EKO BRANDS, LLC v. ADRIAN RIVERA MAYNEZ ENTERS.
Oral Argument · Case 2018-2215 · 39:13
0:00
Judge DYK
Good morning. Here's number 18-2215, Echo Brands, LLC, versus Adrian Rivera-Mainez Enterprises.
0:30
Okay, Mr. Delgado.
0:33
Appellant Attorney (William A. Delgado)
Good morning, Your Honors, and may it please the Court.
0:36
Although there are six different issues on appeal, there are three specific ones that I want to speak about this morning for purposes of oral argument.
0:44
And they are as follows. The first deals with the claim construction of Claim 8 of the 855 patent and whether the District Court committed error when it failed to include the preamble as a limitation of Claim 8.
0:57
And the second and the third issues will be with respect to the fee awards that the District Court awarded during the case.
1:04
Circling back to Issue 1, we believe that the District Court did commit error when it failed to import the limitations of the preamble into the Claim 8 of the 855.
1:14
The test for that is simply that a preamble that is essential...
1:21
Judge DYK
Well, it's not really just a preamble question. The language of the claim itself suggests that the beverage brewer is something separate because it talks about a beverage brewing device for use with a single-service beverage brewer.
1:38
Appellant Attorney (William A. Delgado)
Your Honor, the claim language uses terms from the beverage brewer.
1:47
And that is the test for determining whether or not a preamble is limiting.
1:57
Judge DYK
I don't think you're addressing the point I was making.
2:02
And that is that the language of the claim itself talks about for use with.
2:10
The language of the preamble itself, for use with.
2:13
So that would seem to suggest that a...
2:17
That a brewing device is different from the beverage brewer.
2:22
Appellant Attorney (William A. Delgado)
So I agree that it says for use with, but I don't think that's the...
2:26
The use of that phrase is not dispositive on the issue of whether or not the terms that come from the brewing device are essential or not essential.
2:36
The fact is that without the terms from the brewing device, the terms from the claim itself just do not...
2:43
Judge DYK
It would certainly suggest that a brewing device is not the brewer itself.
2:49
Doesn't it?
2:49
Appellant Attorney (William A. Delgado)
I don't think so, Your Honor.
2:51
I think if we look to the claim in its entirety and we look at the prosecution history of the child application that came from the 855 patent where the examiner required the brewer elements to be in the claim itself indicate that the brewer elements are necessary for purposes of this claim.
3:11
So let me stay on that point for just...
3:13
Judge HUGHES
So if you wanted to claim this reusable capsule...
3:17
This reusable capsule that you plug into the brewing device separate from the brewing device, how would you claim it?
3:24
You still have to describe what the capsule is, its various structure, and how it's going to work in that brewer, don't you?
3:32
Appellant Attorney (William A. Delgado)
I think you do, but I think you can do that in a way that doesn't incorporate some of the elements.
3:37
For example, when you're talking about outlet probe receptacles, there are ways you can use by talking about the depth of an outlet probe receptacle...
3:46
Without referencing...
3:47
Without referencing the specific parts of the brewer, such as the needle and the specific needle that comes with a single server, a single serve brewer.
3:55
How?
3:55
Judge HUGHES
If the point of this is not a generic capsule that can be used with any brewer device, but a specific reusable capsule that can be used with a specific machine, don't you have to describe it with specificity, what that machine is and how they fit together?
4:14
Appellant Attorney (William A. Delgado)
Yes, I think you have to describe the machine.
4:16
But again, I don't think you have to use the terms from the machine in such a way that make them indispensable to the understanding of the claim, which again is what happened here.
4:25
Why?
4:25
Judge HUGHES
This argument baffles me.
4:27
Is this the reason?
4:29
Is this what the willful infringement issue is based on?
4:34
No, Your Honor.
4:35
Appellant Attorney (William A. Delgado)
I don't think so.
4:36
Okay.
4:36
I think that's a separate issue.
4:38
But I think the...
4:40
Judge HUGHES
This wasn't your only defense to willful infringement.
4:44
Appellant Attorney (William A. Delgado)
Correct.
4:45
This...
4:45
To willful infringement, that is correct.
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We had other defenses to willful infringement.
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This was part and parcel of the fact that we stipulated to direct infringement.
4:56
Absent...
4:56
If the brewer is not a part of the claim, which is what the district court held, we had to stipulate to direct infringement because of the container and the way that the container was claimed.
5:09
However...
5:09
Judge HUGHES
It just baffles me how you could argue when everything about the language of this claim is talking about...
5:15
A brewing device as the invention and describes the basic structure or function of it and all the like, and only the time it mentions the actual brewer is just to say that it's for use with this.
5:28
But it doesn't claim the brewer.
5:31
Appellant Attorney (William A. Delgado)
Well, I disagree with that, Your Honor.
5:33
I think if you look at the figures and you look at the specification, the brewer is mentioned throughout.
5:37
And when you look at the child application of the 855 patent, it does claim a brewing system in its entirety.
5:44
It claims the brewer.
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It claims the brewer and the capsule.
