[00:00:01] Speaker 05:
Next case for argument is 24-2350, Coe v. Amazon. Good morning. Good morning, Your Honors.

[00:00:10] Speaker 00:
May it please the Court. Unless the Court takes me elsewhere of the several issues in this case, I'd like to begin with Section 101 and then turn to the claim construction issues. And when I get there, I think the simplest place to begin will be the non-hierarchical limitation, and I hope to talk about damages before I sit down as well.

[00:00:29] Speaker 05:
Well, there's a lot to get through, so can I just, alive for my purposes, not speaking for the panel, but if hypothetically we were to agree with you on step one, there remains the question of what happens with respect to step two, which divides whether or not we reach other issues in this case.

[00:00:49] Speaker 05:
Greeks in that regard say very little and seem to run past each other. But the other side does respond, as I understand it, in red, that...

[00:01:01] Speaker 05:
No. If you want to find for his side on step two, you can go there.

[00:01:06] Speaker 05:
And I'm not quite sure. I don't think he says because there are disputed issues of fact, although you made that point in the summary judgment. But this came up in such a weird posture, motion to dismiss, summary judgment. And you never filed your own cross-motion for summary judgment here. They never reached the step two issue. So it seems like this is not the kind of thing we would decide in the first instance up here. So if you think I'm wrong about that, tell me why.

[00:01:33] Speaker 00:
Yeah, let me just react to that because you're correct that we did not move. We, I think, could not have moved because the – of the way the court had decided on step one at the Rule 12 stage.

[00:01:49] Speaker 00:
But when this court has decided... I didn't understand that.

[00:01:54] Speaker 02:
Why could you not have moved that the district court, that you were entitled to win under step two?

[00:02:04] Speaker 00:
Because the district court concluded that it was law of the case that we could not prevail on step one. And so I don't mean that we couldn't have filed a motion. I mean that the court would have found that futile in light of the law of the case.

[00:02:18] Speaker 02:
And I do want you to get back to it.

[00:02:21] Speaker 02:
Page 26 of the appendix, the district court says that Cove and AWS have both moved for summary judgment. AWS also argues that it's entitled to summary judgment because the patents are invalid under Section 101.

[00:02:35] Speaker 02:
What's that a reference to?

[00:02:38] Speaker 02:
So...

[00:02:40] Speaker 02:
It may just be a mystery because you agree you did not file a motion for summary judgment on 101.

[00:02:47] Speaker 00:
That's right. I'll need to go and see what that page is referring to.

[00:02:54] Speaker 00:
The point that I was trying to make is that when this court has taken up a case in which only step one was decided, sometimes the court remands. Sometimes the court has decided that there is nothing left to decide.

[00:03:06] Speaker 05:
Can I just take you back just before you get to that final point? Oh, sure. I thought you made an argument, or at least someone made an argument, that the reason it wasn't law of the case was because between motion to dismiss and summary judgment motion, there are a whole slew of new claims added. So I guess that's why that would be my follow-up to your saying, well, it was already law of the case, so we couldn't cross-motion for summary judgment.

[00:03:30] Speaker 00:
Well, and of course the court rejected all of that. In other words, the court concluded that nothing that had happened since the Rule 12 stage mattered, nothing about fact development, nothing about claim selection, nothing about the evolution of the law justified departing from the law of the case. And the point that I wanted to make was that we did at that point put in an expert explaining why we would prevail at step two. The other side knew that we had an expert.

[00:04:02] Speaker 05:
I know you put an expert opinion in the motion to dismiss. Different ones?

[00:04:08] Speaker 00:
No, this was at summary judgment. Okay. And so the paragraph one of the other side's statement of facts that they submitted with their motion for summary judgment said basically, we know they're going to rely on an expert. It should not matter. And they did not put in their own expert. They didn't suggest that there was a fact dispute. And really, if you look at what they've said about step two, through the entire history of this case. All they've said is the one page at the end of their Rule 12 opposition.

[00:04:38] Speaker 00:
And I think if you look at, you know, it has some recitations, but then at the end, it just says that each of the three sets of claims contains a thing that makes it, that is an inventive concept. So for the scaling claims, it is transferring. That's what they say. I think if you look at that page, you will see that they have never identified anything on which there could be a fact dispute. I certainly understand that when this court has seen lurking fact disputes that were never resolved by the district court, it has generally sent step two back for resolution.

[00:05:16] Speaker 00:
And it would have discretion to do that here. It's just that the other side has never identified anything requiring resolution by a fact finder at step two.

[00:05:26] Speaker 05:
And I guess the... They do also make the point in red that your expert was conclusory, so I guess that's something... Fair.

[00:05:35] Speaker 00:
And...

[00:05:37] Speaker 00:
We, of course, disagree with that. We have an expert. They don't have an expert. But the point that I was just making is that 661 to 62 of the appendix, you can see kind of the sum total of all the step two argument they've made over the history of the case. I think it's fair to say that this case was litigated as a step one case because that's where the...

[00:05:59] Speaker 00:
where the rubber met the road. And if I could, I would like to talk about the substance of the Step 1 decision by the district court and why these claims don't pass Step 1. And I think it's helpful. There are three sets of claims, and I'd like to take them sort of one by one. I think sort of the scaling claims are in a sense the simplest, and then the other two each add some further step beyond that. But the scaling claims, they just relate to storage and transfer.

[00:06:32] Speaker 00:
They don't even result to, don't even relate to retrieval of the location information. They are a generic server that stores data. a plurality, which can be two, generic servers that store the location of those data. And when the first server gets either too full or too busy or something else, take some of the data from the first server and put it on the second server. That is the sum total of the scaling claims.

[00:06:59] Speaker 02:
And the scaling claims... And here by data, what you mean is index entries, not the underlying data for width that is being indexed.

[00:07:08] Speaker 00:
Correct, because the data repository, that's just one server, one generic server, exactly. So no one claims that that's an inventive server or an inventive hierarchy or anything. I'm sorry, an inventive arrangement or anything like it. And so I think this court has recognized both that the storing of indexing index information is a pre-technical, pre-computer abstract idea. The court has recognized that transferring things from one computer, one computer program, or one server to another are likewise.

[00:07:44] Speaker 00:
That's an abstract idea. And in this case, this really is the...

[00:07:50] Speaker 00:
recurring problem of attempting to patent the result without specifying any particular means of doing so. So in other words, the performance criterion is not specified, and how the transfer is to occur is not specified. It just says in the dependent claim, automate the transfer. Well, automating a process is another classic example of something that under Section 101 doesn't add anything patent eligible to an idea that existed beforehand. And I think on the scaling claims, our point was that this is no different than the card catalog at the library filling up and having to be split.

[00:08:27] Speaker 04:
Can you translate the scaling claims to a patent number for me just to make sure I'm looking at the right patent?

[00:08:30] Speaker 00:
Sure. I'm sorry. So this is the 978 patent, claims 17 and 30. So in the front cover of our blue brief, it's the last two claims you'll find there. Okay.

[00:08:41] Speaker 04:
And is the hash function part of that?

[00:08:45] Speaker 00:
No. The hash function lies only in claims 1 and 2 of the first patent in the cover, which is the 170 patent. And so I'm happy to talk about the hash function, which ultimately is just an abstract algorithm. It is a way of...

[00:09:05] Speaker 00:
transforming a piece of data into another piece of data. It's taking an input, and it generates an output of standardized length, and it uses that for indexing. But that, other than being done on a computer using a hash function, I think the court has recognized in its previous cases confronting hash functions that, especially where, as here, The hash function is described as a well-known function or a standard function in the specification, and the claims don't say anything about how to implement it beyond using a hash function, that that doesn't add anything to amalgamate.

