means of the mask work is fixed in the chip so it is one to one with the chip and therefore as altair is expert with it every element of the chip is three d and in fact the chip has to be multi layered and therefore in three d by statutory command nine zero one n one day and congress was very graphic about it senate report two to three house report eleven to twelve put it this way a chip is a multi layered sandwich complex it has a topography the hills and valleys and an intricate terrain and the last item quickly the layout is one to one with that intricate three d math work that is one to one and in fact everyone has a party when you're finished with it and accordingly or if i understand it right that's basically what the district court said is that the arrangement or selection of combination of the electrical component is protective whereas your position is that only the arrangement of transistors act the transistor level and on the chip on the chip  that everything isn't cheap well let's try to be real clear on what's going on here the district court terra say look there are a arrangements of large blocks functional blocks on the chip they are in two d there is no doubt about that they are on the chip in the sense that that general arrangement and the relative arrangement and placement of the groupings on the chip are on the chip but when you look at the complicated intricate terrain of the chip which is what congress had in mind and what it protected under nine o five there is no similarity whatsoever it's actually a totally different chip now just one point before i get to the totally different part of this congress knowledgeable about what fixed it that's it nothing else that was the expression that congress protected now with respect to differences there's no contest here there really isn't our expert stood up there and went over it in gory detail in three d and showed that the chips on labs the s rams the amplifiers the connection lines if if i understand it right the case went to trial on substantial similarity and importance of the selection arrangement combination of the electrical components and you say that's here if that's there then what should have gone to trial well frankly they don't didn't put together evidence which should have put the chip back claim to the jury because as your honor said when i just said it was undisputed that is this a three d level there is no similarity between these two trips and game so we have to buy into the proposition that nothing about the combination or selection arrangement of the electrical components is protective yes what would be the correct instruction to consider only the you have seen crannies at the transistor level or to consider the entire live each each of the layers together with the imprint on it i would say that the two alternatives that your honor put are the same the the terrain of the chip is what is protected the whole chip at that level is protected what is not protected is the one to it is the two d kind of the picture of these items on little squares and blocks and perhaps i want to get to that and try to clear it for a position up here the court said to the jury the layout of the mask work and the mast work laid the functional blocks out which terrorists as the arrangement we copy we set that's wrong  was talking about blocks squares in rows they're not drawn on any mask or mask work you will not see them on the chip no matter how hard you strain for it they don't that's protected or anything on the chip much less one to one and in three d and in fact they didn't even exist at the time the mass were created in the chips were and they're drawings that hers on our brief page twenty one on the left hand side you'll see some squares you'll see some rows they'll say eighteen labs and ten ellie's e a a be used but the boxe well you can look at a layer which will itself be in three d but there should be no mistake here that there's no charge that at any mask layer level any mask work has been caught any mass that goes into mass work has been copied there is no such charge and no evidence to support it there is when you get to the end of the day the mask work which is the depiction of the entire chip looks and crannies the intricate terrain of it together with the arrangement well the functional blocks which are not protected in are not in three d but the functional blocks are the architecture and the arrangement of them in the relative placement to use their phrase that their phrase of them  a part of me is not protected and that's what they're talking about being protected and that's what we're saying isn't council on that i'd like to ask you a question that maybe could simplify the matter for me  this is the problem of common law unjust enrichment i developed a computer chip very useful  engineering i didn't here like it on everything i did and it cost me a million dollars to develop that chip and you go through reverse engineering and you gave everything that you know that i did you find out about and then you develop a chip is better than mine based upon all well for openers there's no common law claim here with respect to what your honor just talked about i'm not talking about statute i'm talking about i'm talking about due process of law that you can take somebody privately and become useful to not have to pay for well that's what congress say that there could be a construct in some place at some time which would say yes to that question but it's not this place in this time because the congress is statute pre amps any common law claims and there was no components that are embodied in a mask work and therefore the chip is something that the reverse engineer is quote from a house report twenty two  which the reverse engineer competitor is quote free to copy the circuitry the logic flow or the organization of components embodying the mass work that engineer is free to copy and the reason for it is among other things that congress was quite concerned that there's very