ok when you say perhaps it could have been better you better tell me something yes or well the word adapted was added to the claims of the zero one two patent to impart a new meaning it's the only patent and which adapted as in  is also the only way it's also cited in the title of the patent system a method for adapting a piece of terminal equipment and we understand from the specification what the patentee meant when he said adapted because what the specification tells us is that there was existing network equipment that existed in the art prior to the zero one two patent there were p c s there were computers there were us printers and what the patent tells us is these piece of equipment in the logic of your are what i want to know is  evidence of being added by way of them in the prosecution history i have evidence in the fact that it was added it's a word it's a limitation in this claim the word adapted exists in the preamble intentionally we can understand because the patentee wouldn't put it in there by accident and so that's what we meant with our argument that it's added by intention and that it appears in this patent and doesn't appear in the other patents this trick or the  or just the state of the art you're on at the time of the patent filing but certainly even even if if the court was inclined to disagree and that the evidence did not support a finding that it was routine what your honor even if the court's not inclined to to support that argument the court has repeatedly said that claims need not in compas all disclosed embodiments in fact in the t r p systems case we cited this court said that the precedent specification our construction is still correct as a matter of law because it's supported by an overwhelming portion of the intrinsic record of the specification and the claims themselves i'm just asking about the purpose of a about existing piece of equipment that could do conventional either nec communications but the stat specification tells us is that this equipment that existed in the art at the time was incapable of performing these functions the entire virtually entire specification is devoted to the notion of adding new structural components to these existing pieces of equipment to perform the functions in which the patent you believe distinguish over the prior art figures one figures to fi siri illustrate adding this new piece of structure the remote module that would perform these functions nowhere in the specification and the patentee say that these existing pieces of equipment could do these functions believed to distinguish of the prior art in fact the specificity specifications so it's exactly the opposite  three sixty seven the patentee says therefore a method for personally identifying an asset by attaching an extra or internal device to the asset and communicating with that device using existing network lines fifty thirty three fifty six where the patentee says in general the central module monitors remote module circuitry that may be permanently attached to remotely located electronic workstations such as personal computers so what this this teaching us is that the structural configuration of existing ether net terminal equipment that existed in the art at the time  is merely configured to be construed this your court said no for the construction of the term physically connected is necessary show me where the district court specifically reconstructed the limitation to require only that be and starting on appendix thirty nine the court improperly relies on the doctrine of claim differentiation to say that the scope of claim one of the seven six zero patent does not require an actual physical connection between the two constituent components the central and the terminal pieces of equipment basically the court is resolving the parties dispute this dispute before this court was what the scope of claim just claim one require physical connection between these two components it was our position that the words as written physically connect they will signalling pairs of connectors that is equally connects from a central device to  connection didn't actually exist this is a so this is a system claim your honor that talks about two components being in the system and the claim expressly recites that these two components are in fact is equally connected to each other you about what i say meant that this claim element if it doesn't require an actual physical connection what was what were the parties positions for the respect to infringement i'm sorry or are i'm trying to get a what i do not currently have in my head a concrete idea of why this dispute manders oh this dispute matters your honor because aly doesn't sell complete systems the and nor did appellate argue and it's expert reports that we did while we might still be excel the constituent components a terminal device or a central piece nowhere do we sell it to pieces physically connected together and a pelleas infringement read at the district court was based soley on the time of sale when these products are sitting on the shelf available for purchase and when these products are sitting in the store there is in fact no physical connection between what they allege is a central component and what they allege is a terminal component of a reason no claim what is the difference in terms of ultimate infringement under any subsection of two seventy one you care to name the only dirt they had know it well for contributory are and direct infringement if the court is aware you have to show some act of direct infringement and they had no evidence your honor of direct infringement of any system of a only actually being physically connected and so they would have been incapable or for they would not have been able to show the indirect means business in is without the physical connection these things would not be operable is that right for direct infringement no direct and is it agreed that there were some large number of working units out in the world  agree and we contested that position and they have no evidence to show that in fact there was a working system made offered for sale or sold by a ali so there proof on the indirect i'm going to i didn't i didn't say about a word and systems so had i said out there in the world what was damages based on their damages were based on the number of p o e capable ports but to answer your question they want you to units were being sold and in your view those your view that it's in operable if not well that's certainly conceivable your honor but it's their burden of proof to show as you just pointed out that somewhere out in the world there was in fact a system that was put together with these components they had no evidence that anywhere in the world these systems existed but paley that they have i understand your point but it's still their burden of proof to show that in fact that was the case which they did not do  good morning your honor i'd like to pick up where you left off judge toronto the dispute on physical connection would not have made a difference crime are had to infringement series one based on sale