[00:00:21] Speaker 00:
Next case is SAP America versus Willogic, 2017, 1176.

[00:00:37] Speaker 00:
Mr. Lanier, when you're ready.

[00:00:46] Speaker 01:
Good morning.

[00:00:46] Speaker 01:
Is the court good morning?

[00:00:48] Speaker 01:
Reading the district court's opinion, that issue here, one would not know that Wellogic had accused the prior art of infringement of 60 claims after being told by the patent office that that prior art raised a substantial new question of patentability with respect to those claims.

[00:01:05] Speaker 03:
And there are, depending on whether you count the 480 patent either, 59 claims to which what you just said did not apply or 68 claims.

[00:01:15] Speaker 03:
to which it doesn't apply.

[00:01:16] Speaker 03:
It's a 65.

[00:01:18] Speaker 03:
And you did not, in your attorney's fees application, present to the district court, and you certainly don't present here, anything about the specifics of the patent claims.

[00:01:33] Speaker 03:
You made an argument that said, look what they alleged as to roughly half of the claims.

[00:01:38] Speaker 03:
Look what the PTO ultimately decided.

[00:01:40] Speaker 03:
And the district court said,

[00:01:42] Speaker 03:
That's not enough to say it's exceptional.

[00:01:45] Speaker 03:
Go away.

[00:01:47] Speaker 03:
Why is that an abuse of discretion?

[00:01:49] Speaker 03:
You did not show the district court anything about the specifics of the claims and why it was objectively baseless or anything like objectively baseless for these claims to have been asserted.

[00:02:04] Speaker 01:
Your Honor, three reasons.

[00:02:06] Speaker 01:
First of all, the district court clearly erred in finding that this case was not exceptional because it didn't consider the entire totality of the circumstances.

[00:02:14] Speaker 01:
A variety of other facts in addition to the weakness of the patent claims.

[00:02:18] Speaker 01:
It should have done all of that.

[00:02:19] Speaker 01:
The patent claim issue is one of the issues that we presented.

[00:02:23] Speaker 03:
What else?

[00:02:23] Speaker 01:
What else is there?

[00:02:25] Speaker 01:
First, the extraordinary result.

[00:02:27] Speaker 01:
Wellogic and arguing against this day said the odds are that

[00:02:32] Speaker 01:
claims will survive.

[00:02:33] Speaker 01:
It would be unlikely, improbable, et cetera.

[00:02:36] Speaker 01:
That claims would survive.

[00:02:38] Speaker 01:
It was wrong.

[00:02:39] Speaker 01:
But it was wrong in a way that invoked the guidance of the Supreme Court in off day, which is that some cases are so exceptionally weak that they stand out from others.

[00:02:47] Speaker 03:
Right.

[00:02:47] Speaker 03:
But you can't tell.

[00:02:48] Speaker 03:
I have difficulty how you can say that the district court abused its discretion in saying, I don't see the exceptional weakness here based solely on the fact

[00:03:02] Speaker 03:
that the patent owner lost in the PTO.

[00:03:05] Speaker 01:
We don't think that our argument does not depend solely on the patent owner's loss in the PTO.

[00:03:11] Speaker 01:
We do think that is a relevant factor and that the extraordinary result demonstrates the exceptional weakness of the claims.

[00:03:18] Speaker 01:
Without further analysis, the district court was aware of what the back and forth was.

[00:03:22] Speaker 01:
It received regular reports.

[00:03:24] Speaker 01:
But to your honor's point, it's not just that argument.

[00:03:26] Speaker 01:
We do think it's important, but it's not just that.

[00:03:29] Speaker 01:
It was the fact that

[00:03:30] Speaker 01:
The prior art was accused, which... For half the claims, but not for the other half.

[00:03:35] Speaker 01:
That's right, Your Honor.

[00:03:36] Speaker 01:
But again, this Court's argument is very clear.

[00:03:39] Speaker 01:
Not every single argument need to have been bad for there to be a finding of an exceptional case.

[00:03:44] Speaker 03:
This Court's recent decision in Homeland House was... Your argument is not what's sufficient for there to be a finding, but what is sufficient to compel a finding.

[00:03:54] Speaker 01:
That's correct, Your Honor.

[00:03:55] Speaker 03:
And we think... Have we ever come close to saying anything like that?