5:46
And the reason that it does that is because the patent office required them to incorporate the terms from the brewer in order to achieve patentability.
5:53
Judge HUGHES
But did this claim...
5:54
This claim doesn't have a system claim.
5:56
At least the representative one I'm looking at, independent claim 18, doesn't...
6:02
Isn't a system claim.
6:03
Appellant Attorney (William A. Delgado)
That's correct.
6:04
But that's only because of a hiccup in the patenting process.
6:07
In other words, the child...
6:08
What do you mean it's a hiccup in the patent?
6:10
I'm happy to explain that.
6:11
Judge HUGHES
If it was allowed as a single claim to the brewing device...
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Rather than a system claim, then that's what we have to look at.
6:19
Appellant Attorney (William A. Delgado)
It was allowed only as a result of having a different examiner than the examiner from the child application.
6:24
And the precedent from this court makes clear that the prosecution history of related patents is important.
6:30
And we can't just...
6:30
Judge HUGHES
Do you have other arguments in this appeal?
6:32
Appellant Attorney (William A. Delgado)
We do have other arguments, Your Honor.
6:34
But not with respect to that issue.
6:37
So the second and third issue that I wanted to speak to are the fee awards.
6:41
The second fee award was granted...
6:43
Granted as a result of the district court granting ECHO's motion for non-infringement.
6:51
And our position is that the district court's claim construction erred when it claimed that the passageway...
6:58
Or when it construed passageway from the 320 patent to be narrow.
7:02
And that word narrow is contrary to a specific embodiment that is found in the patent.
7:09
And by that I mean here the 320 patent.
7:12
Judge DYK
Yeah.
7:12
But basically in...
7:13
In terms of invalidity, your argument is that a passageway can be just an opening, right?
7:28
Correct.
7:29
Any kind of opening.
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Correct.
7:31
That seems hard.
7:33
It may be that the district court's construction is not correct.
7:39
But it doesn't seem to me that a passageway is just an opening.
7:44
Appellant Attorney (William A. Delgado)
Your Honor.
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If the district court's construction is not correct...
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Then a grant of summary judgment based on that construction would not be correct.
7:51
It would have to be...
7:52
Well, you know...
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Reversed and revamped.
7:53
Judge DYK
Summary judgments reviewed de novo.
7:55
You know, we're not talking about fact-finding.
7:59
Appellant Attorney (William A. Delgado)
That's true.
8:00
But nevertheless, if the construction is incorrect, then it would have to be reversed for further
8:04
fact-finding.
8:05
Judge DYK
Why?
8:05
Appellant Attorney (William A. Delgado)
The...
8:06
Judge DYK
We can look at the record and see whether under the correct construction, summary
8:09
judgment was properly granted.
8:11
Appellant Attorney (William A. Delgado)
The only...
8:12
So they could...
8:13
The district's court construction of passageway was based on its own...
8:17
Its own...
8:18
Its own interpretation.
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It was not offered by either party.
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And with respect to whether or not it can be only an opening, the patent specification
8:24
uses the words opening and passageway interchangeably, which is something that ECHO admitted in one
8:29
of its claim construction briefs.
8:31
They moved away from that position here on appeal, but judicial estoppel precludes them
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from doing that.
8:36
Judge REYNA
The court...
8:37
The court construed passageway as a narrow space of some depth or length connecting one
8:43
place to another.
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Appellant Attorney (William A. Delgado)
The district court, yes.
8:46
That is the...
8:46
The district court did.
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Judge REYNA
Yes.
8:48
And is there...
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Is there anything in the specification regarding the required depth or length of a narrow space?
8:56
Appellant Attorney (William A. Delgado)
Your Honor, the only length that is discussed is described in mathematical terms.
9:01
So it describes the length as five millimeters wide and having a variable length anywhere
9:06
from one millimeter to 20 millimeters.
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So our position is that by saying narrow, it limits the passageway to the 20 millimeter
9:15
length.
9:15
Whereas a passageway that has five millimeters...
9:18
Five millimeters in width and only one millimeter in length is not by definition narrow.
9:22
And that's why we believe that that was erroneous.
9:26
The third argument that I'd like to talk about is the fee award with respect to the obviousness
9:33
determination.
9:34
In other words, that the 320 plan was declared obvious and invalid and the district court
9:40
awarded fees in connection with that.
9:45
ECHO moved for summary judgment on the issue of obviousness.
9:50
Judge Lassnick denied that motion for summary judgment and said that there was a tribal
9:55
issue of fact on the issue of obviousness and we had to go to trial.
9:58
So we did go to trial.
10:00
After trial, Judge Donahue, who tried the case, issued a fee award on the issue of obviousness,
10:06
concluding that we didn't put forth a kind of strong enough defense.
10:11
We've cited cases that all stand for a very simple proposition that if your position is
10:17
strong enough to avoid summary judgment...
10:19
Then it cannot possibly be so sanctionable and frivolous as to merit an award on the
10:26
back end, essentially.
10:27
Judge DYK
JUDGE DONAHUE I'm not sure that the cases stand for that proposition.
