[00:00:02] Speaker 00: Okay, the last case before the court is Large Audience Display System versus Tenman Productions, LLC, case number 1C2266 on appeal from the Central District of California. [00:00:25] Speaker 00: Mr. Goetzel, is that correct? [00:00:27] Speaker 00: Yes, Your Honor. [00:00:28] Speaker 00: You want five minutes for rebuttal? [00:00:29] Speaker 00: Yes, please. [00:00:32] Speaker 03: May it please the court. [00:00:35] Speaker 03: Your Honor, as you know, I represent the appellate large audience display systems in this matter that is before the court for the second time now, following the remand to the Central District of California. [00:00:45] Speaker 03: Judge Rial, the district judge there, continues to abuse his discretion in this matter by not paying heed to the court's guidance in its prior opinion, in particular with respect to the exceptionality and the attorney's fee award that has been entered. [00:01:00] Speaker 03: As this court will recall, it advised the district court that if it's going to make finding exceptionality, it had to determine if the circumstances upon which it relied actually existed. [00:01:12] Speaker 03: And two, if they exist, are they justified by the record? [00:01:16] Speaker 00: So is your argument primarily that the case isn't exceptional? [00:01:20] Speaker 00: Or that even if exceptional, that the fees awarded were too high? [00:01:24] Speaker 03: It's both, Your Honor. [00:01:25] Speaker 03: The case is not exceptional. [00:01:27] Speaker 03: And even if it were, the fees bear no relation to the alleged misconduct. [00:01:31] Speaker 00: OK, so clearly in the first case, the court felt that his reliance on there having been a corporation formed for purposes of establishing venue didn't make sense, since plaintiffs located is irrelevant to establishing venue in the first instance. [00:01:48] Speaker 00: But we did say that it might be relevant to a question of a motion to transfer. [00:01:53] Speaker 00: So the court goes back and says, OK, then I think that it's exceptional because they formed this to try to prevent transfer. [00:02:02] Speaker 00: Why doesn't that address what we told them to do? [00:02:05] Speaker 03: Well, Your Honor, in the first order, what the district judge said is that the corporate formation was with respect to jurisdiction. [00:02:13] Speaker 03: And you said that's irrelevant. [00:02:16] Speaker 03: You said correctly that the location can play a part with respect to transfer for convenience. [00:02:23] Speaker 03: And so what the district judge did is just simply make the assumption, OK, it was located here, and we oppose the motion to transfer venue. [00:02:33] Speaker 03: Therefore, it's exceptional. [00:02:34] Speaker 03: Therefore, there are fees. [00:02:36] Speaker 03: What the district judge did not do [00:02:38] Speaker 03: is actually assess what's involved with respect to the transfer for convenience. [00:02:43] Speaker 03: As this court is aware, there are a number of different factors involved in location of witnesses, of documents, the court's familiarity, all of these sorts of things. [00:02:51] Speaker 03: The district judge did not analyze that, did not assess any of that. [00:02:56] Speaker 03: As the court may recall, the case was filed in the Eastern District of Texas originally. [00:03:01] Speaker 03: And approximately three or four months after filing, they filed the motion, after we filed, Appellees filed the motion to transfer based on convenience. [00:03:12] Speaker 03: The Eastern District of Texas weighed all those factors and determined that four of them weighed in favor of transfer. [00:03:18] Speaker 03: One was inapplicable, and the other four were neutral. [00:03:22] Speaker 03: What the Eastern District did not do, however, was [00:03:25] Speaker 03: issuing sanctions or say this case never should have been filed here or this is frivolous or baseless or anything like that. [00:03:32] Speaker 03: That totally escaped the central district of California's purview. [00:03:37] Speaker 03: All it did was say the motion to transfer was filed. [00:03:41] Speaker 03: We opposed it and that cost time and money to the appellees. [00:03:46] Speaker 02: Did you oppose the motion to transfer on any basis other than the fact that you had a corporation in the state of Texas? [00:03:56] Speaker 03: That was certainly one of the aspects of it. [00:03:59] Speaker 02: What were the other aspects that you asserted, other than to challenge the other side's factors? [00:04:07] Speaker 03: Right. [00:04:08] Speaker 03: Certainly that was the largest part of the connection there. [00:04:12] Speaker 03: The largest part or the only part? [00:04:17] Speaker 03: It was the largest part. [00:04:19] Speaker 04: What were the small parts? [00:04:21] Speaker 03: All right. [00:04:23] Speaker 03: We sought to amend the complaint. [00:04:25] Speaker 03: to bring in additional defendants who were associated with Texas. [00:04:30] Speaker 03: They weren't in the Eastern District, but there