[00:00:00] Speaker 05: Our third case this morning is number 24, 1336, Help State LLC versus United States. [00:00:07] Speaker 05: Okay, Mr. Baines. [00:00:09] Speaker 04: May it please the Court, Your Honors. [00:00:15] Speaker 04: Your Honor, when this case began in this matter below, there was a motion to dismiss filed by the government. [00:00:24] Speaker 04: And at the time, Senior Judge Hodges understood exactly what the case was about. [00:00:29] Speaker 04: He said, and he wrote at the time, that because HCS alleged, Healthy State alleged that the government continued to use, install, modify, and authorize others to use its software source code in ways that infringed HCS's exclusive rights and exceeded its term-limited license, which expired on May 7, 2014, this was sufficient for both copyright infringement and breach of contract. [00:00:56] Speaker 04: There is no finding below of what the government's license is. [00:01:02] Speaker 04: They've never presented that. [00:01:06] Speaker 04: There were assertion of restricted rights in June 8th of 2010 in the baseline code that HHS had that everyone ultimately admitted became part of the rover code that was in the veterinary record that the government continues to use today. [00:01:24] Speaker 04: and that ASMR misappropriated from HES and transferred to the government without any permission. [00:01:32] Speaker 04: The term limited license was the end of it. [00:01:36] Speaker 04: Beyond that, after the entrance of ASMR, the contract is the 0128 contract, Your Honor, that's in the record. [00:01:49] Speaker 04: That is the contract under which the assertion of restricted rights was made. [00:01:54] Speaker 04: And so that is the contract. [00:01:56] Speaker 04: The contract is not that you love. [00:01:57] Speaker 05: You're saying that an assertion of restricted rights creates an obligation? [00:02:03] Speaker 04: Well, yes, Your Honor. [00:02:04] Speaker 04: I think it does. [00:02:05] Speaker 04: I think the government had a responsibility to answer it, and not sit silent for eight years. [00:02:14] Speaker 04: I also believe that, as this court's precedent and other courts have held, that if you have [00:02:22] Speaker 04: no term-limited license that's negotiated with the subcontractor, in this case the subcontractor, that commercial rules apply. [00:02:33] Speaker 04: So in this instance, the end-user license agreement or the standard commercial clauses that were flowed down to HES and its subcontract, which don't provide for anything, like the government's asserting here, government purpose rights, [00:02:51] Speaker 04: would control. [00:02:53] Speaker 04: And that is the contracted issue. [00:02:56] Speaker 04: And when you exceed a license, that is a breach itself. [00:03:02] Speaker 04: And so if the government can't point to a license, then it doesn't have one. [00:03:06] Speaker 04: And it can't use that code. [00:03:08] Speaker 04: Additionally to that. [00:03:10] Speaker 04: Oh, that's a copyright theory. [00:03:14] Speaker 05: Sorry, Your Honor. [00:03:15] Speaker 05: That's a copyright theory. [00:03:17] Speaker 04: Well, it's not just a copyright. [00:03:19] Speaker 04: As Judge Hodges recognized, it's both [00:03:22] Speaker 04: a breach of contract because it exceeds the term limited license and it's also a copyright issue. [00:03:28] Speaker 04: The copyright issue in this case is one that was rife with elevating form over substance. [00:03:37] Speaker 04: I want to address that a little bit and then I'll come back to the breach of contract. [00:03:41] Speaker 06: If you can, before you go to the copyright issue, though that's fairly important, let's go back to the breach of contract. [00:03:48] Speaker 06: And whether you've actually submitted an allegation, a sufficient allegation, was some certain. [00:03:56] Speaker 04: Yes, Your Honor. [00:03:56] Speaker 04: I think we did. [00:03:58] Speaker 04: As of February 11, 2015. [00:04:01] Speaker 06: Show me in the record where you did that. [00:04:05] Speaker 04: Well, in the record, that was on February. [00:04:09] Speaker 04: Well, that was the February 11, 2015 letter to the government. [00:04:16] Speaker 04: And it contained the subcontractor. [00:04:18] Speaker 07: Could you identify where that is in the appendix and explain why it is sufficient? [00:04:23] Speaker 04: Sorry, Your Honor. [00:04:23] Speaker 07: Could you