[00:09:47] Speaker 00:
When you amalgamate a series of abstract ideas, you don't make it patentable.

[00:09:50] Speaker 04:
Can I take a stab at a description, and then you can tell me why my description is completely wrong, which it may well be, or why it's not an improvement to computer technology that would be patentable? Sure.

[00:10:02] Speaker 04:
In the prior art, you have a centralized server that contains location data. Now you can have many different servers, and because of this algorithm or system, you don't need to query all of those servers that store location information.

[00:10:26] Speaker 04:
You can only go to the one that is going to actually have the location information, and that makes the system operate more efficiently. Am I getting the system wrong, or that's not innovative?

[00:10:36] Speaker 00:
Yeah, I think respectfully that what you're getting back is you are getting back information from which you can determine the location, but you're not necessarily getting back the specific location.

[00:10:51] Speaker 00:
And the facts of our product, S3, bear that out because you get back, and I understand that this is contested, but what you get back is this ID, the inode, which then has to go over into another product, another aspect of the system to have the actual location.

[00:11:15] Speaker 04:
So your theory was that you didn't read on their patent for that reason.

[00:11:18] Speaker 00:
No, that's right. And my point here in the 101 discussion is that they prevailed on infringement, obviously think wrongly, but emphasizing the breadth of the claims and the breadth of what it takes to be non-hierarchical as well. They got quite broad readings of each of these things so that you're not actually just getting back a zeroed-in location.

[00:11:45] Speaker 00:
So that's one point. And the second point, and I do want to try to address non-hierarchical quickly if I can.

[00:11:54] Speaker 05:
We'll give you enough time if there are questions.

[00:11:57] Speaker 00:
I appreciate that very much, Your Honor. So the second point is just that I don't think that you can attribute the selection of the hash function as opposed to a different algorithm to achieving an improvement in computer technology, which is generally what this Court's 101 cases have said it takes in order for a computer-implemented invention to be a technological solution. In other words...

[00:12:25] Speaker 00:
It won't do to say that this is better because customers like it better or this is better because it's more efficient. It has to actually be an improvement in the workings of computer technology, and that, I think, is what separates this case from cases like Enfish, which were tackling a problem that the use of computer technology created. I think this court recognized in cases like PersonalWeb that the problems of scaling certain amounts of data and automating processes in the computer world don't respond to a technological problem in the same way.

[00:13:01] Speaker 02:
You adverted a moment ago to the possible relationship between the two claim construction issues that are before us and the 101.

[00:13:12] Speaker 02:
If we were to agree with you, if we were to get to the two claim construction issues and agree with you on those so that the claims suddenly became narrower, how would the 101 analysis be affected?

[00:13:34] Speaker 00:
I don't think it would materially narrow the claims in a way that would change their patent eligibility. Because ultimately, being able to, for example, being able to return the actual location, if one server returns the actual location, if it doesn't have the relevant location on it, that's obviously...

[00:14:00] Speaker 02:
So your argument, for example, would work in the library context if it gave, whether it gives a shelf number or the room. Exactly. In which many, many shelves exist, and you might not be able to find it without more information, but you'd still have the room.

[00:14:18] Speaker 00:
Right. The example we gave in the district court and I think touched on in our brief here in the redirect claims, for example, is that if you have multiple card catalogs and the card catalog just simply says on it, fiction here, if you're looking for history, that's in the catalog down the hall or something like that. When you have a set of indices – one index can direct you to another index, and that as the redirect claims come to the court, that is how, I think that illustrates the 101 problem, that it is something that can be done without the technology.

[00:14:58] Speaker 02:
And what about the non-hierarchical issues?

[00:15:02] Speaker 00:
That's a little bit different. The reason that I adverted to the redirect claims is that I think it illustrates the card catalog analogy well. In the non-hierarchical point, Nub of the difference between us and the district court is that the district court's construction allowed a server to return any information from which the... Sorry.

[00:15:32] Speaker 00:
Information usable by the client to locate the server, whereas our construction was to know which location server contains the location information. Obviously, it would return a more precise answer, but if we're talking about 101, it's still returning location information. It's still implementing the abstract idea of location. storing the index separate from the information, being able to return a more efficient answer I think doesn't make it subject matter eligible.

[00:16:03] Speaker 00:
It's still just separating the what from the where and returning the where answer when queried.

[00:16:11] Speaker 05:
My colleagues don't have anything on 101? So we've moved nicely, swiftly to non-hierarchical. Just as a starting point, I'm not sure, I'm not clear on what construction you were proposing. Red has a very nice little chart on page 20, I think, that says no difference. This is what the district court came up with. This is what you proposed. And then you have... On 26 of your brief, you have a response to that, and you say affirmatively, this is what we proposed.

[00:16:47] Speaker 05:
Where do we – what's the answer to that question? How do we determine it?

[00:16:51] Speaker 00:
So if – and on the page before their chart, I believe you'll find that they very quickly acknowledge what we proposed in the pretrial order, and that is the relevant instruction. They don't – there's no chart on that. So if you look at page 29191 of the appendix, that would be in volume 2. Oh, sorry, 29191. I hope I got that right. Yes, I did.

[00:17:35] Speaker 00:
And it's the box at the top where it says AWS's position.

[00:17:39] Speaker 05:
And this is your pretrial order?

[00:17:47] Speaker 00:
That's right. This is one of the many attachments to the pretrial order that lists the disputed claim construction issues that had not yet been resolved. So we proposed this instruction, verbatim the instruction that we're here appealing, and And then further, we reiterated the point in our response to a motion in limine, which begins at 30322, and that goes on for several pages.

[00:18:21] Speaker 00:
But we conclude at the end of that to say, again, this court should define non-hierarchical for the jury as AWS proposed in the instructions.

[00:18:29] Speaker 00:
And we again say the same thing.

[00:18:32] Speaker 05:
And did you explain anywhere? Because I thought the whole heft of your argument was based on the fact that they gave this away in the prosecution history.

[00:18:40] Speaker 00:
Yes.

[00:18:41] Speaker 05:
And the prosecution history language had to do with oracle and tree and all this. So did you explain how this relates?

[00:18:49] Speaker 05:
to the language in the prosecution?

[00:18:51] Speaker 00:
At length. In the motion and limine response that I just adverted to, so basically from 30322 to 27, there's a lengthy discussion of why this is...

[00:19:06] Speaker 00:
This is what the court found and what the inventors had disclaimed. Because remember, the court had found disclaimer. Like, you know, the other side said we didn't disclaim anything, and the court disagreed with that, and it found disclaimer. The only question was what form of words to use to describe the disclaimer. And the court... initially said, I'm not going to say anything beyond the words non-hierarchical. But then it was willing to add some of the words that Cove used during prosecution. And in its rejection of our argument, it said, well, I used words that were right out of the history.

[00:19:41] Speaker 00:
Yes, that's true, but it didn't use the broadest words. It didn't accurately reflect what they surrendered in order to survive reexamination. And that is the problem.

[00:19:49] Speaker 05:
And we've got a line of cases that talk about you capture and surrender, even if it's broader than what was necessary to do to save the claim. Exactly. Does the stuff we're debating now fall into that bucket, that this wasn't necessarily necessary to preserve a claim, but it was nonetheless disclaimed?

[00:20:10] Speaker 00:
Sure.

[00:20:13] Speaker 00:
Let me answer in two steps. So I don't know whether you would say that the Oracle art specifically would read on this form of words, but I do think that this form of words is the substance of what they propose to overcome the Oracle prior art. So I want to be clear in my answer.

[00:20:39] Speaker 02:
Help me understand...

