[00:00:00] Speaker 04: This morning the first is number 22 22 99 Crown packaging technology versus velvet production machinery May proceed your honor yes may please the court good morning. [00:00:17] Speaker 00: My name is Dan Gettle I represent the plaintiff the patentee in this case and with me a counsel table to my partner Jeffrey less of its I [00:00:25] Speaker 00: Your honors, this morning I'd like to, in my brief time, I'd like to focus on two issues raised in our briefing. [00:00:30] Speaker 00: The first regards the comprising limitation and the comprising argument laid out in the briefing. [00:00:36] Speaker 00: And the second is directed at the doctrine of equivalence analysis regarding the mounted on limitation. [00:00:44] Speaker 00: I think addressing those two limitations is kind of the cleanest path to resolving the appeal. [00:00:51] Speaker 00: As to the comprising limitation, [00:00:54] Speaker 00: issue, the claims of both patents recite an assembly comprising multiple horizontal necking stages with certain characteristics. [00:01:05] Speaker 00: There's two characteristics here that are at issue or addressed in the briefing. [00:01:11] Speaker 00: The first characteristic is that the multiple horizontal necking stages have to be adapted to run at recited speeds of more than 3,400 cans per minute. [00:01:22] Speaker 00: That's the first. [00:01:23] Speaker 00: characteristic relevant here. [00:01:25] Speaker 00: The second relevant characteristic is that the dies used in the multiple horizontal necking stages have to have a component inside the die that quote unquote defines a cylinder. [00:01:37] Speaker 00: That's the claim limitation. [00:01:39] Speaker 00: So thinking about those two characteristics, first it's undisputed. [00:01:45] Speaker 04: The problem is it seems to me you're arguing [00:01:48] Speaker 04: that one embodiment infringes some limitations and the other, that there's another embodiment that infringes other limitations and that somehow you can combine those and find infringement. [00:02:01] Speaker 04: Because in order to find infringement of the cylinder limitation, you have to dispense with the first die. [00:02:08] Speaker 04: In order to satisfy the 3,400 limitation, you have to include the first die. [00:02:17] Speaker 00: So the accused product is the Belvac Necker. [00:02:23] Speaker 00: The CMB 3400 is our product, the patentees product. [00:02:27] Speaker 00: In the accused product, the Belvac Necker, there's no dispute. [00:02:33] Speaker 00: So these necking machines are made up of these multiple horizontal necking stages. [00:02:37] Speaker 00: One machine has 12 or 13 stages, no dispute on that. [00:02:42] Speaker 04: It's also not disputed that- Was what I said accurate or inaccurate? [00:02:46] Speaker 00: I confess, Your Honor, you talked about two embodiments, and that threw me. [00:02:52] Speaker 00: So I confess, I didn't understand your question. [00:02:54] Speaker 04: Well, in order to find that the accused product infringes, you're saying we can dispense with the first die because it's a comprising claim. [00:03:07] Speaker 04: But then when you get to the second issue, the 3,400 limitation or whatever it is, you [00:03:15] Speaker 04: you include the first dye. [00:03:17] Speaker 04: So that would seem to be problematic. [00:03:20] Speaker 00: No, Your Honor, that would be incorrect on this record. [00:03:23] Speaker 00: On this record, it's undisputed that all of these stages run at 3,400 cans per minute. [00:03:28] Speaker 00: When this machine is in operation, stage runs. [00:03:31] Speaker 04: I thought the evidence was that without the first dye, it didn't. [00:03:35] Speaker 00: No, the argument is that stages two through 12 [00:03:40] Speaker 00: need to have stage one in order to run. [00:03:43] Speaker 00: That's the same argument as saying the machine needs electricity in order to run. [00:03:48] Speaker 00: It's irrelevant to the case. [00:03:50] Speaker 00: We proved that. [00:03:52] Speaker 04: How is that irrelevant to the case? [00:03:55] Speaker 04: Isn't that necessary to satisfy the claim? [00:03:57] Speaker 00: No, Your Honor. [00:03:58] Speaker 00: The claim is to an assembly comprising multiple horizontal necking stages, stages two through 12, [00:04:08] Speaker 00: multiple 12 don't produce 3400 a minute they do yes your honor it's undisputed only with one stages to when this machine is in operation it runs at 3600 cans per minute so by definition stages 2 through 12 [00:04:26] Speaker 00: are adapted to run at 3,600 cans per minute, because that's what the machine turns out. [00:04:31] Speaker 04: But it won't run at 3,400 per minute without the first die, without the first stage. [00:04:37] Speaker 00: It also won't run at 3,400 cans per minute without electricity. [00:04:40] Speaker 03: Well, if it wasn't plugged in, then it wouldn't