[00:00:00] Speaker 02:
Engineering versus Campbell Company, 2017, 1974, and 2033.

[00:00:03] Speaker 02:
Mr. Holland.

[00:00:05] Speaker 02:
Thank you, Your Honor.

[00:00:10] Speaker 00:
Good morning.

[00:00:11] Speaker 00:
May it please the Court.

[00:00:12] Speaker 00:
My name is Chris Holland.

[00:00:13] Speaker 00:
I represent the Appellate Campbell Company of Idaho.

[00:00:17] Speaker 00:
And I'm here today to ask this Court to use its review powers to overturn the jury verdict that was entered in the Central District of California of both validity and willfulness.

[00:00:30] Speaker 00:
This case presents, really, Your Honors, a perfect storm, if you will, of invalidity issues.

[00:00:37] Speaker 00:
At the outset, during the examination, an amendment was allowed before issuance, wherein that amendment comprised simply taking the exact language from the cited reference and putting it into the claims, and then the patent was issued.

[00:00:55] Speaker 00:
So from the word go, this patent should not have been issued, but unfortunately it was.

[00:00:59] Speaker 00:
Then you go to the motion stage, and at the summary judgment proceeding, my client, looking back at the record, clearly was arguing or attempting to argue that it was practicing what was the prior art, which was AC waveform use of the signals.

[00:01:16] Speaker 00:
Why don't you address the public use, experimental use issue?

[00:01:20] Speaker 03:
Yes, sir.

[00:01:22] Speaker 03:
As I understand it, the jury

[00:01:28] Speaker 03:
found that there was no invalidating public use here because the two uses that occurred outside of the grace period were experimental.

[00:01:40] Speaker 03:
Is that my understanding of the jury verdict correctly?

[00:01:43] Speaker 00:
Your understanding is correct, Your Honor.

[00:01:44] Speaker 00:
We are challenging that, absolutely.

[00:01:45] Speaker 00:
And I'd be happy to address that.

[00:01:47] Speaker 03:
And what I understand you to be saying is that the first experiment in California

[00:01:56] Speaker 03:
was appropriately experimental, but the second one was not.

[00:02:01] Speaker 00:
No, I apologize.

[00:02:04] Speaker 00:
You are misunderstanding.

[00:02:05] Speaker 00:
I'm sorry if we didn't clarify that well enough in the brief.

[00:02:07] Speaker 00:
We don't think any of those uses qualify as experimentation, unless you're talking about, I think, the one on their parking lot.

[00:02:14] Speaker 00:
That, I think, may have been arguably experimental.

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But there's two external uses of the device, which went on for a period of

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more than one year.

[00:02:24] Speaker 03:
In California?

[00:02:25] Speaker 00:
In California, in Fullerton, California, Your Honor.

[00:02:27] Speaker 00:
Yes, at two different intersections.

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One was at what was called the Gilbert installation or Fullerton 1.

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The second one was at the State College installation or Fullerton 2.

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And both of those... Why isn't this like the city of Elizabeth?

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This had to be tested outdoors.

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Public safety is involved.

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You needed to have it really fully operative and tested.

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because someone can walk across the street and get killed.

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And this was a jury verdict.

[00:02:58] Speaker 00:
Yes, Your Honor.

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It's not like City of Elizabeth because of the clock spring factors and the analysis that one would put into place where the testing that was going on was not directed towards any aspect of the claims.

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That's the problem that they face with this experimental use.

[00:03:13] Speaker 03:
It doesn't have to be.

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The clock spring made clear it was either to ensure that the claim

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limitations are satisfied, but also that it would work for its intended purpose.

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And my understanding is that that is their theory as to why these two uses were experimental, because they were trying to see if it worked for its intended purpose.

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And I have some difficulty in seeing why the first one of those two wasn't designed to see that it would work for its intended purpose.

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But the second one is perhaps more problematic, given the testimony.

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Agreed, Your Honor.

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But I would submit that both of them should correctly be reversed on the issue of public usage for exactly the point of, is it ready for patenting, and has it been reduced to practice?

[00:04:07] Speaker 04:
And yes, when you take it out, let's assume for some... But that ignores the case law that says you can still have that and take it out for public testing.

[00:04:16] Speaker 04:
I mean, your argument on that point, which suggests that once it's ready for patenting, you can't take it out in the public at all.

[00:04:23] Speaker 04:
And that's not the case law.

[00:04:25] Speaker 00:
I absolutely agree, Your Honor.

[00:04:26] Speaker 00:
And I'm sorry if the court was given that impression that it's not possible to do some level of public testing.

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The point is,

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what period of time would be legitimate public testing.

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And the inventor himself admitted that whatever issues were going on, which were identified only as noise and durability.

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Noise and durability are not in the claims.

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So those were not testing directed to the claims per the clock spring and the Helsing factors.

[00:04:50] Speaker 04:
So that public... The durability is testing whether it's going to be useful for its intended use.

