[00:00:00] Speaker 05:
Case 19-2196, synchronous technologies versus Dropbox.

[00:00:07] Speaker 05:
Mr. Hogue, are you ready to proceed?

[00:00:09] Speaker 00:
I am, Your Honor.

[00:00:12] Speaker 05:
Okay.

[00:00:12] Speaker 05:
Well, I'd like to ask Jen to stop the clock because we have a couple of preliminary matters we wanted to raise with you all, so I don't want this time to count against your time.

[00:00:21] Speaker 05:
And I guess the questions that I think the panel has are about whether or not we have a final judgment.

[00:00:29] Speaker 05:
So I think both counsel should probably listen carefully.

[00:00:33] Speaker 05:
Mr. Harvard, that goes for you as well.

[00:00:35] Speaker 05:
And we may ask for your response.

[00:00:38] Speaker 05:
So the question we have as a preliminary matter is whether or not we have a final judgment.

[00:00:45] Speaker 05:
And that question is raised with respect to the 757 patent specifically as there were counterclaims of invalidity as we understand the record.

[00:00:55] Speaker 05:
And the court just reached the question of infringement, and at least as far as we can ascertain in the record, those counterclaims of impolidity for the 757 were neither dismissed without prejudice, no 54B, et cetera.

[00:01:12] Speaker 05:
The second piece of that, before I ask for your response, is that the complaint here talked about extended to all claims, not just the asserted claim.

[00:01:24] Speaker 05:
And there were counterclaims, I guess.

[00:01:27] Speaker 05:
So there was nothing.

[00:01:28] Speaker 05:
The court just dealt with the asserted claims.

[00:01:32] Speaker 05:
So are those all claims other than the asserted claims out of this case gone or do we need some closure with those for those as well?

[00:01:43] Speaker 05:
Now let me ask my colleagues if they have anything to add to this question before we ask you to respond.

[00:01:50] Speaker 03:
No, I agree that the 757 is the one in which we don't have an invalidity judgment.

[00:01:57] Speaker 03:
We have only a non-infringement judgment, but that leaves the question of, even as to the other two, that the counterclaims refer to all claims being invalid.

[00:02:09] Speaker 03:
And the one thing I guess I would add is that they say that they're all invalid, not just under 101, but also 102, 103, and 112, I think.

[00:02:18] Speaker 03:
So there seems to be this unresolved set of counterclaims on its face in the case.

[00:02:31] Speaker 01:
This is Judge Rana.

[00:02:32] Speaker 01:
And also I'd like for counsel to just address briefly the issue of mutinous here.

[00:02:39] Speaker 01:
Our internal chemical company, this court held that

[00:02:44] Speaker 01:
a finding that non-infringement does not by itself meet a request for declaratory judgment on invalidity.

[00:02:51] Speaker 01:
And so it seems to me that there's a potential here for these claims to be alive.

[00:02:59] Speaker 01:
There's no finality unless the parties are able to show us otherwise this morning.

[00:03:11] Speaker 05:
Okay, so let's ask Mr. Hogue and then Mr. Harbour if they could respond to the concerns the panel has raised about finality.

[00:03:20] Speaker 00:
Well, this is Mark Hogue.

[00:03:23] Speaker 00:
I have to say I'm surprised and I guess I would need to go back and take a look at the documents you're talking about.

[00:03:33] Speaker 00:
I do know that

[00:03:36] Speaker 00:
Judge Gilliam rendered judgment for Dropbox and that ended the case.

[00:03:48] Speaker 00:
I never considered that their declaratory judgment counterclaim was live after that point.

[00:04:01] Speaker 00:
That's all I can say at this point.

[00:04:05] Speaker 05:
Well, I think we do have case law.

[00:04:08] Speaker 05:
I'll just respond to that.

[00:04:09] Speaker 05:
This is not the first time this issue has come up before the court.

[00:04:14] Speaker 05:
And so I do think in our cases, we've made clear that counterclaims need to be disposed of in some way, either just missile without prejudice or 54B.

[00:04:25] Speaker 05:
I presume you're not familiar with those cases.

[00:04:30] Speaker 00:
Well, I'm just having a problem recalling whether or not there is a declaratory judgment counterclaim.

[00:04:41] Speaker 00:
That's kind of where I'm at.

[00:04:42] Speaker 00:
This was so many several years ago.

[00:04:45] Speaker 05:
Maybe Mr. Harper can tell us, because presumably the Conquer claim was his.

[00:04:51] Speaker 03:
My recollection is that the 101 was originally, forgive me if I'm confusing cases,

[00:04:59] Speaker 03:
But in this case, the 101 was originally by way of a motion to dismiss before there was even an answer.

[00:05:09] Speaker 03:
So there, of course, there were no counterclaims then.

[00:05:12] Speaker 03:
And the district court said, I will deny the motion to dismiss.

