please the court there are three issues that we believe would benefit most from oral argument and they would be obviousness infringement of the c shopping cart claims and damages and of course happy to answer any three patents and seven different claims all as a matter of law or clued in even considering can i ask you about that just the debt to the judge in the final opinion really just spends one paragraph on this question was what was he saying was really deficient about the analysis was it just that the guy didn't know pi at the end of the day as a matter of law this is obvious i think you wanted to cut through it that was ultimately what the basis was for the issue was that he that  the expert did not ultimately say i reached the legal conclusion of obviousness you but there's a problem right now because there are certain elements that were not identified in the prior art like the problem namely at least on the three court judge thought there was sufficient evidence on there are you know debates on some of those items but that's conflicting evidence exactly of the kind that the jury should consider with respect to that identifiable product i mean that's a number that's associated with a product i mean it's not the type of thing that you would think you would need to have even in the parts of basic shopping so there's not a debate over whether those elements are there or you're i thought your argument in court a is that those are necessary to be identified  art because they're either intuitively obvious or any expert would have known how to do this so of course what i mean it depends which one you're talking about because there's an assertion that there's a lot of things missing and i don't think that's right in terms of a shopping cart database  direct you specifically to a two three seven five where our expert mr tiddles that simply knowing that you can do something like store information about purchases means that a competent programmer can figure out how to do it i mean what we're talking about is storing product identifier numbers him a database and a shopping cart sounds pretty rudimentary and it is very rudimentary just memory with product numbers what the product is so to say there is no disclosure of a shopping cart database the compuserve shopping mall which was actually a closed network for shopping which existed in the prior art which had millions of transactions had shopping cart shopping cart stores according to mr peddle there's no question that it had shopping cart that said eight to one four two eight eight two one four eight eight two one five one all of those are the presence of a shopping cart the debate in which they call the person holding file there because that's all it is the debate was well does the manuals that talk about the shopping mall show the database and the answer is they're stored somewhere of course that's a database and they can't be that that's anough to prevent the jury from even considering whether or not this is obvious we're talking about the use of traditional shopping conventions moving from a closed network to an open network or from a brick and mortar store because the manual show that there's a shopping cart but it doesn't say shopping cart database in specific detail so you know on that and that's for that those reasons i think that the obviousness clearly should've van and the lack of analysis that the court pointed out at the front which was a throwaway an oral record and then a couple of sentences here is not enough for three patents seven different claims things like a receipt that you have an h t m l like a link like we use on the internet to just get a receipt that's itself supposed to be an invention with an independent claim well so this your own is are you arguing that as a matter of law this court should review the jail well that was as decided by the district court d i think that that was reviewed to novato was there are enough to even say that there's something enough that a jury should consider whether a shopping cart or a receipt is obvious i think that's relatively straightforward that of course so and that's just at  which is that those are the three fourteen that's well above the crosses paths that's claimed thirty four of the three fourteen claims seventeen of the four ninety two and i just asked if let's assume direct infringement it's my view that your stronger or for ninety two so assume we would agree with you on infringement issues with regard to the four nine two that would necessitate a reaming and would it because if we have burned up in other words if we affirm on one patent but not the other what happened what we have to do i think it has to get reversed i mean a minimum of damages because they argue that there's three street different features and if there's only one of the features that wrecks the using not three how could the damages be the same when the language in the jury form says three fourteen patents and or the four ninety two which means they could have decided that it was just for the three fourteen and not the four night this goes to the point your honor that the shopping cart and the way the new egg system works in the patented shopping cart what's contemplated is there's a customer with their computer that buy that clicks they want to product and moves it to the shopping cart and that enters into a shopping cart at the server at the internet retailer one by one and this is a requirement of there being a plurality of messages in a rally of products that collect there and that's the way that system works and that specific it talks about modifying the shopping cart in the shopping cart database which is at the internet retailer and that it's modified and which i think is clearly between that and the plurality of messages show it's the one by one purchasing the way the