[00:00:09] Speaker 00:
We have four cases on the calendar this morning, patent case from a district court, patent cases from the PTO, and a case from the Court of Appeals, the CIT.

[00:00:25] Speaker 00:
First case is Cave Consulting Group versus Optum Insight 2017, 1060, and 1093.

[00:00:35] Speaker 00:
Mr. Lancaster.

[00:00:40] Speaker 04:
Thank you, Your Honor.

[00:00:42] Speaker 04:
I hope to reserve five minutes for rebuttal.

[00:00:46] Speaker 04:
I represent Defendant Appellant Optum Insight.

[00:00:49] Speaker 04:
As you've observed, I'll call it Optum in this argument.

[00:00:53] Speaker 04:
I hope to focus on two issues here.

[00:00:56] Speaker 04:
First, the construction of the term weighted episodes of care, which was construed to include a statistical weighting method, direct standardization, that appears in the original specification only as a prior art method

[00:01:11] Speaker 04:
that is criticized and distinguished.

[00:01:13] Speaker 04:
But then, according to Cave, that disavowal was erased by dependent claims that were added five years later.

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Second issue, the on-sale bar defense.

[00:01:24] Speaker 04:
After that defense was dismissed on summary judgment, what we believe to be that error was compounded by its complete exclusion from trial.

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We're talking about software that Cave counsel described as, quote,

[00:01:37] Speaker 04:
no different in any way from the accused product.

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And it allowed Cave to argue at trial that what Optum had done was copy its product, which was, in fact, developed far later.

[00:01:52] Speaker 01:
You characterize the invalidity argument as an alternative in the conclusion to your brief.

[00:01:59] Speaker 01:
Do we need to decide the invalidity issue if we were to agree with you on the claim construction

[00:02:06] Speaker 04:
No, Your Honor, you do not.

[00:02:08] Speaker 04:
In many cases, obviously, there's a counterclaim for invalidity.

[00:02:11] Speaker 04:
There happens not to be in this case.

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It's solely a defense.

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So if the Court were to agree with us on the, on the weighted episode of care, it need not reach the invalidity issue.

[00:02:22] Speaker 04:
And so to deal with that issue, which we agree can be dispositive.

[00:02:26] Speaker 04:
Two arguments support non-infringement because there's agreement between the parties that opt-in uses direct standardization.

[00:02:34] Speaker 04:
And if either of those arguments is resolved for optum, the case is over.

[00:02:38] Speaker 04:
The disavowal language in this specification.

[00:02:44] Speaker 01:
Before you get into the language, I confess I'm a little unclear about what is actually going on here.

[00:02:53] Speaker 01:
To determine physician efficiency, what are we talking about?

[00:02:57] Speaker 01:
The cost of treatment?

[00:02:59] Speaker 01:
need for repeat treatment or both or all of that?

[00:03:03] Speaker 04:
It could be all those things and a few other variables to effectiveness, efficiency, frequency.

[00:03:09] Speaker 04:
It could be a number of variables and it's put to use by a number of different potential users.

[00:03:14] Speaker 04:
Here the focus of the market is the payer market, but it can be used for a variety of different purposes.

[00:03:24] Speaker 04:
And this technology is really a part of the medical system

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almost no matter what area you're in.

[00:03:30] Speaker 04:
Social Security, Medicare, Medicaid, kind of analyzing physician efficiency is a crucial part of the entire medical system.

[00:03:39] Speaker 01:
So both the direct and the indirect method are comparing the physician's experience to a peer group?

[00:03:47] Speaker 01:
Correct.

[00:03:47] Speaker 01:
Is that correct?

[00:03:48] Speaker 01:
But the difference between direct and indirect is whether you are determining the makeup of the physician's practice

[00:03:59] Speaker 01:
by his own experience or whether you're using a pure book.

[00:04:03] Speaker 01:
Is that correct?

[00:04:03] Speaker 01:
Right.

[00:04:04] Speaker 04:
The Optum method focuses on the physician's actual experience.

[00:04:09] Speaker 04:
What Cave calls the indirect method is it turns that actual experience into a model that excludes a number of individual episodes that might add to a number of individual episodes

[00:04:26] Speaker 04:
so that the individual physician's case makeup and case results match the CAVE model.

