[00:00:04] Speaker 02:
Afternoon, an appeal for a preliminary injunction.

[00:00:08] Speaker 02:
Life Nettix versus Moots Eye Capital.

[00:00:13] Speaker 02:
We're doing business as holiday bright lights.

[00:00:16] Speaker 02:
2023, 1146.

[00:00:17] Speaker 02:
Mr. Allen, please proceed.

[00:00:22] Speaker 01:
May it please the court.

[00:00:24] Speaker 01:
I'm Vincent Allen here on behalf of Light and Nettix, the opponent in the case.

[00:00:31] Speaker 01:
The Appellee was a former customer of Light and Addicts that decided they, or what we think, executed a failed design around attempt to get around the patents that Appellee knew about.

[00:00:47] Speaker 01:
In fact, those patents were discussed in the Appellee's patent that it got on its improved product.

[00:00:58] Speaker 02:
Counsel, this is an appeal from a preliminary injunction.

[00:01:02] Speaker 02:
So you got an appeal battle.

[00:01:05] Speaker 02:
And your infringement claims are less than strong, let's say.

[00:01:14] Speaker 02:
So how do you think you can win this?

[00:01:18] Speaker 01:
Well, Your Honor, I think we have to look at the claim construction, first of all.

[00:01:24] Speaker 01:
under a de novo standard of review because it's a question of law that the Federal Circuit must decide whether the district court properly interpreted those claims because the whole case turns on that claim construction that we think is erroneous and we think is supported by the, our position is supported by the Federal Circuit

[00:01:51] Speaker 01:
And specifically, we think that the district court committed errors of law in importing limitations from the specification into the claims.

[00:02:02] Speaker 01:
And that's a couple of different things.

[00:02:03] Speaker 01:
The first thing is the fact that it has to be a single magnet.

[00:02:09] Speaker 01:
Nowhere in the claim does it say it has to be a single magnet.

[00:02:14] Speaker 04:
Can I ask you, counsel, do we really have to resolve that claim construction dispute, at least under the Eighth Circuit standard, at least the district courts seem to think?

[00:02:24] Speaker 04:
Because we're here on state law claims, as long as your opponent, HBL, has shown a fair chance of success,

[00:02:35] Speaker 04:
That's enough.

[00:02:37] Speaker 04:
If the claim construction is disputable, isn't that enough for them to have shown a fair chance that your claims of patent infringement are objectively baseless?

[00:02:48] Speaker 01:
No, absolutely not.

[00:02:50] Speaker 01:
Even if the claims were disputable, it requires more than that.

[00:02:56] Speaker 01:
It requires that we've made the communications in bad faith.

[00:03:05] Speaker 01:
I would say that even though the Eighth Circuit abuse of discretion applies to a preliminary injunction decision, that doesn't apply to the claim construction.

[00:03:19] Speaker 01:
And the whole basis for the court's ruling that he could avoid the privilege that was asserted is that he construed the claims in a way that he said required our case to be objectively baseless.

[00:03:35] Speaker 01:
Without that claim construction, there is no case for defamation.

[00:03:44] Speaker 04:
If the district court's constructions are correct, is the district court right that your patent infringement claims are objectively baseless?

[00:03:54] Speaker 01:
No.

[00:03:54] Speaker 01:
Even if they're incorrect, there's case law that says that even if the plaintiff is incorrect, in their ultimate claim construction,

[00:04:04] Speaker 01:
You still have to show that no reasonable litigant would have ever brought these claims.

[00:04:10] Speaker 01:
And we don't think that that is the case here.

[00:04:13] Speaker 03:
Again, I think you- Let me just see if I understand.

[00:04:18] Speaker 03:
The preliminary injunction here

[00:04:21] Speaker 03:
is against your speaking to the public.

[00:04:24] Speaker 03:
The patent preemption rule backed by the first amendment provides a pretty robust form of protection for a patentee speaking to the public, namely protected against state law liability unless what you say

[00:04:41] Speaker 03:
is not just wrong, but objectively baseless, and I might add, subjectively in bad faith.

[00:04:48] Speaker 03:
So all you need to do to say, I think this is your argument, to say that the preliminary injunction against speaking to the public

[00:05:00] Speaker 03:
should be set aside is to say that you had an objective basis for assertions of infringement, either literal infringement or doctrine of equivalence infringement.

[00:05:12] Speaker 03:
Is that?