10:30
They certainly stand for the proposition that the denial of summary judgment is something
10:35
that needs to be taken into account.
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But which case says that the denial of summary judgment includes a fee award after trial?
10:44
Clerk
MR.
10:45
Appellant Attorney (William A. Delgado)
So, Your Honor, the Checkpoint case says that where there is no misrepresentation,
10:50
a party can rely on denial of a motion for summary judgment.
10:54
Can rely on, but it doesn't say that this includes appeal.
11:00
Fair enough.
11:01
A party can rely on a motion,
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denial of motion for summary judgment
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in connection with a fee award.
11:08
But here, the fee award was made without consideration
11:11
of the denial on the motion for summary judgment.
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And so...
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Judge HUGHES
What do you mean it was made without consideration?
11:17
Without consideration, the judge certainly knew
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that summary judgment had been denied.
11:23
Appellant Attorney (William A. Delgado)
But there was no analysis of how that denial of summary judgment
11:26
played into what was presented in trial.
11:28
And keep in mind, there's two different judges here.
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So the award, to the extent that one was...
11:34
Judge HUGHES
Sure, but they're both the trial court judges.
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They get a look at the record.
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They get to make a decision within their discretion,
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and we review it for an abuse of discretion.
11:41
And we assume they knew what happened.
11:46
Appellant Attorney (William A. Delgado)
Okay, well, if you make that assumption,
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that certainly would have...
11:49
been the purview of this court.
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But again, there was no indication in the order
11:52
that that actually occurred.
11:54
Judge DYK
Did you argue that to him,
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that there should be no fee award
11:58
because of the summary judgment denial?
12:01
Appellant Attorney (William A. Delgado)
I believe we did.
12:02
I can't remember specifically if we did or not.
12:04
I apologize, Your Honor.
12:06
You would be well off to be familiar with that.
12:10
I would.
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And when I sit down, I'll look at that again.
12:13
Judge REYNA
Can you address the issue on the due instruction?
12:16
Appellant Attorney (William A. Delgado)
Sure, I was going to do that in rebuttal,
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but I can do that now.
12:18
Your Honor, the...
12:19
In order for...
12:20
echo to prevail on its argument
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that the jury instruction was erroneous,
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they would have to show that the instruction as a whole
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failed to capture the law correctly
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and show harm.
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In this case, we don't think they can show harm
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for a couple of different reasons.
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Number one, the jury instruction...
12:37
Judge HUGHES
Can you address whether the instruction is correct first?
12:41
Appellant Attorney (William A. Delgado)
Sure.
12:42
We believe the...
12:43
Judge HUGHES
I mean, I know you pulled it largely
12:45
from a model jury instruction
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from the Federal Circuit Bar Association,
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but it seems a little problematic to me
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that it's directing part of the standard to the jury
12:57
to determine whether the jury thinks it's worthy of punishment.
13:00
That seems to me to go to the ultimate question
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of whether enhanced damages should be awarded,
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which is what the district court should decide, right?
13:09
Appellant Attorney (William A. Delgado)
I disagree with that.
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Judge HUGHES
Okay.
13:11
You disagree with that?
13:13
Appellant Attorney (William A. Delgado)
I mean, in practice,
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the district courts have been awarding enhanced damages.
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I think if you look at...
13:19
Judge HUGHES
I mean, it's not really worth having a discussion.
13:21
If you can't read HALO and recognize
13:24
that the ultimate question of whether enhanced damages
13:28
is a question for the judge.
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Questions of fact, like willful infringement,
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can go to the jury.
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But the ultimate question of whether or not
13:40
to award enhanced damages is always for the judge,
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even if he asks for an advisory opinion from the jury.
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Is that not a correct statement of the law?
13:48
Appellant Attorney (William A. Delgado)
Your Honor, I think HALO has to be read in context with Feltoner.
13:51
Judge HUGHES
Okay.
13:53
Appellant Attorney (William A. Delgado)
And Feltoner says that statutory damages,
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which are punitive in nature,
13:57
are a civil litigant can get a Seventh Amendment jury trial
14:02
on statutory damages.
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If enhanced damages are there to punish a civil litigant,
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just as statutory damages would be,
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then one would surmise that enhanced damages
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can also be a jury issue.
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To circle back to the question about whether or not
14:19
the construction was correct, we believe it was,
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because when you look at the...
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Look at the words egregious, willful, wanton, malicious,
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conscious disregard in HALO,
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these all appear together basically in two sentences
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right next to each other.
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And as a result of that, we believe that there is
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synonymity between these words.
14:37
Judge HUGHES
But that's only true if the jury gets to decide
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all of those questions,
14:41
not if one of them is for the district court.
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Appellant Attorney (William A. Delgado)
No, I think that they can be synonymous
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without that determination.
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In other words, if willfulness and maliciousness
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and egregiousness are all synonymous,
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then all of those can make their way...
14:54
Judge HUGHES
No, punishment.
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Because punishment is the sentence that's problematic here.
14:58
Because that seems to me to be the ultimate purpose
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of enhanced damages, which is to punish
15:03
the willful infrinter.
