[00:00:00] Speaker 01: Next case is Unilock versus Motorola Mobility 2021-15-55. [00:00:06] Speaker 01: Mr. Lampton, the cases are obviously very similar, but you will avoid dealing with the Google case because Google's counsel is no longer here to respond. [00:00:22] Speaker 00: OK. [00:00:22] Speaker 00: Thank you, Your Honor. [00:00:23] Speaker 00: So I thought I might start with standing, which is the general rule. [00:00:28] Speaker 00: We believe in it applies here is that the patent owner. [00:00:31] Speaker 00: You have to get over the issue of preclusion definitively in this case. [00:00:35] Speaker 00: Yes, we do have to get over a preclusion in this case. [00:00:37] Speaker 02: Before you, I'll let you move on. [00:00:38] Speaker 00: No, no, I'm happy to start. [00:00:40] Speaker 02: I assume you really don't have a good answer, don't want to, can't give me this answer. [00:00:44] Speaker 02: I'm just curious, in the Apple case, why you didn't see great catcher. [00:00:49] Speaker 00: So at the time of the Apple settlement, one thing that we knew was nobody had raised collateral stable. [00:00:56] Speaker 00: Nobody had raised issue of reclution. [00:00:57] Speaker 00: And it might have seemed somewhat different if we thought we were discovering that issue. [00:01:01] Speaker 00: We might have been able to go back to Apple and insist. [00:01:04] Speaker 00: But no one did. [00:01:05] Speaker 00: And so we never really had the opportunity to try and adjust, do a high-low, insist on trying to get vacatur, which is very hard under US Bancorp, or tried some other way around it. [00:01:15] Speaker 00: So the failure to raise it. [00:01:16] Speaker 03: What happens all the time, I feel? [00:01:19] Speaker 03: You get an indicative ruling from the district court about vacating it. [00:01:24] Speaker 03: And we don't end up vacating it ourselves. [00:01:28] Speaker 03: But the district court has it. [00:01:29] Speaker 03: And that solves the problem. [00:01:30] Speaker 03: It's fairly common. [00:01:32] Speaker 00: It is one way around the problem. [00:01:35] Speaker 00: But you only know it's a problem. [00:01:38] Speaker 00: And you only can agree with opposing counsel to do it if somebody's raised the issue. [00:01:42] Speaker 00: And at the time we settled, we didn't. [00:01:43] Speaker 03: Why didn't you anticipate it, even though somebody's not raised the issue? [00:01:48] Speaker 02: Well, Your Honor, I think- I mean, you are asserting these same patterns against everybody, right? [00:01:51] Speaker 02: I mean, it's the same patterns that issue in Apple and Google and all these cases. [00:01:56] Speaker 02: I mean, you must have- I don't want to call you out for this too much. [00:02:01] Speaker 02: I'm sure that in retrospect, you would have asked for vacature, but it just seems a little odd. [00:02:06] Speaker 02: when you have an adverse ruling and you settle that you don't try to get rid of it when you still have a lot of cases going on against other companies. [00:02:14] Speaker 00: I think in the dynamic of a gigantic settlement like you had in Apple [00:02:18] Speaker 00: If you don't have a really good reason to go back, like people asserting collateral estoppel, it's very hard to reach an agreement that's going to go back and vacate the decision of the district court. [00:02:28] Speaker 00: And you are at the mercy of the district court's willingness to vacate it. [00:02:31] Speaker 00: And there are cases that say, even if you vacate it, sometimes they can have collateral estoppel effect. [00:02:36] Speaker 00: But even apart from all those, this case is different, even than Google, in that there was not merely a forfeiture of the issue of collateral estoppel. [00:02:45] Speaker 00: There was a waiver. [00:02:46] Speaker 00: Motorola, when it submitted a letter identifying the district court of the Apple decision, didn't merely say, here's a relevant decision, and didn't merely omit saying that it's preclusive. [00:02:59] Speaker 00: It said that the Apple decision is, quote, not binding on this court. [00:03:05] Speaker 00: Even though Apple, it said, involved roughly the same set of facts, even though Apple involved a patent that, quote, likewise was one of those Unilock, Luxembourg received from Hewlett-Packard, it said the decision is not binding. [00:03:17] Speaker 00: Having never argued preclusion in that court and having steered the district court away from preclusion by saying it's not binding, they have not merely forfeited, but they've waived the issue in this court. [00:03:28] Speaker 00: You can't say it's not binding to the district court and then tell this court that it is binding, that this court must give preclusive effect to the Apple decision. [00:03:38] Speaker 00: At a minimum, that's also, as we mentioned before, a forfeiture. [00:03:41] Speaker 00: Because there's no, and Motorola doesn't identify any exceptional circumstances that would justify having notified the district court of the decision