[00:05:13] Speaker 01:
Yeah, that's correct.

[00:05:15] Speaker 01:
Although I'm not sure how you reached that determination without actually looking at the claim construction or the error that the court made in deciding

[00:05:27] Speaker 01:
that kind of construction.

[00:05:30] Speaker 03:
I thought one of your arguments is that even if

[00:05:34] Speaker 03:
But you have an argument about the singular, a magnet, that by law, or at least objectively, it's reasonable to say by law means one or more magnets.

[00:05:46] Speaker 03:
And that would then get you over the objective baselessness hurdle for the, what, the 779 patent and the magnetic core.

[00:05:58] Speaker 03:
I think that's right.

[00:06:00] Speaker 03:
Is that right?

[00:06:01] Speaker 03:
Yeah, but the other is that even if there has to be a single magnet with at least five pounds of pull, cutting the magnet in half, if that's quite the right way to say it, but having two half discs next to each other that together have at least five pounds of pull is an equivalent.

[00:06:28] Speaker 01:
Well, it's not just an equivalent.

[00:06:30] Speaker 01:
It's the same thing.

[00:06:31] Speaker 01:
It's a literal infringement of the claim.

[00:06:33] Speaker 03:
But you make both arguments.

[00:06:35] Speaker 03:
It's a claim construction question on the literal infringement.

[00:06:38] Speaker 03:
And then even if you're wrong about the claim construction, you have a doctrine of equivalence argument.

[00:06:44] Speaker 01:
That's correct, yes.

[00:06:48] Speaker 01:
The court said we didn't have a doctrine of equivalence argument, again, because it used the same analysis that it did with respect to direct infringement in saying that you're bothered by the specification or the statements that were made in the specification from seeking equivalence on a multi-magnet construction.

[00:07:10] Speaker 01:
However, there's nothing in the spec that talks anything about

[00:07:15] Speaker 01:
the unitary structure of the magnet, whether it has to be one piece or two pieces.

[00:07:23] Speaker 01:
There's just no discussion in the patent because that feature is not important to the overall invention.

[00:07:31] Speaker 04:
Can you help me on how much of your case has to be objectively baseless in order for the

[00:07:40] Speaker 04:
HBL to have a claim.

[00:07:43] Speaker 04:
Let's just suppose for the sake of argument that maybe you had a reasonable basis to believe you could allege infringement against one of the products under one of the patents.

[00:07:53] Speaker 04:
But you didn't have that level of confidence in your claims with respect to the other product or the other patent.

[00:08:03] Speaker 04:
Who wins?

[00:08:04] Speaker 04:
What do we do if some of your speech is objectively baseless and some is not?

[00:08:08] Speaker 01:
Right, I appreciate that question because the answer is we only need a non-objectively basis claim on one product.

[00:08:19] Speaker 01:
In fact, the letter that was sent out that is being objected to by the appellee doesn't even mention what products it is that are infringing.

[00:08:32] Speaker 01:
It identifies the patents.

[00:08:33] Speaker 01:
It doesn't mention the claims.

[00:08:35] Speaker 01:
So there's no, I mean, the communication is we have patents.

[00:08:40] Speaker 01:
We're going to enforce these patents.

[00:08:42] Speaker 01:
We filed suit against the appellee.

[00:08:47] Speaker 01:
And that's it.

[00:08:48] Speaker 04:
Well, you also call them copiers.

[00:08:51] Speaker 01:
Well, and that's another thing.

[00:08:53] Speaker 01:
It says in the letter that we do not appreciate or something.

[00:09:02] Speaker 01:
copying a patent, or we will not tolerate copying a patented product.

[00:09:07] Speaker 01:
Again, the copying goes in, it's the same thing.

[00:09:11] Speaker 01:
It's patent infringement.

[00:09:12] Speaker 01:
That's what we're alleging.

[00:09:14] Speaker 01:
And for all practical purposes, this product is a copy.

[00:09:17] Speaker 01:
The only thing they did is split it down the middle.

[00:09:19] Speaker 01:
In fact, they say in their patent that you can just split a disk magnet in two, put it together, and voila, it's non-infringing.

[00:09:31] Speaker 03:
But what about the, you accused two products, the magnetic core and the magnetic clip.

[00:09:38] Speaker 03:
What about the clip product?

[00:09:39] Speaker 03:
And I think on the clip, you just assert indirect infringement, right?