were some defendants who were located within Texas. [00:04:35] Speaker 03: We sought leave to amend that. [00:04:36] Speaker 04: Well, that doesn't seem particularly relevant to whether it was proper in the Eastern District. [00:04:40] Speaker 03: Right. [00:04:41] Speaker 03: It's a connection. [00:04:42] Speaker 03: It's not the most tangible connection, granted. [00:04:45] Speaker 03: The question, though, is did the district court examine this, and did it examine all of the factors, and did it make any finding as to whether there was anything unreasonable? [00:04:56] Speaker 04: One particular issue I know the court... Are you just complaining that he didn't give you a good enough reason? [00:05:00] Speaker 04: Because I think he didn't do the best job of explaining why he was reinstituting fees after a remand and after us instructing him to do certain things. [00:05:11] Speaker 04: But I also have a pretty good sense that if we send this back again, you're going to get the same result. [00:05:16] Speaker 03: i'm fearful that also quite frankly i think second time is enough and i think there's enough on the record before you to make that decision without having to do so if the motion to transfer were let's say the eastern district decided okay all of these factors i mean look if we read his opinion it's saying you're not saying he doesn't have the right to assess whether filing there and opposing the motion to transfer created to an exceptional circumstance are you [00:05:46] Speaker 03: That's a very interesting point, Your Honor, because this court, in its Highmark decision from 2012... Well, I don't want to talk about that point. [00:05:54] Speaker 04: I assume he does. [00:05:56] Speaker 04: And so he can look at it and say, you're filing there based purely on incorporation, where you didn't even have people to show up to an office, was a means to file in the Eastern District of Transfer, oppose a venue change, and that was frivolous. [00:06:16] Speaker 04: If he said all of that and explained all of that, why isn't that good enough? [00:06:23] Speaker 03: Well, first of all, the reason why I mentioned the Highmark decision is I'm not sure that he does have the ability to do that because this court said in Highmark that when a tribunal decides to sanction conduct, it should be with respect to the sanctionable actions that occur before it. [00:06:39] Speaker 03: Well, here, that was in front of the Eastern District. [00:06:42] Speaker 04: Yeah, but the cases now before it and the entirety of the cases now before it, you don't have to bifurcate attorney fees proceedings between different tribunals. [00:06:52] Speaker 04: It's the one that ultimately reaches the conclusion. [00:06:55] Speaker 04: I can't imagine that that's what we meant in Highmark. [00:06:59] Speaker 00: We were talking about conduct outside of the litigation rather than conduct that affected the litigation. [00:07:08] Speaker 03: Well, in Highmark, actually, the case was transferred from Pennsylvania to the Northern District of Texas. [00:07:12] Speaker 03: And supposedly, there were some misrepresentations made with respect to the transfer motion in the context of that. [00:07:18] Speaker 03: And that was used as a basis for the exceptionality finding. [00:07:21] Speaker 03: And that's why this court said that if anyone was to sanction that, it really should be the tribunal before whom the sanctionable conduct occurred. [00:07:30] Speaker 03: So I think that's relevant here. [00:07:32] Speaker 02: I think you can assume that Judge Hughes' position is the correct one and perhaps move on. [00:07:39] Speaker 03: All right. [00:07:40] Speaker 03: I'll be happy to move on, Your Honor. [00:07:44] Speaker 03: Putting aside the venue motion, because the district judge in California never assessed anything, never gave any basis, never examined what the Eastern District said, [00:07:54] Speaker 03: His bases for exceptionality are basically the same as what they were before. [00:07:58] Speaker 03: He just clarified his language somewhat in order to make it appear that he was complying with this court's guidance when, in fact, he was not. [00:08:05] Speaker 00: This is also... Just the courts do that all the time. [00:08:10] Speaker 03: I'm sorry, Linda, that makes it harder for you. [00:08:14] Speaker 03: This is also clear with respect to the attorney's fees issue. [00:08:19] Speaker 03: I'm sorry, I didn't mean attorney speaks. [00:08:21] Speaker 03: What I meant is the amount of the fees. [00:08:23] Speaker 03: Not only the amount of the fees, but the reliance on the email that was sent by opposing counsel to our co-counsel Michael Burke. [00:08:33] Speaker 03: The district judge said that the misconduct occurred from the beginning until the motion for a fees. [00:08:39] Speaker 03: Well, the email that was at issue here was used after that fact. [00:08:44] Speaker 03: So they filed a motion for fees saying we're entitled to $750,000 worth of fees. [00:08:50] Speaker 03: But the reliance on that