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And that question, just assume I'm right,
15:08
I'm tired of arguing about this,
15:09
just assume I'm right that that question
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can only be decided by the district court.
15:13
Isn't having that question about punishment
15:15
in a jury instruction problematic?
15:19
Appellant Attorney (William A. Delgado)
If I assume that you are correct, then yes.
15:21
The worthy of punishment language,
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which might be problematic,
15:25
but when we read the entire instruction as a whole,
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it becomes harmless error.
15:30
Particularly because this court has previously...
15:32
Judge HUGHES
The district court didn't seem to think so.
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Appellant Attorney (William A. Delgado)
I understand that that's what the district court said,
15:37
but when you look at the facts of the entire...
15:39
Judge HUGHES
Well, that's not our call, right?
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The district court is the entity that has the discretion
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to determine in the first instance
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whether enhanced damages are available.
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And if he said he could have considered...
15:54
considered them and might have considered them
15:55
absent this finding,
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then that's a call for him to make,
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not for us to look at the record
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and substitute our judgment in the first place, is it?
16:02
Appellant Attorney (William A. Delgado)
No, I think this court can determine
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whether or not, based on the record before it,
16:06
if the error would or would not have been harmless.
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Judge DYK
Yeah, but part of your problem here
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is it seems to me you've got the wrong standard
16:13
for harmless error in your brief.
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What you argue is that the jury could have found
16:20
that this was not willful.
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And that may be, but that's not sufficient
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to show harmless error.
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You'd have to show that the evidence was such
16:31
that the jury had to find that it was not willful.
16:36
So the whole context of your argument
16:41
is not correct, it seems to me.
16:43
Appellant Attorney (William A. Delgado)
Well, Your Honor, I respectfully disagree
16:45
because if you look at the four factual...
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Wait, wait, wait.
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You disagree with me about the standard?
16:51
The standard is not...
16:51
No, not on the standard, on what the evidence showed.
16:54
Judge DYK
Okay.
16:55
All right.
16:55
Well, I think we're out of time here.
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We'll give you two minutes for rebuttal.
16:59
Thank you.
17:00
Mr. Lowe.
17:08
Well, let's...
17:10
Good morning, Your Honor.
17:10
May it please the court.
17:11
Yeah, good morning.
17:14
Let's turn to the willfulness instruction here.
17:18
Yes, Your Honor.
17:19
I mean, it does seem to me on the face of it
17:21
that it allows the jury to find willful infringement
17:27
if the infringement was deliberate, right?
17:30
It does allow that to happen.
17:34
Appellee Attorney
Your Honor, you're correct.
17:36
It does say among examples,
17:38
malicious, deliberate, consciously wrongful,
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or done in bad faith.
17:41
The problem is the inclusion
17:44
of the only the most egregious behavior standard before
17:47
basically tells the jury
17:49
that you have to find a heightened form of willfulness,
17:52
which may or may not include...
17:55
Judge DYK
I'm not sure that's true
17:56
because it says only the most egregious forms of behavior,
17:59
instance of which it...
18:01
are deliberate.
18:02
So the jury is told you have to find it's egregious,
18:05
but deliberate infringement is egregious behavior.
18:10
So it seems to me a little hard to read
18:14
that particular part of the instruction
18:18
as saying that you have to find it's egregious.
18:22
Really, in the abstract, what it seems to be saying is
18:25
you have to find it's egregious and deliberate infringement
18:28
is an example of the kind of...
18:31
egregious behavior we're talking about.
18:34
Appellee Attorney
Your Honor, the problem is
18:36
is when you predicate
18:37
whether a finding of one of these degrees of willfulness
18:41
on being egregious,
18:42
you're immediately casting it in the light
18:44
of a heightened standard.
18:46
This court has long held that willfulness,
18:48
there's a spectrum of standards.
18:49
It can be as simple as deliberate or intentional,
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or it can be a heightened standard
18:53
of malicious or done in bad faith.
18:56
Here, this jury instruction specifically said egregious,
18:59
which cast in the light of the heightened standard.
19:02
But that's not all.
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Counsel suggested that this need to be looked at as a whole.
19:06
Well, then, what do you do when you have this additional issue
19:09
of especially worthy of punishment?
19:11
Because that takes it out of a whole different realm.
19:14
And from the beginning, halo decoupled willfulness,
19:18
which is a jury instruction looking for the subjective.
19:21
No, we understand. We understand.
19:22
Okay, Your Honor.
19:24
Judge HUGHES
Let me ask you this.
19:25
If that especially worthy of punishment line weren't in there,
19:28
and all we had was the last sentence about...
19:32
Was there for egregious behavior and has that whole list of examples,
19:38
which includes merely deliberate, would there be a problem here?
19:43
Appellee Attorney
I think there would, Your Honor.
19:45
Halo mentioned the word egregious six times,
19:48
never in the context of defining willfulness.
19:51
It was always in the context
19:53
of what constitutes an exceptional case.
19:55
There's two things here going on.
