[00:00:00] Speaker 02:
Mr. Maher.

[00:00:01] Speaker 02:
Good morning, Your Honor.

[00:00:08] Speaker 00:
We would like to reserve three minutes for rebuttal as well.

[00:00:11] Speaker 00:
My name is Eugene Maher, and I represent the appellant Adobe Systems, Incorporated.

[00:00:16] Speaker 00:
Your Honor, in Commal v. Cisco, the Supreme Court explained that the district courts have the authority and responsibility to ensure that frivolous cases are dissuaded.

[00:00:25] Speaker 00:
And then in Octane Fitness, the Supreme Court instructed

[00:00:28] Speaker 00:
that the exceptional case determination under Section 285 is one where you look at the substantive strength of a party's litigating position and the unreasonableness in which the manner the case was litigated.

[00:00:40] Speaker 00:
Now, here's where the district court erred.

[00:00:42] Speaker 00:
It failed to properly evaluate the strength or the lack thereof of Plaintiff Blue Spike's patent infringement case.

[00:00:49] Speaker 02:
But the court made a lot of disparaging comments about the way the case was tried.

[00:00:55] Speaker 02:
She suggested that there was

[00:00:58] Speaker 02:
bad faith.

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It was the antithesis of being diligent.

[00:01:06] Speaker 02:
A jurisdiction in the Eastern District was sort of fabricated.

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And the only justification that she seemed to find seems a bit shaky.

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And so

[00:01:28] Speaker 02:
Yes.

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So there was a lot here that justifies reversal.

[00:01:40] Speaker 00:
Yes, Your Honor.

[00:01:41] Speaker 00:
We do fully agree with that.

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We recognize, in looking at the fees order from the district court, that it did not go back and take a look at five different findings that the court just articulated in the district court's previous orders.

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identifying conduct that is unreasonable in the litigation.

[00:01:57] Speaker 03:
Why do you say that?

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How do you know that the court didn't take a look at the totality of the circumstances?

[00:02:04] Speaker 00:
Your Honor, the only comment we see in the fees order, and granted the discussion section is only one page long, is a comment about the conduct being less than ideal.

[00:02:12] Speaker 00:
The less than ideal evokes just a memory of plaintiff's counsel having some conduct that wasn't

[00:02:18] Speaker 00:
Perfect, in the district court's eyes.

[00:02:19] Speaker 01:
But we always assume that the district court considers all the relevant factors in the absence of a clear indication that they happened, right?

[00:02:27] Speaker 00:
Your Honor, I think this court's guidance, actually, in the adjusticam case is important.

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While this court has articulated district court doesn't have to provide and describe every single assessment it does, it does actually have to establish it did look at this under a totality of the circumstances.

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Now, we do have a situation where we think,

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On the conduct side, the district court didn't go back and look at all of the orders they previously issued about their conduct.

[00:02:50] Speaker 01:
Well, but the district court had already sanctioned Blue Spike by dismissing the claims with prejudice.

[00:02:59] Speaker 01:
That's a big sanction, is it not?

[00:03:03] Speaker 01:
And isn't the district court allowed to factor that into its determination?

[00:03:08] Speaker 00:
Absolutely.

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And we don't believe the district court factored all of that in.

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It is an important sanction.

[00:03:13] Speaker 01:
What do you mean she didn't factor it in?

[00:03:15] Speaker 01:
She pointed out that she had dismissed their infringement contentions with prejudice.

[00:03:20] Speaker 00:
Yes, Your Honor.

[00:03:20] Speaker 00:
And that was a result, though, actually, of the deficiency in the technical side of their case.

[00:03:26] Speaker 00:
Before the magistrate court on the Adobe's motion to strike, the magistrate judge found that their evidence was not able to even establish the notice function of every limitation of every claim is found.

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That deficiency is actually what led to their case being struck.

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and dismissed with prejudice, as opposed to their litigation conduct.

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And that's actually one of the issues that we see missing in the fees order.

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And if you look at the guidance that this court has provided, particularly in Rothschild and at a justice camp, the district court has to look at the single issue that helped dispose of the case, analyze the weakness of the infringing position that was brought by the plaintiff blue spike.

[00:04:03] Speaker 00:
And Magistrate Judge Corley, in her order, analyzed this and said, the evidence you brought forth to provide even a notice function fails.

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Your exhibits that you rely on don't even refer to the accused products.

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You don't have a basis for accusing any of these products.

[00:04:17] Speaker 01:
The magistrate court also found... But normally, if all of that was true, the dismissal would still be without prejudice, correct?

[00:04:25] Speaker 01:
So there is a sanction that is involved in the dismissal with prejudice so that she punished them for all of that conduct in a very serious way.