[00:05:17] Speaker 03:
Later, I think first an answer and then an amended answer to this amended complaint or the second amended complaint, there then comes to be from Dropbox

[00:05:28] Speaker 03:
not only affirmative defenses, but counterclaims, I think, four, five, and six, which assert invalidity of the three patents that are at issue.

[00:05:38] Speaker 03:
And that, at least in my mind, is what seems to be hanging out there and without there having been a ruling on them.

[00:05:50] Speaker 03:
But maybe Dropbox, whose claims these are, I guess, can rest.

[00:05:56] Speaker 05:
Okay, we'll change to you, Mr. Harbour.

[00:05:59] Speaker 02:
Thank you, Chief Judge Prost.

[00:06:00] Speaker 02:
This is Adam Harbour for Dropbox.

[00:06:04] Speaker 02:
Judge Toronto is correct that Dropbox did have invalidity counterclaims in the case.

[00:06:10] Speaker 02:
I suppose, like Mr. Hogue, we never considered the matter not final and the court, I believe, closed the case.

[00:06:23] Speaker 02:
And so I think for purposes of this appeal, we consider there to be a final judgment on those issues.

[00:06:31] Speaker 02:
And obviously, the courts, our cross-appeal deals with the 101 motion dismissed, which we think fully addressed that issue as to the claims.

[00:06:44] Speaker 05:
Well, I appreciate your comment that what you consider to be a final judgment, the question is, what is the reality?

[00:06:51] Speaker 05:
We have to consider the record.

[00:06:53] Speaker 05:
So are you prepared to make a statement or do anything with respect to these outstanding counterclaims?

[00:07:02] Speaker 02:
Well, Your Honor, I appreciate that.

[00:07:04] Speaker 02:
I think if the issue is whether or not there is currently a final judgment turns on whether we're saying we consider those to be closed and dropped, I think we are willing to make that representation.

[00:07:21] Speaker 05:
OK.

[00:07:22] Speaker 05:
I mean, colleagues, please proceed.

[00:07:25] Speaker 05:
Yes, Judge Raina.

[00:07:27] Speaker 01:
Yeah, this is Judge Raina.

[00:07:28] Speaker 01:
I want to make sure that I heard the counselor correctly.

[00:07:31] Speaker 01:
And what you're saying, Dropbox is saying that you're no longer going to pursue counterclaims because it's on the basis that your understanding or at least the way you saw the case is that the court did dismiss with finality both the

[00:07:52] Speaker 01:
the counterclaims on invalidity.

[00:07:55] Speaker 01:
Is that correct?

[00:07:57] Speaker 02:
That's correct, Adriana.

[00:07:59] Speaker 01:
Okay.

[00:08:00] Speaker 01:
So you dropped the counterclaims this morning, if in fact it was still an initial penalty.

[00:08:06] Speaker 01:
You're telling me you dropped the counterclaims?

[00:08:11] Speaker 02:
Yes, that's correct.

[00:08:12] Speaker 03:
I'm sorry.

[00:08:14] Speaker 03:
Maybe I shouldn't be confused.

[00:08:16] Speaker 03:
So that means your cross-appeal

[00:08:19] Speaker 03:
is something we can ignore because you've just dropped your 101 counterclaim.

[00:08:26] Speaker 02:
I'm familiar with Cardinal Chemical, Your Honor, and what that case stands for.

[00:08:31] Speaker 02:
What I'm not sure has applied to this case is that requires there to be a counterclaim

[00:08:40] Speaker 02:
in order for the invalidity issue to be separate i think the as your honors have have pointed out the issue here would be on the seven five seven patent which is where this district court judgment was one of non-infringement where the other two patents the judgment was in validity which i think would would move the issue uh... i i think in our view the cross appeal on one oh one for the seven five seven patent if the court were to rule

[00:09:08] Speaker 02:
in dropouts favor that they've been claims were invalid on one of one i think that would have the effect of muting not infringement issue frankly what are the other way around i think if it's the other way around again i without being able to separately address the legal issue and possibly submit uh... supplemental briefing i don't i can't commit to to what those how those cases play out if cardinal chemical

[00:09:36] Speaker 02:
and the Supreme Court's or this Court's judgments require there to be a live counterclaim in order to rule on invalidity, then per my earlier representation, we have dropped those counterclaims for purposes of presenting a final appeal, and so the Court need not rule on it.

[00:09:56] Speaker 03:
Maybe I can just ask the question this way.

[00:10:00] Speaker 03:
you can drop your counterclaims and yet retain the 101 affirmative defense to the infringement charge under 757.

[00:10:12] Speaker 03:
And that would mean that if we affirm non-infringement, that is, reject synchronous appeal, then the 101 now affirmative defense would in fact be moot.

[00:10:28] Speaker 02:
Yes.

[00:10:32] Speaker 05:
Okay.

[00:10:33] Speaker 05:
Well, I'm not sure how to proceed, so I'm looking to my colleagues if they have any other view.

[00:10:38] Speaker 05:
It seems to me that perhaps we are in need of a short recess so that the panel can, which I'm sorry to tell you, Jennifer, that's what I wanted to catch you on before, the need for a short recess at this point.