[00:09:44] Speaker 03:
Inducement or contribute to both?

[00:09:47] Speaker 01:
Yeah, we insert.

[00:09:49] Speaker 03:
So why was that?

[00:09:52] Speaker 03:
First of all, and at least one of the arguments against that is,

[00:09:58] Speaker 03:
or one of the reasons I think the district court rejected is that you effectively disclaimed products that clip to the wire where the wire connects to the light bulb fixture.

[00:10:14] Speaker 01:
Yeah, that is the argument that was made below, is that we disclaimed it because we talked about two different prior audit references, Dugan and Clement, I believe, are the names of them.

[00:10:28] Speaker 01:
priorite references have clips that don't clip to the base of this magnetic light or this light.

[00:10:38] Speaker 01:
It clips to the cord.

[00:10:40] Speaker 01:
So you clip it to the cord and then you hang it on the eve of the house or you clip it to the cord and you hang it up by the cord with a magnet.

[00:10:50] Speaker 01:
Those are the two references.

[00:10:52] Speaker 01:
These references don't talk about

[00:10:55] Speaker 01:
a magnetic clip.

[00:10:56] Speaker 03:
But in the reference, Clement, maybe, where there's a clip and a magnet, what's the arrangement?

[00:11:04] Speaker 01:
So yeah, the magnet is simply, it's got a magnet on it, but it's also got a clip that attaches to the coil.

[00:11:12] Speaker 01:
But it doesn't attach to the light fixture.

[00:11:16] Speaker 01:
OK, so that's really what is unique about our product is that we've got this magnet that is embedded in the base

[00:11:24] Speaker 01:
of the light fixture, and you can stick that magnet on a pole or a flashing that's ferrous, and it will hold the light straight out.

[00:11:36] Speaker 01:
And that's what the magnetic clip does.

[00:11:38] Speaker 01:
It does the exact same thing that our embedded magnet does, that's not made separately.

[00:11:46] Speaker 01:
It's all together.

[00:11:47] Speaker 04:
The issue of whether

[00:11:53] Speaker 04:
If you have two magnets, you can aggregate their pull strength to meet the limitation of the claim.

[00:12:00] Speaker 04:
Do you view that as an issue of claim construction, an issue of infringement, an issue of doctrinal equivalence, or something else?

[00:12:06] Speaker 01:
Well, it was an issue of claim construction because it's undisputed that the magnet has more than five pounds of pull strength overall.

[00:12:16] Speaker 01:
So there's not a question of infringement.

[00:12:19] Speaker 01:
It's whether the court interprets that claim

[00:12:22] Speaker 01:
to require that each of the magnets has five pounds or all of the magnets collectively have five pounds.

[00:12:31] Speaker 01:
And in order to accomplish the purpose of the invention and avoid, it just doesn't make sense to require two magnets with five pounds of pull strength when you only need one magnet.

[00:12:43] Speaker 01:
with five pounds to satisfy the purpose of the invention.

[00:12:47] Speaker 04:
The red brief gives all these examples at pages 24 and 25 of where they say that reasoning would completely sort of eviscerate a whole lot of our doctrine.

[00:12:57] Speaker 04:
There's like a chemical patent and all that.

[00:12:59] Speaker 04:
You know the examples that I'm referring to?

[00:13:02] Speaker 01:
I think so, but I don't agree with those.

[00:13:05] Speaker 01:
First of all, there's not much in the way of context.

[00:13:10] Speaker 01:
All of these cases depend on

[00:13:13] Speaker 01:
What's in the patent?

[00:13:15] Speaker 01:
What's in the claims?

[00:13:16] Speaker 01:
In the biogrow case, for example, the context was that the court found that the purpose of it was the overall concentration of those acids or salts.

[00:13:30] Speaker 01:
And therefore, you should combine them together, because that's what the purpose of it is.

[00:13:34] Speaker 01:
So it's not going to upend claim construction or infringement contention.

[00:13:40] Speaker 01:
by interpreting it in a way that's consistent with the purpose behind that magnet.

[00:13:45] Speaker 02:
You're well into your rebuttal time.

[00:13:48] Speaker 02:
Do you want to let us hear from the other side?

[00:13:52] Speaker 01:
Yes, sir.

[00:13:53] Speaker 01:
I'll reserve my time.