[00:04:36] Speaker 00:
Yes, Your Honor.

[00:04:37] Speaker 00:
The district court certainly did.

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And they also looked at, in addition to that, obviously the length of the litigation, as well as the amount of motions practiced that the district court felt the plaintiff forced the defendant to engage upon.

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Yet the sanction of just entering judgment with prejudice doesn't accomplish the function that the Supreme Court has established here.

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And that's when you have a plaintiff who brings a case, which has now been established that has no technical merit out of the gate.

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Section 285 is established to help deter that behavior.

[00:05:06] Speaker 00:
Lou Spike here has filed over 100 such cases.

[00:05:10] Speaker 01:
There was an absence of allegations, which was the predicate for the dismissal.

[00:05:18] Speaker 01:
What I find difficult here is the notion that you would say the district court, when it dismisses things early, based on the absence of allegations, has then an obligation to go back and essentially try the case.

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to essentially do claim construction and infringement analysis, all of that, even though she did the dismissal upfront.

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So that's part of my problem, is that you're asking the district court to engage in something that she's shortcut by saying the allegations weren't adequate.

[00:05:52] Speaker 00:
Your Honor, to be clear, we don't believe the district court needed to engage in a claim construction in the fees context or reanalyze the infringement or non-infringement side of the case.

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What we thought the district court should have done and failed to do, and as the court is instructing a justicam and a Rothschild, is go back and look at what was the single issue that disposed of the case.

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What made a case dispositive?

[00:06:12] Speaker 00:
And that was actually the lack of allegations, the lack of factual evidence to even provide that notice function.

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We have a lack of adequate pre-filing investigation.

[00:06:22] Speaker 01:
So lack of allegations is what led to the dismissal, the behavior

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that dragged out the case is what led to the dismissal of prejudice.

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The behavior certainly helped lead to the dismissal of prejudice, as well as actually the arguments raised at the hearing before the magistrate judge.

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Judge Corley determined that a number of questions that she posed to Blue Spike and asking about their basis for their direct infringement contentions, their doctrine of equivalence assertions, willful infringement, indirect infringement, all lacked any basis whatsoever.

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So the magistrate judge actually struck

[00:06:57] Speaker 00:
all of those with prejudice, and just gave the plaintiff one opportunity to mend with only one product.

[00:07:02] Speaker 00:
So actually, the with prejudice part already applied during the motion to strike phase, because some of the allegations brought, most of the allegations brought by the plaintiff, lacked any factual basis whatsoever, failed to accomplish notice function.

[00:07:15] Speaker 00:
Yes, Your Honor, district court then came and dismissed the entire case with prejudice, in part based on this issue of the lack of technical basis in infringement contestations, but also in part based on the conduct

[00:07:26] Speaker 00:
And the district court actually noted, but not in the fees order, but in the context of the order dismissing the case with prejudice, and here's another instance where we think there might be an error, the district court noted that as of August 2013, in a footnote, that Plaintiff Blue Spike could have dismissed the case then, that they admitted they were on notice of the weakness of their case at that point, but they chose not to.

[00:07:46] Speaker 00:
Yet that fact did not reemerge in the fees order as yet another instance of misconduct

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that was on the plaintiff's blue spikes part that we don't see the district court analyzing here.

[00:07:55] Speaker 03:
So what's your argument that the order itself is scant?

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It's not detailed enough?

[00:08:00] Speaker 00:
Our argument is that when you look at the fees order, it seems to have missed the most important issue in the case.

[00:08:05] Speaker 00:
And that's the inadequate pre-filing investigation here.

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That's borne out in the infringement contentions that was struck by the court.

[00:08:13] Speaker 00:
But when we get to the fees order, there was no discussion at all about the weak technical case that was brought by the plaintiff.

[00:08:19] Speaker 03:
Okay, so what you find missing here is a technical discussion by the district court.

[00:08:26] Speaker 00:
Yes, Your Honor.

[00:08:27] Speaker 00:
I would phrase it as octane fitness phrasing, which is an analysis of the strength of the case.

[00:08:33] Speaker 00:
She does cite octane.

[00:08:33] Speaker 03:
Yes, Your Honor.

[00:08:34] Speaker 03:
The district court cites octane.

[00:08:35] Speaker 03:
Yes, Your Honor.

[00:08:37] Speaker 03:
So your problem is that her analysis is scant.

[00:08:43] Speaker 03:
It's not detailed enough.

[00:08:45] Speaker 03:
You want more.

[00:08:47] Speaker 00:
You know, I wouldn't necessarily say we want more, that that's the definition of what we're seeking.

[00:08:52] Speaker 00:
I think what's missing, once more, is an analysis of the central most critical issue that drove resolution of the case, and the fact that that is an inadequate pre-filing investigation.

