[00:00:00] Speaker 01: Our next case for argument today is 24-1550, Cooperative Entertainment versus Collective Technology. [00:00:10] Speaker 01: Mr. Raimi, please proceed. [00:00:12] Speaker 00: Good morning. [00:00:12] Speaker 00: My name is William Raimi, and I represent the Appellant Cooperative Entertainment, Inc. [00:00:17] Speaker 00: And if it pleases the court, may I begin? [00:00:20] Speaker 00: This is the second time we've been before this court, still at the pleading stage, not having gone past the pleading stage. [00:00:29] Speaker 00: I think the important part for this thing is we're seeking reversal of a dismissal in Rule 12B6, where the district court found the invention directed towards conventional items, so that it was a conventional invention and therefore didn't suffice to state a claim. [00:00:47] Speaker 00: And we think that the first thing we want to do is clear what the invention is directed to. [00:00:52] Speaker 00: The claimed invention is a segmentation of the peer nodes for content distribution. [00:00:58] Speaker 00: The peer notes themselves do have the content on them. [00:01:01] Speaker 00: But the invention is the P2P network. [00:01:04] Speaker 00: That network, that segmentation, that it aligns different peers together that have the same content, the same pieces of whatever that is, video or data. [00:01:14] Speaker 00: And it's that content that is then segmented. [00:01:18] Speaker 00: And we find that the district court order is in contravention to this court's prior order in cooperative entertainment versus collective 50, Fed 4, 127, and 2022. [00:01:29] Speaker 00: where this court held, determining whether the claim network is well understood, routine, or conventional is a question of fact that cannot be resolved at the Rule 12b6 stage. [00:01:40] Speaker 00: And the district court erred in resolving that issue against cooperatives. [00:01:45] Speaker 02: Didn't the court say in the earlier opinion you just alluded to, there are at least two alleged inventive concepts in claim one. [00:01:54] Speaker 02: And one of those is the requirement of trace routes to be used in content segmentation. [00:02:01] Speaker 02: We said that, didn't we? [00:02:03] Speaker 00: Yes, Your Honor. [00:02:04] Speaker 02: And it seems like your argument to us now is that the claims do not require trace routes to be used in content segmentation. [00:02:14] Speaker 02: Isn't that what you're arguing to us now? [00:02:16] Speaker 00: No, Your Honor. [00:02:16] Speaker 00: That's not it. [00:02:17] Speaker 00: I want to make sure I clear this up. [00:02:19] Speaker 00: There's two different levels. [00:02:22] Speaker 00: of segmentation. [00:02:23] Speaker 00: I chose the words. [00:02:24] Speaker 00: I might have chose different words, but we're past that point. [00:02:27] Speaker 00: Before, we're talking about distribution, this claim of image. [00:02:30] Speaker 00: We're purely talking about content distribution, the segmentation of that content at the P2P level. [00:02:37] Speaker 00: When something gets to a peer node, when it's at the CDN, when it's at that lower level before it gets to be distributed, it is segmented. [00:02:44] Speaker 00: You have a large data file for a large movie. [00:02:47] Speaker 00: Let's just say Star Trek 4. [00:02:49] Speaker 00: something like that, or Star Wars 4 or New Hope, that might be divided into several different nodes, and then that may be pushed up from the CDN into the P2P level. [00:02:59] Speaker 00: That initial segmentation is the video files themselves, and so that doesn't use TraceRoot. [00:03:05] Speaker 02: Is one requirement of your claims the use of trace roots for content segmentation? [00:03:11] Speaker 00: Is that one requirement? [00:03:15] Speaker 02: Yes. [00:03:16] Speaker 02: And so the finding that we're reviewing, I think, is that you failed to allege that. [00:03:21] Speaker 00: Pardon me, Your Honor? [00:03:22] Speaker 02: The finding that we are reviewing is that you failed to adequately allege that, the required use of trace roots in content segmentation. [00:03:30] Speaker 02: Isn't that what we're reviewing? [00:03:34] Speaker 00: that you felt adequately alleged that you know that you want to read the district court orders that he he said he didn't say how would you trade trade routes and how we use tracers to segment content and we went back and tried to explain how we did have the how do you have data was segments before it gets up to the p two p net of the p two p network [00:03:54] Speaker 00: But I can take the court, if I could, back to the patent itself. [00:04:01] Speaker 00: It talks about Appendix 000027 at Column 4. [00:04:08] Speaker 01: But you're trying to take us to the merits of whether or not it's required. [00:04:13] Speaker 01: And I think that what Judge Stark is focused on is [00:04:17] Speaker 01: That is maybe one of the issues, but first you have to overcome the hurdle of, did you make this argument below? [00:04:24] Speaker 01: Because that's the problem. [00:04:26] Speaker 01: You didn't, it doesn't, for example, it doesn't appear to me that you ever argued that gathering information should be interpreted as including segmented content or segmenting content. [00:04:37] Speaker 01: I don't see where you ever argue that you're arguing. [00:04:39] Speaker 01: You've got a lot of stuff on appeal that you're arguing to us. [00:04:42] Speaker 01: And it seems like it was not argued at the district court, despite many opportunities to do so. [00:04:48] Speaker 01: So I don't know why we would address any of that on appeal. [00:04:51] Speaker 00: Yeah, Sean, I think that when you take the 12b6 standard, the life most favorable to the person through the non-movement, and that's who Collective is in this point. [00:05:01] Speaker 00: Here we did make the allegation that Collective's [00:05:06] Speaker 00: network, it's ECD-SECN, did provide for content segmentation based on traceroute. [00:05:14] Speaker 00: We've supplied a white paper with that. [00:05:16] Speaker 00: And that white paper said that they use it as a matrix, and that matrix is segmented based on a traceroute. [00:05:25] Speaker 00: And as we know, that we think is sufficient for the pleading stage. [00:05:29] Speaker 00: This is before we have collected any evidence. [00:05:31] Speaker 00: This is early in the process, and we think that [00:05:33] Speaker 00: should be sufficient. [00:05:34] Speaker 00: And I was taking the court just simply to the patent to explain how the patent talks about that. [00:05:41] Speaker 00: And that's why we think to tie it to being sufficient for that allegation. [00:05:45] Speaker 00: If we go back to, if I'm at your honor, back to page 27 at column four, [00:05:51] Speaker 00: Line 52, the content recipient have a pureness established and are defined by the common content they are receiving from the CDN server. [00:06:00] Speaker 00: The systems and methods automatically identify pure nodes receiving common content and create dynamic networks, communication [00:06:07] Speaker 00: connection for the peer nodes to transmit the common content to each other, rather than the content being directed from the CDN server directly to each recipient. [00:06:15] Speaker 00: That's what the invention is. [00:06:17] Speaker 00: That's a very general description of what the invention is, that it's the actual, the P2P network itself, not the files that are segmented below. [00:06:28] Speaker 00: And we think that by incorporating that white paper shows that we are alleging that they do in fact have that functionality. [00:06:49] Speaker 00: If we go back, in fact, to what the court's order was in appendix page two, right there in the middle of claim one, the highlighted portion is what the district court pointed out. [00:06:58] Speaker 00: It says, wherein the at least one P2P dynamic network is based on at least one traceroute. [00:07:06] Speaker 00: And that's exactly what we said by supplying that flight paper, their matrix, their network that we allege is their P2P network. [00:07:14] Speaker 00: is based on traceroutes. [00:07:15] Speaker 00: So that's another problem. [00:07:16] Speaker 03: But then that claim goes on to say wherein the at least one content delivery server computer is operable to use the traceroute to segment requested content. [00:07:27] Speaker 03: Isn't that a separate requirement that it's actually using traceroutes to segment content? [00:07:34] Speaker 00: Yes, sure. [00:07:34] Speaker 00: The content being the nodes themselves, though. [00:07:38] Speaker 00: That's what we were trying to say. [00:07:39] Speaker 00: That's what the definitions claim. [00:07:40] Speaker 00: It's for the nodes themselves. [00:07:41] Speaker 03: So you're saying the segmentation of peers by trace root is ipso facto segmentation of content. [00:07:49] Speaker 00: Yes, sure. [00:07:50] Speaker 00: The nodes are the content. [00:07:53] Speaker 00: They contain the content. [00:07:54] Speaker 00: And I guess one way to look at this invention is it's [00:07:58] Speaker 00: They have