[00:13:54] Speaker 02:
We'll give you four minutes for rebuttal.

[00:13:56] Speaker 01:
OK.

[00:13:56] Speaker 01:
Thank you, sir.

[00:13:59] Speaker 00:
Good afternoon, Your Honors, and may it please the court.

[00:14:02] Speaker 00:
May, with Mr. Allen's consent, and this is completely optional, I do have two of the magnetic clips.

[00:14:09] Speaker 00:
They were demonstrative exhibits at the hearing.

[00:14:11] Speaker 00:
I know there's a rule-based process for bringing demonstrative, so I can just set these down and forget about them.

[00:14:16] Speaker 00:
But if the court is interested, I could hand them to the marshal.

[00:14:20] Speaker 02:
Why don't you just put them aside?

[00:14:22] Speaker 00:
All right.

[00:14:22] Speaker 00:
Thank you, Your Honor.

[00:14:24] Speaker 00:
Judge Stark, in answer to your question about what do we do with a mixed case, what if some of the claims are unreasonable, but some are not, courts have actually tackled that already.

[00:14:35] Speaker 00:
So there's a case out of the Eastern District of Pennsylvania.

[00:14:38] Speaker 00:
We did not brief this.

[00:14:40] Speaker 00:
I'll alert your honors.

[00:14:42] Speaker 00:
I mean, we didn't include this case in our papers.

[00:14:45] Speaker 00:
Well Boutrin, 2012, US Dist Lexis 66312.

[00:14:52] Speaker 00:
from 2012.

[00:14:54] Speaker 00:
And this is a quote from that case.

[00:14:56] Speaker 00:
As a matter of policy, it would create poor incentives if tacking one meritorious claim onto any number of baseless ones that delay adjudication or resolution

[00:15:07] Speaker 00:
could automatically immunize the whole lawsuit or petition from antitrust liability as a matter of law.

[00:15:13] Speaker 00:
Of course, that's talking about North Pennington, which is a cousin to this bad faith issue we're dealing with here.

[00:15:17] Speaker 02:
Mr. Blainsport, as you know, we're not a policy making body.

[00:15:21] Speaker 02:
Isn't it correct that the injunction is really based on whether the determination that the claims were objectively baseless is correct?

[00:15:35] Speaker 00:
The injunction was based on all four of the main injunction factors, and baked within it was about one sixth of it are the issues that are briefed by my friend.

[00:15:46] Speaker 00:
There is quite a bit more.

[00:15:48] Speaker 02:
But objectively baseless is the base of this.

[00:15:54] Speaker 02:
And as you know, you don't have to be correct with an infringement assertion at the risk of it being objectively baseless.

[00:16:08] Speaker 02:
And at times, A means more than one.

[00:16:14] Speaker 02:
And the clips were attached, maybe not integrally.

[00:16:22] Speaker 02:
So why were the claims correctly found to be objectively basis or just possibly wrong?

[00:16:32] Speaker 00:
To tackle that, Your Honor, the district court tackled all that and also did that in the context of a fair chance of prevailing.

[00:16:40] Speaker 02:
Was it correct?

[00:16:41] Speaker 00:
Of course, the district court was correct.

[00:16:43] Speaker 00:
But the point I'm trying to make is that, and this actually goes to a point from Your Honor, Judge Toronto,

[00:16:50] Speaker 00:
The question, the ultimate categorical question of objective baselessness is not before your honors.

[00:16:56] Speaker 00:
It was not before the district court.

[00:16:58] Speaker 00:
This is instead, as Judge Stark indicated, this is that threshold of preliminary injunctive relief of a likelihood of success on the merits, which in the Eighth Circuit means something perhaps less than other circuits.

[00:17:10] Speaker 00:
It means a fair chance of prevailing.

[00:17:13] Speaker 00:
In this very context of a preliminary injunction and bad faith allegations and so on, we have this court's decision for Mekong Gaming.

[00:17:21] Speaker 00:
The outcome actually went against my position, I'll confess.

[00:17:24] Speaker 00:
But the analysis is very interesting to me, because in Mekong Gaming at the very end, you see that a panel of this court found quote unquote negligible likelihood of success on the objective unreasonableness prong.

[00:17:39] Speaker 00:
But then went on.

[00:17:39] Speaker 00:
It still tackled the question of, well, was there a strong irreparable harm showing?

[00:17:47] Speaker 00:
Was there a strong balance of the harm showing?

