[00:00:00] Speaker 02: Good afternoon, everyone, and may I say first my thanks to all of you to counsel for readjusting your schedule on such short notice. [00:00:10] Speaker 02: The first argued case this afternoon is intellect number 172428, intellectual ventures to LLC against JP Morgan Chase and others, Mr. Powers. [00:00:30] Speaker 00: Thank you, Your Honor. [00:00:31] Speaker 00: May it please the Court. [00:00:33] Speaker 00: This is not a case about regrets or second bites of apples or a change claim construction. [00:00:40] Speaker 00: What happened in this case was that there was a 30-second exchange in the Markman hearing, 15 seconds of which was spent dispelling the idea that this was about the trigonometry concepts of sine and cosine, and the District Court asked what reversing a sine meant. [00:00:58] Speaker 00: IV's counsel answered, [00:01:00] Speaker 00: changing positive to negative or negative to positive. [00:01:03] Speaker 00: The district court parroted that back and said, how about that as the construction? [00:01:07] Speaker 00: And both sides said OK. [00:01:10] Speaker 00: Post facto, there has been a interpretation of that exchange to require that the sign inversion unit in the claim both change negative to positive and positive to negative instead of merely being capable of doing so. [00:01:28] Speaker 00: the sign inversion unit, and that is both procedurally improper and substantively improper. [00:01:35] Speaker 00: Procedurally improper, because that question, the question of whether a sign inversion unit must be capable of doing it both directions, had not been at all at issue at the time. [00:01:48] Speaker 00: The briefing, both sides agreed, and in fact, defendant's construction was, that it's a device capable of additive inversion. [00:01:58] Speaker 03: which is technically a more precise and accurate way of describing... Isn't the question before us not what you agree to or what they agree to, but what the correct claim construction is? [00:02:11] Speaker 00: I agree. [00:02:13] Speaker 03: I totally agree with that. [00:02:14] Speaker 03: All that little going back and forth that you all did doesn't help us understand what the correct claim construction should be. [00:02:21] Speaker 00: I agree precisely. [00:02:22] Speaker 03: If we agree with the trial judge, where do we go from there? [00:02:26] Speaker 00: Well, the trial judge actually never did a construction following a Phillips analysis. [00:02:30] Speaker 00: What I've described is the entirety of the process. [00:02:33] Speaker 00: There was this 30-second discussion in the Markman hearing, and the only debate between the parties at that time was not whether it had to go both directions. [00:02:43] Speaker 00: In fact, that was not an issue at all. [00:02:45] Speaker 00: The only debate was defendants construction inserted the word solely, that this unit is solely capable [00:02:53] Speaker 00: of doing sign inversion, or additive inversion as they describe it. [00:02:58] Speaker 00: So there was not, let's be clear, any Phillips analysis by anyone at the time on this question. [00:03:06] Speaker 00: And there wasn't even a Phillips analysis at the time when the issue that's now before the court was raised in summary judgment. [00:03:15] Speaker 03: Under the trial court's construction, is the question what that construction means, or is the question [00:03:23] Speaker 03: what the defendant's activity actually is? [00:03:31] Speaker 00: There are both questions that are raised, but I would actually say I think the right question is the one that Your Honor posed, which is what is the correct construction? [00:03:39] Speaker 00: Because, as I say, the district court's construction was not the result of a Phillips analysis. [00:03:44] Speaker 00: It was parroting back to Ivey's lawyer what he had heard Ivey's lawyer say sign inversion does. [00:03:50] Speaker 00: Now, in terms of an [00:03:52] Speaker 00: to answer Your Honor's direct question of what's the right construction, we laid that out at some length in our briefs. [00:03:58] Speaker 00: When you look at the claim, the claim merely requires that the sign inversion unit process data. [00:04:05] Speaker 00: It doesn't say only positive data. [00:04:08] Speaker 00: That's very broad in general under very standard traditional claim construction principles. [00:04:13] Speaker 00: That would not force a limiting construction to say only processing positive numbers, not negative numbers. [00:04:19] Speaker 02: So is it true? [00:04:20] Speaker 02: Is it correct? [00:04:21] Speaker 02: Was it an oversimplification that their products don't accept negative numbers? [00:04:27] Speaker 00: I disagree with that, but that to me is sort of the second issue. [00:04:30] Speaker 00: I'm happy to go there, too. [00:04:33] Speaker 02: Well, I think we need to go there in order to try and figure out the result. [00:04:37] Speaker 02: But it seemed to me that the district judge did have very much in mind the way the accused products were and that they didn't accept, if it's correct, that as a matter of fact. [00:04:51] Speaker 02: I agree with you. [00:04:51] Speaker 02: That they don't accept negative numbers, that the construction could relate to that in terms of getting the right answer. [00:05:00] Speaker 00: I agree with you completely. [00:05:01] Speaker 00: The district court did find, we believe erroneously and I'm happy to explain why, that the accused products only accepted positive numbers. [00:05:09] Speaker 