[00:10:52] Speaker 05:
Can you tell us how you would be able to finesse that or finagle that given the audio system and where we are?

[00:11:00] Speaker 04:
Um, I believe I can disconnect the panel members from the call while the attorneys remain on the line, and then I can connect you back in after.

[00:11:13] Speaker 04:
I can set up a conference with just the panel members.

[00:11:19] Speaker 05:
Okay, so you would... We'll proceed to disconnect the judges from this call, and then you will call us on another line so that we can converse just amongst ourselves.

[00:11:30] Speaker 05:
in the interim?

[00:11:31] Speaker 05:
Yeah, is that what I understood?

[00:11:32] Speaker 05:
Okay.

[00:11:33] Speaker 05:
Um, my colleagues amenable towards proceeding in that regard?

[00:11:37] Speaker 01:
Yes.

[00:11:38] Speaker 01:
Yes, that's fine.

[00:11:41] Speaker 05:
Okay.

[00:11:41] Speaker 05:
So we'll, uh, so, and did the parties understand that I guess you remain on this call and we'll get back to you promptly, we hope.

[00:11:51] Speaker 02:
Yes, your honor.

[00:11:52] Speaker 05:
Yes, your honor.

[00:11:54] Speaker 05:
appeal number 2019-2196, synchronous technologies versus Dropbox.

[00:12:01] Speaker 05:
This is a continuation of the discussion we had earlier today about the final judgment questions, and the panel has conferred, and now we're back on the record.

[00:12:13] Speaker 05:
Council, and I want my colleagues, if I've misunderstood or misstated anything, to please feel free to jump in.

[00:12:20] Speaker 05:
But the panel has concluded,

[00:12:23] Speaker 05:
that based on Mr. Harbour's representation that Dropbox is now today dropping or withdrawing all of the counterclaims and only pursuing the 101 claim as an affirmative defense with regard to the 757 patent, we are ready to proceed with the merits case.

[00:12:48] Speaker 05:
Could counsel concur if I've stated correctly what the positions are and where we are?

[00:12:54] Speaker 05:
Mr. Hogue?

[00:12:58] Speaker 05:
Yes, Your Honor.

[00:13:00] Speaker 05:
Do you concur?

[00:13:01] Speaker 05:
I do concur.

[00:13:03] Speaker 00:
I do concur to the extent I have a say in the matter.

[00:13:07] Speaker 05:
Yes.

[00:13:10] Speaker 05:
Mr. Harper, do you have any objections or are you concurring and proceeding in the manner I've described?

[00:13:16] Speaker 02:
I have no objection, Your Honor, and concur.

[00:13:19] Speaker 02:
Thank you.

[00:13:20] Speaker 05:
Okay.

[00:13:21] Speaker 05:
Thank you.

[00:13:22] Speaker 05:
So we're now ready to proceed with the merits case.

[00:13:27] Speaker 05:
Mr. Hogue, start you again.

[00:13:30] Speaker 00:
Thank you.

[00:13:32] Speaker 00:
Good morning again, and may it please the court.

[00:13:35] Speaker 00:
I'd like to spend some time on the importation of hardware into the 757 and the 446 patents.

[00:13:42] Speaker 00:
That limitation is not expressed in the claims.

[00:13:45] Speaker 00:
It wasn't added by argument during prosecution.

[00:13:47] Speaker 00:
It's not mandated by the inventor's definition of device or system in the specification.

[00:13:52] Speaker 00:
Where as close as it gets to software residing on hardware, it is actually contrary to the specification.

[00:13:59] Speaker 00:
And the importation of client-side hardware is even

[00:14:05] Speaker 00:
much more of a random importation.

[00:14:09] Speaker 00:
The 446 patent, step C in claim one or A in claim 11 is not indefinite.

[00:14:18] Speaker 00:
Those claims do not say that a media file contains a directory.

[00:14:24] Speaker 00:
the clause in question comprising a second version of the media data in the same format as the first version in the personal information space.

[00:14:32] Speaker 00:
That is grammatically correct.

[00:14:34] Speaker 00:
There's nothing ambiguous in that term whatsoever.

[00:14:37] Speaker 00:
These claims have been litigated, gone through inter-parties, re-examined, they're licensed.

[00:14:42] Speaker 00:
No one interprets it the way that the

[00:14:45] Speaker 00:
Dropbox suggests and the court suggests.

[00:14:49] Speaker 00:
And in fact, Dropbox's expert, Friedman, had no problem understanding and defending against it.

[00:14:55] Speaker 03:
This is Judge Sorrento.

[00:14:56] Speaker 03:
Can I ask you a question about that directory point?

[00:14:58] Speaker 03:
And I think just to confirm something, I don't really have much doubt about.

[00:15:03] Speaker 03:
But one possible meaning of the term directory is, let's just call it, table of contents.

[00:15:10] Speaker 03:
Or index.