be infringing either, because it wouldn't be 3,400 cans a minute. [00:04:46] Speaker 00: But when it is plugged in and when it is running, stages 2 through 12 are running at 3,600 cans per minute. [00:04:52] Speaker 00: It's a comprising claim that something else is necessary for the machine to run is irrelevant for a comprising claim. [00:05:00] Speaker 03: Not if it's essential to the operation of the machine. [00:05:04] Speaker 03: How can something that has an essential element that's different from your invention infringe your invention? [00:05:12] Speaker 00: I'm sorry. [00:05:12] Speaker 00: Can you repeat that? [00:05:13] Speaker 03: How can something that has an essential element that's different from your invention infringe your invention? [00:05:21] Speaker 00: I'm going to answer that question like this. [00:05:24] Speaker 00: In this case, it's not different than our invention. [00:05:27] Speaker 00: Our invention is running a machine that can run at 3,400, more than 3,400 cans per minute. [00:05:34] Speaker 04: But it can't do that without the first stage, without the first dye, right? [00:05:38] Speaker 04: And if the claim had been a case... Is the answer yes to that? [00:05:41] Speaker 00: It cannot do it without the first stage, just like the disclosed embodiment in the pad, Your Honor. [00:05:46] Speaker 00: It cannot do it without tapered first dye. [00:05:49] Speaker 04: What you're doing is you're then [00:05:51] Speaker 04: You're discarding the first stage when you're looking to whether it satisfies other claim limitations. [00:05:58] Speaker 04: You can't do that. [00:05:59] Speaker 04: I mean, it's got to be the same device that as a whole satisfies each of the claim limitations. [00:06:06] Speaker 00: This device as a whole satisfies each of the limitations irrespective of stage one. [00:06:10] Speaker 00: Stages two through 12 meet all of the limitations of the claim. [00:06:15] Speaker 00: That's undisputed. [00:06:16] Speaker 00: There's been no case cited in this court [00:06:20] Speaker 00: But from this case or in the district courts that says for a comprising claim, you have to show more than some elements in that accused device that meet all of the limitations of the claims. [00:06:32] Speaker 00: That's exactly this scenario. [00:06:34] Speaker 00: Stages 2 through 12 meet all of the limitations of the claims. [00:06:38] Speaker 00: That's been our theory of this case since the beginning. [00:06:40] Speaker 00: On summary judgment, at the hearing, we got an instruction on the word comprising. [00:06:46] Speaker 00: That's always been our theory of the case, Your Honors. [00:06:52] Speaker 00: On the other issue that I want to touch with my brief time last is the doctrine of equivalence analysis regarding the mounted on limitation. [00:07:00] Speaker 00: For here, the argument is very straightforward. [00:07:03] Speaker 00: There's a lack of proof on the function. [00:07:07] Speaker 00: There's no substantial evidence in this record as to the non-infringement position that Belvac was offering on the doctrine of equivalence on the function. [00:07:19] Speaker 01: Did Crown ask the district court to construe the mounted on limitation? [00:07:24] Speaker 00: No, Your Honor. [00:07:26] Speaker 00: There's no evidence from Belvax expert on what the function is, and there's no evidence of what the patent would say the result is that was put in by Belvax expert. [00:07:38] Speaker 01: Didn't the Belvax expert agree with the Crown expert on the function portion? [00:07:44] Speaker 00: No, the Belvax expert actually specifically disagreed that that was the function. [00:07:49] Speaker 00: The Belvax expert agreed that in the necking machine, the gear is attached to the shaft and it rotates. [00:07:56] Speaker 00: But Belvax experts specifically disagreed. [00:07:58] Speaker 01: Can you point me to where in the record I can find that? [00:08:01] Speaker 00: Yes. [00:08:07] Speaker 00: It is at appendix 3486 to 87. [00:08:12] Speaker 00: Question, OK. [00:08:14] Speaker 00: And you agree with Mr. Walsh that mounting of the gear in the Belvac Necker performs exactly the same function. [00:08:21] Speaker 00: I did not agree on the function. [00:08:28] Speaker 00: So this case is similar to the Aquitex case written by you, Judge Dyke. [00:08:36] Speaker 00: where there's not a linking between the claim element in the patent and the supposed equivalence in the accused machine, there's a lack of substantial evidence for that. [00:08:47] Speaker 00: In this case, Bellback's expert never laid out what the function was of the gear-shaft relationship, never laid out what the function of that was, skipped it completely. [00:09:01] Speaker 00: And on the result, he said the result was different, but he never said different from what. [00:09:05] Speaker 00: He said the difference was that there's no shaft deflection