[00:01:14] Speaker 00:
May it please the court?

[00:01:28] Speaker 01:
The issue in this case is whether the district court abused its discretion by ruling that MGA's infringement behavior was so egregious as to justify punishing MGA with a maximum punishment of treble damages

[00:01:41] Speaker 01:
and attorney fees for the entire case, even appellate proceedings.

[00:01:46] Speaker 02:
Mr. Sokol, I don't think, tell me if I'm wrong, that you made an argument in your blue brief that even if an egregiousness determination and therefore enhancement was justifiable, nevertheless, the amount of the enhancement was excessive.

[00:02:06] Speaker 02:
I don't see a separate argument on that.

[00:02:10] Speaker 01:
Your honor, we did say that no enhancement and especially treble damages was appropriate.

[00:02:18] Speaker 01:
That's in our blue brief.

[00:02:20] Speaker 01:
I think that implicitly means treble damages goes too far.

[00:02:26] Speaker 01:
But any enhancement in this case is inappropriate under the circumstances, under the egregiousness test of Hallow.

[00:02:36] Speaker 01:
In a nutshell, the district court refused to consider

[00:02:40] Speaker 01:
the new Hallow test, the egregiousness, and instead it put all of its reasoning into the Reed v. Portek factors, which are optional.

[00:02:52] Speaker 01:
But the key thing is the egregiousness test of the Hallow case, which the court refused to consider.

[00:03:01] Speaker 01:
And that is that

[00:03:08] Speaker 01:
At the particular, under the particular circumstances of the case, the district court has to consider whether the infringer at the time of infringement had any reason to doubt the validity of the patent.

[00:03:21] Speaker 01:
The court didn't go through that exercise.

[00:03:24] Speaker 01:
And that was the emphasis of Hallow.

[00:03:26] Speaker 01:
And that was the reason that Hallow overruled this court's Seagate test.

[00:03:33] Speaker 02:
And do I understand that the state of the evidentiary record, the actual admitted evidence is a state in which the Segal letters are not part of it.

[00:03:44] Speaker 02:
That is, you never offered them into evidence either at the trial or on remand from this court, which would then have triggered a variety of processes, at least including the processes that the trial judge at trial

[00:04:02] Speaker 02:
said was going to be triggered, deposition of the MGA, internal counsel or something, to examine that, is it one Segal letter or two Segal letters?

[00:04:13] Speaker 01:
Excuse me?

[00:04:14] Speaker 02:
Is it one Segal letter or two Segal letters?

[00:04:16] Speaker 01:
There's really just one.

[00:04:18] Speaker 02:
Okay.

[00:04:20] Speaker 02:
So what we have on this record is no admitted and tested evidence of what, at the time of the issuance of the patent,

[00:04:31] Speaker 02:
was MGA's state of mind, there is some evidence about what the pre-issuance state of mind is, which doesn't exactly help you.

[00:04:41] Speaker 02:
The copying of the product with a patent pending mark on it, which ended up supporting affirmed 154D royalties because you knew about those claims and the claims were

[00:04:58] Speaker 02:
only insubstantially different from the claims as issued.

[00:05:04] Speaker 01:
You made a lot of points.

[00:05:05] Speaker 01:
Let me try to address them, and I hope I can remember them all.

[00:05:10] Speaker 01:
One is that the claims of the published application were invalid on their face.

[00:05:18] Speaker 01:
They were invalid because of the

[00:05:25] Speaker 01:
the Swift reference that was described in the written description portion of the patent application, which the examiner subsequently without knowledge of MGA rejected the claims in view of Swift and they had to be amended to permit allowance.

[00:05:49] Speaker 01:
And MGA

[00:05:53] Speaker 01:
Uh, they, this court subsequently held that despite that amendment, they were substantially the same, but MGA had no way of knowing whether the patent would issue or when it did issue what the claims would be.

[00:06:06] Speaker 01:
It wasn't aware of that until the day that suit was filed.

[00:06:10] Speaker 02:
Right.

[00:06:11] Speaker 02:
But then that's where the absence of evidence of what MGA thought on, on or immediately upon issuance of the patent, um, seems like a,

[00:06:23] Speaker 02:
rather significant gap.

[00:06:25] Speaker 01:
Yes, I'm glad you reminded me of that part of your question.

[00:06:32] Speaker 01:
MGA, that analysis, the SQL analysis is part of the record.

[00:06:39] Speaker 02:
The trial judge knew about it.