[00:20:42] Speaker 02:
What concretely is the difference? This is the way that I've been trying to understand it. That the construction that was given just says if the server that gets the request doesn't have the location information, the server has to be able to return the location information without saying anything about how it gets it.

[00:21:08] Speaker 02:
Your...

[00:21:09] Speaker 02:
construction about or know it suggests that the server has to already know where the location is and not go fetch it from some other server in the tree and then get it back before sending it.

[00:21:30] Speaker 00:
No, that's not quite right, Judge Gerardo, for two reasons. So, one, the construction the district court gave was information usable by the client to locate the server. So, you know, so...

[00:21:43] Speaker 00:
That's not even giving the actual location. It can just be information that says, you know, take this to Skynet and it will tell you or something like that.

[00:21:51] Speaker 00:
What Your Honor is asking is about the significance of the word contain, and that was hashed out at summary judgment, and the district court said, no, the server doesn't have to contain the location. it might be able to generate it in some technological way. And that's not the fight that we're having here. We're having the fight between whether it must return the location information or instead just information usable by the client to find the location.

[00:22:21] Speaker 02:
Somebody else will know. Go check with them.

[00:22:24] Speaker 00:
Yes, that's basically right. And, you know, the...

[00:22:29] Speaker 00:
We have a collection of sites at page 52 of the Blue Brief that goes through just how often the other side's expert clung to the court's claim construction and said, essentially, I don't have to answer that. Just look at the court's claim construction. I won't tell you what a hierarchical system is. Just look at the court's claim construction and so on.

[00:22:47] Speaker 02:
The way that you've described the difference between what the district court adopted and what you wanted, doesn't naturally feel like it has much to do with the word hierarchy, whether you're doing a cluster with round robin or, I guess in Oracle, what was told to the examiner was in Oracle, they go down or up one.

[00:23:17] Speaker 02:
The only communications are, to the neighbors on the tree. And you have to go up and down, but you can't kind of do other things.

[00:23:24] Speaker 00:
So I'm no expert, but here's the colloquial answer that I will give you, that if each server can answer which other server to go look at directly, that means the servers are arranged in a flat configuration. I think, as we put it in our brief, each server is kind of on an equal footing. Whereas if all you have to return is information usable by the client, that may well involve going to query a different hierarchy or reflecting it's not here, nor is it in my hierarchy.

[00:23:57] Speaker 00:
I mean, I think I'm being colloquial here.

[00:24:02] Speaker 00:
There is a fair amount of testimony about why we thought our product was not hierarchical, and more to the point, we could not...

[00:24:09] Speaker 02:
But if what we're trying to do is understand as a claim construction matter what was disclaimed, the connection between the words used by the applicant, or I guess the patentee in this case since it was a re-exam, and the claim term that was argued about, not quite a claim term, but one level down from claim term hierarchy, might...

[00:24:39] Speaker 02:
might influence how broad a disclaimer we want to give.

[00:24:44] Speaker 00:
I understand that point, and I think the best place I can send you is to look at the underlying disclaimer itself, which is just a couple of paragraphs. 36555 is one.

[00:24:54] Speaker 02:
It appears twice as slightly different for each of the two.

[00:24:58] Speaker 00:
Exactly. But the heading is verbatim the same, and other than the claim numbers, the two paragraphs that appear on the page I just gave, they also appear verbatim at 24441 under the other patent. So that's exactly right. It explains why servers in hierarchically structured networks do not know what is contained in other servers throughout the network, and that's contrasted with... the flat system that I sort of probably poorly attempted to explain.

[00:25:30] Speaker 00:
But that's really the nub of the point, is that it's the other side that got these claims through reexamination by making this representation. And the quote that the district court gave, and he said, that too came from the reexams, that's true, but it wasn't the thrust of what they said about hierarchy, and this really is the thrust of what they said. It should have been in the claim construction.

[00:25:52] Speaker 05:
Okay.

[00:25:54] Speaker 05:
If we have any questions on location or you said you wanted to cover damages.

[00:26:00] Speaker 00:
I would just say a word about damages. I won't tax the court's patience. But just to note that this is a $525 million jury verdict resting almost entirely on the scaling and hashing claims. There's no separate damages evidence or there's no separate damages number about the redirect claims. And...

[00:26:18] Speaker 02:
Can you assign numbers to those things? Sorry.

[00:26:21] Speaker 00:
Of course. I don't mean dollar numbers.

[00:26:24] Speaker 02:
I mean the scaling claims. Oh, I'm sorry. I got to keep track of patents and their claims.

[00:26:31] Speaker 05:
I thought you told us somewhere in connection with another argument that the other side was trying to say you can uphold the damages award if you do one. if you say these are patent eligible and these aren't, and you rejected that. You said you can't divide up the damages argument, the damages amount, with respect to the individual claims. I thought you had made that point.

[00:26:50] Speaker 00:
So that's actually the point that I'm making. So the damages award is one number. The other side put in no evidence of a number that corresponds to the redirect claims. So, for example, if you upheld the redirect claims but struck down the others, there's no way that you could sustain the damages verdict. You would also knock out S3, which doesn't infringe the redirect claims. But even if you knocked out only the scaling claims, if you look at the evidence that went in,

[00:27:15] Speaker 02:
And just to be clear, Redirector 978, claim 10, and 640, claim 18? Yes, I'm sorry. Thank you. And the hashing claims are claims 1 and 2 of 170.

[00:27:21] Speaker 00:
The scaling claims are 17 and 30 of 978. Okay, thank you.

[00:27:34] Speaker 00:
But that's really the point, is that the scaling claims drove such an enormous portion of this jury verdict, a billion-dollar number that the expert put in. Obviously, the jury didn't take the billion-dollar number and just – write it on the verdict form, but I think there's no way that you could say that the presence of the scaling claims or the hashing claims in the case was not prejudicial and sustained the jury verdict on the ground that it didn't make any difference.

[00:28:04] Speaker 00:
So really just the quick point that I'll make about the jury award, that it rests on two key things, the bargaining split and then the thing that the expert claimed would be split, which was the supposedly billion-dollar profit that really rested on a series of unsupported assumptions that the entire value – of the price premium that S3 commanded was attributable to practicing the scaling claims. And the expert just didn't deal with the differences between the relevant products.

[00:28:37] Speaker 00:
And so I think under these circumstances, sustaining the verdict was an abuse of discretion.

[00:28:44] Speaker 05:
I thought your main argument was the...

[00:28:46] Speaker 05:
Is any of this confidential?

[00:28:50] Speaker 00:
The dollar figures in the comparables are confidential, but only the dollar figures.

[00:28:55] Speaker 05:
I thought it was the span and particularly the floor, not necessarily just the ceiling.

[00:29:01] Speaker 00:
That's absolutely right. We do make the point that the...

[00:29:05] Speaker 00:
The idea that in 2007, in a hypothetical negotiation, at a time when the inventor says he would have considered a million-dollar offer, that it would have come back with a floor of 50% bargaining split, we find that fanciful, especially in light of when you look at the comparables, such as a license to the entire portfolio of IBM, the largest patent owner in America.

[00:29:33] Speaker 02:
I mean, when you say what the...

[00:29:36] Speaker 02:
would have accepted a million dollars.

[00:29:39] Speaker 00:
I didn't say he would have accepted it. He would have considered it. Would what? He said he would have considered it.

[00:29:43] Speaker 02:
Would have considered it.

[00:29:44] Speaker 00:
And he had bought it at $200,000.

[00:29:45] Speaker 02:
It seems to me one of the problems with those kinds of things has to do with some of the assumptions that are built into the hypothetical negotiation. So I can easily imagine somebody in this position or some case like this saying, there's a really high chance that this patent is invalid for maybe for 101 reasons. So I'm not going to get greedy. But once you've cleared that threshold, boy, is this valuable.

