[00:00:04] Speaker 00:
We have two cases before the Court this morning on oral argument.

[00:00:11] Speaker 00:
The first case is Sarif Biomedical, LLC v. Brain Lab, 17-1103.

[00:00:16] Speaker 00:
Mr. Campbell, you're reserving five minutes of your time for rebuttal.

[00:00:23] Speaker 00:
Is that correct?

[00:00:24] Speaker 00:
Yes, Your Honor.

[00:00:25] Speaker 00:
All right.

[00:00:25] Speaker 00:
You may proceed, sir.

[00:00:27] Speaker 01:
Good morning, and may it please the Court.

[00:00:29] Speaker 01:
This is a case that never should have been brought.

[00:00:34] Speaker 01:
the 725 patent, it should have known at that time that the specification conflicts with the claims.

[00:00:41] Speaker 04:
In the blue brief at 48 and 49, you argue that Sarif's expert disagreed with all the construction Sarif proposed to either the district court or the TTAB, and you cited us as J893 without any further explanation.

[00:00:57] Speaker 04:
Tell me what part of

[00:00:59] Speaker 04:
of that page shows the experts.

[00:01:03] Speaker 04:
The expert disagrees with those two instructions.

[00:01:07] Speaker 01:
Your Honor, the thrust of Dr. Filler, the expert's testimony, and you said that was 893?

[00:01:13] Speaker 04:
That's what you cited me to.

[00:01:16] Speaker 01:
Yes.

[00:01:16] Speaker 04:
And I had a little marginal note, so I don't know.

[00:01:20] Speaker 01:
Line 4 through 7.

[00:01:23] Speaker 01:
Basically, Serif argued at the claim construction hearing

[00:01:26] Speaker 01:
that the structure that corresponds to the function of element E was a pair of cameras and the steps, the algorithms of two, three, and four.

[00:01:41] Speaker 01:
Dr. Filler agreed with that.

[00:01:44] Speaker 01:
Plus, he also said you needed to have step one in there, that you needed to have real-time correction, and you needed to have a feedback mechanism.

[00:01:52] Speaker 01:
So he had three additional elements

[00:01:55] Speaker 01:
had, and that's what brought the Court to ask which construction should I rely upon, what Sarif had said or what Filler had said.

[00:02:06] Speaker 01:
Okay.

[00:02:07] Speaker 01:
Okay?

[00:02:07] Speaker 01:
That helps me, yeah.

[00:02:08] Speaker 01:
Maybe I could explain that better.

[00:02:13] Speaker 01:
If Sarif didn't understand when it first did its pre-suit investigation, that he's.

[00:02:19] Speaker 01:
Let me ask.

[00:02:19] Speaker 04:
Let me follow up with.

[00:02:20] Speaker 04:
Please.

[00:02:21] Speaker 04:
Why is it inherently inconsistent?

[00:02:24] Speaker 04:
with the construction, where Serif argues, in their break, the algorithms are one of the supporting structures.

[00:02:35] Speaker 04:
I'm sorry.

[00:02:36] Speaker 04:
Okay.

[00:02:36] Speaker 04:
Serif argues, yes, in response to that, that the algorithms are one of the supporting structures.

[00:02:43] Speaker 01:
Yes.

[00:02:44] Speaker 01:
Serif argues that the algorithms two, three, and four, steps two, three, and four, are the structure along with the cameras that go along with the function.

[00:02:53] Speaker 01:
Now, first off, we know that can't work because there's no computer in there.

[00:02:59] Speaker 01:
It conflicts with what Filler said, at least to the extent that Serif explains in its brief on appeal.

[00:03:09] Speaker 01:
They said Filler had steps one, two, three, four, and a computer, feedback mechanism, and the cameras.

[00:03:17] Speaker 01:
Now, that's definitely in conflict with what they propose here, because they propose

[00:03:23] Speaker 01:
and just those cameras, just the means for determining.

[00:03:27] Speaker 01:
Dr. Filler thought you needed a computer also, apparently, to run the algorithms.

[00:03:31] Speaker 01:
So those conflict.

[00:03:33] Speaker 01:
And in fact, all of those structures conflict with the structure that they advocated at the PTAB.

[00:03:39] Speaker 01:
At the PTAB, they said it should be a computer running the algorithm of step four.

[00:03:47] Speaker 01:
As soon as they got back to the district court, they changed that.

[00:03:50] Speaker 01:
They didn't argue that the PTAB was wrong.

[00:03:53] Speaker 01:
What they said is our, I guess, claim construction was wrong.

[00:03:56] Speaker 01:
And instead of having a computer and just the algorithm of step four, then it should be the cameras and just step two.

[00:04:07] Speaker 01:
And then they continued to add things along the way.

[00:04:12] Speaker 01:
But the problem wasn't the claim construction.

[00:04:14] Speaker 01:
There's no claim construction that could have ever saved this case, because the specification which said that the means for determining

[00:04:23] Speaker 01:
are a pair of cameras.