[00:06:41] Speaker 02:
I want to keep separate.

[00:06:42] Speaker 02:
Part of the record, because it was once proffered

[00:06:47] Speaker 02:
But it's not part of admitted evidence subject to the usual process of testing the evidence.

[00:06:54] Speaker 01:
That's correct.

[00:06:55] Speaker 01:
It was not submitted to the jury.

[00:06:58] Speaker 02:
Or to the judge on remand from this court's 2016 ruling.

[00:07:04] Speaker 01:
Okay.

[00:07:05] Speaker 01:
And the reason it wasn't submitted to the jury, because at the time, Hallow had not yet overruled this court's Seagate test.

[00:07:16] Speaker 01:
What Hallow said is you have to consider all the circumstances, the particular circumstances of the case, which includes that, that Segal analysis that the district court knew about.

[00:07:30] Speaker 01:
We tried to get that in.

[00:07:31] Speaker 01:
We asked for a new trial when this court remanded Sue Wisponte to the district court after Hallow reversed the willfulness ruling.

[00:07:42] Speaker 01:
We filed a petition for rehearing and we said, we should have a new trial.

[00:07:45] Speaker 01:
You said,

[00:07:46] Speaker 01:
We couldn't submit any more evidence.

[00:07:48] Speaker 01:
And so at that point, we didn't think we could submit, and you denied the petition for rehearing.

[00:07:54] Speaker 01:
We didn't think we could submit additional evidence at the trial court, but we very heavily relied on the Segal analysis because that's part of the particular circumstances of the case.

[00:08:05] Speaker 01:
And Hallow said you have to consider their particular circumstances.

[00:08:09] Speaker 01:
In the Reed B. Portek case, this court affirmed the denial

[00:08:14] Speaker 01:
into evidence of certain exculpatory evidence because it said the district court was right in excluding that evidence.

[00:08:24] Speaker 01:
But when it came to punishment in Reed v. Portek, it said the district court erred because it did not consider that very same evidence that was appropriately excluded from the jury.

[00:08:36] Speaker 01:
It said that when it comes to punishment, you must consider all the circumstances.

[00:08:41] Speaker 01:
And in Reed v. Portek, there was no enhancement of damages.

[00:08:47] Speaker 01:
So let me continue.

[00:08:52] Speaker 01:
The circumstances of the case was that the district court refused to consider the particular circumstances that as soon as MGA became aware of the patent, when it was sued, and even before the complaint was served, it became aware of the Siegel analysis, it became aware

[00:09:15] Speaker 01:
of an invalidity defense that this court held was objectively reasonable as a matter of law.

[00:09:21] Speaker 01:
And, and therefore, MGA had reason to doubt the validity of the patent at the time of infringement.

[00:09:32] Speaker 01:
And that was the focus of HALO.

[00:09:34] Speaker 01:
What was the state of mind at the time of infringement?

[00:09:41] Speaker 01:
District court also heard

[00:09:44] Speaker 01:
by refusing to consider the state industries case of this court, which I maintain is virtually indistinguishable from this case.

[00:09:54] Speaker 01:
The district court never even cited the case.

[00:09:58] Speaker 01:
And that was the case we relied on very heavily.

[00:10:00] Speaker 01:
And that's despite Hallow's saying that the district court's discretion is limited by 200 years of cases on enhanced damages, such as the state industries case.

[00:10:12] Speaker 01:
The district court provided three erroneous reasons for ignoring all of those facts.

[00:10:18] Speaker 01:
It said that MGA was re-arguing the issue of willfulness, that the Supreme Court had vacated this court's willfulness finding, and that MGA was attempting to rely on Seagate's objective prom.

[00:10:32] Speaker 01:
And that's all in the appendix at page seven of the district court decision.

[00:10:39] Speaker 01:
MGA is not re-arguing willfulness.

[00:10:42] Speaker 01:
Despite the holding of willfulness, this court remanded to the district court for the district court to revisit the question of egregiousness under Hallow in view of Hallow's clarification of the policy reasons for enhanced damages.

[00:10:59] Speaker 01:
And that clarification emphasized determining under the particular circumstances of the case, whether at the time of infringement, the infringer had any reason to doubt the validity of the patent.

[00:11:12] Speaker 01:
which MGA clearly had.

[00:11:14] Speaker 01:
The district court also relied regarding vacator.

[00:11:20] Speaker 01:
Although the Supreme Court vacated the willfulness holding, it did not disturb this court's decision that MGA's invalidity defense was objectively reasonable as a matter of law.