00: And therefore, under his construction, which required both negative to positive and positive to negative, they did not infringe. [00:05:15] Speaker 00: But the reason claim construction needs to be addressed is, if that construction's wrong, [00:05:20] Speaker 00: If it doesn't require both directions, then their admitted processes, how their products admittedly work, infringe, because they undeniably change positive numbers to negative numbers. [00:05:32] Speaker 00: That's admitted. [00:05:33] Speaker 00: So the client construction question independently is a basis for reversal. [00:05:37] Speaker 00: But to get to your honor's second point on the issue of whether the products accept negative numbers, that's wrong in two respects. [00:05:44] Speaker 00: One, and this report did not, I think, fairly appreciate how the products work. [00:05:51] Speaker 00: And there's two questions. [00:05:52] Speaker 00: One is they don't actually accept numbers like negative seven or negative five or positive five. [00:05:57] Speaker 00: They accept binary numbers, which are zeros and ones. [00:06:00] Speaker 00: And the zeros and ones represent something. [00:06:03] Speaker 00: And the district court found erroneously that those zeros and ones represent only positive numbers based on a data sheet that he misinterpreted, plain and simple. [00:06:13] Speaker 00: And we've explained in the briefs why that is. [00:06:14] Speaker 00: I'm happy to go further. [00:06:16] Speaker 00: But there's even a clearer basis. [00:06:17] Speaker 00: And this is one the district court [00:06:19] Speaker 04: Well, as far as this goes, I mean, didn't the district court have in front of it the evidence that the source code operated between 0 and 2 to the 2048th power? [00:06:32] Speaker 04: If 0, if it has to be greater than or equal to 0, how can it be negative? [00:06:39] Speaker 00: You're exactly right about what the district court relied upon. [00:06:41] Speaker 00: That document is describing not the value of the input, [00:06:48] Speaker 00: But the size of the input, 2048, is the number of bits. [00:06:52] Speaker 00: And that is plainly laid out in the briefing. [00:06:54] Speaker 00: And there's no doubt that that is the document the court relied upon. [00:06:58] Speaker 00: He just plainly misinterpreted it as believing it represented the value. [00:07:03] Speaker 00: This is a binary system, not a decimal system. [00:07:06] Speaker 00: And a binary system, as I said, is zeros and ones. [00:07:09] Speaker 00: And they represent something that is defined by the binary system as it's set up. [00:07:14] Speaker 00: And that binary system has a number of bits. [00:07:16] Speaker 00: And it's defined by a number of bits. [00:07:18] Speaker 00: And the document that Your Honor is referring to is the number of bits that's allowed. [00:07:23] Speaker 00: And we explain that, in fact, that document would be irreconcilably inconsistent with itself if interpreted to be in value, because there's no debate. [00:07:35] Speaker 04: And did you raise this argument that you're making now about this value? [00:07:40] Speaker 04: before the lower tribunal or did you only make it for the first time in oral argument and in the motion for reconsideration? [00:07:49] Speaker 00: I don't believe it was certainly raised below with the district court. [00:07:54] Speaker 04: I believe it was raised for the first time. [00:07:57] Speaker 00: I believe it was raised for the first time. [00:07:58] Speaker 04: You'd like us to reverse this determination on the basis of an argument that you raised an oral argument and reconsideration. [00:08:09] Speaker 00: Yes, in part, but there's two other independent grounds. [00:08:12] Speaker 00: One is the modular math issue, which I haven't gotten to. [00:08:14] Speaker 04: Let me just tell you, you've got a lot of stuff marked confidential, and if I tread into that area, stop me. [00:08:19] Speaker 04: It's not our confidential information. [00:08:21] Speaker 04: Well, then you jump up and stop me. [00:08:23] Speaker 04: If I say something that gives you pause, jump up and stop me, and we can have it, the oral argument tape changed so it doesn't go public, okay? [00:08:32] Speaker 04: You just stop me if I do that. [00:08:35] Speaker 00: There are two independent grounds, independent of the one your honor is talking about, that are bases for reversal that were undeniably raised below. [00:08:41] Speaker 00: But in fairness to IV, this question of what the claim construction meant that was thrown out in this 30-second interchange in Markman was a moving target. [00:08:53] Speaker 04: Well, you keep saying this 30-second interchange, and then you act as though there was never a moment for rethinking it, and as soon as you did, you acted. [00:09:00] Speaker 04: the 32nd interchange took place in 2014 when the district court then issued the construction in writing and it wasn't until 2016 that you wanted to change the word and to the word and slash or. [00:09:15] Speaker 00: We don't want to change the word and to and slash or. [00:09:17] Speaker 00: You're right about the timing. [00:09:18] Speaker 04: You moved. [00:09:19] Speaker 04: You made a motion to do that. [00:09:20] Speaker 00: Our argument doesn't depend on that. [00:09:22] Speaker 04: But you can't say we don't want to change it, that you made a motion to the court asking them to do that. [00:09:25] Speaker 00: That was done below. [00:09:26] Speaker 00: That is not [00:09:27] Speaker 00: what we