[00:04:55] Speaker 00:
Agreed, Your Honor.

[00:04:55] Speaker 04:
That's inherent in this kind of invention, isn't it?

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I mean, these are not

[00:05:00] Speaker 04:
traffic lights or whatever that are going to be used in somebody's home.

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They're going to be used at actual intersections.

[00:05:06] Speaker 00:
Agreed, in theory, Your Honor.

[00:05:07] Speaker 00:
Well, not in theory.

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They're not going to install these in private locations.

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They're going to install these in public streets.

[00:05:13] Speaker 00:
Understood.

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And in theory, I apologize, Your Honor.

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What I was saying is that in theory, yes, you should have some amount of testing.

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And the problem we face here is that the inventor himself said the only issues that they found were solved within a matter of either days in one installation or weeks in the other.

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And then we have

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months and months and months, more than one year agreed to on the record of usage when it already has been found to be functioning fine.

[00:05:37] Speaker 04:
But we don't know if it was durable or not.

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Isn't that why we look at these multiple factors in clock-spring to determine a lot of different things?

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I mean, under your theory, if somebody invents the perfect invention and takes it out and there's no problems within a week or so, then maybe they need to file their patent.

[00:05:57] Speaker 04:
But what if this is an invention that's supposed to have durability of 10 or 15 years, a week's testing, without any rain or any snow?

[00:06:05] Speaker 04:
Well, it's California, no snow.

[00:06:07] Speaker 04:
But you know what I mean.

[00:06:08] Speaker 00:
Yes.

[00:06:09] Speaker 04:
How do we know when the length of time is too long?

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Aren't we supposed to look at these factors?

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And in looking at these factors, how can I conclude that the jury's

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decision is not supported by substantial evidence.

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I mean, I think that the factors weigh more heavily in favor of your friend on the other side.

[00:06:26] Speaker 00:
Respectfully, your honor, I would disagree for a couple of reasons.

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One would be the admissions of the inventor himself about the length of time it took him to understand whether it was functioning correctly or not.

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The lack of documentation is the primary one.

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There is no documentation.

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There's no lab notebooks.

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There's no inventors records.

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There's no change orders.

[00:06:43] Speaker 00:
There's nothing to suggest that for public safety, for ability to know it for noise,

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for any purpose that this testing was going on.

[00:06:50] Speaker 00:
The only time we heard about testing was during the litigation when it was brought up when they realized, my gosh, we've got an installation 33 months before we went and filed for a patent.

[00:07:01] Speaker 04:
Did they get paid for that?

[00:07:03] Speaker 04:
Pardon me?

[00:07:03] Speaker 04:
Did they get paid for any of those 33 months?

[00:07:06] Speaker 00:
They did not get cash for it.

[00:07:07] Speaker 00:
There's one marketing letter that was produced, and that marketing letter from January of 2002, I believe it's 3728 in the record, Your Honor,

[00:07:15] Speaker 00:
showed that what they did was they negotiated a quid pro quo with the city of Fullerton for multiple additional installations, which the marketing group at Polaroid then utilized for marketing the useful invention as it was being displayed in the public.

[00:07:33] Speaker 00:
So yes, there was a question.

[00:07:34] Speaker 02:
Wasn't all this decided and considered and decided by the jury, including his testimony?

[00:07:41] Speaker 02:
After all, he wasn't a patent attorney and might not have understood the consequence of what he was saying.

[00:07:47] Speaker 02:
But the jury evaluated all this.

[00:07:50] Speaker 00:
Yes, Your Honor, they did.

[00:07:51] Speaker 00:
But again, we believe that the problem with that evaluation was that in determining whether the use was public or not, they did not

[00:08:02] Speaker 00:
properly evaluate these issues that were before them.

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And it's an issue of clear error and whether there's substantial evidence to support that.

[00:08:10] Speaker 00:
What they had, and I believe that part of this goes to the issue of validity.

[00:08:16] Speaker 00:
My client had lost on infringement.

[00:08:18] Speaker 00:
So you're there trying to simply defend yourself on the validity issue.

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And on validity, the instructions were given incorrectly.

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And as a result, they are believing that the court had found infringement.

[00:08:30] Speaker 00:
And our clients are bad actors.

[00:08:32] Speaker 02:
What was the error in the instructions?

[00:08:35] Speaker 00:
The error in the instructions was the fact that a different standard was utilized at the claim construction and summary judgment phase.

[00:08:41] Speaker 00:
Did you object?

[00:08:42] Speaker 03:
Pardon me?

[00:08:43] Speaker 03:
Did you object?

[00:08:43] Speaker 00:
Yes, they did.

[00:08:44] Speaker 00:
The record is replete with objections, as well as a judgment format of law under Rule 50 after the fact, Your Honor, and preservation of the objection.

[00:08:53] Speaker 00:
The trial court also multiple times indicated on the record that- What's the error in the jury instructions?

[00:08:59] Speaker 00:
The jury instruction was given that the term digital data signals should simply be given its plain and ordinary meaning.