[00:11:36] Speaker 02:
What do you mean by didn't disturb it?

[00:11:40] Speaker 02:
I mean, that was in fact the basis for the willfulness decision, which the Supreme Court vacated.

[00:11:45] Speaker 01:
It overruled or rather reversed the willfulness finding because it relied on the objective prong of Seagate.

[00:11:56] Speaker 01:
It never even considered whether or not the ruling that the defense was objectively reasonable was correct or not.

[00:12:03] Speaker 01:
It just said that

[00:12:06] Speaker 01:
The objective prong, the preclusive effect of the objective prong is wrong and we now have this new test.

[00:12:13] Speaker 01:
So it did not disturb the ruling that the invalidity defense was objectively reasonable as a matter of law.

[00:12:24] Speaker 01:
And manifestly we were not relying on the objective prong of the Seagate test because that focused on the time of trial.

[00:12:35] Speaker 01:
We're relying on the state of mind of the infringer at the time of infringement, which is what Hallow dictates.

[00:12:45] Speaker 01:
And then it did err on not recognizing the Siegel analysis.

[00:12:54] Speaker 01:
And I've already explained that.

[00:12:56] Speaker 01:
There was no opportunity for MGA to decide whether to present the Siegel analysis to the jury until

[00:13:04] Speaker 01:
after Hallow overruled the objective prong that MGA had relied on.

[00:13:11] Speaker 01:
So that's part of the particular circumstances of the case and the unfairness of the district court's ignoring that.

[00:13:19] Speaker 00:
That would have been an issue that you would have presented to us in the first instance.

[00:13:23] Speaker 00:
I'm sorry, Your Honor.

[00:13:24] Speaker 00:
That would have been an issue that you would present to us in the first instance in the 2016, because this court must have decided

[00:13:32] Speaker 00:
that you're not going to get a do-over in the jury's will from this finding, because we affirm that, right?

[00:13:38] Speaker 00:
So whether you're right or you're wrong about whether or not you should have gotten a do-over, that ship is sail.

[00:13:46] Speaker 00:
And the court below was correctly not going to revisit the jury's failure to have relied on the Segal evidence.

[00:13:57] Speaker 01:
Now, the jury didn't say we didn't rely on the Siegel test.

[00:14:00] Speaker 01:
It wasn't presented to the jury.

[00:14:02] Speaker 01:
Right.

[00:14:03] Speaker 00:
But I thought you were suggesting that you should have gotten a do-over now that you know what halo requires so that the jury would have that in front of them, that you would have reflected on whether to put that in or not put that in a different way, given halo.

[00:14:17] Speaker 00:
I thought that's what, maybe I misunderstood your point.

[00:14:20] Speaker 01:
Well, it's not a do-over.

[00:14:22] Speaker 01:
Willfulness has been found.

[00:14:25] Speaker 01:
That is the law of the case.

[00:14:30] Speaker 01:
But the question of egregiousness is different.

[00:14:33] Speaker 01:
Egregiousness is, was the infringement behavior so egregious as to punish the infringer under the particular circumstances of the case?

[00:14:47] Speaker 01:
The particular circumstances of the case are we didn't present the Siegel analysis to the jury.

[00:14:54] Speaker 01:
because we were relying on the objective prong of the Seagate test.

[00:14:58] Speaker 01:
And the law changed after we made that decision.

[00:15:01] Speaker 01:
It was a strategic decision.

[00:15:03] Speaker 01:
But under the Peabody case in the Sixth Circuit, when you have that kind of a change in the law, you've got to consider that that change in the law occurred in being fair to the party that was prejudiced by not being able to make its strategic decisions on what

[00:15:22] Speaker 01:
on what the law later was.

[00:15:24] Speaker 01:
This is changing the rules of the game after the game has been played.

[00:15:28] Speaker 00:
You're well into your rebuttal, so why don't we hear from the other side and we'll save the remaining time.

[00:15:33] Speaker 01:
Thank you, Your Honor.

[00:15:38] Speaker 03:
Thank you, and may it please the court, David Kane, for intervention toys.

[00:15:44] Speaker 03:
Let me respond to a few points that a proposing counsel just made.

[00:15:49] Speaker 03:
He said at the outset that the district court

[00:15:52] Speaker 03:
refused to consider HALO's emphasis on egregiousness.

[00:15:55] Speaker 03:
That is not the case.