[00:03:58] Speaker 01:
Absolutely, Your Honor, in a few different cases.

[00:04:00] Speaker 01:
For example, in Homeland Housewares.

[00:04:02] Speaker 01:
That's a recent decision of this court cited in the party's papers.

[00:04:06] Speaker 01:
The court in that case, the district court, bound against the prevailing party on invalidity, but found for the prevailing party on non-infringement.

[00:04:17] Speaker 01:
So the prevailing party below didn't win on everything, but yet still the court properly concluded that there was an exceptional case in that circumstance.

[00:04:26] Speaker 03:
Did we look at the details of the claims and the claim construction and the arguments?

[00:04:31] Speaker 01:
In some of those cases, this court's precedent has done that.

[00:04:34] Speaker 01:
They've looked at the details of the arguments.

[00:04:36] Speaker 01:
And again, we emphasize that with respect to the accusation of the prior art, that doesn't require much detailed analysis, requires none.

[00:04:44] Speaker 01:
There's no dispute that Wellogic's accused what it knew to be prior art.

[00:04:49] Speaker 01:
It had worked with the product.

[00:04:50] Speaker 01:
It didn't disclose any prosecution.

[00:04:52] Speaker 01:
For half the claims.

[00:04:52] Speaker 01:
For half of the claims.

[00:04:53] Speaker 01:
Absolutely.

[00:04:54] Speaker 03:
So they could have proceeded in this litigation, put aside that particular argument, as to the other half of the claims.

[00:05:00] Speaker 01:
It would be, in that case, then the case would be different.

[00:05:04] Speaker 01:
And our argument might be different.

[00:05:05] Speaker 01:
But that's why the Supreme Court emphasized we consider the totality of the circumstances here.

[00:05:10] Speaker 02:
We're talking about the R3 software?

[00:05:12] Speaker 02:
Yes.

[00:05:13] Speaker 02:
OK.

[00:05:14] Speaker 02:
Isn't there different versions of the R3 software, so that maybe by the time the

[00:05:19] Speaker 02:
infringement contention, it was a modified version of the R3 software compared to the deemed prior art version of R3 software?

[00:05:29] Speaker 01:
That's a theoretical possibility, but two responses to that, Your Honor, other than the fact that it's a theoretical possibility.

[00:05:35] Speaker 01:
First, Wellogic's accused not just R3, but all its subsequent versions.

[00:05:40] Speaker 01:
And second, in accusing the known prior art and the other versions under different names, it was called ECC and similar things in the future.

[00:05:49] Speaker 01:
If that prior art, if it was prior art that rendered the patent invalid, and then that doesn't change anything else, even if there were other products.

[00:05:59] Speaker 01:
So it accused the specific product that was prior art, and it accused the other subsequent versions.

[00:06:05] Speaker 02:
Did it accuse it as modified to be incorporated with other software products?

[00:06:13] Speaker 01:
What Wellogix did was two things.

[00:06:15] Speaker 01:
It did an interrogatory response and then infringement contentions that we

[00:06:19] Speaker 01:
subsequently had to move for a more detailed statement of the infringement contingents.

[00:06:23] Speaker 01:
That motion was never ruled on because the case was staked.

[00:06:26] Speaker 01:
But what it did in the interrogatory response was it gave a long list of software products, over 100 software products that were accused, including R3, for example, just by that name.

[00:06:37] Speaker 01:
Then later it did infringement contentions that read against the old R3, exactly the way R3 read against the claims, a subset of the claims that were at issue.

[00:06:49] Speaker 01:
Does that address your Honor's question?

[00:06:50] Speaker 03:
OK.

[00:06:51] Speaker 01:
Thank you, Your Honor.

[00:06:52] Speaker 01:
So Judge Toronto, turning back to your questions, again, we emphasize three things.

[00:06:57] Speaker 01:
First, that with respect to those claims, the guidance from this court is consistent.

[00:07:03] Speaker 01:
The Kartner case cited in our papers is clear.

[00:07:06] Speaker 01:
That accusing the prior art is, in fact, something that should be considered in the determination of an exceptional case.

[00:07:12] Speaker 01:
And how we know the district court abused its discretion

[00:07:15] Speaker 01:
is because it didn't even mention that fact in its opinion below.

