[00:00:03] Speaker 03: Our first argued case this morning is No. [00:00:07] Speaker 03: 17-2490, Bernard X. Incorporated v. Apple, Inc. [00:00:13] Speaker 03: Mr. DiMofia. [00:00:17] Speaker 01: Thank you, Judge Newman. [00:00:24] Speaker 01: Your Honor, and may it please the Court. [00:00:27] Speaker 01: In our opening brief, we argued that the patent board below erred in its printed publication findings. [00:00:33] Speaker 01: As we acknowledged in our Rule 28A response, another panel of this court, Judge Newman presiding, subsequently affirmed a similar decision by a board in Rule 36 decision. [00:00:44] Speaker 01: Although Rule 36 decision is non-precedential, we candidly acknowledge that this panel is likely to reach the same conclusion. [00:00:51] Speaker 04: Well, it does have collateral estoppel effect, does it not? [00:00:54] Speaker 01: Your Honor, this Court made clear in the Phil case, I believe in Your Honor's opinion, that collateral estoppel only applies if there is no question which issue was decided. [00:01:05] Speaker 01: If there were two issues which were decided below, and either one could be a basis for affirming the decision below, then collateral estoppel does not apply. [00:01:13] Speaker 02: So wasn't it necessary to the judgment in the Rule 36 that the RFC-2401 is a printed publication? [00:01:20] Speaker 01: Your Honor, we do not believe it was necessary because we also advanced, first of all, we advanced alternative arguments which went to substantive ability issues. [00:01:28] Speaker 01: But secondly, in the Rule 36 decision, as this Court made clear, this Court can inform on any basis present. [00:01:34] Speaker 02: So you're saying there could have been a way for the panel and the Rule 36 judgment to have affirmed the Board without reaching the question of whether RFC 2411 is a printed publication? [00:01:49] Speaker 02: I just need to get a yes or no out of that because right now I don't see how our court could have affirmed without first concluding that RFC 2401 was in fact, there were substantial evidence to conclude that that was a printed publication. [00:02:08] Speaker 02: So am I right or am I wrong? [00:02:11] Speaker 02: And if I'm wrong, why am I wrong? [00:02:13] Speaker 01: Ioanna, we believe in the Rule 36 decision... Am I right or am I wrong? [00:02:18] Speaker 02: And if I'm wrong, why am I wrong? [00:02:20] Speaker 01: Ioanna, I certainly don't want to say that you are wrong, but I think that our position is in the Rule 36 decision, performance can be based on anything based on the record. [00:02:29] Speaker 02: So that's why I'm asking you a question. [00:02:31] Speaker 02: I mean, I understand the theory of collateral estoppel. [00:02:35] Speaker 02: I'm trying to understand the facts of that prior panel decision. [00:02:39] Speaker 04: The believing conclusion depended upon that prior art, right? [00:02:47] Speaker 01: Your Honor, we believe the conclusion did depend on the fact that there was a prior art that the court concluded anticipated or rendered obvious the claimed invention. [00:02:58] Speaker 04: And if that wasn't prior art, then how would you have an anticipation finding that could be affirmed? [00:03:04] Speaker 01: Your Honor, I think the court, I think, again, our position is that in the rule of 36 judgment, we don't know what was the basis of the court's decision. [00:03:13] Speaker 04: Well, how could you? [00:03:14] Speaker 04: I mean, if we affirm an anticipation and obviousness findings, and those findings could only be based on the fact that there was prior art that would do either one of those, then how could that prior art, and the fact that it was prior art, not be central to that lower decision? [00:03:34] Speaker 01: Again, I think our position is that in the Rule 36 decision there is no... We can't just make something up in a Rule 36. [00:03:40] Speaker 04: I mean, I explained that in Phil Insull, or the court explained that in Phil Insull, that if there's no way to get to X without finding Y, then there's collateral estoppel. [00:03:54] Speaker 01: You know, the court could have also been persuaded by the unpetentability arguments that in any event, even if it [00:04:02] Speaker 01: you know, that in any event, there was, in fact, you know, those inventions anticipated. [00:04:05] Speaker 02: So help me, was there an alternative theory that was being debated in that case that could have led to a Rule 36 affirmance that did not require concluding