think the argument requires. [00:09:28] Speaker 00: But you're right. [00:09:29] Speaker 04: But you made that argument below. [00:09:31] Speaker 00: You are right. [00:09:31] Speaker 00: That's what you are. [00:09:33] Speaker 00: That was not an attempt to change the construction, but it was an attempt to understand what the meaning of it was. [00:09:39] Speaker 04: Wait, wait. [00:09:39] Speaker 04: Changing the word and to the word and slash or is not an attempt to change the construction? [00:09:44] Speaker 00: It would change the literal words of the construction, for sure. [00:09:47] Speaker 00: It was an attempt to explain what Ivy understood the original construction to have meant. [00:09:52] Speaker 00: But Your Honor's point of the timing is accurate as to timing. [00:09:56] Speaker 00: But it omits the fact that this issue of and didn't come up until the summary judgment. [00:10:01] Speaker 00: It wasn't in the briefing. [00:10:02] Speaker 00: It was never a question raised by anyone that that construction meant it had to work both ways. [00:10:10] Speaker 00: But I do want to make sure we cover. [00:10:11] Speaker 04: That's what the word and means. [00:10:13] Speaker 04: This is not like a super complicated word. [00:10:16] Speaker 00: As this court is held, and meaning in context could mean either and or it can mean and or. [00:10:22] Speaker 00: That's clear from this court's rulings and common sense. [00:10:26] Speaker 00: It does mean and. [00:10:27] Speaker 00: It doesn't mean it requires both. [00:10:28] Speaker 00: It certainly can do both. [00:10:30] Speaker 00: No doubt. [00:10:31] Speaker 00: It's capable of doing both. [00:10:32] Speaker 00: It doesn't mean it's required to do both. [00:10:35] Speaker 00: But I want to make sure we cover the modular math issue because there is no debate that this engine, the engine that decues products, is part of a modular math system that's laid out fully and not debated. [00:10:50] Speaker 00: The only thing that J.P. [00:10:53] Speaker 00: Morgan Chase debates [00:10:54] Speaker 00: is whether the two's complement operation performs a modular math. [00:10:58] Speaker 00: That's not the question. [00:10:59] Speaker 00: The issue is whether the input to that two's complement system is modular or not. [00:11:06] Speaker 00: And there's no debate that it isn't based on the facts that we've put in. [00:11:10] Speaker 00: And modular numbers are both positive and negative. [00:11:14] Speaker 00: There's no question about that as a matter of mathematics. [00:11:17] Speaker 00: If you have a modular 12 system where 12 is 0, [00:11:21] Speaker 00: The figure 11 is both positive 11 and negative 1, because you get there either by adding 11 or by subtracting 1. [00:11:28] Speaker 04: This feels a lot like a broken clock is right twice a day. [00:11:32] Speaker 00: I don't know why it feels like that, but the math is the math. [00:11:38] Speaker 00: And modular numbers are the inputs to two complement. [00:11:41] Speaker 00: The issue before the court is whether positive numbers are changed to negative. [00:11:46] Speaker 00: So even under the district court's claim construction, which requires both ways, [00:11:50] Speaker 00: Negative to positive and positive to negative. [00:11:52] Speaker 00: There is no meaningful debate on this record that the input of modular numbers are both positive and negative, not simply positive as the district court assumed. [00:12:02] Speaker 00: And the district court's opinion doesn't even address modular numbers. [00:12:04] Speaker 00: It doesn't understand that question. [00:12:05] Speaker 03: What kind of numbers do they input? [00:12:08] Speaker 00: Binary questions, binary numbers, zeros and ones. [00:12:10] Speaker 00: Yeah. [00:12:10] Speaker 00: But those zeros and ones represent modular numbers because it's part of the modular math processor in the system. [00:12:17] Speaker 00: And the [00:12:20] Speaker 00: The citations for that are appendix 4878 to 79, 4886, and 5783. [00:12:27] Speaker 00: Those all make quite clear that this Tu's complement, which is the accused sign-inversion unit, are part of the modular math engine. [00:12:37] Speaker 00: And so modular numbers are being put in. [00:12:39] Speaker 00: So the issue for this report is what are the inputs to the Tu's complement system? [00:12:46] Speaker 00: If those inputs are modular, [00:12:48] Speaker 00: which they are, and there's no meaningful debate in the record otherwise. [00:12:51] Speaker 00: If those inputs are modular, a modular number by definition is both positive and negative, because it's not linear. [00:12:59] Speaker 02: You're putting yourself within the prior art now. [00:13:03] Speaker 00: That's a separate question. [00:13:05] Speaker 02: That's not the issue for this court at this time. [00:13:07] Speaker 02: The trial judge was trying to, it looked, looking from the record, was trying very hard to understand all of the issues and the technology. [00:13:17] Speaker 02: in order to see what the contribution was, what existed in the prior art to provide a claim construction that saved the claims but at the same time seemed to remove these defendants from concern. [00:13:35] Speaker 02: So let's hear from the other side and we'll save you rebuttal time. [00:13:38] Speaker 00: Thank you. [00:13:46] Speaker 02: Mr. Ray. [00:13:53] Speaker 01: Thank you, Your Honor. [00:13:55] Speaker 01: Good afternoon. [00:13:55] Speaker 01: May it please the Court. [00:13:56] Speaker 01: My name is