new like system works which is which is different as a customer as a cookie so the customer isn't talking back and forth to the internet retailer it's picking a product putting it in its own memory picking the product putting in its own memory picking a product putting its own memory then on mosques that all goes and creates an entry in this and in the in the shopping cart database there's no modification in the shopping cart database there just isn't and he and he said any you can look at any evidence that you were clerks look at that supposed to support that will not support that it is not how the system works and i there's no memory in it it's nothing i mean how can you call it something and then all these things go in at once that's not this a plurality of messages and modifying things while in the shopping cart database let me move last to damages which is very important issue here assuming that the court upholds the rulings otherwise if we don't think for the reasons that are in our brief and i just articulated this is a multimillion dollar verdict and there was three fundamental errors the first error which is conceded is that they used the twenty five percent rule to come up with this pie in the sky number that change the whole damages arising right but the answer the argument is that it was harmless error because when you calculate the numbers of them was perfect it doesn't appear to have any relationship to that and that is absolutely right they concede error legal error by the court and i suppose you mean denying the daubert in letting an expert do it there's also the number dropping there were dropping well there's two billion dollars of sales they have against yeah but what's your answer to the harmless and i'm happy to address the answer on the harmless error is that the damages number was two point five million that was the that's accepted by the jury there was no evidence in this record you can look high or low that justifies more than a five hundred thousand dollar  d and i give let me get very specific here we have an extensive licensing history of this patent of this patent nine thousand licenses of this patent at the time two thousand one when and gap and those were are not everyone agreed that was inappropriate to consider those for under four or eight for damages so those don't relate to damages at all they're just it was putting them in it's not there's been even put a reason in their brief as to why those were in there which was the counterbalance the fact that they'd license smaller internet retailers but let me get back to this pattern of licensing so extensive patterning licensing issue for this patent rescue net all these cases talk about real world evidence and guys were talking about a shopping cart or receipt in the internet if you went to your brick and mortar store around the corner from you your supermarket and you heard that they got a new shopping basket or a shopping cart and someone said we want to share of every product that goes through your shopping cart or your checkout stand because you've got a better shopping cart now you'll be outraged and fact that we're moving this the internet doesn't mean all of a sudden you get a share to that point for absence of an entire market value analysis and the use of anon and fringing base so there's two sets of errors that that way there's a twenty five percent admitted error and there's the not infringing base error which i think is plain based on what i just articulated the point of all of this is we have real world evidence of the value of this into that was in one one the hypothetical negotiation one thousand licenses all below three hundred thousand dollars and that's not the only evidence we have the company open market which has which came up these patents sold the patented solution which they thought would be their shopping mall and worked out bankruptcy and sued all those things but they sold that product a license not only for use says that so we're saying set it five hundred thousand that's the right number under trons al there's nothing justified two point five million is five x you know good enough for government work doesn't work this there's millions of these cases that are against internet retailers all the time we can have someone putting up an admittedly erroneous opinion for twenty million dollars and dropping two point five billion is how much these companies made over life it's history or whatever it is and then have that inflate the number five x from real world licen then nine of the software so i think all those bases demonstrate why the minimum if you were going to remain for a new trial which i think is equally justified for that for them allowed to parade the amazon settlement and these other mr wilson and robert wilson on behalf of sovereign and i think i would like to address the damages issues that were just raised as an initial matter and of course answer any of the panel's questions that you might ask mystery news as mischaracterize what the evidence was at trial with respect to damages here we have a situation where even though the twenty five percent rule was touched upon by our expert you had no impact on the jury's verdict and i think that you can reach that conclusion by just looking at the case would be twenty two point five million dollars so if you compare that with the jury's verdict of two and a half million that's a tenth of what our damages expert actually testified about the trial how can we know if the number was out there that was if that was the starting point i mean the twenty five percent rule wasn't that the award has to be twenty five percent it's that's that's kind of starting point it's the rule of thumb and you work off of that number so how can we know that that number had no impact on the jury at least as a starting think you