[00:09:00] Speaker 03:
Is it your argument that she missed that analysis because she applied the wrong standard?

[00:09:05] Speaker 00:
Your Honor, we did make that argument in our opening appellate brief, that in looking at her fees order, it appeared she did a Brooks Furniture type analysis, a very rigid, is there an objective baselessness to the infringement claim.

[00:09:17] Speaker 00:
With the guidance that this court has also offered now in Rothschild, in the Justicam, and yet again in the new Octane Fitness Appeal, the district court, unfortunately, in 2015 didn't have the benefit of that analysis.

[00:09:27] Speaker 01:
But she didn't do Brooks Furniture.

[00:09:29] Speaker 01:
What she said was, you asked me to dismiss the case because the allegations on their face were inadequate, period.

[00:09:39] Speaker 01:
Yes.

[00:09:39] Speaker 01:
And now you're saying, I should go back and do all of this detailed technical analysis

[00:09:46] Speaker 01:
about what the case might have been like had they really been able to go forward with the case, had we gone forward.

[00:09:53] Speaker 01:
And her point was, I can't do that.

[00:09:57] Speaker 01:
You asked me to dismiss it, because on its face, the allegations weren't adequate.

[00:10:01] Speaker 01:
So I can't really go back and say for sure that they could have never had any ability to assert an infringement if they had pled better.

[00:10:11] Speaker 01:
And that's pretty much what you're asking her to do.

[00:10:13] Speaker 01:
That's like asking her to do the whole case when you ask her to get rid of the case up front.

[00:10:19] Speaker 00:
Your Honor, we don't believe she had to go back and do any technical analysis.

[00:10:22] Speaker 00:
It had all been already done by the magistrate court.

[00:10:25] Speaker 00:
The findings were already in the court's order, striking the infringement contentions.

[00:10:29] Speaker 00:
The district court, in the context of the fees motion, did not have to go back.

[00:10:33] Speaker 00:
And in fact, we thought it was error on the court's part to say we had to go back and look at whether the products may infringe or not.

[00:10:39] Speaker 00:
That's not the exercise.

[00:10:40] Speaker 00:
Judgment had already been entered.

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A finding had already been found that the infringement contentions were dismissed with prejudice.

[00:10:46] Speaker 00:
There was no re-technical analysis that had to be done.

[00:10:50] Speaker 00:
But when you look at the totality of circumstances under octane, that has to be waived.

[00:10:54] Speaker 00:
And that's part of the substantive strength of the party's case.

[00:10:58] Speaker 00:
That's missing in here.

[00:10:59] Speaker 00:
In fact, when the court says, is there a culpable basis for infringement, and asking, should do the accused products infringe or not, there's actually three layers of error there.

[00:11:08] Speaker 00:
First of all, there is no concession on our part that there is any infringement by any of the products.

[00:11:13] Speaker 03:
Why didn't you ask for limited discovery on that issue?

[00:11:16] Speaker 00:
On which issue, Your Honor?

[00:11:17] Speaker 03:
On ownership of the technology.

[00:11:21] Speaker 03:
Well, we were the accused infringers, so we... Well, I know, but you're saying that during the case you were arguing that you didn't own the technology that somebody else did.

[00:11:30] Speaker 03:
Yes, Your Honor.

[00:11:30] Speaker 03:
Why didn't you ask for limited discovery in order to settle that particular question?

[00:11:35] Speaker 00:
Your Honor, we actually believe it's the plaintiff's obligation as part of their pre-following investigation to figure out which party they are to sue.

[00:11:42] Speaker 00:
But indeed, Blue Spike actually sued.

[00:11:44] Speaker 03:
That may be true, but you can force the issue.

[00:11:46] Speaker 03:
And you didn't force the issue.

[00:11:48] Speaker 03:
Shouldn't some of the delay be attributed to your failure to try to resolve that particular issue that would have been dispositive?

[00:11:57] Speaker 00:
Your Honor, the opportunities we had to present evidence were limited, actually, by the history of this case.

[00:12:02] Speaker 00:
But we did at every opportunity.

[00:12:04] Speaker 00:
For example, in the context of our transfer motion, we submitted a declaration from the person most knowledgeable at Adobe who previously worked at Autitude and provided that information about different lines of product, some going to Yahoo.

[00:12:16] Speaker 00:
But as we got the case transferred to California, the district court there was very clear that no discovery will occur until there's sufficient infringement contentions.

[00:12:24] Speaker 00:
So we actually followed those court's rules.

[00:12:26] Speaker 01:
Did you admit that there was servicing of Autitude legacy customers?

