[00:00:00] Speaker 02:
Our next case is the Core Wireless Licensing versus Apple Inc.

[00:00:27] Speaker 02:
Mr. Mueller, you reserve three minutes to revoke.

[00:00:56] Speaker 01:
Yes, Your Honor.

[00:00:58] Speaker 01:
Just wait just a little bit.

[00:01:05] Speaker 01:
Okay.

[00:01:06] Speaker 00:
Thank you, Your Honor.

[00:01:07] Speaker 00:
May it please the Court, my name is Joe Mueller, and I represent, along with my partner, Richard O'Neill Appel.

[00:01:14] Speaker 00:
With Your Honor's permission, I'd prefer to start with a 151 patent and then turn to the 536 patent.

[00:01:20] Speaker 00:
With the 151 patent, there are three grounds on which we believe the judgment below cannot stand.

[00:01:27] Speaker 00:
First, with respect to infringement, there was a failure of proof with respect to elements of the claim 14, as construed by the court below.

[00:01:38] Speaker 00:
Second, for invalidity, under at least the logic of the infringement theory, as presented by core wireless, the claim would be invalid.

[00:01:48] Speaker 00:
If that logic were applicable,

[00:01:50] Speaker 00:
in a way that Core Wireless argued with respect to Apple's products, the claim would be invalid in light of the prior art.

[00:01:57] Speaker 00:
And third, as a matter of enforceability, Core Wireless's predecessor, Nokia, the previous owner of the patent, breached a duty to disclose the patent application in a timely fashion before Etsy.

[00:02:09] Speaker 00:
Those are the three grounds on which we believe the judgment cannot stand, three independent grounds.

[00:02:14] Speaker 00:
And I'll start with non-infringement.

[00:02:16] Speaker 00:
With respect to non-infringement, the claim requires that the mobile station,

[00:02:21] Speaker 00:
In this case, the accused iPhones receive a timing advance value one time per multi-frame structure.

[00:02:28] Speaker 00:
A multi-frame structure is a unit of time.

[00:02:31] Speaker 00:
It's a term of art in the context of GPRS, which is a cellular standard.

[00:02:36] Speaker 00:
Multi-frame structure refers to eight multi-frames, which are in turn comprised of 52 TDMA frames, which are in turn comprised of eight time slots.

[00:02:46] Speaker 00:
So it's a concatenation of time slots, and the court construed after

[00:02:51] Speaker 00:
argument by both sides that the claim required sending a timing advance value one time per multi-frame structure.

[00:02:59] Speaker 00:
So for each multi-frame structure, one time a timing advance value would be provided.

[00:03:05] Speaker 00:
And the claim requires explicitly that devices must be configured to receive this multi-frame or the timing advance value one time per multi-frame structure.

[00:03:14] Speaker 00:
So that's the claim requirement.

[00:03:15] Speaker 03:
So the purposes of this appeal, at least, can we assume that this one-time thing is consistent with the continuous operation?

[00:03:27] Speaker 00:
Would we agree that one time is met by continuous?

[00:03:30] Speaker 00:
No, we don't agree with that.

[00:03:32] Speaker 00:
But there's a threshold problem.

[00:03:34] Speaker 03:
I mean, it seems that that was what was argued to the jury.

[00:03:39] Speaker 03:
And there seems like there's substantial evidence for it.

[00:03:41] Speaker 03:
I know you don't agree, but you didn't seem to challenge that as error on appeal.

[00:03:46] Speaker 00:
I just want to start as a basis.

[00:03:48] Speaker 00:
Sure.

[00:03:48] Speaker 00:
And I'm happy to start where we are.

[00:03:50] Speaker 03:
I mean, it's not worth quibbling over things that you're not going to win.

[00:03:52] Speaker 03:
Sure.

[00:03:53] Speaker 05:
Well, yeah.

[00:03:54] Speaker 05:
Let me make sure I understand, because this comes as a surprise to me.

[00:03:57] Speaker 05:
I thought your position was this has three modes that it can act in.

[00:04:02] Speaker 05:
It can act in continuous, it can act in initial, and it can act in on-demand.

[00:04:06] Speaker 05:
And because on-demand and initial are additional

[00:04:09] Speaker 05:
messages that are sent, TAVs that are sent, there's not one.

[00:04:13] Speaker 05:
But isn't it the case that if all that the base station and the mobile station were equipped and configured to do was continuous, that that would be a one communication?

[00:04:26] Speaker 00:
No.

[00:04:26] Speaker 00:
In that case we would surprise sure and I misunderstood your argument then no, and there's there's two basic problems with We did make this argument in our briefs in fact I don't have any of the page numbers for your honors But what we pointed out in the briefs is that even in the continuous mode the timing advanced value is sent four times and the art Okay, okay, I understand before the four as opposed to the one.

[00:04:50] Speaker 05:
Yeah, but if it's only

[00:04:53] Speaker 05:
If the Apple phone is configured to receive the one and act on the one, that would be sufficient.

[00:05:04] Speaker 05:
I take it that even regardless of whether the base station is sending it additional ones for redundancy.

[00:05:11] Speaker 05:
The additional messages are just redundancy, right, in case the phone has not picked up the first one?

[00:05:17] Speaker 00:
Sure.

