i'm certainly not counting your chickens or our so on i'm prepared to talk about this case so i like to talk about the legal error that the that the board committed in changing their claim construction so in the in the proceedings below the board adopted claim construction for risk level and aggregate risk level that was quote a calculated measured or otherwise to paint value of exposure to the possibility of loss related to said trade this is page a seven in appendix but it's it is final decision it's it's clear when you look at how the board applied that claim construction that they narrowed it substantially and if you look at page for example a fourteen and a thirty four price of the trade etc end of quote so the board added another requirements or risk level doesn't just have to be an indication of rest it has to take into account critical information such as volume price and cetera and we saw that application that that change constructional it for the first time when we saw the final written decision at the end of the case so we never had an opportunity to address it below our experts didn't address it we didn't argue about it at the didn't have these requirements of a critical information so we had no reason to do that so we think it was it was error to narrow that construction at the end of the case and and if that construction had been proposed early on in the case we would have objected to it and how you determine a risk level without basic information well you have to have some information but you don't have to have certain you know the critical information that's that's required here don't have to have price and volume no you don't your honor and i don't think that you do now still for is actually uses volume to determine step ups which is of second part of my of my argument this morning is that even under the narrow construction there isn't substantial evidence to support the conclusion by the board that filters doesn't view exactly that so we have relied upon something step up and step out is the mechanism that that i see created to help market makers keep their quotes active in an exchange so for example in exchange would typically have a rule that a quote has to have a certain number valid quote and the market maker misses out on the opportunity to maybe you know trade do that trade so i see came up with this idea of step up and step up adds value back into that quote now that's a good thing and it helps market makers but i see also recognize that because it poses a potential risk because a trader could try and kind of game the system a little bit by putting in a large number of small orders and when that we have that automatic step up that we keep refilling that quote at the same price a trader could perhaps get hundreds of contracts at the price of the original quote because the step up would happen automatically so right so that your theory account because a step up only happens when the volume of the quote drops below the you know the threshold required by the exchange fifty in my example so when the volume in the quote drops below fifty you you step it up so you're adding in my example you're adding twenty contracts to that quote so step up is it's caused five on now it's not it's not an exact measure of how much fine is that it because the fact that a step up happened doesn't tell you whether you   that and it's normally talked about when you're talking about a system like this i mean isn't the risk supposed to be having to do with price and volume calculations well there are many there are many risks that are that face market makers and the claim is fairly broad just says that you have to have if you want to talk about before it's a very broad claim it just says that you have to have a risk level you have to you have to have associated with the trade yes have an aggregate risk level and you cross a threshold you have to it didn't happen it's a wonder it's a zero that value is counted when you have a one you count up those step ups when you get to the threshold which could be three or four for example then you change the price of the quote so that's that's precisely what claim one talks about so what you're saying is that we have to accept at face value that modification can relate to any potential risk that therefore this so for instance is modifying to address a potential risk is that have three step ups now as a market maker if i know that i have three step ups i know volume has been added three separate times to that quote so maybe i'm not comfortable with that or maybe i'm comfortable going up to five if i consent that is there anything in that in the back of the patent that indicates that that the type of risk that's being assessed is the type of risk you're saying because what you're saying is not the risk of loss you're saying it's a risk i'm not gaining as much no your honor respect means that the person buying the contract thinks the stock price is going to rise so they call that going along so if let's say something happens in the in the market you know of review comes out for apple's new i phone and it's a great review when anybody thinks apple you know the traders think apple stock is going to go up so they start hitting options contracts long options contracts and they may want to buy a lot of them you say they're convinced the price is going to go up that poses a big risk to mark really the same kind of risk that the when i was talking about it's a risk to market makers that will sell too many options contracts on the long side and then if the price goes up the market maker could be in a lot of trouble as a market maker would have to go out and buy the that there has to be a risk level associated with the trade now when you have a trade as i'm discussing here the trade that is twenty contracts in a quote for fifty that trade will cause a step up so there is a risk associated with that trade to the market maker every time