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That's what the jury was supposed to evaluate.

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And the problem with that is that at trial, when you're simply looking at validity, that plain and ordinary meaning, the way the Polara experts testified about it, made it sound like digital had to be ones and zeros.

[00:09:21] Speaker 00:
And therefore, the TSMCO device, the Wilkinson patent, and the Prior Art device of my own client, Enlightenment,

[00:09:28] Speaker 00:
would not qualify, whereas at the summary judgment phase, they had strenuously argued to stretch the claims to cover those devices.

[00:09:36] Speaker 00:
And the error then, Your Honor, is the infringement instruction that should have been given, pardon me, the claimage instruction that should have been given should have been the court's actual interpretation from the summary judgment phase.

[00:09:50] Speaker 00:
And that would have at least allowed us on the obviousness and anticipation arguments to have some comeback rather than simply being judged as

[00:09:58] Speaker 00:
a known infringer with essentially no defense to the patent being valid or not.

[00:10:04] Speaker 00:
And I think that also then spills over into willfulness and the other issues.

[00:10:07] Speaker 04:
But that's... But that's all anticipation and obviousness.

[00:10:10] Speaker 04:
It's not public use, which is what we were talking about.

[00:10:13] Speaker 00:
Yes, Your Honor.

[00:10:14] Speaker 00:
And you were asking, I'm sorry, we got down this road because you were asking about, you know, what impact did that have and where was the error?

[00:10:21] Speaker 00:
And I was trying to relate it to that.

[00:10:22] Speaker 00:
I think the two of them go together.

[00:10:24] Speaker 00:
The public use issue... Why do they go together?

[00:10:27] Speaker 04:
Well, they... It's the error in the jury's finding of experimental use.

[00:10:31] Speaker 00:
I think the error in the jury's finding is that the patentee, the inventor himself, admitted that the patent had been reduced to practice and it was ready for patenting.

[00:10:39] Speaker 04:
And to the court's point, some amount of testing... That's not legally sufficient for you to win.

[00:10:43] Speaker 04:
You need to show me clear error in weighing all these factors.

[00:10:47] Speaker 04:
And when I look at through these factors, I see some of them weigh in your favor, and I see some of them weigh in your friend's favor.

[00:10:54] Speaker 04:
And if that's the case, then I don't understand how I can find clear error on a jury verdict.

[00:11:00] Speaker 00:
I think if the court would look at it in terms of things like what the predominating issue that was brought up at the beginning would be, what is the amount of time that's needed for testing?

[00:11:11] Speaker 00:
What's the amount of time that's needed there because it's a public safety issue?

[00:11:14] Speaker 04:
That's only one of the factors, though.

[00:11:17] Speaker 04:
Yes.

[00:11:17] Speaker 04:
You're basically asking me to reweigh these factors, and that's not what we do as an appellate court.

[00:11:21] Speaker 00:
I absolutely don't want that to happen, Your Honor.

[00:11:23] Speaker 00:
I do think the factors, I think that the length of time that was needed was only a few days or a week, according to the inventor himself, and it took several months of public usage thereafter.

[00:11:32] Speaker 02:
That's weighing the factors.

[00:11:35] Speaker 02:
Excuse me?

[00:11:35] Speaker 02:
You're reciting the factors to be weighed.

[00:11:38] Speaker 00:
Yes, I was trying to answer Judge Hsu's question.

[00:11:40] Speaker 04:
But all you're going to do is end up reciting the factors that favor you, but your friend's going to get up and recite all the factors that favor him.

[00:11:48] Speaker 04:
And we're not the finder of fact here.

[00:11:49] Speaker 04:
If there are some factors that favor him and some that favor you, how can we overturn the jury verdict?

[00:11:55] Speaker 00:
What I would say is that the factors that he's going to argue, I believe, that favor him, all favor him only for a limited period of time because the use was shown to be, in any experimentation that supposedly happened,

[00:12:07] Speaker 00:
was shown to have been resolved.

[00:12:09] Speaker 04:
And the problem is that... But not all these factors relate to experimentation.

[00:12:14] Speaker 04:
Some of them relate to degree of commercialization and whether they admit or monitor things, the nature of contacts with potential customers.

[00:12:26] Speaker 04:
Those aren't necessarily time related.

[00:12:29] Speaker 00:
No, Your Honor, you're right.

[00:12:30] Speaker 00:
And the problem is the record is actually devoid of anything supporting

[00:12:34] Speaker 00:
either side on those.

[00:12:35] Speaker 00:
So the ones that he's going to say that was my point, that support him, in fact, and it actually are neutral at best, there is no evidence on either side about it because there are no records of this.

[00:12:46] Speaker 00:
And the problem is with, I'm not, I definitely want the factors to say exactly the same because I think they come out in my favor.

[00:12:51] Speaker 04:
The problem is, is that the way they... The jury didn't find that they came out in your favor.