can you can when you take a look at the sovereign's number of twenty two and a half million and you take a look at the five hundred thousand that was proffered by newegg and the jury was way down close to new aids number in its verdict and that verdict is reinforced by the other evidence that was in front of them particularly with respect to the georgia pacific factors and there was a large amount of evidence with risk respects to new extensive use of this technology and the nature of the technology as being comparability to a company like newegg these are mom and pop type shops that are being that are being licensed for the divine licenses these are bricks and mortar type businesses that have a little bit of an online activity on the side the nature of their revenues which was before the jury was on the order of fifty thousand ten thousand dollars worth of online sales as compared to new way which isn't a totally online distributor retailer it has no bricks and mortar stores and it has hundreds of millions of dollars worth of revenue so the comparability that new it relies on with respect to those licenses is very limited in addition there was additional evidence regarding licensing of the transact product and as the testimony showed at trial contrary to what new ink says there was more than just a single payment up front those payments were spread out over the course of the ears for the companies that had licensed the transact product that was also before the jury as an alternative economic model real world model that was before the jury as opposed to the divine licenses so you can't just look at the divine license and say oh well then you know there must be five hundred thousand dollars of that evidence it was much more evidence talking about you extend of it use talking about the fundamental nature of the technology talking about the transact licenses versus divine licenses and talking about the differences between a new way as a online only type retailer versus district court did not just grant jama well because the expert didn't say the words and i find these claims to be obvious the district court took a look at all of the evidence and is fundamentally deficient on a number of gram factors basically what new ings expert did was it he talked about certain prior art systems and then to the extent that there were claim limitations and there were numerous claim limitations that were not found in these prior art pieces he just basically waved his hands and said well you know there's a lot of work going on in the internet and so somebody would be able to fill this in but he let it go to the jury on anticipation i think he did your honor because the testimony was directed to specific systems that were in the prior art and he numerous elements that were missing yes why how then could he let the same the same claims go on anticipation to the jury yes those same claims he didn't let go on obviousness because so he let it go on anticipation in the absence of elements but not an obvious that he didn't obviousness because it was also evidence regarding teaching away and regarding the combinations that they were relying on so it was a different analysis and he was looking at the arguments that were saying in  evidence sent it in a way but that's a question that most of the jury all the time but there was no rebuttal with respect to new lakes arguments new it didn't have any response to this idea that there was teaching way not only was it teaching a way it was that the systems would be fundamentally incompatible in the way that they were trying to combine it and that was key to their obviousness case they were saying well if there's an element that's missing here then you can rely on this other general internet technology and you can fill in the blanks ands and and and yet if you tried to put those two things together the art was going in the opposite direction the art was going toward to be a connection that was a one to one customer to server connection as opposed to what we're used to today which is  being able to go from website to website across the internet those are fundamental differences in the art that if you try to put these two pieces together they just don't work and there was absolutely no evidence from their expert that it to  was doing was using the claims as a road map and saying well i may have this here i may have this here but we don't have this element and so you know i look at the internet technology at the time and i feel in the black that just didn't do it there wasn't anything  that that was instructing or explaining how a person of ordinary skill in the art would actually put those things together that wasn't based on using the claims as the road map it's a little hard to review that decision right since i mean all of what said look this isn't even a close call and he mentions in his opinion that it's missing fundamental ground factors we recited the testimony that was introduced by new execs on obviousness and if you read that testimony it's clear that there are multiple ground factors that are missing  he's not drawing the connections that you need for even a prime official case of obvious even to get to that threshold particularly given their clear and convincing to the judge didn't really decide on the basis that that he was granting j m a well because he didn't feel that they had even crazier it was already over to the jury that's correct he was going to decide i don't think he decided i think that he looked at the evidence and he decided that there wasn't enough because they hadn't met the fundamental good there's enough evidence on which the substantive issue can be determined whether in fact it was correct to take it from the jury i think that's right your honor yes i think that he he looked at the question is yes and i think that