[00:17:49] Speaker 00:
What about the public interest?

[00:17:50] Speaker 00:
So in other words, we're dealing with this multi-layered

[00:17:54] Speaker 00:
beast which is the preliminary injunction.

[00:17:56] Speaker 03:
Basically the four elements for a preliminary injunction, although sometimes described as factors, are not on the whole balanced against each other.

[00:18:07] Speaker 03:
On the whole, you need each.

[00:18:09] Speaker 03:
Now I think there's some wiggle room about that.

[00:18:12] Speaker 03:
But if

[00:18:13] Speaker 03:
the district court was wrong and sort of clearly wrong, I don't know what the right expression is, to say that the infringement assertions were not just incorrect but objectively baseless, then it seems to me there's not enough to say, well, nevertheless, we will let the district court enjoin speech because there would be irreparable harm and whatnot.

[00:18:40] Speaker 03:
The merits piece of the four-part injunction

[00:18:43] Speaker 03:
test is something like necessary.

[00:18:48] Speaker 00:
To respond, Your Honor, this goes back to our conversation with Judge Stark, which is, in the mixed case scenario, it's not just the district court saying what's nice policy.

[00:18:57] Speaker 00:
It's also the Seventh Circuit in MCI Communications v. AT&T, 708, F-second, 1081, saying that a single baseless claim within a complaint

[00:19:08] Speaker 00:
can serve as grounds for a sham litigation claim.

[00:19:11] Speaker 00:
So in other words, when we have a mixed scenario, we win

[00:19:17] Speaker 00:
if any single of their assertions in their marketplace communications will ultimately be held by the trior fact to have been objectively baseless.

[00:19:26] Speaker 03:
For an injunction, MCI AT&T was a damages case, right?

[00:19:31] Speaker 03:
That was MCI's big damages case against AT&T for trying to keep it out of the long-distance market 1,000 years ago.

[00:19:40] Speaker 03:
And if there was one

[00:19:43] Speaker 03:
basis that might have been a basis for a wrongful antitrust action subject to the all-important question of whether that was the but-for cause of the damages caused, then that would surely be right.

[00:19:58] Speaker 03:
But your claim is that speech is to be enjoined

[00:20:06] Speaker 03:
um if what any part of the speech is baseless even if other parts are not is that what we're talking about that's right your honor and if we're going to and that the entirety of the speech really is that really a sound first amendment principle if if I say one thing that's baseless I can be silenced on the the speech for which I do have a base if Nebraska common law calls the whole communication defamatory

[00:20:37] Speaker 00:
then yes, that type of communication can be enjoined.

[00:20:42] Speaker 00:
And we do not have any appeal from my friend of the Nebraska common law elements application by the district court.

[00:20:49] Speaker 00:
So in Nebraska common law, just like everywhere, there is a substantial truth defense.

[00:20:53] Speaker 00:
So if we held up the two pieces of paper from the appendix, which constitute the offending communication,

[00:21:01] Speaker 00:
And if we sort of yellow highlighted the true statements, red highlighted the objectively baseless statements, maybe in the end a jury will have to deal with the substantial truth defense because the yellows are more than the reds or vice versa.

[00:21:18] Speaker 00:
But here we're dealing with a fair chance of success in the merits.

[00:21:20] Speaker 00:
We're trying to balance all these equitable factors and protect the marketplace from unfair competition, untrue statements, and what have you.

[00:21:29] Speaker 04:
Do you agree that in the posture the case is before us now, we'd have to find that there's at least one objectively baseless statement in the communications that you're unhappy with?

[00:21:39] Speaker 00:
Yes, Your Honor, I accept that.

[00:21:41] Speaker 00:
And it's easy for me to accept that because the 264 patent assertion against the magnetic cord

[00:21:49] Speaker 00:
was found by the district court.

[00:21:50] Speaker 04:
Where is the 264?

[00:21:52] Speaker 04:
This is the protruding point.

[00:21:53] Speaker 04:
The protruding point, right.

[00:21:54] Speaker 04:
Is that referenced in the communication to your joint customers?

[00:21:59] Speaker 00:
Yes, Your Honor.

[00:21:59] Speaker 00:
In two ways.

[00:22:02] Speaker 00:
In the very top of the communication, that patent is named.

[00:22:06] Speaker 05:
Right.

[00:22:09] Speaker 00:
Appendix 542, Your Honor.