email occurred after that fact. [00:08:53] Speaker 03: So not one penny of the fees that they're asking the court for my client to pay was incurred with respect to that email. [00:09:02] Speaker 03: So that seems to be somewhat of a red herring with respect to that truth. [00:09:05] Speaker 00: But didn't we say the first time around, and maybe it was wrong, but didn't we say the first time around that that could be a factor that the court could consider? [00:09:14] Speaker 03: Yes, absolutely. [00:09:15] Speaker 03: And under the totality of circumstances, which is a pretty broad net, there are a lot of things that can be considered. [00:09:21] Speaker 03: uh... but consideration means something more than just merely rubber-stamping the prior opinion there's again there's no analysis there is no indication of how does that impact the fees that they've already presented to the court in other words if they say seven hundred fifty thousand was incurred as a result of this what may not impact the fees but it certainly tends to show that the case was exceptional uh... your honor I disagree with that for the reason that [00:09:49] Speaker 04: Doesn't it demonstrate a pattern of misconduct throughout the litigation? [00:09:55] Speaker 04: Misconduct in opposing the venue transfer. [00:10:00] Speaker 04: Very weak arguments on claim construction and misconduct in disclosing attorney client privilege material. [00:10:09] Speaker 03: Your honor, that's correct. [00:10:11] Speaker 03: Those are the three bases of the district court opinion. [00:10:14] Speaker 03: From the time the case was filed until the re-exam decision came down, it was about five years. [00:10:20] Speaker 03: In fact, it's almost exactly five years. [00:10:22] Speaker 04: And so there are three- I mean, it sounds an awful lot to me like you're saying that email shouldn't be considered at all, which we've already said it can be. [00:10:31] Speaker 03: Your Honor, I think it can be considered as part of the totality of circumstance. [00:10:34] Speaker 03: But this court inviting the district judge to review those circumstances, weigh the evidence, determine was that proper, and so forth, is a different matter entirely. [00:10:46] Speaker 04: Well, it sounds, again, to me like you're quibbling with how you wrote the opinion, not the reasoning. [00:10:53] Speaker 03: I certainly don't mean to evade that opinion. [00:10:55] Speaker 04: Can you just turn to the amount? [00:10:57] Speaker 03: I don't know how close I am. [00:10:59] Speaker 04: You're getting close to your rebuttal. [00:11:02] Speaker 04: I'm troubled by the number of hours here. [00:11:06] Speaker 04: Did you preserve an objection to the number of hours, or are you just arguing that it should have been apportioned more closely to the misconduct? [00:11:15] Speaker 03: Your Honor, it's difficult to say, yes, we do object to the number of hours. [00:11:20] Speaker 03: But do we have a specific number? [00:11:22] Speaker 03: No, I can't say. [00:11:23] Speaker 04: It didn't seem like you made that argument, though. [00:11:26] Speaker 04: Your argument seems based upon this is excessive in relation to the misconduct. [00:11:32] Speaker 03: That's certainly true, Your Honor. [00:11:35] Speaker 04: But don't the district courts have a large degree of discretion there? [00:11:38] Speaker 04: And if they determine that the misconduct was sufficiently pervasive, they can just award all the fees. [00:11:45] Speaker 03: I don't know that they can award all the fees. [00:11:47] Speaker 04: There's not a requirement to apportion precisely. [00:11:51] Speaker 03: Well, certainly this court has said that the amount has to bear some relation with respect to the alleged misconduct. [00:11:59] Speaker 04: And on the other hand, it's also true that... And if the district court finds that the misconduct was pervasive and throughout, then it's within its discretion to award all the fees. [00:12:08] Speaker 03: I think that's a possibility if that in fact is a proper finding. [00:12:13] Speaker 04: Do you know how many hours actually were this number represents? [00:12:18] Speaker 03: Um, I don't remember the exact number. [00:12:20] Speaker 03: It was several thousand, 2000, 3000 something. [00:12:26] Speaker 03: I don't remember the exact number. [00:12:27] Speaker 04: Why don't you object to that? [00:12:28] Speaker 04: I mean, how many hours does it take to, to get it transferred, get it stayed and then. [00:12:36] Speaker 04: And do nothing. [00:12:37] Speaker 04: Yeah. [00:12:37] Speaker 04: I mean, that seems excessive, but you didn't object to that. [00:12:41] Speaker 03: Well, I believe we objected to the excessive nature of it, but you're right. [00:12:44] Speaker 04: We did not on that theory. [00:12:45] Speaker 04: We didn't quibble with the. [00:12:47] Speaker 04: excessive hours you have quibbled with that it wasn't proportionate to the misconduct. [00:12:53] Speaker 03: Well, also the fact that a lot of these attorneys' invoices are redacted. [00:12:57] Speaker 