[00:07:19] Speaker 01:
What the district court said in its opinion was SAP says that WellLogic should have known about the prior art.

[00:07:27] Speaker 01:
That's a true statement, but that wasn't actually our argument below, and that's not the full extent of the facts that the district court should have considered.

[00:07:35] Speaker 01:
The district court should have considered that it accused the prior art after being put on notice by the patent office.

[00:07:45] Speaker 01:
going beyond the R3.

[00:07:46] Speaker 03:
After having been put on notice by the patent office?

[00:07:48] Speaker 01:
That the R3 raised a substantial new question of patentability with respect to two of the patents.

[00:07:54] Speaker 03:
Right.

[00:07:55] Speaker 03:
But the substantial question is not a determination about what the result will be of the full, is this a re-exam or an IPR?

[00:08:04] Speaker 01:
These were re-exams.

[00:08:05] Speaker 03:
Right.

[00:08:06] Speaker 01:
It's not the final answer by any means.

[00:08:09] Speaker 01:
And it ultimately, as Wellogic points out, ultimately the re-exams invalidated

[00:08:14] Speaker 01:
one claim is not a patent based on archery.

[00:08:16] Speaker 03:
Does the difference in the burden of proof make any difference?

[00:08:21] Speaker 03:
That is, the board gets both on re-exam and IPRs to say, this is unpatentable by a preponderance.

[00:08:32] Speaker 03:
Does that make it, let's use the word frivolous, objectively baseless, to assert the claim in litigation where, in order for you to have one on the same invalidity or unpatentability argument

[00:08:44] Speaker 03:
In district court, you would have had to meet a higher standard.

[00:08:47] Speaker 01:
We don't think that the court needs to determine whether the different standards of proof played in at all here.

[00:08:52] Speaker 01:
And that's because our argument is not simply that because they lost, this case was exceptional.

[00:08:59] Speaker 01:
That's part of the argument, because as the Supreme Court guides us, that is evidence of the exceptional weakness.

[00:09:05] Speaker 01:
The point is that having been put on notice of an issue raised over disagreement, raised by the Patent Office,

[00:09:13] Speaker 01:
Wellogic then accused not only R3, but 100 other products of infringement of 120 claims with demonstrating no thought, no care, no concern, and doing nothing in response to the fact that the patent office had raised this issue.

[00:09:29] Speaker 01:
So again, our argument is not that because the patent office identified a question that it later resolved on one patent completely in favor of SAP.

[00:09:38] Speaker 01:
that they were legally precluded from asserting it.

[00:09:40] Speaker 03:
What was going on in this litigation, in the patent case that we're talking about, from the moment that the re-exam was initiated by the PTO, not by the request for it?

[00:09:57] Speaker 01:
Sure.

[00:09:57] Speaker 01:
There were several different re-examination dates.

[00:10:00] Speaker 01:
So in the months leading, that came at different points over a few weeks or a few months, in the few months leading up to

[00:10:06] Speaker 01:
the January 4th stay of the case, January 4th, 2011, I believe.

[00:10:10] Speaker 01:
In those months, the parties were engaged in the things that parties are in a patent case, specifically in this case.

[00:10:16] Speaker 01:
We were preparing invalidity contentions required under the court's local rules, engaged in discovery on all of the claims and damages and non-infringement, doing all of the standard activities of a patent case up until the time that the case was staked.

[00:10:30] Speaker 03:
And when were the last of the re-exam initiation decisions?

[00:10:35] Speaker 01:
I believe that was in October of 2010, Your Honor.

[00:10:38] Speaker 01:
So from the last until the actual stay, our motion was filed, I believe, in November, and I believe it was decided in January, or the order issued in January.

[00:10:46] Speaker 03:
So there was a couple of month periods from the last.

[00:10:49] Speaker 03:
And that's the period of continued litigation for which you're seeking fees?

[00:10:54] Speaker 01:
No, Your Honor.

[00:10:55] Speaker 01:
We are seeking fees for the activity on the patent case, all of it up to January of 2011.

[00:11:02] Speaker 03:
And if he also even, even all of their activity before, as you say, the PTO put them on notice.

[00:11:08] Speaker 01:
That's correct.

[00:11:09] Speaker 01:
Your honor.

[00:11:09] Speaker 01:
That's right.