very energetic and from my vantage point unbelievable industry moving as fast as it would be slowed down and it didn't want that to happen there had been a tradition in the industry of reverse engineering and congress a very clear i think and for the common good therefore i can i can use your property for my benefit when i have to pay for it well you cannot you cannot use my car your honor but you can certainly reverse engineer in the way that i have described and the problem with this case as the reverse engineering part of it is the court knows is that the court's instruction simply took what congress said about the organization the components out the statute is gone and so has the right to copy out of the statute it's gone and that's quest clear i'm getting a little concerned here because i do want to save some time for  program quote for the purpose of the programming logic devices that are sold by altera and the court ruled as a matter of law that program in effect included the bitstream notwithstanding that the bitstream was the program and not the program and in effect if so instructed the jury i asked just wrong on the contract face and in fact and on its face to start with the contrast the contract doesn't say a word about the bitstream let the in limited nothing to do with it that's particularly striking since the license says that the customer must destroy the program upon the terminations of the license but not the bitstream and it also says that the customer cannot transfer the program to a third party but it doesn't say that about the bit stream so the court just read into the contract exactly what the contract does not say but there's not also simply the face to look at the facts are that the a bitstream is the product of the customer choice it's the customer's design his logic design his creation is even the court put it at three eighty seven and eight the customer owns it now terra has no intellectual property rights in it and the license expressly makes the customer responsible for the program's results now one with think surely a reasonable person who'd think that if the license or wants to take the customer's ownership right away and bearing in mind that he's also responsible for what he owns it's a pretty odd thing to do and if you don't say you're doing it you have not intended to do it particularly because by the customer and the customer is absolutely free to use it that's the custom and the court's answer to that was everything i've just talked about is utterly irrelevant and the court rejected some seven offers of bitstream who's responsible for who creates it is directly relevant to who gets to use it and given that both parties to the contract were in the industry industry custom with respect to the technical meaning of the words in the contract is as a matter of law relevant under civil code sixteen forty forty forty five so this case just got off the rails stream is the product of the customer's choice he chooses the design he that she waits the design that he wants his logic design by using the software of the customer when it comes to clear logic i misunderstood your honest question enterprise and perhaps i'm confusing both of us here at the point of the customer it is the customers choices with respect to the design and the creation of it which begin the process and he uses as a tool to bitstream to e weight his desire to source the resources that he wants to desire that he wants to resource and therefore effects you wait his goal but it is not a trivial process no one should have in mind that you just kind of punch a button so you've got a great logic idea let's do it the evidence is that it's a six months to twelve month exercise for the customer who's responsible for what he's doing the contract to achieve his goal no i don't i'm not sure i understood is that it's done as i understand with software it is now by the customer it is not done extract from it the logic design that the customer wished to effect and we do that by means of a patented program which it was pretty great but that is that that's that's the end result i don't want to wear out my welcome here i do have one last point on preemption that i would like to make the court ruled that the use of the bitstream was in effect the use of the program now that's either wrong or it's right we say it's wrong it's the product of it program i mean sorry the use of the bitstream is itself the use of the program that's was the court's reasoning use of it by clear logic now my point here is  they're one of two choices either that's wrong or it's right if it's wrong as we say it is they have no point if it's right then what their logic is an infringement it well i'd like to know that i think that would be an interesting question to ask the other side do they think it would claim interfering with the product that's for by using software t let me get the magic words you quibble and of an infringement if the if the claim amounts to the equivalent of an infringement then or whether it is not ok interesting and novel but let's start with the torture claims in this case the crux of the issue is that the al terrorist software is used to generate what's called place in route logic functions that are part of a big strain that is output from the software and put into the al terra chips so when our agreement says you may use the licensed programs for the sole purpose of programming logic devices manufactured violets are we're saying you can take the output of our program and put it into our devices our argument here is that there is no rational way that that language can be construed to mean you can take the output of our program and put it into a clear logic device and none of the evidence that they presented made that a rational interpretation because that true we think there is no defense here if they mention the ownership of the bitstream there's no evidence for the record one way or another on that issue judge where specifically said i'm not going to reach that