Brent Ray, and I represent the appellees in this matter. [00:14:00] Speaker 01: There are two central issues on this appeal, neither of which find a reversible error. [00:14:05] Speaker 01: One, did the District Court properly hold IV to a stipulated construction of sign inversion unit? [00:14:12] Speaker 01: Yes. [00:14:13] Speaker 01: And did the Court find, properly as a matter of law, that there is no infringement in view of that construction? [00:14:19] Speaker 03: Yes. [00:14:20] Speaker 03: ask you the same question I put to Mr. Powers. [00:14:25] Speaker 03: If you all stipulate that the moon is made of Swiss cheese as a matter of claim construction, we're certainly not bound by that stipulation, are we? [00:14:36] Speaker 01: No, there is, of course, exceptions to the waiver and judicial estoppel doctrines that if there is a result that is clearly wrong, [00:14:45] Speaker 03: or to prevent an injustice that the Court of Appeals... It doesn't have to be clearly wrong, it just has to be wrong. [00:14:50] Speaker 03: That is, it's a question of laws to what the correct claim construction is. [00:14:55] Speaker 03: Isn't that true? [00:14:56] Speaker 03: Yes, there are exceptions to those I... And you all can't stipulate against the law, can you? [00:15:00] Speaker 01: We cannot stipulate against the law, no. [00:15:02] Speaker 01: Okay. [00:15:02] Speaker 03: But I... So the fact that you all stipulated to that is not the issue. [00:15:08] Speaker 03: The issue is did the trial judge apply the correct claim construction in reaching [00:15:14] Speaker 03: the judgment that the trial judge reached. [00:15:17] Speaker 03: Do I misunderstand? [00:15:19] Speaker 01: You don't misunderstand at all, Your Honor. [00:15:21] Speaker 01: And the answer is yes, that the correct claim construction was reached. [00:15:25] Speaker 01: And counsel for IV accurately set forth that there was an instance during the claim construction hearing where counsel for IV was asked, what is sign inversion? [00:15:35] Speaker 01: And he provided a definition, negative to positive and positive to negative. [00:15:39] Speaker 04: Can I ask you a slightly different question? [00:15:41] Speaker 04: While you can't stipulate to a question of law, you can wave a challenge to it, can't you? [00:15:46] Speaker 01: You absolutely can. [00:15:47] Speaker 04: Isn't that what the district court found here? [00:15:48] Speaker 04: They waved a challenge to the claim construction, both because they had proposed it and because they let two years pass before they objected to it? [00:15:56] Speaker 01: Yes, that's exactly right, Your Honor. [00:15:57] Speaker 01: And I'll expound on it a little further, too. [00:15:59] Speaker 01: There was a mention of a 30-second exchange that occurred at the court below. [00:16:04] Speaker 01: But what was not considered during that description was the fact that after the Markman hearing was done, that the parties were offered an opportunity to take those proposed constructions and comment on them. [00:16:17] Speaker 01: And Ivy did not comment or seek to change that construction at all. [00:16:20] Speaker 01: No clarification was asked for. [00:16:22] Speaker 01: Then later on before the same court in the Citibank matter, Ivy proposed in its opening brief the same construction again. [00:16:30] Speaker 01: And they prevailed on that construction. [00:16:32] Speaker 03: The trial judge claimed construction has an and in it, right? [00:16:37] Speaker 01: Yes. [00:16:38] Speaker 03: And the trial judge read that his own and has meaning it's got to go both ways. [00:16:48] Speaker 03: It's got to go negative to positive and positive to negative. [00:16:51] Speaker 03: Isn't that correct? [00:16:52] Speaker 03: That is his and the plain meaning of and, correct? [00:16:56] Speaker 03: And the trial judge concludes that your product only goes one way. [00:17:05] Speaker 03: And that's why you don't infringe. [00:17:07] Speaker 03: Do I have the case correctly? [00:17:09] Speaker 01: Yes, sir. [00:17:10] Speaker 03: All right. [00:17:10] Speaker 03: Now, let's assume you go to breakfast tomorrow morning and the menu says you can have cranberry juice and orange juice. [00:17:23] Speaker 03: How would you understand that? [00:17:24] Speaker 03: Would you understand that to mean you have to have one or the other, but you couldn't have both? [00:17:33] Speaker 01: In normal parlance, and this every situation may demand its own context. [00:17:37] Speaker 01: The plain meaning is that and means conjunctive, both. [00:17:42] Speaker 01: And I think that the court's jurisprudence on this issue. [00:17:45] Speaker 03: You think you'd have to have both? [00:17:47] Speaker 01: I would say that if the word is and is used, the presumption is that it's conjunctive. [00:17:52] Speaker 01: And I think the court's rulings that have found differently, where they've looked at a construction or a claim term that has and, and determined instead that it actually encompasses more than that, that it can be disjunctive, are only narrowly found where the specification compels. [00:18:07] Speaker 03: In my hypothetical, you would say you had to have both kinds of juice for your breakfast. [00:18:12] Speaker 03: Is that correct? [00:18:13] Speaker 01: It comes with both. [00:18:14] Speaker 01: Whether I choose to drink them, it's up to me, I suppose. [00:18:17] Speaker 01: But it comes with both. [00:18:18] Speaker 01: Yes, it does. [00:18:19] Speaker 01: If it says and, [00:18:21] Speaker 