[00:12:57] Speaker 00:
I appreciate that, Your Honor, and that's why we're here.

[00:13:01] Speaker 00:
The problem with their interpretation, I believe, is that anyone could use a public use for any amount of time under this scenario.

[00:13:09] Speaker 02:
Counsel, you wanted to save some time for a bottle?

[00:13:11] Speaker 00:
I do, Your Honor.

[00:13:12] Speaker 00:
You're well into it.

[00:13:13] Speaker 00:
Thank you, Your Honor.

[00:13:13] Speaker 00:
I appreciate it.

[00:13:15] Speaker 02:
Mr. Dilger, you at the clerk's office wanted to note, save five minutes.

[00:13:22] Speaker 01:
I don't want to save.

[00:13:23] Speaker 01:
I won't be saving anything.

[00:13:24] Speaker 01:
No cross appeal.

[00:13:24] Speaker 01:
Yeah, no cross appeal.

[00:13:26] Speaker 01:
I realize that as I walked away, and she'd already gone back in.

[00:13:29] Speaker 01:
But no rebuttal from me.

[00:13:31] Speaker 03:
Let me tell you what my problem is here, OK?

[00:13:35] Speaker 03:
As I understand clock spring in these other cases, that for something to qualify as an experimental use, it has to be either to test the claim limitations, which is not the situation here, or to determine whether the device would work for its intended purpose.

[00:13:55] Speaker 03:
I think you're quite correct that the first use here in California was experimental.

[00:14:01] Speaker 03:
I don't think there's much of an argument to suggest otherwise.

[00:14:08] Speaker 03:
My concern is with the second use, which was still outside the grace period, and the testimony that I guess it was the inventor gave at beginning of page 2537 of the Joint Appendix in which

[00:14:23] Speaker 03:
he said after the first experimental use, he could have filed his patent application, but that he didn't.

[00:14:34] Speaker 03:
But then he seems to say that the reason that he didn't file the application and conducted the second experiment was for commercial purposes, rather than to test the device to see whether it worked for its intended purpose.

[00:14:50] Speaker 03:
And he says that

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repeatedly on 27, 37, and 38.

[00:14:55] Speaker 03:
He's asked, all these factors you're talking about, these were all commercial issues for developing a device correct.

[00:15:03] Speaker 03:
And he says, correct.

[00:15:05] Speaker 03:
And that happens on more than one place there.

[00:15:09] Speaker 03:
So if, in fact, this was testing for commercialization, it wouldn't qualify as an experimental use.

[00:15:18] Speaker 03:
And how do you deal with that testimony?

[00:15:23] Speaker 01:
Well, there is a case actually just directly on point here.

[00:15:27] Speaker 01:
So there's actually three tests.

[00:15:29] Speaker 01:
There is the first two Fulton tests.

[00:15:32] Speaker 01:
I'm not including the parking lot.

[00:15:34] Speaker 02:
George Dyke is asking about this testimony.

[00:15:37] Speaker 01:
Yeah.

[00:15:38] Speaker 01:
This is on page, it says 2737.

[00:15:41] Speaker 03:
25, 37, 38, and 39.

[00:15:44] Speaker 03:
And I believe it's testimony of the inventor.

[00:15:50] Speaker 02:
That's important.

[00:15:51] Speaker 02:
That's the weakness of your case.

[00:15:56] Speaker 02:
I would think he would have had that in mind.

[00:15:58] Speaker 01:
So the question is, is it ready for patenting?

[00:16:01] Speaker 01:
Is whether he's saying, is it ready for patenting, or could he file that?

[00:16:03] Speaker 01:
He said yes.

[00:16:05] Speaker 01:
He said you already had the concept in mind.

[00:16:06] Speaker 03:
But the problem is, he's being as, why did you do the second experiment?

[00:16:11] Speaker 03:
And he doesn't say, I still needed to do testing to see that it would work for its intended purpose.

[00:16:16] Speaker 03:
What he says instead,

[00:16:18] Speaker 03:
is there were commercialization issues, and that was the purpose of the second testing.

[00:16:23] Speaker 03:
And to do testing for commercial purposes that appears under the cases does not qualify as an experimental use.

[00:16:33] Speaker 01:
I think that was in the questioning attorney.

[00:16:36] Speaker 01:
He said there was commercial issues.

[00:16:37] Speaker 03:
Well, he agreed with it.

[00:16:39] Speaker 01:
Is this correct?

[00:16:39] Speaker 01:
He's an engineer.

[00:16:41] Speaker 03:
I don't think he's... He's got to answer the question.

[00:16:43] Speaker 03:
We've got to deal with the record that's in front of us.

[00:16:45] Speaker 03:
You can't say that he didn't

[00:16:47] Speaker 03:
agree with it when he says correct?

[00:16:50] Speaker 01:
Okay.

[00:16:51] Speaker 01:
Well, look, he's not looking at the case law versus commercial.

[00:16:55] Speaker 01:
When he says commercial issues, commercial issues, can you roll this thing out?