[00:04:25] Speaker 01:
And element E said it was something different.

[00:04:27] Speaker 01:
It said it had to be this image database.

[00:04:30] Speaker 04:
Let me take you from the specific to 90,000 v. Yes.

[00:04:35] Speaker 04:
And that is, in the blue brief at 52, you indicate that Sirius's counsel may be involved in abusive litigation practices.

[00:04:46] Speaker 04:
And you did that by highlighting the high number of cases in which he was attorney of record in the District of Delaware

[00:04:52] Speaker 04:
as compared to the overall number of pedicases.

[00:04:56] Speaker 04:
Why didn't you file Rule 11 sanctions?

[00:04:59] Speaker 01:
We did not file Rule 11 sanctions, at least to start, because this does turn... Or 1927.

[00:05:04] Speaker 01:
What's that?

[00:05:04] Speaker 01:
Or Section 1927.

[00:05:05] Speaker 01:
Or 1927.

[00:05:07] Speaker 01:
We mentioned in the brief, in our brief to the district court in 1927, and the district court didn't address 1927.

[00:05:13] Speaker 01:
We didn't file Rule 11 sanctions, or file a motion for Rule 11 sanctions immediately, because

[00:05:21] Speaker 01:
This is a means-plus-function clause, and it does turn to some extent on claim construction.

[00:05:27] Speaker 01:
We believe that just from the beginning, that claim construction would quickly reveal that there's that conflict.

[00:05:33] Speaker 01:
But since it does in some fashion require the court to construe the claim, we thought it would be better to wait until we had the claim construction, which the court had already scheduled at that time.

[00:05:46] Speaker 01:
So that's the reason there was no Rule 11.

[00:05:49] Speaker 01:
But 285, at least since the Supreme Court in Octane, you know, completely covers any of that conduct anyway and seems to be even a broader standard.

[00:05:58] Speaker 01:
So 285 seemed to be the best way to address this, which is what we did before the district court and what we urged this court to do here.

[00:06:07] Speaker 01:
Now, everything about this case has the hallmarks of an exceptional case, one that stands out from others.

[00:06:14] Speaker 01:
The specification conflicts with the claims.

[00:06:17] Speaker 01:
They're insoluble, just like the PTAB found.

[00:06:21] Speaker 01:
Even the structure of element E, the function, is nonsensical.

[00:06:28] Speaker 01:
The third thing is, then they got a caution.

[00:06:31] Speaker 01:
They got a warning from the PTAB that the claim is insoluble, that they can't do anything more.

[00:06:37] Speaker 01:
And in fact, the PTAB just didn't look at Sarah's construction to say that's wrong.

[00:06:42] Speaker 01:
It failed to find any structure in the patent that could support the function of element E.

[00:06:47] Speaker 01:
So that's the third thing.

[00:06:48] Speaker 01:
The fourth thing is their expert disagreed with their construction.

[00:06:52] Speaker 01:
And the fifth thing is if they had some kind of good-faith basis, it was incumbent upon them to produce that opinion.

[00:07:02] Speaker 01:
The pre-suit investigation, the opinion they got after the PTAB said the claims were indefinite, but they refused to do so.

[00:07:09] Speaker 01:
Instead, they came up with a declaration of their lead counsel that says, yeah, we did everything.

[00:07:14] Speaker 01:
We were good.

[00:07:15] Speaker 01:
But we could have come up with our own declaration that said they had bad faith.

[00:07:19] Speaker 01:
So it's just not evidence to support good faith.

[00:07:22] Speaker 01:
And that seems to be where the district court went astray.

[00:07:25] Speaker 01:
The district court didn't realize, apparently, that this claim was invalid from the start, that it conflicted with the spec.

[00:07:34] Speaker 01:
So therefore, apparently, it believed that even though we had a PTAB ruling that the claim was indefinite, it had a different standard that it could apply.

[00:07:45] Speaker 01:
made an error.

[00:07:46] Speaker 02:
It does have a different standard it could apply, right?

[00:07:49] Speaker 02:
I mean, when the PT tab is doing claim construction, at least, it uses BRI, whereas the district court has to use the Phillips standard.

[00:07:57] Speaker 01:
Not really, because they both are constrained to follow 35 USC section 112 paragraph 6.

[00:08:04] Speaker 01:
So they both identify the function and look for structure.

[00:08:07] Speaker 01:
So whether there is a presumption of validity, whether it be

[00:08:12] Speaker 01:
you know, broadest construction, it comes down to exactly the same thing.

[00:08:17] Speaker 01:
You identify the function, and then you look and inspect for the corresponding structure.

[00:08:22] Speaker 01:
In both the district court.

[00:08:23] Speaker 02:
I assume you made all these arguments to Judge Stark, who sees an awful lot of patent cases.

[00:08:30] Speaker 02:
I mean, you understand that we have an abuse of discretion standard, right?

[00:08:33] Speaker 02:
I mean, why do you expect us to disagree with him if he's seen this litigation and considered all these arguments and rejected them?