[00:04:33] Speaker 04:
OK.

[00:04:33] Speaker 04:
That's how it's used.

[00:04:36] Speaker 00:
You said we may not have to decide the on-sale issue.

[00:04:41] Speaker 00:
But as far as that defense is concerned, you've got a confidentiality problem, right?

[00:04:49] Speaker 04:
We have a confidentiality problem to the extent confidentiality determines the issue.

[00:04:56] Speaker 00:
Well, it couldn't be invalid on the ground of public use.

[00:05:02] Speaker 04:
There is a fact issue, we believe, as to public use.

[00:05:07] Speaker 04:
What the court needs to keep in mind is that this was resolved on summary judgment.

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And at the time before Helsing and medicines, Optum thought that there was a fact issue.

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But this court could not hold that the confidentiality of some terms of the disclosure

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removed it as prior art without overlooking the language in both Helsin and medicines.

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Helsin is most blunt.

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It says, an invention is made available to the public when there's a commercial contract to sell a product, embodying the invention, and that sale is made public.

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Here, the sales weren't only public, they were publicized.

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They were advertised.

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our cases to continue with the Helsing quote.

[00:05:54] Speaker 00:
But of course, this is a process, a method.

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The method was not sold.

[00:06:00] Speaker 04:
There are both a process claim and a system claim.

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Both were found to be infringed.

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And what happens real world?

[00:06:11] Speaker 00:
But the system wasn't on sale.

[00:06:14] Speaker 04:
Not exactly, Your Honor.

[00:06:16] Speaker 04:
What happens is the court maybe appreciates this.

[00:06:19] Speaker 04:
much like the system that was found to be prior art in the Scaltech case, there is data that is received from the customer, processed in ways, the details of which are confidential, but the overall method in outline is both requested by and provided to the customer, and then output in terms of these physician efficiency analytics go back to the customer.

[00:06:47] Speaker 04:
And in that way, we think it's quite analytical.

[00:06:50] Speaker 04:
quite analogous to the Scaltec case, where in that case there was waste that came into the processor, got processed in a certain way, the waste went back to the customer in a valued form, coke in that case.

[00:07:02] Speaker 04:
That was found, even though the details of that method were not available to the customer, that was found to be an on-sale bar.

[00:07:10] Speaker 01:
Well, medicine suggests that the sale of the output of a method is a sale of the method.

[00:07:18] Speaker 01:
I'm sorry, once more, Your Honor.

[00:07:19] Speaker 01:
I say our in-bank decisions in medicine suggest that the sale of the output of a method is the sale of a method within the meaning of the onset of a bar.

[00:07:31] Speaker 04:
Right.

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And we, of course, agree with that, as we have no choice.

[00:07:34] Speaker 01:
And what about in a systems claim?

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Is the output of a system a sale of the system?

[00:07:42] Speaker 04:
We think that the same analysis applies to both, and certainly

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at trial, the infringement issue was analyzed in exactly the same way.

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Exactly the information that I provided to you was argued to be and ultimately found to be sufficient to establish infringement of both the system claim and the method claim.

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And so in some cases, it could obviously make a distinction.

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In this case, it doesn't.

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Now, this court has said following the Pfaff case,

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that policy justifications don't matter.

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But in this case, in medicines, the Court analyzed or described policy justifications anyway.

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And in this case, the policy justification that looms largest for us is that this predecessor product, the same as the later product, was sold starting two years before the patent application.

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The buyers of that product

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understood that they were buying a product that was free to the public to use consistent with the terms of their agreement with Optum.

[00:08:49] Speaker 04:
It wasn't until eight years later when the patent issue that they were first put on notice said, no, somebody claims that this is infringing.

[00:08:59] Speaker 00:
And the way that you mentioned policy issues, isn't the policy of the law that is opposed to someone who had an invention earlier and didn't publicize it, the later person who came in and utilized the patent system and disclosed the invention, the law favors such a person?

[00:09:19] Speaker 04:
That's not what either Hellsend or Medicine says, Your Honor.

[00:09:23] Speaker 04:
And I think that what Your Honor is focusing on is how, historically,

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Some third-party claims, the claims of the use by the accused party, are treated differently.

[00:09:36] Speaker 04:
But it is hard to find that distinction in either medicines or Hellsend.

