[00:00:00] Speaker 01: Before we begin the argument this morning, we have a motion from Judge Hughes concerning admission to two of his law files. [00:00:13] Speaker 04: I have a couple of admissions this morning. [00:00:15] Speaker 04: This morning, two of my law clerks are finishing up tomorrow and starting their careers, both in California, actually, after pulling some time off between now and then. [00:00:27] Speaker 04: The great clerks, it's been great having them in chambers this year. [00:00:30] Speaker 04: They've done a really good job, and I'm going to miss them. [00:00:33] Speaker 04: So I move the admission of Pushkal Mishra, who is a member of the bar and is in good standing with the highest courts of California and New York. [00:00:41] Speaker 04: I have knowledge of his credentials, and I'm satisfied that he possesses the necessary qualifications. [00:00:47] Speaker 04: And I move the admission of Jordan Lamothe, who's a member of the Bar and is in good standing with the highest state court of California. [00:00:55] Speaker 04: I have knowledge of his credentials, and I'm satisfied that he possesses the necessary qualifications. [00:01:02] Speaker 04: Judge Wong. [00:01:03] Speaker 03: Judge Hughes has spoken very highly of both of you, and that's good enough for me. [00:01:09] Speaker 01: All right, your motion is granted. [00:01:11] Speaker 01: Mr. Mishra, Mr. LaMotte, welcome to the bar of this court. [00:01:15] Speaker 01: And congratulations on your year of clerkship. [00:01:19] Speaker 01: And thank you for your service to the court. [00:01:23] Speaker 04: Thank you. [00:01:25] Speaker 04: You're very bright, man. [00:01:27] Speaker ?: You sound most worthy of being able to hold yourself as an attorney in this court. [00:01:31] Speaker ?: I'd like to give the floor to the law. [00:01:32] Speaker ?: I know you support the Constitution. [00:01:38] Speaker ?: Thank you. [00:01:38] Speaker ?: Congratulations. [00:01:38] Speaker ?: Thank you. [00:01:43] Speaker 01: Now, we have four argued cases this morning. [00:01:46] Speaker 01: The first of these is 16, 24, 15, Asghari from Rani, which is United States. [00:01:56] Speaker 01: Mr. Pate, or Ms. [00:02:06] Speaker 00: Pate, excuse me. [00:02:07] Speaker 00: Good morning, Your Honors, and may it please the Court [00:02:09] Speaker 00: In this appeal from the Eastern District of Virginia, the District Court improperly decided a patentability issue that had embedded factual questions. [00:02:23] Speaker 01: The District Court... What are the factual questions, and where did you tell us in the brief what the factual questions were? [00:02:30] Speaker 00: Your Honor, the factual question related to whether the technology was well understood, routine, and conventional. [00:02:39] Speaker 00: And that is an issue we briefed throughout our appeal briefs and indicated that the district court erroneously raised that issue. [00:02:48] Speaker 03: Where in the brief or below do you offer the contents of expert testimony and explain how that would render the 432 patent eligible under 101? [00:03:01] Speaker 00: Your Honor, during the briefing on the 101 issue, on the motion to dismiss, [00:03:05] Speaker 00: Our primary focus was on claim construction and the issue about the convention. [00:03:12] Speaker 01: Answer the question. [00:03:13] Speaker 01: Where in your brief do you tell us what expert testimony would disclose about this that you wanted the district court to consider? [00:03:22] Speaker 00: Your Honor, we will certainly get that. [00:03:25] Speaker 00: I don't know. [00:03:25] Speaker 00: Your Honor. [00:03:31] Speaker 03: While you're at it. [00:03:32] Speaker 03: Where in your brain you argue how claim construction would change the 101 inquiry? [00:03:37] Speaker 00: Your Honor, getting back to the earlier question, I, of course, will get to your question. [00:03:41] Speaker 00: Our focus really isn't on the expert testimony. [00:03:44] Speaker 00: That was my claim. [00:03:45] Speaker 00: Our focus is on claim construction. [00:03:47] Speaker 00: That was the focus of our appeal, and that was the focus of our issue. [00:03:50] Speaker 03: So you don't rely on any expert testimony? [00:03:52] Speaker 00: We're not relying on expert testimony at this stage on 101, because remember, it's taking- So you're agreeing there's no fact issue here? [00:04:00] Speaker 00: I'm not, Your Honor. [00:04:01] Speaker 00: Absolutely. [00:04:02] Speaker 01: Then why don't you raise the fact issue? [00:04:04] Speaker 00: Your Honor, it's a motion to dismiss. [00:04:06] Speaker 00: We can't raise expert testimony at that very early stage. [00:04:11] Speaker 00: It's about a motion for judgment on the pleadings. [00:04:14] Speaker 00: And so it's improper to raise that. [00:04:16] Speaker 00: We can and did indicate that it's a fact issue below. [00:04:20] Speaker 04: How is it a fact issue if you're talking about claim construction? [00:04:24] Speaker 04: Claim construction, absent extrinsic evidence, is a question of law. [00:04:28] Speaker 04: It sounds like it's entirely appropriate to raise on a 12b6 motion. [00:04:33] Speaker 00: Your Honor, there's two pieces to your question. [00:04:35] Speaker 00: Let me parse them out. [00:04:37] Speaker 00: First, with respect to claim construction, as this Court has stated previously, often it's important to construe the claims in order to engage in the Alice analysis. [00:04:47] Speaker 