[00:11:10] Speaker 01:
That's right.

[00:11:11] Speaker 01:
And to be very clear, we do not argue that that fact alone is a sufficient basis to compel a finding, but we do believe it compels this court to conclude that the district court clearly aired because it didn't even weigh that fact.

[00:11:26] Speaker 01:
It didn't even mention that fact.

[00:11:28] Speaker 01:
as well as the entire totality of the evidence, all the other things that we identified in our pleadings.

[00:11:33] Speaker 01:
I note that I'm into my rebuttal time.

[00:11:34] Speaker 01:
I had wanted to save a few minutes, unless Your Honors would like me to.

[00:11:37] Speaker 00:
You can continue, or you can save it all, as you choose.

[00:11:40] Speaker 01:
I'd like to save it, if I may, Your Honors.

[00:11:42] Speaker 00:
Thank you.

[00:11:46] Speaker 00:
Mr. Melkonian.

[00:11:52] Speaker 04:
May it please the court, Rafi Melkonian, for the happily law logic.

[00:11:57] Speaker 04:
Your Honours, this is a case where SAP initiated this part of the litigation.

[00:12:02] Speaker 04:
It sued Wellogix for declaratory judgment with respect to patent infringement.

[00:12:08] Speaker 04:
Wellogix did not sue SAP over the patent until it was sued.

[00:12:12] Speaker 04:
And where Wellogix prevailed in other parts of this litigation, I want to be clear about that because this is not the kind of exceptional litigation where Wellogix was trying to hold people up for money or anything like that.

[00:12:24] Speaker 04:
We prevailed against Accenture, the co-defendant in this case, in a trade secrets misappropriation matter and won a verdict of $40 million, which we defended in the Fifth Circuit and in the Supreme Court.

[00:12:38] Speaker 04:
So this is not that kind of exceptional case where a small company is trying to green mail a large company in litigation.

[00:12:47] Speaker 04:
And the district court reasonably exercised its ample discretion to find that this case was not exceptional.

[00:12:53] Speaker 04:
This is a highly experienced district judge.

[00:12:55] Speaker 04:
He lived with the case, and he used his discretion that we see in the opinion.

[00:13:00] Speaker 04:
And that judgment should be affirmed.

[00:13:03] Speaker 04:
My plan is to address some of SAP's specific claims about what supposedly went wrong below.

[00:13:09] Speaker 04:
But of course, wherever the court wants to go, I'm prepared to answer those questions as well.

[00:13:15] Speaker 04:
I do want to start with one overarching point, though, that the district court did the multi-point analysis that's required in opting fitness.

[00:13:23] Speaker 04:
He lived with this case for six or seven years, I don't want to misstate it.

[00:13:27] Speaker 04:
He analyzed the totality of the circumstances.

[00:13:31] Speaker 04:
He looked at the objective unreasonableness of our positions or not.

[00:13:35] Speaker 03:
Did the district court mention the fact that you all accused a product of infringing that was a prior art product that ended up for half the claims in the PTO?

[00:13:52] Speaker 04:
I think the district court does mention that.

[00:13:56] Speaker 04:
He says in one sentence, I think it's on Appendix 7, I think he says, I hope I'm not wrong, that one of SAP's arguments is that we ignore the fact that R3 predated our patents.

[00:14:14] Speaker 04:
But let me answer that substantively as well.

[00:14:16] Speaker 04:
And it's the point Judge Chen made during the first argument, which is that

[00:14:22] Speaker 04:
The 1999 R3 software did predate our patents.

[00:14:27] Speaker 04:
But what we were accusing was the 2006 R3 software, post-2006, after our patents were filed.

[00:14:35] Speaker 04:
So the idea that we should have known that R3 necessarily anticipated all our patents is incorrect.

[00:14:45] Speaker 04:
I don't think that's correct, as a matter of the record.

[00:14:50] Speaker 02:
You accused R3 of infringing the patents, right?

[00:14:55] Speaker 02:
That's right.

[00:14:56] Speaker 02:
And the PTO granted re-exam requests, at least a couple of them, based on R3 raising a substantial new question of patentability.

[00:15:07] Speaker 04:
Yes, that's correct.

[00:15:09] Speaker 02:
So I guess the question is, why wouldn't that put you on high alert that R3, the very product you accused, is actually

[00:15:20] Speaker 02:
anticipatory or potentially anticipatory?