[00:15:12] Speaker 03:
But I gather that it has been agreed all along here that the directory here is essentially the complete collection of all of the content that would be listed in it, not just the listing.

[00:15:26] Speaker 03:
So not, you know, not a three page table of contents, but a 500 page book.

[00:15:31] Speaker 03:
And that's what causes the difficulty of having a particular file

[00:15:39] Speaker 03:
that's in the directory also contain the entire directory.

[00:15:44] Speaker 03:
Am I right about that?

[00:15:46] Speaker 00:
I don't know that that's what is causing the difficulty here.

[00:15:50] Speaker 00:
I have never had a difficulty, but I think that your understanding works.

[00:15:58] Speaker 00:
Okay.

[00:15:59] Speaker 00:
Yes.

[00:16:01] Speaker 00:
Then on the 696 patent, the district judge ruled that six limitations were under paragraph six and that four of the limitations, none of the limitations had statutory means plus function language.

[00:16:17] Speaker 00:
Four of the six limitations contain the term module.

[00:16:21] Speaker 00:
And in accordance with a case named Williamson, he declared they were nonce terms and then they were paragraph six.

[00:16:29] Speaker 00:
But in our patent, the term module is a software term.

[00:16:34] Speaker 00:
You have to identify modules and so forth in the middleware aspect of the claim of the patent.

[00:16:44] Speaker 00:
The other two limitations didn't have any nonce words in them.

[00:16:47] Speaker 00:
They weren't in Means Plus Function format, and he just said that it was Means Plus Function anyway.

[00:16:54] Speaker 00:
But notwithstanding that, we did show that there was substantial structure, algorithms, source code on pages 53 to 55 of our brief.

[00:17:08] Speaker 00:
And as another point, you're supposed to interpret claims in terms of indefiniteness from the level of ordinary skill.

[00:17:16] Speaker 00:
He never made that finding.

[00:17:19] Speaker 00:
And that's basically the points in our brief.

[00:17:25] Speaker 00:
Your Honor, if you have, Your Honor.

[00:17:27] Speaker 03:
Can I clarify one thing?

[00:17:28] Speaker 03:
This, I guess, is on the 696 indefiniteness based on

[00:17:36] Speaker 03:
There's a list of six separate terms.

[00:17:43] Speaker 03:
My understanding, and just tell me if this is right, that each of two terms appears in all of the claims, namely user identifier module and transaction identifier module.

[00:17:57] Speaker 03:
And if the district court was correct about either one of those two,

[00:18:04] Speaker 03:
The rest would not need to be addressed.

[00:18:09] Speaker 00:
You are taxing my ability at this point, Your Honor.

[00:18:14] Speaker 00:
I would have to double, I'm going to have to double check that with my chart.

[00:18:18] Speaker 00:
Okay.

[00:18:20] Speaker 00:
If I may.

[00:18:23] Speaker 03:
Look at the markman.

[00:18:28] Speaker 03:
It was a little difficult because of all of the certificates of correction to arrive at the final language of

[00:18:34] Speaker 03:
of the claims.

[00:18:38] Speaker 00:
The Patent Office printed the originally filed claims and it was a nightmare getting that correct because of the substantial.

[00:18:47] Speaker 00:
I'm having trouble locating my chart.

[00:18:52] Speaker 03:
That's okay.

[00:18:53] Speaker 03:
Don't take your time on that.

[00:18:58] Speaker 00:
I'll reserve time, if I may, and pass the argument on to

[00:19:05] Speaker 00:
My colleague.

[00:19:06] Speaker 05:
Okay.

[00:19:07] Speaker 05:
Um, Mr. Harbor, you're up.

[00:19:10] Speaker 05:
Please proceed.

[00:19:13] Speaker 02:
Thank you, chief judge.

[00:19:15] Speaker 02:
Um, and may it please the court, your honor, the district court here found that all of the claims that were asserted in the three patents in suit were either invalid or not infringed based on the textbook application of

[00:19:30] Speaker 02:
clear binding authority from this court and the clear factual record below.

[00:19:35] Speaker 02:
And those those decisions should be affirmed.

[00:19:40] Speaker 02:
I want to start with the infringement issue on the 757 patent.

[00:19:45] Speaker 02:
And Mr. Hogan, his argument just now said that called it a random importation of hardware into the claims, including on the client side.

[00:19:54] Speaker 02:
And

[00:19:54] Speaker 02:
As your honors know, and as we said at our brief, there was not a random importation of hardware.

[00:20:01] Speaker 02:
That is the clear implication of the specification and the intrinsic record here.

[00:20:06] Speaker 02:
And it also flows directly from what Mr. Hogue himself told the district court during the Markman proceeding in this case.

[00:20:13] Speaker 02:
In other words, the entire dispute between the parties on the term system and device revolved around the question of

[00:20:23] Speaker 02:
Could those terms be interpreted to cover software without any hardware?

[00:20:28] Speaker 02:
And when that issue was raised at the hearing, the court said, it doesn't sound like there's any issue on that.