00: And our position is claim construction needed to occur in this case. [00:04:51] Speaker 01: Yeah, but is this just an abstract statement? [00:04:53] Speaker 01: I understand that there are two points that you're making here. [00:04:56] Speaker 01: But now that we're on the claim construction, let's talk about that. [00:04:59] Speaker 01: What claim construction should the district court have done, which it didn't do, which would have made this case different from your point of view? [00:05:09] Speaker 01: What's the claim construction? [00:05:11] Speaker 03: And wasn't the claim construction that the district court used yours? [00:05:17] Speaker 00: Your Honor, the district court didn't use our claim construction. [00:05:20] Speaker 00: It didn't actually engage in claim construction. [00:05:23] Speaker 00: It simply stated as a conclusory statement that even if it took it in our favor, there would still be a 101 issue. [00:05:30] Speaker 01: What claim construction? [00:05:33] Speaker 01: You make these general statements that they should have engaged in claim construction. [00:05:37] Speaker 01: What claim construction did you suggest which would have made a difference in terms of the 101 analysis? [00:05:45] Speaker 00: Your Honor, the external entity, the central entity, the user, the understanding of transaction. [00:05:53] Speaker 01: Where do you argue that? [00:05:54] Speaker 01: Where in your brief do you argue that a specific claim construction should have been undertaken, which wasn't? [00:06:02] Speaker 00: Your Honor, we argue in our brief that there are a number of hotly contested claim constructions. [00:06:08] Speaker 00: And each of those claim constructions are relevant to understanding the scope under ALICE Step 2. [00:06:13] Speaker 01: OK, but just show me. [00:06:13] Speaker 01: Just show me. [00:06:15] Speaker 01: you argue for a particular claim construction that would have made a difference for you. [00:06:27] Speaker 00: Your Honor. [00:06:27] Speaker 03: And let me turn you to 16 at the bottom where you say the district court purported to evaluate patent eligibility only under the construction proposed by plaintiff's appellants. [00:06:40] Speaker 03: That's you, right? [00:06:42] Speaker 03: This was improper. [00:06:45] Speaker 00: It was improper for many reasons, Your Honor. [00:06:48] Speaker 01: For one, the district court didn't actually engage in... Let's take one thing at a time. [00:06:54] Speaker 01: Where in the brief do you argue for a particular claim construction that wasn't adopted that would have made a difference? [00:07:02] Speaker 00: Your Honor, when we are discussing the issue in the background section, we cite a number of claim constructions. [00:07:11] Speaker 00: And in particular, I believe it's on page eight, [00:07:14] Speaker 00: of our opening brief. [00:07:24] Speaker 00: I'm sorry. [00:07:24] Speaker 00: And in addition, I'm sorry, on page five and six, the district court treated independent claim one as representative and then went on to describe what the claim means. [00:07:40] Speaker 00: And I want to tie this to the second issue. [00:07:42] Speaker 01: Where in the brief do you argue that the district court should have adopted a particular claim construction that would benefit you? [00:07:50] Speaker 01: I don't see it. [00:07:51] Speaker 01: And you're fumbling around. [00:07:53] Speaker 01: You're not showing me where there is such an issue that's raised here. [00:07:58] Speaker 00: I will say this, Your Honor. [00:08:01] Speaker 00: The claim construction issue is really not the focus of our appeal. [00:08:07] Speaker 00: The focus of our appeal... That's what you just got up here. [00:08:09] Speaker 04: You said that the first important thing is that this should have been done under claim construction. [00:08:14] Speaker 00: Let me make clear. [00:08:14] Speaker 00: I apologize. [00:08:16] Speaker 00: There are two issues here. [00:08:17] Speaker 00: One is there are disputed claim terms between the parties. [00:08:23] Speaker 00: And as this court has recognized, when there are disputed claim terms, it's improper... They don't matter. [00:08:30] Speaker 04: If the claim construction issues don't matter, then the fact that you two may dispute it for purposes of infringement and unlike does nothing to the eligibility analysis. [00:08:39] Speaker 04: I read what you said on page six. [00:08:40] Speaker 04: That's apparently your description of what your invention does. [00:08:44] Speaker 04: And there's nothing in your own description on page six that leads me to think this is an eligible invention. [00:08:50] Speaker 04: Point me to where you said this claim, specific claim construction that the district court refused to adopt would have led to a contrary conclusion on eligibility. [00:09:00] Speaker 00: Your Honor, there are several places where we talk about the claim constructions that matter. [00:09:07] Speaker 01: In particular... Let's start with one. [00:09:10] Speaker 00: Where is it? [00:09:13] Speaker 00: One of the issues relates to page 21, where we talk about the technological solution to a technological problem. [00:09:21] Speaker 00: External entity. [00:09:22] Speaker 00: We describe what an external entity is. [00:09:24] Speaker 00: We describe what a central entity is. [00:09:28] Speaker 00: We describe on page 23 and 24 how claim construction is relevant to the question of whether computers are