[00:22:13] Speaker 00:
I qualified in the one way.

[00:22:15] Speaker 00:
It's named there.

[00:22:16] Speaker 00:
I was going to point to the next page of the appendix, which has the attachment to that letter that went out to the marketplace, which is the first page of the complaint.

[00:22:26] Speaker 00:
In that page, that patent number is not repeated.

[00:22:32] Speaker 00:
But that's the page that says, we explicitly, HPL, copied Lightnetics patented product.

[00:22:40] Speaker 00:
That's the page where

[00:22:43] Speaker 00:
Blignetix is telling the purchasing public that HPL copied their product.

[00:22:50] Speaker 00:
Now, that's categorically false.

[00:22:52] Speaker 00:
We know that because they're different.

[00:22:54] Speaker 00:
There's a patent that's issued by the USPTO on HPLs.

[00:22:57] Speaker 04:
What evidence at all do we have in the record of copying and how you devised your product or didn't devise your product?

[00:23:03] Speaker 00:
I missed the first part.

[00:23:03] Speaker 00:
I'm sorry.

[00:23:04] Speaker 04:
What evidence do we have in the record?

[00:23:05] Speaker 04:
You say it's categorically false.

[00:23:07] Speaker 04:
Right.

[00:23:07] Speaker 04:
They say it's at least objectively

[00:23:10] Speaker 04:
reasonable to think that you copied because of how they look like each other, I suppose.

[00:23:15] Speaker 04:
We don't have a record on that, do we?

[00:23:18] Speaker 00:
Well, Your Honor's need not trouble very much on this point, because again, it's another point that my friend did not appeal.

[00:23:24] Speaker 00:
There are findings that the copying accusation was objectively baseless, false, defamatory, et cetera.

[00:23:29] Speaker 04:
Aren't the three statements you're unhappy with, aren't they all intertwined with one another?

[00:23:33] Speaker 04:
Don't they all ultimately go back to whether or not they had a reasonable belief

[00:23:37] Speaker 04:
that your client infringed one or more of their patent claims?

[00:23:40] Speaker 00:
Well, they're certainly related, but they are different.

[00:23:43] Speaker 00:
And the ultimate scope of the injunction is very targeted to these types of statements.

[00:23:47] Speaker 00:
They're isolated one, two, three in terms of type.

[00:23:52] Speaker 04:
So can we, I guess I have a high level question.

[00:23:54] Speaker 04:
We go back to the Eighth Circuit standard, because your argument suggests, I think it should be very easy for an accused infringer

[00:24:03] Speaker 04:
to shut down communication about patent rights during the course of a patent case.

[00:24:09] Speaker 04:
According to you, I guess the question is if this looks to us like just a typical patent case,

[00:24:16] Speaker 04:
At an early stage, there's reasonable arguments for claim construction on both sides, reasonable arguments for whether doctor of equivalence is available, reasonable disputes over infringement.

[00:24:27] Speaker 04:
Is it really as easy as if you show a fair chance that maybe they'll lose and lose badly, they now can't talk about their patent for the next two to three years?

[00:24:39] Speaker 00:
Judge, Your Honor, it's not easy.

[00:24:42] Speaker 00:
This is a very special, rare outlier case.

[00:24:45] Speaker 00:
And in fact, I would call the claim construction that we've seen in the briefing on the 779 patent, I would call it cringeworthy.

[00:24:55] Speaker 00:
And I think Lightnetics briefing does my work for me.

[00:24:58] Speaker 00:
So let me address page eight of the reply brief, just the heading there.

[00:25:02] Speaker 00:
And I'll quote their heading.

[00:25:04] Speaker 00:
The 779 patent covers one or more magnets having an aggregated pull strength of at least five pounds.

[00:25:12] Speaker 00:
Compare that with what the claim actually says, which is a neodymium magnet

[00:25:17] Speaker 00:
embedded in the base, wherein said magnet has a pull strength of at least five pounds.

[00:25:22] Speaker 04:
If I think at this early stage that's a reasonable claim construction position, you lose this appeal.

[00:25:28] Speaker 04:
Is that right?

[00:25:28] Speaker 04:
At least my vote, right?

[00:25:30] Speaker 00:
I don't believe so, Your Honor, because we have an opportunity eventually at the end of the case to convince a trier of fact that it's objectively baseless.