01: It comes with cranberry juice and orange juice, and I get two glasses of juice before me. [00:18:25] Speaker 01: Otherwise, I pick one. [00:18:28] Speaker 01: I would further... But you could take either one. [00:18:31] Speaker 01: I'm sorry? [00:18:31] Speaker 01: You could take either one. [00:18:33] Speaker 01: I could choose to drink either one, but both would come before me when my breakfast came out. [00:18:37] Speaker 01: And the and would be conjunctive in that sense. [00:18:39] Speaker 01: I would also say, too, that the difference between and and nor was certainly cannot have said to have been lost on IV during the claim construction hearing where this occurred as well. [00:18:49] Speaker 01: prior to the argument that involved this patent. [00:18:52] Speaker 01: There was an argument on another patent. [00:18:54] Speaker 01: And Ivy specifically pointed out in JPMC's construction, they've got or and there. [00:19:02] Speaker 01: We don't think that's right. [00:19:03] Speaker 01: We should substitute it with and. [00:19:05] Speaker 01: And that is clear from the record at Appendix 955 that they advocated for that change in the word from or to and and prevailed on that construction. [00:19:16] Speaker 01: So to say that they were not sensitized to the issue of war versus end and the conjunctive versus disjunctive simply does not bear out with the record. [00:19:24] Speaker 01: Now, I'd like to turn, if I may, to... The real issue isn't the end. [00:19:29] Speaker 03: The real issue is whether your product has to go both ways. [00:19:34] Speaker 01: Yes, correct, Your Honor. [00:19:35] Speaker 03: And the construction... And it's not really claim construction. [00:19:38] Speaker 03: That's a question... [00:19:40] Speaker 03: Well, I guess it is a kind of claim construction, isn't it? [00:19:44] Speaker 03: Yeah. [00:19:44] Speaker 01: OK. [00:19:44] Speaker 01: Well, under the claim construction that was stipulated by the parties, the only evidence we have in the record regarding the accused products is that they cannot accept a negative input into the two's complement circuit. [00:19:57] Speaker 01: So it is agreed by the parties that as part of the operation of these circuits, they operate in what's called an unsigned number system. [00:20:08] Speaker 01: In an unsigned number system, all inputs are positive. [00:20:13] Speaker 01: No negative inputs are allowed. [00:20:16] Speaker 01: And this is not a capable and could-be-modified type of argument. [00:20:20] Speaker 01: The cards as they're delivered, the accused products as they're delivered to JPMorgan Chase come encased in a tamper-proof epoxy, about as secure as you can get. [00:20:36] Speaker 01: If you try to modify it, if you tried to change anything on there, the card would become permanently disabled. [00:20:42] Speaker 01: So this is not just an issue of the circuits can't accept and they don't accept negative inputs. [00:20:49] Speaker 01: You couldn't modify it if you wish. [00:20:51] Speaker 01: So in that sense, this is not a question really of capability. [00:20:56] Speaker 01: It's that the cards not only don't do it, but they can't do it. [00:20:59] Speaker 01: And you couldn't modify it if you wanted to to change that around. [00:21:03] Speaker 01: Now, in addition to the fact that these cards work within an unsigned number system, there is documents and evidence in the record that is entirely uncontroverted that says that the negative inputs are not allowed. [00:21:16] Speaker 01: First, there is IBM documents, technical literature that describes something called a precondition. [00:21:23] Speaker 01: A precondition sets forth the boundaries of an allowable input. [00:21:28] Speaker 04: Absolutely, Your Honor. [00:21:30] Speaker 01: Yes, a big number. [00:21:32] Speaker 01: that it sets forth the allowable limits of what that input can be. [00:21:38] Speaker 01: As by the terms of IBM's own documents who makes the accused product, the input cannot be negative. [00:21:47] Speaker 01: Furthermore, IBM engineers were deposed. [00:21:50] Speaker 01: They were asked about this very topic. [00:21:52] Speaker 01: They were asked, can you accept a negative input? [00:21:56] Speaker 01: The answer was no. [00:21:57] Speaker 01: Only positive inputs allowed. [00:21:59] Speaker 01: It's an unsigned number system. [00:22:00] Speaker 03: What do you say to his argument that these binary numbers were really representative of modular numbers, and modular numbers could be the way? [00:22:11] Speaker 01: So if, first off, there is, I think the argument really doesn't matter either way, whether it's modular, binary, versus decimal, versus value, versus size. [00:22:23] Speaker 01: None of that argument [00:22:27] Speaker 01: comes into play when you look at the evidence of record. [00:22:31] Speaker 01: So I'd say that even however the court finds in terms of whether or not there is size versus value, I don't think it matters in terms of the fact that the uncontroverted testimony says it's impossible to get negative inputs. [00:22:43] Speaker 01: But on the modular issue more importantly, first off, the two's complement circuit doesn't input a modulus at all, which is usually a fundamental portion of modular arithmetic. [00:22:54] Speaker 01: There's no modulus. [00:22:56] Speaker 01: Second of all, [00:22:57] Speaker 01: If all numbers can be positive and negative at the same time, then what is the purpose of the sign inversion unit? [00:23:04] Speaker 01: Right? [00:23:05] Speaker 