fundamentally different from humans and therefore we have a situation where you need to understand the scope of the claims in order to understand whether this was something that was cognizable. [00:09:50] Speaker 01: What is the specific claim construction you say should have been adopted? [00:09:54] Speaker 00: Your Honor, it's implicit in the arguments we're making about what... We can't deal with implicit arguments. [00:10:02] Speaker 01: Explicit. [00:10:02] Speaker 01: Where do you make it explicit that there's a specific claim construction that should have been adopted that would have helped you and that wasn't adopted? [00:10:15] Speaker 00: Your Honor, it's throughout the brief in the sense that we describe our understanding of the claim terms and what they mean. [00:10:23] Speaker 04: And with respect- And how does your understanding of those claim terms differ from what the district court relied on to reach its ineligibility analysis? [00:10:32] Speaker 04: Because it seems to me he described your invention in the exact same way that you do. [00:10:38] Speaker 00: Your Honor, actually, the way he described our invention is through a hypothetical that was created by USAA. [00:10:44] Speaker 00: That hypothetical was then modified by the judge in order to describe what the claim terms mean and to apply 101. [00:10:52] Speaker 00: And that's improper. [00:10:53] Speaker 04: Remember, the purpose of the... Can you give us any... I mean, we spent at least five minutes trying to get specifics from you on this. [00:11:00] Speaker 04: External entity, for instance. [00:11:01] Speaker 04: Can you give us one specific example of how a claim construction of external entity based upon the claim language and the specifications would change the outcome here? [00:11:13] Speaker 00: Yes, Your Honor. [00:11:14] Speaker 00: The external entity understanding, whether it's a particular entity that's focused on [00:11:21] Speaker 00: goods or services and how that entity interacts with the central entity as well as the user. [00:11:29] Speaker 00: That helps us understand the physical concrete nature [00:11:32] Speaker 00: of the external entity. [00:11:34] Speaker 04: That does nothing to the eligibility analysis because the abstract idea here is third party authentication. [00:11:40] Speaker 04: You can describe external entity in any way you want. [00:11:44] Speaker 04: It can be a bank, it can be a person, it can be whatever. [00:11:48] Speaker 04: That's not what these claims are about. [00:11:50] Speaker 04: They're about third party authentication and that's an abstract idea and pointing to a specific computer [00:11:56] Speaker 04: a specific location and putting those conventional things, and you can object all you want that they're conventional, but I fail to see how a bank and a computer aren't conventional. [00:12:07] Speaker 04: Those don't render the abstract idea of third party authentication patent eligible. [00:12:13] Speaker 04: This is why claim construction doesn't matter in this case. [00:12:15] Speaker 04: You can tell me whatever you want to define external entity and central entity. [00:12:21] Speaker 04: It's not going to make this abstract idea of authentication any more concrete. [00:12:27] Speaker 04: It's certainly not going to improve computer functioning because this isn't directed at computer functioning. [00:12:33] Speaker 04: It's directed at authentication of identity. [00:12:38] Speaker 00: Your Honor, it is absolutely directed towards authentication of identity. [00:12:43] Speaker 00: And I want to get back to this question about where we raise this issue below. [00:12:48] Speaker 00: So in the disputed claim terms below, the question of dynamic code. [00:12:54] Speaker 01: The question actually was where you raised it in your blue brief. [00:12:58] Speaker 01: You've got to argue it in the brief if you want to preserve it. [00:13:02] Speaker 01: And so far, you've been unable to show us any language, explicit language, saying there was a mistake about claim construction, and we offered this claim construction, and it wasn't adopted, and it would have made a difference. [00:13:18] Speaker 01: You can't raise the issue without presenting it that way. [00:13:24] Speaker 00: I understand, Your Honor. [00:13:26] Speaker 00: Let me get to the second piece here relating to the embedded factual issue. [00:13:31] Speaker 00: That's a separate question that this court needs to consider. [00:13:34] Speaker 03: I have a bunch of questions I want to ask you, and I want to turn to those. [00:13:38] Speaker 03: Sure. [00:13:39] Speaker 03: About inequitable conduct. [00:13:41] Speaker 03: At JA 3397 and 98, there's a copy of the petition to accept an unintentionally delayed benefit claim filed before the USPTO [00:13:52] Speaker 03: And it's alleged to be a pro se filing by Mrs. Asgari Kamrani. [00:14:02] Speaker 03: At JA 3921, Mr. Kamran, Asgari Kamrani, testified that they, quote, received a sample draft from Mr. Rhys Neenstad. [00:14:16] Speaker 03: Am I saying that right? [00:14:18] Speaker 03: Yes, Your Honor. [00:14:19] Speaker 03: Yeah. [00:14:19] Speaker 03: Who is appellate counsel. [00:14:21] Speaker 03: and whose name is listed on the appellate briefs. [00:14:24] Speaker 03: Answers to the interrogatories also demonstrate that Mr. Neenstad had a role in preparing this allegedly pro se submission. [00:14:32] Speaker 03: Why isn't that a fraud by Mr. Neenstad for