[00:12:31] Speaker 01:
I mean, wouldn't that admission alone

[00:12:34] Speaker 01:
have led to some ability to assert infringement?

[00:12:38] Speaker 00:
Your Honor, no.

[00:12:38] Speaker 00:
Actually, it does not provide a basis for infringement assertions.

[00:12:41] Speaker 00:
Because we've seen the totality of their technical evidence about how any product they believe reads onto the claims.

[00:12:48] Speaker 00:
And we have exhibits that don't refer to products.

[00:12:50] Speaker 00:
We have exhibits, as the magistrate court found, that don't even inform on the limitations found in every claim.

[00:12:55] Speaker 00:
It doesn't actually matter what products Blue Spike ultimately tried to accuse.

[00:12:59] Speaker 00:
And they move that target throughout the case.

[00:13:01] Speaker 00:
There was never a sufficient basis on a technical level to show patent infringement.

[00:13:05] Speaker 01:
And you think it was the trial court's job, after having dismissed the case, to analyze all of that technical data?

[00:13:12] Speaker 00:
No, Your Honor.

[00:13:12] Speaker 00:
We think the trial court's judge should go back and take what the magistrate court had done and factor that into the fees analysis.

[00:13:18] Speaker 00:
We think that's missing from the fees order.

[00:13:21] Speaker 00:
If I could reserve my time for any time for rebuttal?

[00:13:23] Speaker 02:
We will do that, Mr. Marr, Mr. Gottheiser.

[00:13:31] Speaker 04:
May it please the court.

[00:13:34] Speaker 04:
Randall Gartiser on behalf of Gartiser, honing myself as an attorney that was accused of this misconduct as well.

[00:13:44] Speaker 04:
And they were seeking jointly attorney's fees, not just from Blue Spike, but myself and my colleague.

[00:13:50] Speaker 04:
And we appreciate the opportunity to be heard on this issue.

[00:13:54] Speaker 04:
I'd like to start off with just basically saying there's three main points here I want to make.

[00:14:00] Speaker 04:
The court did punish Blue Spike.

[00:14:04] Speaker 04:
Second, the Honorable Yvonne Gonzalez-Rogers did apply Octane Fitness.

[00:14:10] Speaker 04:
And third, Adobe had plenty of opportunities to address Blue Spike's alleged shortcomings and decided not to.

[00:14:16] Speaker 03:
How do we know, counselor, that the district court applied Octane Fitness if the

[00:14:24] Speaker 03:
if the order does not discuss, for example, some of the things that were discussed by the magistrate judge.

[00:14:34] Speaker 04:
Your Honor, I think that's a great point.

[00:14:37] Speaker 04:
And the way you know that is because of the evidence before the judge.

[00:14:43] Speaker 04:
The defendants in this case submitted 35 exhibits.

[00:14:48] Speaker 04:
And of those exhibits, some of those are in...

[00:14:52] Speaker 03:
So I counted 12 different instances that really stood out in my mind in terms of litigation conduct and things of that nature, something that could plausibly fall under octane.

[00:15:05] Speaker 03:
And I don't see that the district court addressed any of those other than maybe in passing.

[00:15:11] Speaker 04:
Well, one of the things the magistrate judge did not have at her that she did not know at the time that the district court judge later did know is that

[00:15:21] Speaker 04:
We were trying to work with Adobe to address their concerns.

[00:15:26] Speaker 04:
We had worked with Google, another transfer case, to do the same thing.

[00:15:31] Speaker 04:
And we had been able to work it out.

[00:15:35] Speaker 03:
And what happened was with Adobe, they... The record shows that Adobe was contacting you and bringing up this issue with respect to ownership of the technology.

[00:15:45] Speaker 03:
And you weren't even responding to those calls.

[00:15:48] Speaker 04:
You know, again, that's not accurate.

[00:15:51] Speaker 04:
And I was on those calls.

[00:15:53] Speaker 04:
We wanted to see the agreement between Adobe and Yahoo where they sold this technology.

[00:16:02] Speaker 04:
They said they didn't have any more.

[00:16:03] Speaker 04:
They sold it to Yahoo.

[00:16:05] Speaker 04:
We had settled with Yahoo.

[00:16:07] Speaker 04:
And I actually put them in contact with Yahoo's in-house counsel and said, look, guys, they're not saying to these folks,

[00:16:15] Speaker 04:
They're not saying the same thing.

[00:16:16] Speaker 04:
Adobe, you're telling me that Adobe, we should look to Yahoo and that's just not the case.

[00:16:23] Speaker 04:
I mean, Yahoo is saying that they have nothing to do with that.

[00:16:26] Speaker 04:
Why don't you just show us the agreement so we can, you know, you can redact it.