[00:16:59] Speaker 01:
That's a commercial issue.

[00:17:00] Speaker 02:
Can you roll that out to a population of... In other words, commercial issues here relate to the purpose of the invention and for it being safe.

[00:17:09] Speaker 02:
Yeah, being safe.

[00:17:10] Speaker 02:
He didn't draw in any money on that.

[00:17:13] Speaker 02:
Excuse my last one.

[00:17:14] Speaker 02:
He didn't derive money from

[00:17:17] Speaker 01:
No, he's not saying, look, I need to start making money.

[00:17:21] Speaker 03:
But what he's saying is, I did this additional, the second testing in California to see whether I could commercialize the thing.

[00:17:29] Speaker 03:
And as I understand the cases, the testing for purposes of determining whether it would be a good product or whether it would sell is not experimental use.

[00:17:39] Speaker 03:
It has to be testing to determine whether it would work for the intended purpose.

[00:17:44] Speaker 03:
He doesn't say commercialize.

[00:17:45] Speaker 01:
He's not the person I'm looking at.

[00:17:47] Speaker 03:
He does.

[00:17:47] Speaker 03:
He says all of these factors you're talking about, those were all commercial issues for developing a device, correct?

[00:17:53] Speaker 03:
He says correct.

[00:17:55] Speaker 01:
Well, that's much different than I needed to commercialize it.

[00:17:59] Speaker 01:
These are commercial issues.

[00:18:01] Speaker 01:
But I think the inventor is looking at that as, hey, are we able to roll this out to a population?

[00:18:08] Speaker 01:
I don't think that this is, can you commercialize it?

[00:18:12] Speaker 01:
That's a much different term.

[00:18:13] Speaker 01:
than a commercial issue, a commercial issue to an engineer.

[00:18:17] Speaker 01:
But we all know how engineers interpret things, and especially engineers in a deposition.

[00:18:21] Speaker 02:
Isn't your answer also that this was evaluated by a jury, and that's what juries are supposed to do, evaluate testimony?

[00:18:30] Speaker 01:
This is exactly right.

[00:18:31] Speaker 01:
We have numerous individuals saying that, look, we wanted to make sure that we had it on multiple intersections that it would work.

[00:18:40] Speaker 03:
Uh, on the second, uh, the second, um, and he says on line 24 on 2538, he says, then you, you, and then you demonstrated that you could make it work in January of 2002.

[00:18:52] Speaker 03:
That's before this second, uh, uh, uh, experiment.

[00:18:57] Speaker 03:
He says, right.

[00:18:58] Speaker 03:
And your witness says, yes.

[00:19:02] Speaker 03:
Demonstrated that you could make it work in January of 2002.

[00:19:06] Speaker 03:
And he says, yes.

[00:19:09] Speaker 01:
Make it work.

[00:19:11] Speaker 01:
is much different than make it work for its intended purpose.

[00:19:16] Speaker 01:
Make it work means I can flip a switch and it lights up.

[00:19:21] Speaker 01:
That's making it work.

[00:19:23] Speaker 01:
Stretching out two things across a parking lot is making it work.

[00:19:28] Speaker 01:
Making it work in a conduit filled with water, sand, and mud and sending digital data signals.

[00:19:36] Speaker 01:
I need to describe a little something.

[00:19:38] Speaker 01:
There is, if I walk over to that wall and flip the light

[00:19:41] Speaker 01:
You're just sending power to the light.

[00:19:44] Speaker 01:
You flip it on.

[00:19:45] Speaker 01:
I can have that cord go a mile and flip it.

[00:19:49] Speaker 01:
It's going to go on.

[00:19:49] Speaker 01:
Why?

[00:19:50] Speaker 01:
Because power is pretty strong.

[00:19:52] Speaker 01:
It's durable.

[00:19:53] Speaker 01:
It's not going to have a whole lot of problems because of interference.

[00:19:57] Speaker 01:
When you're sending digital data, it's a much different ballgame.

[00:20:01] Speaker 01:
And that's digital data that is in instructions in digital form.

[00:20:05] Speaker 03:
The problem is that twice here, he says, in January 2002, after the first experiment, I knew that it worked.

[00:20:13] Speaker 01:
He says that twice.

[00:20:15] Speaker 01:
And John McGaffey said exactly the contrary.

[00:20:20] Speaker 01:
We were not.

[00:20:22] Speaker 01:
Who's John McGaffey?

[00:20:22] Speaker 01:
He's the president of Polara.

[00:20:25] Speaker 01:
There is a reams of testimony, including from this individual.

[00:20:29] Speaker 01:
Where's the reams of testimony for the contrary?

[00:20:31] Speaker 01:
multiple intersections 2234 talking about the number of intersections 2243 it's imperative that you test a system and it's true where are you I'm at 2234 and line 22

[00:21:02] Speaker 01:
that you test a system in its true live working environment to make sure that it works.