helping to prepare those submissions? [00:14:37] Speaker 00: It's not a fraud, Your Honor, because it's not inappropriate for trial counsel to help the inventors prepare a document that they then file with the USPTO. [00:14:48] Speaker 00: And this is something that happens regularly. [00:14:51] Speaker 00: It's not a violation of the rules. [00:14:53] Speaker 00: And what the fact testimonial trial demonstrated is the reason why they filed it pro se is because their prosecution counsel at the time was unavailable. [00:15:03] Speaker 00: And they wanted to get it filed hastily in all due speed, given the situation with a priority claim. [00:15:11] Speaker 03: In the yellow brief at 20, you observed that the district court peppered the record [00:15:17] Speaker 03: with observations that the USPTO operates without ethics, ellipsis, and ellipsis, the ADA model rules are practically worthless. [00:15:31] Speaker 03: Where does the record support either of those characterizations? [00:15:34] Speaker 03: Because I read it closely. [00:15:38] Speaker 00: Your Honor, with respect to that quote, it's an argument about the ethical issues. [00:15:45] Speaker 03: The quote is made up. [00:15:47] Speaker 03: Is it not? [00:15:49] Speaker 00: I don't believe so, Your Honor. [00:15:51] Speaker 03: Then where does the district judge say the model rules are, quote, practically worthless? [00:16:00] Speaker 00: It is a quote from the hearing transcript and from the five-day trial, Your Honor. [00:16:07] Speaker 03: Where is it? [00:16:16] Speaker 03: And I have tons of questions about the record. [00:16:19] Speaker 03: I have to tell you. [00:16:21] Speaker 03: So let me short circuit for you. [00:16:26] Speaker 03: Appendix 3689, please turn to it. [00:16:42] Speaker 00: I apologize, Your Honor. [00:16:43] Speaker 00: This is a numerous appendix. [00:16:54] Speaker 03: You want me to read it to you to save you the time? [00:16:57] Speaker 03: The ABA has pretty much eviscerated most of the tough rules. [00:17:04] Speaker 03: Where does the court say they're practically worthless? [00:17:08] Speaker 03: You can't just make up language. [00:17:16] Speaker 03: And I have a bunch of questions about made up language. [00:17:19] Speaker 00: Your Honor, if you look at 3689, you see that Mr. Pearson is talking about the commissioners and making an argument about the standards and ethical... I did look at it, believe me. [00:17:33] Speaker 03: So where does the court say, practically worthless? [00:17:43] Speaker 00: My recollection, Your Honor, is that is part of the larger discussion. [00:17:49] Speaker 00: You have the page in front of you. [00:17:53] Speaker 00: I do, Your Honor. [00:17:54] Speaker 00: You cited to it. [00:18:00] Speaker 00: There could have been a situation with the closing of a quote, Your Honor. [00:18:04] Speaker 00: I'm not seeing it on that specific page. [00:18:08] Speaker 03: You cited to that specific page. [00:18:13] Speaker 03: Let's keep going. [00:18:15] Speaker 00: My recollection and trial counsel's recollection is it's a quote from the [00:18:19] Speaker 00: the trial transcript. [00:18:24] Speaker 00: But I understand you have another question, Your Honor. [00:18:26] Speaker 00: Are you testifying? [00:18:27] Speaker 00: I'm not, Your Honor. [00:18:28] Speaker 00: I'm providing my understanding of... Okay. [00:18:31] Speaker 03: In contending that the district court demonstrated bias against your clients, you also argue that, quote, the district court forbade Appellants' Council from asking leading questions to Mr. Godici? [00:18:45] Speaker 03: Godici. [00:18:48] Speaker 03: trial counsel claimed that you could ask leading questions because Mr. Godici was an adverse witness. [00:18:57] Speaker 03: And the district court judge rejected that position. [00:19:02] Speaker 03: District court said, I've already ruled he's your witness for these questions. [00:19:06] Speaker 03: Where did you challenge the district court's finding that Mr. Godici was not an adverse witness? [00:19:12] Speaker 03: Where in the record is that? [00:19:14] Speaker 00: Your Honor, we're not challenging that on appeal. [00:19:16] Speaker 03: OK, then how did that demonstrate bias against your clients? [00:19:20] Speaker 00: Your Honor, the focus from a bias perspective is on other comments that the court made, including questioning whether the inventors were foreign, changing... OK, let's turn to that. [00:19:33] Speaker 03: It's in the ensuing case after this one. [00:19:38] Speaker 03: But let's turn to that, because I can remember the record [00:19:42] Speaker 03: pretty clearly, the part about being foreign, you say? [00:19:48] Speaker 00: Yes, Your Honor. [00:19:49] Speaker 00: At one point, he questioned the citizenship and origin of the individual inventors. [00:19:56] Speaker 03: And I read that site to that page. [00:19:58] Speaker 03: And in fact, it followed a line which was omitted in which the witness said that he didn't speak English very well. [00:20:08] Speaker 03: Isn't that correct? [00:20:10] Speaker 00: Your Honor, that is my recollection as well. [00:20:13] Speaker 03: And wasn't the court simply inquiring about the ability of the individual to speak English? [00:20:20] Speaker 00: I can't speak as to the court's thought about the situation. [00:20:24] Speaker 03: Okay, then we'll go to that record when we get to the next case and you can explain it. [00:20:29] Speaker 03: Because