[00:05:17] Speaker 00:
I mean, if I could just perhaps step back, and I'll try to answer Your Honor's question.

[00:05:21] Speaker 00:
So the system that actually exists, and there was no dispute on how the products actually work.

[00:05:28] Speaker 00:
There's no dispute that the products have one mode, and in that one mode, they're capable of at all times receiving timing advanced values pursuant to three procedures, initial, on-demand, and continuous.

[00:05:40] Speaker 00:
There was no dispute on that.

[00:05:41] Speaker 00:
The Apple iPhones are always configured to receive timing advanced values in any time slot within a multi-frame structure, one, two, 250,

[00:05:50] Speaker 00:
They are always equipped to do that, always configured to do that.

[00:05:54] Speaker 05:
I think what your honor is asking is, in the instance where- In the continuous, where four messages are sent.

[00:05:59] Speaker 00:
In the continuous, where the four messages are sent, there's still two basic reasons why the products would not infringe.

[00:06:06] Speaker 00:
The first is they're still configured to receive timing advanced values at any time.

[00:06:10] Speaker 00:
They're never in only continuous mode.

[00:06:12] Speaker 00:
They're always in a mode that allows for the receipt of timing advanced values at any moment in time in any time slot.

[00:06:19] Speaker 00:
They're simply not configured to do continuous only.

[00:06:22] Speaker 00:
That is never a mode that they enter.

[00:06:25] Speaker 00:
They're always in a mode that allows for timing advance values as many times as they might be sent.

[00:06:30] Speaker 00:
The second problem with the theory is even in the continuous mode, the facts are undisputed that the timing advance values are sent four times.

[00:06:38] Speaker 00:
The argument made to the district court is that nonetheless met the one-time requirement because the products don't

[00:06:45] Speaker 00:
receive the timing advance value until it's fully decoded and used.

[00:06:50] Speaker 00:
But again, the testimony was clear that they do hit the antenna, they're subject to analog to digital processing, they go to the baseband circuit, they are received in a real sense.

[00:07:00] Speaker 00:
And received in a sense that matters for the invention, because the alleged invention here is to reduce the number of time slots expended by timing advance value operations.

[00:07:10] Speaker 00:
That allows the base station to use other time slots for communications to other phones,

[00:07:15] Speaker 00:
And it also allows the phones to not spend as much time listening for timing advance values.

[00:07:20] Speaker 00:
And we cited to these sections the specification in the briefing, but as one example, the patent talks about how under the approach of the patent, the mobile station, the number of slots to which a mobile station must listen for timing advance values is also reduced.

[00:07:36] Speaker 00:
That doesn't happen in the Apple products.

[00:07:38] Speaker 00:
They're always listening for timing advance values pursuant to any of the procedures.

[00:07:43] Speaker 00:
They are never in a mode where they will only be equipped, configured to receive one timing advance value.

[00:07:49] Speaker 00:
They're, in fact, the opposite of the claimed approach.

[00:07:53] Speaker 05:
Can I move you to the question of implied waiver or inequitable activity?

[00:08:03] Speaker 05:
Suppose you have a case in which

[00:08:05] Speaker 05:
There is a clear breach of the obligation by the participant in a standard-setting organization to reveal an application or a patent.

[00:08:16] Speaker 05:
And nonetheless, the standard-setting organization goes ahead, but they pick a completely different program.

[00:08:26] Speaker 05:
So there's clearly a breach, but the breach does not result in having the patent incorporated within the standard.

[00:08:36] Speaker 05:
Do you think, nonetheless, that that's actionable, an actionable breach?

[00:08:42] Speaker 00:
It might be that there's no case for controversy if, for example, there was no patent claim.

[00:08:47] Speaker 05:
Well, suppose there is another patent claim, but it isn't directed to the particular standard.

[00:08:53] Speaker 05:
It's some poor guy out there who's doing something other than under the standard, and he gets sued.

[00:08:58] Speaker 05:
Can he come in and say, there was a breach of the obligation to the standard setting organization, and

[00:09:07] Speaker 05:
It may not have had the consequences for which the rule was established, but nonetheless, it was a breach and it has consequences.

[00:09:14] Speaker 05:
For me, therefore, you should throw the patent out.

[00:09:17] Speaker 05:
What would you do?

[00:09:18] Speaker 00:
I'd say two things, Your Honor.

[00:09:19] Speaker 00:
These types of claims can be brought, and I have litigated cases in which they have been brought, as breach of contract.

[00:09:25] Speaker 00:
So it's conceivable then the facts you're describing, the party who feels aggrieved by the breach could bring a breach of contract action to try to hold accountable the party.

[00:09:34] Speaker 00:
That's not what we've got.

[00:09:35] Speaker 00:
But I think in an implied waiver situation like we have here, it's difficult to envision how it might come to a court in the absence of an assertion of that same technology as standard essential, which is exactly what happened here.

[00:09:48] Speaker 00:
The 151 patent was asserted from the complaint onward as standard essential.

[00:09:52] Speaker 00:
There was some attempt to move off that at trial.

[00:09:55] Speaker 00:
But if you look at the complaint in the joint appendix, including

[00:10:00] Speaker 00:
Your Honor, at 3-0-0-5.

[00:10:02] Speaker 05:
So when you say it's standing essentially, the organization selected Erickson's plan and not Nokia's, I take it.

