[00:00:03] Speaker 02:
We have three argued cases this morning.

[00:00:05] Speaker 02:
The first is 17-1548, Extra Star Chemicals, LP, versus Westlake Chemical Corporation, Mr. Bitten.

[00:00:27] Speaker 00:
May it please the court.

[00:00:29] Speaker 00:
Appellants bring two issues before the court today.

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First, that we are entitled to judgment as a matter of law on the issue of infringement based on the overwhelming weight of the evidence.

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And second, that Westlake defendant Annap Ali should be relieved of the verdict of non-infringement they obtained based on misrepresentations of fact presented to the jury by their expert.

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I'll briefly address the first before turning to the second.

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At trial, only one limitation was disputed.

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Only one, and that was-

[00:01:02] Speaker 02:
You say support your claim of misrepresentation before trial, right?

[00:01:08] Speaker 02:
That is correct, Your Honor.

[00:01:09] Speaker 02:
And you used them at the trial?

[00:01:11] Speaker 02:
We used some of them, Your Honor.

[00:01:12] Speaker 02:
Well, if you didn't use the others, that was up to you, right?

[00:01:20] Speaker 00:
There were some documents that were the proverbial needle in the haystack that would not have been fair to expect us to find in the middle of a one-week-long trial based on

[00:01:31] Speaker 00:
factual representations brought by their expert that he had never previously disclosed.

[00:01:36] Speaker 02:
You mean it's newly discovered evidence because you didn't find it in the stuff that was given to you earlier?

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Not at all.

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Their expert brought up misrepresentations of fact during trial that had never been disclosed.

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He had never told us during his expert reports or during expert discovery or during any discovery in the case that he would represent the jury.

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And those were twofold.

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Let me get into those.

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The first one,

[00:02:01] Speaker 00:
was that he had verified that the one day's data that they selected to present to the jury, that day was April 23rd, 2014.

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He stated he verified to the jury that that data was representative of their process and all the other documentation that he looked at the night before.

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The way this came up is the day previous, on Wednesday of trial, it came out that the one day they selected, and they testified they could have selected any day, the one day they selected, something was quote, very wrong with the plant that day.

[00:02:30] Speaker 00:
They were having some unusual troubles.

[00:02:33] Speaker 03:
Well, the court actually looked both at the question of whether or not you had a fair opportunity to cross-examine on this topic and looked at the question of whether the data really was as different as you claim.

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And the court concluded that you went on neither ground, right?

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On the temperature, I believe the court did conclude that.

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We believe the court concluded that incorrectly.

[00:03:00] Speaker 03:
But that's an evidentiary determination, right?

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Are we supposed to go back and look at these things de novo and make those kind of factual assessments?

[00:03:10] Speaker 00:
No, it is an abuse of discretion standard under Rembrandt and Facasse.

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But you're really asking us to make a credibility determination.

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You misrepresented something.

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I don't believe so, Your Honor.

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There are verifiable statements of fact whether or not that data was representative.

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That data is a statistical outlier.

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They try to excuse that by saying there are about three or four worst days we could have selected of all the days there were.

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Let me get to the second manner in which the expert misrepresented facts to the jury.

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Not only did he say the data was correct, he then went a step further and said the product that day was good product, quote, good product, that it met specifications.

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And moreover, it was shipped to a very demanding customer.

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later called in his testimony a very discerning customer.

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That customer he identified was Kerwin.

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This had never been disclosed to us.

[00:04:04] Speaker 03:
You just cross-examine him on that.

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You just say, no one ever told us that Kerwin was very demanding or very discerning.

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How can you say that this is true when you never disclosed that fact in the past?

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I don't get this.

[00:04:17] Speaker 03:
This is just not having analyzed the record enough to be sufficiently prepared to cross-examine your ex.

[00:04:24] Speaker 00:
It wasn't a matter of cross-examining the expert on whether or not Curwood was or was not a discerning customer.

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It's we couldn't have been prepared to look through the millions of documents to find the one page that says that shipment didn't go to Curwood.

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The product made that day on April 23rd, 2014 did not meet Curwood specifications.

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Curwood would not accept product with what's known as a black speck level.

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It's degraded or burnt material, which happens when the mixture is too hot.

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would not expect black spec material above a quantifiable measure of one.

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There were measurements that day that were above one, above two, above four, and even above five.

[00:05:05] Speaker 00:
There's one page in millions of pages of documents we had no way to expect, fairly, that he was going to bring a disclosure never previously known to us that this product went to Corwood and be able to comb through millions of pages to find the one page that said,

[00:05:21] Speaker 00:
that product made that day did not meet Kerrwood's specifications.

[00:05:25] Speaker 03:
How do you say it?

[00:05:26] Speaker 03:
I'm having a hard time with this.

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I mean, I tried a lot of cases before and I've seen a lot of cases tried and if you've got millions of pages, you're supposed to look at them all before trial and you should have had someone who said, you know what, that statement wasn't right and we can kill them with it.

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You know, I don't, I don't get this and I also,

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I'm having a hard time with the notion that we're supposed to second-guess the trial court who was there and who saw and who had an ability to assess your ability to address these questions.

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The trial court did not, in its opinion, as to our motion for a new trial, separately address the Kerr Wood Mill Print issue.

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And we believe that's a separate ground to reverse and order a new trial.

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Again, that's a misrepresentation about the quality of that product and where that product went.

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the order on a trial was silent as that only addressed the temperature data.

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So why don't we talk about the substantial evidence as it relates to the minimizing cross-linking?

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Yes, only one limitation was disputed at trial and that was the minimizing cross-linking limitation.

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The overwhelming evidence proved that

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Westlake not only practiced unembodiment of the 163 patent, but indeed practiced the preferred embodiment.

[00:06:45] Speaker 03:
What evidence, you say overwhelming evidence, but I was having a hard time pinpointing it.

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So what evidence do you believe supports your conclusion that the jury could not reasonably have concluded that you didn't sufficiently demonstrate that?

[00:07:03] Speaker 00:
The Jordan's declaration, which I believe joined appendix 10012 and the related testimony, this is a declaration by their own engineer which parrots the words of the 163 patent and uses the very same words to describe a commercial run of one of their accused products.

[00:07:21] Speaker 00:
In that, he testifies that they do use an inline process, which is the preferred embodiment of the 163 patent.

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He testifies the temperatures of that commercial run

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were about 417 to 417, 73 degrees Fahrenheit, converting from Celsius, which is commensurate with the temperatures in the preferred environment as well.

[00:07:39] Speaker 03:
Okay, that's, yours is really more that you think that the accused processes would always necessarily minimize cross-linking.

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But Westlake submitted expert testimony that that's not the case.

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So are we supposed to say the jury didn't have the right to credit Westlake's testimony over yours?

[00:08:03] Speaker 00:
A jury always has the right to credit both parties' testimony.

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However, where the overwhelming weight of the evidence can only support one conclusion for a reasonable jury, that is where that conclusion should be drawn as a matter of law.

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Here, no reasonable jury could have found, given all this evidence, that they practiced the preferred embodiment.

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Did your expert do anything other than parrot the language of the specification?

[00:08:25] Speaker 00:
Our expert walked through every claim limitation and demonstrated their process, that the temperature of their process was in line with the... By saying, I see it here in the specification.

[00:08:35] Speaker 03:
And also... But then there was testimony to the contrary and there's also other parts of the specification that the jury could have relied upon to disagree with that conclusion.

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Based on the Jordan's declaration and the plant layout and all the evidence we had, everything about their accused process lined up

[00:08:55] Speaker 00:
with the preferred embodiment of the 163 patent.