[00:15:57] Speaker 03:
Reed v. Portek itself says that enhanced damages are warranted for egregious infringement.

[00:16:03] Speaker 03:
And the district court's order addressing enhancement both before and after remand addresses and concludes that MGA's infringement was egregious.

[00:16:16] Speaker 02:
Can I ask you a procedural question?

[00:16:17] Speaker 02:
Yes.

[00:16:17] Speaker 02:
Going way back to 2014, but before this,

[00:16:22] Speaker 02:
after the summary judgment ruling here, and I went back in trial.

[00:16:25] Speaker 02:
And so there was a trial that included willfulness, and then there was some sort of proceeding that resulted in a quite lengthy opinion about enhancement and fees and so on.

[00:16:36] Speaker 02:
Post trial, was there a opportunity for an evidentiary proceeding about the read factors, or had all the evidence had to be submitted already?

[00:16:49] Speaker 03:
So Your Honor, this goes back to the first time this case was up on appeal, which is what we called intervention one, just to try to keep them all straight.

[00:16:57] Speaker 03:
That was around 2011 when that decision was rendered.

[00:17:00] Speaker 03:
That was post-summary judgment.

[00:17:02] Speaker 03:
You're correct.

[00:17:02] Speaker 03:
We went back.

[00:17:03] Speaker 03:
We had a trial in 2012.

[00:17:05] Speaker 03:
Following the trial, there was a lengthy procedure where we submitted briefing.

[00:17:11] Speaker 03:
The district court asked for briefing on all issues such as whether there was willfulness under the then existing Seagate standard,

[00:17:19] Speaker 03:
And the parties also sort of made a post, even though it wasn't quite post judgment yet, it was post verdict, but like post judgment motions.

[00:17:27] Speaker 03:
And yes, during that process, to answer your question, there was briefing, there was the opportunity to submit declarations.

[00:17:34] Speaker 03:
On our side, we certainly submitted extensive declarations outlining and outlining our attorney's fees and why we were entitled to our attorney's fees.

[00:17:44] Speaker 03:
District court judge referred it to a magistrate.

[00:17:47] Speaker 03:
I won't get too much into the weeds.

[00:17:49] Speaker 03:
We had a procedure with the magistrate where we had a hearing with experts.

[00:17:53] Speaker 03:
And then ultimately, I believe June of 2013, there was the opinion that went up in 2014 and was argued as part of what I call intervention two, where willfulness was originally vacated or reversed and then up to the Supreme Court back down.

[00:18:13] Speaker 03:
So yes, during that process,

[00:18:16] Speaker 03:
And there was an opportunity for evidence to be submitted, and evidence was submitted on both sides.

[00:18:23] Speaker 02:
But not the Siegel letter?

[00:18:24] Speaker 03:
The Siegel letter was not.

[00:18:26] Speaker 03:
The Siegel letter, I do not believe, was submitted.

[00:18:29] Speaker 02:
I mean, I assume it wasn't.

[00:18:32] Speaker 02:
My question really was whether there would have been an opportunity to.

[00:18:36] Speaker 03:
Yes, Your Honor, there would have been an opportunity, as well as an opportunity.

[00:18:39] Speaker 03:
And I think this is an important point beyond the Siegel letter itself.

[00:18:44] Speaker 03:
There was an opportunity to submit

[00:18:46] Speaker 03:
A declaration from Mr. Siegel had MGA chosen to do so.

[00:18:52] Speaker 03:
That was an opportunity both before intervention two and following remand from intervention two.

[00:18:58] Speaker 03:
There was no restriction from the district court on what could be submitted.

[00:19:02] Speaker 03:
There could have been a declaration from Mr. Carey, the attorney who they brought to court for trial way back in 2012, and then that precipitated

[00:19:13] Speaker 03:
the district judge saying, well, you really never, you maintain privilege the whole time, but now you're going to waive privilege.

[00:19:20] Speaker 03:
I'm going to let you do that, MGA, but I'm going to require you to present Mr. Carr for deposition during trial and produce any documents.

[00:19:30] Speaker 03:
You said repeatedly you have it, but if you have any, you got to produce them, which resulted in them producing 600 pages of documents during trial after representing that there were no documents.

[00:19:42] Speaker 03:
They do that.

[00:19:43] Speaker 03:
The evening, I think it was a Wednesday evening, we're going to take Mr. Khare's deposition.

[00:19:48] Speaker 03:
They said, no, you're not going to take his deposition.

[00:19:51] Speaker 03:
We're putting him on a plane.