[00:21:07] Speaker 02:
Please look back to the microphone because you didn't record it.

[00:21:09] Speaker 02:
Oh, my phone.

[00:21:10] Speaker 01:
I'll bring it over.

[00:21:11] Speaker 01:
To make sure that it works the way it's supposed to.

[00:21:16] Speaker 03:
He did that with the first test.

[00:21:18] Speaker 03:
What was he talking about, the necessity for the second test?

[00:21:20] Speaker 01:
No, no, no.

[00:21:21] Speaker 01:
The first test was the... He's talking about making it work.

[00:21:27] Speaker 01:
He's talking about the parking lot.

[00:21:29] Speaker 01:
stretching it out in a parking lot and flipping a button and making sure that the light went on.

[00:21:36] Speaker 01:
2240.

[00:21:43] Speaker 01:
Every intersection has different equipment, different lengths of wire.

[00:21:47] Speaker 01:
I'm at line 25, spreading into 2241.

[00:21:52] Speaker 01:
And based on the facts, we knew that noise, electrical noise from high voltage was a problem and a concern.

[00:21:59] Speaker 01:
We felt that it would be necessary to test on more than one, ideally three, intersections.

[00:22:06] Speaker 01:
I want to address something that was said.

[00:22:08] Speaker 01:
I believe you said it, Judge Scheich, which you weren't testing the claim elements.

[00:22:14] Speaker 01:
That's not true.

[00:22:16] Speaker 01:
What was tested and what was changed in both instances, in both the first intersection, there was a change made.

[00:22:23] Speaker 01:
They had a change from, I believe it was a transformer to an inductor.

[00:22:27] Speaker 01:
It might have been the, I'm sorry.

[00:22:28] Speaker 01:
I think it was an inductor to a transformer, was because the digital data signal, which is explicitly part of the plan.

[00:22:34] Speaker 03:
What was the change that was made after the second?

[00:22:37] Speaker 01:
They had to change, they had to basically pump up the volume on the second one because this was a three intersection because the way the streets came together, it was a different configuration.

[00:22:50] Speaker 01:
And because of that, they had to adjust that as well.

[00:22:54] Speaker 01:
They had to do it kind of, this was an in the cabinet adjustment.

[00:22:57] Speaker 01:
They didn't pull it out.

[00:22:58] Speaker 01:
But they went and they adjusted it.

[00:23:01] Speaker 01:
And then the final piece of the puzzle was, hey, and this is where Manville sales comes directly on point.

[00:23:07] Speaker 01:
Manville sales said, the language from the case, no basis for confidence that this would work.

[00:23:16] Speaker 01:
No basis for confidence this would work.

[00:23:18] Speaker 01:
And prior to testing in the winter, it's on the street, it's a light thing.

[00:23:24] Speaker 01:
They've got to make sure that it can actually withstand

[00:23:27] Speaker 01:
being on the street exposed to the elements.

[00:23:31] Speaker 01:
There was no basis.

[00:23:32] Speaker 01:
Making it work doesn't mean making it work not once, not twice, but a thousand times.

[00:23:39] Speaker 02:
Well, then, if we agree with you, how long does one have to test?

[00:23:45] Speaker 02:
One can't test for 10 years because the system's going to be around for 20 years.

[00:23:50] Speaker 01:
Well, I think in the city of Lyth, they believe the period was something like four years.

[00:23:56] Speaker 01:
You know, that is an issue for the jury.

[00:23:59] Speaker 01:
That is an issue for the jury, where the jury can come and say, you took too long.

[00:24:03] Speaker 01:
Look at all this, you took too long.

[00:24:06] Speaker 01:
But what the city of Elizabeth says is, was this a bona fide effort to test an invention?

[00:24:13] Speaker 01:
Was this a bona fide?

[00:24:14] Speaker 01:
If it wasn't a bona fide effort to test invention, I don't know what it was.

[00:24:19] Speaker 01:
He talked a little bit about a marketing letter, so there's a quid pro quo.

[00:24:23] Speaker 01:
If you look at the quid pro quo,

[00:24:25] Speaker 01:
This letter, it was, we will install it.

[00:24:30] Speaker 01:
We will maintain it.

[00:24:31] Speaker 01:
We will de-install it.

[00:24:33] Speaker 01:
And at the end of it, we'll install a new one, all at no charge.

[00:24:37] Speaker 01:
So not only did they not get paid for it, they installed the first system, and they said, no problem.

[00:24:42] Speaker 01:
Thanks for your help, City of Fullerton.

[00:24:45] Speaker 01:
We'll install a second system.

[00:24:48] Speaker 01:
Cobra Electric, there's all these documents saying, we're still testing.

[00:24:52] Speaker 01:
This is the Canada.

[00:24:53] Speaker 04:
Can I just turn you briefly to the enhanced damages that will work?

[00:24:56] Speaker 04:
I'm sorry.

[00:24:57] Speaker 04:
The enhanced damages that will work.