identify where that is in the appendix so you can explain why it's sufficient? [00:04:28] Speaker 03: Well, I think, let's see. [00:04:39] Speaker 04: The portion of that letter that's in the appendix is at 2669, Your Honor. [00:04:46] Speaker 04: 2669 yes the the Appendix at 20 sorry sorry Yes, I think that's right There's a there's three pieces of correspondence there there is the There's the there's the document that refers back to the February 11th letter at appendix 2757 there is a [00:05:13] Speaker 07: Well, before you do that, why don't you tell us, you know, you said you'll find this at page 26. [00:05:19] Speaker 07: What is it, 26 what? [00:05:23] Speaker 04: 2669. [00:05:23] Speaker 07: Thank you. [00:05:24] Speaker 04: Yes, Your Honor. [00:05:25] Speaker 04: That was attached. [00:05:26] Speaker 04: This was the attachment to the February 11, 2015 letter. [00:05:30] Speaker 04: And it basically, it has the portion in it from the subcontract that shows that ASM was entitled to 25% of any new rover work. [00:05:44] Speaker 04: And so it's a formulaic application. [00:05:46] Speaker 04: On October 1, 2014, when the first claim letter was sent, which the court didn't consider below, but which we brought up, it said stop using our code. [00:05:56] Speaker 04: There's no license for this. [00:05:59] Speaker 04: The license has not been extended past May 7. [00:06:03] Speaker 06: There is nothing in the record that indicates it's some certain. [00:06:06] Speaker 06: You don't say? [00:06:08] Speaker 06: Your honor, you're arguing that you provided a formula and then you provided background information and it's up to the government to work out the calculation. [00:06:19] Speaker 04: Yes, your honor, that's a simple arithmetic calculation. [00:06:23] Speaker 06: Is that consistent with our precedent? [00:06:26] Speaker 04: Yes, your honor, I think it is. [00:06:28] Speaker 04: We've cited the ECC case and then the other cases that are cited in it and in our brief say that a simple arithmetic calculation is [00:06:37] Speaker 04: qualifies as a sum certain. [00:06:39] Speaker 04: And you can take the documents that are attached to a claim to figure that out. [00:06:42] Speaker 06: I see that. [00:06:43] Speaker 06: But that's only if you present the values. [00:06:47] Speaker 06: You have a calculation. [00:06:48] Speaker 06: And let's say x is in the calculation. [00:06:52] Speaker 06: Then later you say x equals $25. [00:06:57] Speaker 06: Well, you don't have that here. [00:06:59] Speaker 06: You don't have the values. [00:07:00] Speaker 06: You have a range. [00:07:02] Speaker 04: Well, we have a minimum value, Your Honor, and the government had the contract, and so did ASMR. [00:07:08] Speaker 04: We didn't have the contract. [00:07:11] Speaker 04: HES did not have the contract. [00:07:13] Speaker 04: And at the time the October 1, 2014 letter was sent, they had not been paid anything yet. [00:07:20] Speaker 06: I understand that. [00:07:22] Speaker 06: But I'm really interested in whether you actually stated some certainty, because that's disposable to your case. [00:07:31] Speaker 04: We also have an agreement, an argument about that. [00:07:34] Speaker 04: I don't think the absence of a some certain is dispositive. [00:07:39] Speaker 04: The government's affirmative defense only says that we didn't comply with jurisdictional prerequisites for 41 USC 7103. [00:07:51] Speaker 04: It's dispositive as to the breach. [00:07:53] Speaker 04: Sorry, Your Honor? [00:07:54] Speaker 06: It's dispositive as to whether there's been a breach or looked at the contract. [00:07:59] Speaker 04: You know, the government can't really rightfully argue that they weren't on notice of what they were claiming at the time. [00:08:05] Speaker 04: The whole purpose behind that regulatory addition that is not in the statute itself is to simply allow the government to know what's in there. [00:08:20] Speaker 04: Now, the government had the contract, the subcontract, and that dollar value in it. [00:08:27] Speaker 04: And they had the contract with ASMR. [00:08:30] Speaker 04: And so they knew what was going to be paid. [00:08:33] Speaker 04: And they knew what the calculation would be. [00:08:35] Speaker 04: They also knew what the maintenance agreement was and what the annual maintenance fee was. [00:08:41] Speaker 04: In fact, they asked about it in the letter back to