03: So it's hard for us to say what exactly is included within that. [00:13:00] Speaker 03: If you have 1.8 hours, but everything is blacked out. [00:13:04] Speaker 04: Well, it's their burden to show, though. [00:13:05] Speaker 04: You could have at least pointed out objections to it. [00:13:08] Speaker 04: You could have said, this seems excessive for the amount of legal work done here. [00:13:13] Speaker 03: Yes, Your Honor. [00:13:14] Speaker 03: And again, I believe that we have, but we have not done it to that level of specificity with respect to the number of hours. [00:13:20] Speaker 03: That is correct. [00:13:23] Speaker 00: OK. [00:13:23] Speaker 00: We'll save the last couple of minutes for a rebuttal. [00:13:33] Speaker 01: Thank you. [00:13:33] Speaker 01: May it please the court, my name is Andrew Langsome. [00:13:36] Speaker 01: I'm counsel for the Abelie. [00:13:39] Speaker 00: You know, I have to tell you, one of the most exceptional things about this case was that red brief. [00:13:43] Speaker 00: I mean, I've never seen so many adjectives in a brief, ever. [00:13:47] Speaker 00: I mean, it's not the norm in terms of how people practice law before this court. [00:13:52] Speaker 00: This is not all about puffery. [00:13:57] Speaker 01: I understand, Your Honor. [00:13:58] Speaker 01: I apologize for that. [00:14:01] Speaker 01: Let me go to the point that was made at the end first, about how many hours were spent. [00:14:08] Speaker 01: I don't have the number, but if you divide 750,000, [00:14:13] Speaker 01: by an approximate average rate of $700 or $600 or $500 per hour, it sounds like you're in the range of about 1,200 hours of work. [00:14:24] Speaker 01: In that range, 1,000 to 1,500 hours. [00:14:27] Speaker 04: Which sure sounds like even still, even if it's not a couple thousand, it sounds like an awful lot. [00:14:33] Speaker 01: I was involved, Your Honor, in I think 67% of the work over seven years. [00:14:39] Speaker 00: Then why did you need six other partners to participate? [00:14:43] Speaker 01: The court looked at those numbers. [00:14:46] Speaker 01: My work plus another young partner's work and another young partner's. [00:14:52] Speaker 01: This was never overstaffed. [00:14:54] Speaker 01: We did a motion. [00:14:56] Speaker 00: But the court said you're allowed to charge partner rates for all this non-partner work just because you don't bother to hire associates or paralegals. [00:15:04] Speaker 01: Actually, the court pared down our request. [00:15:07] Speaker 00: By not very much. [00:15:08] Speaker 01: By not very much. [00:15:11] Speaker 01: Motion to transfer. [00:15:13] Speaker 01: Vigorously opposed, I respectfully request, look at the record, how many volumes, including a serve reply and a motion for serve reply, a re-exam with each filing. [00:15:25] Speaker 00: But we're not allowed to look at what occurred in the re-exam. [00:15:28] Speaker 00: And I think that was pretty clear in the prior opinion, that what occurred before the PTO, that's up to the PTO to decide what happens in the re-exam. [00:15:37] Speaker 00: So you spent a lot of time in your brief talking about what they should or shouldn't have done during the re-exam process, but that doesn't have anything to do with the exceptionality of this case. [00:15:46] Speaker 01: I understand. [00:15:47] Speaker 01: I'm only addressing Judge Hughes' point about how many hours. [00:15:52] Speaker 01: If you look at the record in the re-exam, it's got papers this odd. [00:15:55] Speaker 00: Right, but we can't give you hours for the re-exam. [00:15:58] Speaker 04: Yeah. [00:15:59] Speaker 04: I mean, how come you get attorney fees for work done before the PTAB? [00:16:05] Speaker 01: Because the judge in this case did not merely say the venue was initially defective, but rather he said at each stage of the litigation. [00:16:18] Speaker 02: But that's not part of the litigation. [00:16:20] Speaker 02: That's a separate legal proceeding. [00:16:22] Speaker 04: He can base his exceptionality on certain things, but he can't award fees for an entirely different proceeding. [00:16:33] Speaker 01: Are some of the... Interesting point, not raised by... Well, I know. [00:16:37] Speaker 01: But we said that in the first opinion. [00:16:40] Speaker 01: Much of the fees, I know, relate to the re-exam. [00:16:45] Speaker 01: You are correct. [00:16:45] Speaker 04: Well, that's what seems very problematic about this, because what was actually done in the Eastern District of Texas and in California seems incredibly minimal. [00:16:55] Speaker 00: Relative to the re-exam... There's no legal authority to award fees for time spent in the re-exam. [00:17:02] Speaker 01: Except, Your Honor may be exactly correct, but in this case, the claim constructions that were set forth in the re-exam were facially unreasonable. [00:17:18] Speaker 00: And the district court... You know, even if everything you say about the re-exam is 100% true, the court had no authority to award you fees for