01: The sign inversion unit takes the sign of a number and it changes it from positive to negative and negative to positive. [00:23:11] Speaker 01: If you already have numbers that exist in a positive and negative realm at the same time, it sort of defeats the purpose of the whole unit. [00:23:19] Speaker 01: And I think that this is an artifact of the reality [00:23:24] Speaker 01: that when intellectual ventures got to the end of fact discovery and the summary judgment motion was propounded, they realized that the evidence in the record really only showed one thing, that negative inputs were not allowed. [00:23:37] Speaker 01: And so they submitted expert declarations and attorney argument after the fact, including on reconsideration for the first time, trying to disturb them. [00:23:45] Speaker 01: And so Ivy has made some arguments in their briefing that during this process, during this briefing, [00:23:52] Speaker 01: that there was somehow a, you know, factual inferences that were decided against it and that's simply not true. [00:23:59] Speaker 01: The only evidence that was before the trial judge was that negative inputs weren't allowed. [00:24:05] Speaker 01: I'll make one final point though about the number system about modular mathematics and why it doesn't hold any water. [00:24:13] Speaker 01: When Ivy's expert was deposed in this matter during summary judgment, he was asked [00:24:19] Speaker 01: Here is a binary number, a collection of zeros and ones. [00:24:22] Speaker 01: What is it? [00:24:23] Speaker 01: Tell me what number this is. [00:24:25] Speaker 01: And he says, I gotta know the convention. [00:24:29] Speaker 01: I have to know how we're interpreting this. [00:24:32] Speaker 01: What is the convention? [00:24:34] Speaker 01: He was asked again, well, 101 is the number, that's the binary number. [00:24:38] Speaker 01: What number is this? [00:24:39] Speaker 01: I have to know a convention. [00:24:42] Speaker 01: The convention is the sort of legend, the language, [00:24:47] Speaker 01: that the circuit speaks to determine what a number is. [00:24:50] Speaker 01: And the convention of the accused products is that negative inputs are not allowed. [00:24:55] Speaker 01: It can't recognize. [00:24:56] Speaker 01: Only positive inputs are allowed. [00:24:59] Speaker 01: And so even if we take Dr. Wolf's later musings regarding modular arithmetic and his number wheel at face value, he still has to confront his earlier sworn testimony in the case where he says, we have a convention. [00:25:13] Speaker 01: We have to have a convention. [00:25:15] Speaker 01: And that, again, goes [00:25:17] Speaker 01: directly to our argument that the way that the math may work in theory, the way you may put up a number wheel in theory, doesn't mean this is the way that the circuit in the accused product actually works. [00:25:41] Speaker 01: I'd like to go back to two other points regarding claim construction that we touched on earlier, but to make sure that I hit them. [00:25:51] Speaker 01: One regarding waiver. [00:25:54] Speaker 01: So it's our position that the arguments that Ivy is making here on claim construction are new arguments. [00:26:02] Speaker 01: Certainly they are trying to change a construction. [00:26:07] Speaker 01: I believe that they heard earlier in the opening [00:26:09] Speaker 01: remarks that this is not an attempt to change. [00:26:11] Speaker 01: Well, that's in fact exactly what it is. [00:26:14] Speaker 03: Well, they clearly didn't foresee the consequences of the way the trial judge was viewing that idea, the claim construction, did they? [00:26:25] Speaker 01: Again, I go back, Your Honor, to the fact that they clearly contemplated the difference between or and end in the same construction and had many, many opportunities thereafter to seek clarification, but they never did. [00:26:36] Speaker 01: They only sought to [00:26:38] Speaker 01: change the construction once summary judgment was upon them. [00:26:42] Speaker 01: And the district court allowed them to do so. [00:26:44] Speaker 01: The district court allowed them to file a motion. [00:26:47] Speaker 01: If you want to change it, you want to see why I should reconsider this under the local rules of the Southern District of New York, please go ahead. [00:26:55] Speaker 01: Convince me if you think I've overlooked something. [00:26:57] Speaker 01: And they got an opportunity to do that. [00:26:59] Speaker 01: And their motion was rightfully denied. [00:27:02] Speaker 01: So but more to the point past the reconsideration, their argument though is waived. [00:27:08] Speaker 01: They are asking this court to issue a new construction versus signing versus unit. [00:27:12] Speaker 01: That's clear from their briefing. [00:27:14] Speaker 01: Even past the waiver argument, there's also a judicial stopper argument. [00:27:18] Speaker 01: And that obviously operates to protect the courts rather than the litigants. [00:27:23] Speaker 01: And that is you can't take positions later on in litigation that are inconsistent with positions you've taken before. [00:27:30] Speaker 01: During this 32nd exchange, as Ivy has referred to, they had defined a term. [00:27:37] Speaker 01: They agreed to a construction. [00:27:38] Speaker 01: They stipulated to it. [00:27:39] Speaker 01: The courts are allowed and encouraged, obviously, to hold them to that, hold the parties to an agreed construction, because it is repugnant of the judicial process to later come back and say that that