[00:10:09] Speaker 05:
Now, are you saying that, nonetheless, the 151 was effectively incorporated in the standards?

[00:10:19] Speaker 00:
Well, that's their argument.

[00:10:20] Speaker 00:
I think our threshold argument is it wasn't.

[00:10:22] Speaker 00:
There's no infringement, because the approach that was actually selected is different.

[00:10:25] Speaker 05:
But assuming infringement, you would say, well,

[00:10:28] Speaker 05:
So my hypothetical doesn't apply because there was a consequence, which is that we're here.

[00:10:32] Speaker 00:
In fact, and in fact, at trial, they argue that the Erickson proposal had effectively co-opted their technology and that it was incorporated into the standard.

[00:10:40] Speaker 00:
This is exactly what the rules are intended to prevent, where a party sits on a patent application for years, four years, after this section of the standard was adopted, surfaces later and asserts the patent is standard essential.

[00:10:54] Speaker 00:
And the various reasons relied on by the district court for not finding unenforceability simply don't square with the plain language of the policy.

[00:11:01] Speaker 00:
The policy itself says you're required to disclose applications, not just patents, but applications that might be essential if a proposal were adopted.

[00:11:12] Speaker 00:
So it's not just actual essentiality that's a touchstone.

[00:11:16] Speaker 00:
It might be essential if the proposal were adopted.

[00:11:19] Speaker 00:
And as our expert, who is the former chairman of the board of Etsy, testified,

[00:11:22] Speaker 00:
The purpose behind that is to ensure that choices with respect to technical proposals are made with eyes wide open.

[00:11:28] Speaker 00:
That the various participants and working groups understand what parties are applying for in terms of coverage and protection on the proposals being made to the organization.

[00:11:39] Speaker 00:
So they can decide with eyes wide open as to who holds which rights which proposal to adopt.

[00:11:44] Speaker 00:
What happened here is exactly what the rules are intended to prevent.

[00:11:48] Speaker 00:
A party makes a proposal.

[00:11:50] Speaker 00:
has an application pending, doesn't reveal it for years, four years after the section was frozen, and five years after the proposal were made.

[00:11:59] Speaker 00:
And if the defense says, well, our proposal was rejected, but our idea got in through someone else's proposal that we knew about, that's not a defense.

[00:12:08] Speaker 00:
It still shows knowledge of the assertion of essentiality.

[00:12:12] Speaker 00:
And here we sit, subject to a claim of infringement based on using the standard.

[00:12:19] Speaker 00:
Well, if that's the type of claim you're trying to develop, that's the type of right you're trying to acquire, you need to let the standard setting organization know.

[00:12:25] Speaker 00:
That's exactly what the rules require, being clear and transparent about what rights you have in application form and in actual patent form.

[00:12:33] Speaker 00:
And that just didn't happen here.

[00:12:36] Speaker 00:
So we do think the unenforceability decision was wrong, and that it was an error of law in misreading the plain and unambiguous terms of the SCIPR policy.

[00:12:44] Speaker 00:
And we think it's a damaging precedent going forward

[00:12:47] Speaker 00:
not to make clear, but the rules mean what they say, and that if you're required to disclose applications that might be essential if a proposal is adopted, that necessarily means... You're helping me with the timeline of the facts here.

[00:12:58] Speaker 03:
Sure.

[00:12:58] Speaker 03:
They didn't disclose the application.

[00:13:00] Speaker 03:
Did they ultimately disclose the patent?

[00:13:03] Speaker 00:
Yes, in 2002.

[00:13:04] Speaker 03:
And was that before or after the standard was adopted?

[00:13:07] Speaker 00:
Four years after the standard was adopted.

[00:13:09] Speaker 00:
That's definitely right.

[00:13:10] Speaker 00:
And the NCI... Too late at that point for any... Too late for anyone to do anything.

[00:13:14] Speaker 00:
It was four years after the standard was frozen.

[00:13:17] Speaker 00:
And one of the arguments that the district court relied on is that the contours of the patent right weren't fully known until the patent was issued.

[00:13:25] Speaker 00:
Well, that doesn't, again, square with the policy.

[00:13:28] Speaker 00:
The policy refers to applications.

[00:13:30] Speaker 00:
And by definition, applications are not final.

[00:13:33] Speaker 00:
And the manifest purpose of that term, application, as confirmed by our expert, the former chairman of the board of the organization, was to be upfront and transparent, even with respect to applications.

[00:13:44] Speaker 00:
They might change over time, but you need to let the organization know you have an application on file that relates to the technology that might be essential if the proposal were required.

[00:13:56] Speaker 00:
If I might turn to the 536 patent briefly.

[00:13:58] Speaker 00:
In the 536 patent, again, we believe there's a failure proof with respect to the construed terms.

[00:14:05] Speaker 00:
The terms require a binary, good state, bad state system.

[00:14:10] Speaker 00:
The actual technology at issue is a more sophisticated and different eight-state system.

[00:14:15] Speaker 00:
One point I'd like to focus the course attention on, if I could in my remaining time, is actually an evidentiary ruling, which we think rests on an error of law, where testimony from the named inventor of the patent, as well as testimony from the engineer at Qualcomm who designed the chips, was excluded because the engineer and the inventor used the word state.