[00:19:52] Speaker 03:
We're sending him home.

[00:19:53] Speaker 03:
And they told the district court judge that the next morning.

[00:19:56] Speaker 03:
So after having waived the privilege, saying they're going to produce the documents to us as ordered by the court, and the court at that point said, well, you're going to be sanctioned because you've repeatedly represented that the documents, there are no documents and now you've produced them.

[00:20:09] Speaker 03:
They sent him home and they didn't put him on.

[00:20:10] Speaker 03:
They didn't present.

[00:20:12] Speaker 03:
a declaration from Mr. Carré either in that period before the intervention to appeal or after the remand from intervention to.

[00:20:20] Speaker 03:
So the point that I wanted to make in a long-winded way of making that point is they've never presented any evidence about who authored the opinion or given us any opportunity to take discovery on the author of the opinion.

[00:20:37] Speaker 03:
They've never presented any evidence that anyone at MGA

[00:20:41] Speaker 03:
read that opinion letter or that anyone at MGA relied on that opinion letter and they've given us no discovery, aside from the 600 pages of documents produced in the middle of trial, about those subjects.

[00:20:53] Speaker 03:
So opposing counsel says that MGA was relying on this Segal letter or this defense.

[00:21:02] Speaker 03:
There's no evidence of that in the record.

[00:21:05] Speaker 03:
None at all.

[00:21:06] Speaker 03:
And we were denied the opportunity to take discovery

[00:21:10] Speaker 03:
to show what I think is already apparent from the face of the Siegel letter, which is that it's not competent.

[00:21:17] Speaker 03:
Of course, a review of the letter shows that it contains no discussion of claim construction.

[00:21:22] Speaker 03:
It contains very little substantive discussion at all.

[00:21:25] Speaker 03:
It concludes that all claims are not infringed, all claims are anticipated, and all claims are obvious.

[00:21:33] Speaker 03:
Of course, the first conclusion that all claims are not infringed

[00:21:37] Speaker 03:
is belied by the fact that summary judgment was granted and affirmed.

[00:21:42] Speaker 03:
That was in intervention one.

[00:21:43] Speaker 03:
Summary judgment of infringement.

[00:21:45] Speaker 03:
Summary judgment of infringement.

[00:21:46] Speaker 03:
Thank you.

[00:21:47] Speaker 03:
The second opinion, which is that all claims are anticipated, summary judgment was granted of no anticipation.

[00:21:55] Speaker 03:
MGA didn't even appeal that ruling.

[00:21:57] Speaker 03:
And the third summary judgment of obviousness, when you look at the chart corresponding to the claims that were tried,

[00:22:05] Speaker 03:
There is nothing other than a conclusory statement that the prior art discloses all limitations of the claim for each of the claims that are asserted.

[00:22:15] Speaker 03:
I think that's clear from the face of the letter.

[00:22:18] Speaker 03:
But again, we were denied discovery to show even further that those opinions are not competent and not reliable.

[00:22:27] Speaker 03:
But it's beside the point, because there's no evidence of anybody having read or relied on those opinions.

[00:22:36] Speaker 03:
The district court correctly understood the task on remand, correctly understood, and this court couldn't have been more explicit about it, that willfulness was decided.

[00:22:49] Speaker 03:
The district court understood, because it's expressed in intervention two, that it was to revisit its evaluation of egregiousness.

[00:22:58] Speaker 03:
But this court said, in remanding, we're not saying that the decision of the district court has to change.

[00:23:05] Speaker 03:
That's law of the case.

[00:23:06] Speaker 03:
I believe I heard opposing counsel now acknowledge, although I don't think that's apparent from the papers, that that is law of the case.

[00:23:13] Speaker 03:
Willfulness has been decided.

[00:23:15] Speaker 03:
Much of their briefing suggests that the district court abused its discretion because it didn't re-evaluate whether MGA acted in bad faith.

[00:23:25] Speaker 03:
MGA acted in bad faith.

[00:23:27] Speaker 03:
That's an affirmed finding based on the willfulness determination that was affirmed in intervention two.

[00:23:33] Speaker 02:
They spend another... But the question, let's put it this way, of just how bad the faith was, namely egregiousness, was an open question on remit.

[00:23:42] Speaker 03:
Absolutely, Your Honor.

[00:23:43] Speaker 03:
But I think that the point is, and the problem with the appellant's position is, rather than acknowledging and making just the point Your Honor made, willfulness is decided.