that RFC 20401 is a printed publication? [00:04:20] Speaker 02: Was there? [00:04:21] Speaker 01: You want to do additional arguments, I think. [00:04:23] Speaker 02: What were those additional arguments? [00:04:25] Speaker 01: I would acknowledge, though, the printed publication was a threshold issue in that case. [00:04:29] Speaker 02: OK, so it's a threshold issue. [00:04:31] Speaker 02: It was necessarily decided. [00:04:34] Speaker 01: Your Honor, we again, I think opposition is in a rule 36 decision because the court cannot form on any basis in the record. [00:04:41] Speaker 01: We don't know what exactly the court decided. [00:04:42] Speaker 02: What would have been that other basis in the record in that case? [00:04:47] Speaker 02: Because I don't know of one. [00:04:48] Speaker 02: What was it? [00:04:49] Speaker 01: I think based on the fact that the court affirmed without opinion, we don't know which argument the court said. [00:04:54] Speaker 01: What about alternative arguments? [00:04:56] Speaker 04: Tell us what your alternative argument that could have [00:04:59] Speaker 04: resulted in an invalidity finding without this prior act? [00:05:04] Speaker 01: Your Honor, I would acknowledge that the finding that the RFC-2401 was a printed publication was indeed the fresh release yourself. [00:05:12] Speaker 01: So I think under that analysis, the court would have addressed that question. [00:05:17] Speaker 01: But we don't know which specific arguments the court accepted with respect to that. [00:05:22] Speaker 02: So therefore, we did find that RFC-2401 was a printed publication. [00:05:27] Speaker 02: It was a threshold issue, in your words. [00:05:29] Speaker 01: Yes? [00:05:30] Speaker 01: I think it was a threshold issue, yes. [00:05:32] Speaker 02: Okay, then the collateral estoppel applies, doesn't it? [00:05:35] Speaker 02: Because that was actually litigated. [00:05:38] Speaker 02: You were there. [00:05:39] Speaker 02: It's a final judgment. [00:05:40] Speaker 02: So that's it. [00:05:42] Speaker 02: On RFC 2401 threshold question, whether it was a printed publication. [00:05:48] Speaker 01: Your Honor, I do believe it was a threshold issue, so it would [00:05:51] Speaker 01: I don't want to acknowledge that karate staple applies from that, again, because our view is in the rule 36 decision, it's impossible to tell what was the precise basis of the court's opinion. [00:06:01] Speaker 03: We appreciate that there are problems with rule 36. [00:06:05] Speaker 03: The rules are that it is straightforward and there was no basis of departing from the decision of the district court. [00:06:15] Speaker 03: So let's, in the remainder of your time, tell us [00:06:19] Speaker 03: your theory of why that is not a publication? [00:06:25] Speaker 01: Why it is not a printed publication? [00:06:27] Speaker 03: Or is that what you're trying to tell us? [00:06:29] Speaker 01: Your Honor, we actually, we have the argument why it's not a printed publication. [00:06:34] Speaker 01: We specified it in our brief. [00:06:36] Speaker 01: We actually prepared on that question to rest in our briefs unless there are questions from the court. [00:06:41] Speaker 04: So why are we here then? [00:06:43] Speaker 01: Your Honor, we're here because we also have, as we said, a constitutional argument that we do wish to maintain, and maintain that that argument required us to pursue the appeal. [00:06:51] Speaker 04: So what precisely is your constitutional argument, and where in your briefing does it appear? [00:06:56] Speaker 01: Our constitutional argument is that it would be impermissibly retroactive to invalidate the patent for the IPR procedures if the, if we, if actually the application for that patent was filed prior to the entry into force of the American Dems Act. [00:07:12] Speaker 04: All right, where does that show up in your brief? [00:07:15] Speaker 01: In our opening brief, we raised the general constitutional argument on the oil states. [00:07:21] Speaker 01: And we believe that our argument is a subset of that broader argument, which is a challenge to the constitutionality of the IPR procedures. [00:07:28] Speaker 02: Can you show me which sentence in your brief? [00:07:31] Speaker 02: Because there's only three or four sentences in your brief. [00:07:34] Speaker 02: And it's all about oil states. [00:07:36] Speaker 02: It's all about if the Supreme Court [00:07:39] Speaker 02: reverses oil states than you want to preserve