[00:30:15] Speaker 00:
So you're right that the hypothetical negotiation does build in invalidity and infringement. But at the same time, I think that both the comparable evidence and also the evidence of how much these products were worth and how much or how little it would have cost to design around, those are all still fair game even in a scenario where you take invalidity to be off the table. So if you can design around much more cheaply – I assume all of that was tried.

[00:30:46] Speaker 00:
That's right. I mean, we are ultimately saying that the jury's verdict can't be sustained based on the evidence, in part because of the incompleteness of the other side's presentation, so that when you look at which aspects of the damages analysis we put in evidence on and they didn't, that under these circumstances, a new trial would be required, even if the liability verdict were to be affirmed.

[00:31:13] Speaker 05:
Okay.

[00:31:14] Speaker 00:
Thank you very much, Your Honor.

[00:31:15] Speaker 05:
Will we stir a little rebuttal?

[00:31:25] Speaker 05:
Good morning. Good morning. We went over, and so I'm not going to reset the clock, but we went over by 16 minutes. So if there are questions and you need it, we'll obviously give you a comfortable.

[00:31:38] Speaker 01:
Thank you so much, Your Honor. May I please report? Yes.

[00:31:42] Speaker 01:
Why don't I start by talking about 101, since that was a good portion of the discussion. And I think, really, the heart of the matter under the cases and what we're talking about here is how does this system work, and is the invention improving the way a computer operates, or is it simply using a computer as a tool? And I'm going to talk about it, questions permitting, from two different perspectives. One is just describe how this is architecture, and then two, describe how this is in no way, shape, or form a carved catalog, because I think those are the two dimensions on which this turns.

[00:32:20] Speaker 01:
So there are...

[00:32:24] Speaker 01:
To put it briefly and then to get into the details, what code was replacing was systems like a card catalog. Of course, nobody thought that you could use a card catalog for distributed databases. That was not what was used. But it was replacing that type of architecture with four changes.

[00:32:44] Speaker 01:
The first part is that it is all the previous systems had either, as you noted, Judge Kovner, like centralized databases where a relational database sort of thing where if you wanted to get the data in the database, you had to know where to find that and go to it, or alternatively, a DNS model, which is similar to the Oracle model. DNS is you go up and down a tree.

[00:33:09] Speaker 01:
What does that mean? If you've ever looked in a joint appendix for a page number, you take a guess about where it is. And maybe you're off, so you go earlier, and then you go later, and then you iterate, and you find the right spot. That is very similar to a tree structure. There's no way to pinpoint exactly where you are where you're going. Instead, you go up and down the tree. So the first of the four design changes that improved the way the computer operated, the first was this invention of intermediate location servers.

[00:33:41] Speaker 01:
Nobody had used that in those prior art And, importantly, these are not generic servers. We know that they're arranged in a non-hierarchical configuration. That means that either they return the information you're looking for, or they can tell you how to get there. Those two things. And I'm going to talk later about non-hierarchical, because I think there were some misunderstandings in that.

[00:34:04] Speaker 01:
This builds on an architecture... that is fundamentally different than a library. It's where you separate the concepts of a data entity from data, and this is critical because this is why this is such an innovative product.

[00:34:17] Speaker 01:
A data entity is a logical grouping, say the movie Moana or a financial spreadsheet or any bucket that you, a book, any bucket you might put it in.

[00:34:28] Speaker 01:
The beauty of databases and distributed data collection is the underlying data that would populate that data entity, they're dispersed on remote servers, and you only get the data entity, say the spreadsheet, when you call it up. And here's the example that always resonates with me, is a spreadsheet. Imagine you wanted a P&L for 2023 in your company.

[00:34:48] Speaker 01:
There's no place you go to get a P&L for 2023. You call up P&L for 2023. That's your data entity. And that data entity then is populated by remote data that they'll then go and fill the spreadsheet. What if I ask for a P&L for 2020 to 2023? It's using the same underlying data. You don't have to store it multiple times. It's populating a data entity. And this is critical to understanding how this works and why it's not a library.

[00:35:20] Speaker 01:
It's not any of these conventional systems.

[00:35:22] Speaker 02:
I'm sorry. Don't the claims here apply to anything that's a data entity, including a book?

[00:35:31] Speaker 02:
That is, if we're talking about 101, we're always asking the question, can I think of something that would be in this claim that is absolutely nothing but using computers, off-the-shelf computer electronics to do what, in this case, would be done in a library? So that creating the book on the fly, this isn't restricted to that.

[00:36:00] Speaker 01:
like creating your profit and loss statement? Well, actually, it is. It is restricted to that in this way. I mean, not in the way that Your Honor said it, but in this way. As part of the claim construction, the claim language, the specification, all of it recognizes that we're talking about, and even AWS concedes that we're talking about data entities and data being distinct things. That is not a book. Yes.

[00:36:27] Speaker 02:
I'm sorry, data entities and data being designed?

[00:36:30] Speaker 01:
Distinct things.

[00:36:31] Speaker 02:
The key distinction was there's, I don't know, data and data entity, and then most importantly, there is indexing information. That's my shorthand for the identification, the thing that you use for people, that people can search in order to ultimately get what they really want, which is not... the information in the index, but the information that the index leads you to.

[00:36:57] Speaker 01:
Well, that's not quite right, but it's exactly the right question, and that's why I'm emphasizing that the technological environment that this arises in is separating the data entity from the data. I mean, that is critical to understanding this invention. If I want the movie Moana...

[00:37:15] Speaker 01:
and I put in my request into AWS, it does not go to the movie Moana. The movie Moana is spread into 10, say I want Moana in Spanish. It's spread around 10 to 20 different location servers, the bits and bytes, the individual pieces of information that is only assembled when you call up a data entity. When I call up a P&L for 2023, there's no file folder like we're used to in the olden times where you go to the file folder and pull data the P&L for 2023, all that exists on the servers are bits and bytes of data in a disorganized, non-aggregated, non-logical bucket form.

[00:37:52] Speaker 01:
It's only when in a distributed database you call up the data entity that then it goes out and gets the data. Now, that's the first of four things that distinguish this from Pyre systems and make it a technological advancement. If you don't appreciate that this arises in the context of of distributed databases where data entities and data are separate things, just as AWS concedes, then that just drives you right to a library.

[00:38:19] Speaker 02:
Just to maybe help me understand a little bit, the distinction between data and data entity, is this something different from or the same as what I generally understand? Computer memory, if you want to store a file, the computer memory is not...

[00:38:38] Speaker 02:
typically, or in any way, often is not storing all of the data that make up this file contiguously. It's putting different pieces everywhere, but it's maintaining internally an index so that when I ask for the file, the memory chip or the controller or something has a map. Are you talking about something different from that? Very different, Your Honor.

[00:39:02] Speaker 01:
And here's why.

[00:39:06] Speaker 01:
The easiest way to think of it is database. That's kind of a specialized term. In our case, it's either a database or a distributed data collection, but let's use database.

[00:39:15] Speaker 01:
Nobody thinks that they have a database on their hard drive unless they're doing something very special. A database. In litigation, if you say to somebody, can you please print your database for me, the answer is that's nonsensical. The database is just data.

[00:39:32] Speaker 04:
Yes?

[00:39:34] Speaker 04:
Some of this feels a little new to me. Do you think your claim relies on, describes this concept of Moana being stored in many different places, there being essentially no book, and that's part of your patent? Because where would I see that in your patent? Sure.

[00:39:55] Speaker 01:
Yes, it's absolutely in there. Any place, and there's two different things you can look at for that. Three, I guess, if you include the specification. The claim itself, either, if you read it, very... Okay, can you identify which claim we're talking about? Sure, we're talking about the 170 claim. Okay. Claim 1. Claim 1.