a trade cause a step up that poses risk to the market maker because more volume is being added to that to that quote adding more via means there are more contract out there that traders on the other side can buy so that that's a that's a direct risk to the market maker and the my problem is is that even if you go back to the words claim construction the one that you said you liked it does say it calculated measured or otherwise obtained value of exposure and how is the number of step out of step up to a value of x value to exposure well it think it has to mean a precise value wouldn't normally mean you know a comparison of or a calculation it says calculated measured or otherwise and to value is in order to get to a value don't to have to have two different won't so you have two options there you have and we can call it a zero in a one so if there is no set if that trade does not trigger a step up and doesn't have just the right molly m to trigger a step  your running total of step us so for that quote maybe now we have five step ups for that quote which means that there have been five orders that came in and hit that quote not for the full volume but for just the right volume to generate a step up and now that the market maker is starting to increase to perhaps an uncomfortable level because volume contracts keep getting added to that code over and over and over again and as those contracts get at it that market maker is exposed to more and more risk because if there are long contracts in my example and the price rises the market maker could be in trouble so this is this still for his mechanism protects market makers from the risk of having too many contracts out there on sort of the wrong side of things it's asked it in a deposition in this matter this is in the appendix of page eighty seven ninety eight the question so the risk level is the fact that we are stepping up the answer that is kind of strange right question mark she was puzzled by it because in fact the fact that one of stepping up cannot be a calculated measured or otherwise of pain value of exposure to the possibility of loss related to centralia that is it's got to be the possibility of loss related to the trade to just take place that just took place and you say to that exchange a couple times what what did she mean by strange the question was strange or the fact that that's the risk a strange or i don't understand right that when when the questioner just didn't close the loop there right the the risk level the question of whether or not there's a step up is a yes or no answer to whether or not you put in more quotes to meet the exchange traded minimum it has no correlation to the risk of loss associated with the last there and then one circumstance you have the term contracts out there and all the five of them you know five is a transaction for five of them and you want to replace and get back to the ten so the step up is one five contracts have been sold the step up was one and another circumstance you have twenty contracts out there and you sell nine of them so instead of five you're selling a larger number nine the step up there is actually zero because twenty one is nine your eleven year already higher than the required number of contracts so you're trading more contracts but instead of getting a step up you get no step a third example let's assume that there were ten contracts out there and you sell one of them and then in what you can then you have a step up of one so again you have a step up one for the car lights to one contract being sold  me you can't get in trouble if you keep your mouth shut you probably don't want the p to have keeping their mouth shut giving conclusory conclusions what they did here is they said here is the agreed upon point construction calculated measured or otherwise obtain value of exposure to the possibility of loss and then they examined in detail whether the interpretation that i assumed was pointing until first met that agreed upon construction they said is there that number one until first car light to a value of exposure to the possibility of loss and there were questions of both sets of attorneys on well what is the one really mean and what if there are more contracts traded less contracts traded countr some risk of loss but doesn't do it very well that doesn't mean that it wouldn't anticipate right well i think i think what the people have concluded and i believe it was completely correct is itself is didn't calculate a risk of loss what it is it asked the question should there be a step up or not should there be a state it's a yes or no question and it has no relationship to the volume it has you know in talking about the different types of risks this is down in winds fifty five fifty six fifty seven fifty eight talking about the number of contracts the number of shares the price the change in price when that's what you have when you're talking about risk of l it's mostly volume and price it can be other things to do with you know how far up the contracts are maybe it could be the rate of change you know in the price or all sorts of variations but what the pita and did is it looked at three analyzed based on the testimony of dr steel was our expert in that cited in the p ten decision based on the admissions made by dr o'hara i ses expert based on the admissions made by mr murray these at least these three things they looked that and they said there isn't the correlation between this this number one and the possibility of the risk of loss sosina with the prior trait and mr murray is only talking about the second element here that's the aggregate risk of loss he says if you get one one one you get five then something must be going on the system is being gamed but there's a separate element which is the risk of loss associated with the prior trade that's where they fall down they also fall down on the aggregate risk level if you were to look at the