[00:16:30] Speaker 04:
We just want to see it so that we can make our own determination because people disagree about agreements.

[00:16:35] Speaker 02:
We're talking about exceptional case here, attorney fees.

[00:16:38] Speaker 02:
The court itself talked about bad faith, extending

[00:16:43] Speaker 02:
multiplying litigation unnecessarily and use of gamesmanship.

[00:16:49] Speaker 02:
She laid out all these instances justifying fees, but then she found no fees.

[00:16:56] Speaker 04:
And I think part of that is because at the end, she looked at all the totality and understood that based on the correspondence that we presented to her as well, that we tried to- She mentioned one thing that made a colorable

[00:17:11] Speaker 02:
justification for infringement, the autitude customs.

[00:17:18] Speaker 04:
Yes, sir.

[00:17:18] Speaker 02:
That's all she mentioned.

[00:17:20] Speaker 04:
But it was the whole autitude time frame.

[00:17:22] Speaker 04:
There was two years that they had the accused technology.

[00:17:26] Speaker 04:
And they, again, if we could have just... One of the things I learned when I was captain of the army, you know, you trust, but you verify.

[00:17:33] Speaker 04:
And all we asked was to see the documentation that supported this attorney argument that we gave it away.

[00:17:40] Speaker 04:
We don't have it anymore.

[00:17:41] Speaker 04:
And what really started to push the issue of removing it.

[00:17:45] Speaker 03:
What you are arguing is that you wanted to see the source code.

[00:17:48] Speaker 04:
Well, before that, we wanted to see the agreement.

[00:17:51] Speaker 04:
Two years into it, they told us they didn't even have the source code.

[00:17:56] Speaker 04:
That would have been nice to know two years before.

[00:17:58] Speaker 04:
But two years before, we just wanted to see the agreement where they say that Adobe sold it to Yahoo.

[00:18:06] Speaker 04:
And we don't have it anymore.

[00:18:07] Speaker 04:
Now, I know in some of these declarations, it's like, well,

[00:18:10] Speaker 04:
of it into now.

[00:18:13] Speaker 04:
It's very confusing.

[00:18:14] Speaker 04:
And we just asked them to give us a look at that document, because Yahoo's in-house counsel isn't saying the same thing.

[00:18:23] Speaker 04:
And we had just resolved the case with them, so we didn't want to save third-party discovery on it.

[00:18:27] Speaker 01:
The friend on the other side said the court entered an order saying there would be no discovery until the adequacy of the pleadings was

[00:18:36] Speaker 01:
sort of out.

[00:18:38] Speaker 01:
Was that by request of Adobe, or was that by your request, or was that Suez-Fonte?

[00:18:46] Speaker 04:
That was at the request of Adobe at the hearing.

[00:18:50] Speaker 04:
What they did is they ran to the court on this infringement contention.

[00:18:54] Speaker 04:
While we were trying to work them out with Google, they just went and moved on us, saying they were inadequate.

[00:19:00] Speaker 04:
We had already reduced the number of claims.

[00:19:02] Speaker 04:
We had reduced the number of products down to one.

[00:19:05] Speaker 04:
It had 42 claims at the time.

[00:19:06] Speaker 04:
It was five patents.

[00:19:08] Speaker 04:
And so we were already narrowing it down like they wanted us to.

[00:19:13] Speaker 01:
Do you have any authority for the proposition that if the court enters an interim sanction, whether it be for discovery, abuses, or a sanction like this, or dismissal of prejudice, that that should be factored into the 285 analysis?

[00:19:29] Speaker 04:
Well, as you indicated yourself earlier, I know that the court did that.

[00:19:35] Speaker 04:
and under the totality, I think the authority would be octane fitness under the totality of the circumstances.

[00:19:41] Speaker 04:
She also, you know, with prejudice, that was a big deal.

[00:19:46] Speaker 04:
She also, simultaneously in the other case that she mentioned, she invalidated all the patents because they were, all the patent claims because... Counselor, to what extent does 285 encompass sanctions other than attorney's fees?

[00:20:05] Speaker 04:
So I think, again, Senator, there's the application of the octane fitness, where you look at the totality of the circumstances, and any punishment is relevant.

[00:20:14] Speaker 03:
The octane fitness applies to 285, section 285, and that goes to attorney's fees.

[00:20:21] Speaker 04:
Correct?

[00:20:25] Speaker 04:
It was also a 297 claim here as well.

[00:20:28] Speaker 04:
So I want to just make that point known.

[00:20:31] Speaker 04:
I'm sorry.

[00:20:32] Speaker 04:
I need you to repeat the question.

[00:20:34] Speaker 04:
I don't know if I answered it.