19:57
We have willfulness, subjective intent, whether they knew
20:00
or should have known or acted with,
20:01
reckless disregard, that's something for the jury to decide.
20:05
When determining an exceptional case, which applies to 284,
20:09
enhanced damages, which applies to 285, that is the province
20:13
and always has been of the judge.
20:15
You can't ask the jury to see whether this case stands apart
20:17
from the others, this likely was the jury's first instance
20:20
of ever seeing the case.
20:22
That's the province of the judge who have seen many cases
20:24
and to decide does this case stand out different from others.
20:27
Judge HUGHES
So your view is that last sentence is also problematic
20:30
because whether something...
20:31
or not is egregious behavior is a question for the judge as well.
20:36
Appellee Attorney
It is, Your Honor, because it's...
20:38
then you go back and look at the read factors,
20:40
the nine different factors, one of which is willfulness.
20:43
Unfortunately, over the years, there's been many decisions
20:47
which have caused confusion with the court.
20:49
In 2005, perhaps the best example of that was the CIS
20:54
versus Munns-Priszer Court, 408 F. 1374,
20:58
where this court said willfulness requires a show
21:01
in that the totality of the circumstances evince
21:04
the egregious conduct that constitutes willful infringement.
21:07
With due respect, that's hard to fathom and what that's led to is
21:12
that over the years, the courts have used it as a shorthand,
21:15
district courts, as a shorthand.
21:16
Judge DYK
What case do you have from our court after Halo that says
21:21
that referring to punishment in the jury instruction
21:24
or egregious behavior in the jury instruction is harmful error?
21:29
Appellee Attorney
So I don't have one that says...
21:31
I don't have one that says harmful error,
21:32
but here's what I have, Your Honor, and I canvassed the cases.
21:36
We have the Western Geico case, which talked about the fact
21:41
that the patentee need only prove suggestive willfulness alone.
21:45
In other words, it decoupled in that instance,
21:48
and it was after Halo and spoke to Halo and said you have willfulness
21:51
and that's different than enhanced damages.
21:54
And then we have the Arctic cat case, 876 F. 1350 in 2017.
22:01
Where this court explained under Halo, willfulness can be found
22:04
when there's a subjective willfulness.
22:06
Nowhere in that case did they indicate an express
22:10
or implied component of egregiousness.
22:12
That's what we have.
22:13
Judge DYK
That's all true, but I guess what you're saying is that we don't...
22:18
This is an issue of first impression as to whether including references
22:23
to punishment and egregious behavior in jury instruction is harmful error.
22:27
Appellee Attorney
I think it is, Your Honor.
22:28
Unfortunately, the imprimatur
22:31
of the Federal Circuit Bar Association for several years has been used,
22:35
and that's all that we as litigants and courts have to rely upon
22:38
because we don't have other jurisdictions.
22:41
But here's what the result of that has been.
22:43
Within a span of two months...
22:44
Judge HUGHES
Did you propose a different jury instruction on this issue?
22:48
Appellee Attorney
We did, Your Honor.
22:49
Judge HUGHES
And it didn't include...
22:50
It wasn't the Federal Circuit Bar.
22:52
Appellee Attorney
It was not.
22:53
We specifically struck out language.
22:56
We started with the Federal Circuit Bar, and then the court, we raised the objection,
23:00
and the court then...
23:01
And asked for briefing.
23:03
Judge DYK
And you originally agreed that the instruction was fine.
23:06
Appellee Attorney
Well, Your Honor, we preserved our objection.
23:09
There's been no question about that.
23:11
Judge DYK
The judge allowed you to backtrack and change your position.
23:15
Appellee Attorney
Well, and...
23:16
I want to talk about how significant this is, and even if it is an issue of first impression,
23:22
it's one that the court needs to take up.
23:24
We cited in our case the Erickson District Court case from Texas.
23:28
We cited the Ballenge case from Michigan.
23:31
Delaware.
23:32
And then our case.
23:33
Within the span of two months, in 2018, three different courts struggled with this.
23:38
Judge Payne in the Erickson case at first had a jury instruction very much like the
23:43
Bar.
23:43
He says, punishment, egregious, to find willfulness.
23:46
And then after Arctic, he came back and said, all right, I understand now.
23:50
It seems that we do need to decouple willfulness, which is...
23:53
Judge DYK
Okay.
23:54
But the issue here...
23:55
I mean, why don't you just assume that we're not going to bless this instruction?
24:03
We're not going to say this is the way to do it.
24:05
The question is whether we need to set aside the jury verdict and have a new trial because
24:11
there was some language in here which was undesirable.
24:15
Whether we have to find that that's harmful error and start all over again, which courts
24:20
are reluctant to do.
24:22
That's why there's a harmless juror doctrine.
24:26
Appellee Attorney
Yes, Your Honor.
24:27
But this case is one that mandates this.
24:29
I couldn't probably have drafted facts that are more compelling to show that this was
24:34
harmful error.
24:35
I don't think there's anything there in this situation.
24:35
Judge REYNA
You could have if it had happened this way.
24:37
Let's look at the...