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Their evidence was that they additionally filtered out, by use of what they call a screen pack, at the end of the process, additional gelled or crossing material.

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But it's Horn Book patent law that if you have a claim on a pencil, you do not avoid infringement by adding an eraser to that pencil.

[00:09:18] Speaker 00:
A filter on the end of the process is just an additional element.

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The fact that they were using an inline process

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minimizing oxygen exposure, using nitrogen purges throughout the process, and controlling temperature, such that the Jordan's declaration lines up with the temperatures in the preferred embodiment.

[00:09:35] Speaker 02:
All that.

[00:09:36] Speaker 00:
They presented testimony that their heat in that one single day's worth of data was too high.

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Suppose we reject your contention about the misrepresentation.

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Do we then find that there's substantial evidence to support the verdict of non-infringement?

[00:10:00] Speaker 00:
I believe you can, yes.

[00:10:01] Speaker 00:
Because as to the Jordan's declaration and other runs... We can't affirm.

[00:10:07] Speaker 00:
I believe that we are entitled to the judgment as a matter of law and it should be reversed.

[00:10:12] Speaker 02:
I don't understand that.

[00:10:13] Speaker 02:
If we reject your misrepresentation theory, isn't there plenty of evidence supporting the verdict on infringement?

[00:10:21] Speaker 00:
I do not believe so.

[00:10:22] Speaker 00:
Again, the major argument was the screen pack argument, which is again, sort of something tacked on in.

[00:10:27] Speaker 00:
It's an additional feature.

[00:10:29] Speaker 02:
They also said that the process itself before the end was not minimizing cross-legging for a variety of reasons.

[00:10:37] Speaker 00:
It was minimizing cross-legging.

[00:10:40] Speaker 00:
That's what they said, but they said it was minimizing cross-legging because of the problem.

[00:10:44] Speaker 02:
When it comes here, that's what they said.

[00:10:46] Speaker 02:
That's substantial evidence, generally.

[00:10:50] Speaker 02:
Why isn't it, I mean, they gave a significant amount of testimony that their process didn't minimize cross-linking and that they had the TACWIS procedure on at the end to eliminate the cross-links.

[00:11:08] Speaker 00:
The three arguments that they made were all overwhelmingly

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Dispute, I'm not just kidding, overcome a trial.

[00:11:17] Speaker 00:
The screen pack is not a viable argument.

[00:11:19] Speaker 03:
But overcome with only your references to the specification, right?

[00:11:24] Speaker 03:
I mean, you didn't have any other independent evidence.

[00:11:28] Speaker 00:
No, I don't disagree with that.

[00:11:30] Speaker 00:
We did have all of the evidence about how their plan operated, their own engineers' declarations about how that plan operated.

[00:11:37] Speaker 03:
Do you define minimizing cross-linking as

[00:11:42] Speaker 03:
any minimal reduction at all, or is there some measure of reduction that's needed?

[00:11:49] Speaker 00:
This report correctly defined it as a plan and order meeting, which in the context of the patent, it talks about in column four less cross-linking, and in column six provides a quantifiable measure of the cross-linking obtained when there's a test called test one in the patent measuring gel counts.

[00:12:07] Speaker 00:
Gel counts is cross-linked material.

[00:12:09] Speaker 00:
And it shows that cross-linking is reduced against the control

[00:12:12] Speaker 00:
which is the conventional process.

[00:12:17] Speaker 02:
I will save your time for a moment.

[00:12:20] Speaker 00:
Yes, your honor.

[00:12:28] Speaker 01:
Mr. Joseph.

[00:12:30] Speaker 01:
Good morning and may it please the court.

[00:12:32] Speaker 01:
I'd be happy to take any and all questions on the non-infringement side of the case.

[00:12:36] Speaker 01:
Well, here's one question.

[00:12:38] Speaker 02:
Suppose we were to agree with you hypothetically

[00:12:41] Speaker 02:
and agree that the judgment of non-imprisonment should stand, what do we do about the invalidity issues?

[00:12:49] Speaker 02:
Do you care about them at that point?

[00:12:51] Speaker 01:
Yes.

[00:12:52] Speaker 01:
I know sometimes they have more practical importance than others.

[00:12:54] Speaker 01:
We do.

[00:12:55] Speaker 03:
Why?

[00:12:56] Speaker 01:
Pardon?

[00:12:57] Speaker 01:
Why?

[00:13:00] Speaker 01:
There is a court order of mediation in terms of which are confidential.

[00:13:04] Speaker 01:
But the point is that we are concerned that they could still try to sue again on the same patent.

[00:13:09] Speaker 01:
OK.

[00:13:09] Speaker 01:
I can't.

[00:13:10] Speaker 01:
Yeah.

[00:13:11] Speaker 04:
Let's jump in then to the on sale bar.

[00:13:15] Speaker 04:
I'm having trouble understanding how plum tree can allow an offer for sale and then a reduction to practice pursuant to that offer.

[00:13:23] Speaker 04:
I'm talking about the second step of plum tree and how there's two kind of things laid out and how there could be any difference between that and a situation where 345,000 pounds of something is produced and then there's an offer for sale.

[00:13:37] Speaker 04:
I mean, help me understand how a plum tree could permit possibly one to amount to an on-sale bar and maybe arguably not permit the other.

[00:13:47] Speaker 04:
This is a friendly question.

[00:13:51] Speaker 01:
Yeah, no, I completely agree.

[00:13:52] Speaker 04:
Well, you were passing long enough, so I think that I wanted to help you.

[00:13:56] Speaker 01:
Which is greatly appreciated, obviously.

[00:13:59] Speaker 01:
Right, the point of plum tree is there are a couple different prongs there, and one of them is using the

[00:14:04] Speaker 01:
the acclaimed method for commercial use.

[00:14:07] Speaker 01:
And here you're talking about producing a commercial use for this enormous amount of product that then before the critical date was offered for sale and then to the extent that it matters immediately after the critical date was in fact delivered to complete one of those offers for sale.

[00:14:22] Speaker 02:
I'm having trouble.

[00:14:23] Speaker 02:
I read the material on the record that you said.

[00:14:26] Speaker 02:
I spent quite a bit of time looking through it.

[00:14:28] Speaker 02:
What exactly were the offers?

[00:14:30] Speaker 02:
You say there was a

[00:14:33] Speaker 02:
an offer to PACTIV and an offer to CryoFact.

[00:14:38] Speaker 02:
When did those offers take place and where do we find them in the record?

[00:14:42] Speaker 01:
Yeah, the exact offers, what we have in the record is two things.

[00:14:46] Speaker 01:
We have emails, these internal emails that reflect the fact that offers had been made and then we have witness testimony that doubles down on that and it says that the offer that had been made, we had decided to fill that with product funding.

[00:15:00] Speaker 02:
Well, what was the offer made?

[00:15:01] Speaker 02:
Are the offers made orally in writing?

[00:15:04] Speaker 01:
What are we talking about?

[00:15:06] Speaker 01:
Well, so the testimony about Cryovac is that there was, quote, always an outstanding offer there because it made regular purchases pursuant to an outstanding offer.

[00:15:14] Speaker 01:
I agree, the record is vague on the actual underlying offers.

[00:15:18] Speaker 03:
The reason is that... So clearly, under Plum Tree, where you have to have an unequivocal offer to sell a product that is made pursuant to the method,

[00:15:31] Speaker 03:
You can't satisfy that prong of plum tree.

[00:15:36] Speaker 03:
Because you can't show what the offer said.

