which is a waiver of the government's sovereign immunity when a government contractor provides services to the government and there's a patent infringement i don't mean to be when i ask this question but sort of like why why we're necessarily here i think you indicated i think you may have indicated that you weren't seeking an injunction so what this court the just below leaves you with the remedy is that so problematic that we're you know litigating this issue here not as a matter of principle or is it a there are practical there's probably a principle that the practical matter yonder would be if we went to the my concern would be that we proceed to get to the court of claims that case goes to a conclusion is ultimately appealed to this court for some reason and maybe this court at that point in time decides differently from what judge perry did in the in the district court so i think it makes sense to have the issue resolved now that's the practical point means you don't get yourself in a catch twenty two and then get told four years down the road that you're you're in the wrong place after all exactly what you are saying so that's why we're here in in n as i said it remains part of the case below  definitions which would put them in the position of having authorized and requested an exception but ability to or any invention to the united states took the position in the case that there had been at some point in the past and authorization and consent to the potential infringement it's our position that that never occurred and as a reef points out  i believe you know there is a case out there the roberts case cited in our briefs where the government and if in a situation came back later and sent as an express authorization and consent letter after the fact saying to the extent there is any ambiguity in what happened we're here by granting that authorization and consent that never happened here the dignity of government is in my reading of their papers never said that expressly in any othe papers what they said is they argued that what had happened had constituted in our authorization consent in the government through the witness at the treasury so that the only two papers she could identify that could have constituted that were a couple of letters that had been sent from someone at treasury to someone at the federal reserve bank and those are in our independence in their reference throughout the re and neither one of them says anything of the sort indeed the government was okayed was in favor of was happy to participate with the federal reserve banks instituting this software but consenting to doing that is one thing consenting to waive the government sovereign immunity and grant immunity from patent infringement to a private party is a different thing it's the latter part that never hope that the court would award my fees for the time that's been wasted all along up to this point in time and you know a question in my mind and we want to write something that supposed to mean that was something i was thinking about in this case when i was leaving government's arguments earlier behavior and does that meet with fourteen ninety eight can the government authorized later something that it determines happened earlier without its suppose there was no question there was no evidence of earlier government authorization but after the fact they go back and authorize that that it's fourteen ninety eight there is one case and it's been cited in the briefs the roberts case where that happened and that was approved it was after the fact you know said supposed that it could happen that an intervention by the government in a later case could constitute a post hoc optimization i have not we have not found any case where that is ever happened where the intervention by itself is that if there an intervention and then they deliver a the normal expected clear and unambiguous authorization to send a letter that be something different but that's never happened here now this roberts case because i wasn't remembering and i looked it up authorization and i mean do you feel that roberts is rightly decided is not binding on us though no i understand it it's the only case that we ever found that spoke to that issue directly it's the only one and  it's hard for me to say that that's wrong judge because keep in mind what's going on here with fourteen ninety eight to the government has the right under that statute to make the decision it's going to waive its sovereign immunity and it's go whether that happens before whether that happens after or you know to be honest i don't think it probably makes any difference you know however i would say judge it's what i said a moment ago and i think it response to your first question why are we here there 's been an enormous amount of time spent and wasted without that having happened i would add let's assume because we're again going to run out of time let's assume for the remainder of your argument that when it comes time for the government to stand they say no we're not going to be liable for full and entire reasonable an entire propane solution for whatever reason if they go otherwise i think you're home free to go to the court of federal claims and perhaps hold them to it when it let's assume there we are in the posture the ambiguous or other posture that we're in but is there anything else that you want to tell us in government concept and the authorization consent concept which is mostly what we've been talking about you know the for the government part of the analysis i don't think the case case law describes any real clear way of understanding how to test that if he exists or not the reality is virtually all the cases that address this issue there is some kind of government contract there is some kind of government specification there or something and when the government goes out procurers solicit something from a private party it's pretty clear it's for the government that didn't happen here what happened was a federal reserve banks approached the government and asked them if they wouldn't produce a pay and cooperate in this and they agreed to do that there is no government contract there never has been and so what's been and also the government when given an opportunity and this is reflected in our briefs positively on a big use we said this is not a government for germany we don't want to look like a government for germany it's a federal reserve banks who are not to go meant for jury something for something that they are doing so you know it's our position that when you don't how do you dress the four to go for the government concept when there's no contract i think you have to look at you know what was the purpose you know who was where is the benefit who solicited whom and that's addresse against private parties and what you are such as fourteen ninety eight doesn't apply and so yes we're seeking all available remedies under the patent office we had told the government i did expressly that their concern about an injunction to stop treasuries checks was not something they should be