[00:09:40] Speaker 04:
And the policy justification that I was trying to describe was the policy of discouraging the removal of inventions from the public domain.

[00:09:50] Speaker 04:
And that's exactly what happened here, Your Honor.

[00:09:53] Speaker 04:
This case seems to us to be analogous.

[00:09:56] Speaker 04:
I mentioned before the Scaltech case.

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but also the Evans case, where the user in question raising the 102 issue was the accused party, was the defendant.

[00:10:08] Speaker 04:
And that's the case in which the court set out the rule that is also applicable here.

[00:10:13] Speaker 04:
If the accused product is the same as the product that was used before, that's sufficient to establish a 102 defense.

[00:10:25] Speaker 01:
Could I bring you back to the infringement issue

[00:10:29] Speaker 01:
Please.

[00:10:30] Speaker 01:
As I understand it, your contention is that the specification disclaims the direct approach, right?

[00:10:42] Speaker 01:
Correct.

[00:10:43] Speaker 01:
And then I guess it was claims, what is it, 22 and 29 or whatever it is, that had claims for direct standardization, right?

[00:10:54] Speaker 04:
No, Your Honor.

[00:10:55] Speaker 04:
One oddity in this case is neither one of those claims includes the phrase direct standardization.

[00:11:02] Speaker 04:
That phrase is only included in unasserted claims.

[00:11:07] Speaker 04:
And those unasserted dependent claims are the claims that were added five years later.

[00:11:11] Speaker 03:
27 and 28.

[00:11:14] Speaker 03:
Among them, 27 and 28.

[00:11:16] Speaker 04:
I think it's not 28.

[00:11:18] Speaker 04:
I think it's 22.

[00:11:21] Speaker 04:
27 or 29, but you're talking about the same thing, two independent claims.

[00:11:25] Speaker 04:
Those were the two claims that were asserted.

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And the, as I say, the unasserted claims that were added later that included the language direct standardization.

[00:11:36] Speaker 04:
So when the application was filed, no such phrase appeared anywhere in the application or the claims.

[00:11:44] Speaker 04:
I see that I have four minutes left, and I wonder.

[00:11:48] Speaker 01:
22 is one of the asserted claims, right?

[00:11:51] Speaker 01:
Yes.

[00:11:51] Speaker 01:
And then so then 27 and 28 are added dependent claims to 22.

[00:11:59] Speaker 01:
And I guess the argument is if 27 and 28 describe direct standardization, that that must be something that's also covered by claim 22, no?

[00:12:14] Speaker 04:
That's the argument.

[00:12:15] Speaker 04:
Those claims weren't asserted.

[00:12:18] Speaker 04:
22 and 29 that were asserted.

[00:12:21] Speaker 04:
But those unasserted claims, if those undo the disavowal, then you have to reach the written description arguments that we also set out in our brief.

[00:12:32] Speaker 03:
Can I ask you just one quick question?

[00:12:34] Speaker 03:
And I think you were, in responding to some questions about the on-sale bar, you were talking about 22 is a method claim, 29 is a computer-programmed product claim.

[00:12:45] Speaker 03:
I don't know whether that's the same as a system claim or not.

[00:12:48] Speaker 03:
And then you reverted to how, on the infringement side of the case, the infringement was treated identically.

[00:12:56] Speaker 03:
What was the nature of the activity accused of infringement, selling

[00:13:01] Speaker 04:
In Evans?

[00:13:02] Speaker 04:
I'm sorry, in Evans?

[00:13:05] Speaker 03:
No, in the case that we have in front of us right now, when the other side asserted infringement, was it by your selling something, making it, using it, what?

[00:13:19] Speaker 04:
The focus was on selling.

[00:13:20] Speaker 04:
And so the damages were measured by the number of customers and the sales to those customers.

[00:13:27] Speaker 03:
You sold your computer product?

[00:13:30] Speaker 04:
Eventually, yes, but pre-software was sold.

[00:13:37] Speaker 04:
But pre-application, the software was not in itself sold.

[00:13:42] Speaker 04:
It was rather data comes in, software processes it, different process, data goes back.

[00:13:50] Speaker 04:
And may I reserve my last couple of minutes?

[00:13:52] Speaker 00:
We will give you three minutes, Brad.