[00:08:41] Speaker 01:
Well, because all of Judge Stark's conclusions weren't supported by the evidence.

[00:08:49] Speaker 01:
For example, he found there was a good faith basis, that Serif had a good faith basis.

[00:08:53] Speaker 01:
He doesn't cite anything in the record to identify that.

[00:08:57] Speaker 01:
The only thing that we could come up with, and which Serif could come up with, is that the judge must have relied upon this declaration from their counsel.

[00:09:05] Speaker 01:
But that's not evidence, because it doesn't say what the case is.

[00:09:10] Speaker 01:
Right.

[00:09:11] Speaker 01:
It doesn't provide any support whatsoever.

[00:09:15] Speaker 01:
I'm sorry.

[00:09:17] Speaker 01:
Can you go back to your question?

[00:09:18] Speaker 01:
It seemed to have skipped ahead a little bit.

[00:09:21] Speaker 04:
No, you can keep going.

[00:09:22] Speaker 01:
I think I covered it?

[00:09:23] Speaker 01:
Good.

[00:09:24] Speaker 04:
When I say it's not supported, I mean by foundational information.

[00:09:27] Speaker 01:
Right.

[00:09:30] Speaker 01:
And getting back to your question, now I remembered it.

[00:09:34] Speaker 01:
The district court also found the intrinsic evidence supported the claim construction.

[00:09:38] Speaker 01:
and didn't provide any site to that.

[00:09:40] Speaker 01:
But we know it's exactly the opposite.

[00:09:42] Speaker 01:
The intrinsic evidence says that the structure which corresponds for the means of determining it is just those cameras and nothing else, no image database.

[00:09:54] Speaker 01:
So the intrinsic evidence actually defies their construction.

[00:09:57] Speaker 01:
And that's why, along the way, Sara felt compelled to change the specification to rewrite it to include also.

[00:10:05] Speaker 01:
So it's not just the cameras.

[00:10:06] Speaker 01:
It's also the cameras

[00:10:08] Speaker 01:
and whatever structure they try to add in.

[00:10:12] Speaker 02:
People make these arguments in patent cases all the time, particularly in these means plus function claims.

[00:10:18] Speaker 02:
They make one argument about here's the structure.

[00:10:21] Speaker 02:
They lose.

[00:10:23] Speaker 02:
They say, well, maybe this is the structure.

[00:10:25] Speaker 02:
They change their claim construction argument.

[00:10:27] Speaker 02:
I mean, if we're going to award attorney fees for that, we're going to be awarding an awful lot of attorney fees.

[00:10:32] Speaker 01:
True.

[00:10:33] Speaker 01:
It would be in a lot of cases.

[00:10:35] Speaker 01:
But that's not the same thing that happened here.

[00:10:38] Speaker 01:
Here we have from the very beginning.

[00:10:39] Speaker 02:
Didn't they dismiss their case as soon as they lost on their last claim construction argument?

[00:10:45] Speaker 01:
They moved to dismiss once they lost claim construction, once the court said the patent's invalid.

[00:10:50] Speaker 01:
Yes.

[00:10:52] Speaker 01:
But they should have done that before they even brought the case or when the PTAB came along.

[00:10:57] Speaker 01:
Just because they did it once the court finally said it's invalid, you know, that's not helping out a lot.

[00:11:03] Speaker 01:
We still incurred significant legal fees getting to that point.

[00:11:07] Speaker 00:
You seem to be arguing a lot on claim construction.

[00:11:10] Speaker 00:
Is this a case about claim construction?

[00:11:14] Speaker 01:
Only to the extent that if they had done a precinct investigation, a claim construction, they would have realized the patent wasn't valid from day one, because it's insoluble.

[00:11:23] Speaker 01:
There's no way that you can look at the spec and look at claim one and find that they meet in any fashion, because one describes the invention as one thing and one describes the invention as a wholly different thing.

[00:11:37] Speaker 01:
And that's why it's not a case about just, you know, trying to refine a claim construction.

[00:11:42] Speaker 01:
They weren't refining it.

[00:11:43] Speaker 01:
They were doing everything they could to prolong the case and hope to get a settlement.

[00:11:48] Speaker 00:
You're into your rebuttal time.

[00:11:50] Speaker 00:
Any questions?

[00:11:53] Speaker 00:
Thank you.

[00:11:59] Speaker 04:
Mr. Kroger.

[00:12:01] Speaker 03:
Thank you, Your Honor.

[00:12:02] Speaker 04:
May it please the Court.

[00:12:03] Speaker 04:
Let's turn to that declaration of

[00:12:06] Speaker 04:
Is it Serif?

[00:12:08] Speaker 04:
Serif or Serif?

[00:12:09] Speaker 03:
I believe it's Serif, Your Honor.

[00:12:10] Speaker 03:
And you're talking about the declaration of Mark Fenster?

[00:12:13] Speaker 04:
Yeah.