issue because it's irrelevant doesn't matter who owns it the specific language sends in the agreement you can only use the program to program l terror devices you also mentioned a declaration from a mr plath they submitted some materials to the job which were rejected on numerous evidentiary grounds and they did not appeal those so that is not properly before the court so i think the key issue is the specific interpretation they would like to have is explicitly scooted by the language in the agreement itself with respect to the preemption argument the answer is quite easy there is no cases that they've cited that has found the right on point on this issue so is the national rental car case which is in a circuit case so those are those are my responses on the tort claim before moving on to the masterwork if you have any questions please let me know now with respect to the master claim that we lost sight of there are two separate aspects of what we are claiming here there are interconnection lines on a chip and then there are structures logic structures that perform functions on the signals that are delivered by all those electrical wires we presented evidence at trial that allows us i mean five i guess five chips maybe fifty thousand lines were copied one by one to precise places from our chip into their chip they've not presented anything to suggest that those are not important or material they haven't disputed with evidence that those are substantially similar layouts they haven't disputed that those are original layouts to al terra they haven't disputed that those are unique layout features to alex are they've also of the semiconductor device as we've set forth in the fact section of our briefs there are specific structures that are made up of groupings of transistors that have to be placed in particular locations in the actual chip with precise mathematical geometry that are then reflected exactly in the mask work that's created but that's not the only thing that's that's done in creating a mass you've got to connect all of those thousands and thousands of structures with lines that run in particular ways and are grouped in particular ways we presented evidence that they copying all of those interconnection lines precisely into their chairs and chip at best what they've done is to say by by placing a grouping of transistors in one place that's not protected i think their stuff or questions i don't think there's any dispute that the lines that the layout engineer draws on the chip and that are built on the chip are three dimensional they exist in the chip the real and they're protecting causing the problem that i have  to be too severe and to get public policy i think the permanent injunction is limited it's it doesn't tell them that you have to go out of business it tells them you cannot use these features that you've been friends you can go to any other chip congress contemplated that just like in copyright cases your remedy as a copyright holder is not only monetary but it's also injunctive relief you are entitled to injunctive relief to prevent people from ideas i understand were the mask work act was was stated by congress to be interpreted by the copyright rules that are normally applied in copyright is the mass work act is an extension of the copyright act it's chapter geometries of thousands and thousands of lines and thousands of structures it's just it's hard to fathom that that would happen because the masterwork act protects the actual physical layout of all of these features well that's the you have to conclude that the jury found that that wasn't important that right the during you have to conclude that the jury decided that that wasn't enough to extinguish were they were not features that were required or necessary given the function here over i'm different ways lots of different ways you could have done that exactly many different ways you could have done that clear logic raised a merger defense to argue that we had to do it this way if the only way it could be done judge were ruled on summary judgment that's wrong and they have not appealed that so he looked at that and said there's many different ways you can do it  and the evidence is under speeded that those features actually exist in the mask work they are part of what the mask work designer duds the mask work designer draws each of those lines in the position the grouping of transistors by putting in fact a box around it and placing it into a persona is geometric position on the mask so those repeated structures that you see when you look at a chip are there because some mask work layout designer put them there that's why judge where said this is part of the mask we can't ignore that it's part of building a mask and we can say that congress intended to exclude that from protection what congress appears to have intended to prohibit is piracy of the sort that existed in the early seventy's so he's going to peeling away taking a picture of it and using it for bait but congress was concerned about that but i don't think that's all they were concerned about are they said and you'll see it in the matthews leahy report that mask or call there's a protected not just from wholesale copying but from piecemeal copying and that's why they said the rule is going to be if it's an important or material part of the mask evidence to support giving it right yes exactly all right and i'm going to find that evidence where in the whole trial record summary judgment record you will find that in the  chopped up and we don't have the whole thing the best i could do for you is in the opposition to the elysee amicus brief i have a footnote which gives you pinpoint information about why each of these features mass where he did not say you could copy the organization of the components so i now read the instructions saying that you can only copy th stuff it's not protected what happened instead of the whole thing what happened in this case is there is no evidence that they made a copy of the