[00:23:52] Speaker 03:
They spend most of their time saying, we weren't willful.

[00:23:56] Speaker 03:
We didn't act in bad faith.

[00:23:58] Speaker 03:
They didn't make an argument really that notwithstanding that we acted in

[00:24:03] Speaker 03:
bad faith because our infringement was willful, notwithstanding the fact that we deliberately copied.

[00:24:09] Speaker 03:
That's another affirmed finding from intervention two.

[00:24:11] Speaker 03:
It was an objective indicia of non-obviousness.

[00:24:15] Speaker 03:
This court affirmed this court.

[00:24:16] Speaker 03:
The district court said there's overwhelming evidence, and there is, of copying.

[00:24:21] Speaker 03:
They sent the game over.

[00:24:22] Speaker 00:
So what are they left with?

[00:24:23] Speaker 00:
So we're all on the same page.

[00:24:26] Speaker 00:
There's a finding of willfulness, but now what's in play is whether the district court is going to give nothing in light of that finding or trouble damages.

[00:24:36] Speaker 00:
So what's the universe in which they can come in?

[00:24:41] Speaker 00:
Can't they come in on an objectively reasonable question?

[00:24:45] Speaker 00:
even if it had been rejected before, could they come in now and try to put on witnesses that would have said at the time this was an objectively reasonable thing, we thought that was invalid.

[00:24:55] Speaker 03:
I suppose, and there is one case I'm aware of from this court that says objective reasonableness can be considered, but it certainly can't be the deciding factor.

[00:25:03] Speaker 03:
We know that from the Supreme Court's Halo decision.

[00:25:07] Speaker 00:
So we know from Halo that it can't be the deciding factor in terms of

[00:25:11] Speaker 00:
the amount, whether or not the judge is going to apply one time or three times, we know that?

[00:25:17] Speaker 03:
No.

[00:25:18] Speaker 03:
We know that that can't be a bar, is what I meant to say.

[00:25:21] Speaker 00:
That that can't be a bar.

[00:25:23] Speaker 00:
But we don't know, do we?

[00:25:24] Speaker 00:
I mean, if the district court judge, in her discretion, went all the way back in the weeds and looked at the claim construction positions and looked at the objective reasonableness of the validity of claim construction, by the way, as something that wasn't before the jury, and said, you know what?

[00:25:42] Speaker 00:
There was, at the time, not looking back, but at the time, they had a reasonably reasonable basis for doing what they did.

[00:25:50] Speaker 00:
Would she be within her rights under an abuse of discretion standard on the amount?

[00:25:56] Speaker 03:
Your Honor, I believe as a factual matter, she did go back and look at.

[00:26:01] Speaker 03:
She didn't use the words, I'm evaluating the objective reasonableness, but she evaluated the most reasonable case.

[00:26:06] Speaker 03:
No, I'm asking as a matter of law, would that be appropriate?

[00:26:08] Speaker 03:
Not what she did.

[00:26:10] Speaker 03:
My threshold question is, could she do that?

[00:26:12] Speaker 03:
Yes, I believe she could.

[00:26:13] Speaker 03:
There's no prescribed set.

[00:26:16] Speaker 03:
It's a totality of the circumstances test.

[00:26:18] Speaker 03:
So I don't know that the judge would have to focus on objective reasonableness, as long as the judge was more broadly looking at the entire case, looking at the claim construction issues, as you pointed out, Your Honor, looking at the closeness of infringement, looking at the closeness of defenses.

[00:26:36] Speaker 03:
I don't know that the judge, so to try and answer your question as directly as I can, I don't know that she has to focus on

[00:26:42] Speaker 03:
whether a particular defense, whether anybody at MGA ever reviewed it or relied on it, was, quote unquote, objectively reasonable.

[00:26:50] Speaker 03:
I think the court could do what the court did in this case and look at the fact that on every contested issue, differences in the art, level of skill.

[00:27:01] Speaker 03:
I mean, just on level of skill alone, here, their expert opined that the level of skill for the ordinary artisan in board game design

[00:27:11] Speaker 03:
was three years working with lasers and optics for board game design.

[00:27:16] Speaker 03:
Now, the jury rejected that.

[00:27:18] Speaker 03:
The district court rejected that.

[00:27:20] Speaker 03:
And I think that in valuing that factor and saying that there was a difference and that none of the references disclosed moving key pieces and looking at the objective indicia, which the district court, the jury found were there, the district court agreed, this court agreed, the district court can do that and review

[00:27:39] Speaker 03:
the strength of the defense, and I suppose in some sense you would say, well, they're reviewing the objective reasonableness, but I don't know if that's the test.