in the accused product. [00:09:11] Speaker 00: The shaft deflection and gear alignment was the other thing he referenced. [00:09:15] Speaker 00: Shaft deflection causing gear alignment isn't even discussed in the patent at all. [00:09:19] Speaker 00: And their expert admitted that as well. [00:09:22] Speaker 00: So for the function way result analysis, there's no evidence of what the function was. [00:09:30] Speaker 00: And you can see this right from the J-Mole ruling. [00:09:33] Speaker 00: Judd, the lower court, never refers to any function. [00:09:38] Speaker 00: And the way and the result on the way, without a function, the question is the way of doing what. [00:09:45] Speaker 00: Belvax expert never laid down the way of doing what. [00:09:48] Speaker 00: And on the result, again, the expert pointed to a result that was totally different than anything disclosed in the patent, admitted [00:09:56] Speaker 00: that there was nothing in the patent on ship deflection. [00:09:59] Speaker 01: So what's the import though of the testimony on appendix three four eight six beginning at line 20 talking about the function. [00:10:05] Speaker 01: So I saw the portion you pointed us to. [00:10:07] Speaker 01: But what if you read just a little bit before that. [00:10:09] Speaker 01: Does that not address what would be the function of buying the gear. [00:10:17] Speaker 00: I'm just going to grab that page. [00:10:19] Speaker 01: Understood. [00:10:24] Speaker 01: It's 3486 beginning at line 20. [00:10:27] Speaker 01: You pointed us to 3486 beginning at line 24 going on top of 3487. [00:10:38] Speaker 00: You're at line 20, Your Honor. [00:10:40] Speaker 01: Yes, that's correct. [00:10:41] Speaker 00: So yeah, I see what he's saying. [00:10:43] Speaker 00: And I apologize for not pointing that out. [00:10:45] Speaker 00: But his testimony immediately following that, I'm not sure what he means when he says answer in that claim language. [00:10:53] Speaker 00: Yes. [00:10:54] Speaker 00: I don't know what that means. [00:10:55] Speaker 00: But then the question came back and said, and you agree with Mr. Walsh that mounting on the gear in the Belvac Necker performs exactly the same function, right? [00:11:03] Speaker 00: Answer, I did not agree on the function of your previous definition. [00:11:07] Speaker 00: No, I did not. [00:11:08] Speaker 00: He does not agree that the function is transferring rotational force from the gear to the shaft. [00:11:17] Speaker 00: He never agreed to that. [00:11:18] Speaker 01: But if you read what's on line 20, he essentially does seem to agree with it. [00:11:23] Speaker 01: I mean, maybe we're just reading this differently. [00:11:26] Speaker 01: It sounds like we are. [00:11:27] Speaker 01: But if you look at line 20, I do think there's a little something different there. [00:11:30] Speaker 00: I'll let you move on. [00:11:31] Speaker 01: I don't want you to get stuck on this. [00:11:32] Speaker 00: And with that, I'll reserve the rest of my time unless there's any further questions. [00:11:36] Speaker 04: Okay. [00:11:48] Speaker 02: Good morning. [00:11:49] Speaker 02: May it please the court. [00:11:51] Speaker 02: Your honor's questions with respect to Crown's appeal on the infringement issues go to the heart of the problem with the appeal. [00:11:58] Speaker 02: But I want to start with on sale bar because this is first and foremost an on sale bar case. [00:12:05] Speaker 02: Crown is already pursuing a continuation application in an attempt to circumvent the jury's verdict. [00:12:10] Speaker 02: There's a very real prospect that we'll be back here again. [00:12:13] Speaker 02: And this appeal therefore can and should be decided most comprehensively by finding these patents invalid based on Crown's pre-critical date commercial offer for sale of the invention. [00:12:25] Speaker 01: So counsel, do you agree that if we agree with you on the on-sale bar argument, [00:12:30] Speaker 01: We do not need to reach the argument you raised with respect to written description. [00:12:34] Speaker 02: I do, Your Honor. [00:12:37] Speaker 03: We have to rule in your favor, right? [00:12:38] Speaker 03: Not just send it back for a new trial or a trial on it. [00:12:44] Speaker 03: Because it went off on summary judgment. [00:12:45] Speaker 02: It went off on summary judgment. [00:12:47] Speaker 02: So if this court was to affirm the non-infringement verdict, I don't think there would be a remand opportunity for the on-sale bar since it was raised. [00:12:55] Speaker 02: Why is it a validity issue? [00:12:56] Speaker 02: It is a validity issue. [00:12:57] Speaker 02: It was raised as an affirmative defense. [00:12:59] Speaker 03: not as a counterclaim, but we would submit, Your Honor, that the record on on-sale bar... But if we reach... I just want to make clear in my head, if we don't agree that the