[00:12:15] Speaker 04:
To support your argument that they had a good faith basis to believe in limitation, he was not indefinite.

[00:12:21] Speaker 04:
That's in your red brief at 8 to 10 and 20.

[00:12:24] Speaker 04:
Putting aside the issue of privilege, do you contend that the declaration in its current form has evidentiary value?

[00:12:33] Speaker 04:
That is, I'm saying, do you concede it's conclusory?

[00:12:37] Speaker 03:
It is written at a high level, Your Honor, but there is nothing from the district court's opinion which actually even shows that he was required to or relied on this declaration.

[00:12:46] Speaker 03:
Boy, you're not answering my question.

[00:12:48] Speaker 03:
It's easy, yes or no.

[00:12:50] Speaker 03:
I do not believe it to be written at a high level.

[00:12:53] Speaker 03:
I do not believe it to be evidentiary insufficient.

[00:12:57] Speaker 03:
In fact... Wait, wait, wait.

[00:12:59] Speaker 04:
You do not believe that it's evidentially insufficient?

[00:13:02] Speaker 04:
Correct.

[00:13:02] Speaker 04:
So you say it is not conclusory?

[00:13:04] Speaker 04:
Correct.

[00:13:06] Speaker 03:
All right, you're right.

[00:13:06] Speaker 03:
It's not conclusory.

[00:13:07] Speaker 03:
It establishes good faith.

[00:13:10] Speaker 04:
The district court... Wait, wait, wait, wait.

[00:13:15] Speaker 04:
Since you say it's not conclusory, please identify, pull it up in the record, and identify which portions provide sufficient facts to allow the court to conclude that Serif conducted a pre-filing investigation of whether limitation E was indefinite and

[00:13:34] Speaker 04:
whether it had a good faith basis to conclude that it was not indefinite.

[00:13:40] Speaker 03:
Okay.

[00:13:42] Speaker 03:
It mentions that Serif is... Size to the record, please.

[00:13:44] Speaker 03:
This is Appendix 64, paragraph 2 of the Fenster declaration.

[00:13:49] Speaker 03:
It refers to the fact that Serif's pre-filing investigation included both attorney analysis and discussions and consultations with various technical experts.

[00:13:59] Speaker 03:
It doesn't say what that analysis was, but it does say that it consulted with experts.

[00:14:04] Speaker 04:
Geez, that's great.

[00:14:06] Speaker 04:
What's a foundation?

[00:14:09] Speaker 03:
Foundation is a fact made with knowledge about something that occurred.

[00:14:14] Speaker 04:
Now, again, we offered to make more... What's the foundational basis for saying those experts were consulted?

[00:14:21] Speaker 04:
Who, what, when, why, where?

[00:14:23] Speaker 03:
Mr. Fenster, as lead counsel for plaintiff Serif Biomedical, had the knowledge to state what the pre-filing investigation consisted of.

[00:14:34] Speaker 04:
And he didn't.

[00:14:36] Speaker 04:
Or do you think he did?

[00:14:39] Speaker 03:
Your Honor, this is an evidentiary matter.

[00:14:40] Speaker 03:
Right.

[00:14:42] Speaker 03:
And the district court, BrainLab, in their brief, requested that the court strike this declaration.

[00:14:50] Speaker 03:
And the court did not respond to that request.

[00:14:52] Speaker 04:
Is that your answer to me?

[00:14:54] Speaker 03:
I think that the evidentiary sufficiency of this should be decided by the district court in the first instance.

[00:14:59] Speaker 03:
And the district court.

[00:15:00] Speaker 03:
So we can't review that.

[00:15:02] Speaker 03:
Would you tell me your authority for that statement?

[00:15:04] Speaker 03:
Of course you can review it.

[00:15:05] Speaker 03:
And if you find it conclusory, of course this court can strike it, Your Honor.

[00:15:09] Speaker 03:
But going back to my point.

[00:15:10] Speaker 03:
We can ignore it.

[00:15:12] Speaker 03:
You can ignore it, yes.

[00:15:13] Speaker 03:
But going back to my point, the district court's order, which is at issue here, does not reference this declaration.

[00:15:21] Speaker 03:
So you're saying the district court entirely ignored it?

[00:15:24] Speaker 03:
I think a fair reading of the district court's order is that it did not rely on this declaration.

[00:15:27] Speaker 03:
I think the court says it found good faith

[00:15:30] Speaker 03:
because at each stage of the litigation, Plaint provided detailed arguments grounded in the intrinsic evidence in support of its proposed constructions.

[00:15:38] Speaker 03:
A fair reading of the district court's order is that it believes Serif's arguments, through its expert testimony at the claim construction hearing, were strong enough to show that there was always a good faith in this case.

[00:15:48] Speaker 03:
I don't believe the court found it necessary to pierce the veil into the pre-filing investigation based off the strength of the arguments presented.

[00:15:56] Speaker 00:
So the board opined that claims one through nine were probably indefinite and it refused to institute on those claims.