construction was incorrect, because that's inconsistent with what position they've taken later in litigation. [00:27:59] Speaker 01: I'd say one more thing, Your Honor, unless there's any other questions. [00:28:10] Speaker 01: Regarding Ivy's evidence, as they say, regarding attorney arguments and their conclusory expert opinions, [00:28:23] Speaker 01: Again, there has been some in the briefing that they were somehow shortchanged on summary judgment because the court made some inferences against them. [00:28:31] Speaker 01: The district court did look at the declarations and heard the argument made by the attorneys from IV, but under Dynacor and Liquid Dynamics, those expert opinions cannot themselves create a genuine issue of material effect, particularly when they are unsupported and conclusory as they are here. [00:28:52] Speaker 02: Do you want to comment on the modular aspect? [00:28:56] Speaker 01: If I may, Your Honor, I'm out of time. [00:28:58] Speaker 02: Well, we'll take a couple of minutes. [00:29:00] Speaker 01: OK. [00:29:01] Speaker 01: So on the modular aspect, to reiterate, going back to my comments with Judge Plager, the modular aspect doesn't change the underlying concept that the accused products have to have a convention. [00:29:15] Speaker 01: They have to have a convention for how they interpret numbers. [00:29:18] Speaker 01: So regardless of whether or not the inputs are modular or they're not, [00:29:22] Speaker 01: They're interpreted only one way, and that is that the inputs cannot be negative. [00:29:27] Speaker 01: And if they can't be negative, then they cannot infringe claim four. [00:29:31] Speaker 02: OK. [00:29:32] Speaker 01: Thank you. [00:29:34] Speaker 02: Thank you. [00:29:34] Speaker 02: Mr. Powers, let's wait for four minutes. [00:29:41] Speaker 00: Thank you, Your Honor. [00:29:42] Speaker 00: I'd like to begin with a claim construction question. [00:29:44] Speaker 00: If you reverse the claim construction, the case goes back, because there's no debate they infringe under a unidirectional [00:29:50] Speaker 00: sign inversion unit. [00:29:52] Speaker 03: Which way do you think the claim construction, what's your new claim construction that you want? [00:29:58] Speaker 00: Exactly the same as we argued below, which was something which inverts the sign of an input number. [00:30:04] Speaker 00: Their construction was the same, additive inversion is capable of that. [00:30:08] Speaker 00: So it can do both, like your juice example, you can order both if you want, but you're not forced to drink both types of juice when it comes to you, it's a choice. [00:30:17] Speaker 00: And our construction is exactly the same below as it is here, [00:30:20] Speaker 00: We stipulated to a construction that was ambiguous at best. [00:30:24] Speaker 00: Once it became clear what this post-facto interpretation of it was, we objected. [00:30:28] Speaker 02: Well, just to be clear, you want us to tell the district judge that the construction that you stipulated, that you both stipulated to, was wrong. [00:30:38] Speaker 00: Or that it does not require both directions. [00:30:40] Speaker 00: I mean, it does not require, it doesn't have to be wrong. [00:30:42] Speaker 00: The interpretation of it, the post-facto interpretation of it, requiring... It's the interpretation of the construction. [00:30:48] Speaker 00: Exactly. [00:30:49] Speaker 03: really at issue, not the language of the construction. [00:30:53] Speaker 00: The language is fine. [00:30:54] Speaker 00: The interpretation of it requiring both directions is wrong. [00:30:58] Speaker 00: And I'll note there, and it's important, you heard no defense. [00:31:02] Speaker 03: The way it's written, the way the trial judge pronounced the construction could go your way or it could go his way, depending on how you interpret it. [00:31:13] Speaker 00: In our view, it requires one direction and permits both directions, [00:31:19] Speaker 00: but does not require both directions. [00:31:21] Speaker 00: Under that construction, they've admitted infringement. [00:31:25] Speaker 00: And that's, I think, clear. [00:31:26] Speaker 00: And what's important, I think, on the question of getting to the right construction is that J.P. [00:31:33] Speaker 00: Morgan Chase's brief attempts no defense under a Phillips analysis of that construction requiring both ways. [00:31:38] Speaker 00: There is zero attempt to do a disciplined claim construction analysis. [00:31:43] Speaker 00: It's all waiver. [00:31:43] Speaker 00: It's all this has already been done. [00:31:46] Speaker 00: And the district court performed no such analysis. [00:31:49] Speaker 00: We laid out in our brief why claims, specification, file history make clear that the proper meaning of that construction that we agreed to does not require both directions. [00:32:00] Speaker 00: As to waiver, the court's waiver law cases under digital vending and otherwise require a new construction, someone arguing for something that is undeniably different from what they argued for below. [00:32:10] Speaker 00: That's not true here. [00:32:11] Speaker 00: We have an ambiguous construction, which once it became clear how it was being interpreted post facto, we objected, made it quite clear in the record below, [00:32:20] Speaker 00: and are now arguing consistently with that. [00:32:22] Speaker 00: So with regards to claim construction, the only party that's done an actual analysis of the Phillips is IV, not the district court, not the defendants. [00:32:31] Speaker 