[00:14:37] Speaker 00:
And the word state also appears in the claims.

[00:14:41] Speaker 00:
And the district court took the view that it would be too confusing for the jury to hear testimony in which a word, state, appeared that also appears in the claims.

[00:14:49] Speaker 00:
It would be tantamount to some form of expert opinion or the like, akin to what this court dealt with in the Cordis case, where an inventor was asked about an accused infringing product.

[00:15:00] Speaker 00:
It's not what the testimony was.

[00:15:02] Speaker 00:
It was percipient testimony

[00:15:04] Speaker 00:
by witnesses who worked on, respectively, the chip at issue and who worked on the patent and the technology that gave rise to the patent.

[00:15:13] Speaker 00:
And they were offering fact testimony.

[00:15:15] Speaker 00:
The fact that they used the word state, which is a term in the computer field, referring to state machines and many different contexts in the computer field, is of no moment and should not have been allowed to be the basis for exclusion of that testimony.

[00:15:28] Speaker 00:
It was highly prejudicial to Apple.

[00:15:30] Speaker 00:
insofar as it deprived the jury of hearing from the inventor and the Qualcomm engineer with respect to key facts that related to our non-infringement defenses.

[00:15:40] Speaker 00:
And again, if the rule is going to be that any time a fact witness uses a claim term, their testimony is excluded, that's going to have a distorting effect on patent cases.

[00:15:50] Speaker 00:
And so we think at a minimum because of that, there needs to be a vacatur of the 536 decision and a retrial with the full set of evidence.

[00:15:59] Speaker 00:
We actually think we go further because we think it's a matter of law.

[00:16:02] Speaker 00:
There's a failure of proof.

[00:16:03] Speaker 00:
But at a bare minimum, the testimony should not have been excluded, and it was an error of law to do so.

[00:16:11] Speaker 00:
Thank you, Your Honor.

[00:16:19] Speaker 01:
Mr. Finster.

[00:16:22] Speaker 04:
May it please the court.

[00:16:25] Speaker 04:
The court should affirm the judgment because substantial evidence supports the jury's verdict in all respects and because the district court did not abuse its discretion in making its findings on the implied waiver.

[00:16:36] Speaker 04:
If the court pleases, I'll start first with the 151.

[00:16:39] Speaker 04:
On the 151 infringement, the evidence supports the jury's verdict that operating in continuous mode

[00:16:48] Speaker 04:
the accused products meet the claim element of receiving the TAM, the TAV, once per multi-frame.

[00:16:57] Speaker 04:
There was extensive evidence in the source code and in the expert testimony of Dr. Wessel that the accused products work in continuous mode.

[00:17:06] Speaker 04:
In continuous mode, they are specifically programmed in their source code to receive the TAV once per multi-frame structure and to use that same TAV for both

[00:17:18] Speaker 04:
the uplink and downlink channels even when the base station sends separate TAVs for both the uplink and downlink channels.

[00:17:26] Speaker 04:
The evidence was, contrary to what my friend just said, the evidence was that the actual adopted standard did not adopt the 151 making it essential, but rather Erickson's proposal gave it the option.

[00:17:41] Speaker 04:
The actual standard, and the evidence is replete,

[00:17:45] Speaker 04:
in the record that the standard gives the base station the option to use separate TAVs for the uplink and downlink and gives the mobile station the option to use one or both.

[00:18:00] Speaker 04:
The source code then shows that the accused products was specifically programmed, not by happenstance, not merely capable, but specifically configured to and intentionally designed to

[00:18:14] Speaker 04:
only receive the TAV once for multi-frame structure and to use that TAV for both the uplink and downlink channels just as the 151 requires.

[00:18:24] Speaker 05:
And your answer to the argument Mr. Lerner makes about the four signals as opposed to the one is, if it goes to the word received, you say that it ignores three of the signals even though they are sent and even though they may have been

[00:18:41] Speaker 05:
They may hit the antenna, but it doesn't pay any attention to them once it's picked up the signals.

[00:18:46] Speaker 04:
The jury heard conflicting testimony from this, but Dr. Wessel testified expressly that one, the claim requires not receipt of the TAM, the timing advance message, but rather the timing advance value.

[00:18:57] Speaker 04:
That the timing advance value is an 8-bit integer value.

[00:19:01] Speaker 04:
and that that 8-bit integer value, the TAV, does not appear in the TAMs, the four timing advance messages, and that the source code only decodes that TAV to receive the 8-bit integer one time.

[00:19:17] Speaker 04:
And he went through that.

[00:19:19] Speaker 05:
I'm not sure I understood what you just said.

[00:19:21] Speaker 04:
Sure.

[00:19:22] Speaker 05:
Are you saying that the TAM is sent four times?

[00:19:27] Speaker 05:
Correct.

[00:19:28] Speaker 05:
Are you saying that each of the four does not contain the requisite bits to transmit the TAV?

[00:19:37] Speaker 04:
That is correct.

[00:19:38] Speaker 04:
Dr. Wessel testified... One of the other three TAVs.

[00:19:41] Speaker 05:
Only the first contains that?

[00:19:43] Speaker 04:
No, no, no.

[00:19:44] Speaker 04:
The TAM is a convoluted... The timing advance message contains a convolutionally encoded version of the TAV.

