today with an issue that cuts across all the patent claims in this case and that is the improper application of the entire market value rule to the calculation of lost profits in this case in this case there were three patents asserted and the seven million dollars in lost profit then and seven million dollars the jury verdict depends on the award of lost profits and these lost profits in turn depend on the application of the entire market value rule and this the application of the entire market value rule to the lost profits award in this case is crystallized on page thirty of nies response brief in which they say that their lost profits are identical whether one or more of the own money to ten and five three patents were infringed in other words the amount of lost profits is in derived entirely under their calculation from the infringement of any of these shirted claims now the problem with this is myriad but the biggest problem is that there is simply no evidence that any one of the patented features are responsible for the entire market value of these v c r and probably the best example is the feature claimed in the five three patent that is a circuit from which you can admit the six cent six cent coins form and it's an oscillating circuit that's used for the race heads which are part of the recording circuit combos now according to food on its profits for those products range from approximately four dollars to proxima twelve dollars and fifty cents but the features for each one of those types of products the patented features is exactly the same so what is missing in this case is any evidence of any kind that the allegedly patented features are what drove the customer do i see it's only on page sixty seven importantly is based on the absence of any evidence so from our perspective it has no real point in belaboring it unduly now and certainly you are right it has been the subject of considerable discussion for this court  efforts other than to recognize that if the sensitive issue for that and that of course is what distinguishes the marking situation here from the case law such as maxwell a case where the patent he was unable to have make any efforts to have those products marked because they are you know the product of another that the patent key is in effect simply acting as the manufacturer and nothing more and that the product is the o e m s product and whether it's labeled or not is up to the o e m we are saying no we're not we're saying that as a patent he in order to enjoy the benefits of the construct of marking statute there is an obligation to make affirmative effort to ensure the products sold to the public are marked with the patent numbers and since that is our position and you're saying that that was met simply by asking the customer to do that and when the the korean parent company of the u s sales subsidiaries and what happened was when the the parent company one of the korean predecessor parent company so it so that agreement relates to the us series in that that was how that asset the subsidiary was transferred between the two companies and because that agreement is governed by korean law which does not provide for successor liability of certain requirements are met and those requirements were met there is no successor liability between either the parents or th and whatever for that i made to enforce that judgment under new jersey law fails i mean the normal course is to if you have a company that goes out of business and the assets are plundered from a company you would go after the shareholders that the owners of the company and that's what new jersey law provides here for whatever reason that did not happen so to look at the interest of the insurers here the interest of new jersey would not be or not serve because the party seeking to enforce the successor liability is a japanese corporation no ties to new jersey in other words new jersey's law where you get so they have no ties to yours well they're they own a sales that's exactly correct and when the congress in an act of the statute to provide damages and awarded damages and the federal courts can issue judgments congress did not  protected by new jersey law the patent laws are not the scope of new jersey it's not new jersey's interest to enforce the patent laws that was congress's interest  issue of judgments and forcing judgments and when you look at the interest of new jersey there are no new jersey citizens whose interest will be protected by the application of success success or liability in this case you look at whether or not the laws protect or would harm a citizen of state and in this situation there is no evidence that the application of new jersey law would benefit a citizen of new jersey in any way in fact it would be detrimental to the the only party to this case who is a citizen of jersey and that is they will transamerica the current  that is the law if the sale was made but for the arrangement whether that was one patents two patterns or all three you're entitled to loss lost profits that circumstance no council said repeatedly about basis for the lost profits should should we remain for consideration of this issue moonlighted loosen absolutely not your honor this this is actually a case as extraordinarily powerful evidence that isn't typically before the court specifically the overwhelming majority of the lost profits here were to a single customer target and it was based on direct evidence of the vice president of sales of food there was direct testimony but that could only have been accomplished using the infringing features and in fact the test when it came out only from full night it came from de whoop let's take for example the two ten pattern that was on allow the first high performance piece motor to be used in a v c r which solved the problem of slow rewind speeds a lot of customers people may recall used to get rewind charges if you brought back tapes they hadn't been rewinded customers were very interested in getting high speed rewind the v p of sales said that was a necessary each or according to the daewoo engineer this is the quote from the day we're engineer himself he said high speed rewind was required in the market up all the testimony was that these were necessary features the zero and eight patent made v c r smaller also lower the price for shipping and for warehousing and what was unique about this case when i put on witnesses sales people who were in the room who were actually making the sales who testified about the profits that they lost they would chose not to put on anything with us they didn't put on any sales witnessed even try to contradict it averaged about ten cents and there was testimony in the record that this was a brutally price competitive business and every penny did count and so even a tense and that margin may have been the cause of the difference but d and i would just note further about exact point on the two ten patent that was never practiced by from ny after the pattern issuance of these marking issues do not apply at all in the two ten pattern they have an appeal that so there's no question  never any assertion that it was far from the very first the only request for damages was on the date that notice was provided april two thousand and three so there's only one patent where the question mark and you can comes into play and there you're only talking about four months because the entities began selling in october two thousand and two they received a clear notice letter showing infringement in april two thousand and three only april two thousand and three so you're really talking about four months and even if you exclude all that from the damage base and even if the own it were the only patent to survive it would still support the entire jury verdict because the expert testimony of tonight's expert was that even for the period  for just target sales after the notice letter was over the damage award by the jury which is seven point two and the expert calculated about seven point four million what is your position with respect to the marking obligation of to take steps to assure that those products are marked where is there a distinction between so to an o e m company customer as compared to a licensee for example i think the corner has treated a bit differently products that a company sells that sell versus products that are ultimately sold by a third party i think they're still a requirement to use some efforts to mark m sale doesn't change that calculus as far as you're concerned or i think it does lower the bar somewhat because for me i was making a product for another company who control the packaging who made decisions about what was going to appear on that