[00:40:15] Speaker 01:
And when you, and I will admit, when I started with this case, I read over these words, and it was only upon studying them more carefully that I saw that It refers to, on the one hand, data entities, and then at other places it refers to data.

[00:40:32] Speaker 01:
The judge in this case interpreted pertaining to a data entity, and she went through the Moana example in the claim construction. She called it award-winning film, but it's the exact same example, where she explains how the data are the bits and bytes, and in this patent that is distinct from from the data entity.

[00:40:55] Speaker 04:
So the concept of a data entity that's described in Plan 1, you're saying, is this idea of Moana being... It's what? It's like the spreadsheet?

[00:41:04] Speaker 01:
It's the bucket. You would say, Your Honor, I'd like the movie Moana. The movie Moana in Spanish, let's say, is the bucket. That's a data entity.

[00:41:14] Speaker 01:
What populates that are the bits and bytes that are spread out in all different places. That's the data that you pull in.

[00:41:20] Speaker 04:
Okay, but now I'm confused because all this says in claim one is a data repository configured to store a data entity wherein an identifier string identifies the data entity. So it says Moana is the data entity.

[00:41:31] Speaker 01:
Exactly.

[00:41:32] Speaker 04:
So a data repository configured to store Moana wherein... The logical concept of Moana.

[00:41:38] Speaker 01:
That's the important thing. The data entity is only a logical concept. The data that populates it, and that's what the rest of the claim is about, the data location or the individual data that populate it.

[00:41:50] Speaker 01:
So if I say spreadsheet or Moana, that's a logical thing. The movie Moana, the idea of it is a logical thing. And then the pointers in the system are pointing out to these 10 to 20 different places where you gather the data to assemble that movie Moana. And this relates to your question, Judge Sorrento. What the location information is about is not locating a data entity. It's locating the underlying data to populate a data entity. And that can be 20, 50, 100 different places.

[00:42:21] Speaker 01:
It's organized when you need, and called up, Judge Kovner, when you need the information.

[00:42:28] Speaker 05:
Can I ask you a broader question, which I think may underlie a portion of what my colleagues have been asking about? The district, as I'm calling, the district court opinion on 101 relied heavily, if not almost entirely, on the specification.

[00:42:45] Speaker 05:
and not on the claim language. And as you know, I think I'm correctly stating our case law, it doesn't allow for that. It says you look at the claims. So is it fair that a lot of, am I correct in what a lot of what you're saying here comes from the specification but is really reading the claims in the context and in accordance with the specification and relying so much on the specification? Am I misstating that?

[00:43:13] Speaker 01:
I may be splitting hairs with you, Your Honor, but I would say I've got these four design improvements, and we've gone through the first one. Each and every one of these is absolutely tethered to the claim It's right in there, and we can walk through it. It is, of course, also in the specification, and it's also in the claim constructions. It's in all three locations. But I'm not going to talk to you today about a single thing that I can't point you to in the claim. All of this is in the claim. Now, in fairness, you're not going to see in a claim like this ever that somebody goes and explains in some sort of English way the difference between a data entity and data.

[00:43:55] Speaker 01:
But you can see as you read the claim that sometimes it's referring to data entity. That's a particular thing in computer science. And sometimes it's referring to data. And when we're in the context of a distributed data collection, a.k.a. a database, one skilled in the art, of course, understands, and this is part of the claim construction, that those are two distinct things. Pertaining to a data entity was construed as being two separate things. So that's the first thing. We have location servers arranged in a non-hierarchical configuration that builds on the architecture with data and data entities.

[00:44:26] Speaker 01:
Then we have, second, that the data entity has a unique identifier. I'm not saying there's anything special about having a unique identifier, but this is how the system works. And you put that identifier identifies the data entity, so the movie Moana in Spanish. That's a number or a string of characters that identifies the movie Moana in Spanish. Then the question is, where would the system find the underlying data out on these remote servers to populate that data entity?

[00:44:58] Speaker 01:
That's the location information that is present on the location servers. And how do you put the location information on the location servers? And this is a big part of why this is so unique. You use a hash function as a router.

[00:45:13] Speaker 01:
You're not using a hash function like personal web. You're doing something very different with it. I'd say it's more like diamond versus deer.

[00:45:21] Speaker 01:
The conventional use of a hash function, I think as counsel, my friend said, is, and I'm defining it, this is what it is.

[00:45:27] Speaker 05:
So you point us to the claim language you're now referring to. Are you in the middle of that? Claim one, which is based on a hash function.

[00:45:34] Speaker 01:
Yes. Used to organize the data location information towards the end, so last piece.

[00:45:41] Speaker 01:
Let me explain what a hash function is conventionally, and you can look at personal web because it does the same thing. The definition of a hash function is take a variable length string of any length, doesn't matter, put it into the hash function, do the mathematical calculation, and out pops a fixed length string of characters.

[00:46:01] Speaker 01:
That's the math. That's what a hash function does. That's all that it did in personal web. That is not what Cove's doing. It is employing a hash function but it's administratively limiting the output to only available location servers. And there's no argument and no computer science sense that you'll find anywhere that that's what hash functions do. It is not what they do. They simply create this fixed string of characters. What the patent does is it says, based on those hash functions, you distribute the location information, which you can read more about it in the spec, the enabling part in the spec.

[00:46:37] Speaker 01:
But what it's talking about is administratively limiting the output of a hash function. And one skilled in the art would know that because it says don't just run a hash function. It says based on a hash function. So, yes.

[00:46:51] Speaker 05:
Okay, no, finish your thought, but I think we need to move on to the next issue.

[00:46:55] Speaker 01:
Well, I want to, and I'll quickly tell you the other two features just so you have them because I've only gone through two. But you're using hash function as a router. And then another design choice, very quickly, Judge, is that you're distributing the hash functions. That is an architectural choice. That means that you're putting the hash functions out on the location servers.

[00:47:15] Speaker 01:
That is not any conventional use of anything, to be honest. And unlike a library, when you go to a library card, it doesn't say, I'm sorry, War and Peace isn't here, but you can go find it over there. That's what this is doing here. with the distributed hash function. And finally, just to sort of wrap it up, Judge, you're using these intermediate location servers to map the data entity, the moving Moana, to the underlying data.

[00:47:44] Speaker 01:
All those things combined are architectural or design choices. And what do they do? They make a limitless... scalable environment. The DNS and the centralized databases, their problem and why it would never work is that they've got an inherent upper bound on their scalability. So when you get to 100 million entries in an index changing each day, they could never possibly manage it. But with this architecture, there's no inherent upper bound to scalability.

[00:48:13] Speaker 05:
Let me move you to the second part of 101 where I started with Mr. J, which is assuming we...

[00:48:20] Speaker 05:
might reject your argument on step one. I didn't quite understand what you were saying in your brief. You said you can take step two up if you find for me, but not if you're going to find for the other side. To do that, you have to remand it.

[00:48:38] Speaker 01:
I think that's right, Your Honor. That's what I'm saying, because their position below...

[00:48:44] Speaker 01:
was that fact issues on Step 2 preclude summary judgment.

[00:48:49] Speaker 05:
Well, yes, they said that, but then in the alternative, they said something quite different. So is that the reason you say we can't reach Step 2 here, because they admitted at the moment?

[00:49:02] Speaker 01:
No, that's just part of it. The reason is they never moved for summary judgment. So to grant them summary judgment, where we haven't had an opportunity to marshal our evidence and explain it. I mean, we were surprised when, in the reply, we saw that they were actually not challenging the motion to dispute.