[00:19:53] Speaker 04:
Right, but it still contains the TAV.

[00:19:55] Speaker 04:
No, actually it doesn't.

[00:19:56] Speaker 04:
The testimony in the record was

[00:19:58] Speaker 04:
that the 8-bit integer itself, because it's convolutionally encoded, the 8-bit integer does not actually appear in that timing.

[00:20:08] Speaker 05:
Sure, but it's... The information is sufficient to receive it.

[00:20:11] Speaker 05:
If the message is set in Russian and it's later translated into English, it's still a message.

[00:20:16] Speaker 05:
It's still the same message.

[00:20:17] Speaker 05:
It just happens to be in a different language.

[00:20:18] Speaker 05:
What you're saying is the convolutionally encoded

[00:20:22] Speaker 05:
message is still the TAV, right?

[00:20:24] Speaker 05:
It just doesn't happen to have the exact bit numbers that the ultimate encoded TAV does, right?

[00:20:31] Speaker 04:
The testimony in the record was that the timing advance message contains information sufficient for the receiver to decode and receive the TAV, but that the

[00:20:49] Speaker 04:
actual 8-bit integer itself, the TAV, is not itself as an 8-bit integer in the timing advance messages.

[00:20:58] Speaker 04:
And that the system only receives it one time.

[00:21:00] Speaker 04:
He went through the source code and showed the if-then statement and testified that that... Well, I understand your argument about receipt.

[00:21:08] Speaker 05:
Just so what confused me was that you were saying, I think, that the TAMs did not contain the TAV.

[00:21:19] Speaker 05:
Realistically, they do contain it, right?

[00:21:21] Speaker 05:
It's just in an encoded form.

[00:21:26] Speaker 05:
Isn't that right?

[00:21:27] Speaker 04:
It is encoded and it is received in an encoded form.

[00:21:31] Speaker 04:
But Dr. Wessel did testify and actually went through this in the record that that 8-bit integer is not itself in the timing advance message.

[00:21:42] Speaker 05:
And so... I understand that.

[00:21:44] Speaker 05:
It wasn't in English.

[00:21:47] Speaker 05:
It was in Russian when it was sent.

[00:21:49] Speaker 04:
That's right.

[00:21:49] Speaker 05:
But it was translated into English.

[00:21:51] Speaker 05:
So the question then still comes back to when was it received, whether in the Russian version or the English version.

[00:21:57] Speaker 05:
And your argument is that it wasn't received until it was translated into English.

[00:22:01] Speaker 04:
Well, it's not just my argument.

[00:22:02] Speaker 04:
But the evidence supports the jury's determination.

[00:22:05] Speaker 04:
We have to assume that that's what the jury so found.

[00:22:10] Speaker 04:
With regard to the other operating modes, so I think

[00:22:18] Speaker 04:
it can't really be disputed that there is substantial evidence to support the jury's determination that in continuous mode, the TAV is received one time, drawing all inferences in favor of core wireless as we must.

[00:22:31] Speaker 04:
So the next question is, does the fact that it can receive this on-demand signal negate infringement?

[00:22:38] Speaker 04:
It does not.

[00:22:40] Speaker 04:
The continuous mode is the only

[00:22:42] Speaker 04:
mandatory mode.

[00:22:43] Speaker 04:
That's in DX170.

[00:22:45] Speaker 04:
It appears in the record at 9862.

[00:22:47] Speaker 04:
Continuous mode is mandatory.

[00:22:49] Speaker 04:
The evidence is that the on-demand and initial modes are optional.

[00:22:53] Speaker 04:
Moreover, Dr. Wessel testified that the continuous mode is sufficient as long as the mobile station is moving less than 600 miles an hour.

[00:23:01] Speaker 04:
He testified, this is at appendix 1428 to 1429, that it would be a huge waste of resources to send another

[00:23:10] Speaker 04:
timing advance message to a mobile that's running the continuous timing advance process.

[00:23:14] Speaker 04:
And at 2026, Dr. Knightley admitted that there is no evidence that the on-demand was ever used.

[00:23:21] Speaker 04:
And so the jury was sufficient, had substantial evidence that was sufficient to warrant the jury's conclusion that the continuous mode is a normal operating mode, that the on-demand is rarely if ever used, and that the

[00:23:37] Speaker 04:
Accused products are configured to receive the timing advance value one time for multi-frame structure in continuous mode, which is a normal operating mode, and therefore infringe the 155.

[00:23:47] Speaker 05:
Can I ask you about the 536?

[00:23:49] Speaker 05:
Yes.

[00:23:50] Speaker 05:
Specifically, with respect to the definition and the claim construction of bad state and applying that to the speech degraded category.

[00:24:06] Speaker 05:
in the accused device.

[00:24:08] Speaker 05:
The bad state is defined as state flagging that the frame does not contain error-free user information.

[00:24:20] Speaker 05:
Now, your witnesses testified that speech degraded was a bad state.

[00:24:27] Speaker 05:
But if I understand speech degraded, that does not necessarily mean that

[00:24:33] Speaker 05:
there is that the frame does not contain error-free user information.

[00:24:38] Speaker 05:
Isn't that right?

[00:24:39] Speaker 04:
No, Your Honor.