that is made plain from the lack of evidence from new aides as an expert and in particular not even responding to the points on a teaching around secondary consideration and i'm asking is how can the judge decided if he thinks the jury could decide well i think that the judge decided that there wasn't enough evidence to bring to the jury because new age hadn't met its burden of production and in sabotaging a prime official case so no reasonable jury given the lack of evidence on proceed to the other any other issue that you have to realize it's your another it's at the can you this is on the hypertext statement claims yes and on the evidence or lack there of direct infringement yes i mean one of the arguments you even though there's no evidence of anybody using this there's no evidence in the record but we can say well the jury could infer maybe they used to know i think that that there is much more evidence on the record circumstantial evidence demonstrating customer use of the hypertext even claims and and we attempted to point that out in our brief as well so if you take a look at the new aig system when you first go online with the new aig system it's got a banner of that's around the main page it directs you direct right so we ship assuming every time there's a feature that there's no evidence required of direct you know i think that if it is a feature that is prominently displayed on the website and as the customer goes through the website it follows through with the banner there is also instructions i've been reading what evidence of customer use i mean presumably it wouldn't have been that hard right well my understanding your honour's that there wasn't evidence direct evidence from newegg as far as tracking the customer use on the web site and that level of granularity but it wasn't required in the sense that the new ink instructions customers have to use this the system it's featured prominently on the website it's on every page is the cut scrolls through you have any traces o rely on the eco case and the lucent case you know argument here and the important thing is that the by being a this kind of prominent feature and then looking at the nature of the website it is incredible to me to believe that customers who are shopping online are not going to track their transactions and are not going to be interested in an order history and so the argument that you raised your honor as far as this being part of the customer's or the jury's experience i think it's part of customer experience and the nature of this type of website again it reinforces the fundamental nature of this type of system for this type of online retailer and all of that was explained to the jury so all of those that evidence forms the basis for a conclusion that yes customers use this on the website it is a prominent feature and it's essential to new waves operation of its business and of course customers trac their products and look at their order histories and the only system that's available on ewing's website is the admittedly infringing hypertext statement like the other way by the way according to your theory you try to distinguish as the case that new through line yes and with respect to a co and the instructions that were provided there were both infringing and non infringing and so we were distinguishing that in the case here because the instructions that are provided on line are infringing in direction right to this i protect statement system and there's no contention from new way that its system doesn't meet the limitations of the claims they concede that so each and every one of limitations that are reside in the hypertext statement claims are found in its infringing system so that's admit it so the only issue then here was they say there wasn't enough evidence of use but as i said your honor there's more than enough circumstantial evidence that customers go online they shop on unix website is a prominent feature that allows them to track their orders and have another minute or two of this in another post yes i just want to to touch briefly on the the issue that mr innocent raise with respect to the shopping cart claims and how there isn't a requirement to modify and you know it's completely contrary to the evidence and the way that the system works what he's trying to read into the claims is a physical setting aside of database or data storage space and that's not how the court construed the claim that's not what the claim or cites to modify merely means was construed to be an instance to modify an instance of a shopping cart and that's different than modifying a specific physical space in the database and that's important because newegg didn't contest that construction and that was the basis for sovereigns expert testimony and what he showed was that the newegg website identifies a shopping cart id and dispute because they're saying the identification of a shopping cart ideas not enough to be an instance of a shopping cart but that's exactly what it is it is a pointer to the shopping cart and products are associated or taken away from that shopping cart once you create that instance wage servers that's correct but then when the the products are downloaded from the customer's computer to new and then there's the creation of the shopping cart idea which is the instance of the shopping cart that's the first step and then the products that the customer has selected are then associated with that shopping cart and what they're trying to read in is a limitation that says you set aside some space in your database and then you put those products in that's not what the claims require as the court construed and they don't dispute the court construed modifying to be modifying instance of a shopping cart so the creation of the id is the instance and the downloading is the modification