what occurred in the re-exam. [00:17:30] Speaker 00: Just can't. [00:17:34] Speaker 00: Are you sure the fees included the re-exam? [00:17:37] Speaker 04: Yes, ma'am. [00:17:39] Speaker 04: I mean, that seems the only logical explanation for why it's $1,200. [00:17:42] Speaker 01: The re-exam papers, I thought, were huge. [00:17:43] Speaker 04: Sure, the re-exam took a long time. [00:17:45] Speaker 01: You don't get a bill for those. [00:17:48] Speaker 01: Well, the district court granted it on the basis of, at each stage of the litigation, Plaintiff and its counsel exhibited exceptional conduct, justifying this award. [00:18:00] Speaker 04: Sure, you can look at that. [00:18:03] Speaker 01: to claim interpretation. [00:18:05] Speaker 04: When I start talking, you have to stop. [00:18:06] Speaker 04: He can look at that in terms of making an exceptional case finding, but he can't charge them for the hours spent in a proceedings that's not before him. [00:18:17] Speaker 04: The PTAB is not a wing of the district court. [00:18:20] Speaker 04: It is a separate administrative proceeding, and the hours expended there are not included in the attorney fee statute. [00:18:28] Speaker 01: I understand what you're saying, Your Honor, and yet you yourself said [00:18:32] Speaker 01: It's the conclusion of the case that the judge is dealing with. [00:18:35] Speaker 01: And therefore, what happened in the Eastern District of Texas, those fees can be awarded by the District Court of California. [00:18:41] Speaker 04: Because it's part of the case. [00:18:43] Speaker 04: It's part of the same case. [00:18:45] Speaker 04: It was transferred to California. [00:18:47] Speaker 04: Correct. [00:18:47] Speaker 04: The PTAB re-exam is not part of this case at all. [00:18:53] Speaker 04: I mean, this is remarkable that you even asked for them. [00:18:56] Speaker 04: It's remarkable your friend on the other side failed to object. [00:19:00] Speaker 04: And it's remarkable that the district court judge awarded these fees. [00:19:05] Speaker 00: Is there a possibility that you all could sit down and calculate which hours were attributable to the PTAP proceedings and which not, and then reach a resolution of this issue based on that? [00:19:19] Speaker 01: There's an absolute [00:19:20] Speaker 01: not just a possibility, but I believe a certainty that we can calculate how much of our fees, my firm's fees, were directed towards Eastern District of Texas' motion to transfer, the answer that some discovery was held, the motion to stay in California, the request by plaintiffs to reopen the case. [00:19:45] Speaker 00: Well, I mean, my colleagues could disagree with me on this, but I think that [00:19:50] Speaker 01: But I don't know that we could agree with that. [00:19:52] Speaker 00: Right. [00:19:52] Speaker 00: So the question is, if you could do those calculations and present them to the other side, and then we can see whether or not there is anything that needs to be adjusted. [00:20:06] Speaker 00: You could stipulate to an adjustment of the fee award. [00:20:13] Speaker 00: The other side knows that they've got an uphill battle with respect to [00:20:17] Speaker 00: a court exercise in its discretion with respect to finding exceptionality, and even with respect to Lodestar calculations. [00:20:24] Speaker 00: But if there is a way to get to the bottom line here, then at least we'll know what we're dealing with. [00:20:32] Speaker 02: Yes, Your Honor. [00:20:33] Speaker 00: Are you willing to go through this exercise? [00:20:36] Speaker 03: We're certainly willing to talk with you. [00:20:42] Speaker 00: What do you think, Judgeman? [00:20:47] Speaker 02: Well, I think that would be constructive. [00:20:50] Speaker 02: I think it's something that should be done. [00:20:54] Speaker 00: Why don't we do this? [00:20:55] Speaker 00: Why don't you do this calculation? [00:20:58] Speaker 00: Submit to us the breakout. [00:21:03] Speaker 00: And in the meantime, you all have a conversation and then submit a joint report on whether or not you're able to reach a resolution. [00:21:12] Speaker 04: When the dollar amount, I mean, we're not expecting him to waive his appeal, obviously. [00:21:18] Speaker 04: But if you can agree on something that attributes the fees to the litigation and not to the PTAB, presumably that 750 number, whatever it is, is going to go down substantially. [00:21:32] Speaker 04: I would agree. [00:21:34] Speaker 00: You can keep going. [00:21:39] Speaker 00: You still got time. [00:21:41] Speaker 01: So the district court determined this case was exceptional and awarded attorney fees, taking the guidance of the CAFC in the first time before the court, where you did indicate that the use of the email was a factor that could determine exceptionality, that their plaintiff's opposition to the venue could be considered. [00:22:09] Speaker 01: the objective unreasonableness of plaintiff's claim language arguments, I thought the decision said in the re-exam. [00:22:21] Speaker 00: Pardon? [00:22:22] Speaker 00: I thought that the CAFC's decision the first time indicated that... That with respect to a finding of exceptionality, to the extent that the arguments made in the re-exam for claim construction were the same ones, [00:22:38] Speaker 00: that were made at the district court, then the court could consider that in its exceptionality determination, not in its numbers. [00:22:44] Speaker 01: No. [00:22:45] Speaker 01: I'm not talking about the numbers, Your Honor. [00:22:47] Speaker 01: I'm saying that I thought your direction to the district court the first time indicated there were four factors that the district court should reconsider. [00:22:58] Speaker 01: Totality of the circumstances, the use of the email, and I'm abbreviating, the opposition and factors relating to the transfer for venue, [00:23:06] Speaker 01: And I thought it said, objective unreasonableness of LADS's claim language arguments in the re-exam. [00:23:15] Speaker 04: Based upon proper district court standards of claim construction versus PTAP claim construction. [00:23:22] Speaker 01: This case was not, the claim construction was not done at the district court level. [00:23:28] Speaker 04: Right, but that's what we said is, you can't just find it unreasonable based upon. [00:23:33] Speaker 00: Right, in other words, even if [00:23:35] Speaker 00: even if you think they were unreasonable at the re-exam, that doesn't make them even unreasonable. [00:23:41] Speaker 00: The same claim construction argument. [00:23:44] Speaker 00: So the point was, if he's saying the claim construction arguments are unreasonable for purposes of the litigation, and he's basing that on what happened on the re-exam, we said that's apples and oranges, because there are different standards that apply. [00:23:58] Speaker 00: That didn't mean that we said he should go back and re-look at whether or not they were really acting in bad faith in the re-exam. [00:24:04] Speaker 00: What we said is, [00:24:05] Speaker 00: That's not relevant to whether or not. [00:24:08] Speaker 00: So we have to rethink whether they objectively unreasonable act using the Phillips standard, using the standards that apply, the burden of proof, everything else that applies in the district court. [00:24:21] Speaker 04: Understood. [00:24:23] Speaker 01: Do you think he did that? [00:24:27] Speaker 01: I can't be a mind reader. [00:24:30] Speaker 04: Well, we can't either. [00:24:31] Speaker 04: That's why it has to be in the opinion. [00:24:33] Speaker 04: Can you point to language in the opinion that suggests he made a finding that the claim construction positions advanced during the re-exam, if they had been advanced in district court under the Phillips standard, would also have been unreasonable? [00:24:48] Speaker 04: Do you think he made that kind of finding? [00:24:50] Speaker 01: I think he did, Your Honor. [00:24:51] Speaker 04: Where? [00:24:55] Speaker 01: In his decision, he specifically said [00:25:00] Speaker 01: that their claim constructions as proposed in the re-exam were, I thought the language was, were frivolous. [00:25:10] Speaker 04: It was his determination. [00:25:11] Speaker 04: It's not clear that he concluded that they were frivolous as proposed under Phillips. [00:25:21] Speaker 04: Phillips or under the BRI standard? [00:25:24] Speaker 04: Because they can be frivolous under BRI, but not frivolous under Phillips. [00:25:30] Speaker 01: He did not go into that detail. [00:25:33] Speaker 01: He did not. [00:25:35] Speaker 01: That's what we told him. [00:25:38] Speaker 01: He said that the claim language construction sought by LADS. [00:25:44] Speaker 01: I don't know that he used the exact word for it, so I'm just using it now. [00:25:48] Speaker 04: I mean, you're essentially asking us to infer that he paid attention to what we said, and even though he didn't provide the specific language, that's what he meant. [00:25:57] Speaker 01: Yes, sir. [00:25:59] Speaker 01: I do want to just point out in the last few minutes here that there were many reasons considered by the district court in granting attorney fees and determining this case to be exceptional, not just the venue position. [00:26:14] Speaker 00: I don't like the use of the email either. [00:26:16] Speaker 00: I think that, I mean, putting my old district court hat back on, I might have actually sanctioned them separately for using that. [00:26:25] Speaker 00: Having said that, we do have cases that say, [00:26:29] Speaker 00: that the award of fees has to be tied to fees actually incurred because of the impropriety. [00:26:35] Speaker 00: So given the timing of the use of that email, what fees were incurred in relation to the use of that email? [00:26:44] Speaker 01: Relative to the $750,000, Your Honor, relatively insignificant or small. [00:26:50] Speaker 01: But those cases, and I think you may be referring to the kilopass type case, say that [00:26:59] Speaker 01: Like our case, it's not merely the bad faith of using an attorney client