for purposes of this case, the right to also be released from this AIA proceeding. [00:07:48] Speaker 02: It doesn't say anything about retroactive application at all. [00:07:53] Speaker 02: Point me to a sentence in here that tells me that why I shouldn't believe that you're being dishonest in your response to the 28-J letter from the other side. [00:08:03] Speaker 01: Your Honor, I don't think we were dishonest at all because our position... I'm sorry, what sentence should I be reading in [00:08:09] Speaker 01: Your Honor, the general, it's that section where we preserve it. [00:08:13] Speaker 02: Yeah, go ahead. [00:08:14] Speaker 02: I mean, I could read it out loud, or I could have you read it out loud, but right now I don't see anything in here about retroactive application of the AIA to your pre-AIA path. [00:08:25] Speaker 01: Your Honor, we think that under the Supreme Court's logic in all states, the retroactive application is a subset of broader constitutionality challenge to the IPR procedures. [00:08:35] Speaker 02: I don't understand. [00:08:36] Speaker 02: Where did you make the argument? [00:08:38] Speaker 02: Your argument is solely about oil states and whatever was argued in oil states. [00:08:44] Speaker 01: And we, opposition, as the court in oil states said, we, they rejected the general constitutionality challenge, but they said they now decided whether it's constitutional to oblige. [00:08:54] Speaker 04: that oil states didn't make that argument. [00:08:56] Speaker 04: The very header of your section says we should await the Supreme Court's decision in oil states. [00:09:02] Speaker 04: I mean, you rely specifically on the oil states' arguments to the extent that oil states waived the retroactivity argument. [00:09:10] Speaker 04: Why doesn't that mean that you waived it as well? [00:09:12] Speaker 01: Yeah, we don't think there is a waiver. [00:09:14] Speaker 01: I understand if the court reaches a different conclusion. [00:09:16] Speaker 01: We also think this court, as it's said, has discretion to consider. [00:09:19] Speaker 02: You don't believe you waived it because why? [00:09:22] Speaker 01: We believe because we phrased a general, we made the general constitutional change. [00:09:26] Speaker 02: Where did you make the so-called general where anything and everything that's in the Constitution is in play in your case? [00:09:35] Speaker 02: I don't see that in your case. [00:09:36] Speaker 01: I may have been imprecise. [00:09:37] Speaker 01: We made the general challenge to the constitutionality of IPAP procedures under Article 3 and the Seventh Amendment. [00:09:44] Speaker 01: And we believe the more narrow constitutional problem the Supreme Court identified in all states is a subset of that broader challenge. [00:09:53] Speaker 03: Well, we suppose since the brief was written before the oil stakes decision, it's not impossible, of course, that the Supreme Court, if they had decided to go the other way in oil states, they might have continued to draw this distinction. [00:10:11] Speaker 03: But as it is, it's a difficult issue. [00:10:15] Speaker 03: Is there anything else you need to tell us? [00:10:17] Speaker 01: No, Your Honor, we also raised other claim constructions and other issues related to Aventale, but we're prepared to rest on our brief. [00:10:24] Speaker 03: Okay, well then let's hear from the other side. [00:10:26] Speaker 01: Thank you. [00:10:32] Speaker 03: Mr. O'Quinn. [00:10:33] Speaker 00: Thank you, Judge Newman, and may it please the Court, John O'Quinn, on behalf of Apple. [00:10:38] Speaker 00: Just coming back to the first set of questions the Court was asking, there's no question that the issue of [00:10:45] Speaker 00: whether RFC 2401 was a printed publication was the threshold issue as to all seven of the IPRs that were at issue in the prior proceedings. [00:10:54] Speaker 04: Why didn't you argue collateral estoppel then in your letter? [00:10:56] Speaker 00: Judge O'Malley, in our letter we were simply trying to respectfully bring to this Court's attention the fact that there had been an intervening development from this Court and identifying the fact that this Court had decided that issue. [00:11:09] Speaker 00: Obviously under this Court's internal operating procedures, a Rule 36 decision can have collateral estoppel effect. [00:11:15] Speaker 00: If the court thinks it's necessary for us to brief that, we're happy to. [00:11:18] Speaker 00: But I think