24:38
If you look at the first paragraph of the instruction, and that's the one that contains
24:43
the wording we're talking about, especially worthy of punishment, reserved for egregious
24:48
behavior.
24:49
But that's followed by a second paragraph that enumerates different instances, which
24:55
all of them seem to me to be correct or proper.
25:01
So, assuming that there's some prejudicial effect as a result of this, I don't think
25:05
there's any reason to be concerned.
25:05
I think that the second paragraph is a result of the first paragraph of instruction number
25:07
40.
25:08
Isn't that cured in any way by the second paragraph that sets out a different instruction
25:16
to the jury?
25:17
Appellee Attorney
I'll be very precise about the answer to your question.
25:20
Is it cured in any way?
25:21
I think that it helps, but do I think that it cures the prejudice caused by the first
25:26
paragraph's requirement of punishment and egregious conduct?
25:29
No, I do not.
25:30
And neither did the district...
25:31
Judge REYNA
But that second part is fine, right?
25:33
I mean, that would not be legal there.
25:34
Appellee Attorney
Yeah, the second part is fine.
25:35
That's correct, but unfortunately, taking it as a whole, it is legal error because it
25:40
tells the jury, putting them in the place of the court.
25:43
You have to compare this to others and find that this is especially egregious and especially
25:47
worthy of punishment, all things of the province of the judge.
25:50
And in this case, Your Honor, the district court specifically recognized that if this
25:56
was bad law, now, unfortunately, the district court characterized the Bar Association instruction
26:02
as law.
26:03
When it isn't, it's an attempt by the district.
26:05
It's an attempt by the bar to be helpful.
26:06
But he says, if this is bad, this was not harmless error.
26:10
And we know this.
26:11
We can never get inside the minds of the jury, but here we've gotten about as close as we
26:15
can.
26:15
The jury, after five and a half hours of deliberation, came back and said, we agree to everything
26:20
except this one question.
26:22
And we're hung on that, and we have very divergent views.
26:25
And the response to the judge was, go back and read that instruction.
26:29
And when they did, after what was obviously a close call, they came back.
26:32
Well, in this situation, as this court recognized, the standard for harmless error is it's harmless
26:38
if there's no way that the court or the jury could have found otherwise.
26:41
Here, we know from the jury's own questioning that the jury very much could have found otherwise.
26:47
It was teetering on a razor's edge.
26:49
Judge DYK
Yeah, but it's not clear that that was because of the instruction.
26:51
It could be that they were debating whether the evidence was sufficient to show willfulness
26:55
under a correct standard, which is the second part of this instruction.
27:00
We don't know.
27:01
MR.
27:01
Appellee Attorney
Your Honor, I think that's the point.
27:02
I think, as you noted earlier, who is in the best position to ascertain whether or
27:07
not it was harmless error.
27:08
It seems like the district court judge that actually put forward that instruction.
27:12
And that judge found clearly, if this was wrong, if the statement of the law is wrong,
27:17
then I don't believe it was harmless.
27:19
Moreover, if that was wrong, and this is remanded as it should solely for the determination
27:24
of willfulness, then it will reconsider at that time the exceptional case for enhanced
27:30
damages and attorney's fees.
27:31
This is perhaps, as I said, the most classic case, scorched earth litigation, all the
27:37
reasons that the judge looked at for exceptional.
27:40
He was teetering on the edge of granting more award of sanctions or enhanced damages but
27:46
for this willfulness finding.
27:47
Because this was based on an inaccurate statement of the law and the jury was teetering on an
27:52
edge, I don't see how it can be considered harmless.
27:55
And even though the court is loath to remand, in this case, to affirm everything else which
28:00
was proper, and I'm happy to talk about the other issues that were raised, they seem
28:04
pretty pedestrian compared to this, but this case needs to be remanded for a jury determination
28:10
of solely willfulness.
28:12
And after that, a reassessment by the court within its purview about whether or not it
28:16
is an exceptional case and further that enhanced damages and additional attorney's fees may
28:21
be warranted in this case of scorched earth litigation by arm that finally needs to be
28:29
stopped.
28:30
Judge REYNA
So let's go back to the claim construction issue, okay?
28:34
On page 12, this is appendix 12, page 12 we have the district court's opinion and at
28:40
the very end, the court says, the court finds that one skilled in the art would, in light
28:45
of the intrinsic evidence, construe passageway as a narrow space of some depth or length
28:51
connecting one place to another.
28:54
Where in the intrinsic evidence do we find any reference, if not a linear reference,
29:00
that the passageway be narrow, that there be depth and length to that passageway?
29:08
Appellee Attorney
Your Honor, it's in the patent.
29:10
Look at the figures.
29:12
This is something I want to correct.
29:14
The figures themselves show the difference between an opening, and I'll refer you to
29:18
the capsule itself, which has a lid.
29:20
There's an opening, which is a flat with no depth or length, to where the…
29:24
Judge REYNA
Figure 1 shows only a simple hole.
29:26
It doesn't say narrow and it doesn't refer to depth.
29:32
Just a hole.
29:34
Appellee Attorney
Right.