[00:20:35] Speaker 04:
No, you haven't, but that's... But I believe under the totality and circumstances that's how you would apply this.

[00:20:41] Speaker 01:
What she did... So would the fact of a different sanction be factored into the question of exceptionality or would it be factored into the question of the size of the fee award?

[00:20:54] Speaker 04:
Well, she found that that was the appropriate remedy in this case.

[00:20:59] Speaker 04:
She, Sue Sponte,

[00:21:00] Speaker 04:
moved with prejudice to dismiss not only our claims, but also then granted them to the prevailing party.

[00:21:07] Speaker 04:
We paid them $7,282 in costs.

[00:21:11] Speaker 04:
And we didn't argue about them.

[00:21:12] Speaker 04:
We just paid them.

[00:21:14] Speaker 02:
Well, it cost a lot of sanctions.

[00:21:19] Speaker 04:
They can be, Your Honor.

[00:21:21] Speaker 04:
I mean, I understand what you're saying.

[00:21:24] Speaker 04:
But the conduct and the strong wording ultimately

[00:21:28] Speaker 04:
There wasn't a lot of backing up of some of the things that the defendants were saying.

[00:21:33] Speaker 04:
She says in her order itself that there was more attorney argument.

[00:21:39] Speaker 04:
And she had all the settlements, this talk about there were nuisance values.

[00:21:44] Speaker 04:
None of that was corroborated by the evidence.

[00:21:46] Speaker 04:
None of it was even provided to you to look at.

[00:21:49] Speaker 04:
And she even cited in her order itself that it's reviewed for abuse of discretion when she was

[00:21:58] Speaker 04:
coming up with her ruling.

[00:22:00] Speaker 04:
And she, I also just want to point out real quick that she took into account specific information that was part of her record at Appendix 1368, 1371, 1378, and 1401.

[00:22:14] Speaker 04:
That first one was 1368.

[00:22:24] Speaker 04:
And so, and with respect to some of the

[00:22:28] Speaker 04:
The things that were said by opposing counsel here is that there was no evidence.

[00:22:37] Speaker 04:
Again, I disagree.

[00:22:40] Speaker 04:
I signed that complaint.

[00:22:41] Speaker 04:
And I know what was in it.

[00:22:43] Speaker 04:
And if they had a problem with it, they could have moved under 12B6.

[00:22:47] Speaker 04:
They chose not to.

[00:22:48] Speaker 03:
Why did you assert 100 claims?

[00:22:51] Speaker 03:
And then later on, if you signed the complaint, and I guess that... We didn't have...

[00:22:57] Speaker 03:
What you're saying is that you certified as to the sacredness, et cetera.

[00:23:02] Speaker 03:
Then why was there such a sharp reduction in the number of claims that are being asserted?

[00:23:11] Speaker 04:
There is always a natural funneling or distilling of the claims in a case.

[00:23:17] Speaker 04:
I will say that I've learned from this, and we now try to start off around 42.

[00:23:20] Speaker 03:
Do you think that's the case?

[00:23:21] Speaker 03:
And in patent cases, if there's just natural funneling

[00:23:25] Speaker 03:
of the claims that are in controversy?

[00:23:29] Speaker 04:
Absolutely, Your Honor.

[00:23:30] Speaker 04:
In fact, some courts kind of have a local rule that require you to do such funneling.

[00:23:35] Speaker 04:
And just realistically presenting the evidence to a jury, you only need about four or five claims when you're done, when you get there.

[00:23:44] Speaker 04:
Otherwise, it gets boring.

[00:23:46] Speaker 04:
100 would be too many for a jury.

[00:23:49] Speaker 04:
It could be, but I would think so, yes, sir.

[00:23:51] Speaker 03:
Why did you assert 100 then?

[00:23:53] Speaker 04:
Well, in the complaint, we asserted the claims of five patents.

[00:23:58] Speaker 04:
And then later, when we started to get into the infringement contingents and saw how they were using their product and their advertising services to help identify and then pick the ad, that's how we ended up having more broader claims.

[00:24:13] Speaker 04:
Because at the time, there were four accused products as well.

[00:24:16] Speaker 01:
Did you ever seek to amend your complaint to specifically allege infringement based on the servicing of the legacy attitude customers?

[00:24:28] Speaker 04:
We were in the process of getting ready to do that.

[00:24:34] Speaker 04:
When everything went sideways with Google, her ruling in the companion case with Google that all the claims were invalid,

[00:24:44] Speaker 04:
of that particular asserted against that defendant.

[00:24:47] Speaker 04:
There were 30 or 40 claims there.

[00:24:50] Speaker 04:
And so at that point, we decided that it was probably best.