[00:13:54] Speaker 04:
Thank you.

[00:13:55] Speaker 00:
Mr. Brophy.

[00:13:58] Speaker 02:
Good morning.

[00:13:59] Speaker 02:
I represent the Apple ECC group, and I think I'm happy to chat about the items that Mr. Lancaster raised.

[00:14:08] Speaker 02:
I think, first and foremost, picking up where Mr. Lancaster left off, it's important to understand that there was a flow of activity over time for this predecessor company, IHCIS, which eventually became Opmincite.

[00:14:23] Speaker 02:
During the period prior to the 126 patent being filed,

[00:14:28] Speaker 02:
They did not have a product to sell.

[00:14:30] Speaker 02:
The only thing they could do is take in data from a customer, run that data internally, and deliver the outputs, the results, to a customer.

[00:14:38] Speaker 02:
They did not license the software.

[00:14:39] Speaker 02:
They didn't give a senior to come.

[00:14:40] Speaker 01:
So isn't that a sale of the method under medicines?

[00:14:45] Speaker 02:
It is a sale of the method insofar as the patentee is concerned.

[00:14:49] Speaker 02:
There's a fundamental distinction between a patentee sale and a third party, completely disconnected third party sale.

[00:14:56] Speaker 02:
And in this instance,

[00:14:58] Speaker 02:
Optum Insight was completely separate from CC Group.

[00:15:01] Speaker 01:
Well, let's put it this way.

[00:15:02] Speaker 01:
You agree, do you not, that if this sale had been made by the patentee, that the on-sale bar would apply?

[00:15:10] Speaker 02:
I do not agree, Your Honor, but for a different reason than I think you suspect.

[00:15:14] Speaker 02:
The reason I don't agree is that one of the issues we raised on appeal is that the prior art reference, which we're calling impact analysis, is actually a Frankenstein of five different documents from different time periods, which

[00:15:27] Speaker 02:
Both parties admitted deal with multiple methodologies.

[00:15:31] Speaker 02:
They do not relate to the same methodology.

[00:15:33] Speaker 02:
And so there is no impact analysis prior art.

[00:15:37] Speaker 02:
There's a conglomerate.

[00:15:38] Speaker 01:
Well, putting that aside, if there is impact analysis prior art, you agree that if this sale had been made by the patentee, that the on-sale bar would apply?

[00:15:48] Speaker 02:
I agree with respect to the method claim, which is claim 22, but not with respect to claim 29, which is a product claim.

[00:15:55] Speaker 01:
And what's the difference?

[00:15:57] Speaker 02:
One of them is a product tangibly embodied in computer code.

[00:16:02] Speaker 02:
So it's like a CD for example that you would sell and there was no sale of a CD.

[00:16:07] Speaker 02:
There was no product of that variety to sell.

[00:16:11] Speaker 02:
And so unless we're going to ignore entirely the fundamental distinction between those different types of claims, there has to be some meaning behind that.

[00:16:19] Speaker 02:
And in my mind the meaning is

[00:16:21] Speaker 02:
One of them is a method of use.

[00:16:23] Speaker 02:
The other is a product claim.

[00:16:25] Speaker 02:
I agree with you that under this court's jurisprudence, when a patentee offers something for sale that is the result of a method, that that triggers the on-sale bar.

[00:16:36] Speaker 02:
I do not agree, however, that that relates to this case, because we're dealing with a third-party use.

[00:16:40] Speaker 02:
And there are fundamental distinctions in the policy behind enforcement of the on-sale bar in those situations.

[00:16:46] Speaker 01:
Well, the problem is that we have

[00:16:48] Speaker 01:
cases which, including medicines and health and both, which say that the unsolved bar applies to third parties.

[00:16:56] Speaker 02:
And my view of that is, and I think if you look at those decisions and the facts underlying those decisions, the third parties that are referenced there are third parties that are somehow in league with the patentee.

[00:17:08] Speaker 02:
So for example, the patentee doesn't make a sale.

[00:17:11] Speaker 02:
In league with the patentee.

[00:17:12] Speaker 02:
In league with or connected in some way.

[00:17:14] Speaker 02:
So for example, a third party

[00:17:17] Speaker 02:
works closely with the patentee, obtains information about the invention, and then goes off and sells it without the inventor objecting.