that it's been conceded, and I think it's beyond dispute that this was a necessary issue to the prior decision. [00:11:27] Speaker 00: In fact, three of the IPR proceedings involving three of the prior patents, the 009, the 341, and the 131 patent, [00:11:36] Speaker 00: The only issue that was appealed in that prior appeal was whether or not RFC 2401 was a prior printed publication. [00:11:44] Speaker 04: So can you tell us that there was no alternative theory that wouldn't have depended on that prior? [00:11:51] Speaker 00: Correct. [00:11:52] Speaker 00: So the prior Rule 36 decision affirmed as to all seven IPR proceedings upholding the invalidation of five patents, and for three of those patents, [00:12:02] Speaker 00: The one and only argument that was made in the prior proceeding that this court decided in March was whether or not RFC 2401 was a prior printed publication. [00:12:11] Speaker 00: And with respect to the second issue that was raised at argument today, obviously, any arguments about retroactivity have been waived. [00:12:20] Speaker 00: There's not any suggestion of them in any of the briefing. [00:12:24] Speaker 00: Indeed, the brief refers specifically to the arguments that were at issue in oil states, namely whether or not the Seventh Amendment [00:12:31] Speaker 00: applies and whether or not there's an Article III issue. [00:12:35] Speaker 00: And indeed, in their reply brief at page 26, they had said that this court's binding precedent foreclosed the argument. [00:12:41] Speaker 00: Of course, this court didn't have binding precedent on the issue of retroactivity. [00:12:45] Speaker 00: If the court has further questions on any of these issues, I'm happy to address them. [00:12:50] Speaker 00: But for the reasons stated in our brief and that I've articulated today, we respectfully submit the decision should be affirmed. [00:12:59] Speaker 03: Let me ask you a question that's troubling me that is peripheral to what we're saying. [00:13:05] Speaker 03: If, in fact, we thought that there was a constitutional issue which has come to the surface now that the major issue in oil states has been resolved, isn't there an obligation on all of us to assure that the Constitution is not violated? [00:13:23] Speaker 00: So, Judge Newman, I think that it's very well established in this Court, in the Supreme [00:13:29] Speaker 00: even constitutional arguments, of course, can be waived. [00:13:33] Speaker 00: And to the extent that they are now attempting to assert a retroactivity argument, that's certainly not something that has previously been presented. [00:13:42] Speaker 00: This Court has been consistently clear in cases like Smith-Kline v. Apotex and Aventis v. Hospira, 675 F. [00:13:50] Speaker 00: 3rd at 1332 that if an argument is not presented in an appellant's brief, it's waived. [00:13:55] Speaker 00: And that's true with respect to constitutional arguments as well in cases like Tronzo versus Biomet from this court. [00:14:02] Speaker 00: And Haley versus West Penn, a third circuit decision, 842 F third at 230, says, quote, because the constitutional claim was not presented in appellant's opening brief, it's waived. [00:14:11] Speaker 00: And there it had to do with issues relating to due process as well, if I recall correctly. [00:14:22] Speaker 00: And so Judge Newman. [00:14:24] Speaker 00: There was certainly nothing about the oil state's decision that has given them some intervening right or intervening argument that they didn't have at the time that they filed their opening brief. [00:14:35] Speaker 00: This court's decision in MCM versus HP certainly didn't address any type of retroactivity argument. [00:14:42] Speaker 00: And so it wasn't foreclosed by precedent. [00:14:45] Speaker 00: And oil states is very clear that it was not addressing. [00:14:48] Speaker 00: And it certainly wasn't creating or acknowledging the existence of some argument that didn't previously exist. [00:14:54] Speaker 00: The court was just simply being precise and saying what they weren't addressing because there were some things that had been talked about during oral argument in that case that were not part of the decision. [00:15:03] Speaker 04: There were several amicus briefs who raised the Seventh Amendment issue as well, which means that that's why the Supreme Court felt the need to say we're not reaching it. [00:15:12] Speaker 00: I think that's exactly right, Judge O'Malley. [00:15:14] Speaker 04: So it was out