[00:16:04] Speaker 00:
Shouldn't you be precluded at this point from bringing those claims up?

[00:16:10] Speaker 03:
No, Your Honor.

[00:16:10] Speaker 03:
The PTAP lacks statutory authority to find claims invalid for indefiniteness.

[00:16:19] Speaker 03:
It found that it could not construe the claims and therefore denied an IPR

[00:16:24] Speaker 03:
But it could not, it could especially have precluded from finding them indefinite or invalid.

[00:16:27] Speaker 03:
Only the district court could do that.

[00:16:30] Speaker 03:
So once we had the decision, we evaluated it and we thought that the district court applying a different, at least factual standard, being able to weigh expert testimony, which the PTAB was not able to do, might come to a different conclusion and might support our conclusion.

[00:16:48] Speaker 00:
So setting the merits aside, just for the purposes of

[00:16:51] Speaker 00:
from attorney's fees to make it whether this is an exceptional case or not.

[00:16:55] Speaker 00:
Should we look at that statement through the PTAB at all?

[00:17:01] Speaker 03:
In some circumstances, you might.

[00:17:02] Speaker 03:
But in this case, I don't think you should.

[00:17:04] Speaker 00:
I don't think that should be part of the totality of the circumstances.

[00:17:07] Speaker 03:
It should.

[00:17:07] Speaker 03:
And the district court did look at it and say that our decision to continue the case after receiving that did not make this stand out from the others.

[00:17:16] Speaker 03:
But I would note this.

[00:17:18] Speaker 03:
The BrainLab's decision to seek this IPR is very interesting in light of Mr. Campbell's statements that this patent was always objectively invalid, and this case should never have been brought.

[00:17:29] Speaker 03:
They knew when bringing an IPR that an IPR could not be instituted on indefinite grounds.

[00:17:38] Speaker 03:
I mean, truly, they don't seem to claim that their IPR was frivolous.

[00:17:42] Speaker 03:
So if they really thought this patent was... You mean they claim your patent was frivolous?

[00:17:46] Speaker 03:
Yes.

[00:17:46] Speaker 03:
But they spent, but that's what they claim.

[00:17:49] Speaker 03:
But they took the most securitist route possible to get resolution of that issue by the court.

[00:17:55] Speaker 03:
The PTAB could not find, it was actually barred from finding this indefinite.

[00:18:00] Speaker 03:
Therefore, it should have been proceeded to the district court by rule 11, by early summary judgment.

[00:18:04] Speaker 03:
I'm going to talk.

[00:18:05] Speaker 03:
Sure.

[00:18:05] Speaker 03:
I'm sorry, Governor.

[00:18:06] Speaker 04:
At JA5, the district court says that BrainLab has not demonstrated that this is a nuisance suit.

[00:18:14] Speaker 04:
Court goes on to list several factors that would typically weigh in favor of finding a nuisance suit, including Serif's status as a nonpracticing entity and Serif's decision to allege infringement against several other entities and then settle those cases.

[00:18:32] Speaker 04:
What evidence or considerations did the district court cite or actually rely on that weighed against finding a nuisance suit?

[00:18:41] Speaker 03:
Well, Your Honor,

[00:18:42] Speaker 03:
We're at five in the record.

[00:18:44] Speaker 03:
I understand.

[00:18:44] Speaker 03:
Unlike many of the cases in which this Court has expressed concern over what it refers to as predatory patent cases, I'm referring, of course, to the Rothschild decision.

[00:18:58] Speaker 03:
I'm referring to the SFA v. Newegg decision.

[00:19:01] Speaker 03:
There has been some evidence in the record as to, at the very least, the amounts of the other settlements so that the district court can weigh

[00:19:11] Speaker 03:
Were these in fact quote unquote nuisance cases brought solely to get cheap settlements for less than the cost of litigation?

[00:19:19] Speaker 03:
BrainLab did not put the evidence of those amounts into the record.

[00:19:24] Speaker 03:
Furthermore, unlike a majority of the cases, again the briefing and again I'm talking about the SFA.

[00:19:29] Speaker 03:
Did you put them in?

[00:19:30] Speaker 03:
No, we did not.

[00:19:31] Speaker 04:
Then how are you relying on them?

[00:19:33] Speaker 03:
We didn't have any, we don't have the burden of persuasion on this motion, your honor, BrainLab did.

[00:19:38] Speaker 03:
If BrainLab thought that this was truly a nuisance case just to extort nuisance value settlements, it had the burden to present that evidence to the district court.

[00:19:47] Speaker 04:
They could do it without it, couldn't they?

[00:19:50] Speaker 03:
They could, but the district court decided that BrainLab did not meet its evidentiary burden.

[00:19:59] Speaker 03:
But regardless, Your Honor, here the rec... You still haven't answered my question.

[00:20:02] Speaker 03:
I'm sorry, what was your question, Your Honor?

[00:20:04] Speaker 04:
What evidence or considerations did the district court cite or actually rely on that weighed against finding a nuisance suit?