[00:24:54] Speaker 04:
Well, actually, before that, we decided once we had the ruling at the magistrate level, and she said that we're not going to be able to meet the standard of ND Cal.

[00:25:05] Speaker 04:
And they did not move to challenge our infringement contentions in ED Texas.

[00:25:09] Speaker 04:
And I liked our infringement contentions.

[00:25:11] Speaker 04:
But again, they didn't even put them

[00:25:14] Speaker 04:
in the record for you to even look at to make your own decision.

[00:25:17] Speaker 04:
Instead, they want to sit up here and say that they're bad and not allow you to make that decision on your own.

[00:25:24] Speaker 04:
The court had them, though.

[00:25:26] Speaker 04:
They were an exhibit that Judge Gonzalez-Rogers had and did consider, along with the pages that I pointed out just now and also the fact that some of the things in the transcript made by the magistrate judge

[00:25:41] Speaker 04:
wasn't exactly, you know, it was a little bit not accurate.

[00:25:44] Speaker 04:
I mean, some of the exhibits that were included, such as Appendix 1372, 1371, 1378, it just talks about how Adobe is committed to altitude product lines.

[00:26:02] Speaker 04:
Adobe is very committed to altitude product lines and will continue to invest both in care and management, as well as creating end-to-end solutions.

[00:26:10] Speaker 04:
This has got their emblem on it everywhere.

[00:26:13] Speaker 04:
It was, it looks like 84-32 at the top.

[00:26:17] Speaker 04:
It was part of their extensive exhibits that they gave to the court for their attorney's fees.

[00:26:23] Speaker 04:
And again, earlier on, they could have moved for 12B6.

[00:26:27] Speaker 04:
They didn't.

[00:26:28] Speaker 04:
They just filed an answer.

[00:26:30] Speaker 04:
They could have moved for directed verdict, 12C.

[00:26:33] Speaker 04:
They didn't.

[00:26:34] Speaker 04:
They just, you know, just didn't.

[00:26:37] Speaker 04:
And then they could have

[00:26:39] Speaker 04:
moved for rule 11 sanctions.

[00:26:42] Speaker 04:
You know, they said a letter, and they put it at the end.

[00:26:45] Speaker 04:
And we said, if you really think that we haven't met our burden, do it.

[00:26:48] Speaker 04:
Send us the right thing at the safe harbor.

[00:26:50] Speaker 04:
They didn't.

[00:26:51] Speaker 04:
And then they wanted a motion to transfer.

[00:26:53] Speaker 04:
And then it was just like, aha.

[00:26:55] Speaker 04:
And then they told us we didn't have any source code.

[00:26:59] Speaker 04:
We don't have to help to know.

[00:27:01] Speaker 04:
And they did have some discovery obligations earlier.

[00:27:05] Speaker 04:
Judge O'Malley asked me about, well, didn't they say,

[00:27:08] Speaker 04:
Well, once it started to come out that they may have not kept them, and that's some of the things I held, I mentioned to you here, it came out that they didn't have the source code anymore.

[00:27:24] Speaker 04:
We asked them, when did you lose it, or when did you not have it?

[00:27:27] Speaker 04:
Because you had it at one point, because you sold it to Yahoo.

[00:27:30] Speaker 04:
That's what you're telling us now.

[00:27:32] Speaker 04:
And the case started in 2012.

[00:27:34] Speaker 04:
And so we asked just a simple declaration from the IT.

[00:27:38] Speaker 04:
guy that says that, to kind of back up the attorney argument.

[00:27:41] Speaker 04:
We couldn't get that.

[00:27:42] Speaker 04:
So those are just simple things.

[00:27:43] Speaker 04:
If they'd have just given it to us, then we could have walked away.

[00:27:46] Speaker 04:
The agreement with Yahoo, for example.

[00:27:48] Speaker 04:
We just wanted to verify what they were saying.

[00:27:50] Speaker 04:
Trust, but verify.

[00:27:53] Speaker 04:
And we could never get that corroboration.

[00:27:55] Speaker 04:
And I think that shows in some of the correspondence that the court had in front of it that I wrote to opposing counsel.

[00:28:07] Speaker 04:
The third point there was that there are plenty of opportunities.

[00:28:13] Speaker 04:
I mentioned a couple there already.

[00:28:15] Speaker 04:
And it wasn't... Anything further, counsel?

[00:28:26] Speaker 04:
Your time is about to... I appreciate it, Judge Laurie.

[00:28:31] Speaker 04:
No thing at this time.

[00:28:32] Speaker 04:
If you have any questions for me, I'd be happy to answer them.

[00:28:34] Speaker 04:
Thank you.

[00:28:35] Speaker 02:
Thank you, Mr. Altizer.

[00:28:36] Speaker 02:
Mr. Maher has almost two minutes.