facts are sufficient to reverse outright in granting you summary judgment, we could still send it back for further trial. [00:13:19] Speaker 02: Yes, you could, Your Honor. [00:13:21] Speaker 02: And we've raised that issue in our brief, but we've also pointed out in our briefing that we believe the record is such on on-sale bar that [00:13:29] Speaker 02: the most appropriate course would be for this court to reverse and render, just as it did in the Junker case. [00:13:36] Speaker 02: And that's because the offer at issue here... Can we back up just one second? [00:13:41] Speaker 04: If I understand correctly, your expert looked at photographs of the device, and he was prepared to testify that the device shown in the photographs satisfied all the claim limitations, and there's also no dispute about ready for patenting. [00:13:56] Speaker 04: So we don't have any controversy [00:13:59] Speaker 04: about whether what was shown in the photographs would be anticipatory and satisfy the claim limitations, right? [00:14:09] Speaker 02: Correct, Your Honor. [00:14:10] Speaker 02: There was no issue with photographs. [00:14:11] Speaker 02: It was just the offer for sale itself. [00:14:14] Speaker 04: And there's no dispute that what was in the photographs is the same product that was in the quotations, right? [00:14:21] Speaker 04: There's no dispute. [00:14:22] Speaker 04: So the sole question that we have [00:14:24] Speaker 04: is whether what was shown in the photographs and what was included in the quotations was on sale within the many of our cases, right? [00:14:32] Speaker 02: That's exactly right, Your Honor. [00:14:33] Speaker 02: No dispute that it was a pre-critical date sale, no dispute over ready for patenting, no dispute that it was an invention. [00:14:39] Speaker 04: Okay, I don't understand that [00:14:43] Speaker 04: how the device itself, which the judge said wasn't properly made part of the record, would show that it was on sale. [00:14:53] Speaker 04: You have to go to the documents for that, right? [00:14:57] Speaker 02: Correct, Your Honor. [00:15:00] Speaker 02: On-sale bar case is premised on the offer letter itself, this 11 page quotation that starts at appendix 4724 in the record. [00:15:09] Speaker 02: Our on-sale bar case is entirely premised on that. [00:15:12] Speaker 02: And that was the document that the judge below addressed in denying our motion to summary judgment and granting summary judgment, we believe, improperly. [00:15:21] Speaker 02: to crown. [00:15:22] Speaker 04: Okay, but that quotation says it's governed by English law, but nobody seems to have paid any attention to that or thought that English law had any bearing on this question, right? [00:15:32] Speaker 04: That's correct, Your Honor. [00:15:33] Speaker 04: So I think under our cases, we can assume that as a result of waiver, we'd apply American law to that, right? [00:15:40] Speaker 02: That's correct, Your Honor, and that's what both parties and the district court did. [00:15:44] Speaker 02: And under American law, the question under this court's precedence is whether [00:15:48] Speaker 02: This commercial offer invited simple acceptance. [00:15:51] Speaker 02: And the fact is that it did. [00:15:53] Speaker 02: To accept this offer for sale, the customer, a complete packaging machinery, was to do three things. [00:15:59] Speaker 02: It was to submit a purchase order. [00:16:02] Speaker 02: It was to make simultaneous payment of 50% of the purchase price, quote, with order, end quote, [00:16:09] Speaker 02: and it was to provide certain technical specifications and the offer's requirement of partial payment with the purchase order is critical. [00:16:19] Speaker 02: It means that a contract was to be created and in fact partially performed [00:16:24] Speaker 02: upon complete packaging machinery's order itself before any subsequent written acceptance of that order by Crown. [00:16:33] Speaker 02: It also stated that manufacturing would commence immediately upon receipt of the order. [00:16:39] Speaker 02: So you not only have the offeree performing already, you have Crown, the offeror, performing already before you ever get to a written acceptance provision. [00:16:49] Speaker 04: So under our cases, this written acceptance provision [00:16:54] Speaker 04: doesn't necessarily prevent the creation of an offer for sale under medicines and hospira, but there we rely on other provisions of the contract in essence clarifying what was meant by written acceptance. [00:17:10] Speaker 04: If I understand the record here, what happened [00:17:13] Speaker 04: with respect to orders for this Necker machine in past instances, is there's no evidence that there was ever a written acceptance. [00:17:24] Speaker 04: What there is is evidence that there was a written acknowledgement. [00:17:28] Speaker 04: Am I correct about that? [00:17:30] Speaker 