like to start with the subject matter jurisdiction issue the district court erred even reaching the state law claims because they did not arise out of a common nucleus of operative facts with the patent claims the state law claims centered on dr constant  just the relationship between the board and i'm sorry the company and the board member this invention and whether this company had any interest in either acquiring a developing chocolate and this all occur february two thousand and ten these events are all over now the patent case starts two years later and that case centers around this validity of a completely different product and your score had this one one thousand patent that w never practiced and whether chocolates elements infringe that and those facts were the prior art on the one thousand patent and whether chocolate had these so called end page a state law opinion by the district court in two hundred twenty four findings of fact and not a single word it mentions the one thousand patent and if you go to the patent trial judge you know party even mentioned the state law at the sales of chocolate on the one hand and what the n g s sculp did but no so the damages facts on and the common damage expert was on completely different theories because one is based on the  series now now and i just wanted to give out a hypo if i could because i think what the what they district court said is the chalk that was the heart of the case and just the fact that the same product features in both cases can't be sufficient and as for instance if you imagine a plaintiff who brings an arrant t case in federal court arising out of a boating accident he can add a state law claim that says defendant stole that boat for him two years ago and i think just the same is true here although chocolate it certainly features in both cases the core facts about chocolate are just different in each case and that's all i wanted to say about subject matter jurisdiction i wanted to go to corporate opportunity and less you want me to say we agree with you on  of that doctrine and the way it was applied here really should have led the court to sort of not embark upon this very scary and choppy waters of delaware law because of all the the the questions that raises about  taking assuming that the corporate opportunity doctrine could apply to a director's own patent ideas and the three basic problems with that are and they are serious is that under delaware law fiduciary have the right to prepare to compete  is quite unworkable and it suffers all the same problems of stifling innovation of the implied right about right ownership that the court held and recognized was untenable so first turning to be at the right to prepare to compete deller lardy has a doctrine of the breach of loyalty that applies when a fiduciary uses a his her own own skills and ingenuity and it's called the duty not to compete but twenty five years ago and that  that the delaware supreme court issued to the court held that fiduciary can prepare to compete but they have to resign before they actually compete and preparing to compete in that case was soliciting investors developing an invention and doing a working was on the board he resigned from the board in two thousand and ten and that was almost two years before he ever sold the chocolate device but the court below held that that the doctrine of the corporate opportunity doctrine prevented any kind of development of any kind of solicitation of investors without first disclosing any and all preparations and plans to compete but that perversely construes delaware law to penalize and punish the very conduct i e concealment and disclosure the delaware law affirmatively encourages in order to stimulate competition and industry the court in that case said we have to have you have to be able to in effect lie to your employer or lie to your corporation about plan compete as long as you're adding there before you actually compete otherwise we wouldn't have competition and that's frankly how lawyers can leave their law firms to they don't have to go around and disclose that and you see this other mismatch when the court says well the doctor here went beyond preparing to compete because he usurped a corporate opportunity a b it was one he created but both the duty not to compete and the duty not to usurp corporate opportunities are merely subspecies of this broader duty of loyalty and if designing about evil invention and concealing those plans are ok under the duty not to compete they're not usurping a corporate opportunity either when our second point which is that federal law encourages an express  assignment before you can be divest of your rights if you think about what happens here if the state law says that companies can inquire these ownership rights they are quire that instantly a second pops into the idea of a board infringing so the one thousand nine hundred patent hadn't even issued until well after he left the company and i don't know i don't know how you infringed by just thinking of an idea you would definitely know that more than me but that there is a one  patent and that my understanding of the way the courts have construed you know making use or selling is you actually have to you know start developing in a manufacturing and i don't just think thinking of something in your mind or going to talk if you go talk to an investors council said you know what somebody think about investing or helping me by my paints and i'm thinking about i don't see how that somebody could say that's an infringement about something you thought of but i'm going to defer to you on the law of infringement issues very often and i'm a little puzzled is it is it the case that the lol regarding the fighting a duty of a director and duty of all includes to talk about your plans to compete so and it says it's presley says we have to do this to encourage industry and free competition but also keep in mind this is a quarter century ago this is not like some new fangled theory that delaware law came out two years ago so it has been the law for a quarter century in delaware that the new ferries don't have a duty of disclosure and this is one of the huge problems with this case is that the court held that this that it implied ri imposed the very same implied right of outright ownership that the court house was just untenable and so the court the third problem with this is to magine because this right which you're talking about this right it just to offer or whatever it is i don't even know what the court said but the this just reduces to the untenable right that the court has rejected now that something less than that the parties are left in hopeless deadlock if they can't reach a mutual agreement even if both sides are acting in