[00:15:38] Speaker 03:
I mean, obviously, if they were selling pursuant to older offers, and those older offers were for the prior process, the product pursuant to the prior process, you're not going to be able to point to an unequivocal statement that, in fact, they were going to produce pursuant to this other process.

[00:16:01] Speaker 01:
Right, no, we agree.

[00:16:02] Speaker 01:
We're not saying that the customer was told what process was going to be used to make the product.

[00:16:07] Speaker 01:
In fact, the testimony in the record was that the customer couldn't care less.

[00:16:11] Speaker 01:
I mean, they chose not, this came up in secondary considerations, the plaintiff chose not to inform the customers that there was a new method.

[00:16:16] Speaker 03:
And were they, clearly the customer just cared about the product and they'd been getting the same product all alone.

[00:16:24] Speaker 03:
So they didn't care about the process.

[00:16:26] Speaker 03:
And you're not saying that there was somehow

[00:16:30] Speaker 03:
a requirement that the new process had to be used.

[00:16:34] Speaker 01:
No, the decision was that it would be used.

[00:16:35] Speaker 01:
So it's the same as in D.L.

[00:16:36] Speaker 01:
Alde, or the same posture as in D.L.

[00:16:41] Speaker 01:
Alde, or this court's more recent decision earlier this year, and the recent case in Medicines Against Us Fire, the latest version of that.

[00:16:48] Speaker 02:
But the problem is that in order for an offer of sale to count for the on sale bar, it has to be an offer that if it were accepted,

[00:17:00] Speaker 02:
would obligate the offeror to provide the product.

[00:17:05] Speaker 02:
And that's, it seems to me, part of the difficulty here.

[00:17:09] Speaker 02:
First of all, we don't even know what the offer is.

[00:17:12] Speaker 02:
And why is it that the offeror here, whatever it might have been, obligated them to provide the new product?

[00:17:20] Speaker 01:
Well, because it was an offer to, two things.

[00:17:23] Speaker 01:
One, it's an offer to sell product.

[00:17:25] Speaker 01:
And it's the same product that's always been.

[00:17:26] Speaker 03:
But the product's not the patent.

[00:17:28] Speaker 03:
The method is the pet.

[00:17:29] Speaker 01:
That's why it's just like DL Ald or medicines against Aspira where what's being sold is a product.

[00:17:36] Speaker 03:
But the medicines, it wasn't a method claim.

[00:17:41] Speaker 01:
I thought it was.

[00:17:42] Speaker 03:
And clearly, in fact, that was a big point in the on-bond medicines case where we said all those cases that they're relying on are very different because they're method claims, they're not.

[00:17:51] Speaker 02:
The product was a product by process, but we have Scaltech, we have other cases that if

[00:17:57] Speaker 02:
If you have a patented method and you offer to sell a product made by a patented method, that would be an unsold bar, and that's what you're talking about here.

[00:18:06] Speaker 02:
But what I'm struggling with is where's the evidence that you, for the critical data, where the patentee made an offer to sell a product made by the patented method?

[00:18:20] Speaker 02:
In other words, your problem arises from the fact

[00:18:25] Speaker 02:
care of their two products, one of which is made by the patented method and one isn't.

[00:18:32] Speaker 02:
And there doesn't seem to be any evidence that the purchasers care of one way or the other.

[00:18:40] Speaker 02:
But nonetheless, if there was an offer to sell a product made by the patented method before the critical date, the cases suggest that

[00:18:51] Speaker 02:
there would be an on-sale bar, but I'm just struggling.

[00:18:55] Speaker 02:
Where's the evidence in the record that such an offer was made?

[00:18:59] Speaker 01:
So there are two things.

[00:19:00] Speaker 01:
I think the first, fundamentally, there's one product.

[00:19:03] Speaker 01:
It's just like in DLL, the product was an emblem.

[00:19:05] Speaker 01:
There's an older way to make it, a newer way to make it.

[00:19:08] Speaker 01:
The question for the on-sale bar was, did the offer relate to product made by the older method or the newer method?

[00:19:14] Speaker 01:
And although you're right, in the case of product by process, it's similar.

[00:19:17] Speaker 01:
Which process was used to create the product was the issue that the courtroom added for fact determination on in the other case.

[00:19:22] Speaker 01:
And it's the same point here.

[00:19:24] Speaker 01:
One product could be made one way, could be made the other way before the critical date.

[00:19:28] Speaker 01:
Was there an offer to sell the product that would have been made by the patented method as opposed to the other one?

[00:19:33] Speaker 01:
And customer knowledge is irrelevant.

[00:19:35] Speaker 02:
Customer knowledge is irrelevant, but you also do have to have a situation where the acceptance of the offer would obligate the patentee to provide the new product

[00:19:49] Speaker 02:
And that's the difficulty here that I'm seeing because, and that could be manifested in a variety of ways, but what is the evidence here that the patentee was obligated to provide the new product, that the customer could have complained that they didn't provide the new product?

[00:20:13] Speaker 04:
Do you agree that the patentee has to be obligated to provide the new product?

[00:20:16] Speaker 04:
That doesn't seem consistent with the plum tree second prong,

[00:20:19] Speaker 04:
If you want to agree with Judge Dyke, feel free to go ahead.

[00:20:23] Speaker 01:
I was going to say two things.

[00:20:24] Speaker 01:
One is just on the facts.

[00:20:26] Speaker 01:
I think on the facts, I think a fundamental disagreement here is whether there's two products or one.

[00:20:30] Speaker 03:
So why did you say it was a summary judgment case?

[00:20:33] Speaker 03:
You both said there are no material issues of fact.

[00:20:37] Speaker 03:
And now we've got a situation where you say, well, all they had was this new process.

[00:20:43] Speaker 03:
And they were making everything with this new process.

[00:20:45] Speaker 03:
So definitely they were going to sell it.

[00:20:46] Speaker 03:
And yet we know that days before,

[00:20:49] Speaker 03:
this delivery, that they delivered the old product.

[00:20:54] Speaker 01:
So... They delivered the old product after the critical date too, right?

[00:20:58] Speaker 01:
Well, after the critical date, they were out of bulk supply.

[00:21:01] Speaker 01:
A week before the critical date, they shipped it once really.

[00:21:02] Speaker 01:
Oh, I thought they were a little clearer plant, right?

[00:21:04] Speaker 01:
But they were still producing it at other plants.

[00:21:06] Speaker 01:
There are different plants doing it different ways.

[00:21:08] Speaker 03:
But the point is... So they could have shipped from any plant.

[00:21:13] Speaker 01:
But they had decided, the important thing is for these offers to sell for these clients, for these customers.

[00:21:17] Speaker 01:
I guess I don't really understand why

[00:21:19] Speaker 03:
You guys both said this was a summary judgment.

[00:21:22] Speaker 01:
I was going to say, I mean, you know, we're arguing both ways.

[00:21:26] Speaker 01:
If the court thinks they're genuine disputes of fact, that's not a basis for affirming summary judgment, right?

[00:21:31] Speaker 01:
It's a basis for reversing and remanded.

[00:21:32] Speaker 03:
Well, except for if we find that you waved to that argument.

[00:21:36] Speaker 01:
Well, no, because we opposed their summary judgment motion.

[00:21:38] Speaker 03:
I mean, we did say, I mean... No, you filed a cross motion for summary judgment.

[00:21:43] Speaker 03:
You agreed that there were no genuine issues of material fact.

[00:21:46] Speaker 01:
Right.

[00:21:46] Speaker 03:
Which is our view.