[00:15:24] Speaker 04:
Well, I think our argument was that the 1999 version of R3 was not anticipatory.

[00:15:30] Speaker 04:
Now, of course, we lost that argument, if we accept that, with respect to some of the claims.

[00:15:35] Speaker 04:
But our position was that by 2006, they had incorporated our inventions into their software and were thus infringing our patents.

[00:15:45] Speaker 04:
Now, again, we didn't win that argument, and I understand

[00:15:50] Speaker 04:
You know, it would have been better had we won them.

[00:15:52] Speaker 04:
But that doesn't make the case exceptional.

[00:15:54] Speaker 04:
It doesn't make an abusive discretion to have denied the exception.

[00:15:58] Speaker 03:
Can I just double check something?

[00:15:59] Speaker 03:
Yes, sir.

[00:16:00] Speaker 03:
When you talk about R3, you don't accuse a document.

[00:16:03] Speaker 03:
You accuse a product, right?

[00:16:04] Speaker 03:
Yes, it's a software product.

[00:16:06] Speaker 03:
In the re-exam, I assume that the PTO was talking about a document of some sort, a publication?

[00:16:12] Speaker 03:
They were talking, I believe, about the instruction manual.

[00:16:15] Speaker 03:
OK, that's a document, right?

[00:16:17] Speaker 03:
That's right.

[00:16:18] Speaker 03:
Did your accusation of infringement by an actual product that SAP made, used, sold, offered for sale, imported, whatever it is, corresponded to the 1999 instruction manual, if that's what the document was on which the re-exam was initiated?

[00:16:45] Speaker 04:
No.

[00:16:45] Speaker 04:
No, Your Honor, we were accusing the current

[00:16:48] Speaker 04:
R3 product at the time.

[00:16:50] Speaker 03:
Is there anything in the record that tells us whether there were changes between 1999 and 2006, or do we just not know?

[00:17:01] Speaker 04:
We don't know, but SAP's brief concedes that there are, by noting that there's been developments in the software.

[00:17:09] Speaker 04:
It changed its name.

[00:17:10] Speaker 04:
I think Mr. Lanier even said so just a few minutes ago.

[00:17:13] Speaker 04:
So it's not directly in the right.

[00:17:15] Speaker 04:
So the instruction manual presumably changed.

[00:17:17] Speaker 03:
Call it this other thing now.

[00:17:19] Speaker 03:
Yes.

[00:17:20] Speaker 04:
It changed.

[00:17:21] Speaker 04:
I'm sure there were developments.

[00:17:22] Speaker 04:
I mean, I was thinking about it last night.

[00:17:24] Speaker 04:
This is a software program where you're supposed to go to a well and do procurements.

[00:17:30] Speaker 04:
So the idea that a 1999 instruction manual would have anything to do with a 2006 instruction manual, where you're starting to get handheld computers that can go to the well, do the procurement of the new products,

[00:17:44] Speaker 04:
that they would look anything like seems to me quite unlikely.

[00:17:47] Speaker 04:
But it's not in the record that I can point to what exactly the developments were between 1999 and 2006 or 2007 or anything like that.

[00:17:57] Speaker 02:
Just to be clear, I don't see anywhere in the district court's decision that calls out the R3 situation from the re-exams.

[00:18:04] Speaker 02:
The A7, the judge does point to the fact that it was a lengthy re-exam process.

[00:18:13] Speaker 02:
So suggesting that it wasn't such a clear-cut, simple, open-and-shut process.

[00:18:22] Speaker 02:
But the judge doesn't actually address the question of whether it was entirely improper for you to allege that R3 is infringing when R3 was prior R. Your Honor, he doesn't use the word R3.

[00:18:38] Speaker 04:
I'm confident that in that opinions he summarizes

[00:18:44] Speaker 04:
SAP's argument about what we supposedly did wrong.

[00:18:47] Speaker 04:
I may have pointed you to the wrong page.

[00:18:48] Speaker 04:
I apologize for that.

[00:18:50] Speaker 04:
He doesn't use the word R3.

[00:18:51] Speaker 04:
He doesn't describe the whole argument in great detail, although I don't think he's required to.

[00:18:58] Speaker 04:
But he had that argument before him.