[00:49:18] Speaker 05:
You just started saying, well, we haven't had an opportunity to what? You're not saying there's a factual dispute, which you didn't really say and read, and that you think that if we manned it on step two, it would reopen the record and an opportunity for you to submit questions. new declarations on this question?

[00:49:39] Speaker 01:
Yes.

[00:49:41] Speaker 01:
In the spirit of what we're saying, what we were trying to say in the Red Brief is we know from time to time the court will evaluate claims in a step-two analysis, putting aside step one. You can still do that to find it's eligible. But if we're talking about fact-based issues, they didn't move for summary judgment. The only motion was law of the case. They responded on law of the case. only about step one, and we weren't briefing step two. So, yes, we believe that fact issues would come down in our favor, either precluding summary judgment for the defendant or actually requiring summary judgment in our favor.

[00:50:16] Speaker 01:
That hasn't been briefed on appeal. Below, it's never been taken up. So, in your hypothetical, that would be the appropriate result as a remand for consideration of step two.

[00:50:27] Speaker 05:
I want to move to non-hierarchical.

[00:50:30] Speaker 01:
Yes, I'd be happy to. I think that One point was not surfaced appropriately in my friend's argument. And that is, we were sort of conflating, oh, this is claim construction. Let's talk about claim construction. This was not claim construction. This was, and they clarified in the reply, because we said in our brief, we don't know what order they're appealing. They said, oh, we're appealing the motion and limine order. That was when Amazon attempted to revisit the construction of non-hierarchical, and the ruling there is I'm not going to revisit it.

[00:51:08] Speaker 01:
It's too late for that. I've already ruled about what the definition of non-hierarchical is. That's reviewed for an abuse of discretion.

[00:51:16] Speaker 01:
We're taking this up fresh. That was in the context of summary judgment. In summary judgment, the judge allowed Amazon to brief. There was a prosecution disclaimer, and they briefed it about non-hierarchical. And they won that issue, that a hierarchical configuration was disclaimed. It has to be non-hierarchical. And the judge said there's a dispute about what non-hierarchical means. And so the judge defined the term non-hierarchical.

[00:51:47] Speaker 01:
And then he said, I'm not going to construe it further than that. further than what he had actually already ruled.

[00:51:52] Speaker 05:
But you have in your brief, you got it from somewhere in the record, I'm sure, a statement of what they were claiming was the appropriate claim construction. And it really is very clear. It's a persuasive argument because it's virtually identical to what the district court came up with. In other words, what are they complaining about or how can they complain about it now? And are you disagreeing with Mr. Jay that they were proposing another claim construction or

[00:52:17] Speaker 01:
I agree with what you're saying, but there's a really absolutely critical path to get there.

[00:52:23] Speaker 01:
There's a reason we're not talking about what they actually proposed at claim construction, which was not what you're seeing now. They proposed a three-part definition at claim construction, which the judge went through in itemized detail in the summary judgment order.

[00:52:39] Speaker 05:
Do you have an appendix?

[00:52:42] Speaker 01:
I do.

[00:52:43] Speaker 01:
Appendix 31 is the...

[00:52:47] Speaker 01:
order, and it's quoting Appendix 18696.

[00:52:52] Speaker 01:
Appendix 31?

[00:52:54] Speaker 01:
Yes, ma'am.

[00:52:56] Speaker 01:
At summary judgment, they proposed this very long definition. The court went through each of the pieces and reached its ruling and rejected that. Then at the motion and limine stage, they proposed a new construction that differed entirely from what they had proposed before. So where's their...

[00:53:16] Speaker 01:
summary judgment stage proposal?

[00:53:21] Speaker 01:
Appendix 18696, Your Honor.

[00:53:23] UNKNOWN:
18696?

[00:53:23] Speaker 02:
Yes, sir.

[00:53:27] Speaker 02:
Which volume is that?

[00:53:29] Speaker 01:
I believe that's in volume one.

[00:53:34] Speaker 01:
And I can read it to you to focus the attention.

[00:53:38] Speaker 01:
At Clean Construction, they propose that non-hierarchical means... Hold on. Yes, ma'am. 18696.

[00:53:46] Speaker 01:
18696.

[00:54:13] Speaker 01:
So it's that three-part definition that you see there in the middle of the page that was proposed. And in the court's order at Appendix 31, The court went through that and analyzed each of the pieces, rejected it, and found the claim construction the definition of non-hierarchical. Then we fast forward. I'm sorry.

[00:54:32] Speaker 02:
So on 18696, the three parts, this is in the sentence that begins, here, Cove limited the scope? Yes, sir. That reads like a statement of your position, not of their position.

[00:54:48] Speaker 01:
No, this is their position. This is their document, but isn't that a sentence that says what your position is? Oh, I'm sorry. The context is they're saying there was prosecution history disclaimer, and during the prosecution history, Cove disclaimed hierarchical, and now this is where they say this is what we want the word non-hierarchical to mean. So they're saying in the prosecution history, Cove limited the scope of its asserted claims to these three things.

[00:55:16] Speaker 01:
That's what the judge analyzed.

[00:55:18] Speaker 01:
And there's very important reasons.

[00:55:19] Speaker 05:
But this goes on to say, but Cove's... I mean, this is coming from Amazon, right? This is Amazon's document.

[00:55:26] Speaker 01:
Yes, ma'am.

[00:55:26] Speaker 05:
And they say, but Cove's infringement of validity contentions served before the re-exam didn't notify... There's more here.

[00:55:33] Speaker 01:
There is, but I'm saying, if you look at both the judge's order and you look at this, I'm just giving you a place to see what it is they were proposing as the definition of non-hierarchical.

[00:55:43] Speaker 02:
The reason, at least, that I asked you to focus on this is it seems to me that...

[00:55:49] Speaker 02:
Your wanting us to focus on the motion in limine, not the summary judgment ruling and litigation, matters only if they didn't make, at the first stage, the argument that they are now making. And that's what I want to understand.

[00:56:13] Speaker 01:
Well, yes, and can I give you one clarification? I'm not asking you to focus on one or the other. They said they're only appealing the mill rule.

[00:56:21] Speaker 02:
Right. Okay. If they made this very same submission to the district court at summary judgment and the district court said, there are a number of different statements here. I think it's enough just to say A.

[00:56:35] Speaker 02:
And if they preserved at that point the argument that, no, you really needed to say B, then that's a perfectly preserved argument for current purposes.

[00:56:46] Speaker 01:
It is, and that's not what they did. You can read this at your leisure, and you will see that it's a fundamentally different argument that they're making. at the... That's our point exactly, Your Honor, is that they want the benefit of de novo reviews, so we sort of slough over the fact that when it was de novo review, when there was claim construction, what they're proposing at the mill stage and on appeal is not what they were telling the court.

[00:57:10] Speaker 04:
You're making the point that at the summer business stage they asked for a very... restrictive definition of non-hierarchical, right? Like more restrictive than... I would just say different. Okay, it has the three parts.

[00:57:22] Speaker 01:
Yes.

[00:57:22] Speaker 04:
So they lose on that, right? Yes. And so then... They come back at the motion and eliminate stage having lost on that, and then they're asking now for a new construction. So why aren't they allowed to do that? They know they've lost their broadest theory, and now at the motion and eliminate stage, they're saying, okay, we accept that we're not going to restate our three-part test, but you should at least instruct on this version that's a little bit more restrictive than yours.

[00:57:52] Speaker 01:
Well, I would say that that's the case nuance communication, and you don't get unlimited bites at the apple on claim construction. This was claim construction. Then when they came back and said, now we'd like to have another claim construction, it's within the judge's discretion to decide whether they're going to revisit claim construction.