02: There is no evidence that the offeree provided a written acceptance. [00:17:34] Speaker 02: Well, it did provide a written acknowledgement. [00:17:36] Speaker 02: There is no evidence of a written acknowledgement by the offer either. [00:17:40] Speaker 02: There is the transmission of the offer itself. [00:17:43] Speaker 04: No, no, no, not in this case. [00:17:44] Speaker 04: In these past instances. [00:17:45] Speaker 04: Oh, I'm sorry. [00:17:47] Speaker 04: I'm looking to the past practice here. [00:17:51] Speaker 02: Yes. [00:17:51] Speaker 04: Looking at the past practice, there are several instances in which there was an offer to purchase from other parties. [00:18:00] Speaker 04: In the past, there's no evidence that that was followed by a written acceptance, but there is evidence that was followed by a written acknowledgement of the order, correct? [00:18:09] Speaker 02: That's correct, Your Honor, but after Crown entered the order into its system. [00:18:14] Speaker 02: So, but that is correct. [00:18:15] Speaker 02: I think Your Honor's reference to the Medicines II case and Helson [00:18:20] Speaker 02: is very appropriate because what the court dealt with in that case was a written, a reservation reserving the right to reject a purchase order or to accept. [00:18:30] Speaker 02: And this court relied on the fact that under the agreements in place in those cases, there was a best efforts requirement, a requirement to exercise commercially reasonable efforts on behalf of the offeror to fulfill the contract. [00:18:44] Speaker 02: And we have the very same thing here. [00:18:46] Speaker 02: at appendix 4732, Crown provides in this offer, quote, every effort will be made to carry out the contracts, which puts us squarely in the same framework. [00:18:57] Speaker 04: But I don't see that that provision really bears on this, because that provision has to do with shortage of materials and things of that sort. [00:19:08] Speaker 04: So I don't think that particularly gets you. [00:19:12] Speaker 02: Your Honor, the provision itself, which is at appendix 4732, says, quote, every effort will be made to carry out the contract. [00:19:24] Speaker 02: And then it lists a series of causes. [00:19:26] Speaker 02: And then at the end says, or other cause beyond our control. [00:19:29] Speaker 02: So it is all encompassing. [00:19:31] Speaker 02: And if you follow the order of events of how this offer was going to be accepted, [00:19:37] Speaker 02: We are very much in the same situation as in medicines, too, even though there's not an executed contract. [00:19:43] Speaker 02: What happens here is you have the offer by crown. [00:19:45] Speaker 02: You have simple acceptance by the offer by submitting a purchase order, paying over a million dollars at that point in time, performing. [00:19:53] Speaker 02: and submitting specification sheets. [00:19:55] Speaker 01: At that point, you have a contract. [00:20:01] Speaker 01: Yes, Your Honor. [00:20:04] Speaker 02: Crown also raises the in this country issue, which the district court did not address, but which this court certainly can resolve because it turns on a pure dispute of law between the parties and specifically [00:20:17] Speaker 02: This court's precedence in this country language under pre-AIA 102B is clear. [00:20:24] Speaker 02: The offer simply must be directed to an offeree in the United States at its place of business. [00:20:30] Speaker 02: There's no question on the facts here that happened. [00:20:33] Speaker 02: This offer was addressed to Complete Packaging Machinery at its address in Colorado. [00:20:38] Speaker 02: It was sent to a CPM business email address. [00:20:42] Speaker 02: And if you look at Crown's customer list in connection with this quotation at appendix 4763, they list complete packaging machinery as based in the quote USA. [00:20:52] Speaker 02: The dispute that Crown raises is trying to inject an additional requirement into the, in this country. [00:20:59] Speaker 02: language or requirement that if the offered product is accepted, it's to be used in the United States. [00:21:07] Speaker 02: That's not what this court has held in Ray Kavanaugh and in Hamilton Beach. [00:21:11] Speaker 02: Do we know what prompted this letter? [00:21:14] Speaker 02: We know that Crown was actively trying to sell its new 3,400 Necker. [00:21:19] Speaker 02: Indeed, if we were in a post-AIA world, there's 13 additional offers. [00:21:23] Speaker 02: We do not have [00:21:25] Speaker 02: a document from Complete Packaging Machinery saying, please send it to us. [00:21:28] Speaker 02: But what we have is a very targeted communication only to them specifically. [00:21:33] Speaker 03: This isn't just a list of products and prices on a website or a flyer that is just a catalog of merchandise. [00:21:42] Speaker 03: This is a letter directed to a company with