on a Sunday, two days after it issued, but not going and saying it's relevant, but not going and taking the second step and saying, and it's relevant because it's particular. [00:03:57] Speaker 00: They were taking the position that it wasn't binding until it became final, I guess. [00:04:01] Speaker 00: Well, it actually is a terrible position. [00:04:05] Speaker 00: It's absolutely foreclosed by this court's decision in Farmacia. [00:04:09] Speaker 00: Farmacia is absolutely clear that a decision of a district court is preclusive, even if there's an appeal pending. [00:04:17] Speaker 00: And it's preclusive. [00:04:18] Speaker 00: Even if that appeal is still pending, when you take that opinion up on appeal and you are challenging it, it's a decision that's absolutely and positively foreclosed by precedent and the uniform views of the courts of appeals. [00:04:29] Speaker 00: The courts of appeals uniformly agree. [00:04:31] Speaker 00: An issue is preclusive once issued by a district court and doesn't lose that preclusive effect unless it's overturned by a court. [00:04:37] Speaker 03: My argument that according to you, it's based on good case law and they didn't assert it. [00:04:45] Speaker 03: So maybe they forfeited the argument that it wasn't preclusive while it was on appeal, but they didn't seem to forfeit the argument that it became preclusive when it was finally resolved by settlement and the appeal was dismissed. [00:05:04] Speaker 00: That argument didn't come up since they never mentioned the term, preclusion. [00:05:08] Speaker 00: But I think under farmacia, and I think it can be absolutely read no other way, it's preclusive pending appeal. [00:05:14] Speaker 00: It doesn't cease to be preclusive just because an appeal is there. [00:05:17] Speaker 00: And so you had every ability to raise it all the way through the district court, never did. [00:05:22] Speaker 00: Even though there was still litigation ongoing, the parties were still briefing things, December 10th. [00:05:27] Speaker 00: The district court asked for additional briefing. [00:05:30] Speaker 00: December 16, they filed the briefing. [00:05:32] Speaker 00: At no point in that period did they apprise the district court. [00:05:34] Speaker 00: Wait, I know we said it's not binding. [00:05:36] Speaker 00: But actually, it is preclusive. [00:05:39] Speaker 00: And you should decide this case on collateral stockholder grounds. [00:05:43] Speaker 00: That sort of foreclosure just comes too late in the day. [00:05:46] Speaker 01: Is this a question of forfeiture versus waiver? [00:05:51] Speaker 00: Yes. [00:05:51] Speaker 00: Waiver is something that this court cannot overlook. [00:05:57] Speaker 00: when you steer the district court away from an issue, that's it. [00:06:01] Speaker 00: It's no error for the district court not to address the issue. [00:06:03] Speaker 00: It's gone. [00:06:05] Speaker 00: If you forfeit it, if you fail to raise an issue, that's something that, under exceptional circumstances, this court can overlook. [00:06:13] Speaker 00: But even in this case, I don't think Motorola has identified exceptional circumstance that would excuse their failure to raise the conclusion in the 26 days between the decision and the final judgment here, between the notice [00:06:27] Speaker 00: that they gave the district court an entry of final judgment, especially since there was still briefing going on with the district court. [00:06:35] Speaker 00: I know they say things like that local rules barred it, but Motorola actually filed a notice. [00:06:42] Speaker 00: It had only to go one step further and say, not only is this binding, it's binding because of preclusion, something it didn't do. [00:06:49] Speaker 00: It did the opposite. [00:06:50] Speaker 00: It steered the district court away from preclusion. [00:06:53] Speaker 00: If I can turn back to the merits, then. [00:06:56] Speaker 02: So what is the legally protected interest for purposes of Article 3? [00:07:01] Speaker 02: Is it the right to exclude? [00:07:03] Speaker 00: Yes, it is the one that Section 1, the fundamental right that Section 154 gives patentees, and that right is the right to exclude those who are not authorized to use the patented item. [00:07:15] Speaker 00: And that is the nature. [00:07:16] Speaker 02: That qualifying language is what I guess you want us to make sure that's in there, because if it's [00:07:23] Speaker 02: I see a little bit of facial appeal in the district courts ruling on this, but I don't really understand it because you didn't give up rights to your patent or the right to sue, but if it's the right to exclude and you don't have a complete right to exclude because [00:07:40] Speaker 02: there's people out there that can get licenses, so you can't exclude anybody that's got a license, then if a complete right to exclude is required, you don't have it. [00:07:51] Speaker 00: I think that's right. [00:07:53] Speaker 00: But I think the notion. [00:07:55] Speaker 