[00:58:09] Speaker 04:
But do you think that the district court at the summary judgment stage resolved this dispute? Yes.

[00:58:14] Speaker 04:
Can't we say the district court only went so far as it needed to go to resolve the summary judgment motion and it didn't decide this nuance between the two possible things you might have explained?

[00:58:26] Speaker 01:
No, I wouldn't say that. I would say that...

[00:58:29] Speaker 01:
When you come in for claim construction, I mean, and Your Honor is a district judge, I mean, when you come in for claim construction, you provide your construction to the court. The court rules on the two constructions that are in front of you. It rules for one side or the other. I am not aware of any authority that says the district court must then, if somebody decides at the eve of trial that they don't like what they proposed before, that they get to propose a new one.

[00:58:51] Speaker 04:
As to what the district court ruled in the summary judgment, it didn't pick between two versions.

[00:59:00] Speaker 04:
and it doesn't tell us which one?

[00:59:02] Speaker 01:
I would disagree with that, Your Honor. If we look at page 31?

[00:59:08] UNKNOWN:
38?

[00:59:08] Speaker 01:
Appendix 38. And, Your Honor, you're honing in on the right question.

[00:59:25] Speaker 01:
What Amazon's position is is that the judge didn't decide it. Now, I will just tell you as an important foreshadowing, the judge thinks that he decided it. The judge, when he ruled on their motion, said, I've already decided this. It was in black and white. I'm not revisiting it. So what does he say? The code on page 38, appendix 38, the code patents do not include a definition of non-hierarchical, but during...

[00:59:50] Speaker 01:
I'm over time. I just realized, I'm sorry.

[00:59:53] Speaker 05:
Oh, we're so over time.

[00:59:55] Speaker 01:
Okay.

[00:59:57] Speaker 01:
The red light startled me.

[00:59:58] Speaker 05:
You've still got, by my count, three more minutes. You're still three minutes behind Mr. Jack. Okay. Thank you, Your Honor. So I'll tell you when you need to stop.

[01:00:05] Speaker 01:
Okay. So Appendix 38.

[01:00:07] Speaker 01:
The patents don't include a definition, but during the reexamination process, Cove repeatedly described what non-hierarchical meant in the context of the patent, and it gave one of those places where it defined it. This is the definition that was provided to the jury and what the judge said he already ruled. He then goes on to say Cove also provided multiple descriptions of servers in hierarchical terms.

[01:00:31] Speaker 01:
So he's describing the opposite of hierarchical. Then he says, here on 39, Cove acted as its own lexicographer in defining the claim term, and the court therefore adopts Cove's definition. That's the context in which he says no further claim construction is required beyond what he already ruled. And if we have any doubt, Judge Kovner, when they tried to do a new claim construction, a new interpretation of non-hierarchical, At the eve of trial, the judge said on the record, I've already ruled on this.

[01:01:05] Speaker 05:
Wait a minute. The sentence following where you stopped, it says AWS does not dispute Cove's definition of non-hierarchical and its state argues that the allegedly imprinting products do not utilize the required configuration. Yes.

[01:01:22] Speaker 05:
So for purposes of Claim construction and summary judgment, he was saying that the two are the same?

[01:01:27] Speaker 01:
No, he's saying this definition, any given server, the one that's on 38, he's saying that definition is not disputed.

[01:01:39] Speaker 01:
That's the definition, and that's what the court said and intended.

[01:01:46] Speaker 01:
I do want to just point out, and maybe this is more of just a placeholder given the limits of time, that the judge also found in post-trial that there was no prejudice. This didn't affect the verdict. And there's an important reason why. When you look at Amazon's brief here, when they're talking about how this might have prejudiced them, they're actually misreading the claim.

[01:02:09] Speaker 01:
They say because a KFC, which is the location server, in some instances might have to get the information from a brick manager, the BM, that shows you that it doesn't meet this limitation. And it's talking about the second part of the nose limitation that it proposed. The first part is the location server must be enabled to return the requested information.

[01:02:38] Speaker 01:
If you don't have it, you can't return it, then you have to know, in their view, know which location server contains the information. Everything they describe in their brief and they describe today was under the first part of the clause, not the second part. We all agree on the first part of the clause. There's no real estate between the parties on the first part of that definition, and everything they're describing is about the first part of that definition. And then on the second part of the definition, which is if you can't return it, you have to either know which server has it, or you have to, in their view or in our view, provide information to tell you the location server to go to.

[01:03:18] Speaker 01:
There was no prejudice on that either because in the 170 claim 1, it has, in other words, the same knows limitation. Knows was proven, and their own documents say that if a KFC doesn't have, can't return the requested information, and we cite this in the brief, it knows which other location server to send you to. So this wasn't something that was really an issue at trial. And, you know, of course, they have to show prejudice. And if you trace, that's why I said it's a bit of a placeholder because I realize it's a complex issue, but if you trace it through, this business about the KFC having to go to the BM was not under the clause that they're disputing.

[01:03:58] Speaker 01:
It was under the part of the clause that they agree was the correct construction.

[01:04:02] Speaker 05:
Okay. You want to spend a few more minutes on damages? Yes.

[01:04:06] Speaker 01:
Yes. I want to – thank you, Your Honor. I want to clear up one misperception.

[01:04:14] Speaker 01:
My friend said that the price premium that's referring, I assume, to the Goldilocks argument drove all of this. That's just simply not true.

[01:04:24] Speaker 01:
The price premium, if we just look at that as such, is just as to brick managers, just as to the scaling claims. It doesn't affect, which is the smallest part of this case. So it's just not true that it affected everything. And as we pointed out, this is not a Dalbert argument at all. There is no apportionment methodology argument here. On this record, it's undisputed what the profit pool was directly attributable. Their only argument is Mr. Bergman should have, the damages expert, should have considered other factors more than he already did.

[01:04:57] Speaker 04:
Can I just ask you one question on the bargaining split? Where does the 50% come from?

[01:05:01] Speaker 01:
Okay, exactly. Here was the way the analysis went, and the case to read is Willis. Willis is dispositive. It's on all fours with this case. In fact, our situation is slightly better. We submitted it as a 28-J letter, Your Honor. Willis said, when you're... It's not apportionment. In apportionment, when you're deciding the profit pool, you do, I think, fairly read under the case law, have to come up with a quantified basis for the incremental benefit over non-infringing alternatives.

[01:05:33] Speaker 01:
Mr. Bergman, the damages expert, did that, and it's undisputed that he did that, and that's what the profit pool is. But then Willis says, once you're coming to how would hypothetical negotiators split up that profit, It's enough for the expert to go through each factor and say which ones had an upward effect and which ones had a downward effect. I say Mr. Bergman's is one step better because if you look at the expert report, which is part of what you're evaluating in Dalbert, what he does is this. He goes through all of those factors. And then he says probably the two most important factors here are that Amazon's own internal documents show that they're willing to give up virtually all of the direct profit to get all these indirect benefits, and they made all these extra billions of dollars in downstream benefits.

[01:06:20] Speaker 01:
And here's the important part. His actual conclusion was not then wham 50%.

[01:06:25] Speaker 01:
His actual conclusion was, it is my opinion, therefore, that Amazon will be willing to give up the vast majority of their profits

[01:06:33] Speaker 04:
I get the top number, the theory for that. I guess I'm wondering, the bottom number, what's the theory?

[01:06:38] Speaker 01:
Well, and I'm being very specific here, so let me say it this way because this is important, I think. We're fine under Willis. Even if he said, and therefore I arrived at 50%, I commend you to Willis because that is exactly what happened in that case.

[01:06:51] Speaker 03:
So you think he doesn't have to... say anything to justify it? Or what did... Well, he does.