worried about we have no interest in stopping the treasury checks it's the validation process that checks for fraud that we that is what we are interested at and that's what we've you know we didn't that's all we were seeking so now if the government wanted to ask me if my my client would agree that it's not trying to stop the validation process either and would satisfy itself which is damages you know we might do  that but i think that probably is not really and and necessary inquiry because i would assume that at the time if i prevail ultimately a case and ask for an injunction against it i think the government could come in with a pretty good public interest i think perhaps we should hear from the other side  good morning they have pleased the court i'm appearing here for the three federal reserve banks as well as for five sir if i may i'd like to respond first to the questions that were close from the bench to see opposing counsel and  i think it's important to understand in connection particularly with the first question posed by judge pros the following and counsel picked up on it at the very end when they said we're only trying to get an injunction on the valid patient side against the banks we're not seeking to enjoin the treasury it's important to understand what this technology is it's customized software that has two aspects to it one is the treasury that to imprint on every trip check that they issue in a seal which is actually the signature block on the check with their bunch of dots and when that's decoded it will show the name of the the date of the check the amount of the check or the critical information and what it's presented to a federal reserve bank for payment their reader their computer software the other side of the coin and scramble that it can tell with ninety nine percent plus accuracy whether there's been a forgery or alteration mr raban per file the declaration in the district court which is a page for forty two of the appendix in which he specifically said that we're not trying to interfere with the printing and cashing of u s treasury checks instead as reflected by the complaint plaintiffs were seeking only to a joint the use of the validation process by the federal reserve banks this is somewhat like saying to the july company or only going to enjoin you from making razor blades you can go ahead and make the razor the problem is the razor is no good unless you have the razor blades and here the fact the treasury encrypts this information on the checks is totally worthless if the federal reserve banks their fiscal agents under section three night it was going to tell us it would be inappropriate r let's return to the question of whether they might this you know the law of injunctions has had certain clarifications along the way which might be applicable here if in fact the bigger argument is whether an injunction may or may not be available and otherwise there is no dispute that would change the complection of this case  t is for the government and its authorized or consented to by the government somewhat tautological but that's what the statute says and there can be no doubt here that only the requirements of the statu have been satisfied but i guess the there can be no doubt boy that's that's kind of tough because i think you have to admit that you're in the hinterland with regard to the for the government thing between say larsen and riles on the one and and severus and on the other i mean any you're not clearly governed by any of these cases as far as the for the government so beyond any doubt language seems a little bit over  and i'm going to try to support that judge moore that riles is an easy case that dealt with is on the continental shelf and all that was occurring to the government with a percentage royalty coming from the drilling this is very much different than  also very much different than larsen larsen was a case where thermal plastics plants were being used by health care providers who were seeking government reimbursement under medicare and some of the government sponsored plans it's rightly held in those cases of the government's interest was remote and direct that's not saying that you're in the category of the contractor subcontractor the government here in the form of the united states treasury went out through its fiscal agent the federal reserve bank of philadelphia who contracted with pfizer to customize software that can only be used by the united states treasury of the federal reserve they need to contract with the government you are saying that the banks were acting for the government as the government rather than as whatever color crazy independent status the banks are i don't think that this quite exactly but i remember it's not that banks are it's a small isolation of the government for all purposes or not for all purposes but it's not only with respect to deposit but it's also also with respect to the payment process as kicked back by the federal reserve bank i believe out of the applicable law the wrist with the bank to whom the check was or initially presented but that's not i think that's missing the point that's what counsel argues in his brief but i think the point is the government has a legitimate significant interest in maintaining the authenticity of its own checks and ensuring that they're not fortune altered and maybe you know if there was some danger here to the government like for example the surgery was so extensive that the banks were beginning to say we're not going to cash government checks because we just can't we don't have an accurate means of ensuring the accuracy of them but there was some evidence in the record anywhere of what you're saying that it would distinguish it from say the general notion that the government has an interest in ensuring a healthy citizenship and thereby you know i was interested in the in the welfare of the medicare program where the government has an interim the government has a lot of public interest clearly but yet that alone shows the forgeries and alterations that have been caught as a result of using the software there are substantial numbers there i mean we're not talking about in significant numbers and there's also testimony from this tillman who at the time was the deputy commissioner of f and this software has a ninety nine percent accuracy rate that's undisputed in the record i don't doubt any of that but i still don't see how this is for the government it seems to me it's at least primarily beneficial to the  so what i think you have to show me is why the benefit to the government is sufficient is sufficient enough to make this for the government because as in reilly's and as in larsen and there was a benefit to the government right the government got royalt government it was government land that the but there's definitely that hinder land and i need you to get me overwhelmed and i think the owner you're citing to seven sin of which is the most recent case from this court that deals with this issue and i think the importance of seven cents for purposes our discussion here on this