us, back to healthy state at the time. [00:08:47] Speaker 04: But they never resolved the issue of who owned the software. [00:08:50] Speaker 04: And they never answered the claim. [00:08:53] Speaker 04: And then they waited. [00:08:55] Speaker 04: over six years, in fact, just over six years, so they could avoid the statute of limitations, to basically say that you can't do this anymore. [00:09:04] Speaker 04: You know, you can't say, you know, we're going to go back to the beginning and say that your claim's forfeited because you didn't talk about it something certain. [00:09:13] Speaker 04: Now, the ECC case was very important in that regard, and this is something that the court below didn't consider, is that [00:09:20] Speaker 04: when the statute of limitations running and then the other aspects that were important for that consideration is something that dictates waiver by the government. [00:09:34] Speaker 04: What we're talking about here is a forfeiture issue. [00:09:36] Speaker 04: It's either a forfeiture issue for a healthy state or it's a forfeiture issue for the government in terms of their right to bring a claim. [00:09:43] Speaker 04: I want to come back for a moment. [00:09:44] Speaker 05: Sorry, Your Honor. [00:09:45] Speaker 05: I want to come back for a moment as to what the contract is. [00:09:48] Speaker 05: Your theory is that you're suing on the 2009 contract, right? [00:09:53] Speaker 04: Well, on the assertion of rights and then the government's, you know, there is a violation of the term-limited license of the subcontract. [00:10:02] Speaker 05: Just answer my question. [00:10:04] Speaker 05: Is your claim based on the 2009 contract? [00:10:07] Speaker 04: In part, yes, Your Honor. [00:10:09] Speaker 04: It's not based completely on that. [00:10:11] Speaker 05: It's also based on the assertion of restrictive rights. [00:10:15] Speaker 04: Yes, Your Honor. [00:10:16] Speaker 04: It's also based on the term-limited license in the subcontract to the initial Rover contract. [00:10:23] Speaker 05: Did you make the allegation in the complaint that there was a breach of the 2009 contract? [00:10:31] Speaker 04: I think what we said, I don't know that we specifically mentioned that in the complaint, but we mentioned that it was based, we mentioned the restricted rights letter in the complaint, and the restricted rights letter was attached to the complaint. [00:10:45] Speaker 04: So it was incorporated in it. [00:10:46] Speaker 04: And it mentions that contractor. [00:10:49] Speaker 04: So before I run out of time here, we will stand on the paper with respect to those issues. [00:10:57] Speaker 04: But in terms of, we believe that the copyright issues are ones where the court really needs to remand for further development of a record. [00:11:11] Speaker 04: When we're looking at what was required below, [00:11:15] Speaker 04: You can see that our client got the development environment like in October of 2021. [00:11:23] Speaker 05: Part of the copyright claim was rejected on the theory that you didn't submit a satisfactory specimen to the Copyright Office, right? [00:11:34] Speaker 02: That's part of it, Your Honor. [00:11:36] Speaker 05: So what's wrong with that? [00:11:38] Speaker 05: I mean, it wasn't the right specimen, right? [00:11:41] Speaker 05: Well, the whole... There's no question about that. [00:11:44] Speaker 04: The revised submission cured all those issues. [00:11:49] Speaker 04: And the Copyright Office would have allowed it had the court allowed it below. [00:11:52] Speaker 07: What evidence is there that the Copyright Office would have allowed it? [00:11:56] Speaker 07: Because I thought the Copyright Office said there was no cure anyhow. [00:12:01] Speaker 04: No, Your Honor. [00:12:02] Speaker 04: The Copyright Office actually said, and I cite to that, [00:12:21] Speaker 03: That's a 2315 to... What volume? [00:12:26] Speaker 03: I'm not sure what volume it is, Your Honor, but it's a... When you look at 2315... When you give us a multi-volume appendix, you should know what you're talking about. [00:12:47] Speaker 04: Yes, Your Honor, I apologize for that. [00:12:50] Speaker 04: But it's Appendix 2315 to 2317. [00:12:55] Speaker 04: That's where the USDO basically says to the court that... [00:13:14] Speaker 05: What page, 2315? [00:13:16] Speaker 04: 2315 to 2317 is where the Copyright Office talks about that, Your