[00:20:13] Speaker 03:
That BrainLab had not met its burden by only saying that because four cases were filed and three of them settled by claim construction, that meant this was a nuisance suit.

[00:20:24] Speaker 03:
That was the evidence that the district court found insufficient.

[00:20:37] Speaker 03:
The other thing I'd just like to point out, as you mentioned, this is an abuse of discretion standard.

[00:20:42] Speaker 03:
And this is a decision written by the Chief Judge of Delaware, Judge Dark, who has a lot of experience with patent cases.

[00:20:50] Speaker 03:
And the fact that he reviewed this, found this case did not stand out from the others should be entitled to great weight and should only be overturned if there's a clear answer.

[00:20:59] Speaker 03:
What's your authority for that?

[00:21:00] Speaker 03:
What's my authority for what?

[00:21:01] Speaker 03:
The Chief Judge Starcutt?

[00:21:02] Speaker 03:
What you just said.

[00:21:03] Speaker 03:
The Chief Judge Starcutt has great authority over patenting.

[00:21:05] Speaker 03:
No, that it should be entitled to greater weight than any other judge.

[00:21:08] Speaker 03:
That was not what I meant to say.

[00:21:09] Speaker 03:
I just meant to say he has a, and if I said that, I apologize.

[00:21:13] Speaker 03:
Well, he has experience in patent cases and clearly has the experience to determine when one stands out from the other, which is the octane test.

[00:21:21] Speaker 04:
In your red brief at 37 and 38, you request attorney's fees and costs pursuant to FRAP 38.

[00:21:28] Speaker 04:
characterizing BrainLabs' appeal as frivolous.

[00:21:32] Speaker 04:
It looks to me like they've raised several valid concerns on appeal.

[00:21:36] Speaker 04:
Why isn't your request for fees and costs frivolous under the same rule?

[00:21:42] Speaker 03:
Your Honor, this is an issue of... And why shouldn't we sanction you under Rule 38?

[00:21:46] Speaker 03:
This is an issue of claim construction in which the District Court engaged in an evidentiary hearing and heard facts from both experts.

[00:21:56] Speaker 03:
After hearing the experts testify, the district court found that while he disagreed with our positions, with Sarah's positions, that our positions were nonetheless not unreasonably weak, and that the expert, who was undisputedly qualified, was not unreasonably weak.

[00:22:12] Speaker 04:
So how does that make their appeal frivolous?

[00:22:15] Speaker 03:
Overturning a factual finding by a district court is always frivolous?

[00:22:19] Speaker 03:
Not always frivolous, but in this issue where the sole determination

[00:22:25] Speaker 03:
is one of claim construction.

[00:22:27] Speaker 03:
And the district court engaged in a factual finding heard live testimony in which he is the best decider of the decisions that were said.

[00:22:36] Speaker 02:
And ultimately, why in the world would you make that request?

[00:22:41] Speaker 02:
You won.

[00:22:42] Speaker 02:
You didn't get attorney's fees awarded against you.

[00:22:45] Speaker 02:
You probably should have, but you didn't.

[00:22:47] Speaker 02:
And then you turn around and ask for attorney's fees against the other side.

[00:22:55] Speaker 02:
It really undermines your case.

[00:22:58] Speaker 02:
You should think about that going forward.

[00:23:01] Speaker 02:
I mean, I don't understand how anybody rationally looks at this and say they don't have a non-frivolous argument on attorney's fees, even if they end up not prevailing.

[00:23:14] Speaker 02:
I mean, it just makes your credibility go out the door when you say their appeal is frivolous.

[00:23:22] Speaker 03:
Understood, Your Honor.

[00:23:25] Speaker 03:
We will withdraw the request for frivolousness.

[00:23:27] Speaker 02:
Well, I didn't mean to make you withdraw the press, but just think about it.

[00:23:29] Speaker 02:
I mean, these cases are under a high standard review.

[00:23:34] Speaker 02:
So I mean, to say that their argument, even though they're not going to prevail.

[00:23:39] Speaker 03:
Your Honor, the finding for frivolousness is based on, as I said, they waited until the very last instant to raise this indefiniteness under 1E.

[00:23:53] Speaker 03:
They filed an IPR, which if they truly believed the claim was to be indefinite, they knew had no chance of success.

[00:24:00] Speaker 03:
And so the only way to raise this would be to have the district court make a claim construction.

[00:24:04] Speaker 02:
Well, presumably, they had other grounds for the IPR that would also make this patent valid if you got over the indefinite.

[00:24:11] Speaker 03:
I believe with regard to claim 1E and the two denied that relied on it, in their IPR, this was the only grounds for that.

[00:24:20] Speaker 03:
They urged, in fact, that the court construe the term

[00:24:24] Speaker 03:
so they could apply prior art to it.

[00:24:25] Speaker 03:
But they also said that it's indefinite.

[00:24:27] Speaker 03:
So therefore, they admitted there was a reasonable argument that this claim was amenable to construction.