[00:19:00] Speaker 04:
They made that argument in their papers.

[00:19:03] Speaker 04:
And I think it's quite clear that he considered it.

[00:19:07] Speaker 04:
If I might address briefly some of the non-patent issues that our friends on the other side say,

[00:19:14] Speaker 04:
exemplify the sort of misconduct or the exceptional nature of the case.

[00:19:20] Speaker 04:
For one thing, just as a threshold matter, I don't think that any actions we took in the trade secrets part of this case can properly be considered as a matter of an exceptional case finding under Section 285.

[00:19:35] Speaker 04:
For one thing, most of the time the trade secrets litigation was not

[00:19:42] Speaker 04:
part of this same case.

[00:19:43] Speaker 04:
They were severed.

[00:19:44] Speaker 04:
And so I think just as a matter of procedural rules, you can't consider those in this matter.

[00:19:53] Speaker 04:
But even to the extent you do, I think it's perfectly safe for this court to assume for the matter of argument that you can consider them.

[00:20:02] Speaker 04:
Nothing went wrong in that litigation that would require an exceptional case finding.

[00:20:07] Speaker 04:
If you look at the briefs, our friends on the other side say that we

[00:20:12] Speaker 04:
sort of committed misconduct by raising a jurisdictional argument in the trade secrets litigation with respect to the forum selection clause.

[00:20:20] Speaker 04:
For example, we were right about that argument.

[00:20:25] Speaker 04:
The district court in that case lacked subject matter jurisdiction.

[00:20:28] Speaker 03:
No one disputes that.

[00:20:29] Speaker 03:
And that was solved by joining it to the patent case.

[00:20:32] Speaker 03:
That's right.

[00:20:32] Speaker 03:
And that's the basis on which the Fifth Circuit then on appeals rejected the jurisdictional challenge because they're

[00:20:41] Speaker 03:
There was now one case in which there was no need to rely on diversity.

[00:20:45] Speaker 04:
That's right.

[00:20:46] Speaker 04:
He reestablished federal question jurisdiction and then used supplemental jurisdiction to solve the jurisdictional problem.

[00:20:53] Speaker 04:
But our point always was, if we had not raised that to the district court, I think we would have been in quite a lot of trouble in the Fifth Circuit, because the Fifth Circuit would have found the jurisdictional problem.

[00:21:02] Speaker 04:
And so we did what we thought was best, which was raise it for the person who could fix it.

[00:21:06] Speaker 02:
And then we had a dispute.

[00:21:09] Speaker 02:
sought to sever the trade secret claim from the patent case.

[00:21:13] Speaker 04:
I think we did.

[00:21:14] Speaker 02:
That was you.

[00:21:14] Speaker 02:
And then after you successfully got that severed, you came back and said, oh, look, there's no jurisdiction over the trade secret case.

[00:21:23] Speaker 04:
Yes, that did happen.

[00:21:25] Speaker 04:
I'm not going to say that.

[00:21:27] Speaker 02:
So what are we supposed to make of that?

[00:21:30] Speaker 04:
I don't want to say it this way, but first of all, the reason he was found at the time

[00:21:38] Speaker 04:
it was found, the jurisdictional problem was that a power counsel got involved.

[00:21:42] Speaker 04:
And we did a jurisdictional analysis, as we always do when we're going up to any court of appeals, to make sure that there's jurisdiction.

[00:21:52] Speaker 04:
And that's when we discovered the issue.

[00:21:55] Speaker 04:
Why no one noticed it at the time the severance was granted?

[00:22:00] Speaker 04:
I can't honestly give you an answer to that.

[00:22:03] Speaker 04:
But I think people didn't think about the question

[00:22:07] Speaker 04:
The fact that you create a new case when you sever a case from another, and there needs to be an independent jurisdictional basis.

[00:22:15] Speaker 04:
And it was just a mistake that had to be fixed in one way or another.

[00:22:20] Speaker 04:
But the fact that we raised that at the time we did, I don't think implies anything bad about what we are doing.

[00:22:29] Speaker 04:
One other point.

[00:22:32] Speaker 04:
Our friends in their briefs, at least, I don't think Mr. Linear quite got to it, say that we relitigated certain issues in the two trade secret litigations.