I think it's crystal clear that that's a direct misrepresentation to this court that you're making. [00:20:38] Speaker 00: We disagree, Your Honor. [00:20:39] Speaker 00: I apologize if the Court feels that way. [00:20:42] Speaker 00: There is no intention to misrepresent. [00:20:46] Speaker 03: In the yellow brief at 21, you contend the district court made a sui sponte finding that Mr. Neenstad had engineered a conspiracy among appellants and non-party witnesses. [00:20:58] Speaker 03: You cite to JA 4167 where the district court said it's sufficient enough evidence to pose a conspiracy. [00:21:06] Speaker 03: If I could figure out why he did it, and that's why I'm listening to all the evidence, how does that constitute a sui sponte finding of conspiracy? [00:21:16] Speaker 00: Your Honor, given the context and how the judge raised it, do you understand what a finding is, like a finding of fact or a conclusion of law? [00:21:27] Speaker 00: I do, Your Honor. [00:21:28] Speaker 03: So how is that a finding? [00:21:29] Speaker 00: It's his view of how... It's an observation by a judge. [00:21:35] Speaker 03: You know the difference, don't you? [00:21:36] Speaker 00: I understand, Your Honor. [00:21:37] Speaker 00: We didn't mean to imply that it's a finding of fact. [00:21:40] Speaker 03: You just used the word willy-nilly. [00:21:46] Speaker 00: Your Honor, within the context we were using it, we did not indicate that it's a finding of fact. [00:21:52] Speaker 00: And in fact, the issue, remember, was inequitable conduct, right? [00:21:57] Speaker 00: certain findings of fact relating to that issue. [00:22:00] Speaker 03: In the gray brief at 20, USAA alleges that Mr. Neenstad and his law firm have a direct financial stake in the outcome of this litigation. [00:22:08] Speaker 03: And the transcript at JA4055 includes testimony from Mr. Nader Asgari. [00:22:16] Speaker 03: Am I saying their names correct? [00:22:17] Speaker 00: Asgari, Kamrani. [00:22:19] Speaker 03: Yeah, Kamrani. [00:22:19] Speaker 03: OK. [00:22:21] Speaker 03: Identifying May and Mark as having a financial interest in this litigation. [00:22:26] Speaker 03: Do you dispute that May and Mark, as well as Mr. Neenstad, have a direct financial interest in this litigation? [00:22:32] Speaker 00: We don't, Your Honor. [00:22:33] Speaker 00: Our point is it's irrelevant. [00:22:38] Speaker 01: We're well over the time. [00:22:40] Speaker 03: I know. [00:22:40] Speaker 03: I have lots more for the other cases. [00:22:44] Speaker 01: Okay. [00:22:44] Speaker 01: Well, we'll hear from the others. [00:22:46] Speaker 00: Thank you, Your Honors. [00:22:54] Speaker 01: Mr. Davis. [00:23:03] Speaker 02: Good morning, your honors, and may it please the court. [00:23:06] Speaker 02: I will start briefly with the 101 appeal. [00:23:12] Speaker 02: The answer to your honor's question is we could not find anywhere in the blue brief where they specifically appealed a Markman construction issue either, and neither did they raise a specific issue in the briefing and the argument before the district court. [00:23:30] Speaker 02: the court so found and final two pages of its brief, excuse me, of its order. [00:23:37] Speaker 02: Here, Your Honors, the 432 patent recites an abstract idea of authenticating a user, and we don't believe that this is a case that falls under the rubric of either Burkheimer or Atrix that counsel referenced in their 28-J letter yesterday, and so we believe that the one-on-one decision should be affirmed. [00:24:00] Speaker 01: We're turning to the issue of inequitable conduct. [00:24:03] Speaker 01: Would you look at 2454 of the appendix? [00:24:10] Speaker 01: One of the key findings here by the district judge as to why some of these misstatements were inadvertent rather than intentional. [00:24:26] Speaker 01: relates to the claim of priority to the 837 application, which was not co-pending. [00:24:32] Speaker 01: I think everybody agrees with that at this point. [00:24:35] Speaker 01: And what he says at the top of the page there is this plaintiffs know that even experts in PTO procedure testify inconsistently as to whether a patent application could claim priority to claims that aren't co-pending. [00:24:52] Speaker 01: Is there such testimony in the record that [00:24:54] Speaker 01: experts have different views about whether you can claim priority to something that isn't co-pending. [00:25:01] Speaker 01: That's kind of a surprise to me. [00:25:04] Speaker 02: I'm sorry, it was your honor's question. [00:25:08] Speaker 02: I think that is a surprise, your honor, and while I don't have a specific site in the record where that would have come up, I can tell you generally where it did. [00:25:16] Speaker 01: One of the... Well, yeah, I do want specific sites. [00:25:20] Speaker 01: I mean, is the [00:25:24] Speaker 01: uh... suggestion here that experts testified permissible which seems to be an important building block of the district [00:25:41] Speaker 01: I'm not sure that there is such inconsistent testimony. [00:25:46] Speaker 02: Is there? [00:25:47] Speaker 02: I don't believe there is, Your Honor. [00:25:48] Speaker 02: I think what the district court was confused about. [00:25:51] Speaker 02: There was certainly no testimony about that in this case below in the bench trial. [00:25:57] Speaker 02: What happened was one of the witnesses that USAA put on was Mr. Gaudisi. [00:26:01] Speaker 02: I mean, it's