[00:17:26] Speaker 00:
But we have to look at statutes.

[00:17:29] Speaker 00:
We're looking at the old statutes.

[00:17:31] Speaker 00:
We're not talking about A, used and only used by others.

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B, talks about in public use or in sale without any distinction between by the inventor

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or by a third party.

[00:17:46] Speaker 02:
So my view of that goes all the way back to the 1800s in the Pennant case, which discusses the entire purpose of the on-sale bar.

[00:17:55] Speaker 02:
And the purpose of the on-sale bar, as they recognize there, is when the patentee is in control of the timing of his or her own commercialization, there should be a heightened standard for them.

[00:18:06] Speaker 02:
So in other words, we're going to provide an exception to the normal rule that the public must be

[00:18:13] Speaker 02:
conferred knowledge of the invention in this circumstance in which the patentee has control over the timing of his or her commercialization and decides to go ahead and commercialize.

[00:18:23] Speaker 02:
That is fundamentally distinct from this case in which we had no control over Optum Insights commercialization.

[00:18:30] Speaker 02:
And so the on-sale bar simply doesn't apply to this situation.

[00:18:33] Speaker 01:
And that's... But that the cases say otherwise.

[00:18:36] Speaker 01:
The cases say it does apply to third parties.

[00:18:38] Speaker 02:
The cases, number one, the Helsington Medicines case exclusively deal with sales by the patentee.

[00:18:45] Speaker 01:
And as I mentioned, the third parties... They speak to third-party sales also.

[00:18:51] Speaker 02:
And I guess my reading of that, Your Honor, is that those third parties are, as I said, in league with or somehow affiliated with the patentee.

[00:18:58] Speaker 02:
And the body of case law is filled with examples of the patentee not taking a step, the third parties taking a step,

[00:19:06] Speaker 02:
with the patentee's knowledge, awareness, acceptance.

[00:19:10] Speaker 01:
What about 102G?

[00:19:12] Speaker 01:
Why doesn't 102G apply?

[00:19:14] Speaker 02:
The Fox Group case requires that for 102G, the lack of concealment requires that the thing that is not concealed is what the invention actually claims.

[00:19:24] Speaker 01:
And so in other words, the thing that... Yeah, but is a confidentiality agreement the same thing as concealment?

[00:19:30] Speaker 01:
Concealment

[00:19:32] Speaker 01:
seems to be addressed to a large extent to the question of commercialization.

[00:19:38] Speaker 01:
In other words, you keep your invention secret and you don't commercialize it.

[00:19:44] Speaker 01:
Whereas here, it was commercialized.

[00:19:47] Speaker 01:
And why does this fit within concealment?

[00:19:50] Speaker 01:
I'm having some difficulty with that.

[00:19:52] Speaker 02:
The purpose behind concealment, the question of concealment, and really the purpose behind all of this, is the fundamental policy of

[00:20:01] Speaker 02:
making sure that the public gets access to knowledge of inventions as quickly as possible.

[00:20:06] Speaker 02:
And 102G is not served by an interpretation that allows private secret sales ensconced within confidentiality agreements to satisfy the lack of concealment requirements.

[00:20:20] Speaker 01:
Well, the sale's not secret.

[00:20:21] Speaker 01:
What you're contending is that the details of the invention are not kept confidential.

[00:20:27] Speaker 02:
Exactly.

[00:20:27] Speaker 02:
And how does it benefit the public at large if a company is permitted to

[00:20:32] Speaker 02:
continue to sell a product in a way that doesn't confer knowledge to the public.

[00:20:37] Speaker 02:
But then use that sale later when someone comes along and discloses it through the patent process in a way that we want to encourage.

[00:20:45] Speaker 02:
But that person gets to invalidate this person's patent.

[00:20:48] Speaker 02:
Between those two people, and this is what Gourvi Garlak says, as between those two parties, we want to promote the party who is going to bring the invention to the public domain.

[00:20:58] Speaker 02:
And this person here, who offered it for sale in secret, didn't do that.

[00:21:03] Speaker 02:
And that's what Rescue Net says.

[00:21:04] Speaker 02:
That's what Gore V. Garlock says, which are both good law.

[00:21:07] Speaker 02:
We're not addressing the Helsing case.