[00:24:32] Speaker 03:
And then they turn around an appeal and then say, it's objectively invalid on its face, and you should overrule the court on the abuse and discretion standard after you made factual findings.

[00:24:45] Speaker 03:
That was the basis for our claim of frivolousness.

[00:24:47] Speaker 03:
How many angels can dance on the head of a piano?

[00:24:54] Speaker 04:
Yeah, I know.

[00:24:58] Speaker 04:
You can't answer that question.

[00:25:00] Speaker 04:
But it's tautological argument, and it's the same thing.

[00:25:03] Speaker 00:
So let me ask you a question, Counselor.

[00:25:07] Speaker 00:
When you argue that the district court looked at the case and found it not to be exceptional, is the district court supposed to look at the cases only within the experience of that particular judge?

[00:25:23] Speaker 00:
at all of the cases in that district or all the cases in, within the country in order to make a determination whether this particular case is exceptional or not?

[00:25:35] Speaker 03:
Octane says it's to the district court's discretion and on a case-by-case basis.

[00:25:40] Speaker 03:
And I take that to mean that the district court should only evaluate, is within its discretion if it only evaluates the cases which it has experience with.

[00:25:51] Speaker 03:
To the extent

[00:25:52] Speaker 03:
the district court should have, or was required to... So if the court's never had such a case, just can't do anything about it?

[00:25:58] Speaker 03:
No, Your Honor.

[00:25:59] Speaker 03:
Octane doesn't say patent case by patent case.

[00:26:01] Speaker 03:
It says case by case.

[00:26:03] Speaker 03:
Even a district court judge... Whose first case is a patent case?

[00:26:08] Speaker 03:
Yes, Your Honor, but even a district court judge who's never had a patent case before, presumably has heard... has read briefs, heard arguments, made rulings.

[00:26:16] Speaker 03:
They have... No, no.

[00:26:18] Speaker 03:
Their first assigned case is a patent case.

[00:26:20] Speaker 03:
It just came onto them.

[00:26:22] Speaker 04:
They're paralyzed under your theory.

[00:26:24] Speaker 03:
If they have no prior experience in any case whatsoever, in that case, they might need to look for other cases.

[00:26:35] Speaker 03:
That isn't the case here with Chief Judge Stark.

[00:26:37] Speaker 03:
And furthermore, BrainLab never gave the judge the tools with which to look outside of its own cases to the extent it thought there were some necessary.

[00:26:45] Speaker 03:
It didn't say, other courts have found similar claim construction arguments like this to be unreasonable in these circumstances.

[00:26:52] Speaker 03:
In fact, it never raised these arguments to the district court at all.

[00:26:57] Speaker 03:
I see my time is expiring unless anyone has any further questions.

[00:27:00] Speaker 03:
No, thank you.

[00:27:01] Speaker 00:
Mr. Campbell?

[00:27:07] Speaker 00:
I just have a few points, Your Honor.

[00:27:08] Speaker 00:
You have three and a half minutes.

[00:27:11] Speaker 00:
I'm sorry?

[00:27:11] Speaker 00:
Three and a half minutes.

[00:27:13] Speaker 01:
Thank you.

[00:27:16] Speaker 01:
Council mentioned the PTAB in our IPR request.

[00:27:21] Speaker 01:
We filed a request at the IPR to invalidate all the claims under 102 and 103.

[00:27:27] Speaker 01:
We succeeded on claims 10 and 11.

[00:27:31] Speaker 01:
Claims 1 through 9 were found to be indefinite.

[00:27:34] Speaker 01:
In a number of cases.

[00:27:35] Speaker 00:
You found them to be indefinite.

[00:27:37] Speaker 00:
The PTAB?

[00:27:38] Speaker 01:
Yes.

[00:27:39] Speaker 01:
The PTAB in its dicta, which doesn't mean it's wrong, said that.

[00:27:42] Speaker 00:
Did it actually analyze and find that the claims were indefinite?

[00:27:46] Speaker 01:
Yes.

[00:27:47] Speaker 01:
It analyzed claims one through nine and found them to be indefinite.

[00:27:50] Speaker 04:
And said it wouldn't institute because of that.

[00:27:53] Speaker 01:
Correct.

[00:27:53] Speaker 01:
And therefore didn't institute with respect to those claims.

[00:27:56] Speaker 01:
But it did do 10 and 11.

[00:27:57] Speaker 01:
Yes, it did.

[00:27:58] Speaker 01:
And then they dismissed with respect to 10 and 11.

[00:28:01] Speaker 00:
Had it found that they were not indefinite?

[00:28:03] Speaker 00:
Could it have instituted on those claims?

[00:28:06] Speaker 01:
If it found that claims one through nine were indefinite, or were definite, then it could have instituted because we did provide prior art, which would, we believe,

[00:28:15] Speaker 01:
have found those claims invalid under 102 and or 103.

[00:28:20] Speaker 01:
But there were a number of cases that came out.