[00:27:47] Speaker 03:
I think they look at the defense and say, how close on the spectrum was the defense?

[00:27:52] Speaker 03:
And it is within the district court's discretion as the court that sat and presided over trial and then reviewed the evidence to say, not close.

[00:28:01] Speaker 03:
And that's what the district court did.

[00:28:03] Speaker 03:
So I think that whether or not the court has to

[00:28:06] Speaker 03:
focus on, quote unquote, objective reasonableness.

[00:28:09] Speaker 03:
As long as it's evaluating the closeness, which can be a factor, the district court has discharged its duty.

[00:28:22] Speaker 03:
Let me touch very briefly on a couple of other points that opposing counsels raised.

[00:28:30] Speaker 03:
One is the state industries versus A.O.

[00:28:33] Speaker 03:
Smith case.

[00:28:34] Speaker 03:
That case, of course, and this court has talked about it in non-precedential decisions, that case came up in the context of prior to the amendments from 1999 that provided for publication of patent applications.

[00:28:49] Speaker 03:
There's no question because InnoVention Toys sent MGA its published patent application.

[00:28:56] Speaker 03:
There's also no question that they knew that there was a patent application that was out there based on

[00:29:02] Speaker 03:
obtaining a copy of the game, marked patent pending, and then copying it that there was a patent.

[00:29:07] Speaker 02:
And a prudent person... That's why there's an affirmed judgment of 154D.

[00:29:11] Speaker 03:
That's why there's an affirmed judgment of willfulness.

[00:29:13] Speaker 03:
And so they can't... No, no, no.

[00:29:14] Speaker 02:
154D wrote these.

[00:29:17] Speaker 03:
Yes, because the claims were substantially identical.

[00:29:20] Speaker 03:
They keep saying that the claims have changed, but that's another affirmed ruling.

[00:29:24] Speaker 03:
The claims were substantially identical.

[00:29:25] Speaker 03:
And this court said in intervention two, the reason they're substantially identical

[00:29:30] Speaker 03:
is that the claims already required movement, not just of the regular playing pieces, but of the key playing pieces.

[00:29:36] Speaker 03:
There's no question they had knowledge and certainly were on notice to follow this application.

[00:29:45] Speaker 03:
And that's what a reasonably prudent person who's copied a game would do.

[00:29:47] Speaker 03:
Is the patent going to issue?

[00:29:50] Speaker 03:
And of course, looking back, the district court can say and did observe they never stopped.

[00:29:57] Speaker 03:
They copied the game.

[00:29:59] Speaker 03:
They got a notice letter to which they never responded with the published patent application with substantially identical claims.

[00:30:05] Speaker 03:
They kept making the game.

[00:30:07] Speaker 03:
They were sued.

[00:30:09] Speaker 03:
They got the patent.

[00:30:10] Speaker 03:
They kept making the game.

[00:30:11] Speaker 03:
They kept selling the game.

[00:30:12] Speaker 03:
They didn't stop selling the game until the court enjoined them from selling the game.

[00:30:16] Speaker 03:
So all of these factors, the district court evaluated both after the trial in back in its opinion from 2013, which it incorporated and discussed and footnoted.

[00:30:28] Speaker 03:
in its opinion post remand after intervention two.

[00:30:32] Speaker 03:
That was a 63 page very detailed opinion on all of these issues.

[00:30:36] Speaker 03:
And then in a subsequent order, I should say, that referenced that one, went through all of these issues again, found that all of the factors except for the last factor favored enhancement.

[00:30:47] Speaker 03:
And so I would submit in my few seconds remaining that this is an egregious case.

[00:30:54] Speaker 03:
It's hard to imagine a more egregious case where all of these read factors, save for one, which is did they conceal their infringement, point in the direction of enhancement.

[00:31:05] Speaker 03:
The district court therefore did not abuse its discretion in awarding attorney's fees, as it did.

[00:31:12] Speaker 00:
Thank you.

[00:31:12] Speaker 03:
Thank you, Your Honors.

[00:31:24] Speaker 01:
Judge Tarantro, I think you asked me where we said in the briefs that less than treble damages.

[00:31:33] Speaker 01:
The blue brief at page 26 and the gray brief at page 3, I think, supports that.