a soft C. And counsel attempted to impeach Mr. Gaudisi [00:26:08] Speaker 02: with testimony they found on Westlaw or Lexus from another case. [00:26:14] Speaker 02: And our belief was at the time [00:26:19] Speaker 02: that the other side mischaracterized that testimony, and I think that the judge respectfully may have been confused about the point that they were making, but at no time in this case, in the record before this court, was there any such testimony. [00:26:34] Speaker 02: In fact, the testimony from Mr. Godici, as well as the testimony of the plaintiff's patent law expert, also a former commissioner, [00:26:45] Speaker 02: Mr. Dickinson was consistent about the copendency requirement. [00:26:51] Speaker 02: Did you raise this point in your brief? [00:26:54] Speaker 02: I do not believe that we raised that specific point in our brief, Your Honor. [00:26:59] Speaker 02: Maybe we should have. [00:27:01] Speaker 02: Sounds like maybe we should have. [00:27:04] Speaker 02: But Your Honor seizes on what we believe is the key foundation and building block of the inequitable Conway case, and that is [00:27:12] Speaker 02: that the district court committed an error by not beginning and looking through the lens of the fact that. [00:27:20] Speaker 02: And the law. [00:27:21] Speaker 02: And the law. [00:27:22] Speaker 02: But unless the plaintiffs here could claim priority back to the original 837 patent, there's no way that the 432 patent could be valid because it's in Hayek-Verba the same specification. [00:27:37] Speaker 01: And so, viewed through that lens, the... Well, if they could trace priority back through one of the other patents, like the 129, they could get the priority date, right? [00:27:48] Speaker 02: Well, they could, and that's what they tried to do eventually. [00:27:55] Speaker 02: And that was one of the issues and one of the challenges. [00:27:58] Speaker 02: Obviously, there were a number of issues that we raised in our briefing [00:28:02] Speaker 02: One that I just want to point out that more specifically on the 129 patent is that over the course of the prosecution of these patents, even up into the trial, the plaintiffs and inventors continually switched patent lawyers. [00:28:19] Speaker 02: And one of the lawyers that they used was Mr. Fort Court. [00:28:22] Speaker 02: And when Mr. Fort Court took over, on the day that he took over, [00:28:27] Speaker 02: He actually filed a power of attorney at the patent office in the application for both the 129 and what became the 432 patent. [00:28:40] Speaker 02: On the same day, he filed terminal disclaimers in those two pending applications. [00:28:47] Speaker 02: And so any reasonable patent lawyer would know and would understand that if the same lawyer filed powers of attorneys and those two separate pending applications on the same day, [00:28:58] Speaker 02: and inter-terminal disclaimers on the same day, that that attorney understood that those were related applications. [00:29:06] Speaker 01: OK, but that relates to the unintentional delay question. [00:29:10] Speaker 01: If they had listed, if they had claimed priority back to the 837 in the original application, relying on the 129 application, which was co-pending, what would have been wrong with that? [00:29:23] Speaker 01: Anything? [00:29:24] Speaker 02: I think the problem would have been, Your Honor, that as the PTAB subsequently found, that it's not a continuation in part because... No, no, I understand that, but that's just terminology to some extent that's for the benefit of panelists. [00:29:41] Speaker 01: Just answer my question substantively. [00:29:44] Speaker 01: If they had relied on the 129 in the original application and claim priority through the 129 to the 837, [00:29:52] Speaker 01: Would there have been anything wrong with that? [00:29:54] Speaker 02: I don't think there would have been anything wrong with that from an inequitable conduct standpoint. [00:30:00] Speaker 02: I think that the problem is that the rules at the patent office under 37 CFR 1.78 require that if there's been a mistake before the patent office and there is a delay in correcting that mistake, that you must [00:30:18] Speaker 02: file a sworn affidavit that says that the delay was unintentional. [00:30:22] Speaker 02: And the problem here is that the inventors, when they undertook something like 15 or 16 months after this litigation had begun to file that sworn declaration, they did so without talking to any of the patent attorneys who were involved in the prosecution. [00:30:42] Speaker 04: Why doesn't, under the inaugural contract standard, why doesn't that still lead to [00:30:48] Speaker 04: a reasonable, slightly less reasonable inference that they were just incompetent rather than committing a fraud in the patent office. [00:30:56] Speaker 02: Your Honor, that's a great question. [00:30:58] Speaker 02: And I think the answer is that if there were that one isolated incident and nothing further, we would have a much more difficult argument. [00:31:06] Speaker 02: But that's not the facts as they're presented. [00:31:09] Speaker 02: We're presented now with facts where the court was required to look at the totality of the circumstances. [00:31:14] Speaker 02: And we've got the inventors filing this [00:31:18] Speaker 02: so-called pro se. [00:31:21] Speaker 03: I'm concerned when you say that they didn't talk to any of the attorneys. [00:31:26] Speaker 03: Given the totality of these circumstances, I'm not at all sure that's true. [00:31:32] Speaker 03: I think they may have talked to [00:31:33] Speaker 02: Your Honor, in our view, there were, and frankly, in the district judge's view, he stated from the bench, there was something that was very unusual that was going on in this case, and we'll get to this in the fees portion, but he said he'd never seen anything like this in his 30 years on the bench and his 30 years in practice. [00:31:50] Speaker 01: Your basic problem, it seems to me, is they could have gotten the priority claim back to date 37 if they'd done it right, which I think you agree. [00:32:00] Speaker 01: And what we're dealing with is whether doing it wrong [00:32:03] Speaker 01: is evidence of effort to mislead the Patent Office, as opposed to evidence of incompetence. [00:32:12] Speaker 01: And we've got a factual finding here by the district court, basically, that it's a result of incompetence. [00:32:19] Speaker 01: It's hard to overcome that, it seems to me. [00:32:22] Speaker 02: I recognize and acknowledge that fact, Your Honor. [00:32:26] Speaker 02: I think the only response is, is that under Therese's [00:32:31] Speaker 02: While it's true that we can't meet our burden if there is an equally reasonable alternative, the problem that we have is that given the number of attorneys and the number of acts that occurred over the number of years, it becomes more and more difficult to say that what they did was reasonable and was isolated. [00:32:53] Speaker 02: Your Honor, it was not one isolated incident. [00:32:56] Speaker 02: And many of these occurred after the lawsuit was filed. [00:33:01] Speaker 02: engaged with or with the assistance of contingency fee counsel who was representing them in this litigation. [00:33:09] Speaker 02: And that really, at the end of the day, became, in our view, what the major issue was. [00:33:16] Speaker 02: And frankly, Your Honors, as we said in our brief, after the district judge issued his 101 decision, we would not have expected to have even gone forward and been here. [00:33:31] Speaker 02: The problem that we had on behalf of our client is that when they approached the plaintiffs and asked for a super sack letter, the plaintiffs refused to give it to them. [00:33:40] Speaker 02: And we knew that they had continuation applications pending. [00:33:44] Speaker 02: And since this trial occurred in April of 2016, two additional patents in this family have issued. [00:33:50] Speaker 02: And my understanding is that there are another six applications that are pending at the patent office now. [00:33:56] Speaker 02: And so that's really why we're here on behalf of USAA because USAA just wanted to make it stop. [00:34:02] Speaker 04: Are they all about third-party authentication? [00:34:04] Speaker 02: They are either identified as continuations or continuations in part and have a substantially identical. [00:34:10] Speaker 04: What if that was going to be invalid under 101 anyway? [00:34:12] Speaker 02: If this court affirms, I think that's right. [00:34:16] Speaker 03: That sort of supersedes my question, which is how the heck are they going to get those issues? [00:34:21] Speaker 02: Yeah, I think if the court affirms either on the 101 issue or in the subsequent appeal that my colleague Mr. Countryman is handling, then that becomes less of an issue going forward for our client. [00:34:35] Speaker 01: Unless there are further questions. [00:34:39] Speaker 01: Thank you, Mr. Davis. [00:34:41] Speaker 01: OK, Ms. [00:34:44] Speaker 01: Payton, we'll give you two minutes here to respond. [00:34:48] Speaker 00: Thank you, Your Honor. [00:34:50] Speaker 00: When we're talking about reviewing a district court's inequitable conduct decision, we have an abuse of discretion standard. [00:34:57] Speaker 00: The district court had multiple motions that were reviewed. [00:35:00] Speaker 01: Is there any evidence in this record that different experts in this area have different views as to whether you can claim priority to an application which wasn't co-pending? [00:35:13] Speaker 00: Let me make sure I understand your honor's question. [00:35:15] Speaker 00: Is it focused on whether [00:35:18] Speaker 00: It was improper to call it a continuation or a continuation in part. [00:35:22] Speaker 01: I'm not focusing on the terminology. [00:35:24] Speaker 01: This original application claimed priority directly to the 837, not through the 676, but directly to the 837. [00:35:35] Speaker 01: The question is whether that was a misrepresentation of the patent laws. [00:35:39] Speaker 01: And one of the district court's findings here is, well, different experts have different views about whether you can claim priority to something that isn't copending. [00:35:48] Speaker 01: Which is a surprise to me. [00:35:50] Speaker 01: I would have thought that experts pretty much agreed that you couldn't claim priority in something that wasn't co-pending. [00:35:56] Speaker 01: Where is the evidence that different experts had different views about whether you could trace back to something that wasn't co-pending? [00:36:06] Speaker 00: Your Honor, I'll say there's two pieces. [00:36:08] Speaker 00: One, there's the experts who were here at trial talking about whether there was fraud on the office. [00:36:14] Speaker 04: But really what the expert on your behalf testified exactly that to support the district court's