prices. [00:21:46] Speaker 03: And the words this offer is generally in accordance with our conditions of sale. [00:21:52] Speaker 02: Absolutely, Your Honor. [00:21:53] Speaker 02: Do you think that's enough? [00:21:55] Speaker 02: No material issue of fact. [00:21:57] Speaker 02: There is no material issue of fact. [00:21:59] Speaker 02: And as your honor pointed out, with respect to the terms itself, this court has addressed kind of the hallmarks of a commercial offer for sale. [00:22:06] Speaker 02: every single one of those hallmarks, and then some are in this offer. [00:22:10] Speaker 02: If that's an offer, does it even matter whether there's acceptance or not? [00:22:15] Speaker 02: No, Your Honor. [00:22:15] Speaker 02: It's well settled that offers for sale, just like for sale, constitutes an on-sale bar under 102B. [00:22:24] Speaker 02: Price, product description, quantity terms, delivery terms, terms of payment, manner of delivery, FCA, Shipley, our Packers, [00:22:32] Speaker 02: location of delivery, transfer of title. [00:22:35] Speaker 02: The document even has pages of what are called standard conditions of sale. [00:22:40] Speaker 02: We included in our briefing at page 63 a chart of this court's cases invoking the onset. [00:22:46] Speaker 03: So hypothetically, and I know this is in the record, but would it make any difference if Crown had just looked up all the various potential customers and sent out a form letter to every single one of them saying the same thing? [00:23:02] Speaker 03: Would that be more akin to the list of products available? [00:23:06] Speaker 02: It would be more akin to that line of cases where you have blast promotions and this court has said that's just mere advertising. [00:23:13] Speaker 02: Given the certainty of the terms in the offer itself, I think it very well still could constitute a commercial offer for sale and suggest that it would. [00:23:22] Speaker 02: But that would be a different factual circumstance. [00:23:24] Speaker 02: I see my yellow light is on if I could reserve the remainder of my time for rebuttal. [00:23:28] Speaker 02: OK, thank you. [00:23:29] Speaker 02: Thank you, Your Honor. [00:23:31] Speaker 04: Mr. Cattle? [00:23:33] Speaker 00: Thank you, Your Honor. [00:23:36] Speaker 00: Can I come back to the comprising issue very briefly? [00:23:38] Speaker 04: Well, I don't think they really argued the infringement issue, so I think you have to confine yourself. [00:23:45] Speaker 00: OK. [00:23:45] Speaker 00: Thank you, Your Honor. [00:23:47] Speaker 00: Your Honor, on the question about medicines and Helsin and what's the difference between this case and medicines and Helsin, there's a very big difference between [00:23:54] Speaker 00: this one-way document and the facts of Medicines and Healthsons? [00:24:01] Speaker 04: Well, I understand that and I think all we really get from Medicines and Healthsons is that the mere fact that there's an acceptance provision in the contract doesn't mean that there is a lack of a commercial offer for sale. [00:24:14] Speaker 04: So we have to look at this contract, the practice under this contract and the terms [00:24:20] Speaker 04: not a contract, but the offer. [00:24:23] Speaker 04: We have to look at the terms to see whether that acceptance provision really has any meaning. [00:24:29] Speaker 04: The witness has testified that the sending of the [00:24:37] Speaker 04: acceptance is a response to the offer-creative binding agreement, and I don't quite see what there is in the contract which would prevent that from being the case, because there isn't any evidence that there ever was written acceptance in these other cases. [00:24:56] Speaker 04: There's just an acknowledgement and an acknowledgement [00:24:59] Speaker 04: according to the dictionary definition of acknowledgement, it just seems to me we've received the offer. [00:25:04] Speaker 04: It's not necessary to create a binding agreement. [00:25:10] Speaker 00: Okay, thank you, Your Honor. [00:25:11] Speaker 01: Do you agree that the only issue in dispute with respect to the on-sale bar issue is whether the offer for sale of the machine was to a Colorado company that was a commercial offer for sale, and do you also dispute the in-this-country portion? [00:25:25] Speaker 00: We dispute both. [00:25:25] Speaker 01: We do not believe that this... But you don't dispute anything else with respect to the on-sale bar issue, correct? [00:25:31] Speaker 00: Correct. [00:25:32] Speaker 00: Yeah, just whether it amounts to an offer in the first place and whether that offer was in the United States. [00:25:37] Speaker 00: Turning to the in the United States. [00:25:41] Speaker 04: Before you go on to that, just answer the question that I was asking you about. [00:25:45] Speaker 04: Why isn't it sufficient here that the past practice was not to have a written