02: That's not your view of what's necessary. [00:07:57] Speaker 00: No, you can surrender as the patent owner part of your right to exclude by allowing others to license or issuing licenses to others, and still have the right to exclude everybody else who isn't authorized. [00:08:08] Speaker 00: Even that, I don't think the fact that someone might be authorized, even that doesn't go to standing. [00:08:14] Speaker 00: The decision in tenesis makes it clear that that goes to a defense. [00:08:20] Speaker 00: I had license. [00:08:20] Speaker 00: I had permission. [00:08:21] Speaker 00: And in tenesis was a case we had co-owners, co-inventors. [00:08:26] Speaker 00: Both of them had the right to license. [00:08:27] Speaker 00: And the court held that the fact that one co-owner has a right to license does not mean that the other co-owner cannot sue, that it doesn't have a right to sue. [00:08:36] Speaker 00: In fact, in the tenesis, the infringer said, I had a license from the co-owner. [00:08:41] Speaker 00: And the court said, that doesn't go to standing. [00:08:43] Speaker 00: That goes to a patent-licensed defense. [00:08:46] Speaker 00: And that makes this an a for sure case. [00:08:49] Speaker 00: This is the fact that we don't even have a co-owner. [00:08:51] Speaker 00: We're the sole owner. [00:08:52] Speaker 00: And there's somebody who has a non-exclusive right to sub-license. [00:08:57] Speaker 00: That doesn't just entirely destroy your right to exclude. [00:09:00] Speaker 00: It simply means that you have no right to exclude. [00:09:03] Speaker 00: on the merits, somebody who's received a license from them. [00:09:06] Speaker 00: And as we know, throughout this case, Fortress has insisted it didn't have a right to exclude. [00:09:13] Speaker 00: It didn't think there was a breach. [00:09:15] Speaker 00: It didn't think there was a problem. [00:09:16] Speaker 00: And it never licensed anybody. [00:09:17] Speaker 00: So at a practical level, our right to exclude was wholly intact. [00:09:23] Speaker 00: There was nobody else licensed by somebody else to whom we would lose on the merits, because they had been licensed by somebody else. [00:09:29] Speaker 00: And I don't think you can reduce that to something as sort of a mere formality. [00:09:33] Speaker 00: This court's been very careful in trying to figure out who the patent owner is to make sure that you really have the patent owner before you, before you let them sue. [00:09:43] Speaker 00: It makes sure that you have not transferred all substantial rights to some other entity. [00:09:48] Speaker 00: And it also isn't an interrogation in any respect about the court's caution in dealing with exclusive licensees or people who claim to be exclusive licensees. [00:09:57] Speaker 02: What about the Morrow case? [00:10:00] Speaker 00: So Morrow is a case in which they had split up the rights so that a company called Gucklett, G-U-C-L-T, had the right to sue, sort of a naked right to sue, and another company held ownership. [00:10:12] Speaker 00: And the court held Gucklett, even though you have the exclusive right to sue, you don't own the patent and you aren't [00:10:19] Speaker 00: an exclusive licensee, and therefore you don't have standing. [00:10:22] Speaker 00: It didn't go back and say, hey, the owner, I think it was out or out, A-U-H-T or something like that, you don't have a right to sue either. [00:10:29] Speaker 00: Out wasn't before the court. [00:10:31] Speaker 00: It wasn't an issue that had to be addressed. [00:10:34] Speaker 00: The dissent said, oh my gosh, this may mean that you have nobody who has a right to sue. [00:10:39] Speaker 00: But Alfred Mann came back and cleaned that all up. [00:10:42] Speaker 00: And at the decision, Alfred Mann says, look, the way this works, I have to quote back, is you have one of two situations. [00:10:49] Speaker 00: Either the patent licensee did not transfer all substantial rights, and it says, in which case the licensure remains the owner of the patent and retains the right to sue for infringement. [00:10:58] Speaker 00: OK. [00:10:59] Speaker 00: We didn't return over all substantial rights. [00:11:02] Speaker 00: We remain the patentee. [00:11:04] Speaker 00: We have the right to sue for infringement. [00:11:05] Speaker 00: Then it gives the alternative case. [00:11:07] Speaker 00: Or the licensure did transfer all substantial rights to the exclusive licensee, in which case the licensee becomes the owner of the patent for standing purposes and gains the right to sue on its own. [00:11:16] Speaker 00: Well, no one says, fortress. [00:11:19] Speaker 00: was had all substantial rights. [00:11:21] Speaker 00: It did not become the patent owner. [00:11:22] Speaker 00: And for that reason, we remained the owner of the patent, which under 154 has the right to exclude and has the right to bring suit. [00:11:31] Speaker 00: I see I'm once again well into my rebuttal. [00:11:33] Speaker 00: I reserve the internet time unless there