[00:20:34] Speaker 02:
And Mr. Hogue agreed that there wasn't, that in fact, even under their claim construction, hardware was required on the client side, because that's where the systems and devices are in the claim terms.

[00:20:46] Speaker 02:
And that no one was arguing that the claims could be infringed by software alone.

[00:20:52] Speaker 02:
notwithstanding clear record at the district court what synchronous is now trying to argue is that in fact the claims can be infringed by software alone and there is no case that they cite in their brief or no precedent of this court that allows such a holding under centillion which is on all fours with this case the

[00:21:19] Speaker 02:
the accused infringer must make use or sell the entire claimed system in order to uh... infringed a system claim in that case the question was if the users in installed the software that was provided by quest on their uh... local property means which was with their computer what what even though it was quest software and they controlled it and in that case of what's until you know it is that they were the mastermind of the system

[00:21:46] Speaker 02:
was that making the system in the court held very clearly that it was not.

[00:21:51] Speaker 02:
And that ruling applies whether or not hardware is required or whether the software must simply reside on hardware.

[00:21:58] Speaker 02:
The key point is the software has to reside on the hardware on not just one client device but two different client devices that are joined to a central data store in order to exist.

[00:22:10] Speaker 02:
And there is no evidence and no argument

[00:22:12] Speaker 02:
in this case, the Dropbox ever directly infringes a claim to those systems.

[00:22:17] Speaker 02:
It doesn't make that complete system.

[00:22:19] Speaker 02:
It doesn't use that complete system, and it doesn't sell that complete system.

[00:22:24] Speaker 02:
So under the clear authority of this court, the district court was correct.

[00:22:32] Speaker 02:
The synchronous turns to a number of cases based on fantasy sports, and it's for a pliable reason.

[00:22:40] Speaker 02:
I want to briefly

[00:22:41] Speaker 02:
address those because we didn't have an opportunity to and and i think in all of those cases that they stand for the unremarkable and frankly irrelevant proposition here that eight claim to an apparatus or system as opposed to a method that has software on hardware doesn't actually have to be used in order for someone to be in but guilty of reliable for infringing the system so impenetrable sports there was a claim to eight the uh...

[00:23:09] Speaker 02:
a person like a computer for playing fantasy football that had various software me and all the court held was

[00:23:16] Speaker 02:
It doesn't matter if the user is required to actually use the means on the hardware.

[00:23:23] Speaker 02:
The computer that has those software means infringes the claim.

[00:23:26] Speaker 02:
Now, synchronous argues that the computer in that case was the end user's computer trying to draw some analogy to this case.

[00:23:34] Speaker 02:
And it says that in its reply brief without citing anything in fantasy sports.

[00:23:39] Speaker 02:
And that's because fantasy sports says just the opposite.

[00:23:42] Speaker 02:
At page 1119, there is an entire paragraph

[00:23:45] Speaker 02:
analyzing the fact that it is in fact the server, commissioner.com server, which is where the users of the system play and therefore that is what maintains the software.

[00:23:57] Speaker 02:
It highlights the fact that the accused infringer there had advertised that there is no need to download software and updates onto the user's computer.

[00:24:07] Speaker 02:
So it is contrary to the position that Synchronosis has taken in this case.

[00:24:13] Speaker 02:
All of those cases

[00:24:14] Speaker 02:
simply stand for the proposition that for the software components that state a capability, they need not be used for a complete system to be made.

[00:24:25] Speaker 02:
Not a single one of those cases stands for the proposition that someone can be, an accused infringer can be liable for direct infringement without meeting all the claim limitations.

[00:24:35] Speaker 02:
Nor does Unilock stand for that proposition.

[00:24:39] Speaker 02:
Even under the in-residence theory, as the district court called it,

[00:24:43] Speaker 02:
the the claims still require hardware to be residing on top but i'm sorry software to be residing on hardware to be infringed here that is uh... was what the synchronous maintained at the summary judgment hearing it's what it's expert admitted that that the system is not complete and these these uh... admissions are on page forty and forty one of our are read brief uh... the system is not complete until the user install the software are not one but two different

[00:25:12] Speaker 02:
personal computers to form the complete system of three components.

[00:25:17] Speaker 02:
There is no active infringement as to that complete system.

[00:25:23] Speaker 02:
Unless your honors have further questions on that, I'll turn to the 446 patent indefiniteness.