there. [00:15:15] Speaker 04: in the public domain at the time these briefs were filed. [00:15:18] Speaker 00: I think that's right. [00:15:19] Speaker 00: The Supreme Court was simply acknowledging that in deciding the specific issues that it had before it, it wasn't foreclosing other challenges that had not been before it, but was very clear that this wasn't something that oil states had raised. [00:15:32] Speaker 00: And again, it wasn't something that this court had decided previously. [00:15:35] Speaker 00: So this is an argument that was available to vernetics should it have wished to pursue it. [00:15:40] Speaker 00: Now, ultimately, I think at the end of the day, it's- [00:15:44] Speaker 02: case law or discussion or briefing in this appeal as to when is it constitutionally permissible to retroactively apply a new act of Congress? [00:15:54] Speaker 00: None whatsoever Judge Chen. [00:15:55] Speaker 02: Do we have any kind of letter from any of the parties in this appeal after oil states came out requesting that supplemental briefing be heard on the question of retroactive application of the AIA? [00:16:10] Speaker 00: No, Judge Chen, this issue is not presented to this appeal and it would not be... So we have nothing here until now at this oral argument. [00:16:17] Speaker 00: That's absolutely right, Judge Chen. [00:16:20] Speaker 00: And so I respectfully submit that's an issue that Vernettix has waived and would not be appropriately addressed by this court in this case. [00:16:29] Speaker 00: If the court has further questions on this issue or any of the other issues, I'm happy to address them. [00:16:34] Speaker 03: Anything else for Mr. Equipp? [00:16:36] Speaker 03: Okay. [00:16:37] Speaker 00: Thank you, Judge Neiman. [00:16:44] Speaker 01: Unless there are questions from the panel. [00:16:48] Speaker 02: So what's the best sentence in your brief that tells me that I should know that you brought up a challenge to the AIA and the retroactive application of the AIA to your patent? [00:16:59] Speaker 02: What's the best sentence I should read? [00:17:01] Speaker 01: Ewan, I think it's a sentence that refers to the constitutionality question. [00:17:05] Speaker 02: Which sentence is that? [00:17:06] Speaker 01: It is in our brief that refers to the oil states, the pending oil states case. [00:17:14] Speaker 01: We believe it's the first sentence of the... Page 54? [00:17:17] Speaker 01: It is on page 54. [00:17:19] Speaker 02: The Supreme Court is currently considering the question of whether the board's IPR process violates the Constitution by extending private property rights through a non-Article 3 forum without a jury. [00:17:30] Speaker 01: And the following sentence where we specify that if the Supreme Court decides that the Seventh Amendment Article 3 preclude the board from invalidating patents, [00:17:38] Speaker 01: then the court should decide the board's IPR decision. [00:17:41] Speaker 02: Did the Supreme Court decide that the Seventh Amendment Article III preclude the board from invalidating patents through the IPR? [00:17:48] Speaker 01: The court said that Seventh Amendment Article III... Did it decide that? [00:17:51] Speaker 01: It decided that, but it left open the question whether it's constitutional to apply them in specific circumstances, and we believe that that's a substantive question. [00:17:59] Speaker 02: And you didn't raise that in your brief here on page 54. [00:18:02] Speaker 01: We didn't specifically brief it because we believe that pending the Supreme Court's decision, it was premature to brief those issues. [00:18:09] Speaker 01: The court's precedent at the time foreclosed any kind of such challenge. [00:18:13] Speaker 02: What, on retroactive application? [00:18:16] Speaker 01: In general, because the court's precedent at the time foreclosed, in general, upheld the constitutionality of the IPR procedures. [00:18:23] Speaker 01: We believed in all circumstances. [00:18:24] Speaker 04: On your article 3, but we did not address that retroactivity issue, did we? [00:18:28] Speaker 01: Well, we believe that the court's precedent in general [00:18:31] Speaker 01: foreclosed him in that argument at the time. [00:18:36] Speaker 01: So therefore, we did not brief it. [00:18:39] Speaker 03: Okay. [00:18:40] Speaker 03: We will take the issues under submission. [00:18:43] Speaker 03: Thank you both. [00:18:44] Speaker 01: Thank you, Your Honor. [00:18:45] Speaker 03: The case is submitted.