[00:24:40] Speaker 04:
The testimony in the record was that Dr. Wessel testified expressly that the speech degraded is treated by the system as a bad frame.

[00:24:51] Speaker 04:
And I'll point you to 2284.

[00:24:52] Speaker 05:
But treated by the system is different from whether the flag indicates what it contains.

[00:24:58] Speaker 05:
That was sort of the whole point of the claim construction, wasn't it?

[00:25:02] Speaker 05:
had asked for a claim construction more in the nature of how the system treats it.

[00:25:07] Speaker 04:
Speech degraded flag.

[00:25:08] Speaker 04:
Dr. Wessel's testimony was that speech degraded flags that frame for the system as a bad frame.

[00:25:16] Speaker 04:
And he testifies at 2284.

[00:25:17] Speaker 04:
I think in this table it sounds nuanced, but in the device it's not nuanced at all.

[00:25:22] Speaker 04:
When it receives a speech degraded frame, that frame is substituted and muted.

[00:25:27] Speaker 04:
The receiver treats it like it does not contain error-free user information.

[00:25:32] Speaker 04:
If the receiver thought it contained error-free user information, it would use it.

[00:25:36] Speaker 04:
Dr. Wessel's testimony was unequivocal on this, that each one of the RX types flag that frame as either containing error-free user information or not containing error-free user information, and the RX DTX handler so treats it.

[00:25:58] Speaker 04:
And bad frames are substituted and muted.

[00:26:01] Speaker 04:
And that was the evidence

[00:26:03] Speaker 04:
presented to the jury, drawing all inferences in favor of the verdict.

[00:26:07] Speaker 04:
We have to assume that the jury credited that testimony over Dr. Nyles, Dr. Burers, I think it was.

[00:26:18] Speaker 04:
If there are no other questions on 536, I'll just move briefly to the waiver issue, the district court.

[00:26:26] Speaker 04:
did not abuse its discretion or make any findings of error clear.

[00:26:30] Speaker 05:
Let me ask you on 536 real quickly.

[00:26:32] Speaker 05:
Sure.

[00:26:33] Speaker 05:
You may have a one-sentence answer, but why is the Ratch marker not a codeword?

[00:26:44] Speaker 04:
Dr. Wessel testified that the Ratch ID is not a codeword that delineates the 35-bit message.

[00:26:53] Speaker 04:
Why?

[00:26:53] Speaker 04:
Okay, so he testifies at 1509 and at 1510 that the Ratch ID doesn't indicate that the, doesn't delineate the start or end of the message.

[00:27:06] Speaker 04:
It doesn't indicate where the message occurs and it doesn't even indicate definitively for the system that the frame even contains a message.

[00:27:15] Speaker 04:
Rather, it has to go through this two-step process of going to the second step

[00:27:19] Speaker 04:
Once it determines that there's no data, then it goes and does the CRC check to see if the 35-bit pattern matches the predefined 35-bit pattern, and only then does it determine that the frame contains a message.

[00:27:37] Speaker 04:
His testimony is at 1509 to 1510, at 1558, and at 2186 to 2190.

[00:27:53] Speaker 04:
Turning now briefly to the waiver argument.

[00:27:57] Speaker 04:
First, there was no evidence that the 151 patent was essential.

[00:28:03] Speaker 04:
In fact, the evidence was that the 151 patent was made optional in the standard, that you can practice the standard without performing the 151 patent, and therefore, it's not required to be disclosed at all.

[00:28:14] Speaker 04:
Moreover, the district court found and was justified in so finding

[00:28:19] Speaker 04:
that there was no duty to disclose because, one, it wasn't essential, two, there was no essential IPR.

[00:28:26] Speaker 04:
There hadn't been any patent rights applied yet.

[00:28:31] Speaker 04:
The only application that existed as of the freeze date of June 1998 was a finished application.

[00:28:37] Speaker 04:
The evidence in the record is that that was confidential.

[00:28:39] Speaker 04:
And the confidential information is expressly excluded from the definition of essential IPR.

[00:28:46] Speaker 04:
The 151 patent wasn't even applied for in the US until November 1998 after the date.

[00:28:55] Speaker 04:
And it didn't become allowed until June 2002.

[00:28:58] Speaker 04:
And it was disclosed July 2002 right after.

[00:29:04] Speaker 05:
What's the provision that excludes confidential information from the IPR?

[00:29:13] Speaker 05:
You don't have to give me chapter and verse.

[00:29:16] Speaker 05:
Just give me the gist of it.

[00:29:18] Speaker 04:
It's the definition of essential IPR and essential IPR.

[00:29:22] Speaker 04:
The evidence in the record is that the definition of essential IPR excludes confidential material.

[00:29:29] Speaker 04:
And the evidence further is that the application at the time of the freeze date up through the freeze date, which is the relevant time for disclosure,

[00:29:40] Speaker 04:
was confidential.

[00:29:42] Speaker 04:
These were finished applications.

[00:29:44] Speaker 04:
And under Finnish law, which I know nothing about, but the evidence in the record was that under Finnish law, these applications were considered confidential.

[00:29:51] Speaker 05:
Confidential being in the sense that it was the right of the applicant not to have them disclosed, presumably either by the Finnish office or by anyone with knowledge of the application.