[00:21:09] Speaker 02:
And again, I believe that's because the Helsing and Medicines Co.

[00:21:12] Speaker 02:
cases deal with third parties that are somehow affiliated with the patentee.

[00:21:16] Speaker 02:
When you have a true third party sale, it simply cannot be that the private commercialization of that third party acts as a prior art reference.

[00:21:26] Speaker 02:
One thing that I've been juggling in my mind, and I'll admit I don't exactly fully understand or appreciate the impact of this, but essentially what that means, if we were to interpret the on-sale bar to apply to truly third-party sales, it would mean that that third-party sale can act as an anticipating sale, but can never be used as an obviousness, as part of an obviousness argument.

[00:21:51] Speaker 02:
And I don't understand how that works, because the

[00:21:54] Speaker 02:
The whole premise of 103 is that a 102 reference can also be used as a 103 reference.

[00:21:59] Speaker 02:
But in this situation, the 102 reference doesn't deprive the public of the knowledge of the invention.

[00:22:04] Speaker 02:
And so it can act as an anticipating reference, but can never act as an obviating reference.

[00:22:09] Speaker 02:
And that seems to be a fundamental conflict under the law.

[00:22:12] Speaker 01:
Could you address the infringement issue?

[00:22:15] Speaker 02:
Yes, certainly.

[00:22:16] Speaker 01:
If it weren't for these dependent claims, which I guess are 27 and 28,

[00:22:24] Speaker 01:
you would lose on the claim construction, wouldn't you?

[00:22:28] Speaker 02:
No, I disagree, Your Honor.

[00:22:30] Speaker 02:
And there are a number of reasons.

[00:22:31] Speaker 02:
First, the prosecution history itself includes statements from the inventor saying direct standardization was within the scope of my claims, and here's how it works.

[00:22:41] Speaker 01:
And under the libel Flarsheim case... Well, did that occur at the time that these dependent claims were added?

[00:22:48] Speaker 02:
It occurred in a rejection shortly after those dependent claims were added.

[00:22:52] Speaker 01:
OK, so it wasn't part of the original prosecution?

[00:22:55] Speaker 02:
It wasn't, Your Honor.

[00:22:56] Speaker 02:
Well, I shouldn't say original prosecution, because it was part of the original prosecution file.

[00:23:01] Speaker 02:
But libel Flarshine says that for purposes of claim construction, you take the patent and the record as it was issued.

[00:23:10] Speaker 02:
You do not look at it at the time it was filed.

[00:23:13] Speaker 02:
You look at it at the time it was issued.

[00:23:16] Speaker 02:
I think, pretty clear under the law, because prosecution plays a role in the claim construction process.

[00:23:21] Speaker 02:
And so we can't simply ignore, and I know the appellant characterizes these as late added claims.

[00:23:28] Speaker 02:
These weren't late added claims.

[00:23:30] Speaker 02:
We added these claims as part of the prosecution process in the original case.

[00:23:33] Speaker 02:
So they weren't late added.

[00:23:35] Speaker 02:
And anything that takes place in the prosecution bears on the meaning of the claim terms as they're construed by the court.

[00:23:41] Speaker 02:
And the reason for that is that entire record is what informs the skilled artisan

[00:23:46] Speaker 02:
as to what is inside and outside the scope of the invention.

[00:23:50] Speaker 03:
So I think I'm looking at the right place.

[00:23:52] Speaker 03:
This is Appendix Page 850.

[00:23:58] Speaker 03:
We have just the one page, so it's not very informative, where it says, Claim 27 was rejected and residing direct.

[00:24:07] Speaker 03:
standardization, the examiner considered it unclear how the calculation utilizes direct standardization.

[00:24:14] Speaker 03:
And then you say the direct standardization method utilizes each physician's episode distribution weight to calculate physician and peer group statistics.

[00:24:25] Speaker 03:
There was no apparent recognition on the examiners

[00:24:29] Speaker 03:
part that there was even a question as to whether there had been a disclaimer in the spec that what error number two about all the prior art was essentially the use of direct standardization as you have now called it and the statement quite explicit statement in the specification about what the invention requires

[00:25:00] Speaker 03:
Don't you think more in the prosecution history than this should be needed to overcome what we would in these circumstances otherwise I think find a very clear disclaimer in this respect?