[00:24:59] Speaker 04:
So let's just set aside the jury's verdict on Wilfrid Simpson.

[00:25:03] Speaker 02:
OK.

[00:25:03] Speaker 04:
Correct.

[00:25:04] Speaker 04:
It seems to me that there's still a potential problem here in that this public use defense is certainly a very good argument, or at least I think it is.

[00:25:14] Speaker 04:
I mean, we spent most of our morning on whether this is a valid public use or not.

[00:25:19] Speaker 04:
Where did the district court properly take into account the strength of the public use argument before awarding enhanced damages?

[00:25:28] Speaker 01:
Well, there's the timing issue.

[00:25:30] Speaker 01:
This is a litigation development.

[00:25:33] Speaker 04:
Sure, but he still has to take it into account.

[00:25:36] Speaker 04:
Willful infringement does not automatically lead to enhanced damages.

[00:25:40] Speaker 01:
Certainly.

[00:25:41] Speaker 01:
But the judge went through the read factors.

[00:25:44] Speaker 04:
I'm asking you, where in the district court's opinion did it take into account the strength of the public use defense in determining whether enhanced damages were proper?

[00:25:56] Speaker 01:
Well, he clearly took into account.

[00:25:58] Speaker 04:
Where?

[00:25:59] Speaker 01:
Well, I'm not in the actual enhanced damages portion.

[00:26:04] Speaker 01:
I don't recall this argument we raised.

[00:26:06] Speaker 01:
I didn't look specifically at it.

[00:26:07] Speaker 01:
I don't recall him saying in the enhanced damages work.

[00:26:11] Speaker 04:
We conclude that the district court didn't even consider his public use defense in determining whether enhanced damages was appropriate or not.

[00:26:20] Speaker 04:
Shouldn't we remand?

[00:26:21] Speaker 01:
No, not at all.

[00:26:22] Speaker 01:
The district court was sitting there every day during the whole public use.

[00:26:27] Speaker 04:
But if he ignored the public use defense, then it was improper.

[00:26:32] Speaker 04:
Well, then show me where he considered it.

[00:26:37] Speaker 01:
I don't believe there's a requirement that in enhancing damages,

[00:26:40] Speaker 01:
you specifically address in the section called Enhancing Damages every single defense.

[00:26:46] Speaker 04:
Sure, but we have to understand his opinion.

[00:26:49] Speaker 04:
And if we think this is a really, really strong defense and that it would have been air not to properly consider it, and if we can't tell whether he considered or not, then we should remand it.

[00:26:59] Speaker 01:
Well, he certainly considered it at length.

[00:27:02] Speaker 01:
He considered the defense, obviously, right?

[00:27:04] Speaker 01:
In his Rule 51.

[00:27:05] Speaker 01:
He seems to say that it was a weak defense.

[00:27:08] Speaker 01:
I think that's correct.

[00:27:10] Speaker 03:
Well, if we disagree with that, and we think it's not a weak defense or a strong defense, even if it didn't prevail, then don't we have to send it back up?

[00:27:20] Speaker 01:
I don't think so.

[00:27:21] Speaker 01:
The question is not whether you disagree with him.

[00:27:24] Speaker 01:
The question is whether he abused his discretion.

[00:27:26] Speaker 03:
The question is whether he made a mistake in making his determination.

[00:27:32] Speaker 03:
If he made a mistake,

[00:27:35] Speaker 03:
then you have to set it aside, right?

[00:27:37] Speaker 01:
No.

[00:27:37] Speaker 01:
Not under an abusive discretion standard.

[00:27:40] Speaker 03:
No?

[00:27:41] Speaker 03:
Really?

[00:27:41] Speaker 03:
Not under an abusive discretion standard.

[00:27:43] Speaker 03:
See, I thought there were plenty of cases that say, even under an abusive discretion standard, if the district court makes a mistake in the analysis and it's not harmless error, it has to go back.

[00:27:57] Speaker 01:
The last part I think you said.

[00:27:59] Speaker 01:
Here, the idea that

[00:28:03] Speaker 01:
There is one factor that you think he weighed too little, or I guess he weighed it too little, I think is the argument.

[00:28:12] Speaker 01:
He did not weigh that defense sufficiently.

[00:28:15] Speaker 04:
Well, let me ask you this, aesthetically.

[00:28:17] Speaker 04:
If he didn't weigh it at all, if he just ignored the public views, it would be an abuse of discretion, right?

[00:28:25] Speaker 01:
I think if he completely did not even pay attention to a defense raised by that side, yes.

[00:28:31] Speaker 04:
But in this case, I don't think there's anything you can look... If we disagree with him on the strength of the defense, you think it's not an abuse of discretion?

[00:28:38] Speaker 01:
It's not an abuse of discretion in that.

[00:28:40] Speaker 01:
I mean, that is kind of the epitome of discretion.

[00:28:43] Speaker 01:
Hey, I think I would have judged who's weighed this more heavily.