Honor, and about how they have pending applications, and they're asking for the court to give them permission to proceed, and the court never responded to that or didn't allow it. [00:13:32] Speaker 04: We asked for the court to allow that as well, and the court didn't grant that. [00:13:40] Speaker 04: And so where we, you know, [00:13:43] Speaker 04: What I'd like to point out, Your Honor, in looking at the SAS case. [00:13:46] Speaker 05: I don't recall that your blue brief argued that the court erred in not allowing this later correction. [00:13:54] Speaker 04: That opening brief? [00:13:56] Speaker 04: Yes. [00:13:57] Speaker 04: Oh, yes. [00:13:58] Speaker 04: We argued that, Your Honor. [00:14:01] Speaker 04: And we argued it below as well. [00:14:02] Speaker 05: Could you show me where you argued that was error? [00:14:18] Speaker 04: Well, I think there's a couple of places, Your Honor. [00:14:26] Speaker 04: We talk about it at page 65 to 66 in our opening brief. [00:14:33] Speaker 04: We talk about, in the context of the AFC analysis and all that kind of thing, we talk about that. [00:14:43] Speaker 05: I'm not seeing where you argued that the court made an error in not allowing you to make a correction. [00:14:50] Speaker 02: Well, yes. [00:14:59] Speaker 04: I mean, what I say there, Your Honor, when you're looking at the AFC test that the court applied to. [00:15:05] Speaker 05: Where? [00:15:06] Speaker 04: I'm talking about the comparison part of it. [00:15:09] Speaker 04: No. [00:15:09] Speaker 05: You're looking at the blue brief. [00:15:10] Speaker 05: Show me which page. [00:15:12] Speaker 04: Oh, it's on 66. [00:15:13] Speaker 04: It's on 66, and I'm talking about the comparison part. [00:15:19] Speaker 04: It says, all without any evidence having been presented by the government or ASMR over which material portions of the code over which protection was sought were not protectable. [00:15:29] Speaker 05: OK. [00:15:30] Speaker 05: I don't see that that's arguing that the district court's law claim is another mistake in not allowing the amendment. [00:15:37] Speaker 02: Go ahead. [00:15:38] Speaker 02: Well, your honor. [00:15:41] Speaker 05: Okay. [00:15:46] Speaker 05: I think we're out of time. [00:15:47] Speaker 05: We'll give you two minutes for a bubble. [00:15:49] Speaker 04: Okay, your honor. [00:15:50] Speaker 04: Let me just say just one thing. [00:15:52] Speaker 04: No, no, no. [00:15:53] Speaker 04: Okay. [00:15:53] Speaker 04: All right. [00:16:08] Speaker 01: May it please the court, Your Honors, on the breach of contract claims. [00:16:15] Speaker 01: Judge Dyke, I think you asked the correct question as to why the appellant's position doesn't boil down to a copyright claim. [00:16:23] Speaker 01: I think their position is that the government doesn't have a license. [00:16:28] Speaker 01: To me, that's a conjection that there is no contract that could have been breached. [00:16:32] Speaker 01: And therefore, really, the breach claim should go away on that basis. [00:16:37] Speaker 01: The 0128 contract that was raised here at this court was not raised below. [00:16:43] Speaker 01: What we litigated below was the breach of the 2009 contract. [00:16:47] Speaker 01: Yes, Your Honor. [00:16:48] Speaker 01: What we litigated below entirely was an end user license agreement allegedly being breached. [00:16:55] Speaker 01: That was the sole license that they provided during discovery in response to our interrogatory questions when we asked them, what contract are you saying that we are breaching? [00:17:05] Speaker 01: They had identified only the end user license agreement in their interrogatory responses and in their 30 B 6 step position. [00:17:11] Speaker 01: And that's what we litigated. [00:17:14] Speaker 01: It turned out there was no evidence that anybody at the government had ever seen the end user license agreement because it was buried away and not shown to users because it was an old vestigial part of the software. [00:17:27] Speaker 01: So the undisputed record showed that nobody in the government ever saw the sole contract alleged to be breached in this case. [00:17:34] Speaker 01: And therefore, the Court of Federal Acclaims correctly granted summary judgment of no breach of contract. [00:17:41] Speaker 01: On the copyright issue, Your Honor, I'll just pick up the one point about the suggestion that a deposit