[00:25:14] Speaker 02:
So I have a couple thoughts with respect to that.

[00:25:16] Speaker 02:
First of all,

[00:25:17] Speaker 02:
Your absolute software case states that when a party uses the phrase present invention in a haphazard way... This is not haphazard.

[00:25:27] Speaker 03:
It depends what verb comes after it.

[00:25:29] Speaker 03:
The verb is pretty strong.

[00:25:32] Speaker 02:
I think that there are three things that I would say to that.

[00:25:36] Speaker 02:
One, we have dependent claims that explicitly bear on direct standardization.

[00:25:43] Speaker 02:
A skilled artisan reading the patent would not believe that there was a clear and unequivocal disavowal of scope, because the inventor has claims directed to that exact embodiment.

[00:25:53] Speaker 03:
Number two, the- But how does that square with the notion that disavowal, if clear enough, can overcome what is otherwise absolutely plain on the face of the claim, not even a question of interpretation?

[00:26:09] Speaker 02:
So the second, and that's a good question.

[00:26:13] Speaker 02:
The second thing is we have to look very carefully at what the specification says.

[00:26:18] Speaker 02:
And both experts in this case agree to this, by the way.

[00:26:22] Speaker 02:
And this was testimony that came out of trial as well.

[00:26:26] Speaker 02:
The second error that's identified in the patent, it does not say the invention does not work when you do this.

[00:26:35] Speaker 02:
It doesn't.

[00:26:36] Speaker 02:
What it says is, and their expert agreed to this at trial,

[00:26:39] Speaker 02:
What it says is in certain circumstances when you have low data volume, when the number of claims that you're analyzing is small, the use of direct versus indirect can result in errors.

[00:26:53] Speaker 02:
It is not saying

[00:26:55] Speaker 02:
The invention doesn't work with this.

[00:26:57] Speaker 02:
It's saying in certain circumstances.

[00:26:59] Speaker 03:
But why doesn't it say, and I guess this is particularly on column 92, the system of the present invention uses an indirect standardization technique for weighing together, et cetera.

[00:27:09] Speaker 03:
Why doesn't that say in clear terms, we know that other people have been using direct standardization, but that's not our invention, even though the other one works.

[00:27:21] Speaker 02:
So direct and indirect, as it sounds like you appreciate, have been around for decades.

[00:27:27] Speaker 02:
And there is no dispute by those skilled in the art that either one works.

[00:27:31] Speaker 02:
The notion of waiting comes with it, direct and indirect standardization, and everyone knows it.

[00:27:36] Speaker 02:
It's as simple as that.

[00:27:37] Speaker 01:
I don't think that's necessarily the case.

[00:27:39] Speaker 01:
I mean, the specification here is saying that direct standardization doesn't work well in some circumstances.

[00:27:45] Speaker 02:
In some circumstances, yes.

[00:27:47] Speaker 02:
But that is not a clear disavowal to someone skilled in the art, because as

[00:27:51] Speaker 02:
Optum Insights expert even agreed.

[00:27:54] Speaker 02:
When you look at this, he understands this to say that only in certain circumstances does this lead to error.

[00:27:59] Speaker 02:
Not that you simply can't use it.

[00:28:01] Speaker 02:
And if you have large data volumes, which many health plans do, you're perfectly fine using direct standardization.

[00:28:07] Speaker 02:
And everyone's known that for a very long time.

[00:28:09] Speaker 02:
And so this is not a situation where no one knew what direct standardization was or whether it would work or not.

[00:28:16] Speaker 02:
This is straightforward math.

[00:28:18] Speaker 01:
So what do we do if we disagree with you and we think this is a clear disavowal?

[00:28:23] Speaker 01:
Do you lose then?

[00:28:25] Speaker 02:
I don't think so, Your Honor.

[00:28:26] Speaker 02:
First of all, I don't know, and obviously this is up to you and not to me, but I don't understand how there can be a clear disavowal to a skilled... No, no, but you're already in my premise.

[00:28:37] Speaker 01:
I'm saying, let's assume hypothetically that we disagree with you and say that there is a clear disavowal of direct.

[00:28:46] Speaker 02:
Do you lose?

[00:28:47] Speaker 02:
Your Honor, I don't know that.