acceptance, but simply a written acknowledgement, which means we received the offer. [00:25:56] Speaker 04: And why isn't that in conjunction with the testimony about the acceptance of the offer or the creation of the offer as being an offer for sale of graded binding contracts sufficient? [00:26:14] Speaker 00: Well, Your Honor, we don't believe that this does would put complete packaging in the position of mere acceptance because it specifically says that any purchase order is subject to our approval. [00:26:26] Speaker 04: Okay, but in the past, it was never an approval, it was just an acknowledgement. [00:26:31] Speaker 00: For CMB's practice, Your Honor? [00:26:34] Speaker 00: Yeah. [00:26:34] Speaker 00: But in those cases, there was a purchase order, so there's an offer to buy. [00:26:39] Speaker 00: That acknowledgement is the acceptance of the offer to buy, because then they went down the road of creating the machine and selling it. [00:26:48] Speaker 00: That's different. [00:26:49] Speaker 03: Why isn't the purchase order an acceptance of the offer for sale? [00:26:53] Speaker 00: There was no purchase order in this case. [00:26:55] Speaker 03: Yeah, but if there could have been a purchase order, then that would be accepting the offer for sale. [00:26:59] Speaker 00: Sorry, I misunderstood your question. [00:27:01] Speaker 00: The reason is because of all of the elements in this offer that are still outstanding. [00:27:08] Speaker 00: First of all, we reserve the right to accept the purchase order. [00:27:14] Speaker 00: And the pricing terms are not completely laid out because there's a number of places in there that have to be announced. [00:27:23] Speaker 01: But there was a price listed. [00:27:25] Speaker 00: There was a price for the machine listed. [00:27:27] Speaker 00: Yes, Your Honor. [00:27:30] Speaker 04: Just to be clear, is your position apart from the in the United States aspect, is your position that the only reason that this wasn't an offer for sale is that it said it was subject to written acceptance? [00:27:44] Speaker 00: No, there's other reasons too. [00:27:46] Speaker 00: They're required to get information from the customer about where is it going to be used. [00:27:51] Speaker 00: There was a questionnaire that the customer needed to fill out in order to tell us these are not these are not cookie cutter machines. [00:27:57] Speaker 00: They're custom made machines based on the requirements for the customer in terms of [00:28:01] Speaker 00: what can is going to be in there. [00:28:03] Speaker 03: I don't understand why that makes it not an offer. [00:28:05] Speaker 03: It just says we're offering you a machine and if you have customization you want, you tell us and we'll work on that. [00:28:12] Speaker 03: It's still an offer for sale of the basic machine. [00:28:15] Speaker 03: It has a price. [00:28:17] Speaker 03: It has packing charges. [00:28:20] Speaker 00: It does, Your Honor, but it has first one. [00:28:21] Speaker 03: It has calls in the [00:28:23] Speaker 03: Last paragraph, this offer is generally in accordance with our conditions of sale. [00:28:29] Speaker 03: I don't understand how you get over the fact that it's describing itself as an offer. [00:28:33] Speaker 00: Well, first and foremost, there's a reservation of accepting the purchase order, and then there's the offer. [00:28:40] Speaker 03: That doesn't mean it's an offer. [00:28:41] Speaker 03: It means they may decline to accept the offer to buy. [00:28:44] Speaker 03: But it doesn't mean it's not an offer for sale. [00:28:48] Speaker 00: In order for it to be an offer for sale, simple acceptance would create a binding contract. [00:28:54] Speaker 00: If simple acceptance doesn't create a binding. [00:28:56] Speaker 00: And I see I'm out of time. [00:28:57] Speaker 00: I think I'm out of time. [00:28:58] Speaker 04: Don't worry about it. [00:29:01] Speaker 00: Simple acceptance. [00:29:01] Speaker 00: Continue as long as we have questions. [00:29:03] Speaker 00: I'm sorry to interrupt you, sir. [00:29:04] Speaker 00: Well, continue as long as we have questions. [00:29:07] Speaker 00: Thank you, Your Honor. [00:29:09] Speaker 00: I think I just answered the question. [00:29:11] Speaker 01: Did you want to say something on in this country? [00:29:13] Speaker 00: I do, Your Honor. [00:29:14] Speaker 00: To find that this offer for sale, even if it is an offer for sale, is in this country would be contradictory to this court's approach in the Caterpillar case and in W.L. [00:29:25] Speaker 00: Gore. [00:29:26] Speaker 00: In the Caterpillar case, if the mere offer coming from outside the US into the US amounted to an offer for sale, then this court would not have required additional briefing to find out where was the machine used. [00:29:40] Speaker 00: And it was only after that briefing that this court found that the machine