[01:06:56] Speaker 01:
He has to go through... I want to get to this qualification because it's so helpful. He has to say, this factor's up, this factor's down, this one increases, this one decreases. That's all for Willis. That's all she did. And at the end she said, and therefore it's this minimum... and this maximum, which, by the way, was a larger range than we have in our case. That passed muster under Willis. But he did one thing more that wasn't in Willis. He said, he didn't say, and therefore my conclusion is 50% to 100%. He said, my conclusion is, and this is directly tethered to the documents, Amazon would be willing to give up the vast majority of its direct profits in exchange for all these indirect benefits.

[01:07:35] Speaker 01:
Then where does the 50% come from? It just comes from a matter of sixth grade logic. what percentage is the vast majority? I don't know, but it's at least 50%. It has to be. If it's the vast majority, you know it's at least 50%.

[01:07:50] Speaker 01:
So his analysis about the vast majority was directly related to a lengthy analysis he did under Georgia Pacific that's on all fours with Willis. He concludes vast majority, and instead of doing something that I think would have been less analytically sound in saying, so I conclude vast majority is 64%, 75%.

[01:08:08] Speaker 01:
He takes the more conservative, reasonable view that whatever it is, we know vast majority is at least 50%. Okay.

[01:08:15] Speaker 05:
Time's up. Okay.

[01:08:19] Speaker 01:
Thank you for your note.

[01:08:20] Speaker 05:
You've gone over, so I was allotting the bubble. So you're going to get five minutes of rebuttal.

[01:08:31] Speaker 00:
Thank you, Your Honor. Just a few points.

[01:08:38] Speaker 00:
A lot of the discussion in the 101 section was about things that are not claimed. And so there is no claim to data entities separate from data. This is the point that I made in the opening, that there can be one data repository. Moana would be, in the example, is data or a data entity. It's not the location information that is stored on the location servers. One data repository can store all the data entities. There's nothing in here about dispersing it, separating it from the data that it contains.

[01:09:13] Speaker 00:
And the little odd that my friend referred to the district court's claim construction of a term...

[01:09:26] Speaker 00:
Data pertaining to the entity, and we've dealt with this in our reply brief, but I think the point that I want to make here is that that term doesn't appear in the claims in suit. It is in different claims that were no longer in the case. So I don't think that either the claim language or the claim construction can get you the concepts that my friend said were making the difference in their one-on-one argument.

[01:09:48] Speaker 05:
Just one quick point. I don't want to take up your time, but his comment about hash function, that this wasn't what we think of or we know of as hash function. This is something different.

[01:09:57] Speaker 00:
I think what he's saying is that what you put into the hash function is information that had not previously been put into a hash function. But the hash function itself is utterly conventional. The specification says that. And in 101 terms, applying a hash function to a new environment or a new input that hadn't previously been put in, that doesn't make it subject matter eligible.

[01:10:20] Speaker 00:
The second point I just want to make about step two, just to reiterate quickly that...

[01:10:27] Speaker 00:
They've never identified any fact dispute. They've just said that there was an inventive concept. So, for example, for the scaling claims, they just said the transfer mechanism is what would satisfy step two. This is at that page I gave you before, 661 to 62 from the 12b6 opposition. I think it's fair to say that at a minimum, at no point in the case yet, Has the other side identified anything factual that would go to what we think of as a step two fact dispute, which is about what is routine and conventional?

[01:10:59] Speaker 05:
But the question is whether they get another bite at the apple.

[01:11:02] Speaker 00:
I agree that that is the question.

[01:11:05] Speaker 00:
I agree, but I would just note that in most cases where this court has sent it back, there's at least a prospect of needing to do so. Now, I think, as the court may remember, in the Optus case, for example, that was the posture the court faced. There was going to be a new trial anyway, and the court said to the district court, either figure this out before trial and figure out what needs to go to the trial with the rest of the stuff.

[01:11:31] Speaker 00:
Third point, this is about the non-hierarchical instruction. I think Judge Kovner is right that when you ask for, and Judge Geronto as well, when you ask for a jury instruction and it is refused on the record, that is generally enough to preserve the objection to the jury instruction, the refusal of the jury instruction. What the other side is saying is that because this is claim construction, we asked too late because claim construction was over. But I think it's important to understand this sequence. At summary judgment, the district court rejected their position that there had been no disclaimer.

[01:12:03] Speaker 00:
So that's when non-hierarchical entered the construction. But the court said it did not need to give any further construction of non-hierarchical And why? One of the things that it said at page 41 of the appendix is that our request for the construction would be redundant, unnecessary, because Cove had already conceded that this is part of the disclaimer. So when we then capitalized on that, we wanted it put in the jury.

[01:12:29] Speaker 02:
So on page 39 of the appendix, the court says, and the court therefore adopts Cove's definition. What do those words mean?

[01:12:38] Speaker 00:
I'm honestly not sure, but I believe that if you read that together with the passage from page 41 that I was just referring to, this is at the bottom, inclusion of AWS's requested language would be redundant. Cove has conceded that the mandate that each server in the server network must be enabled to, and this is what we wanted, return the requested information or know which location server contains it.

[01:13:03] Speaker 00:
is disclosed by the non-hierarchical configuration. So at page 41, the district court says, that's what Cove had acknowledged or conceded. So we wanted a jury instruction that said exactly that. We said it again at greater length in the motion eliminate opposition. And if you look at the hearing on the motion eliminate, pages 96 and 97 of the appendix, you will see that the judge said, one, I've already ruled on this. Two, We asked, but two, I'm going to change my claim construction anyway. I'm going to add some more language, the language preferred by those that wound up in the final instruction.

[01:13:36] Speaker 00:
So this was not a matter of, like, claim construction is closed and I'm not changing it. The judge changed it, and we said, quote, we'd prefer the further construction. And he said, not it's too late. He said, quote, I don't think the further construction is right, page 97. It was rejected on the merits. We've done everything we need to preserve it, and the other side hasn't explained why our construction is wrong.

[01:13:57] Speaker 02:
And I think Mr. Reitman says something to the effect, under the heading of you haven't shown prejudice.

[01:14:06] Speaker 02:
Address that for me.

[01:14:07] Speaker 00:
Sure. And I alluded to this in the top side of the argument, that we have a collection at page 52 of the Blue Brief, like all the places in which the other side's expert refused to answer questions about hierarchical structures and whether ours was one. because he said, I'm not going to answer that because the court has given us the claim construction. The court has given us the claim construction, and I'm not going to depart from it.

[01:14:33] Speaker 02:
And so I don't think it is correct to say that this part of the claim construction is... I think Mr. Reichman made his point by referring to KFC and BM, and I forget whether he referred to Skynet. Can you translate the question of prejudice into...

[01:14:53] Speaker 02:
those specifics of the accused systems.

[01:14:56] Speaker 00:
So I think that what he said today was that the KFCs could return the information and not something else by querying... I thought maybe he said the KFC... Everybody agrees KFCs know this.

[01:15:12] Speaker 00:
But I don't think so. I think what he said was that they can return the information by getting it from a brick manager. But what the expert testified was that KFCs are a non-hierarchical structure, and brick managers also are a non-hierarchical structure. So in other words, I don't think that the jury – could have concluded from that testimony that actually it's all one thing. Our position was that's a hierarchy. In other words, that the KFCs above the brick managers are a hierarchy, and the other side's expert kept saying, forget everything that you know about hierarchy colloquially.

[01:15:51] Speaker 00:
Stick to the court's claim construction. I think that's the problem.

[01:15:55] Speaker 05:
Okay.

[01:15:56] Speaker 00:
That's it.

[01:15:56] Speaker 05:
We're out of time. Thank you. We thank both sides for taking some minutes.