29:35
Figure 4, I believe, shows a hole in the top and it shows the passageway where the needle
29:40
goes in the bottom, which has depth or length, and it must have depth or length to allow
29:45
for the needle.
29:46
See, there is a difference in how the terms were used.
29:49
Opening, as this court recognized, was not used the same as passageway, and this judge,
29:54
relying on the intrinsic evidence and how it was used, where you say an opening in the
29:59
top, which is flat, does not have a passageway.
30:00
Where in the court's opinion does it say that?
30:06
Judge REYNA
All it says is that it relies on the intrinsic evidence.
30:10
Appellee Attorney
So I understand, if I understand correctly, you're critical of the district court because
30:15
it didn't refer to Figure 4, which shows the depth or the length or something.
30:19
That may be the case, but it still was present in the patent that the court looked at, just
30:24
because the patent didn't point to specifically Figure 4.
30:27
Okay.
30:27
Judge REYNA
So we can't import a limitation out of a single embodiment, correct?
30:32
Appellee Attorney
That's correct, but every embodiment that they talked about, even when they get down
30:36
to defining the millimeters, how different it is, every single time they talked about
30:42
the passageway, they talked about it being configured to receive the needle.
30:47
In other words, something that had depth and length.
30:48
Every time they talked about the opening on top of the lid, they did not talk about something
30:53
with depth or length.
30:54
So they used opening different than passageway.
30:56
Judge REYNA
Why does the opening to receive the needle have to have something different than the
31:01
opening to have some, let's say, narrowness to it, or even depth?
31:06
Why can't it just be like through a wire mesh, for example?
31:10
Appellee Attorney
Well, it has to have depth or length because they say that it prevents the needle from
31:14
penetrating the brewing material that's inside.
31:17
So in other words, it has to have some kind of a depth to be able to act as an offset
31:22
before the needle from piercing the contents of this container.
31:24
So that's the difference between that and the opening at the top, where the needle is
31:28
meant to go in and pierce the container.
31:32
Judge DYK
The only...
31:33
If we were to sustain the determination of invalidity of these claims, this infringement
31:41
issue only affects the attorney's fees?
31:44
Appellee Attorney
You're right, Honor.
31:45
And that's the other thing.
31:46
The obviousness with the counsel, just like you did Belosim, is no time dealing with it
31:50
all because you can't overturn the jury branding of the pieces and the court's ultimate determination.
31:56
The claims are going to be invalid, just like this court held last year in the Federal Circuit
31:59
about claims five and 18.
32:01
So it's a moot issue.
32:03
But beyond that, it still does, because of the way that they prosecuted those, notwithstanding
32:07
the fact that they should have known that they were invalid.
32:10
This court held that the independent claims were invalid, and they pressed the issue admittedly
32:16
simply to keep the injunction from the ITC alive against our client, precluding them
32:21
for more than a year.
32:22
They kept that alive all the way to the time of trial.
32:24
They didn't participate in the special jury verdicts.
32:28
They spent a little time.
32:29
Judge DYK
That's where they stood at peace for the obviousness question, right?
32:32
Yes.
32:33
Okay.
32:33
Not this fee issue.
32:35
Not the fee issue related to infringement.
32:38
Appellee Attorney
Right.
32:39
There are the two fee issues, one related, but they didn't challenge the underlying merits
32:42
of that.
32:43
They only said it rises or falls with whether or not this court finds that there was non-infringement.
32:48
Judge REYNA
If we were to reverse on this claim construction issue on Passageway, what does
32:53
that do to the sum of judgment decisions?
32:58
Appellee Attorney
Well, they still – the claims are still invalid.
33:01
It does nothing with those.
33:02
Because the claims 8 and 19 were still found invalid after trial by the jury.
33:09
And so the issue with respect to the claim fees having to do with obviousness pertains
33:15
to that.
33:15
This would have no impact.
33:17
It's not like –
33:17
Judge DYK
Well, obviousness becomes more difficult under the court's construction of Passageway.
33:21
I'm sorry?
33:22
The obviousness argument becomes more difficult, not less difficult, depending on the Passageway
33:30
construction.
33:31
Appellee Attorney
Actually not.
33:32
Because the only things that were challenged on the obviousness argument were the brewing
33:36
chamber element and the lid element.
33:39
Passageway was not even an issue with respect to the obviousness.
33:42
Judge REYNA
But non-infringement on the 320 patent, that was granted based on construction of Passageway.
33:48
Appellee Attorney
Correct.
33:49
Non-infringement was based on Passageway.
33:50
Judge REYNA
So if we reverse on the construction, we'd have to reverse on that.
33:56
And the same is true with the 320 patent, attorney's fees relating to non-infringement.
34:04
Appellee Attorney
No.
34:05
So to be clear, Your Honor, on the first one, the court denied arms motion for non-infringement
34:12
because of the Passageway issue.
34:14
That's true.
34:15
On obviousness, that's the one that went all the way through trial, and the court found
34:20
there that there was obvious, and then it awarded attorney's fees because of the manner
34:25
in which it had been pursued, even though it was a meritless case.