[00:21:48] Speaker 03:
said to the trial court or to this court that there are genuine issues of material effect, and yet you're standing here saying, well, it's really a debate over the facts.

[00:21:57] Speaker 01:
Well, our brief in this court did squarely argue that if the court thinks there's materials to be a fact, not based on a firm summary judgment, we don't think that there is.

[00:22:09] Speaker 01:
We think the facts are unambiguously with us for two reasons.

[00:22:12] Speaker 01:
One, there is an outstanding offer for sale.

[00:22:14] Speaker 01:
of the product, this is the one product.

[00:22:17] Speaker 01:
What is the offer?

[00:22:17] Speaker 01:
PX 3236.

[00:22:18] Speaker 02:
What is the offer?

[00:22:19] Speaker 01:
Where do we find the offer?

[00:22:22] Speaker 01:
Right, it's the offer that's relevant.

[00:22:23] Speaker 01:
I mean, you're right, the proof that's in this Army Judgment Record, it's the emails for Cryovac.

[00:22:29] Speaker 01:
An email to Cryovac?

[00:22:32] Speaker 01:
No, well, there were internal emails describing offers to Cryovac and offers to Pacta.

[00:22:36] Speaker 02:
And there was then, with respect to Cryovac... But they don't... The documents of the offer that was transmitted

[00:22:41] Speaker 01:
I don't think the specific offers made it into the record because it wasn't disputed.

[00:22:45] Speaker 04:
Wasn't there no dispute that there was in fact an ongoing and open offer to Cryovac and that there was an offer to Pactiva?

[00:22:52] Speaker 04:
I just looked through the yellow brief and it repeatedly talks about how the offers didn't contain a promise to supply the news.

[00:22:59] Speaker 04:
I don't think there were any offers that would satisfy in general.

[00:23:03] Speaker 01:
That's the thing.

[00:23:04] Speaker 01:
The amount of proof you put in depends on what's actually being disputed.

[00:23:07] Speaker 01:
And what was disputed?

[00:23:09] Speaker 01:
between the parties was whether these offers were for products, the same product, PX 3236, made by the one method or the other.

[00:23:15] Speaker 02:
I would think it would be sort of interesting to know what the offer was exactly, right?

[00:23:21] Speaker 01:
Well, we know for certain it was obviously to sell the product.

[00:23:25] Speaker 01:
I agree, there's a different component of the on-sale bar.

[00:23:26] Speaker 03:
It has to be- The product could be made by ongoing process.

[00:23:30] Speaker 01:
Yes.

[00:23:30] Speaker 03:
So the fact that you have an offer to sell the product, where you've got two different processes, does not equal, I have made an offer to sell the product by the new

[00:23:39] Speaker 03:
And that's your problem, is that you're saying that we should conclude, as a matter of law, that the mere fact that they had some product that was made by the new process stockpiled is the end of the inquiry.

[00:23:52] Speaker 01:
No, it's more than that.

[00:23:54] Speaker 01:
What we're arguing, and it's the witness testimony for both.

[00:23:57] Speaker 01:
The witness testimony was that they had decided, for the critical date, to fill these offers with product made by the patented method.

[00:24:03] Speaker 01:
And it's their witnesses.

[00:24:05] Speaker 01:
So first for Cryback.

[00:24:09] Speaker 01:
It was the testimony of Equistar's own, Jasmine Mehta, testified that by August 24th, 10 days before the critical date, the, quote, decision had been made to ship the pork-produced material from the patented method.

[00:24:20] Speaker 02:
The problem with that is they could have changed their mind.

[00:24:23] Speaker 02:
And if they changed their minds, the person to whom they were making the offer, even if it had been accepted, had no basis to complain that suddenly they changed their mind and decided to give them the old product rather than the new product.

[00:24:38] Speaker 01:
But, I mean, I think I'm agreeing with Judge Moore here, sorry it takes so long to get back to you, that whether they would change their mind, it doesn't change the fact that there had been, at some point in time.

[00:24:48] Speaker 04:
It had to commercialize.

[00:24:49] Speaker 01:
Right, at some point.

[00:24:49] Speaker 04:
It's an offer for sale, it's unfulfilled, it's still an offer for sale, it triggers the on-sale bar, right?

[00:24:53] Speaker 01:
Exactly, you don't need any completed sale at all.

[00:24:55] Speaker 01:
Right, you need an offer, and there's never been any dispute that the offer was definite enough.

[00:24:59] Speaker 01:
That's not disputed.

[00:25:00] Speaker 01:
You need an offer, and you've made the product, you've offered it for sale,

[00:25:05] Speaker 01:
And the decision, at some point in time before the priority date, had been made for both customers to supply product made by the patented method.

[00:25:13] Speaker 04:
And in fact, wasn't there testimony that any orders out of Houston, there was nothing but the Laporta product available to ship to them?

[00:25:20] Speaker 04:
There was no more product made by the conventional method available to ship to Houston?

[00:25:25] Speaker ?:
Right.

[00:25:25] Speaker 01:
As of at least August 27th, the week before the critical date, there was no more bulk supplies of it made by any other method.

[00:25:32] Speaker 04:
And any facility or only Houston?

[00:25:34] Speaker 04:
What about Damio or Damco or whatever it's called?

[00:25:36] Speaker 01:
The testimony was this week before, at least for these, at least for, I mean.

[00:25:39] Speaker 04:
They had that one car left from Damco that they shipped on the 28th, but that there was no more.

[00:25:44] Speaker 01:
Right, that was the 27th, right, 27th.

[00:25:45] Speaker 01:
But yes, it was a week to go, exactly.

[00:25:47] Speaker 01:
So then at that point, though, what you've got is you made a huge amount of this stuff.

[00:25:51] Speaker 01:
That's what you had decided you were going to supply.

[00:25:53] Speaker 01:
And then, to the extent that it matters, the day after the critical date an acceptance comes in, and the next day they ship what they had decided to ship.

[00:26:00] Speaker 01:
Where does the record show that

[00:26:02] Speaker 02:
or they could no longer supply the whole compare?

[00:26:14] Speaker 01:
Sorry, it was EchoStar's vice president, Mr. Opasek, testified that they had run out of- What page were you on?

[00:26:23] Speaker 01:
Sorry, I don't have the page number.

[00:26:24] Speaker 01:
It's the testimony of Opasek in the record.

[00:26:27] Speaker 01:
I'm sorry about that.

[00:26:28] Speaker 01:
But what he testified was that they had run out of PX3236 in bulk

[00:26:31] Speaker 01:
So it would have to be the AU, which is the product by the patent method, as of August 24th.

[00:26:37] Speaker 01:
And then a few days later, they discovered they still had one rail car and shipped it, but then they were back to where they had been when Mr. Opasek said.

[00:26:44] Speaker 04:
Page 3067.

[00:26:46] Speaker 01:
Thank you.

[00:26:48] Speaker 01:
But the- Wait, wait, wait.

[00:26:52] Speaker 04:
3067.

[00:26:52] Speaker 04:
I think that might be the testimony you're looking for.

[00:27:00] Speaker 01:
I just got a note saying 3067 as well.

[00:27:32] Speaker 03:
Why isn't the creating the bulk product just mere pre-commercialization activity?

[00:27:39] Speaker 01:
Just creating the product standing alone would not be an on-sale bar because there's no offer for sale or sale.

[00:27:45] Speaker 01:
We agree with that.

[00:27:46] Speaker 01:
The point is that there was an offer for sale to make to supply PX 3236.

[00:27:50] Speaker 01:
Never been disputed.