that i think but there was conflicting evidence which a jury was entitled to consider leaving aside that i think common sense under western union and all those other cases would permit you to say yeah you include a receipt that you can click on a hot spot on your web site leaving aside the the manifest obviousness of that there on shopping cart a two three one six one eight eight two one four two it's all that shopping cart was present in a prior art on hypertext statement a twenty three thirty one thirty six that that it was in the prior art and session identifier twenty three forty and these are combinations they need to they need to show each of the different claims let's not fall into the trap that the district court did of looking at these as it's as though it's one invention with all these things they have an invention that's just the idea of a receipt on a website that you clipped to that's what this court would uphold that a jury can't even consider whether that's obvious that's what we're talking about and in terms let's get beyond so the statement there was two things that were supposedly missing that didn't happened in the prior art i gave you cites and there are more in our brief that in fact there was testimony that was competent that that wasn't a priority second is what you really heard there was some handwaving but you really are when you listen hard was well this teaching away what does that mean what do you mean teaching a well they said if you go from this private network compu serve where you have to dial up an old fashioned modem and you think bring that to the internet it's broken it won't work you can't use the idea of a shopping cart or a  or that you have a session number for your session you can't use those ideas over the internet would be non obvious and no reasonable person could consider that obvious that's their argument but that basis is it wouldn't work boy do we have evidence that would work boy  have that evidence in this case we have simply knowing that you can do something like store information about purchases means that a proper probable computer programmer can figure out how to do it match up to these sort of claims of for one to match up with the teachings of the co books basic internet internet functionality and common sense that's a two three three six eight two three one two three one three programming the function the desired functionality was within the skill of one new york this is the teaching away is that someone would know how to program a computer to have a shopping cart database someone would know how to program a computer to have an h t m l at a two three three five the expert says anyone would get the receipt you could get the receipt that x could l to present the h t m l was a well known technology that you used to make an internet page so on and there is nothing else there's no other thing that he says is missing it's all in the record and the judge didn't even let the jury decided on the seven different claims in three patents without any explanation what were the role of cookies in the prior art in the prior art they didn't use cookies they had this process that the claims cover of you go one by one and you move the product into the database one by one the and this is in the record that that was an innovation later on that new way uses of you save memory by doing having the customers do it judgement you nailed it is the way this thing works it all goes in a mosque at the end the hand waving is well there's the shopping cart id number right the instance of a shopping cart it's all narrowed down to that the only thing they have left is is a shopping cart id number that a shopping cart and then that all merges into the shopping cart database there's no modification of anything in the database and the answer that there's a number that's not in the shopping cart database admittedly council was canned and clear about that the number isn't a instance of a shopping cart what's the justification for that and it's certainly not what's absolutely perfectly clear is it is not an instance of a shopping cart theatre in the shopping cart database he will not get up here and tell you that the shopping cart id number as ever allocated memory in the shopping cart database because it would be true so he's relying on that the word instance is sort of fancy an instance of a shopping cart that means a version of a shopping cart that's modified in the shopping to be a slight effect in order for the admitted legal error that effected the damages analysis here to be to be survivable five times the only competent and evidence in the record is not slight the only competent evidence is five hundred thousand or below with the licensing of three which i won't go through again but the second point i want to make on that is the only thing there was really nothing in substance in terms what the evidence was that we graham factors what was extensive use two thirds of the so the question is two thirds of the transaction should be an eventual arge don't want what's their response their response is well the system is capable of that but and this gets a little fancy in order to avoid the divid infringement problems that they had they argued consistent with sincerely in the new case that its use of the system at the customers using the system there and saying there is no make of the system there's no cell of the system there's no important system it's only use of the system and for their divide infringement when they try to survive that problem but then when they come over to the damages part they say well we don't need actual use we're going to charge you for two thirds of the transactions for a single purchase product purchase notwithstanding the claims require a plurality and notwithstanding the fact that uses our theory thank you very much