are other questions. [00:11:37] Speaker 00: Thank you. [00:11:38] Speaker 01: Mr. Claff. [00:11:40] Speaker 04: May it please the court, this court does not need to get to the question of whether or not Unilock had standing at the time it sued Motorola, because it is stopped from raising that argument here. [00:11:54] Speaker 04: Motorola did not waive and did not forfeit the estoppel defense. [00:12:01] Speaker 04: To understand this question, I think it's important to understand the posture of the Motorola case at the time the Apple decision came down. [00:12:09] Speaker 04: That case had been pending for years. [00:12:11] Speaker 04: Motorola filed an original motion to dismiss on an issue unrelated to standing. [00:12:16] Speaker 04: The case proceeded. [00:12:18] Speaker 04: When the standing issue arose, Motorola filed a motion to dismiss on that standing question. [00:12:24] Speaker 04: It was fully briefed. [00:12:26] Speaker 04: It was argued. [00:12:28] Speaker 04: The court was literally weeks away from issuing its decision on the standing when the Apple decision came down. [00:12:39] Speaker 04: Motorola did was what it was supposed to do under the local rules, which is it filed a notice of subsequent authority. [00:12:47] Speaker 04: What is a notice of subsequent authority? [00:12:50] Speaker 04: It is a very specific document for a very specific purpose. [00:12:55] Speaker 04: The briefs on the motion to dismiss, to state the obvious, had various arguments with various case law in support. [00:13:02] Speaker 04: The point of the notice of subsequent authority is amongst- That strikes me as a bit unbelievable. [00:13:08] Speaker 03: If there had been a decision which precluded the arguments that Unalak was making, I mean, certainly you could notify the district court of that. [00:13:20] Speaker 03: I mean, there can't be that you can't notify a district court of that. [00:13:25] Speaker 04: The timeliness of the notice certainly goes to the forfeiture defense that Unalak is raising. [00:13:32] Speaker 04: But for waiver, you need a knowing and intentional relinquishment. [00:13:37] Speaker 03: Don't you agree that in those circumstances, despite what the local rules may say is the usual refugition, if there's a subsequent development that [00:13:49] Speaker 03: Requires the district court to issue a particular ruling surely you have the right to notify the district court, right? [00:13:57] Speaker 04: That's correct Motorola could have sought leave to file a third Dispositive motion one based on Issue preclusion right that could have happened. [00:14:07] Speaker 04: The question is on the forfeiture defense is [00:14:10] Speaker 04: Was it reasonable for them not to do that and wait till the issue was before this court? [00:14:17] Speaker 04: On the waiver defense, though, there needs to be this knowing and intentional relinquishment. [00:14:23] Speaker 04: And I think the context of this document is really important, because you're not going to find that knowing and intentional abandonment of the right, there's certainly no express [00:14:32] Speaker 04: Wait, Motorola didn't go to the court and say, hey, there's this preclusive issue. [00:14:36] Speaker 04: We're not going to assert it. [00:14:38] Speaker 04: So what that leaves you with is the context of the document, the actual words that are used. [00:14:44] Speaker 04: And I'm trying to hone in on this context, Your Honor, because the point of the document is to supplement this existing briefing. [00:14:52] Speaker 04: And so if the point of the document that was actually filed is to say, hey, we've got these arguments in the existing briefing on this motion, [00:15:00] Speaker 04: They've got some various authorities cited. [00:15:03] Speaker 04: Here is another authority on that argument. [00:15:08] Speaker 04: It's not meant to raise new issues. [00:15:12] Speaker 04: It's not meant to raise a new invalidity defense. [00:15:14] Speaker 04: It's not designed to bring in new arguments. [00:15:17] Speaker 04: That would require some additional briefing, that third dispositive motion that, hypothetically, Motorola could have moved for. [00:15:24] Speaker 03: So what you're saying is that when [00:15:26] Speaker 03: said it's not binding on this court, you meant as a matter of authority. [00:15:30] Speaker 03: It's a matter of starting to cite this whenever. [00:15:33] Speaker 04: That's right. [00:15:33] Speaker 04: This is a document about, hey, we're going to add some additional citations to our existing briefs. [00:15:39] Speaker 04: All non-binding on this court means is this court being the district of Delaware. [00:15:45] Speaker 04: Not binding on this court means it's not from the Federal Circuit, it's not from the Supreme Court, it's not from the Third Circuit. [00:15:52] Speaker 04: And Unalak is putting way too much [00:15:54] Speaker 04: wait on those words to try to suggest that that is a knowing and intentional waiver. [00:15:59] Speaker 04: It's just a