[00:30:02] Speaker 05:
But that doesn't mean that the possessor of the application wouldn't have a right to disclose

[00:30:08] Speaker 05:
Or it couldn't be required to disclose by the body that's the standard setting operation, right?

[00:30:18] Speaker 04:
I disagree with the last statement that there's, because there's a duty to disclose that's defined by the standards.

[00:30:25] Speaker 05:
But depending, I mean, the standard setting operation could have said, we don't care if it's confidential or not, we want to see it.

[00:30:33] Speaker 05:
And there would have been an obligation to waive confidentiality by the applicant in that situation, wouldn't you agree?

[00:30:41] Speaker 04:
In that situation, I agree, but that's not the situation here.

[00:30:43] Speaker 05:
OK, so you're pinning this entirely on the definition of what is required as being excluding confidential material.

[00:30:52] Speaker 04:
Only with respect to confidential, but that there was no duty to disclose.

[00:30:57] Speaker 04:
The court's finding was well supported.

[00:30:59] Speaker 04:
It wasn't essential.

[00:31:01] Speaker 04:
It was confidential.

[00:31:03] Speaker 04:
an actual IPR right at that time and didn't become so until 2002.

[00:31:07] Speaker 04:
I'm sure there's a lot of reasons there.

[00:31:13] Speaker 04:
The jury heard conflicting testimony, but it heard substantial testimony in support of every one of the points that we needed to make for infringement.

[00:31:25] Speaker 04:
This was a good trial.

[00:31:26] Speaker 04:
We laid out exactly the evidence.

[00:31:29] Speaker 04:
The jury heard the evidence and conflicting testimony as to why the accused products meet the 151 patent, why they were specifically programmed in their source code to receive the TAV once, and why they meet the two-step interpretation process of the 536.

[00:31:47] Speaker 04:
The jury was well supported in its finding that there was no invalidity, and we asked the court to affirm.

[00:31:56] Speaker 01:
Thank you.

[00:31:58] Speaker 01:
Mr. Neuer?

[00:31:59] Speaker 01:
I'm going to push back at three minutes.

[00:32:01] Speaker 02:
Thank you, Your Honor.

[00:32:06] Speaker 00:
Several points, Your Honors.

[00:32:07] Speaker 00:
First, your question on the continuous mode and whether the timing advance value is in each instance of the four, it is.

[00:32:14] Speaker 00:
It is in each instance of the four.

[00:32:15] Speaker 00:
There was no dispute on that.

[00:32:17] Speaker 00:
The argument made below by the expert for core wireless was that the decoding process meant that it wasn't fully received until the processing had occurred and there was reliance on it.

[00:32:27] Speaker 00:
But the TAV was

[00:32:29] Speaker 00:
without question, within each of the four instances.

[00:32:31] Speaker 05:
Albee in an encoded or encrusted form.

[00:32:34] Speaker 00:
Correct.

[00:32:34] Speaker 00:
That's exactly right.

[00:32:36] Speaker 00:
Related to that, for the invalidity defense that we presented, the continuous procedure was part of the prior art.

[00:32:42] Speaker 00:
And that's the argument that we made, that if continuous somehow met the claim, the continuous procedure was in a prior proposal to Etsy that said Appendix 9907 describing the continuous procedure.

[00:32:55] Speaker 00:
And that was the argument our expert made.

[00:32:56] Speaker 00:
It said, if this somehow satisfied

[00:32:58] Speaker 00:
the claim, it'd be invalid in light of the prior art teaching that same continuous procedure.

[00:33:03] Speaker 00:
Second point, Mr. Fenster emphasized that these procedures on-demand timing, on-demand initial and continuous are optional.

[00:33:13] Speaker 00:
And that's true from the perspective of the base station.

[00:33:16] Speaker 00:
And if I could respectfully, Director Honors, to join Appendix page 2276.

[00:33:21] Speaker 00:
This is a question and answer with the defendant, with Core Wireless's expert when I was cross-examining him.

[00:33:27] Speaker 00:
Question, sir, we've heard argument in this case that the base station has the option of using these three procedures, right?

[00:33:34] Speaker 00:
Answer, absolutely, yeah.

[00:33:36] Speaker 00:
Question, but you understand that from the mobile station, the phone's perspective, it is absolutely mandatory that they perform all three, correct?

[00:33:44] Speaker 00:
Answer, yeah, that's right.

[00:33:46] Speaker 00:
Question, and that is, in fact, how the Apple products are configured to operate.

[00:33:52] Speaker 00:
They're configured to do all three.

[00:33:54] Speaker 00:
Answer, yes, that's right.

[00:33:56] Speaker 00:
And that's the basic

[00:33:57] Speaker 00:
failure here.

[00:33:58] Speaker 00:
We have phones that are configured to receive timing advanced values at any point in time, any point in time within a multi-frame structure, one, two, three, four, seven, 250 times in a claim that requires being configured to receive a timing advanced value once.

[00:34:12] Speaker 00:
It's the exact opposite of the claimed approach.

[00:34:15] Speaker 00:
So we think that that testimony shows that the optionality is on the base station side, not the mobile side.

[00:34:21] Speaker 00:
And that segues into my third point, which is the unenforceability issue.

[00:34:24] Speaker 00:
This is a mandatory part of the standard for the phone.