[00:25:39] Speaker 00:
But again, let's feed forward to where we are today.

[00:25:43] Speaker 00:
We're at the point of interim equitable relief.

[00:25:46] Speaker 00:
We have this relatively light likelihood of success burden in the Eighth Circuit.

[00:25:51] Speaker 00:
So we've done all the work necessary to show that we have a fair chance of prevailing, proving that this is ranked blue lining of a patent claim, which courts don't do.

[00:26:02] Speaker 00:
That's not claim construction.

[00:26:04] Speaker 00:
That's editing.

[00:26:06] Speaker 00:
So we're back to, in this appeal,

[00:26:13] Speaker 00:
has, like netics, established that there was any abuse of discretion by the district court.

[00:26:19] Speaker 00:
And Your Honors, I would submit that there has not been.

[00:26:22] Speaker 03:
Can you explain a little bit more on the clips?

[00:26:28] Speaker 03:
What does the record say about, and I don't know what the, this is a highly non-technical term, how snuggly

[00:26:36] Speaker 03:
the clip fits to the base of the bulb-carrying unit?

[00:26:46] Speaker 00:
You could go to the record of Mr. Genenbacher's declaration for that answer.

[00:26:50] Speaker 00:
I don't have the page number handy, but it should be very easy to find.

[00:26:54] Speaker 00:
He says correctly.

[00:26:55] Speaker 00:
I'm not going to pick them up.

[00:26:56] Speaker 00:
I'm going to use my hand.

[00:26:58] Speaker 00:
He says correctly that the end of the preexisting socket presses against.

[00:27:06] Speaker 00:
the bottom of the clip.

[00:27:08] Speaker 00:
And if you look on the bottom of the clip, there's no attachment mechanism whatsoever.

[00:27:12] Speaker 00:
It's like a flat piece of plastic.

[00:27:14] Speaker 03:
But it presses against it.

[00:27:15] Speaker 00:
Presses against.

[00:27:16] Speaker 03:
And the raised lip of the clip, if that's what one wants to call it, presses against the

[00:27:27] Speaker 03:
the cylindrical surface of the face?

[00:27:32] Speaker 00:
The district court originally thought that in the TRO order.

[00:27:34] Speaker 00:
But having reviewed the demonstrative exhibits, he corrected himself.

[00:27:38] Speaker 00:
And he realized the sides don't do any kind of hugging.

[00:27:41] Speaker 00:
Instead, the sides have these arms that go this way.

[00:27:47] Speaker 03:
You asked them to make that correction, or they did?

[00:27:49] Speaker 00:
No one asked for that correction.

[00:27:51] Speaker 00:
It's just when he got to the preliminary injunction opinion, he corrected himself.

[00:27:55] Speaker 00:
He said, oh, I might have said something incorrectly, but here's the way it is.

[00:27:59] Speaker 00:
If you look at the arms, they sort of hug the light cord.

[00:28:04] Speaker 00:
Installation on the light cord is exactly the disclaim material.

[00:28:09] Speaker 00:
Installation of a clip on the light cord, full stop.

[00:28:12] Speaker 03:
Right, so the arms that come up, and as I understand it, the arms come up out of a little disc and the disc has a little lip around it.

[00:28:20] Speaker 03:
That's right.

[00:28:21] Speaker 03:
Right, and I was, I guess, curious whether both the disc part of the clip and the little lip part, not the arms,

[00:28:29] Speaker 03:
whether both of those, you said that the disc part does actually touch the bottom of the base.

[00:28:36] Speaker 03:
Does the rim part also touch the bottom, not the bottom, but just above the bottom of the base?

[00:28:44] Speaker 00:
Don't quote me because I just don't know the answer.

[00:28:46] Speaker 00:
I think the circumference might be a little bigger than a typical light socket.

[00:28:50] Speaker 00:
So there would be some outer edge of the lip that doesn't touch even any part of the circumference of the base.

[00:28:57] Speaker 00:
I believe that's how it works.

[00:28:59] Speaker 02:
Counsel, doesn't an abuse of discretion include an error of law?

[00:29:05] Speaker 00:
It can include an error of law, but again, If my friend had demonstrated just a categorical error of law in all parts of the claim construction, this would be a different case.

[00:29:20] Speaker 00:
Then I would concede we have to go back and revisit the preliminary injunction.

[00:29:25] Speaker 02:
Anything further?