statement of precedent. [00:16:02] Speaker 04: And it's true. [00:16:02] Speaker 04: That statement was not binding on this court. [00:16:05] Speaker 04: That doesn't mean it's not binding on Unilock from an estoppel perspective, because they had a full and fair opportunity to litigate it in the Apple Court. [00:16:14] Speaker 04: So it's just a simple statement [00:16:16] Speaker 04: in the context of a notice of subsequent authority. [00:16:18] Speaker 02: How far do we go down this line, though, on what you don't have to raise, even if there's a final decision? [00:16:24] Speaker 02: What if, instead of this standing issue, the district court in the Apple case had declared the patents invalid under 102? [00:16:37] Speaker 02: You would have, I assume, in your case, you would have come back and said, or it would have been smart to come back and say, in addition to the standing arguments, you should dismiss this case because these patents are invalid, CX, and you're precluded. [00:16:53] Speaker 04: Right, at the reasonable time to kind of do so. [00:16:57] Speaker 04: But here, in terms of a waiver, it's not like there was some critical moment where a defense- That's what I'm asking. [00:17:03] Speaker 02: What's a reasonable time to do so? [00:17:05] Speaker 02: Is it at any time before the decision is issued? [00:17:09] Speaker 02: I think- I mean, you want to put a lot of stock in the time that there was a short time until the decision was issued. [00:17:16] Speaker 02: I don't know. [00:17:16] Speaker 02: Had the judge told you when he was going to issue the decision, or were you just waiting on it? [00:17:22] Speaker 02: I mean, it could have been another year. [00:17:24] Speaker 02: Like, why does that short time really matter here? [00:17:27] Speaker 02: once you know about it, you should raise it. [00:17:31] Speaker 02: I mean, if it had come a year later, the decision hadn't come out for a year and you hadn't raised it, would that be forfeiture or waiver? [00:17:39] Speaker 04: So on Your Honor's question about the actual timeline for the decision, I don't know the answer to that question one way or the other. [00:17:46] Speaker 04: As a matter of practical effect, when the judge [00:17:49] Speaker 04: heard oral argument on the motions. [00:17:51] Speaker 04: I think everyone involved knew, just based on the practice of that court, a decision was going to be fairly imminent. [00:17:57] Speaker 04: But I can't tell you for certain one way or the other whether you can answer that. [00:17:59] Speaker 02: But I don't know whether that helps you or cuts against you. [00:18:02] Speaker 02: Because if you know that this is a judge who promptly issues decisions after oral argument, and you've got an entirely new legal basis to challenge the claim, then I would think you would jump on it even more quickly. [00:18:14] Speaker 04: Well, I think forfeiture is really about the reasonableness of it. [00:18:18] Speaker 04: And the requirement here is not that a party immediately raise the issue. [00:18:23] Speaker 04: There's a reasonableness time frame to it here. [00:18:26] Speaker 04: And here, in the sight right, Miller and the five unlabeled boxes decision out of the Third Circuit, which does cover this court, I think gets directly to the point. [00:18:37] Speaker 04: Everyone knew, and in fact, Unalak did, appeal the Apple decision. [00:18:43] Speaker 02: And would it make any difference if the decision, and I know this is hypothetical, it's not what happened here, but if the decision hadn't issued in your case for a year, and by that time not only had Unalak appealed the Apple case, but it had settled it, and there was a dismissal without vacatur. [00:19:03] Speaker 02: And you still didn't notify the district court of the finality of that case and aspiration of reclusion. [00:19:10] Speaker 04: Yes, certainly at some point after that, [00:19:12] Speaker 04: you're going to be waiting too long. [00:19:14] Speaker 04: But I think the magic moment here for reasonableness in this context is the settlement. [00:19:19] Speaker 04: It's the moment where you know, wait, this decision, which has some technical preclusive effect, but as a matter of practice, is not going to have preclusive effect until this court reviews it. [00:19:32] Speaker 04: The moment that is no longer true, that the settlement occurs, the case is not going to get appealed. [00:19:41] Speaker 04: That is the reasonable time to act, and that's what Motorola did. [00:19:45] Speaker 04: Didn't even wait for the opening brief in this court. [00:19:48] Speaker 04: Filed a motion for summary affirmance. [00:19:50] Speaker 04: This court said, brief it in your briefs, and that's what we did. [00:19:53] Speaker 04: But from a purpose of promptness, reasonableness, once the settlement came into effect, he filed a motion for summary affirmance and raised it with the court. [00:20:10] Speaker 02: Don't forget that they want it back downstairs when you leave. [00:20:16] Speaker 04: I