copy can be fixed through a supplemental registration. [00:17:53] Speaker 01: It cannot be. [00:17:55] Speaker 01: A deposit copy is a fundamental requirement of a copyright registration. [00:18:00] Speaker 01: And the Copyright Office's guidance says it is one of those things that cannot be fixed through a supplemental registration. [00:18:07] Speaker 01: That's at 37 CFR 202.6D42, cited in our briefs. [00:18:16] Speaker 01: It's also at Appendix 28351. [00:18:19] Speaker 01: The copyright register in this case was consulted by the Court of Federal Claims for an opinion. [00:18:25] Speaker 01: If you had known that there were X, Y, and Z problems in the registration, would you have granted or rejected the application? [00:18:33] Speaker 01: And the register at 28351, that's in volume 11, stated that the deposit copy issue is not something that can be corrected. [00:18:44] Speaker 01: And so that is not something that could be fixed through a supplemental registration. [00:18:49] Speaker 01: The Court of Federal Claims. [00:18:51] Speaker 06: So did the Copyright Office make an express finding that the deposit was faulty, would have been deposited to be registered? [00:19:00] Speaker 01: No, Your Honor. [00:19:02] Speaker 01: The Copyright Office only provided under the statute, there's a referral mechanism where the court, if it's presented a question of copyright invalidity, first submits essentially an advisory opinion to the Copyright Register saying, hypothetically speaking, [00:19:18] Speaker 01: If x, y, and z were errors, would you have rejected them? [00:19:21] Speaker 01: Would they be material? [00:19:23] Speaker 01: So the Copyright Register in this case answered that hypothetical question, yes. [00:19:28] Speaker 01: If indeed there was a problem in the deposit copy, yes, I would have rejected it. [00:19:32] Speaker 01: But the Copyright Register made no finding as to whether indeed there was an error. [00:19:36] Speaker 01: That finding, however, was made by the Court of Federal Claims on summary judgment because the undisputed record showed that, first of all, what was submitted was not the claim to work. [00:19:48] Speaker 01: And second of all, undisputably, there was knowledge by the applicant that what was submitted was not the claim work. [00:19:55] Speaker 01: And so we think summary judgment was properly granted on that basis. [00:20:00] Speaker 01: Unless the court has any further questions, we're happy to rest on our briefs. [00:20:05] Speaker 05: OK. [00:20:05] Speaker 01: Thank you. [00:20:06] Speaker 05: Thank you. [00:20:10] Speaker 05: Ms. [00:20:11] Speaker 05: Manoli? [00:20:17] Speaker 00: Thank you, Your Honor. [00:20:18] Speaker 00: May it please the Court, Jenna Monalee, on behalf of the government. [00:20:21] Speaker 00: The court of law claims here are disposed of both the breach of contract claim and the copyright infringement claim for two dispositive reasons. [00:20:29] Speaker 00: As Jezrena pointed out, the claim lacked us uncertain. [00:20:34] Speaker 00: And as my colleague discussed, the contract that was at issue below, the EULA, there was no proof that a government agent with authority viewed it. [00:20:46] Speaker 00: Our position is that [00:20:47] Speaker 00: the arguments as far as the 0128 contract had been waived because they were not raised below. [00:20:52] Speaker 00: On the copyright issues, as discussed, the first issue was as to the validity of the copyright registrations, which we agree summary judgment was properly granted based on 411D. [00:21:05] Speaker 00: And then additionally, the court of error claims excluded the only expert report as to infringement, which we believe was properly done, and summary judgment was properly granted. [00:21:17] Speaker 07: Would you address Mr. Baines' argument about the timeliness of some certain allegation? [00:21:28] Speaker 00: AMS and the government in our answer to the complaint asserted an affirmative defense of a lack of satisfying the requirements of jurisdiction, right? [00:21:40] Speaker 00: Yes, Your Honor, but as this court stated in the ECC case, even though it's not a jurisdictional requirement, it is still a required element of [00:21:49] Speaker 00: Contract to Dispute Act. [00:21:52] Speaker 07: Is there anything else besides the phrase jurisdiction that was intended to encompass some certain argument? [00:21:59] Speaker 00: Well, Your