[00:31:42] Speaker 01:
They say, oh, so when it was remanded, the plaintiff did not ask

[00:31:51] Speaker 01:
to take evidence regarding the Siegel analysis and test it.

[00:31:55] Speaker 01:
They knew we were relying on it.

[00:31:58] Speaker 01:
It's in the record at appendix 5112 through 5184.

[00:32:04] Speaker 01:
We were relying heavily on it.

[00:32:08] Speaker 01:
And they didn't say, well, if they're going to rely on it, we want to take some more evidence about it.

[00:32:16] Speaker 01:
They could have done that.

[00:32:17] Speaker 01:
We were already told we could not introduce

[00:32:20] Speaker 01:
no evidence, but they certainly could have acquiesced in it if they were so willing.

[00:32:26] Speaker 01:
And the question here is punishment of MGA, which is why you have to consider all of the circumstances.

[00:32:35] Speaker 01:
The question isn't whether intervention has a right to trouble damages.

[00:32:40] Speaker 01:
They don't.

[00:32:40] Speaker 01:
They've been fully compensated.

[00:32:42] Speaker 01:
They got lost profits.

[00:32:44] Speaker 01:
They got an injunction.

[00:32:45] Speaker 01:
The question now is,

[00:32:48] Speaker 01:
was the behavior of MEGA sufficiently egregious to justify trouble damages.

[00:32:54] Speaker 01:
And for that, all the circumstances, which is really due process for MGA, have to be considered.

[00:33:00] Speaker 01:
The change in law that made the strategic decision that MGA made under Seagate, the wrong decision in retrospect.

[00:33:10] Speaker 01:
But there is no way of knowing that.

[00:33:13] Speaker 01:
Oh.

[00:33:16] Speaker 01:
Even without the Segal analysis, there's still an abuse of discretion here, given the timing, which is indistinguishable from a state industries case.

[00:33:25] Speaker 01:
In state industries, there was no attorney opinion.

[00:33:28] Speaker 01:
And the court still said it was an abuse of discretion for the district court to award treble damages and reverse that.

[00:33:37] Speaker 01:
So we don't even need the Segal analysis, but it is part of the particular circumstances of the case.

[00:33:46] Speaker 01:
The closeness of the case, if the, at the time the law was that we had an objectively reasonable defense, that means the jury could have said that the patent is invalid and intervention gets nothing whatsoever.

[00:34:02] Speaker 01:
You couldn't be any closer.

[00:34:03] Speaker 01:
And furthermore, this court reversed.

[00:34:07] Speaker 02:
Excuse me.

[00:34:08] Speaker 02:
Do you have any case that talks about the difference or the difference between

[00:34:14] Speaker 02:
objective reasonableness and closeness or the identity of them or how those two terms relate to each other?

[00:34:20] Speaker 02:
The answer could be no.

[00:34:25] Speaker 01:
Not off the top of my head.

[00:34:27] Speaker 01:
I don't know if there is such a case, but common sense is that if you had an objectively reasonable defense, which certainly means that the jury could have bought that defense and invalidated the patent, the case has closed.

[00:34:43] Speaker 01:
On the issue of willful infringement itself, and I know we cited a case on this, the court reversed on willful infringement under existing law.

[00:34:53] Speaker 01:
So it was not only close, we had a winning position on willfulness under the existing law at that time.

[00:35:05] Speaker 01:
That only got turned around by the Supreme Court later on, but we made the right decision.

[00:35:12] Speaker 01:
under existing law to rely on the objective prong of the Seagate test because in fact we won on that issue.

[00:35:22] Speaker 00:
Your time is run through.

[00:35:25] Speaker 00:
If you have a final statement to make.

[00:35:30] Speaker 01:
Yes, Your Honor.

[00:35:31] Speaker 01:
I submit that if the court affirms on treble damages in this case, it will revive the practice pre-Seagate

[00:35:42] Speaker 01:
of raising willful infringement and the right to enhance damages in virtually every case.

[00:35:48] Speaker 01:
That was something that was erased by the Seagate test, but is still a valid consideration.

[00:35:58] Speaker 01:
And it would be contrary to the Supreme Court's admonition that treble damages, enhanced damages should only be occurring in rare cases of truly egregious conduct.

[00:36:11] Speaker 01:
That's not this case.

[00:36:13] Speaker 01:
Thank you.

[00:36:13] Speaker 01:
We thank both sides.

[00:36:14] Speaker 01:
The case is submitted.

[00:36:15] Speaker 01:
That concludes our proceeding for this morning.