[00:28:48] Speaker 02:
And the reason is this was a term to claim construction at the beginning of the case.

[00:28:52] Speaker 02:
And so we directed our entire fact discovery in this case with the understanding that it covered both.

[00:28:58] Speaker 02:
And so we did not press on all the ways in which this software might satisfy the indirect standardization form of waiting.

[00:29:06] Speaker 02:
So unfortunately, we just don't have the record for me to answer that question.

[00:29:11] Speaker 01:
Did you argue in your brief that a remand is required if

[00:29:15] Speaker 01:
We disagree with you on the claim construction?

[00:29:18] Speaker 02:
I do not believe so, Your Honor.

[00:29:19] Speaker 02:
I think our position was simply that this argument should fail.

[00:29:24] Speaker 00:
Any final thoughts, Mr. Brophy?

[00:29:28] Speaker 02:
I don't think so.

[00:29:29] Speaker 02:
Thank you all very much for your time.

[00:29:30] Speaker 00:
Thank you.

[00:29:31] Speaker 00:
Mr. Lancaster will give you three minutes for rebuttal if needed.

[00:29:38] Speaker 04:
Two, I think, very brief points, Your Honor.

[00:29:41] Speaker 04:
Just as to the commentary of the experts on the

[00:29:44] Speaker 04:
weighted episode of care issue, if the Court were to look at the testimony of the Optum expert Thomas, you would see that his clear testimony was that there was not support for direct standardization within the patent.

[00:30:00] Speaker 04:
But, of course, we have to leave that to the record.

[00:30:02] Speaker 04:
The second point that I wanted to make was the Section 102 point, which, as Your Honor observed up front, is not an issue that the Court need reach if it resolves the

[00:30:14] Speaker 04:
infringement issue.

[00:30:15] Speaker 04:
But I wanted to remind the Court of the view of this product-process distinction that Cave counsel took at trial.

[00:30:26] Speaker 04:
And that view, again, was, quote, this is not a different alternative, referring to the earlier product.

[00:30:34] Speaker 04:
This is telling the story of the accused product, close quote.

[00:30:39] Speaker 04:
Not just process, product.

[00:30:41] Speaker 04:
That's on Appendix 11821.

[00:30:44] Speaker 04:
And that was a key part of Cave's arguments at trial.

[00:30:49] Speaker 04:
It seems apparent that Cave's argument stands or falls on this third-party distinction, what the Court has already inquired about, a distinction that you can't find in Hellsend or medicines.

[00:31:02] Speaker 04:
But maybe more to the point, it's a distinction that you can't find in the Supreme Court's FAF decision and the emphasis on looking at the language of the statute.

[00:31:10] Speaker 04:
When you run through 102, and one of the members of this panel already observed it, there are many parts of 102 that focus on which party is relevant to that particular section.

[00:31:22] Speaker 04:
Not so for on sale.

[00:31:24] Speaker 04:
There is no limitation within this patent, within the statute.

[00:31:29] Speaker 04:
And so it does seem that this is a pretty pure case of what is perhaps the fundamental rule of patent litigation, that which infringes if after

[00:31:40] Speaker 04:
invalidates, if before.

[00:31:43] Speaker 04:
And for that reason, we ask for the relief that we requested.

[00:31:47] Speaker 01:
I have one more question for you.

[00:31:49] Speaker 01:
Let's suppose hypothetically that we were to agree with you on the claim construction.

[00:31:55] Speaker 01:
They now argue for the first time, apparently not raised in the brief, that that should result in a remand rather than J-Mall in your favor.

[00:32:04] Speaker 01:
What's your answer to that?

[00:32:05] Speaker 04:
I don't understand what the issue would be, Your Honor, because there was agreement throughout the case, including at trial, that the method that Optum used was direct standardization.

[00:32:20] Speaker 04:
There was no fact issue left to be resolved by the district court.

[00:32:23] Speaker 04:
That's part of the record as an agreement between the parties.

[00:32:27] Speaker 04:
So you have the claim construction excluding direct standardization.

[00:32:31] Speaker 04:
You have the agreement that that's what Optum practices.

[00:32:34] Speaker 04:
That should be the end of the case, Your Honor.

[00:32:37] Speaker 00:
Thank you.