Honor, we asserted it as an affirmative defense and then through discovery, sought discovery on whether or not there was a some certain stated in the claim and then it was the subject of our summary judgment motion. [00:22:13] Speaker 00: So our contention is that it's not the same factual circumstance in which this court found an ECC [00:22:19] Speaker 00: that it had been waived, because the factual circumstances here is that the government did present that as an affirmative defense and did seek the factual circumstances behind it to assert it throughout the course of the case. [00:22:35] Speaker 07: And Mr. Baines identified a particular page of the appendix to support the view that, as uncertain, had been identified. [00:22:43] Speaker 07: What's your response to that evidence? [00:22:46] Speaker 00: Yeah, as discussed in our brief, the February 2015 letter does not include a sum certain. [00:22:51] Speaker 00: It simply states that asked that Healthy State be compensated and the range, the 25% to 50% that's found in one of the exhibits. [00:23:01] Speaker 00: Healthy State identified that throughout the course of litigation, but also identified three other instances. [00:23:08] Speaker 00: of what it claimed that the sum certain was. [00:23:11] Speaker 00: So our position is that the CFC- Those were different? [00:23:14] Speaker 00: They were. [00:23:15] Speaker 00: Their 30B6 representative testified as to a range between $500,000 and $550,000 per engagement. [00:23:26] Speaker 00: And then the range went from 25% to 50% just down to the 25% that Mr. Baines identifies today. [00:23:33] Speaker 00: So the CFC considered these [00:23:36] Speaker 00: of shifting some certain requirements and concluded that the case law supports that if the you can find that there's a lack of some certain if the kind of position as to some certain changes throughout the litigation. [00:23:53] Speaker 05: Okay, thank you. [00:23:54] Speaker 00: Thank you. [00:23:54] Speaker 05: Mr. Baines, you have two minutes. [00:23:57] Speaker 04: Thank you. [00:23:59] Speaker 04: Your Honor, ultimately on all these issues that we've addressed here, and this is a de novo review of this court because that was a summary judgment, there are issues of dispute of fact on all these things, on whether the sum certain was, whether that was waived, whether that was appropriate, whether the affirmative defense actually pled the regulations implementing 7103. [00:24:22] Speaker 04: And when we look at what was raised below, there's a line in the ASMR brief about miscellaneous assertions that are waived, saying that they're undeveloped. [00:24:36] Speaker 04: The way I look at this portion of the brief, and I'm going to talk about this in terms of that all these things were raised, and because they say they're undeveloped, that shows exactly that there are issues of disputed fact on all these things. [00:24:52] Speaker 04: The CFC denied HES due process by blocking HES from correcting its copyright registration application. [00:25:00] Speaker 04: We raised that at appendix 2318 to 19, 2207, and 1257. [00:25:03] Speaker 04: Did you raise it in the opening brief here? [00:25:10] Speaker 04: Yes, Your Honor, we did. [00:25:12] Speaker 04: We raised all these issues about blocking. [00:25:20] Speaker 04: I was looking for that on the break, and I know it's in here. [00:25:23] Speaker 04: If I can supplement that, I'd appreciate it. [00:25:26] Speaker 04: I just couldn't put my finger on it during our break. [00:25:30] Speaker 04: But on the second issue, appellees have unclean hands or should be a stop from defending against HES claims. [00:25:37] Speaker 04: That's raised at appendix 2207, 2407 through 06 through 07, 2399, and 2395 to 96. [00:25:47] Speaker 04: The CFC should allow HES to cure its failure to state of demand for some sort. [00:25:52] Speaker 04: That's a key point that goes directly to this issue about whether we could cure it. [00:25:58] Speaker 04: There is a provision in the statute allowing that. [00:26:02] Speaker 04: That was raised at Appendix 406. [00:26:04] Speaker 04: And then 10 USC 2321, if you look at 2321H, [00:26:10] Speaker 04: It says what a claim is in this context, and it doesn't require some certain at all, and says that it meets the definition of 7103. [00:26:17] Speaker 05: OK, we're out of time. [00:26:19] Speaker 04: All right. [00:26:19] Speaker 05: Thank you.