conclusion. [00:36:23] Speaker 00: Your honor, yes. [00:36:23] Speaker 04: In the transcript. [00:36:25] Speaker 00: Show me. [00:36:26] Speaker 00: He testified, I believe, that it was both art and science with respect to how this dealt with. [00:36:33] Speaker 04: The district court said experts testified inconsistently as to whether patent applicants could claim priority to claims that aren't co-pending. [00:36:42] Speaker 04: Where is it? [00:36:43] Speaker 04: your expert saying that there was confusion or that people wouldn't know that because I don't see it either. [00:36:53] Speaker 00: Your honor, we're actually not disputing the co-pendency situation here and that wasn't really the... That's not what I'm asking. [00:37:03] Speaker 04: District courts seem to rely on the fact that this was really confusing and even experts wouldn't know [00:37:10] Speaker 04: how to go about getting priority, which has led to him to find that this was incompetent, but not fraud. [00:37:18] Speaker 04: But I could not find a single statement from an expert that said, experts or even I wouldn't know that you couldn't do it. [00:37:26] Speaker 04: The site that the district court makes for that support is to your attorney characterizing and mischaracterizing testimony from the experts. [00:37:35] Speaker 00: Your Honor, [00:37:38] Speaker 00: We were not mischaracterizing. [00:37:40] Speaker 00: What we were trying to explain is given all of the patent attorneys that had provided testimony to the court, the patent attorney's testimony demonstrated that the question of continuity is both art and science. [00:37:55] Speaker 00: So reasonable. [00:37:56] Speaker 04: I'm not asking about continuity in general. [00:37:58] Speaker 04: I'm asking about whether you can get continuity from a patent application that's not co-pending. [00:38:07] Speaker 04: Is there any single expert in any of these proceedings that said it's confusing or it's questionable whether claims have to be co-committed or not? [00:38:16] Speaker 04: That seems to me a fundamental base rock conclusion that any expert in patent law would know. [00:38:23] Speaker 00: Your Honor, here, the focus of the expert testimony was... Wait, wait, wait. [00:38:27] Speaker 03: You're getting notes from your co-counsel. [00:38:30] Speaker 03: I would hope the notes would say it's here at this point in the record. [00:38:34] Speaker 00: Do they not? [00:38:37] Speaker 00: Actually, Your Honor, what trial counsel pointed out is that the focus of the expert testimony was not on the co-pendency issue. [00:38:46] Speaker 00: It was on whether it was proper to. [00:38:49] Speaker 03: So in effect, you're saying the answer to Judge Hughes is no, there's nothing in the record that supports it. [00:38:54] Speaker 04: And so the district court's conclusion to that effect is error. [00:38:59] Speaker 00: The district court made a statement about co-pendency that was not the focus. [00:39:04] Speaker 00: of the analysis. [00:39:06] Speaker 00: I think reasonable people would disagree. [00:39:08] Speaker 04: So if the district court's factual conclusion on this point is clear error, and that's the key basis for his support or to support his conclusion that this was incompetence, not fraud, why shouldn't we send it back? [00:39:24] Speaker 00: Because the focus, Your Honor, was on whether it was improper, whether it was... What was viewing the district court's decision and his rationale. [00:39:31] Speaker 04: And as you say, he gets a very high degree of deference under an abuse of discretion standard. [00:39:37] Speaker 04: But if his decision relies on incorrect factual conclusions, then that degree of deference, it may be the same, but the outcome may change. [00:39:47] Speaker 00: Your Honor, this particular question, co-pendency, [00:39:50] Speaker 00: is not a factual conclusion that's relevant to their inequitable conduct claim. [00:39:55] Speaker 03: Expert testimony is a factual question. [00:40:00] Speaker 00: Your Honor, I'm actually making a different point. [00:40:03] Speaker 00: Their focus was on whether it was fraud on the office to fail to claim the priority through the children application. [00:40:12] Speaker 03: I accept that you're making a different point. [00:40:15] Speaker 03: But that different point has nothing to do with what Judge Hughes just said to you. [00:40:20] Speaker 03: So I guess we can stop here and go to the next case. [00:40:23] Speaker 00: Your Honor, one last point I want to make there. [00:40:26] Speaker 00: Just to be clear, there were many factual points that the judge took into account. [00:40:31] Speaker 00: This was just one of them. [00:40:33] Speaker 00: And just because the judge might focus on a particular aspect relating to co-pendency does not mean that they demonstrated clear error. [00:40:42] Speaker 03: So you're saying it was error. [00:40:45] Speaker 00: Your Honor, the [00:40:47] Speaker 00: I can't concede that it's error. [00:40:50] Speaker 00: I think the focus of the analysis is focused really on whether CIP or continuation is the issue. [00:40:57] Speaker 00: So the judge noting this co-pendency issue is frankly tangential to their inequitable conduct claim and the totality of the circumstances and the basis for the district court's decision. [00:41:12] Speaker 01: I think that's enough. [00:41:13] Speaker 01: Thank both counsel, the case is submitted. [00:41:15] Speaker 01: Our next case is 17-25.