a bunch of nodes that are out there. [00:08:01] Speaker 00: It's going to find the nodes that have the same video file or pieces of video file and align and exchange between those rather than going back to the CDN. [00:08:11] Speaker 00: So that's how we were trying to define the invention. [00:08:17] Speaker 00: Going back and trying to explain to the district court how the video files themselves were also segmented may have caused the confusion that that was probably a place that should have been left a little bit different. [00:08:29] Speaker 00: But it wasn't. [00:08:36] Speaker 00: So yeah, going back to segmented by trace root, just as the peer nodes with the same contents are segmented based on comparable trace roots. [00:08:44] Speaker 00: And that's all that means. [00:08:45] Speaker 00: So wherever the trace roots are, [00:08:47] Speaker 00: in the P2P network. [00:08:48] Speaker 00: And you get this by going to appendix 818, paragraph 14, it talks about peer segmentation is based on trace route. [00:08:57] Speaker 00: Peer segmentation, we're not talking about, the content is on the peers, so that is doing the content segmentation at the same time, but just the peers. [00:09:06] Speaker 00: appendix 819, the claim invention in period R16, is the distribution of the peer nodes. [00:09:13] Speaker 00: The peer nodes contain the contents, so it's doing both, but it's defined as doing it through the peer nodes. [00:09:21] Speaker 00: And back to Paragraph 819 of Paragraph 18, there could be further claims at another step. [00:09:30] Speaker 00: So you could have quality of service being another part beyond the trace route that helps further define or segment the peer notes. [00:09:39] Speaker 00: And again, this is confirmed at Appendix 818 and Paragraph 13, where it talks about the segmentation of video files. [00:09:46] Speaker 00: The video and data itself is being the conventional part of this, not the actual [00:09:50] Speaker 00: pure no segmentation, just the segmentation of the files themselves. [00:09:55] Speaker 01: Counsel, one advantage that perhaps Judge Stark and I have, having been on this case before, is we get to watch your argument evolve. [00:10:04] Speaker 01: And I don't think that the argument you're making today reflects at all the arguments you've made in the past, or the arguments you made before the district court, or what we held in the prior decision. [00:10:14] Speaker 01: I think that many of the arguments you're making today about how the segmenting has to be at the peer rather than the content using the trace route [00:10:22] Speaker 01: are directly contrary to what you argued to us in the past, what you argued throughout the district court. [00:10:26] Speaker 01: You came up with a new and different theory just for us on appeal. [00:10:31] Speaker 01: I was here before. [00:10:32] Speaker 01: I saw you before. [00:10:33] Speaker 01: We had this argument before. [00:10:34] Speaker 01: And this feels like you're talking about now a whole different patent than what you argued in front of me last time. [00:10:40] Speaker 01: So I'm really at a loss on how you could possibly prevail and how this is not a completely new theory raised for the first time on appeal. [00:10:48] Speaker 00: Your Honor, I wish I would have argued that first case before you. [00:10:51] Speaker 00: I did not. [00:10:52] Speaker 00: I came in at the end of the case to argue that this one, to say, when there obviously has been an inconsistency in the use of the terminology and the patent and the terminology in the second amendment complaint, I was brought in after that to see if I could come on and fix this. [00:11:07] Speaker 00: I apologize to the court. [00:11:09] Speaker 00: If you thought that I misled you, I'm not trying to do that. [00:11:11] Speaker 00: I'm trying to explain what the patent is meant to do. [00:11:13] Speaker 01: No, you're OK. [00:11:14] Speaker 01: Well, fair enough. [00:11:14] Speaker 01: Then I'll give you the benefit of the doubt. [00:11:17] Speaker 01: fix the mistakes made by prior counsel for your client in the way that they represented things to us and to the district court. [00:11:25] Speaker 01: And you just don't get to do that. [00:11:27] Speaker 01: You're bound by all that. [00:11:28] Speaker 01: And these arguments you're making here today about segmenting at the pier, those weren't made before. [00:11:34] Speaker 01: At any point in this case, you've made them. [00:11:36] Speaker 01: Maybe they're good arguments. [00:11:37] Speaker 01: Maybe