good faith and that's a mediation parties all the time think their cla because of all the concessions in the other side's briefing and the strangeness of and the time periods being so distinct burden of proof on tolling no one from n g o s for denied that they had notice of the facts of the development of a competitive device by dr constantino and no one testified at trial not a single and just for witness that they had been misled this evidence was ignored in its entirety by the district court and it overwhelmingly demonstrates that an joke or n g o s for not only suspected they in fact knew from their conversation with d following three years and they didn't seek to add to do sherry duty claims to the pantsuit until may twenty fourth team long after the statute of limitations had run and because the corporate defendants had had a successful period was told there is no evidence to support these findings delaware law requires that once a plaintiff is suspicious of wrongdoing just suspicious the plaintiff has obligated to diligently investigate and file within the limits limitations period and just score was suspicious and show score investigated and angelus or garner all of the evidence it needed to bring bring the very claims that brought yet it chose not to file immediately asked dr constantino to resign due to an alleged conflict after determining and i and after determining that their insurance would not reimburse a judgment that when a time that's the first time that they learn that that  did not i believe they did not but february third two thousand and ten is more than four years before they actually brought the claims and one of the things that i think is very telling the court rests its decision basically on these two letters that were through that was not the technology of chocolate however john it was not a scoring catheter chocolate operated by having these little pillows and grooves it was a completely new and different way of doing it and that's the argument is that the metal parts didn't actually talk to the inside of the vein or whatever it was the pillows that's my understanding you're on he or eventually and what i think is interesting and the point that i wanted to bring out is that its insurance company to find out what and this is after reading these letters they didn't believe anything in those letters they were convinced that dr constantino was in the throes of developing a competitive angioplasty product they went to their d n a carrier and said we'd like to sue basically and will you cover any judgment you could you conclude you're out of time sorry and and what i was going to say is the fact that they were intending to sue him and ten after all of the evidence the port relied on and continue to feel that way throughout the limitations period tracking the devised by ten k the patent application this was not a case where there was any fraudulent concealment conclude that they do not fall in the same line of business line of business being an element of the breach of illusionary duty quite so the technical operation of the chocolate product was front and center in the sherry case and you know better than anyone that the operation of the product would be front and center in the patent case but it's not just what judge ryder said there are sites in there in the briefs and in the record before you the cites in the brief aren't footnote eight at which we set forth the number of places in which just as just one example scoring whether his advice scored was a central issue in the reach of a dish or a duty case and a central issue in the pan case and there are citations to the record actual record cites in footnote eight of our brief and since it's important  your honor asked the question about common nucleus if if i would be permitted to cite two additional sites in the record that are not in our brief but are in the record that reflect that scoring was front and center in both the products operated differently according to them my clients would not have been interested and it was not in my client's line of this and that was a major part of the produce yury brief trial how the how the chocolate product operated and given that whether my clients would have been interested you have not had to grapple not that this much raptly required with the elements or breach if you do share you to climb under delaware law but it includes whether the product at issue is within my client's line of business whether it would have been something that my clients would have had an interest and expectancy in and whether by pursuing it while he was on the board he put himself in a position that was in him a call to our our client well that would be relevant to this supplement of yours action yes but that's not relevant to the course it certainly has you would know better than i that how the product operates is exactly what but ok that one item out of product operates what else as anything else yes of course but let me let me respond because i detect a note of skepticism in the patent case the the question is how does the product operate and that consumed an enormous amount of time in fact that was the bulk of the patent cases well so obviously front and center in the reach of leisure duty case and in the patent case we relied on his role at inchy to score for the following things among others number one  the he approved the purchase of the patent application as a director and as c e o of fact that became the one one nine patent showing that he believed it was valid second it was important to show the extent of competition for both liability and damages it show that it was the same line of business that he placed himself in them in and  an appropriate case if the only overlap were damages depending upon the role of damages in the in a given trial it might or might not but the fourth thing that would constitute a common nucleus of after the fact is that you've heard about the statue of tensions which i'll address in a moment but the the the conduct of the patent case is what produced the documents that put us on inquiry notice of what actually had happened until the documents were produced in the patent case that have the grounds for some of that over six included i mean you can come up with all kinds of claims and discovery that should be filed in the state or yes that's absolutely together they actually would have been tried together and the record is very clear that the only reason that they were not trying to hear there is that we dismissed the only fiduciary breach claim that carried a jury trial right and the court was expressed in saying that she would take that opportunity to really duras of having to sit through two trials and in her hope that by addressing one of the trials first that the