[00:28:49] Speaker 01:
I would have weighed this issue more heavily.

[00:28:52] Speaker 04:
That's... I mean, the problem with his decision, at least for me, is

[00:28:56] Speaker 04:
He goes through and spends a lot of time explaining why the jury is correct on willful infringement.

[00:29:02] Speaker 04:
And it's not going to overturn that.

[00:29:04] Speaker 04:
And then almost proceeds automatically to award enhanced damages without considering under halo

[00:29:09] Speaker 04:
whether there are other reasons that would prevent a board.

[00:29:13] Speaker 04:
And if that is truly the case, I don't think there's enough here to find evidence.

[00:29:18] Speaker 04:
That's truly the case.

[00:29:19] Speaker 04:
That's legal error, isn't it?

[00:29:20] Speaker 04:
Willful damages does not automatically, or willful infringement does not automatically require enhanced damages.

[00:29:27] Speaker 04:
That is true.

[00:29:27] Speaker 01:
His opinion comes pretty close to that.

[00:29:30] Speaker 01:
No, I wouldn't say that.

[00:29:31] Speaker 01:
I think he handled, as you saw, a very exhaustive Rule 50 motion.

[00:29:36] Speaker 04:
Not on enhanced damages, though.

[00:29:38] Speaker 04:
He certainly handled all the... He had a very exhaustive opinion on why the jury was right about willful infringement, and then he kind of just leaps to enhance damages.

[00:29:48] Speaker 01:
Well, he also had a lengthy discussion of the Rule 50 motion and the prior use defense, and goes through the clock screen factors and goes through each of them and finds that the clock... I mean, similar to the discussion earlier, that the clock screen factors overwhelmingly point to experimental use.

[00:30:09] Speaker 02:
Thank you, counsel.

[00:30:11] Speaker 02:
Speaking of clock spring, we have to look at this clock.

[00:30:14] Speaker 02:
It shows a red light.

[00:30:17] Speaker 02:
Let's hear a repuddle from Mr. Holland.

[00:30:23] Speaker 00:
Yes, Your Honor.

[00:30:23] Speaker 00:
Just very briefly, to go back to the issue that you were discussing with my opponent on the various factors, and I agree with Judge Hughes and all of you really about, I don't want the factors rewritten.

[00:30:34] Speaker 00:
I think they sometimes support each of us.

[00:30:36] Speaker 00:
The question, I think, in this case, especially with these very

[00:30:39] Speaker 00:
unique facts where you have this extremely long length of time, and you have no documentation to show that it even was experimental contemporaneous with the supposed experiments, I think that creates a very dangerous standard for anyone to be able to drive a truck through on any type of usage if this is allowed to be called public usage.

[00:30:56] Speaker 00:
So that's the concern I have is that there needs to be... You mean experimental usage?

[00:31:01] Speaker 00:
Correct, Your Honor.

[00:31:01] Speaker 00:
Correct.

[00:31:02] Speaker 00:
The idea that you can say this wasn't a public use even though we have all the factors met up ready for patenting and

[00:31:09] Speaker 00:
and reduce the practice because of this supposed experimentation.

[00:31:13] Speaker 00:
When you have no documentation, you have nearly three years, 33 months of usage before you go to the patent office.

[00:31:19] Speaker 00:
I think that's problematic as a standard.

[00:31:21] Speaker 00:
That's first.

[00:31:22] Speaker 00:
And then secondly, if I could just briefly on the HALO issue, I absolutely agree with Judge Hughes, as you might expect.

[00:31:29] Speaker 00:
I think that this is dangerously close to simply saying the jury was right on willfulness.

[00:31:34] Speaker 00:
Therefore, I'm going to multiply the damages by two and a half.

[00:31:37] Speaker 00:
I think the factors of halo are not nearly met here.

[00:31:40] Speaker 00:
We've outlined that substantially.

[00:31:41] Speaker 00:
There's no egregious nature here.

[00:31:43] Speaker 00:
There's no piracy.

[00:31:44] Speaker 00:
Opinions of counsel were sought.

[00:31:46] Speaker 00:
A lot of consultation was done.

[00:31:48] Speaker 00:
And to the judge's point, I don't think any of those were really considered.

[00:31:53] Speaker 00:
Judge McCormick's a very good judge.

[00:31:55] Speaker 00:
I've been in front of him in other proceedings.

[00:31:56] Speaker 00:
I think he was trying hard.

[00:31:57] Speaker 00:
But unlike this panel and this court, he is not an expert in patent law.

[00:32:01] Speaker 00:
And so I think if this panel disagrees with his finding, that's meaningful.

[00:32:05] Speaker 00:
This was his very first patent case.

[00:32:07] Speaker 00:
And so for him to say, I think that this is, you know, public use is not there and therefore I'm going to just discount it, I don't think it's appropriate and I think it's perfectly appropriate for this panel for revamp for at least the issue of enhanced damages to be tried again.

[00:32:21] Speaker 02:
Thank you.