[00:25:31] Speaker 02:
On that question, I'll first say that as we noted in our brief, the notion that our expert

[00:25:40] Speaker 02:
was able to interpret the claim of the certificate that i think it is based on it on fair reading of the expert report there was as your honor the well aware the expert gave an opinion that the claims are invalid is indefinite and then it's an alternative said if they're not and it means what think about that means here's why it invalid under section one or two or three that doesn't mean that the expert was agreeing that the terms have the meaning that you know describes them

[00:26:07] Speaker 02:
the uh... what what synchronous is asking the court to do here is exactly what the patentee in chef america in alan engineering in in process control were asking the court to do which is a rewrite the claims to to save their to save them from invalidity which this court has repeatedly held is improper one thing i will note here uh... if your honors

[00:26:36] Speaker 02:
uh... wish to hear about it you know obviously we have a promotion to strike on this point because in the reply brief on this issue for the first time uh... synchronous argued that the claims were capable of being understood and could be interpreted a lot of an examiner's amendment and at the submission that they made to the patent office with there is a good if assuming that those are not clearly waived because

[00:27:04] Speaker 02:
synchronous did not that failed to read that issue at any point um... it's clearly unconvincing there's a reason we would commit that synchronous never rate that issue markman never read that issue an expert discovery can never read that issue in summary judgment and that's because the the beat file history in the examiner's amendment does not make clear the meaning of the terms synchronous

[00:27:29] Speaker 02:
says that its submission made clear that the generating a digital media file is the reason for the second version of the media data and then cite the 10 page submission it made without quoting anything.

[00:27:41] Speaker 02:
And that's because there's nothing in that submission that makes that clear.

[00:27:45] Speaker 02:
It merely in that submission, the patentee or the applicant was distinguishing two different prior art references on the basis of essentially every limitation in the claim.

[00:27:55] Speaker 02:
And in fact,

[00:27:56] Speaker 02:
But one of the term at issue here that was added, which is a digital media file, is not, that term doesn't appear anywhere in that submission.

[00:28:04] Speaker 02:
The examiner's amendment, nor would it matter, Your Honor.

[00:28:08] Speaker 02:
The examiner's amendment, there is no case that says that if language comes from an examiner, in the case here, it was agreed by the patentee, that that somehow immunizes the claim from invalidity.

[00:28:20] Speaker 02:
In fact, as Your Honors know, every claim that is found invalid by court

[00:28:26] Speaker 02:
is one where an examiner approved of the language if they did not provide it and did so and provided and as a result had a presumption of validity that this court has never found that that that immunizes the claim somehow from the finding of indefiniteness in this case it is the language is clear the

[00:28:53] Speaker 02:
to the point that Mr. Hope suggested right now that the media data need not comprise or include a directory of digital media files.

[00:29:01] Speaker 02:
That is not the position either synchronous or its expert took below at pages 49, 85, and 58, 51 of the appendix.

[00:29:10] Speaker 02:
Both synchronous and its expert agreed below that media data includes a directory of digital media files.

[00:29:17] Speaker 02:
And to Judge Toronto's question, whether or not that's an index or just the files themselves,

[00:29:23] Speaker 03:
the claim makes no fact uh... in india why why did what why would it i don't think that this point has been contested but why would it and it and you're gonna have to correct uh... the image that's in my head i have to have this image of uh... a bunch of different movies and in and so each of those is a is uh... media file and and in one of the movies uh... you know there's uh... there kind of uh...

[00:29:52] Speaker 03:
sandwich boards or something at the end that list all the other movies that are available to the user.

[00:29:59] Speaker 03:
And why does that media file, that media file would include a directory of all the media files if all the directory is an index or a list?

[00:30:10] Speaker 03:
So what's wrong with what I just said?

[00:30:15] Speaker 02:
What is wrong with that, Your Honor, is that neither the patent suggests that that's what the term means, nor has synchronous ever suggested that that's what the term is.

[00:30:22] Speaker 03:
Oh, okay.

[00:30:23] Speaker 03:
Well, that's why I asked.

[00:30:24] Speaker 03:
But that wouldn't mean that it would make no sense if that's what it did mean.

[00:30:30] Speaker 02:
Right.

[00:30:31] Speaker 02:
I think that the key point is both the inventor of the patent and synchronous expert agreed that a digital media file cannot contain a directory of digital media files.

[00:30:44] Speaker 02:
There was no argument below to the district court as a matter of claim construction or when this issue was presented on summary judgment that it would make sense if the digital media file contains that directory.

[00:30:57] Speaker 02:
In fact, the way that the term digital media file was defined by the court was as a digital audio or video content in the form of a file such as an MPEG MP3 real audio or a liquid audio file.

[00:31:09] Speaker 02:
There is no

[00:31:11] Speaker 02:
testimony or suggestion that that can include such an index or that the index would be what this digital media file means and i think the further reason supporting that is that the in in limitation e of claim one it requires a transferring of a digital media file over the network containing the different information and the if people were talking about here is a digital media file that

[00:31:38] Speaker 02:
itself contains in it some sort of directory somehow, that wouldn't be the difference information that's later transferred.

[00:31:44] Speaker 02:
So no matter how synchronous slices it, the claim just simply doesn't make any sense.

[00:31:51] Speaker 02:
And what they're asking the court to do is to rewrite it.

[00:31:58] Speaker 02:
If there are no further questions on that issue, I'll move briefly to the 696 indefiniteness question and I'll start

[00:32:05] Speaker 02:
um, Judge Toronto with your question about the terms and you are correct that the term user identifier module appears in all of the claims.