think the five-on-label box is an important decision, because it's directly addressing this point, where they're in the appellate court in the Third Circuit, and they wait until the 11th Circuit actually rules on it. [00:20:32] Speaker 04: That's when they raise it, and the Third Circuit says, yeah, that's fine. [00:20:35] Speaker 04: That makes sense. [00:20:37] Speaker 04: pointing to the exact same kind of concerns that we talked about in our brief, that Wright and Miller talks about, that Judge Connolly talked about in the district court decision about the interplay between a decision that is technically final and preclusive, but at the end of the day is likely going to be appealed. [00:20:52] Speaker 03: Would you address their argument that because this is a non-mutual situation that the rules ought to be less strict [00:21:06] Speaker 03: about Claude Ostapel and that perhaps because the Apple settlement encompassed a lot of things other than this case that somehow ought not to be preclusive? [00:21:22] Speaker 04: I think in terms of the non-mutual, what really comes into play is did they have a full and fair opportunity to kind of litigate this issue? [00:21:28] Speaker 04: And they did, right? [00:21:30] Speaker 04: They did in the Northern District of California in the Apple case to fully litigate that issue. [00:21:35] Speaker 04: It's the same issue that's here in Motorola. [00:21:38] Speaker 04: It's not like the differing nature of the parties sort of steered the argument in one direction or the other. [00:21:45] Speaker 04: If you look at their opening brief and the Apple appeal that has since been dismissed, it's on all fours with the issues in the Motorola case. [00:21:54] Speaker 04: So I don't see the argument in terms of non-mutuality where they have had the full opportunity to litigate the exact same issue that's here. [00:22:09] Speaker 02: I mean, isn't the argument that the settlement against Apple probably had a bunch of different moving pieces, and they wanted to get it there, but they didn't want to get rid of their right to appeal, and they decided that they wouldn't seek vacatur? [00:22:22] Speaker 02: I mean, they probably made a mistake in not raising, you know, asking for vacatur. [00:22:28] Speaker 02: You may have made a mistake in not asking Judge Connolly to apply issue preclusion. [00:22:34] Speaker 02: Doesn't all this kind of go, at least for the forfeiture analysis, [00:22:38] Speaker 02: into, or sorry, for the issue of preclusion analysis, whether we should be really strict here. [00:22:43] Speaker 02: Because they didn't get a chance to test this out, this standing argument before us. [00:22:50] Speaker 02: And it's obviously a particularly difficult and complex issue. [00:22:53] Speaker 02: And I don't think our precedent is particularly clear on it. [00:22:57] Speaker 02: Why shouldn't we just decide that in this case, we're not going to apply it because it's settled before we had a chance to look at it? [00:23:05] Speaker 04: I think for several reasons. [00:23:06] Speaker 04: First, they could have. [00:23:07] Speaker 04: And it's not just an issue. [00:23:10] Speaker 04: So one, the court has already addressed, but certainly could have conditioned the settlement on vacatur. [00:23:16] Speaker 04: But even if you don't want to go that approach, there's no reason you can't reach a settlement agreement that is all but final, that still allows us to go up to this court. [00:23:29] Speaker 04: High, low, different amounts. [00:23:30] Speaker 04: You pay for our attorney's fees. [00:23:32] Speaker 04: If we win, vice versa. [00:23:33] Speaker 04: It doesn't sort of get at. [00:23:35] Speaker 04: the meatier components of the settlement. [00:23:38] Speaker 04: There were absolutely ways to deal with this, and they opted not to do those ways. [00:23:44] Speaker 04: Applying it here is going to benefit multiple parties. [00:23:49] Speaker 04: It's going to save us work in this case, Blackboard case, any other parties they choose to sue or would otherwise have chose to sue on these patents. [00:24:01] Speaker 04: What they're basically asking [00:24:03] Speaker 04: Apple to have, or Motorola and everyone else to have done, is any time you have a decision that might potentially, hypothetically get settled, you've got to immediately run to the court and start filing motions on that for fear that the parties themselves might settle. [00:24:23] Speaker 04: I don't think that is a wise position. [00:24:26] Speaker 03: Does this affect any case other [00:24:28] Speaker 03: than the Motorola and Blackboard cases. [00:24:32] Speaker 03: There are no other cases pending, right? [00:24:33] Speaker 04: Correct. [00:24:34] Speaker 04: Not to my knowledge. [00:24:38] Speaker 03: And so when I say they potentially could have brought, obviously... Well, if they've effectively terminated the license, then it's not a problem for any new case. [00:24:54] Speaker 04: Correct. [00:24:54] Speaker 04: Not an issue in our