[00:29:27] Speaker 00:
If there are no further questions, Your Honor, I would just ask on behalf of HBL that this court protect fair competition, honesty, fair play in the marketplace.

[00:29:36] Speaker 00:
Remember, these are assistant managers of hardware stores who are getting these notices.

[00:29:40] Speaker 00:
This was way over the top and affirmed the preliminary injunction.

[00:29:45] Speaker 02:
Thank you.

[00:29:47] Speaker 02:
Mr. Malone, we'll give you your full rebuttal time back.

[00:29:51] Speaker 02:
Four minutes.

[00:29:52] Speaker 01:
Thank you, Your Honor.

[00:29:55] Speaker 01:
First, I wanted to address the allegation that if any of our claim construction arguments are wrong, we lose.

[00:30:05] Speaker 01:
How could that be true?

[00:30:07] Speaker 01:
The communication was not about claim construction.

[00:30:10] Speaker 01:
It was about we sued the appellee on these two patents

[00:30:19] Speaker 01:
We don't even identify the two products that we sue them on in either this communication or the letter.

[00:30:28] Speaker 01:
So how can you say that this letter is false if any claim is successful?

[00:30:35] Speaker 01:
So if we win on the magnetic cord, we win on the claims regarding this letter.

[00:30:44] Speaker 01:
If we went on the clip, we went on this letter because, again, neither one of them are identified here in the letter.

[00:30:52] Speaker 01:
And furthermore, contrary to the Appalachian Council's argument, the court did, in fact, rely heavily on all of those Nebraska common law claims in finding that this case was objectively baseless.

[00:31:11] Speaker 01:
And you can find that in the court's memo starting at page 49 of the appendix to page 54.

[00:31:23] Speaker 01:
Again, the court acknowledges that federal patent law provides a privilege, but he points out the exception.

[00:31:31] Speaker 01:
We kept arguing, look, it has to be objectively baseless.

[00:31:37] Speaker 01:
And if it doesn't meet that standard, these claims should not stand.

[00:31:41] Speaker 01:
We shouldn't get the injunction.

[00:31:43] Speaker 04:
Can we talk a little bit more about the clips?

[00:31:46] Speaker 04:
Would you agree that you disclaimed some use of some type of clips?

[00:31:51] Speaker 04:
Or are you denying all disclaimer?

[00:31:54] Speaker 01:
So the clip is a broad term.

[00:31:57] Speaker 01:
It's a term that's actually used in our dependent claims to show how the base can clip to the second end of the light socket.

[00:32:07] Speaker 01:
So to just say that all clips whatsoever are disclaimed would be contrary to the law.

[00:32:14] Speaker 04:
I figured you would say that, but would you agree that you disclaimed some narrower use of clips in the context of magnetic lights?

[00:32:22] Speaker 01:
Well, with respect to Dugan and Clement, if you look at those prior art references, I think, yes, we couldn't claim that one of those

[00:32:33] Speaker 04:
clips infringed our patent because it's not even attached to the... So how, for example, is Clement's use of clips different than HPL's use of clips?

[00:32:43] Speaker 01:
It's different because they attach it to the light cord only.

[00:32:48] Speaker 01:
The use of the clips in the case of the Appellee is that they're clipping it to the cord adjacent to light fixture.

[00:33:00] Speaker 01:
It actually clamps

[00:33:02] Speaker 01:
snugly against that light fixture and it holds which the wire itself is part of the light fixture too because it gets clamped down.

[00:33:11] Speaker 01:
So the wire is part of the light fixture.

[00:33:14] Speaker 01:
The clip clips onto them the wires.

[00:33:18] Speaker 04:
So Clement could clip anywhere along the cord but HBL's product has to clip near the light?

[00:33:24] Speaker 01:
The difference between HBL's product and these other products is that it attaches to the base.

[00:33:31] Speaker 01:
Our argument is it attaches to the base.

[00:33:34] Speaker 01:
It doesn't have to be a mechanical connection directly to the base.

[00:33:39] Speaker 01:
The mechanical connection here is indirect as far as what holds it on.

[00:33:45] Speaker 01:
The clips hold a clip to the wires, and that's what holds the magnetic clip snug with the base.

[00:33:55] Speaker 01:
But by doing that, you're attaching that clip to the base

[00:34:01] Speaker 01:
that this light fits to it, none of the other prior law references are doing that.