they're arguments that your client should have made from jump. [00:11:39] Speaker 01: Maybe if they'd had you from jump, you'd have made those arguments. [00:11:42] Speaker 01: But you didn't. [00:11:42] Speaker 01: And these are just all new arguments. [00:11:45] Speaker 00: Fiona, I don't find them inconsistent with this court's prior opinion, though. [00:11:49] Speaker 00: I mean, I don't find it. [00:11:51] Speaker 00: And we still are segmenting based on content. [00:11:53] Speaker 00: The content is the peer notes. [00:11:56] Speaker 01: Content is the peer notes or the content's in the peer notes? [00:11:58] Speaker 01: Let's be precise. [00:12:03] Speaker 00: The content is the peer notes. [00:12:05] Speaker 00: The peer notes are the content. [00:12:06] Speaker 00: There is no distinction between the two levels of segmentation, though, right, to getting to what's on the different peer notes. [00:12:14] Speaker 00: And that's what we were trying to explain to the district court in that second amended complaint. [00:12:18] Speaker 00: And that seemed to cause confusion. [00:12:20] Speaker 00: But the content is 100. [00:12:22] Speaker 01: I sure understand why the district court was confused. [00:12:25] Speaker 02: By telling the chief that you think your arguments are not inconsistent, I take it you're conceding they are new arguments. [00:12:31] Speaker 02: You did not make these arguments to the district court, correct? [00:12:34] Speaker 00: Judge Stark, my belief is that these are the arguments we made that they weren't conveyed correctly. [00:12:40] Speaker 00: We have always alleged, and the patent is written such that the segmentation is the peer notes, that the content is on the peer notes. [00:12:47] Speaker 02: So you do not acknowledge that these are new arguments for us on appeal? [00:12:53] Speaker 00: I tried to get him in on what I thought what y'all had put before. [00:12:59] Speaker 00: I do understand now that you're saying that's not what you understood before. [00:13:02] Speaker 00: So to that extent, yes, you are. [00:13:04] Speaker 00: Then they are new arguments. [00:13:06] Speaker 00: What I'm trying to explain is that they're still consistent with this court's prior opinion because the content [00:13:12] Speaker 00: is the peer nodes, and the peer nodes require segmentation by traceroute. [00:13:18] Speaker 00: And so the peer nodes require segmentation by traceroute as well. [00:13:22] Speaker 00: And so that's the only distinction. [00:13:25] Speaker 00: Your prior opinions, Your Honor, stays exactly the same. [00:13:29] Speaker 00: The only thing here is, [00:13:30] Speaker 00: Is it conventional? [00:13:32] Speaker 00: And it's not. [00:13:32] Speaker 00: We're talking about the video files being the wholly different step being segmented to being conventional. [00:13:39] Speaker 00: So it's a very different process. [00:13:41] Speaker 00: If I could, I'll reserve the rest of my time. [00:13:43] Speaker 01: That's certainly fine. [00:13:45] Speaker 00: Thank you very much. [00:13:46] Speaker 01: Mr. Dowler. [00:13:54] Speaker 04: Good morning, Your Honor. [00:13:55] Speaker 04: May it please the Court. [00:13:56] Speaker 04: My name is Michael Dowler, and I represent Collective Technology. [00:13:59] Speaker 04: I listened to counsel's argument and your comments, and it's true. [00:14:04] Speaker 04: This case has always been about segmenting content with the traceroute. [00:14:10] Speaker 04: The first time I heard the argument about the case is really about segmenting peers with the traceroute was in their initial brief on this round for the appeal. [00:14:22] Speaker 04: I think if you look at the patent claims, they talk about segmenting content. [00:14:27] Speaker 04: with a trace root. [00:14:29] Speaker 04: The specification talks about the same thing. [00:14:32] Speaker 04: The Second Amendment complaint even talks about how they argued before the patent office that the novelty of their invention was using a traditional trace root in an unconventional way to segment content. [00:14:49] Speaker 04: It was never about segmenting a peer. [00:14:50] Speaker 04: I don't even know how you would segment a peer. [00:14:54] Speaker 01: Well, he said the peer is the content. [00:14:58] Speaker 04: Yeah, I think the claim is very clear that the content is stored on the pier, like you said. [00:15:03] Speaker 01: I'd advise that in the pier or more. [00:15:04] Speaker 04: Yes, exactly. [00:15:06] Speaker 04: And then on the first appeal where Judge Stark and Chief