[00:28:22] Speaker 01:
IPR is still somewhat new and was even newer back then.

[00:28:25] Speaker 01:
There were a number of cases which came out which construed means plus function clauses.

[00:28:30] Speaker 01:
And in those cases, the PTAB would find whether they were valid or whether they were definite or indefinite.

[00:28:39] Speaker 01:
And so since it was at least a threshold issue, that the PTAB would have to

[00:28:45] Speaker 01:
analyze, that's why we filed the IPR, because we would win if it found it indefinite or win if it found the claims to be invalid.

[00:28:53] Speaker 01:
So it wasn't a frivolous avenue by any stretch of the imagination.

[00:28:57] Speaker 01:
In fact, we won.

[00:28:59] Speaker 01:
We got what we wanted.

[00:29:00] Speaker 01:
We got claims 10 and 11 invalidated under the prior art.

[00:29:03] Speaker 01:
And we got the PTAB to say that claims 1 through 9 were indefinite, specifically on this claim 1E, which we're talking about.

[00:29:12] Speaker 01:
because it found that there was no corresponding structure anywhere in the specification.

[00:29:17] Speaker 01:
So the PTAB did look at it, looked at claims 1 through 9, found it to be indefinite, and then Serif completely disregarded that and said, it's dicta, we can ignore it.

[00:29:27] Speaker 02:
And...

[00:29:33] Speaker 01:
The district court is not bound by it.

[00:29:34] Speaker 02:
The district court could have come up with an entirely different reasoning and said, I conclude that these claims are definite, right?

[00:29:42] Speaker 02:
And you wouldn't be able to argue that the district court's decision was incorrect because it was in conflict with the PTAP decision.

[00:29:48] Speaker 02:
You just have to show it was incorrect on the merits.

[00:29:51] Speaker 01:
No.

[00:29:51] Speaker 01:
But the PTAP decision is one thing, one objective signpost they got, which said that this unbiased observer

[00:30:00] Speaker 01:
looked at the claims and said they are indefinite.

[00:30:03] Speaker 01:
That at least should have prompted them to decide whether that claim construction by the PTAB was right or wrong.

[00:30:12] Speaker 00:
Why should they?

[00:30:13] Speaker 00:
It's not authority.

[00:30:14] Speaker 00:
It's dicta.

[00:30:14] Speaker 01:
Well, just because it's dicta doesn't mean it's wrong.

[00:30:17] Speaker 01:
That's not dicta is not Latin for wrong.

[00:30:19] Speaker 00:
It has no binding weight.

[00:30:21] Speaker 00:
There's no authority.

[00:30:22] Speaker 01:
It doesn't have binding authority, but it does have authority in saying that a panel

[00:30:29] Speaker 02:
But they can still argue to the district court that PTAB decision is not right.

[00:30:34] Speaker 02:
Don't pay attention to it.

[00:30:36] Speaker 02:
Here are our arguments.

[00:30:38] Speaker 02:
Listen to them.

[00:30:39] Speaker 01:
But they didn't do that.

[00:30:40] Speaker 01:
They did not argue why the PTAB was wrong.

[00:30:43] Speaker 01:
They just changed their claim construction.

[00:30:45] Speaker 02:
Well, I mean, that's implicitly arguing that they recognize the problem with their prior case, and they're shifting it.

[00:30:51] Speaker 02:
I don't see anything extraordinary about that.

[00:30:53] Speaker 02:
I mean, if you think that shifting

[00:30:56] Speaker 02:
arguments in response to unfavorable rulings in the PTAB or elsewhere is exceptional, then there's going to be a lot of money awarded in fees in patent cases.

[00:31:06] Speaker 01:
But the problem is that they didn't do it based on evidence in the patent.

[00:31:12] Speaker 01:
It's not like they just refined it or slightly changed it.

[00:31:16] Speaker 01:
They came up with now six different claim constructions, some of which were contrary to the others, internally inconsistent.

[00:31:23] Speaker 01:
So it's not like they're refining it, saying, yeah, we learned a little bit from the PTAB.

[00:31:27] Speaker 01:
It didn't like when we said this, so we'll supplement that.

[00:31:30] Speaker 01:
We'll fix it.

[00:31:31] Speaker 01:
It just continued to come up with five different claim constructions solely to obfuscate the case, to make it difficult for the district court to realize that the case was invalid.

[00:31:42] Speaker 00:
I'll let you conclude.

[00:31:43] Speaker 00:
You are out of time.

[00:31:44] Speaker 00:
Do you have one other question?

[00:31:46] Speaker 01:
Your Honor, I have nothing else unless the Court has any questions.

[00:31:50] Speaker 01:
But this case should be decided exactly the same way as the Rothschild case, Rothschild versus Guardian, or a Justicam versus Newegg.

[00:31:57] Speaker 01:
It should be reversed because the District Court abused this discretion in dying fees.

[00:32:02] Speaker 01:
Thank you.

[00:32:03] Speaker 00:
Thank you.