[00:32:15] Speaker 02:
The term transaction identifier module appears in all of the claims and then the other terms appear in one of them.

[00:32:23] Speaker 02:
Um, so, but, but respectfully on, on all of the terms, there is no basis to reverse the district courts clear holding here, which was based on,

[00:32:33] Speaker 02:
un-contradicted, unrebutted expert testimony from Dropbox.

[00:32:37] Speaker 02:
The court found that these terms were not terms associated with structure, that there was no description and specification that a person of ordinary skill and the art would associate with these terms, and the court relied on Dropbox's expert.

[00:32:54] Speaker 02:
Synchronous though, contending that the district court ignored the view of a person of ordinary skill and the art,

[00:33:00] Speaker 02:
had an opportunity to submit its own declaration, but it did not follow the district court's rules and had the declaration struck.

[00:33:07] Speaker 02:
Therefore, the record here, and by the way, don't appeal that ruling to this court.

[00:33:13] Speaker 02:
And so those, the fact findings that the district court made based on that uncontested fact record are reviewed for clear error.

[00:33:22] Speaker 02:
And there clearly is not clear error here with respect to those rulings and what the person of ordinary skill in the arts

[00:33:30] Speaker 02:
but how he or she would view the patent.

[00:33:33] Speaker 02:
The last issue that I'll touch on briefly is on our cross appeal on the 101 issues.

[00:33:40] Speaker 02:
And your honors, the district courts ruling that the claims did not claim abstract idea, as we set out in our brief, came on the heels of Enfish, but before a number of cases which make clear that claims that are essentially identical to these.

[00:33:59] Speaker 02:
claim an abstract idea and add nothing more.

[00:34:01] Speaker 02:
The claims and data engine, for example, claim tracking changes in a spreadsheet by comparing versions and identifying what's changed, which in essence is what the 757 patent has claimed here.

[00:34:15] Speaker 02:
The synchronous tries to spin the, to say that there is some benefit, but as we made clear in our brief,

[00:34:26] Speaker 02:
The fact that the specification can identify a benefit to applying an abstract idea in the context of a computer does not mean that the claim is ineligible.

[00:34:35] Speaker 02:
So I hear that I'm in my rebuttal time, unless Your Honor has further questions.

[00:34:39] Speaker 05:
Actually, you already exhausted.

[00:34:41] Speaker 05:
Jen can correct me if I'm wrong, but I think I heard two buzzers, so I think you've exhausted your rebuttal time as well.

[00:34:46] Speaker 05:
Oh, I'm sorry, Your Honor.

[00:34:47] Speaker 05:
Yes, that's correct.

[00:34:48] Speaker 05:
But that's okay.

[00:34:49] Speaker 05:
That's correct.

[00:34:50] Speaker 05:
Okay, well, I mean, if the other side, you only get rebuttal if the other side deals with the 101 issue, and if they do, we'll restore you a minute or two.

[00:34:58] Speaker 05:
So thank you.

[00:35:00] Speaker 00:
Thank you.

[00:35:02] Speaker 00:
Your Honor, I always love being misquoted when I'm

[00:35:09] Speaker 00:
arguing here.

[00:35:10] Speaker 00:
I did not say that ever that hardware was a limitation, nor would it make any difference if I had, because I'm not a source for claim construction.

[00:35:21] Speaker 00:
But on appendix page 6055, I explained to the judge what I was talking about.

[00:35:28] Speaker 00:
Software residing on a computer.

[00:35:32] Speaker 00:
We're talking about the magnetism on top of the hard drive.

[00:35:35] Speaker 00:
We're talking about the pattern of on-off switches, not the field effect transistors.

[00:35:40] Speaker 00:
I did agree that we weren't talking about software sitting in a box, because I said what he was talking about was a box full of printouts of source code.

[00:35:50] Speaker 00:
As far as the use of the system, Dropbox operates the whole system.

[00:35:58] Speaker 00:
Once it's in place in residence on software, wherever that software may be, it's not delineated in the claim.

[00:36:07] Speaker 00:
for the use.

[00:36:09] Speaker 00:
They do use the whole system as shown in appendix page 6383.

[00:36:13] Speaker 00:
The user does nothing more than download the Dropbox client and then Dropbox watches it, updates it, and makes sure that everything stays in sync that's in there.

[00:36:26] Speaker 00:
As far as making and selling, the software Dropbox exists on its own server and

[00:36:37] Speaker 00:
and is distributed throughout their population of customers.

[00:36:47] Speaker 00:
The centillion argument is severely hampered by the claim language here.

[00:36:51] Speaker 00:
because the claims don't require processing means on the back end.

[00:36:57] Speaker 00:
Those limitations just simply aren't there.

[00:37:00] Speaker 00:
I did want to say that when Dropbox has its anomalous interpretation of the 446 claims, one and two, for the indefiniteness argument, that's really an enablement argument.

[00:37:14] Speaker 00:
There's nothing ambiguous in the terms.