[00:27:51] Speaker 03:
Which also there's no dispute that it could have been made by either method and had historically been made for these same customers by the old method.

[00:28:00] Speaker 01:
Agreed.

[00:28:01] Speaker 01:
So then the question is though, if it could be made, this is the same fact question that arose in the other cases I mentioned.

[00:28:06] Speaker 01:
Okay, what was being offered for sale?

[00:28:07] Speaker 01:
Was it made by the one or by the other?

[00:28:10] Speaker 01:
And the testimony in the record is first, their witness has testified that as for both of these two customers, the quote decision had been made.

[00:28:17] Speaker 03:
In those other cases, it was important that you were talking about a sale of a product.

[00:28:22] Speaker 03:
So you were offering the product and there was only one process.

[00:28:26] Speaker 03:
Here, what we're talking about is a method, a process method.

[00:28:30] Speaker 03:
And the patent is for the method, not for the end product.

[00:28:34] Speaker 03:
We know that.

[00:28:34] Speaker 03:
And so these are materially different facts than the cases on which you're relying.

[00:28:39] Speaker 01:
Well, DLL is pretty close.

[00:28:42] Speaker 01:
It was a manufacturing method.

[00:28:44] Speaker 01:
It was the patent.

[00:28:45] Speaker 01:
And what was offered for sale was a product that had previously been made by a different method, could now also be made by the new patent.

[00:28:52] Speaker 03:
But the offer there said, we're going to make it by this new method, right?

[00:28:58] Speaker 01:
I don't remember the offer in DLL being that specific.

[00:29:00] Speaker 01:
But the point, though, is simply that it's a fact question.

[00:29:04] Speaker 01:
The fact question is, okay, the product that's being out for sale was made by the one or the other.

[00:29:07] Speaker 03:
Okay, it's a new fact question for you.

[00:29:08] Speaker 03:
It was not a fact question before Judge Moore asked you if it was a fact question.

[00:29:11] Speaker 01:
No, it's always been a fact question.

[00:29:13] Speaker 01:
Our point.

[00:29:13] Speaker 03:
No, you never told me just the court back.

[00:29:15] Speaker 03:
You said cross-mation for summer judgment, there are no material issues of fact.

[00:29:20] Speaker 01:
I'm sorry.

[00:29:20] Speaker 01:
What I meant by fact question is I didn't mean to say that we think it's disputed.

[00:29:25] Speaker 01:
I meant to say that there is a fact question and we think the record is unambiguously in our favor.

[00:29:30] Speaker 01:
Let's come back to 306-7.

[00:29:34] Speaker 02:
I see that it says that they weren't making the old product in the La Porte facility.

[00:29:40] Speaker 02:
So if we're going to come from La Porte, they couldn't do it.

[00:29:43] Speaker 02:
Where does it say here that it couldn't come from another facility?

[00:29:48] Speaker 02:
There were more than one facility making this stuff, right?

[00:29:53] Speaker 01:
Well, what she tests, so it's on page, I mean, 3677, transcript page 192, starting at line 14, and Ms.

[00:30:01] Speaker 01:
Mehta says in this email, any orders for PX 3236 in bulk will have to come out of the port, correct?

[00:30:09] Speaker 01:
Yes.

[00:30:09] Speaker 01:
That refers to the port, yes.

[00:30:11] Speaker 01:
So the point was, for this customer, they had decided, going to ship from the port, what they had in the port was made by the newer method.

[00:30:21] Speaker 02:
decided and have to are not in the same thing.

[00:30:23] Speaker 02:
That's part of what we're talking about.

[00:30:28] Speaker 02:
Are you contending that the order had to be filled from the port or just that they decided to fill it from the port?

[00:30:38] Speaker 01:
Well, I think it's both.

[00:30:39] Speaker 01:
Mainly we're saying they decided.

[00:30:40] Speaker 01:
I mean, they decide what they're offering for sale.

[00:30:42] Speaker 01:
What they're offering for sale is something that... Okay, so where does the record tell us that they were compelled to fill from the port?

[00:30:50] Speaker 01:
Compelled?

[00:30:51] Speaker 01:
Well, sorry, I meant to say that if it's from a report, they're compelled because that's all they have.

[00:31:00] Speaker 01:
It didn't mean to say that the record says that they were compelled to provide it from a report.

[00:31:04] Speaker 01:
But the record accepts that, you know, Metta says that that's, I mean, it does.

[00:31:09] Speaker 01:
Paul, any orders for PX 3236 involved will have to come out of the report.

[00:31:14] Speaker 01:
That's the testimony.

[00:31:15] Speaker 01:
And again, page 192, it's in line 16.

[00:31:19] Speaker 01:
So that says it will have to come out of the report.

[00:31:21] Speaker 01:
She also said that the decision had been made to ship that from the report, which means that they had decided before the critical date.

[00:31:29] Speaker 02:
The decision, the internal decision to provide one or the other is not something that could be enforced by the purchaser.

[00:31:37] Speaker 02:
That's the problem.

[00:31:39] Speaker 02:
If the purchaser, they have an offer

[00:31:45] Speaker 02:
which creates the on-sale bar, it has to be an offer that, if it were accepted, would obligate the patentee to buy the patented product right here, the product made by the patent method.

[00:31:58] Speaker 02:
Can, no?

[00:32:00] Speaker 01:
I don't think so.

[00:32:01] Speaker 01:
I mean, no, because, well, for a couple of reasons.

[00:32:04] Speaker 01:
And Judge Moore's going to probably maybe add a third in a minute, or can go first if you want.

[00:32:09] Speaker 01:
But there are a few things about it.

[00:32:12] Speaker 01:
One is you still,

[00:32:14] Speaker 01:
The commercial, the production of this vast amount of material with the intent to sell is a commercial use under, of the method.

[00:32:26] Speaker 03:
Was the method ever disposed of publicly?

[00:32:28] Speaker 01:
No, but that's the real point here.

[00:32:30] Speaker 01:
Remember, the whole point of the on-sale bar is to enforce the basic patent bargain, which is- That's not the only point.

[00:32:36] Speaker 03:
There are various purposes behind the on-sale bar, and one of which is to make sure that something, a patent,

[00:32:43] Speaker 03:
and that it's been disclosed to the public, either because the method's been disclosed or the product has been delivered and that product could be, that someone could figure out the method based on that product.

[00:32:56] Speaker 03:
But until those things occur, there's nothing put out in the public domain.

[00:33:01] Speaker 01:
Right, but is this reported on in DL-Alt?

[00:33:03] Speaker 01:
The other very important purpose is that you don't want people to keep things as trade seekers for years, and only when they happen to leak out, then seek an additional 20 years of a patent.

[00:33:12] Speaker 01:
Part of the basic part of the patent bargain fully at issue here.

[00:33:15] Speaker 01:
That didn't happen here.

[00:33:17] Speaker 01:
Well, it did in the sense that they were using this method for commercial purposes for more than a year.

[00:33:21] Speaker 01:
And that's the line that Congress drew.

[00:33:22] Speaker 03:
We said in Medicines on Bunk that the mere fact that there's some commercial benefit to stockpiling is not enough.

[00:33:29] Speaker 01:
Right, you also need an offer for sale.

[00:33:30] Speaker 03:
It has to be commercialization.

[00:33:32] Speaker 03:
within the concept of the UCC.

[00:33:35] Speaker 01:
And making bulk product to sell, and then making bulk product to sell without standing offers to sell, which then right after the critical date you deliver on, is that.