was in California. [00:29:48] Speaker 01: California is a non-PREC case of ours, correct? [00:29:50] Speaker 00: It is. [00:29:51] Speaker 00: But W.L. [00:29:51] Speaker 00: Gore is not. [00:29:52] Speaker 00: That was a Judge Markey case where he found an offer for sale was not in the United States under facts like this, where the offer came from outside the US into the US. [00:30:01] Speaker 00: He called it an offer for sale in W.L. [00:30:04] Speaker 00: Gore, and he said that that offer was not in the United States based on only that. [00:30:11] Speaker 04: Okay. [00:30:12] Speaker 00: Thank you. [00:30:24] Speaker 02: Judge Hughes, your point is exactly right. [00:30:27] Speaker 02: This is an offer for sale that could be accepted simply by the offer is submitting a purchase order, making simultaneous payment and submitting the spec sheets. [00:30:40] Speaker 02: has more details of a commercial offer for sale than virtually any other on-sale bar decision of this court that we could find. [00:30:48] Speaker 02: And the partial performance is really critical. [00:30:51] Speaker 02: Crown's position requires writing language out of this offer. [00:30:56] Speaker 02: The offer is very clear. [00:30:58] Speaker 02: As soon as the customer sends in its purchase order, it has to pay 50% of the price. [00:31:03] Speaker 02: It has to begin performing. [00:31:04] Speaker 02: As soon as the customer sends in its purchase order, Crown the offeror [00:31:08] Speaker 02: has to start manufacturing, quote, immediately, unquote, upon receipt of the order. [00:31:14] Speaker 02: So this offer contemplates a clear form of simple acceptance. [00:31:18] Speaker 02: And in fact, you have partial performance. [00:31:20] Speaker 02: by both parties at that point in time before you even get to a reservation of rights and the reservation of rights falls squarely within the commercially reasonable efforts paradigm that we saw in medicines too. [00:31:34] Speaker 01: Are there any open issues such that we would need to vacate and remand if we are agreeing with you on the on sale bar or could we straight reverse? [00:31:41] Speaker 02: You could certainly straight reverse and that's what we would ask the court to do. [00:31:45] Speaker 02: With respect to the in this country language that your honor's talked about, Hamilton Beach and Inray Cabernet are very clear on the point as to what's required. [00:32:00] Speaker 02: The imposition of a use requirement when you're dealing with an offer for sale first doesn't make much logical sense, because in most offer for sale situations, you're not going to actually have a sale. [00:32:11] Speaker 02: And if you're not going to have a sale, you're not going to have use. [00:32:15] Speaker 02: The non-precedential decision in Caterpillar, which Your Honor asked about, is not on point. [00:32:21] Speaker 02: Caterpillar is a for sale case. [00:32:24] Speaker 02: But with respect to offer for sale, Caterpillar says, quote, under the pre-AIA on sale bar, if the offer for sale was made in this country, then the invention would be on sale in this country, even if the invention was sold for use outside the United States. [00:32:41] Speaker 02: That's the issue we're dealing with. [00:32:42] Speaker 02: Caterpillar then went on to deal [00:32:44] Speaker 02: With a sale scenario, and what Caterpillar said is in the sale context, typically you're looking at transfer of title. [00:32:51] Speaker 02: There, the transfer of title was in Italy, so that couldn't qualify. [00:32:55] Speaker 02: And what this court held was that an alternative way to prove that an actual sale was in this country was to look at where the product was going to be used. [00:33:06] Speaker 02: That's not our situation here. [00:33:07] Speaker 02: And the Gore case is certainly not our situation here. [00:33:12] Speaker 02: really is talking in terms of Section 102A. [00:33:16] Speaker 02: known or used in this country language. [00:33:18] Speaker 02: Perhaps it's talking about public use under 102B. [00:33:21] Speaker 02: There's no discussion of the on sale part of 102B in Gore. [00:33:26] Speaker 02: It's not even clear from Gore where the product is being used. [00:33:29] Speaker 02: But Gore doesn't come close to touching the facts that we're presented with here. [00:33:34] Speaker 02: Just as it is clear on the face of the offer that we're dealing with a commercial offer for sale, it's clear on the facts. [00:33:41] Speaker 02: And under this court's precedent, [00:33:42] Speaker 02: that that offer was in this country under the language of the statute and therefore we would submit that this court should reverse and render judgment in our favor with respect to the on-sale bar issue. [00:33:55] Speaker 04: Okay. [00:33:55] Speaker 04: Thank you. [00:33:55] Speaker 04: Thank both counsel. [00:33:56] Speaker 04: The case is submitted.