[00:37:16] Speaker 00:
There's nothing

[00:37:18] Speaker 00:
They're understandable, they're reasonably certain under the Nautilus standard.

[00:37:22] Speaker 00:
And the Nautilus standard does require interpreting claims in light of the specification and the prosecution history.

[00:37:30] Speaker 00:
They would like to strike the prosecution history because it's not helpful to them.

[00:37:34] Speaker 00:
And then as far as the 696, the application of paragraph six is not a fact, it is a matter of law.

[00:37:44] Speaker 00:
and whether or not the specification satisfies, has the equivalent structure supporting the meaningful structural limitations, that is a matter of law.

[00:37:54] Speaker 00:
And that would conclude my argument, unless anybody has any further questions.

[00:38:03] Speaker 05:
And I'm not inviting a response to the 101 issue, but you have time if you wish to deal with that.

[00:38:11] Speaker 00:
Oh, the 101 issue, yeah.

[00:38:15] Speaker 00:
These are very strong patents.

[00:38:19] Speaker 00:
issue number one, is it drawn to an abstract subject matter?

[00:38:25] Speaker 00:
The answer to the question is no.

[00:38:27] Speaker 00:
The patents are directed to improving the speed, minimizing bandwidth, decreasing storage, and then enabling two people to sync, two systems to sync without being directly connected against each other.

[00:38:42] Speaker 00:
So that's an improvement in the hardware.

[00:38:45] Speaker 00:
As far as the

[00:38:47] Speaker 00:
Step two goes, we have quite a bit of, we have structure.

[00:38:53] Speaker 00:
I wanted to pull that out.

[00:38:58] Speaker 00:
Anyway, we have the two sync engines that in a data store, the sync engines have structure in them.

[00:39:07] Speaker 00:
Difference transaction generator, previous state of the data.

[00:39:11] Speaker 00:
And so forth.

[00:39:12] Speaker 00:
And all that does is to make sure that the information that is being synced is the differences are generated, the instructions what to do with those differences and they're transmitted.

[00:39:27] Speaker 00:
to the server.

[00:39:28] Speaker 00:
It's Delta Sync to the server or to the cloud.

[00:39:31] Speaker 00:
That's how it's usually talked about.

[00:39:33] Speaker 00:
And that's transformative.

[00:39:35] Speaker 00:
That is very non-conventional.

[00:39:38] Speaker 00:
This patent has been through inter-parties re-exam and to IPRs.

[00:39:44] Speaker 00:
So it's novel.

[00:39:46] Speaker 00:
With that, I have no further... Thank you.

[00:39:49] Speaker 05:
We appreciate that.

[00:39:50] Speaker 05:
And Mr. Harbour, we'll restore a minute or two for rebuttal on the 101 issue only.

[00:39:57] Speaker 02:
Thank you, Chief Judge Prost.

[00:40:00] Speaker 02:
I don't have much to add on the issue than to what's in our brief and what I said before.

[00:40:05] Speaker 02:
I think if you look, for example, at the 757 patent and the 446 patent, all they claim are the abstract idea that you have one document, you change it, you compare the two documents, and then you send the changes.

[00:40:23] Speaker 02:
There is no

[00:40:25] Speaker 02:
structure or specific information about how you generate those changes, only that you do so by comparing two versions of the data.

[00:40:35] Speaker 02:
There is no information and certainly nothing nonconventional about how the system is structured that is an improvement in any way.

[00:40:41] Speaker 02:
We don't deny, obviously, that when you send less than the full file, you're saving bandwidth.

[00:40:47] Speaker 02:
But as indicated earlier, there's nothing in this court's precedent that say that the merely the benefits that flow from taking an abstract idea

[00:40:56] Speaker 02:
sending the changes to something rather than the full thing uh... that that makes but that that raises even a question of whether something is patent eligible in uh... in capital in the electrical at intellectual ventures with capital one case for example the invention in the specification was uh... away of comparing and reading together income otherwise incompatible xml documents but the fact that there was some benefit didn't render the claims

[00:41:25] Speaker 02:
um eligible patent eligible under section 101 and in that case in particular um the court held that limiting um the claims to a particular technological environment doesn't provide a non abstract idea and that's all that the 446 patent does under their reading is take what's in the 757 and limit it to media data data or media files there is these claims are

[00:41:52] Speaker 02:
at a fundamental level, the most basic abstract idea that is we have been practicing for years, including when we sent a pocket part to a treatise.

[00:42:01] Speaker 02:
And so they are therefore ineligible under Section 101.

[00:42:04] Speaker 02:
Thank you.

[00:42:05] Speaker 05:
Thank you.

[00:42:06] Speaker 05:
And we thank both sides and the cases submitted.

[00:42:10] Speaker 05:
And that concludes our proceeding for this morning.

[00:42:12] Speaker 05:
Thank you all.

[00:42:14] Speaker 05:
Thank you, Your Honor.

[00:42:14] Speaker 05:
Thank you, Your Honor.

[00:42:15] Speaker 04:
The Honorable Court is adjourned from day to day.