the joint appendix of a seven seven three eight dr harris asked this question where intil for his does have expressed we describe up any indication of risk i don't think so and i had the reason i don't and more importantly the p ten didn't think so and it was and its conclusion was supported by substantial evidence experts on both sides an admissions and here's here's the reason i go back to the same examples again if you have twenty contracts out there and you sell nine of them you want eleven left under the assumption that ten is the required minimum you saw nine contracts and your step up is zero you don't have to step up because you're already higher than the required minimum on the other hand if you have ten contracts out there and you still want you're going to have to step up so your step up will be one so you've got a risk level of one of the value of one for it for a transaction involving one contract but i risk level or a value of zero selling nine contracts doesn't make any sense there i mean that it seems to be completely backwards shouldn't the risk if nine were traded be higher than the risk of one or traded that's the sort of analysis that detail went into a definite explained its reasoning over course of four or five it's a number i don't believe that it's a risk level associated with the trade and i don't believe it's a calculated measured or otherwise obtained value of x no what if the numbers well first mr mori has level associated with a particular  now we also know your honor well i think that addresses the points that i wanted if the court has no further questions i'm having a hard time i understand the argument but i just i just don't see how between the value that you're talking about and also the weather with price so again we go back to the same example and explain why i think there's absolutely no correlation between the two of them and one of the people that was it was perfectly justified in reaching that same conclusion let's go back to the same example if you have twenty contracts out there you have twenty contracts out there and you sell nine of them don't you want one hundred contracts out there and you sell eighty nine of them you end up eleven contracts that's above the exchange minimum right so the step up there is zero you sell eighty nine contracts to someone contracts the risk is zero under his under i ses articulation on the other hand if you had ten contracts out there and you sell one you've got to do a step up the risk of those one there isn't a correlation or maybe he can make up you know eight eight you know if you read a coke case about how that's why the result in the i p r really is not at all inconsistent with the conclusions that the board drew in the c p m that the basic method of this claim was used in open outcry there's no inconsistency here because we didn't ask the board in the i p r to reject the claims based on what happened in open outcry you can use one or two a type or so there's the board has not been at all inconsistent now the step up is i concede is not precise it is not a precise measure of risk and it certainly relates to the trait the trade causes the step up i've never really understood this argument if there's if there's a quote there for fifty contracts and a trade comes in for twenty contracts that trade would cause a step up in that example so the step the fact that a step up has happened is of course related to that trade the the step up right but what what's your response was argument that while it may ultimately get to something that correlates to an aggregate rest level it does not determine that claims has to be an indication of risk related to the trade so if there if there isn't so there are two possible values here and i can see eight isn't one of them zero for risk level zero in one now if the if the value is zero at tells the market maker that there's been no step up associated with that trade so no volume has been added to the contract so if the let's say the original contract was on the original quote was for one hundred contracts exchange minimum is fifty and the order was for twenty so it goes down to eighty so there wouldn't be a step up there right because it's not didn't fall below the minimum so that the the risk level there would be zero that's also a market maker don't worry we have not added any volume to the quote that you have out there now if there's another trade against that quote that brings it down below fifty and now that the system is adding volume to the market makers quote the risk of that becomes one which is a different value that tell something very meaningful to the market maker tells the market maker that volume has been added to the contract and when value means contracts that people can buy and that market makers would have to honor those contracts and sell stock for example volumes would result in the same risk level of one or zero so it's a it's a sort of a blunt instrument if you will to tell the market maker that that something's happening here that should be concerned about vimes being added to your quote  and the market maker in advance and say ok as long as that doesn't happen five times don't worry about it you can you can keep going electronic exchange but if it happens five times change my price to protect me so that is what it's it's precisely what claim one talks about you have a risk level you add them up and you get over threshold you change the price that's the very basic sort of economic method that's it that's at issue in these explicitly disclose aggregate and dr howard knew that the word aggregate isn't until first so she said no it doesn't explicitly talk about aggregate but if you look at the entire transcript hugh cour says that counting step ups is an aggregate risk level because you're adding them up and that's what the claim requires that you add up the risk levels to get to some aggregate risk level exactly the same as the