of the component parts a direct infringement understand player intellectual property or offense even though that argument has been rejected repeatedly by the district court and mark bennett again on summary judgment that the court was correct in rejecting the physical connection argument the daily makes based on the language of the claim and claim  physical connection dispute it leaves this court to simply take their word for it that if they were to receive their construction of physically connected they wouldn't speculate as to infringement they have a new trial for infringement i have to say it's a new trial on infringement certainly that would be unfair to the patent holder and a waste of judicial resources and most importantly of this court's precedent they needed to identify the prejudice in their opening brief and they failed to do that and  point on adaptive since there was no prosecution history on the word adapted as you pointed out it's not repeated in the body of the claim it is not a word that needs to import additional limitations beyond the entire body of the claim the court was correct in rejecting ailey's attempted additional limitation which would turn it into a product by process claim requiring a retrofitting limitation where then infringement would depend on the order in which these products were is proposing is that each word the preamble would need to have additional limitation above and beyond the entirety of the claim now their main argument is that the word adapted with or without provides no more meaning no more palatable distinction all the other limitations in the claim without the adaptive part any prior art piece of ether not equipment would meet the preamble it is limiting in the context of the preamble claim thirty one it just doesn't add more additional limitations beyond the entire claim and it certainly would be improper to read a retrofitting limitation for a temporal limitation and again to the projects you're on or even a lees own expert admitted that a device manufacturer with this invention would still meet the term adaptive under their incorrect claim construction and if i might turn briefly to the two phrases your honor bailey and it's experts all admitted in the court noted that these structural limitations were known understood by personally ordinary skill in the art that alone is enough to meet the test under williamson under sky versus mine to get media rights tacked to defeat that claim that they invoke one twelve six means plus function  first rejected mr mills methodology because he stated he didn't have to account for any potential increase in value due to standardization due to dr matta seti the technical experts statement an opinion that there was an absence of not infringing alternatives this report rejected that and said go back and do it again make sure you are accounting for standardization and don't rely on the absence of not infringing alternatives were on the record crime are demonstrate that and related features of the patents and the crime as licenses network one licenses the power of reason at premium or admitted into evidence without objection ailie never once objected and it's to dahlberg and any time during trial to any of the evidence coming in what they complain about now is the weight and that went to the jury or to experts looked at the evidence for take it analyzed it made arguments and the jury made  litigation settlement licenses are comparable well your honor every license negotiated for a patent has some specter of litigation a patent owner has no other enforcement mechanism other than to file suit so the hypothetical negotiation assumes that's not the case unfortunately you're either if we are talking about the two companies are talking about taking a license and we approach you if you refuse the next step has to be some form of litigation or abandoning your rights that's true if every company refuses if they refuse now there were not not all of the license in this case were negotiated during litigation there were a few that weren't but at the same time this the specter of litigation isn't enough to make the license agreements themselves and admissible and i believe that proposition was lost again in eric's vetter fact in this case you have licenses from prime are directly on point about thirty licenses in total about a dozen were running royalty licenses some were a per port rate and dollar figures purport and then a royalty percentage of net revenue and mr mills relied on his methodology to form an opinion and his opinion what he did is he actually used primarily lowest rates from all of its running royalty licenses of two dollars and fifty cents had mr mills and he testified just a trial used a percentage reasonable based on all the ga pacific factors accounting for the value of these patents with respect to products and accounting for any potential artificial value due to standardization but again your honor the question is did he abuse to the court its discretion and allowing him to testify about this opinion when he had objective evidence that was admitted without objection that was tied to facts of this case certainly not a case where he arrived in an opinion antitrust counterclaim elite chose to put itself in the place of shoes bring america's claim fail to even present expert opinion on it maintain it through summary judgment telling the court during the letter brief for summary judgment that it could present its antitrust claim to the jury without any expert testimony against a party that it alleged was a non practicing entity which is incapable of proving market power and it did that through pretrial and if elite conduct was on behalf of  court's precedent in cases like in just a camp i don't think there'd be much hesitation in finding it was an exceptional case ailie also did what it just a candid and continuing to pursue an objectively baseless non infringement argument post  markman and worse than a just a cam through summary judgment telling the district court that they had affirmatively disproved infringement because while the products are in the box there's no power flowing you can't meet the past couple of cross claim elements and they repeat that today in their briefing and their argument still when they sell the product they cannot possibly infringe if those one of those alone would be enough to find a patent owner liable for an exceptional case in this case they did so much more they maintained fraud implied license in breach of contract claims knowing they were legally unfactual impossible they're appealing the jury instructions on fraud when they are incapable of proving the elements even if they were given their jury instructions the jury instructions were improper because they would have created a nonexistent cause of action for fraud in a vacuum where the fraud was against anybody in the in the even in this case you have a company that didn't exist and where we showed their proposal in red line the final reply brief apology as i don't know the colors but i'm page ninety eight which we provided in red line if we the court