[00:33:46] Speaker 01:
It's an important point that the non-disclosure to the public, I mean this court held, it said it's irrelevant, but that's why it's irrelevant, it's actually important.

[00:33:56] Speaker 03:
You can't have a situation where someone just- Were there any new-

[00:34:00] Speaker 03:
offers, outstanding offers, other than the ones that were historical, that were offers based on the old product?

[00:34:10] Speaker 01:
The thing about based on the old product, I mean, the offers were for these two customers of the two that are in the record.

[00:34:19] Speaker 01:
Pardon?

[00:34:19] Speaker 01:
The offers that are in the record are for these two customers.

[00:34:22] Speaker 01:
Except the offers aren't in the record.

[00:34:24] Speaker 01:
But they're referenced in the record and it's undisputed.

[00:34:26] Speaker 01:
This is the point.

[00:34:26] Speaker 03:
No, they're saying there had been an historical

[00:34:29] Speaker 03:
purchase, a history of purchases by this one client.

[00:34:33] Speaker 03:
But you don't have anything that says that there was an actual offer made.

[00:34:39] Speaker 03:
Why don't you look at 3123?

[00:34:40] Speaker 01:
I mean, that's the emails.

[00:34:42] Speaker 01:
It's the reference set.

[00:34:45] Speaker 01:
And then the witness testimony reference set as well, going to 3123.

[00:34:49] Speaker 04:
It seems like it has a quote.

[00:34:53] Speaker 01:
One of the emails.

[00:34:53] Speaker 04:
Price.

[00:34:55] Speaker 04:
It's been approved.

[00:34:55] Speaker 04:
Number of years that the agreement would be approved for.

[00:34:58] Speaker 04:
no rebate terms, it seems very precise.

[00:35:03] Speaker 04:
There hasn't been a dispute that this is the offer, right?

[00:35:06] Speaker 04:
They've never once, at any point below or on appeal, disputed that this was an offer.

[00:35:12] Speaker 01:
Exactly.

[00:35:13] Speaker 01:
And this is the thing, there's simply never been a dispute, as you said, on these points.

[00:35:20] Speaker 01:
And so the dispute has always been whether there's

[00:35:27] Speaker 01:
whether you've already created a genuine issue of fact as to the key point of exactly which method would be used for the outstanding offers.

[00:35:33] Speaker 01:
And again, it's not just here, it's in our brief as well.

[00:35:38] Speaker 01:
Our point is pretty simple, that one, we think we're entitled to judgment on the undisputed record.

[00:35:42] Speaker 01:
But if not, the other side certainly isn't.

[00:35:44] Speaker 01:
You can't affirm based on perception of fact disputes.

[00:36:07] Speaker 00:
May it please the court?

[00:36:09] Speaker 00:
Judge Morris, one of your questions about whether the second prong of plum tree is satisfied, it's not here.

[00:36:15] Speaker 00:
The record is undisputed that the patented process was only performed once before the critical date, and that was the very first time it was tested.

[00:36:22] Speaker 04:
Actually, two batches were made, not once.

[00:36:24] Speaker 04:
It was performed twice because two batches were made totaling 345,000 pounds.

[00:36:29] Speaker 04:
So it was performed twice for two batches.

[00:36:32] Speaker 04:
Each time results in a batch.

[00:36:33] Speaker 00:
Two lots were made on the very same day.

[00:36:35] Speaker 04:
It was all once.

[00:36:38] Speaker 00:
The process was performed continually for a span of a few hours over a day, and two production lots were made out of that.

[00:36:47] Speaker 04:
We had 45,000.

[00:36:48] Speaker 00:
Correct.

[00:36:49] Speaker 04:
And an average sale is about 47,000 pounds.

[00:36:52] Speaker 04:
Is that correct?

[00:36:53] Speaker 00:
I know it's correct, but under this.

[00:36:55] Speaker 04:
That's a lot of product.

[00:36:55] Speaker 04:
That's almost 10 times the average bulk sale that you make.

[00:36:59] Speaker 04:
That's how much you produce.

[00:37:00] Speaker 04:
Seems like a lot for a test run.

[00:37:02] Speaker 00:
Well, the reason we had to produce that much is that remember that the purpose of the 163 patent is to bring two processes together, to bring the mixing to the reactor.

[00:37:12] Speaker 00:
These reactors are massive.

[00:37:15] Speaker 00:
They produce a lot of material, and to get it out of the wide spec into a in-spec run, and get enough material out that they could test it, again, on a commercial-sized reactor, which was the purpose of the invention, to bring two processes to the commercial reactor.

[00:37:32] Speaker 00:
It made sense that they produced that much.

[00:37:34] Speaker 00:
Then they had to test it.

[00:37:36] Speaker 00:
They tested that over the next few months and eventually reached the conclusion that it not only produced acceptable product, but even better product.

[00:37:44] Speaker 00:
The presentation was made between Equistar and MSI on September 11, 2001.

[00:37:52] Speaker 00:
Very memorable day.

[00:37:53] Speaker 00:
They reached the conclusion days before that.

[00:37:55] Speaker 02:
I don't understand what all this has to do with the on-cell bar.

[00:38:00] Speaker 02:
It doesn't make any difference whether they produce the stuff for testing or experimental use or whatever.

[00:38:05] Speaker 02:
If they offered to sell it, that's it, right?

[00:38:07] Speaker 00:
There was a continual offer to sell PX3236.

[00:38:10] Speaker 02:
No offer including... Am I correct that the fact that they produced it for experimental purposes is irrelevant if they offered to sell it, right?

[00:38:19] Speaker 00:
It's only relevant to the second prong of plum tree, which I believe came up in my opposition's argument.

[00:38:25] Speaker 02:
Well, plum tree says if you...

[00:38:27] Speaker 02:
offer to sell a product made by the patent method before the critical date that brings into play the on-sale bar.

[00:38:35] Speaker 00:
Correct.

[00:38:35] Speaker 00:
But this court has also been clear in medicines and healths in that that offer for sale must unambiguously put the invention on sale.

[00:38:43] Speaker 00:
The offer at appendix 3123 says nothing about how it's going to be made.

[00:38:47] Speaker 04:
That's the first problem.

[00:38:49] Speaker 00:
Correct.

[00:38:50] Speaker 04:
Okay.

[00:38:50] Speaker 04:
What about the second problem?

[00:38:52] Speaker 00:
The second prong is whether the actual process was undertaken for commercial gain, for commercial purposes.

[00:39:01] Speaker 00:
The very first, the only pre-critical date run of this process was the very first test run to figure out if this could be done on a commercial reactor.

[00:39:10] Speaker 00:
And that's the reason for the size of the loss, because this was done on a commercial reactor, not in a lab.

[00:39:16] Speaker 00:
The whole purpose of the patent is to bring this all into one commercial production line.

[00:39:21] Speaker 04:
So you're saying that it hadn't been produced in advance of the critical date?

[00:39:27] Speaker 00:
It had been produced, but not for commercial purposes.

[00:39:29] Speaker 04:
Where is your proof of that?

[00:39:31] Speaker 04:
Because it looks like you produced a lot of it, and you produced it way in advance of the critical date, and then you did use it to fill offers, and you have a lot of emails before the critical date saying, we're going to use it to fill offers.

[00:39:44] Speaker 04:
A lot of emails saying that.

[00:39:45] Speaker 04:
So obviously those people weren't of the view that it was being tested during the time that they're saying, let's fill offers with the stuff in the portal.

[00:39:53] Speaker 00:
Under under linear tech, those types of preparations to sell are not offers to sell.