product the surface that does that relieves the patent he from any obligation to put the bat number where the phone at the the evidence or th we believe that given that there was some third parties who didn't mark but it was a very small percentage and this is a fact issue that we think there's substantial evidence that a jury could rely on the find that there was supposed to and i guess what i'm getting at is whether there's an obligation in the first place the if your argument is that well these are not the patents he's products or the patent he's licensees products the patent he is just functioning as a manufacturer of products you know soul ten percent of its sales were or sales it made itself with a number in the ninety percent were sold to o e m customers that the market could be flooded with those ninety percent with no patent markets a patent he would still there some at least an implied license well it's certainly an implied license they're buying it when i they have to have a license to rings it back into the fold of maybe they think should be considered similar to a license see when it comes to market well i think the extent there is some effort required i think the testimony here was that that when i made an effort but that it's more interested in marking but now let's just let's assume that there is the obligation and let's assume that when i did say ok i'd like you to put the pet number in the o e m customers that well it's our product and we don't want to do that now you're arguing that it doesn't amount to much because it was what nine percent ten percent something like that but my monitor standing of the few cases that i've touched on this is that where there are products do not contain the there were some careful it's to be diligent and to either rectify the problem or to explain that this was the exception and not the rule as opposed to circumstances where  home nine to ten percent nine to twelve percent of products were simply permitted to be sold without the marking so my question is if there is an marking obligation isn't the amount involved here sufficient to take it out of the statute simply because it will not permit it well there are there is case law that talks about as much as five percent being sold in court or in that case i believe it was a license for the circumstances exactly in that particular case but i would point out it is not where were you have you know i would submit that between nine and twelve percent is not in them significant percentage and it was permitted if you will it was it was not it was not a question of them and inadvertent though you tomorrow or something that respect to successor liability so the transfer agreement says absolutely nothing about the us city or as i think what happened with the district court is that it made a decision on what was acquired the parent companies and it sort of rolled that into the u s companies and we think that was an error that the transfer agreement did not convey the assets of the u s companies it did not didn't refer to them didn't say anything about that one day they came in and they were they were electronics america corp and then the next day they were they will act tronics corporation of america i think i got that backwards but they just switched the order of the words in their name it was the same employees selling the same v c r s in the same fielding they just had a new name they weren't part of the twenty but really what agreement affected this conveyance that's an excellent question we were never able to to get any documentation on that it was just a continuation of america which suddenly became the corporation that was also responsible for the u s v c r sales in new jersey but the testimony from the when this is was it was the same people working at the same company in fact for a period of time there wearing two hats they would actually go out and collect accounts receivable for what was the prior company in and they were still doing business for the current one and that's why we feel that law jersey it's uniquely implicated by these facts in jersey has a successor a liability law that says we're a company is american to new age and there's a defacto merger they shouldn't be allowed to use that essentially put behind a liability a liability that arises under any law that applies in new jersey be that you know a tort law or u s patent law these were new jersey corporations they were operated and run in new jersey i believe the current company may be incorporated in florida but still the v c r business was run out of new jersey but what did the records of the state in which they were incorporated reflect in terms of the operation before the transfer and operations after the transfer were there were there any documents recorded the default the party basically didn't produce documents and they dissolved we know very little about them the new company the party that's here representative basically said you know that we don't have documents on the previous company it was all very it was a mysterious transact and to be honest and that's why we think it is a very appropriate one for the application of successor liability and actually if i could address one specific point the counsel raised and he said you shouldn't apply new jersey law because there jersey has no interest in increasing the liability of a corporation that does business there that is not the rule in california in fact ever tato case that we cite about exactly the opposite they said california in that case had decided interest in applying its tort law against the california to because it has an interest in regulating conduct within its borders in fact the case law is uniformly clear the new jersey has a strong interest in regulating conduct in orders such as infringing and making sure that that liability is the answer is how much profit are they entitled to as a result of that lost sale how much profit did they lose this is not a case like juicy where versus orange bang where you're talking about a product that completely well if you accept that evidence which i don't think you're obligated to do because the evidence of why one party got the the business versus another party is unclear it's not clear that's but if you if you take that is true that but for our presence in the market with those features they would have got the sale the question remains unanswered is how much profit are they entitled to and are they entitled to profit based on the total sales price of all the products they claim they would have sold and it's undisputed here that the evidence that was presented to the jury was that the profit was based on the total sales price so this isn't this isn't situation we're asking to second guess a factual finding made by the jury this is a situation where there was just no evidence that the patented features and anything to do with custom should not apply i think the most important point there is that there is no explanation of any crime in the prosecution history or the reason for the amendment there's no identification of the rationale for why the claim was amended and in that case you're left with a concession that the amendment was narrowing and then they're trying to say that the rationale for the amendment is tangential to the alleged equivalent but there is no rationale and the alleged equivalence is alleged to infringe the limitation that was added during the prosecution there's a direct relation then finally on the the o ne patent which is the other patent that if there is a corporate forms the corporate forms here existed after the transfer of the company the predecessor new jersey company continue to exist there are corporate records maintained by the secretary of state as  investors were who the owner of that company was and that was the predecessor korean company and it sold that asset sold virtually all of its assets to the new korean company so in a situation like that where ownership of the company changes hands there is an allegation that funds do not remain to pay off liabilities the course of action is against the former owner  california case where there's a holding that they would not apply the law of another jurisdiction because california's laws were designed to protect conduct to regulate conduct within situation the law of the four injuries stiction would would not have benefited would not have regulated conduct in california therefore california had no interest in apply own limitations of liability from another jurisdiction so the point and then on the  the only truth the testimony was that it was do not mark and the reason why was because we were conscientious and they were nervous about packages and that was the