34:28
Two different issues.
34:31
Judge DYK
Okay.
34:31
We seem to be out of time.
34:33
All right.
34:33
Thank you, Your Honor.
34:34
Mr. Delgado?
34:39
Yes.
34:40
Appellant Attorney (William A. Delgado)
Thank you, Your Honor.
34:41
I realize I went over time, so I'll try to be brief.
34:44
With respect to the question that was raised, what happens if you reverse on the construction
34:49
of Passageway and the 320 patent, as I alluded to before?
34:52
If you reverse that construction, then the motion for summary judgment that was granted
34:57
in ECHO's favor of non-infringement would also have to be reversed.
35:01
Judge DYK
Well, not necessarily.
35:03
If we say that the construction was wrong, but still a Passageway is not an opening,
35:09
and it's not a non-infringement, then it's not a non-infringement.
35:09
I mean, the summary judgment record showed only an opening.
35:13
Appellant Attorney (William A. Delgado)
If this court were to substitute a construction of that nature, then I agree with Your Honor
35:19
on that.
35:20
Nevertheless, with respect to whether or not a Passageway is or is not an opening, at page
35:25
16 of our reply brief, we pointed to a couple of different points within the specification
35:30
that highlight that the words opening and Passageway were used interchangeably for the
35:35
bottom part of the receptacle, and those are at Column 5, lines 23 and 24.
35:40
In Column 6, lines 53 and 55 of the 320 patent.
35:45
And so there is room there, or not room, but there is wording in the specification that
35:52
shows that those terms are used interchangeably.
35:55
Judge DYK
So we're, show me that again.
35:58
Appellant Attorney (William A. Delgado)
So, Your Honor, in the 320 patent?
36:01
Yep.
36:02
Columns 5.
36:03
Judge DYK
What lines?
36:04
What page are they?
36:05
Line 22 through 28.
36:06
Page 90.
36:09
22 to 28.
36:17
Appellant Attorney (William A. Delgado)
That doesn't use the .
36:19
It doesn't use the word opening there.
36:20
No, and then, right, that's the Passageway, and then you compare that to Column 6?
36:24
Yeah.
36:24
Line 53 to 55.
36:37
Judge DYK
But wait, but that's a different opening.
36:39
It's not the, not the, not the Passageway opening that we're talking about here, right?
36:44
Appellant Attorney (William A. Delgado)
It's a different figure, but in both cases it's talking about the...
36:50
No, but it's an outlet.
36:51
Judge DYK
It's a, right?
36:52
To allow for the outflow of the beverage.
36:55
Right.
36:56
That's a different opening or Passageway opening.
36:58
passageway than the one we're talking about here, right?
37:01
Appellant Attorney (William A. Delgado)
Well, if you look at column five, where it talks about passageway...
37:03
Judge DYK
But answer my question.
37:05
Isn't that true?
37:06
In column six, they're not...
37:08
This opening, which you're referring to in lines 54 and following, is a different opening
37:14
than we're concerned with about the definition of passageway.
37:19
Appellant Attorney (William A. Delgado)
I don't believe it is, Your Honor.
37:21
I think it's ultimately both are referring to the hole at the bottom where the fluid
37:26
outflows the capsule.
37:29
Judge REYNA
There's multiple, as we've just seen, there's multiple references to passageway in this
37:35
pen, but I don't see any of them that reference to narrowness, depth, or specific length.
37:44
Am I missing something?
37:46
Appellant Attorney (William A. Delgado)
No, Your Honor.
37:46
That's exactly correct.
37:47
In fact, when you asked the question, why does it have to be narrow to accept the needle,
37:52
I would submit that it does not have to be narrow to submit the needle.
37:54
It has to be of a certain width to accept the needle, but it doesn't have to be of a
37:58
certain length.
37:59
And therefore, it doesn't have to be narrow.
38:01
It could be quite wide and still accept the needle.
38:04
Judge REYNA
In column nine, lines, let's say, six or seven, it says, when the reciprocal has at
38:12
least one passageway that provides fluid flow from one interior of the receptacle to the
38:18
exterior, and I find similar passages that way, but none of them seem to, none of them
38:25
do require or even mention narrowness, for example.
38:30
Appellant Attorney (William A. Delgado)
Yes, I think that is correct, Your Honor.
38:32
Judge REYNA
But what does it matter if we were to reverse on this claim construction, what does that
38:37
do to the rest of the case?
38:38
It seems to me that your answer to Judge Adiakis was that at the end of the day, it doesn't
38:44
matter.
38:45
Appellant Attorney (William A. Delgado)
Well, no, you'd have to, our position is that if you reverse on that construction, that
38:49
would lead to a reversal of the grant of summary judgment of non-infringement, which would
38:53
then lead to vacating the first fee award, because that fee award was granted as a prevailing
39:00
point.
39:00
And therefore...
39:01
Does it affect invalidity?
39:05
No, that would not affect invalidity.
39:08
I see that I'm over again.
39:09
Thank you.
39:10
Thank you, Your Honor.
39:11
Thank both counsel and case system.