[00:39:59] Speaker 04:
If there's no offer to sell PX 32 36, that's not in dispute.

[00:40:05] Speaker 04:
The question is, were you going to fill it?

[00:40:08] Speaker 04:
Are you, were you planning on selling the new product?

[00:40:11] Speaker 04:
or were the product made by the new process, or were you planning on selling the product made by the old process?

[00:40:16] Speaker 00:
The undisputed record is at some point that decision was made, but it was never, No Step was taken to actually fill a product until after the critical date.

[00:40:26] Speaker 00:
Indeed, the emails referenced that as a Jasmine medal.

[00:40:30] Speaker 04:
Until after the critical date.

[00:40:32] Speaker 04:
Do we really know when the decision was made?

[00:40:34] Speaker 04:
Does this record tell me when the decision was made pursuant to the offer, to fill that offer with this?

[00:40:40] Speaker 04:
With the pre, the new process?

[00:40:42] Speaker 00:
It does not.

[00:40:43] Speaker 00:
It does not tell you when that decision was made for certain.

[00:40:47] Speaker 00:
Even the Jasmine met to email.

[00:40:49] Speaker 02:
For certain.

[00:40:50] Speaker 02:
I thought there was evidence that they did internally decide to fill it with a product made by the email.

[00:40:58] Speaker 00:
But even if they did decide to internally fill it, the production itself was not for commercial purposes.

[00:41:04] Speaker 00:
It was for experimental purposes.

[00:41:06] Speaker 00:
It was the very first run.

[00:41:07] Speaker 00:
And at some point, if they did decide to fill it,

[00:41:10] Speaker 03:
that's still an internal decision, it's mere preparation to sell.

[00:41:26] Speaker 03:
The patented product or patented method has to be unambiguously on sale.

[00:41:30] Speaker 00:
Absolutely.

[00:41:31] Speaker 00:
And that's why the first prong of plum tree is not satisfied here, because there was never an offer to sell that unambiguously put the patented invention, the patented process, on sale.

[00:41:40] Speaker 03:
The second prong has to include that as well, after medicines and health.

[00:41:43] Speaker 00:
Medicines wasn't on the box.

[00:41:48] Speaker 00:
Correct.

[00:41:49] Speaker 04:
But the second prong of plum tree... You think Medicine Co.

[00:41:52] Speaker 04:
rendered the second prong of

[00:41:53] Speaker 04:
Plum Tree totally superfluous?

[00:41:56] Speaker 04:
That they incorporated into it the unambiguity requirement of the first problem?

[00:42:00] Speaker 00:
I don't believe so.

[00:42:01] Speaker 00:
I think medicines is talking about a separate issue in terms of whether an offer for sale puts the invention on sale, not whether there was a commercialization of the process before.

[00:42:13] Speaker 00:
And so Plum Tree is talking about both potential options, both sort of what should the offer for sale look like?

[00:42:17] Speaker 00:
And it should be unambiguous.

[00:42:18] Speaker 00:
And here it was not unambiguous.

[00:42:20] Speaker 00:
There was no mention of the patented method.

[00:42:23] Speaker 00:
ever and at no point would we have been compelled to offer the new product made with the new method.

[00:42:30] Speaker 00:
We could have decided, we could have told people we were out of orders until we had more conventional product come in.

[00:42:36] Speaker 03:
They could not have said, we only accept this if you do it under the new method.

[00:42:42] Speaker 00:
Absolutely.

[00:42:43] Speaker 00:
There was no offer out there that could have bound us to send the new material

[00:42:48] Speaker 04:
We discussed with Mr. Joseph that there really are two incentives that exist behind the own sale bar that sort of justify it.

[00:42:57] Speaker 04:
Number one is favorable to you in that it is you don't want to take things back from the public that are already been disclosed to the public and there's no evidence in this record that the new process, the new patented process was in fact known by the public and therefore you're taking it back, right?

[00:43:17] Speaker 04:
There's no evidence of that.

[00:43:18] Speaker 04:
But the second incentive behind the on-sale bar, which Mr. Joseph mentioned, is to prevent commercialization that extends more than a year prior to the critical date.

[00:43:27] Speaker 04:
Because we don't want people having 25 or 30 year patent terms.

[00:43:31] Speaker 04:
And so that one, I'm a little worried about.

[00:43:34] Speaker 04:
Because what Plum Tree says is if you offer to sell somebody something, and then you reduce it to practice pursuant to that offer, even though the person doesn't know that you're selling them the patented process one.

[00:43:46] Speaker 04:
That's an on-sale bar because it's a combination, not just a stockpiling product, but a stockpiling product in conjunction with an offer to sell it.

[00:43:54] Speaker 04:
And so that's where I'm worried that your case falls.

[00:43:57] Speaker 04:
I don't see how you can avoid the on-sale bar and the extension commercialization by simply switching the order, making 345,000 pounds of it, then making the offer to sell it, as opposed to making an offer to sell it and then making 345,000 pounds of it.

[00:44:15] Speaker 04:
I don't, as long as both of those events occur before the critical date, that's my problem with your position, is you're extending the monopoly more than 20 years by doing all the things necessary for commercialization.

[00:44:26] Speaker 00:
And again, the first production, the only production pre-critical date, was not for commercial purposes.

[00:44:32] Speaker 00:
The record is undisputed on that.

[00:44:33] Speaker 00:
And they never- Well, it was for commercial purposes.

[00:44:35] Speaker 04:
You fully intended to try to manufacture something and sell, but maybe you were still experimenting on it or still testing it, but it wasn't for commercial purposes.

[00:44:43] Speaker 00:
We didn't know if the process was going to work.

[00:44:46] Speaker 00:
We didn't know if it was going to meet the PX3236 specs.

[00:44:49] Speaker 00:
It was an experimental run on a commercial reactor which pumps out thousands upon thousands of pounds per hour.

[00:44:57] Speaker 02:
We provided it right after the critical date.

[00:45:01] Speaker 02:
The test was run in July.

[00:45:05] Speaker 02:
You provided this stuff to people immediately after the critical date.

[00:45:08] Speaker 02:
It was ready to sell before the critical date.

[00:45:12] Speaker 00:
The question is whether you made an offer to sell it before the critical date.

[00:45:15] Speaker 00:
Correct.

[00:45:16] Speaker 00:
And under the first prong of plum tree, there was never such an offer.

[00:45:19] Speaker 00:
So we were never bound.

[00:45:20] Speaker 00:
We would never have been bound by mere acceptance.

[00:45:22] Speaker 00:
It's not the first part of plum tree.

[00:45:24] Speaker 02:
No one's suggesting that they contracted to perform the patent method.

[00:45:29] Speaker 02:
The question is whether they

[00:45:32] Speaker 02:
who offered to sell a product made by the new patented method for the critical day.

[00:45:39] Speaker 00:
And we never made that offer.

[00:45:41] Speaker 00:
There's only a continual offer to sell what had been our current product.

[00:45:45] Speaker 00:
It'd be like saying Coca-Cola comes up with a new bottling process, saying that it's ongoing contracts and past offers to sell Coca-Cola, somehow obligated to now potentially.

[00:45:59] Speaker 04:
Let me give you a hint.

[00:45:59] Speaker 04:
Suppose that

[00:46:02] Speaker 04:
And I know these are not the facts in this case.

[00:46:03] Speaker 04:
I just want to be really clear.

[00:46:05] Speaker 04:
But suppose that you had been making it by the conventional process.

[00:46:09] Speaker 04:
You decided to make it by the new process.

[00:46:10] Speaker 04:
You weren't experimenting.