[00:22:42] Speaker 04:
Again, we don't agree with that characterization of what happened.

[00:22:46] Speaker 04:
There was a 2008 trade secret litigation against WellLogix, excuse me, against SAP, where Judge Ellison, the first district judge, held that the forum selection clause applied in this NetWeaver agreement, and that the proper venue was Germany.

[00:23:02] Speaker 04:
We did not do anything after that decision was made.

[00:23:07] Speaker 04:
We did not sue SAP.

[00:23:10] Speaker 04:
And you didn't appeal that decision?

[00:23:11] Speaker 04:
We did not appeal that decision.

[00:23:13] Speaker 04:
Then they sued us in Texas.

[00:23:15] Speaker 03:
And then you asserted that by their suit, they've now waived the Forum Solution Clause, and that argument ultimately was rejected.

[00:23:22] Speaker 04:
It was rejected, but I thought it was a good faith argument.

[00:23:24] Speaker 04:
We thought it was a good faith argument.

[00:23:28] Speaker 04:
No court to deal with it said it was frivolous or meritless.

[00:23:32] Speaker 04:
They said we were wrong, and that happens.

[00:23:35] Speaker 04:
So in that second litigation, we did not try to relitigate the things Judge Ellison had decided.

[00:23:42] Speaker 04:
We did not try to relitigate whether the form selection clause was valid or whether it had been entered into as a contract of adhesion or anything like that, and we did not attack

[00:23:54] Speaker 04:
Judge Ellison's other main opinion, which was that it covers both SAP America and SAP AG.

[00:24:00] Speaker 04:
That would have been subject to the first appeal, which was not taken.

[00:24:04] Speaker 04:
So all we argued in that second go around, our main argument was there's been waiver.

[00:24:12] Speaker 04:
So I don't think that that could possibly be something the district court was required as a matter of his discretion to grant a exceptional case finding.

[00:24:25] Speaker 04:
Other than that, with respect to the patents, I want to make one additional point.

[00:24:31] Speaker 04:
Most of these patents had nothing to do with R3.

[00:24:34] Speaker 04:
So I think by the time we get to their reply brief, it's clear that their main arguments are about the 223 and 486 patents and the concept that R3 anticipated most of those claims.

[00:24:47] Speaker 04:
But the other four patents were broadly not about R3.

[00:24:50] Speaker 04:
And if you look carefully at the board decisions, which is all we have in the record,

[00:24:56] Speaker 04:
as far as I know.

[00:24:57] Speaker 04:
If you look carefully at the board decisions, what you'll see is arguments going both ways.

[00:25:02] Speaker 04:
We prevailed with respect to some legal arguments before the board.

[00:25:07] Speaker 04:
Ultimately, however, all of those claims are invalidated, but they had nothing to do with R3 or any other sort of obvious software that existed prior to our patent.

[00:25:22] Speaker 04:
I think when the judge considered all of them the totality of the circumstances, he was well within his discretion to say, look, this litigation was nothing special.

[00:25:32] Speaker 04:
It was a defeat for well logics, to be sure, but well within the normal bounds of litigation between two parties that have been fighting about important issues for many years.

[00:25:46] Speaker 04:
If the court has no further questions, I'll yield the balance of my time.

[00:25:50] Speaker 00:
Thank you, counsel.

[00:25:52] Speaker 00:
Mr. Lanier has some rebuttal time.

[00:25:56] Speaker 01:
Thank you, Your Honor.

[00:26:03] Speaker 01:
Your Honor, Mr. Melkonian started off by pointing out that SAP sued Wellogic in the patent case underlying this.

[00:26:10] Speaker 01:
Of no moment does this court's homeland housewares case confirms a DJ plaintiff can be a prevailing party entitled to recovery under 285.

[00:26:19] Speaker 01:
Mr. Melkonian then said it's important to emphasize

[00:26:22] Speaker 01:
that Wellogic actually prevailed.

[00:26:24] Speaker 01:
They sued Accenture, and they prevailed.

[00:26:26] Speaker 01:
But leaves out one critical thing that also was ignored by the district court, that in the decision confirming that they prevailed on various issues, the district judge hearing that case, trying those facts, specifically distinguished SAP from Accenture.

[00:26:41] Speaker 03:
Wellogic throughout this case specifically found that the German litigation is pending, I gather.