Judge Moore were here, Judge Ecken wasn't, Judge Worry was, [00:15:15] Speaker 04: That was all about segmenting content with the trace root, in fact. [00:15:20] Speaker 04: I think the decision was clear that that was one of the inventive aspects of these claims. [00:15:30] Speaker 04: If it were in any doubt, and it doesn't sound like it is, but if you were to look at the second amended complaint in paragraph 20, it says, the 452 patent claims all require segmenting the digital content [00:15:43] Speaker 04: according to the trace root. [00:15:46] Speaker 04: That's paragraph 20 of the second mandatory complaint. [00:15:48] Speaker 04: So it's in all the evidence, but it's in the most important piece of evidence we've got, which is the second mandatory complaint. [00:15:56] Speaker 04: So I do think it's true that the arguments that are directed to segmenting peers and not content is something new for the first time that's been briefed and has not been in this case ever before. [00:16:13] Speaker 01: Well, let me ask you, because I don't actually think that we need to take up too much more time on this, but what about the motion to amend? [00:16:19] Speaker 01: Why would it be futile or why is there not an abuse of discretion in not allowing them to amend again? [00:16:26] Speaker 04: Well, first of all, they didn't even ask for leave to amend. [00:16:30] Speaker 04: But second of all, so the district court didn't get to consider whether or not they should have an opportunity to amend in light of any arguments that they have made, that said, [00:16:42] Speaker 04: If you look at the second amended complaint and the district court judge's decision, he decided the case for two reasons. [00:16:52] Speaker 04: He dismissed for two really independent reasons. [00:16:54] Speaker 04: One of which is there was no plausible allegation that the content was segmented using a traceroute. [00:17:00] Speaker 04: I think that's self-evident now. [00:17:02] Speaker 04: I think that they know that that's correct, and that's why they've come up with this new argument. [00:17:07] Speaker 04: But the second one is when they amended the complaint, [00:17:13] Speaker 04: to result at the second minute of the complaint, they did that in the context of an earlier dismissal. [00:17:19] Speaker 04: So this is actually the third time the district court judge has dismissed the case. [00:17:24] Speaker 04: The first time is when we went on appeal and the first one on the 101 issue. [00:17:28] Speaker 04: The second time is when we went back, and in light of this court's decision, [00:17:33] Speaker 04: that segmenting had to be done with a traceroute. [00:17:35] Speaker 04: We moved to dismiss. [00:17:37] Speaker 04: The district court looked at the first amended complaint and said, yes, I don't see any allegation of segmenting at all, much less using a traceroute. [00:17:44] Speaker 04: And the factual assertions in this collective white paper don't talk about segmenting and don't talk about using a traceroute to segment. [00:17:53] Speaker 04: And so I'm going to dismiss the first amended complaint, but give them yet another opportunity to amend. [00:18:02] Speaker 04: They amended, and that's where we came up with the second amended complaint. [00:18:06] Speaker 04: And in that second amended complaint, they said a couple of things. [00:18:09] Speaker 04: They said they did address the court's issue about no allegation of segmentation. [00:18:15] Speaker 04: They put in paragraphs 12 and 13 in the second amended complaint to talk about segmentation. [00:18:22] Speaker 04: Conventional segmentation where they were just breaking up the data into chunks. [00:18:26] Speaker 04: Nothing about using a traceroute. [00:18:29] Speaker 04: They tied in those new paragraphs with existing paragraphs that were in the first amended complaint wherein they said, and this traditional segmenting that we're talking about here is the same prior arts segmenting that we talked to the Patent Office about and distinguished our claims over. [00:18:46] Speaker 04: We told the Patent Office that [00:18:49] Speaker 04: Yes, there are trace roots in the prior art, but using these trace roots to segment the content is what made these claims patentable. [00:18:57] Speaker 04: And this court went through the same analysis in its first decision, recognizing that. [00:19:04] Speaker 04: And so those allegations are in the second-minute complaint. [00:19:08] Speaker 04: So what the district court said is in the pleadings where they allege segmenting using [00:19:13] Speaker 04: a traceroute, they referred back to those new paragraphs, 12 and 13, and said, the way collective is segmenting is using the conventional segmentation techniques. [00:19:25] Speaker 01: So he said... Okay. [00:19:26] Speaker 01: Let me see if I can streamline this a little bit. [00:19:28] Speaker 01: So the narrow question in front of us, right, is whether they plausibly pled infringement of the traceroutes limitation. [00:19:35] Speaker 01: That's really the whole ball of wax, isn't it? [00:19:38] Speaker 04: it's that and whether they admit it in their complaint that the collective doesn't infringe because they don't segment using the traceroute. [00:19:47] Speaker 04: If you look at paragraphs 35 and 44 in the second-minute complaint, they say the way collective segments is using the traditional [00:19:56] Speaker 04: segmentation technique which does not use a traceroute. [00:20:00] Speaker 04: So not only did they not plead it, they fled themselves out of court by admitting that Collective doesn't infringe. [00:20:06] Speaker 02: We don't have to reach that second question. [00:20:08] Speaker 04: You don't, but I think it does address why there shouldn't be another opportunity to amend. [00:20:14] Speaker 04: It's futile. [00:20:14] Speaker 04: They've already admitted that Collective doesn't infringe. [00:20:18] Speaker 01: OK, so if we conclude that they did not plausibly plead infringement of the trace root limitation, because we got kind of like a little switcheroo going on here with what needs to be segmented, the peer versus the content, that ends this case? [00:20:32] Speaker 04: Yes, it does. [00:20:33] Speaker 01: OK, do you have anything further? [00:20:34] Speaker 04: No, I don't. [00:20:35] Speaker 01: Thank you. [00:20:37] Speaker 04: Thank you, Your Honor. [00:20:49] Speaker 00: If it please the court, just to go back real quick, because maybe there is simply, I think, a fundamental misunderstanding the terminology used. [00:21:00] Speaker 00: The peer nodes are the content. [00:21:02] Speaker 00: There's no question about that. [00:21:03] Speaker 00: The peer nodes are the content. [00:21:04] Speaker 00: But that doesn't exist in isolation. [00:21:06] Speaker 00: Content can't exist in isolation. [00:21:09] Speaker 00: It exists. [00:21:09] Speaker 01: Peer nodes are not content. [00:21:10] Speaker 01: Peer nodes are the nodes. [00:21:11] Speaker 01: The content is stored on the nodes. [00:21:13] Speaker 00: Yes, Your Honor. [00:21:15] Speaker 00: Yes, there's no question about that. [00:21:17] Speaker 00: But what is traceroute? [00:21:20] Speaker 00: Traceroute traces how these nodes travel around through the network, how they travel through different routers, how they travel through the internet. [00:21:27] Speaker 00: That's what it would trace. [00:21:29] Speaker 00: It wouldn't trace the content individually. [00:21:31] Speaker 00: It traces the peer nodes. [00:21:32] Speaker 00: The peer nodes are what's carrying this content. [00:21:34] Speaker 00: So without the peer node, there is no content. [00:21:37] Speaker 00: So I think what we said in the first case, whether or not it was conveyed, what I'm saying now and what we're saying in this case are 100% the same, Your Honors, and I apologize if there was confusion. [00:21:49] Speaker 00: But there can't be a traceroute without these peer nodes going somewhere, because the content itself has to be in something to be traced. [00:21:58] Speaker 00: And that's exactly what [00:22:00] Speaker 00: the invention does is it segments that content by a tracery. [00:22:04] Speaker 00: That content is in the peer notes. [00:22:07] Speaker 00: And we didn't say that was conventional. [00:22:10] Speaker 00: That was what the patent office found to be unconventional. [00:22:12] Speaker 00: That's what this court found to be unconventional in the last time. [00:22:16] Speaker 00: And if the court doesn't have any further questions, I would say one more thing, that the motion to amend under the Ninth Circuit presidium have not requested [00:22:28] Speaker 00: that this court, if they thought that we could clear of the provisional grant lead to amend. [00:22:32] Speaker 00: And that's the case of Lopez v. Smith, 203 Fed 3rd, 1122. [00:22:37] Speaker 00: And Your Honor, it's on page 15 of our blue brief. [00:22:41] Speaker 00: And with that, thank you very much, Your Honor. [00:22:42] Speaker 01: All right. [00:22:43] Speaker 01: I thank both counsel. [00:22:44] Speaker 01: This case is taken under submission.