering his conclusory assertion that the claim requirements have been met.

[00:31:39] Speaker 00:
I think when you look at what the parties understood the technology to be and what the correct claim construction actually is, that doesn't get TQP nearly far enough to support a jury verdict of infringement.

[00:31:52] Speaker 00:
Dr. Jaeger later conceded on cross-examination the fundamental difference between

[00:31:59] Speaker 00:
the RC4 one byte at a time, and mass encryption and transmission, distinguishing that from what is done in the patent that monitors a stream of data and does the block counting, as Mr. Fenster described.

[00:32:14] Speaker 00:
If the court has no further questions about non-infringement, we're happy to yield our time on the cross appeal unless the court has questions on that as well.

[00:32:21] Speaker 04:
Do you want to talk about the cross appeal or rely on the briefs?

[00:32:25] Speaker 00:
If the court has no questions, we'll rely on the briefs for that.

[00:32:28] Speaker 04:
OK.

[00:32:29] Speaker 00:
Thank you.

[00:32:31] Speaker 04:
Okay.

[00:32:31] Speaker 04:
Thank you, Mr. Breen.

[00:32:34] Speaker 04:
Okay, Mr. Fenster, let's put three minutes for rebuttal and just on the main appeal then.

[00:32:42] Speaker 01:
Your Honor, three points.

[00:32:44] Speaker 01:
First, yours is a de novo review.

[00:32:48] Speaker 01:
Don't get bogged down in the JMAAL order.

[00:32:52] Speaker 01:
Yours is a JMAAL review and you should be applying the actual charge as given.

[00:32:58] Speaker 01:
The ordinary meaning of the actual charge does not say at the transmitter.

[00:33:03] Speaker 01:
It says a new key value is used each time a predetermined value has been sent.

[00:33:09] Speaker 01:
It doesn't say at the transmitter.

[00:33:11] Speaker 01:
It doesn't say at the receiver.

[00:33:12] Speaker 01:
It just requires that it's a new key value in first and second sequence.

[00:33:17] Speaker 01:
Newegg would have you rewrite that as a new key value in the first sequence is used at the transmitter each time, and a new key value is used in the second sequence at the receiver each time.

[00:33:31] Speaker 01:
That's not what it says.

[00:33:33] Speaker 01:
It says a new key value, singular, is used singular, where that new key value is in the first and second sequence.

[00:33:43] Speaker 01:
Your de novo job

[00:33:45] Speaker 01:
is to compare the evidence to that language, the plain language of that charge.

[00:33:51] Speaker 01:
And your honors, I submit that the evidence is more than substantial to show that.

[00:33:56] Speaker 01:
Dr. Yeager testified exactly that, that each time a predetermined number of blocks is received, a new key value is used.

[00:34:05] Speaker 01:
He testified that the new key value that's used at the receiver is in the first and second sequence.

[00:34:12] Speaker 01:
That is the jury question.

[00:34:16] Speaker 01:
whether a new key value that's used at the receiver each time a predetermined number of blocks have been sent, that key value being in the first and second sequence, whether that meets that limitation.

[00:34:34] Speaker 01:
That was the jury question.

[00:34:36] Speaker 01:
That was the substantial evidence.

[00:34:38] Speaker 01:
And drawing all inferences in favor of the verdict as you must, that substantial evidence requires

[00:34:46] Speaker 01:
reinstatement of the verdict of infringement.

[00:34:52] Speaker 01:
The substantial evidence that shows besides at 3397 and 98, Dr. Yeager's testimony was not at all conclusory.

[00:35:11] Speaker 01:
He testified that the block of data, this is at 3292, the block of data is the predetermined characteristic of the transmitted data.

[00:35:19] Speaker 01:
This will cause a new value in the second sequence to be produced.

[00:35:24] Speaker 01:
He testified that RC4 encrypts each block of data with a new key.

[00:35:29] Speaker 01:
That's at 3284.

[00:35:30] Speaker 01:
He testified that the new age system has a method for tracking the number of blocks and that that's

[00:35:37] Speaker 01:
integrated into the RC4 algorithm.

[00:35:40] Speaker 01:
That's at 3335.

[00:35:43] Speaker 01:
He testified that he applied the court's claim construction.

[00:35:46] Speaker 01:
He testified that the second sequence is identical to the first sequence because the same pseudorandom number generator is used and both transmitter and the receiver received the same seed.

[00:35:59] Speaker 01:
He gave backup to testify, to justify his interpretation and his conclusion and his testimony.

[00:36:08] Speaker 01:
his evidence that a new key value is used at the receiver each time a block, the predetermined number of blocks, has been received, have been sent, and that that new key value is in the first and second sequence.

[00:36:27] Speaker 04:
Okay, we need to move on.

[00:36:28] Speaker 04:
We have the argument.

[00:36:31] Speaker 04:
I think we're repeating ourselves.

[00:36:34] Speaker 04:
Thank you both.

[00:36:35] Speaker 04:
The case is taken under submission.

[00:36:37] Speaker 04:
Take the cross-appeal on the briefs.

[00:36:40] Speaker 04:
Thank you.