were to adopt their improper instruction it would be the primer was libel for fraud by making a misrepresentation material fact in the abstract so you did not propose this a instruction that was different from what was given  but they did propose something between their view which is which i think exxon actually expresses repudiation corrector on and the one that was given that's correct your honor they maintained this fraud in the abstract position that crime or done something wrong in the year two thousand and company later they claim fraud breach of contract implied license but these alleged acts or omissions and most importantly that was based on fabricated duty which the court t report found as a matter of law crime are owed no duty and aly does not appealing that but the jury was not bound by the district court's determination of that question on the question of the equitable question of equitable stock or was it no your honor but it was the same he found the jury was misrepresentation instruction and the reason why we did your arse that both parties agree the texas state law applied here and under the x on the emerald case that we cited the texas supreme court held that the misrepresentation or mission did not need to be made to the defrauded party in that case exxon have submitted well plodding reports to the texas railroad commission and those reports were relied on by  subsequent operator in the field and as i did tell me from rove about this so the exxon decision said i think in terms it is not enough all by itself that a fraud in that case there would be plaintiff has to be not just within some foreseeable range of expectations but especially likely to be one of those people and all of that was addressed by the exxon decision in ruling on the reliance element and the exxon decision didn't repudiate the seventy nine seventy nine airport garage standard which is practically verbatim what the district court used here and the fifth circuit i think that is the lay of the legal land i think certainly would not have been even x and would not have been satisfied by your proposed instruction which would have all that would be translated into acts in terms a mere fraud on the railroad commission brief on pages seventy three seventy six and that there is a long history of crime are being involved with the standard setting organization being aware understanding what these letters of assurance mean why they are submitted who will be relying on them it's not just just a quick lead turned to the damages mr cohen and to the briefing has tried to turn this into a question on whether or not this is of a and a question of admissibility of these litigation settlement agreement one of them is a portion within the product between the fact that features and i don't think that features and when you move to exclude his testimony judge said you're wrong about that he's done that the second one is giving some value to the standardization and he in his initial submission he said i don't even have to try to do that because of the nonexistence of not infringing attorney this and judge said judge was said no no the federal circuit says you have to try to do it but you can actually rely on this expert doctor not a setting mad a settee views about not infringing alternatives that's obviously relevant and then he went back and said now i'm going to value the standardization and i think ultimately that value is so small that it doesn't change my bottom line what's wrong with that well i think in the first instance it shows that he really didn't value the standard because in a first report he says i don't have to value the standard and it's two dollars and fifty cent support and then when he was specifically instructed by the court no i want you to value the standard he comes back in a second report that we just turns out by the way that when i go in there when you move you leave said that's bad and the judge said no no actually he's fine now except for one sentence and i strike that one sentence i think the issue i would take with iran is that page eighty five or something something like next year i think this year i would take with that as it's not based on a reliable economic analysis and cyro this court criticize qualitative statements based on the patents value are important without it being rooted in a quantitative market analysis and that's exactly what's taking place here dr mr mills has provided no quantitative analysis as to the value of the patented features versus an patented features and he's provided no quantitative analysis as to the value of the standardization that by definition is unreliable he was allowed to testify at trial just into the qualitative importance i relied on dr matta say and i think this invention is really important so i'm going to give it all this value and i think based on dr matta setting this invention drove demand for the standard how do you think he should have proceeded to do something corn today well there's there's a lot of different things he could have done he could of done market surveys he could a value the cost of the technology to implement the power of reason that standard like our expert at r t could have done our expert mr bakewell went back and looked at non infringing alternatives that were available to the i tripoli before the implementation of the standard i mean analyzed those costs because they weren't tainted by patent hold up and valuation of standardization it was a very clean way to look at what it would have cost to do the accused features in the fiel standard prior to standardization it could have done something like that but he didn't facts only to put undue pressure on a litigant that is by definition under octane fitness an exceptional case unfortunately the district court abused its discretion when it ignored ailey's antitrust counterclaim for which it never intended to try and test the merits it ignores the fact that like a just a cam ailie defied the court's claim construction order and maintained its operational state argument and ignored the fact that it maintained all of these weak to meritless claims and defenses right up until pretrial dropped all of its invalidity during trial the fact is it's fancier today still incapable of meeting the elements of fraud it never showed the jury a contract the one of these and inventor ship under ovation these are the issues that it decided to try to the jury as opposed to its myriad of other claims and defenses these are the ones that decided to try and test the merits fraud breach of contract implied license derivation the so called main inventor mr banky admitted at his first deposition the concepts for the inventions came from crime are certainly came from c m s at his next deposition mr banky said he does not consider himself the sole inventor and yet ailie persisted and maintained that he was the fact the true inventor and at the end of the day had they won on that claim the patents could have been corrected the whole purpose of litigation strategy has simply been to force crime or to accept pennies on the dollar which is the