Motorola case, but I understand, Your Honor. [00:25:00] Speaker 01: Any further thoughts? [00:25:08] Speaker 04: No further thoughts from me, Your Honor. [00:25:11] Speaker 01: Thank you. [00:25:13] Speaker 01: So Lampson has a little time left. [00:25:17] Speaker 00: Thank you, Your Honor. [00:25:18] Speaker 00: In this case, even though briefing was still ongoing in the district court, Motorola notified the district court of Apple, but never said it was preclusive, said it wasn't binding. [00:25:27] Speaker 00: And if you look in terms of the local rules, of course you can notify the court and say- So you mean briefing was still ongoing. [00:25:33] Speaker 00: There was still supplemental briefing. [00:25:35] Speaker 00: On December 10th, the district court asked for supplemental briefs on an issue due December 16th. [00:25:40] Speaker 00: That's well after the district court in Apple. [00:25:45] Speaker 02: Specific. [00:25:46] Speaker 00: Yes, we weren't saying we're still briefing generally. [00:25:48] Speaker 00: Please file a new motion. [00:25:49] Speaker 00: That's correct. [00:25:51] Speaker 00: But if you look at appendix 715 to 718, Motorola had no problems sending letters, addressing an argument. [00:25:57] Speaker 03: No, no, there's no question. [00:25:58] Speaker 03: They admit that they could. [00:26:00] Speaker 03: Yeah, OK. [00:26:02] Speaker 03: But they decided to wait for finality. [00:26:04] Speaker 00: They decided to wait for final and direct review, which isn't the standard for collateral estoppel. [00:26:11] Speaker 00: It's immediate collateral estoppel effect. [00:26:13] Speaker 00: And if you don't assert it at the earliest practicable opportunity, which is the standard under Mendenhall and the standard under Georgia Pacific, I think is the name of the case, then you forfeit that. [00:26:25] Speaker 00: And in this case, they actually waived it. [00:26:29] Speaker 03: that it's worth it if you wait. [00:26:31] Speaker 00: That's true. [00:26:32] Speaker 00: But the earliest practical law, the whole purpose of the doctrine is to have judicial economy. [00:26:36] Speaker 00: And when you have a case where the district court didn't have a chance to take a shortcut and do collateral estoppel, where we're actually addressing the issue for the first time on appeal, that feels like we're opposite the role of judicial economy. [00:26:47] Speaker 00: And five unlabeled boxes, very briefly, that doesn't say that you get around exceptional circumstances. [00:26:54] Speaker 00: It merely found exceptional circumstances in case of mutual. [00:26:58] Speaker 00: Proclusion mutual out where if you had two different judgments between the parties They would be subject to conflicting obligations and worse still it was the FDA and its effort to Regulate a federal if they had not said there was collateral stoppable There was a risk that under one judgment the FDA could regulate a federal under another judgment It could not finally I want to turn very briefly judge like to your point that this is non-mutual collateral stoppable [00:27:23] Speaker 00: which is not a hard and fast rule like neutrality, it is an equitable doctrine. [00:27:27] Speaker 00: The courts can take into account the circumstances and they can freely dispense with it if circumstances require it. [00:27:33] Speaker 03: So why wasn't there a full and fair opportunity to litigate? [00:27:36] Speaker 00: So I think the answer is in the context of non-mutual collateral estoppel, non-mutual issue preclusion, [00:27:43] Speaker 00: As Wright and Miller explains, they substitute in, for full and fair opportunity, a similar incentive to litigate to the finish and full exercise of appellate rights. [00:27:52] Speaker 00: That's a phrase from Kaiser. [00:27:54] Speaker 00: And Wright and Miller explains, also, that whenever settlement seems to have sacrificed meaningful opportunities to test the judgment further, a later court should be free to deny non-mutual preclusion. [00:28:04] Speaker 00: And here, the incentive to litigate to the- [00:28:08] Speaker 03: if this were a minor issue in the context of the Apple case. [00:28:12] Speaker 03: It was the central issue in the Apple case. [00:28:16] Speaker 03: And what you're saying is that we should take account of factors extraneous to the case. [00:28:22] Speaker 03: That is, the desire to reach an overall settlement between Apple and Unilock to determine whether flat or estoppel should apply. [00:28:30] Speaker 03: I don't know any authority would suggest that that's relevant. [00:28:34] Speaker 03: I mean, it seems to me you've got to consider, in terms of full and fair opportunity, [00:28:42] Speaker 03: relationship among the parties. [00:28:44] Speaker 00: I think the opportunity, the incentive to litigate to the full extent under Kaiser and Wright and Miller reflects, do we have confidence that the judgment is right because there was a reason to go to the mat over it? [00:28:56] Speaker 03: But when you have this