entire mask for any purpose so you don't even permits one copy of the entire mask if you want to do that and you need to do that to do the reverse engineering that you're planning to do it's innocent in essence the intermediate copy rule that applies in some copyright cases where you can make the copy to make sure that you can do the reverse engineering here they did not make an entire copy of the mask what they did was they studied pictures trying to match and map the features from pictures of the chip into their own design and the only reason they didn't have that was not for the purpose of learning or evaluating they did it for the purpose of just copying and that's why the provision doesn't apply at all because the purpose that's permitted which is evaluating learning and teaching him not for lack of an avid interest right now i'm saying that it was it to the extent there was an error it is not prejudicial will harm harmful in any way because the only evidence was that they did i don't understand why that's your main are you not well because i believe their argument is that the there was error in the jury instruction and that error was harmful yes and i'm saying that the evidence is to the contrary that there was to the extent there was error in the phrasing of the instruction it was not harmful because there is only evidence undisputed in the record ok let me let me pose a different you can't copy for technical parts of the mask or for any purpose including studying it let alone using it to make a better mousetrap it so long as it's not identical and if you've gone through the work and you've gone through all that exercise it can be substantially similar ye ok well it's not just the work of having studied something it's the work of having come up with your own design after having extracted the ideas and unproductive all elements my my coins is that there is no evidence and the record does is to dispute what was presented at trial showing that their intent was not to study or extract on protectable elements at all their their intent from the beginning was to do what if it's protected layout features that your copy then then you have not fallen in the statutory language that says you can only copy for the purposes of learning or a value when you can't copy for the purpose of copying that interpretation would render the entire statute meaningless because everybody's going to look hard at a chip when they're copying it and and that interpretation would excuse wholesale comping as well as piecemeal copying both of which congress said should not be permitted under the act so i understand a copyright principles of reverse engineering which apply the purpose of process from beginning to end including copying of somebody else's mask work to extract those elements so in the context of the entire descriptions he gave of the reverse reverse engineering out i don't think it is wrong follows exactly the pattern of the statute but unsearched different words that are not on protectable concepts and both sections one and coo of the instruction just like legislative history what we intend here is you can copy things that are not protected and that is all and you can't copy things that are protected means unprotected well because what they're talking about there is the functional organization of components and contrast it with the infringement it has contracted with the actual physical placement of those features and if you look at  schrader's comments the comments of the copyright office to the sax what she said was specifically it's the physical arrangement of these features on the chair that are protected it doesn't protect functional organization it doesn't protect circuit diagrams that aren't actually in the physical characteristics of the chip so what congress said was if it's physical if it's actually in the chip has a feature that you can look at and say yes that has a physical existence that has exact geometric relationship with other features that's part of the mask work and that's protected but if we're talking about circuitry in a diagrammatic way that's not actually in chip but actually just as a functional description it's not protected we agree with that we agree with that we're not seeking protection for that we're seeking protection for what the mask work layout designer actually did in placing things in the mask  and if you exclude that you are stripping away protection that congress intended to give because it's part of the mask and indeed it's an important part of the mask to copy the organization of components so it is clear that that instruction is antagonistic to the clear language of the statute number one number two with respect to the proposition that coppery right law principles applied in the first engineering that is false page three on line forty seven of the congressional record the house memorandum specifically states similarly the privilege created by this act such as the reverse engineering right may not be restricted by reference to the narrower privileges that of tain under copyright with respect to the debate about whether we did it for the purpose of copying only the matter did in fact  go to the jury what they're really asking for obviously is a directed verdict on an issue that they knew did not move through to grok the verdict on in the trial court and for very good reason and that's because we did exactly what the x said you're supposed to do we went down there we analyzed that chip we determine from it what its architecture was the organization of its components and then we did with reference to that reverse engineering statute exactly what the statute in the house report says that we can do with respect to the transistor level going to the jury the fact is that if you look at seven seventy eight of our our  the world part of the design layout of the mass work and is not limited to the design level of transistors or other electrical devices so he said that notwithstanding that if the electrical that the transi