[00:34:28] Speaker 00:
And now the argument is, well, this is not really a standard essential patent.

[00:34:31] Speaker 00:
The complaint says explicitly, and it's, I think, at 3006, but the complaint is in the joint appendix.

[00:34:37] Speaker 00:
It characterizes these as standard essential patents, including the 151.

[00:34:40] Speaker 00:
It's the contention the whole way through the case.

[00:34:43] Speaker 00:
And the reliance for their infringement theory is on the standard and what the standard makes mandatory.

[00:34:48] Speaker 00:
Well, if that's the type of theory you want to advance and you have to play by the rules in front of the standard setting organization,

[00:34:53] Speaker 00:
And to Your Honor's question on confidential information, this is the definition.

[00:34:56] Speaker 00:
IPR is defined, and this is at Appendix 9657, to mean any intellectual property right conferred by statute law, including applications thereof, other than trademarks.

[00:35:07] Speaker 00:
For the avoidance of doubt, rights relating to get up, confidential information, trade secrets, and the like, are excluded from the definition of IPR.

[00:35:15] Speaker 00:
It is clear in the face of that procedure that applications were meant to be disclosed.

[00:35:19] Speaker 00:
And as the chairman of the board testified at trial, the references to confidential information and trade secrets and so on relate to other forms of intellectual property.

[00:35:27] Speaker 00:
Moreover, the idea in the patent application was proposed by Nokia to the standard setting organization.

[00:35:34] Speaker 00:
There's no way to maintain confidentiality over an idea they proposed to the organization.

[00:35:38] Speaker 00:
It wasn't a confidential idea.

[00:35:39] Speaker 00:
What they kept confidential improperly was the existence of a patent application.

[00:35:44] Speaker 00:
And it would be a highly damaging precedent for standard setting organizations going forward.

[00:35:49] Speaker 00:
to permit a party to do exactly what these rules are intended to prevent, to keep your patent rights secret for years and years and years, and then later allege that they're standard essential.

[00:36:00] Speaker 00:
The final points I'll make, Your Honor, is on the 536 patent, you're exactly right, Judge Bryson, on both.

[00:36:05] Speaker 00:
The speech degraded.

[00:36:06] Speaker 00:
It's not flagged as good state or bad state.

[00:36:08] Speaker 00:
It's an intermediate state.

[00:36:10] Speaker 00:
It could be good or it could be bad.

[00:36:12] Speaker 00:
And it's a function of the eight-state system being more nuanced and just different in kind from the binary two-state approach claimed by the patent.

[00:36:19] Speaker 05:
Well, what do you say to the argument Mr. Fenster makes about the fact that the Apple phone flags the speech you graded as in the same way that it would flag bad speech?

[00:36:37] Speaker 00:
It doesn't flag it in that way.

[00:36:38] Speaker 00:
It uses it as your honor pointed out.

[00:36:40] Speaker 05:
It treats.

[00:36:40] Speaker 05:
I mean, the verb that is the weasel, if I may, verb that is floating around here is the verb treat.

[00:36:48] Speaker 00:
That's right.

[00:36:48] Speaker 00:
That's exactly right.

[00:36:49] Speaker 00:
And this was the argument made by core wireless Ed Markman, as your honor pointed out, referring to downstream use as the touchstone.

[00:36:56] Speaker 00:
And Judge Graywall rejected that argument and said, no, there has to be something about the frame itself that tells you what it is.

[00:37:02] Speaker 00:
And it needs to tell you if it's a good state or a bad state.

[00:37:05] Speaker 00:
And they're trying to shoehorn this eight-state system into this binary paradigm.

[00:37:10] Speaker 00:
And this just doesn't fit.

[00:37:11] Speaker 00:
The speeds are graded.

[00:37:13] Speaker 00:
It could be good.

[00:37:13] Speaker 00:
It could be bad.

[00:37:14] Speaker 00:
You don't know by looking at the frame itself.

[00:37:16] Speaker 00:
The fact that downstream it's treated the same is irrelevant.

[00:37:20] Speaker 00:
It's irrelevant.

[00:37:20] Speaker 00:
And the final point you're under is, on the bit pattern, you're exactly right.

[00:37:24] Speaker 00:
The Ratch marker always denotes where the Ratch

[00:37:27] Speaker 00:
code occurs.

[00:37:27] Speaker 00:
In fact, it's a set number of bits.

[00:37:29] Speaker 00:
Exactly.

[00:37:30] Speaker 00:
Exactly.

[00:37:31] Speaker 05:
After the word comes the message.

[00:37:33] Speaker 00:
Without exception.

[00:37:35] Speaker 00:
That's it.

[00:37:35] Speaker 00:
Without exception.

[00:37:35] Speaker 00:
And that's different from what the patentee claimed.

[00:37:39] Speaker 00:
In fact, they disclaimed that approach.

[00:37:40] Speaker 00:
OK.

[00:37:41] Speaker 01:
Thank you.

[00:37:41] Speaker 01:
OK.

[00:37:42] Speaker 01:
Thank you.

[00:37:43] Speaker 01:
That concludes our argument for this morning.

[00:37:45] Speaker 01:
This court now stands and loses.

[00:37:55] Speaker ?:
I won't worry about the dermatitis for a morning, it's there.