[00:28:40] Speaker 00:
Your Honor, the vast majority of what we just heard from Blue Spike is finger pointing at Adobe.

[00:28:45] Speaker 00:
But we don't have an explanation from them on how they had a basis to file a suit in the first place.

[00:28:50] Speaker 00:
Do you know anything Blue Spike pointed out?

[00:28:51] Speaker 00:
They said 1368, 1371, 1378.

[00:28:54] Speaker 00:
Those are all exhibits the magistrate court reviewed and determined not to even provide notice of how the claims are infringed.

[00:29:01] Speaker 02:
But the district court abused her discretion.

[00:29:05] Speaker 00:
Absolutely, Your Honor.

[00:29:05] Speaker 00:
We believe the district court did in the context of the fees order.

[00:29:09] Speaker 00:
Now, Plaintiff Blue Spike does not want to offer any discretion to indeference to the magistrate court because of all those findings are against them.

[00:29:16] Speaker 00:
But in the fees context, they said, oh, we have to defer.

[00:29:18] Speaker 01:
But yes, there's abuse here.

[00:29:20] Speaker 01:
But if you say there was no basis to sue in the first place, you didn't file a motion to dismiss.

[00:29:24] Speaker 01:
You didn't attack the complaint.

[00:29:26] Speaker 01:
It wasn't until you got to the Northern District of California, where the rules are very strict,

[00:29:31] Speaker 01:
that you started to hammer on the issue of infringement contentions, right?

[00:29:36] Speaker 01:
So it's probably the face of the complaint that was the problem, apparently, in your mind.

[00:29:40] Speaker 00:
Your Honor, I respectfully disagree.

[00:29:42] Speaker 00:
We sent a letter to Blue Spike as soon as we got their infringement contentions in Texas, pointing out all the technical deficiencies, showing that they had no evidence that we performed any comparing of what's known as an abstract to anything in the database.

[00:29:56] Speaker 01:
When you say you disagreed with me, you did not move to dismiss the complaint.

[00:30:00] Speaker 00:
We did not move to dismiss the complaint.

[00:30:01] Speaker 00:
Yes, Your Honor.

[00:30:02] Speaker 00:
We had clues from the complaint that suggested that there were deficiencies because they described their patents as being about fingerprinting, yet all of their accused products, all four of them, were advertising products.

[00:30:12] Speaker 00:
But until we saw the infringement contentions for the first time in February 2014, we didn't see the weakness, the lack of technical basis.

[00:30:19] Speaker 00:
And as soon as we saw that, we gave notice in April, we gave notice in May, we gave notice again in October.

[00:30:25] Speaker 01:
Did you provide with the documentation of the transfer of the technology?

[00:30:29] Speaker 00:
Yes, Your Honor, in the form of the declaration from Mr. Alfand, we certainly did.

[00:30:32] Speaker 00:
But as to who owns the products and what products should actually be accused?

[00:30:36] Speaker 01:
But you didn't provide them with the agreement when they asked for it.

[00:30:39] Speaker 00:
No, Your Honor, Discovery was not open at that point.

[00:30:40] Speaker 00:
So we did not provide the agreement.

[00:30:42] Speaker 01:
Because you were the one who asked to stay Discovery.

[00:30:44] Speaker 00:
We asked to stay Discovery, yes, in the context of under the Northern District when we moved to strike the infringement contentions.

[00:30:51] Speaker 00:
But the actual court guidance on the fact that you can't get source code Discovery, for instance,

[00:30:55] Speaker 00:
That was Sue Esponte from the District Court.

[00:30:56] Speaker 01:
Forget the source code.

[00:30:57] Speaker 01:
What about just the agreement that shows that the technology was transferred?

[00:31:01] Speaker 00:
We did not provide that to them, Your Honor.

[00:31:03] Speaker 00:
But that's actually not the reason they lost the case.

[00:31:06] Speaker 00:
The reason they lost the case is they have no technical evidence.

[00:31:08] Speaker 00:
They can't show you where the abstract is in our products.

[00:31:11] Speaker 00:
They can't show you how the abstract is compared to anything in the database.

[00:31:14] Speaker 00:
None of the exhibits they just cited, 1368, 1372, 1378, will give you a single clue how that's done or whether even those steps are performed.

[00:31:23] Speaker 00:
And that's what the Magistrate Court found.

[00:31:25] Speaker 00:
Your honor, I see I'm out of time, so unless there's another question.

[00:31:27] Speaker 02:
Thank you, counsel.

[00:31:28] Speaker 02:
We'll take the case under advisement.

[00:31:30] Speaker 00:
Great.

[00:31:30] Speaker 00:
Thank you, your honor.