00: There is no defense on the merits of the claim construction that requires both ways, and there could be none. [00:32:37] Speaker 00: And the fact that there is none, I think, is highly significant. [00:32:40] Speaker 00: On the second question about, and if Your Honors hold that, the case goes back because they've admitted infringement. [00:32:47] Speaker 00: On the factual question, [00:32:48] Speaker 00: The modular question, I think, is at this point pretty clear. [00:32:52] Speaker 00: There is no debate from defendants either in their brief or here that the inputs to the two's complement operation are modular. [00:33:04] Speaker 00: And there is no debate, nor could there be, that modular numbers are both positive and negative. [00:33:09] Speaker 00: So even if you accepted the district court's interpretation of the stipulated construction, those numbers are not purely positive. [00:33:18] Speaker 00: They are by definition positive and negative. [00:33:21] Speaker 00: And so then counsel's really only response to that is, well, that makes the concept of sign inversion meaningless if they're both positive and negative. [00:33:28] Speaker 00: which merely shows a lack of understanding about how modular math works. [00:33:31] Speaker 04: I didn't understand him to say it made it meaningless. [00:33:34] Speaker 04: I understood him to say, in theory, that may be the way modular math works. [00:33:40] Speaker 04: But in this case, the framework created by all of the documents demonstrates that you just can't use negative numbers as the input. [00:33:48] Speaker 04: And so your expert's testimony was theoretically modular math works this way. [00:33:54] Speaker 04: But in this case, you have a series of definitions in the underlying documents that define the contours of how it's going to work in this particular circuit. [00:34:04] Speaker 04: Maybe I misunderstood his argument, but that's what I understood his argument is. [00:34:07] Speaker 04: I don't think he was disputing with you theoretical concepts of modular math. [00:34:11] Speaker 00: He made both arguments, but you're right. [00:34:12] Speaker 00: He did make the second argument. [00:34:14] Speaker 00: And as to the second argument, it's important to look at page 48, 31, and 2 of the record, which is the IBM engineer who was deposed. [00:34:22] Speaker 00: And his point makes clear how their reliance on this document is meaningless. [00:34:28] Speaker 00: Because his point, which he said over and over again, is this system has no, the exact quote is, no notion of input signs. [00:34:35] Speaker 00: That's because it's binary. [00:34:37] Speaker 00: It's a one and a zero, a series of ones and zeros, a very large number of ones and zeros. [00:34:41] Speaker 00: And so his, his testimony is being very precise and accurate, saying, well, it's not negative, no. [00:34:48] Speaker 00: Because it's not negative or positive, it's merely zeros and ones. [00:34:52] Speaker 00: What it represents could be negative, it could be positive. [00:34:56] Speaker 00: And the document on which they rely is very, very clearly not addressed to the numerical value of what the input is. [00:35:05] Speaker 00: It's quite clearly the size of the document, size of the input that's permitted. [00:35:10] Speaker 00: And that we've laid out in the briefs as well. [00:35:12] Speaker 00: But on the modular numbers, there really is, there's no testimony, there's no testimony saying the modular number has to be positive. [00:35:20] Speaker 00: and a modular input by definition. [00:35:23] Speaker 00: By definition, it's a binary representation of a modular number and by definition that underlying modular number is both positive and negative. [00:35:31] Speaker 00: So if the district court's construction is permitted and stands as its construction, then there is infringement still because there is a negative number to a positive number and a positive number to a negative number. [00:35:43] Speaker 00: And the reason that can be true where the modular number is both negative and positive is because [00:35:48] Speaker 00: signs in this concept, as defendants' construction made clear, is not changing a negative to a positive. [00:35:55] Speaker 00: It's the additive inverse. [00:35:57] Speaker 00: So in decimals that we think of, it is a negative to a positive, because the additive inverse of negative 7 is 7. [00:36:03] Speaker 00: That's what brings you to 0. [00:36:05] Speaker 00: But the additive inverse in modular math, where the number may be 11 in a modulus of 12, the additive inverse there is 1, not negative 11. [00:36:15] Speaker 00: It's 1. [00:36:16] Speaker 00: because it moves you from 11 to 12, which is zero in a modular system. [00:36:20] Speaker 00: And so the idea that you cannot have sign inversion in a modular math system merely misunderstands how modular math works. [00:36:29] Speaker 00: And none of the testimony in which they rely addresses the whole modular math system that this is clearly a part of. [00:36:36] Speaker 00: And we've laid that out quite clearly, and I think there can be no meaningful debate, that even under the court's post-factual interpretation of this agreement, [00:36:45] Speaker 00: That construction doesn't preclude a modular math system because they are negative numbers too. [00:36:51] Speaker 02: I think we need to move on, Mr. Powers. [00:36:54] Speaker 00: Thank you. [00:36:55] Speaker 02: Thank you both. [00:36:56] Speaker 02: The case is taken under submission.