[00:26:47] Speaker 01:
The German litigation is pending.

[00:26:49] Speaker 01:
It's moved along since we updated the court and the record.

[00:26:52] Speaker 01:
I'll represent to the court that the German litigation has reached an outcome of what they call the first instance courts.

[00:27:00] Speaker 01:
SAP prevailed in defeating all of Wellogic's substantive claims.

[00:27:04] Speaker 01:
It was awarded statutory fees, but not the full amount of damages we sought.

[00:27:08] Speaker 01:
Wellogic's is appealing the substantive determination denying its claims against SAP, and we're appealing on the fees in Germany.

[00:27:15] Speaker 01:
It's a different set of fees, not what we're seeking here.

[00:27:17] Speaker 03:
And that's not, is that only

[00:27:19] Speaker 03:
patent claims or also includes things like the claims on which Wellogic's prevailed against Accenture?

[00:27:27] Speaker 01:
Those are precisely the claims on which Wellogic prevailed against Accenture.

[00:27:31] Speaker 01:
There are no patent claims.

[00:27:33] Speaker 01:
We had always said that the patent claims belonged in the US because they were covered by the net weaver forms election clause because the patent claims did not arise under the agreement that the torrent and trade secret claims did.

[00:27:46] Speaker 01:
And so the key point there is that the district judge hearing those facts did not even consider the fact that his colleague had actually found that SAP and Accenture were differently situated, something we don't hear about from Wellogic.

[00:27:59] Speaker 01:
But I do want to turn back to R3 because it has consumed a lot of our discussion here.

[00:28:03] Speaker 01:
Appendix page 9.

[00:28:05] Speaker 01:
Exactly, Your Honor.

[00:28:07] Speaker 01:
That's exactly where I was going to go.

[00:28:08] Speaker 03:
That is a reference to this argument.

[00:28:10] Speaker 03:
It doesn't quite say, and by the way, the red lines

[00:28:16] Speaker 03:
four and five, SAP's contentions that Wellogic should have known about SAP's prior art.

[00:28:26] Speaker 03:
That's a reference to this argument, although it doesn't expressly mention that the prior art of SAP is part of what you say was accused, maybe incorrectly.

[00:28:38] Speaker 01:
I believe that those words are correct, Your Honor, but I don't think that's the import.

[00:28:42] Speaker 01:
This Court should give that sentence and the phrasing of it for two reasons.

[00:28:45] Speaker 01:
The first is that that sentence reflects nothing about the actual underlying facts.

[00:28:51] Speaker 01:
It's not just that Wellogic should have known that some versions of the software predated it.

[00:28:55] Speaker 01:
It should have known it was prior, or it was familiar with the product.

[00:28:59] Speaker 01:
Secondly, that sentence, which is the only very broad, high-level reference to the issue at all, betrays no understanding of this court's guidance, again, in Kartner and many other cases,

[00:29:11] Speaker 01:
You don't accuse the prior art that's not generally acceptable.

[00:29:14] Speaker 01:
This isn't evolving law here.

[00:29:16] Speaker 03:
I thought it was interesting.

[00:29:18] Speaker 03:
What should I make of the fact that in your application for fees, as is fairly common, you have one section about litigation positions completely maritalist and then a separate section about unreasonable litigation conduct.

[00:29:35] Speaker 03:
At this point about R3 does not appear in the first.

[00:29:39] Speaker 03:
That is, it's not one of your two

[00:29:41] Speaker 03:
two points about why their position was objectively meritless.

[00:29:46] Speaker 03:
It's only one of the points made about why there's subjective bad faith.

[00:29:52] Speaker 01:
That's correct, Your Honor.

[00:29:52] Speaker 01:
That is how we presented.

[00:29:54] Speaker 01:
And I think we could potentially have argued it in both.

[00:29:56] Speaker 01:
I think we emphasized it in subjective bad faith to emphasize that subjective bad faith, while not required but available to support a finding, was present in this case.

[00:30:06] Speaker 01:
But we did distinguish it that way.

[00:30:08] Speaker 01:
I see that my time is up.

[00:30:09] Speaker 01:
If there are no more questions, I'll

[00:30:11] Speaker 00:
Thank you.

[00:30:12] Speaker 00:
Counsel will take the case under advisement.