sort of a comprehensive... What I'm suggesting to you is that that has to be determined within the context of the particular case, not in the context of an overall relationship between the parties and the fact that they wanted to [00:29:10] Speaker 03: reach an overall settlement. [00:29:13] Speaker 00: Your Honor, I'm not sure that that is present either way. [00:29:16] Speaker 00: But we're in the land of equity here. [00:29:19] Speaker 00: And equity, I would think, would account for all the circumstances in deciding whether or not this is a judgment that we have sufficient confidence in that we would like to give it collateral or stop or effect. [00:29:28] Speaker 00: Equity would look at whether or not we, in fact, have served judicial economy. [00:29:32] Speaker 00: And finally, I would like to point out that, look, as Motorola's decision below in this case pointed out, this is an area where [00:29:39] Speaker 00: The issues are anything but straightforward. [00:29:42] Speaker 00: The law lacks coherence and breeds confusion. [00:29:45] Speaker 00: There's a UCC provision that says, look, when people have security in intellectual property or other property, it's a traditional and standard thing to say that they can license it in the event of breach. [00:29:58] Speaker 00: This is an incredibly important issue in which we have a lot of issues. [00:30:03] Speaker 00: a lot of concerns from the lower courts. [00:30:05] Speaker 00: It is precisely the case. [00:30:06] Speaker 02: But if we agree with you on the termination agreement from the Google case, then it's not going to affect you at all going forward, right? [00:30:12] Speaker 02: It's only going to affect you with regard, personally, I understand the law. [00:30:17] Speaker 02: Yes. [00:30:18] Speaker 02: But personally, it's only going to affect you with regard to Motorola and Blackboard. [00:30:22] Speaker 00: Right. [00:30:22] Speaker 00: But personally, but I think when you're talking about the public interest, as you do under the equities, the public interest looks to the public. [00:30:29] Speaker 00: And when the UCC has a standard provision that says, [00:30:32] Speaker 00: Upon breach, you can license. [00:30:34] Speaker 00: And that's going to be a very common thing throughout. [00:30:36] Speaker 00: There's a strong reason for this court to say, you should have raised it at the earliest instance. [00:30:42] Speaker 00: The district court could have addressed it if you hadn't. [00:30:44] Speaker 00: You didn't. [00:30:45] Speaker 00: And we think we should straighten out the line. [00:30:46] Speaker 00: I'm not understanding what you're trying to get out of this UCC provision. [00:30:50] Speaker 00: So the UCC says, as a standard provision for security interest in property, whether intellectual property or other property, that in the event of breach, you shall have the right to license that property. [00:31:00] Speaker 00: So if it were an apartment building, you could license people to use it. [00:31:03] Speaker 00: If it's intellectual property, you can license people to use the patent, use the copyright. [00:31:09] Speaker 00: Because that's a standard UCC provision, it probably appears in thousands and thousands of contracts. [00:31:14] Speaker 03: I suspect that's why we have it. [00:31:15] Speaker 03: I'm not understanding the point. [00:31:17] Speaker 00: So the point is that because this is a common provision, this is a very important issue for across the board, not just for us, but for the law generally. [00:31:28] Speaker 00: It's going into what is the effect of all those contracts that have that UCC provision. [00:31:32] Speaker 00: And because of the importance of the issue, and because of the importance of the district court saying in this case, look. [00:31:38] Speaker 00: Maybe I'm dense. [00:31:39] Speaker 00: I do not understand what you're saying. [00:31:41] Speaker 03: What is the point? [00:31:42] Speaker 00: The point is this. [00:31:44] Speaker 00: The argument for Motorola is that [00:31:47] Speaker 00: If you have somebody who has a non-exclusive license, a non-exclusive right to license others, that destroys game. [00:31:55] Speaker 00: You're going to be saying that as a result of this UCC provision. [00:31:57] Speaker 03: And this provision. [00:31:58] Speaker 03: No, don't interrupt me. [00:31:59] Speaker 03: I'm sorry. [00:31:59] Speaker 03: That that will be a common situation. [00:32:02] Speaker 00: That's exactly right. [00:32:03] Speaker 00: That's exactly what I'm saying, Your Honor. [00:32:04] Speaker 00: And I'm sorry if I was being dense about what you were trying to ask. [00:32:08] Speaker 00: But given the importance of that issue, given the failure to raise it below, given the fact that district court didn't pass the line, we ask the court to address this issue and clarify the law. [00:32:16] Speaker 00: Thank you, Your Honor. [00:32:17] Speaker 01: Thank you, Mr. Lampton. [00:32:18] Speaker 01: The case is taken on a submission.