privilege document. [00:27:07] Speaker 01: If that were the only reason to get exceptionality and attorney fees, I would agree. [00:27:11] Speaker 00: Right, just a factor. [00:27:12] Speaker 01: But it's a factor. [00:27:14] Speaker 01: There are nine or 10 reasons why the court determines exceptionality. [00:27:20] Speaker 00: Right, I'm not saying it's... We said in the first time around, that's a factor you can consider in determining exceptionality. [00:27:26] Speaker 00: I have no problem with that. [00:27:27] Speaker 00: I still have no problem with that. [00:27:29] Speaker 00: The question is, which fees should be tied to that? [00:27:33] Speaker 01: If it were only that, then the kilopass dictates that it would be the incremental fees in our having to deal with it. [00:27:41] Speaker 01: But it's not just that. [00:27:42] Speaker 01: It was the venue motion. [00:27:44] Speaker 01: It was the opposition to the motion to stay. [00:27:47] Speaker 00: Did he make a finding that the opposition to the venue motion was objectively unreasonable? [00:27:54] Speaker 01: I think, again, he did not use your words, Your Honor, but I think it's clear as can be when he says, the LLC was formed two days before filing the complaint. [00:28:05] Speaker 01: The patent was assigned to the LLC 20 days before it was even formed. [00:28:12] Speaker 01: They never conducted any business. [00:28:14] Speaker 01: In fact, this court agreed in its first opinion, LADS, the acronym [00:28:21] Speaker 01: never conducted any business in Texas. [00:28:25] Speaker 01: They failed to even maintain their LLC status. [00:28:29] Speaker 01: According to the CAFC, the inventor and sole owner of LADS exclusively was residing in California. [00:28:37] Speaker 01: And the CAFC, in its first opinion, said LADS never even picked up the keys to the office, which was the sole tie to [00:28:51] Speaker 01: the Eastern District of Texas. [00:28:54] Speaker 01: They argued and re-argued. [00:28:56] Speaker 01: They were in business. [00:28:57] Speaker 01: They were actively licensing. [00:28:58] Speaker 04: You're setting forth an awful lot of facts that aren't disputed. [00:29:02] Speaker 04: But putting those facts together and then making the legal conclusion that the opposition to the motion to transfer was frivolous is a different story. [00:29:13] Speaker 04: I mean, is there any language in its opinion that even remotely comes close to making that conclusion? [00:29:21] Speaker 01: I don't think there's language that says that the opposition was unreasonable. [00:29:26] Speaker 01: I think there's better language that says the mere assertion of venue, putting together of this fiction of an LLC in Texas for the purpose of defeating a change of venue, that was wrong. [00:29:44] Speaker 01: I think that's clear from this court's first opinion. [00:29:47] Speaker 04: But that's not what we told him to look at. [00:29:49] Speaker 04: We told him to look at. [00:29:51] Speaker 04: whether the opposition was frivolous. [00:29:56] Speaker 01: Wouldn't, Your Honor, with all due respect, wouldn't the opposition be frivolous if the creation was fictitious and intended to? [00:30:07] Speaker 02: Well, not necessarily if there were other factors that would come to bear. [00:30:18] Speaker 00: OK, you're out of time. [00:30:19] Speaker 02: Thank you. [00:30:20] Speaker 02: I just want to make sure we're clear on the assignment we have given you. [00:30:27] Speaker 02: That is, my understanding is that you have agreed that you will sort of sit down together and take another look at the fees and consider whether the re-exam expenses can be pulled out. [00:30:44] Speaker 02: And once you get to a number without those fees, [00:30:50] Speaker 02: whether you might explore a settlement. [00:30:57] Speaker 02: If you do that and... If you settle the whole thing, great. [00:31:01] Speaker 02: You can advise the court within, I don't know, 20 days? [00:31:05] Speaker 02: Is that enough time? [00:31:06] Speaker 02: 30 days? [00:31:08] Speaker 01: I think 20 is enough. [00:31:09] Speaker 01: I think I can get the numbers. [00:31:14] Speaker 01: I won't be the one that has to go through it. [00:31:16] Speaker 04: In the billing records you submitted in support of your application, does it identify hours that were spent in the re-exam? [00:31:26] Speaker 04: Is it discernible from the billing records, or are they redacted to exclude that? [00:31:35] Speaker 01: I would think that we should be able to see it. [00:31:38] Speaker 04: I just wonder if they can see it. [00:31:40] Speaker 01: Well, if not, I'll show them. [00:31:42] Speaker 00: Some of it's going to be easy, because it's going to be between the stay and the lifting of the stay. [00:31:46] Speaker 00: But there might be a little bit more to say. [00:31:49] Speaker 01: There was a motion to stay filed once that was stayed. [00:31:52] Speaker 01: But granted, there should be no more district court proceedings. [00:31:59] Speaker 00: Thank you. [00:32:00] Speaker 00: Thank you very much. [00:32:06] Speaker 03: Your Honor, real quick, with respect to Judge Lynn's point, I assume that with respect to our assignment here, the fees that have been incurred after that motion [00:32:15] Speaker 03: were submitted are not going to be added back, and then they're taking the re-exam fees from that. [00:32:20] Speaker 03: In other words, I'm sure Mr. Longzom has spent more time on the appeal and so forth, so I would hate to see the $750,000 increase to whatever, $900,000, and then remove the re-exam from that, just so I understand our... Well, what we're talking about is that the fees... And district court litigation. [00:32:37] Speaker 02: Fees in connection with the patent office proceeding [00:32:41] Speaker 00: We have the right to award fees if we think there's some basis for that. [00:32:45] Speaker 00: I just wanted to make sure I was doing the right thing in conjunction with the opposing counsel. [00:32:51] Speaker 00: Judge Lynn is right that once that number is recalculated there might be a basis to consider overall settlement because obviously this judge thought that there was something wrong in Denmark, that you all created this entity, you fought [00:33:11] Speaker 00: the transfer to a pretty obviously appropriate district. [00:33:16] Speaker 00: You fought at every step of the way. [00:33:18] Speaker 00: And he believed that there was impropriety that occurred. [00:33:22] Speaker 00: So yes, we've got a lot of criticisms of things that are not in this opinion. [00:33:29] Speaker 00: But if we send it back again, as you said, he's liable to say, all right, well, this is what I was really talking about. [00:33:37] Speaker 00: So maybe if we can get the numbers right, [00:33:40] Speaker 00: the number of hours, right, that you might consider whether or not it's worth continuing to pursue this appeal. [00:33:46] Speaker 00: I'm not telling you you can't. [00:33:48] Speaker 00: But I'm saying this is, you know, we're not trying to act like you're wearing the white hat here. [00:33:55] Speaker 00: Right. [00:33:55] Speaker 03: OK. [00:33:56] Speaker 03: No, I totally understand what the court is saying. [00:33:58] Speaker 02: This also doesn't really signal where the court might come out on this case, because there are other outcomes. [00:34:07] Speaker 03: Right. [00:34:08] Speaker 03: I understand that. [00:34:09] Speaker 03: I've got five seconds left basically. [00:34:11] Speaker 03: I just wanted to to judge Hughes's point. [00:34:15] Speaker 03: Nowhere does the district court refer my time is up, I believe. [00:34:18] Speaker 03: May I finish? [00:34:19] Speaker 00: Yes. [00:34:20] Speaker 03: Nowhere does the district court say that our actions are objectively unreasonable. [00:34:26] Speaker 03: Nowhere. [00:34:27] Speaker 03: what the district judge says with respect to claim construction is objectively weak. [00:34:31] Speaker 03: Well, weak isn't the same thing as unreasonable, as this court has pointed out in a number of decisions. [00:34:36] Speaker 03: You have to have something more to recover fees under 285. [00:34:39] Speaker 03: It has to be objectively unreasonable. [00:34:42] Speaker 03: The district court absolutely does not go to that point. [00:34:46] Speaker 03: It refers to the venue issue. [00:34:48] Speaker 03: It never says that was unreasonable, as, again, Judge Hughes pointed out. [00:34:53] Speaker 03: Your guidance was, [00:34:55] Speaker 03: Where in the venue, in our opposition to it, is there something unreasonable? [00:35:00] Speaker 03: The judge never says that at all. [00:35:03] Speaker 03: Claim construction, he never says that at all. [00:35:06] Speaker 03: And with respect to the attorney email issue, he's treating it as a strict liability fence. [00:35:12] Speaker 03: And you can agree or disagree, was it inadvertently waived? [00:35:16] Speaker 03: Did they claw it back? [00:35:17] Speaker 03: Did they set up the procedures? [00:35:18] Speaker 03: So forth. [00:35:19] Speaker 03: But the district court never examined any of that. [00:35:21] Speaker 03: So thank you for your time. [00:35:23] Speaker 00: Let me ask you one last question. [00:35:24] Speaker 00: Why didn't you raise the question of where are these fees? [00:35:27] Speaker 00: I mean, you had the fee application. [00:35:29] Speaker 00: You saw the numbers. [00:35:30] Speaker 00: Why didn't you say, is any of this relating to the re-exam? [00:35:36] Speaker 00: You saw the dates on that. [00:35:37] Speaker 00: I mean, why didn't you object? [00:35:40] Speaker 00: I mean, we could find this whole thing waived. [00:35:43] Speaker 03: Well, I think that we've objected kind of to the totality and so forth. [00:35:47] Speaker 03: Did we specifically point out you cannot object? [00:35:50] Speaker 03: I mean, you cannot recover attorney's fees from the re-exam. [00:35:53] Speaker 03: I don't believe our briefing said that. [00:35:58] Speaker 00: OK. [00:35:58] Speaker 00: Thank you. [00:35:58] Speaker 00: The cases will be submitted.