second trial would not be necessary there are so that's twenty years ago now rosin the cut delaware supreme court referred to the contours of the doctrine as being the well established the guidelines that were set forth in that case in a guth required the court to balance the equities set forth a four part test for the plaintiff to prove and a four part test for the defendant take advantage of there were no there are court supreme court said no hard and fast rules and what we're hearing today and in the briefing is that there's a ninth fact not one that the delaware supreme court listed but a ninth factor this business about invention that is dispositive so far from at here into delaware law which is i said your honor is well established and has two four part test the defendant would seek to urge upon you a ninth factor and notwithstanding the delaware supreme court saying that these no factors dispositive they're all for the court to balance and they're all to be considered they would say that by virtue of the defendant supposedly coming up with this by himself he is somehow exonerated i would suggest you that this an unusual case for that argument to be made since the first the very first finding of fact by the court and something that the finance proclaim is that this was jointly come up with by the defendant  duty is breached or observed and i would say that the law of fiduciary duty does not suggest that directors or lawyers are supposed to lie to people and it certainly doesn't countenance what happened in this case so for example your honor at a six one six five six of the record constantino while he was a director of the company compared angio score or interscope and chocolate and said that chocolate was a step up over n g o s or while he was on the board he said that the dissection rate which mean so that is not what the teller supreme court had in mind with respect to the statute of limitations i would say the following additional court entered an order that said that my clients had acted diligently to be very clear and i want to be very clear about this she also found that constantino deceived his lawyers and my client the lawyers wrote that letter and he said among other things no development had taken place false she found he said i hadn't done anything false the court found and at the conclusion of those letters s score had no information about what he had done it had no information about what the product was so it could not have sued had it to it all it could have said was we we understand he may be going into special people we don't know what the balloon is and we don't know whether he's actually worked on it except it turned out he had so the court was entirely correct in its factual finding that he had deceived my client and his lawyers there is one thing in the reply brief and i would mention attempting to find financing that's it eighty ninety one and in the march twenty first letter and and in the conversation that they had about glider in the summer it was clear that this company that we're talking about a trireme at the time had no money so it was not surprising at all that the defendant would have revealed that he was looking for financing is no statement about that financing being tied directly to special scoring as an affirmative way of showing functional equivalence now our side mentioned scoring but it was a icing on the cake and i'm sorry to go desserts again but it was more on the way that it can't be equivalent but most of it and the heart of this was whether it was the end struts and the attachment to the catheter shaft and what the prior art revealed and this is a response that goes to all of it it has to be the core it can't be i mean i can't believe i actually looked on the google images what a core looks like but it can't be the membrane in the nuclear plant and has to be the center so just the fact that they can point to little things here and there it's not the core so i you can go to those sites i don't i don't think they're going to help him the second one was his role a proved it i guess it's valid but his main thing was on willfulness and again i'm very surprised by this but i'm going to give you the cite for this at the pretrial conference on august twenty one pages eighty two and eighty three and eighty seven that lawyer school and you score conceded that he would not rely on anything dealing with the state law case because it was not helpful and willfulness was not mentioned in the penn trial so i checked on that he the closing argument made a passing reference pat never practiced so you could have it could have been known by you know i don't know one of you or me and you could bring the patent case so interest wouldn't even have to exist to bring that patent case and then the final thing is discovery and i think that  response you could make the same thing about the boat case again it has to be the core and just briefly on the corporate liability the comparison of the two products to the investors i'm surprised he didn't mention science accessory because that is what the director for the share he did there he compared his product and an investor prospectus so it's exact fact pattern that you can compare it to that is one of the things you would talk about is what's in the market so that is covered squarely by that case and then his final what about well developed if i could just do another process so in the t c example he says why does it matter if it's a third party so when process was painting that the federal right is vindicated if he can sell his invention when he leaves but if the cost is on the board pay for his paintings and so moreau the other thing is is when you have them a tease presenting this opportunity you know what you're talking about because that third party articulate what it is here we have no clue what this thing is the court never told us what this right to require i didn't tell us why that was an option right and if it's an option right whether there be an option period option price royalty what the procedures also the very other thing that's very curious is the duty when you have your third party it arises at present third party teas comes to you and picasso i've got this another cut out are you interested in it here the court how the duty arises the instant an idea becomes concrete concrete enough to what solicit inventors in to file a patent application but an inventor has no way of knowing when that's concrete enough you could say a constant could say you know if you want to buy my next painting i don't even know what it is yet and that certainly would be quite marketable so would it have been first steve jobs but other people you might have to have a whole bunch of patent applications just to get somebody to convince you