[00:46:11] Speaker 04:
You knew the new process would work.

[00:46:13] Speaker 04:
You actually abandoned the factory and had it torn to bits that made it by the old way.

[00:46:18] Speaker 04:
In fact, the only way you have now to manufacture PX 3236 would be to be manufacturing it out of the new process.

[00:46:26] Speaker 04:
Now, nobody knows this in the public.

[00:46:28] Speaker 04:
Your cryovac or Pactiva people, they don't know this.

[00:46:31] Speaker 04:
But that's the only way you could actually continue to produce more of it.

[00:46:35] Speaker 04:
You have an ongoing offer with Cryovac.

[00:46:36] Speaker 04:
They place an offer.

[00:46:38] Speaker 04:
You've stockpiled 345,000 pounds of the new stuff.

[00:46:41] Speaker 04:
But you don't fill the offer until two days after the critical date.

[00:46:44] Speaker 04:
Does that create an on-sale bar?

[00:46:46] Speaker 00:
Was the 345,000 pounds made from that new plant we tore down and built up?

[00:46:52] Speaker 00:
I mean, under that hypothetical, I can see where your concerns would lie.

[00:46:56] Speaker 00:
But that's not the facts of this case.

[00:47:00] Speaker 04:
Would that be an on-sale bar, yes or no?

[00:47:03] Speaker 04:
The customer doesn't know, but you no longer even have the capacity to fill the order through the old process.

[00:47:09] Speaker 04:
You have non-stockpiled, you don't even have the factory anymore.

[00:47:13] Speaker 04:
You've got a continuing and open offer.

[00:47:15] Speaker 00:
If we no longer have the capacity to use the conventional method, we only have the capacity to produce via the patented method and we're making the

[00:47:22] Speaker 00:
We're making offers to sale with only that capacity.

[00:47:26] Speaker 00:
Yes, that would be an on-sale bar.

[00:47:27] Speaker 00:
But that's not the fact in this case.

[00:47:29] Speaker 04:
How do we know that in light of the testimony of your employees that say, we had no more of the conventional product, we had a lot of the new product, and any orders that would have to come at least out of Houston would have to be filled with the new product?

[00:47:45] Speaker 00:
Because the record also says that they continue to use the conventional process.

[00:47:48] Speaker 04:
No, where does it say that?

[00:47:49] Speaker 04:
Where?

[00:47:50] Speaker 00:
I didn't find that anywhere.

[00:47:52] Speaker 04:
If you look at... I found there was one shipment after the time, but then I have somebody saying we had one more rail... I found evidence we had one more rail car from Damco that contained the old product.

[00:48:02] Speaker 04:
That's only 47,000 pounds, by the way.

[00:48:04] Speaker 04:
That couldn't have filled either the Krylovac or Pactiva offers, which were both higher than that.

[00:48:08] Speaker 04:
But in any event, there's no evidence that I can tell that you're continuing to make the conventional product.

[00:48:13] Speaker 04:
You may have had the ability to, but no evidence that you were.

[00:48:16] Speaker 00:
If you look at Joint Appendix 101, 34 to 35,

[00:48:20] Speaker 00:
Wait, 10134 to 10135.

[00:48:23] Speaker 04:
The 10,000 something.

[00:48:25] Speaker 00:
It is.

[00:48:26] Speaker 04:
101.

[00:48:28] Speaker 00:
It's also in the yellow brief at page 24.

[00:48:31] Speaker 00:
There's a snippet of it.

[00:48:32] Speaker 00:
That's easier to grab.

[00:48:37] Speaker 05:
Sorry, 101.

[00:48:40] Speaker 00:
Either join the panics, 10134, or yellow brief at page 24.

[00:48:46] Speaker 04:
10134.

[00:48:48] Speaker 04:
Yeah, that's the email, right?

[00:48:51] Speaker 00:
This is the production lot numbers.

[00:48:54] Speaker 00:
Yes.

[00:48:54] Speaker 04:
And everything in INT is the old and LPOT is the new.

[00:48:58] Speaker 00:
So the only stuff coming with the patented process is the look for it, the LPOT.

[00:49:04] Speaker 00:
But after that, we're also filling orders out of different facilities, TXPT and EXET.

[00:49:09] Speaker 00:
Those are conventional mixing facilities.

[00:49:14] Speaker 00:
So throughout this process, even to this day, we fill orders, sometimes with the conventional process-made product.

[00:49:26] Speaker 02:
Okay.

[00:49:26] Speaker 02:
Okay.

[00:49:28] Speaker 02:
All right.

[00:49:30] Speaker 02:
I think we're out of time.

[00:49:37] Speaker 01:
Thank you, Your Honor.

[00:49:38] Speaker 01:
The Council of Cases submitted.

[00:49:40] Speaker 03:
This is where I want to go, because medicines go.

[00:49:43] Speaker 03:
En banc, we said mere commercial benefit, mere commercial activity is not enough, right?

[00:49:50] Speaker 03:
We need commercialization within the concept of the UCC, which means you have to have an offer that upon acceptance would bind you to do a certain thing, right?

[00:50:03] Speaker 03:
And so in this case, we said stockpiling doesn't matter.

[00:50:09] Speaker 03:
In medicines, we said the mere stockpiling is not a problem.

[00:50:13] Speaker 03:
commercial benefit, doing something for commercial benefit is not a problem.

[00:50:17] Speaker 03:
What you need is an actual offer that the other side can force by accepting.

[00:50:24] Speaker 03:
And here we've got a method.

[00:50:27] Speaker 03:
And the other side has to force use of that method by accepting, right?

[00:50:32] Speaker 03:
Under the UCC.

[00:50:33] Speaker 01:
I don't think so.

[00:50:34] Speaker 01:
Here's why.

[00:50:35] Speaker 01:
There's no doubt that offer has to be definite, can be accepted.

[00:50:39] Speaker 01:
The offer here was for the product.

[00:50:41] Speaker 01:
Again, the customers just don't care how it's made.

[00:50:43] Speaker 01:
That's what would happen.

[00:50:44] Speaker 03:
That's what does.

[00:50:46] Speaker 03:
It's not.

[00:50:47] Speaker 03:
It has to be for the method.

[00:50:49] Speaker 03:
It has to be for the patent, not for the product.

[00:50:52] Speaker 03:
Because we know that the product can be made by the method or by another method.

[00:50:57] Speaker 01:
It's the same as in DLLT.

[00:50:59] Speaker 03:
Well, DLLT was before PATH, before Medicines Co., before all of those cases.

[00:51:03] Speaker 03:
So you can go back 25 years if you want.

[00:51:06] Speaker 03:
But there is a lot from the Supreme Court and from our court that has happened in the interim.

[00:51:11] Speaker 04:
Is it your view that Plum Tree was sub silencio overruled by Medicine Co.?

[00:51:15] Speaker 01:
No, nowhere.

[00:51:16] Speaker 01:
And Plum Tree, I mean, in subsequent decisions of this court, quoted Plum Tree with approval on this very point, including, excuse me, well, there's Plum Tree quoted DLL.

[00:51:27] Speaker 01:
Plum Tree also quoted Henry Koller, which said the exact same thing as DLL.

[00:51:30] Speaker 01:
So the question is the acceptance of an offer for a product.

[00:51:34] Speaker 01:
The question then is just, was it going to be made by the one method or the other?

[00:51:39] Speaker 01:
And here, in our view, the record is very clear on that point.

[00:51:42] Speaker 01:
If you don't think the record is very clear on that point, though, then that's a basis, again, for denying summary judgment or granting it.