point is that they said there really has to be a benefit to the government council has been arguing this brief that it has to the government has to be the primary beneficiary that's not what this court said  sevenths that it simply has to be a benefit i think it's hard for me to understand how you can say that the government and that is the department of the treasury doesn't have a strong interest in the public being ensure that their checks are authentic and we have consistently and the record and it and at this level said that authorization consent has been provided by that treasury department through apa mass for the banks to use the software  there's a very close relationship between the financial management service and the banks and the banks basically hold our money and make disbursements for ass they're basically our bankers that it had sort of the fiscal agency relationship and it at the masses always looking for ways to preserve and protect the integrity of our checks and had directed the banks specifically to use this particular software which is customized for war and reading  encryption the encrypted data that is put on the checks by the treasury department when we when we print our checks there's a very and direct benefit to the government and being able to quickly detect whether there is an  compensation because we don't know what that might be but that's as much a part of the century does everything you know it's certainly honor and the government would not challenge you meanly if you know certainly if this court affirms which we have if we get sued in a court of federal claims certainly not i mean our position has been consistent that there is a benefit for the government and by use of the software and we have provided authorization can then percentage you and we have expected any what we wanted and in this pilot tests to determine whether the software was useful and would really do what we needed it to do and interacted the banks to use that now in looking at the this letter and the second letter or for the rollout for the permanent use of the fact where in the check fraud detection process and that second letter was issued on are signed on august eighteenth of two thousand and three now both those letters have to be read in the context of the very close working relationship between the financial management service and the banks in trying to get this this type of software and check integrity software developed and implemented and and between and certainly i think christian that current the data that's put on the checks by treasury by my software that needed lies from i serve and then on the other end those checks are presented to the bank to be able to have the banks be able to read that encrypted data and very quickly determine whether or not there's an alteration or a this action was undertaken for the government and i mean i imagine you would acknowledge that you're not the primary beneficiary of the use of the software that the banks themselves are because they've weighed having to pay checks out and but nonetheless you think the government's interest is sufficient enough that this qualifies under the for the government problem i think it definitely does and if you look at the case i mean if you look at riles i mean basically that was an oil rig and that was accused of and printer and i mean we didn't care sure they're not i guess we do and i think in the testimony that is in the record we definitely did i mean we looked at other technology and enjoyments management service looked at a parking technology when work we had very specific functionalities that we needed and that is that for then the first lateral where we were implementing the pilot program where we specifically directed the banks to use fi server software so we definitely are very interested in exactly what software is using and what kind of functionality how the government accommodates statutory provision about reasonable an entire company sushi compensation if in fact there had been a procurement perhaps this patent she could have much faster now and they're certainly environmental time to tell me that your interest comes in the money you stated by not having to use the employee to perform the service any longer well and i want to take a step back you're going to you've got to compare that the amount of money you're going to have to pay them in terms of reasonable compensation for getting their software right i mean if the amount of the bridgeman cost exceed the cost the savings for the individual employees it's not really a benefit to the government well i think you have to look at in the case law the benefit for the government does not necessarily have to be monetary i mean if you look at the his case when you were just arguing it was you said we were in there retest people to other jobs and that's the benefit we realize that is some of the benefit we realize we do have some financial benefit that we do realize from it  certainly there's never been a comparison between the benefit to the government and what other benefits are are a creature other people if you look at the seven think a the precisely that's why i'm trying to really focus on the statu station where there would be reasonable royalty or who knows what would be paid and i just heard you say well that's not us but where we don't pay such compensation because we're not the ones experiencing the savings in that case this patent she has not would not have lost the right of action as against those who are in the position to fulfill the more than one aspect in that statue one is that there be a contractual arrangement or something close to it and you assure us that the government is going to it's not going to dispute that question your concern is that if the banks are saving money hand over fast and that we say no we're the ones that are accepting liability somehow that gets parsed out and they the plaintiffs can never attempt to argue that and the court of fighter planes i think it's are concern d what we say under fourteen ninety eight is that we're expecting liability which means they can bring i mean we're saying those acts are as if they are x and we know you can re all of that and a quarter of federal claims in terms of however you know whatever arguments you're saying whatever reasonable realty would be assessed against the banks you will assume and pay well we're saying that we are liable for that particular act now however that that would damages would have been client's remedies in this sort of situation my you know that the federal acquisition regulation which applies to government procurement was not used here was not used here because it was a private party it was federal reserve banks who went out and contracted for this and my client is a paper say provides an alternative solution for the very same thing my client was not given an opportunity to bid on that because this was an inside limited beyond lack of an injunction it's reasonable roti plus costs and expenses and you don't need jury there yes and if it's a suit it between two two private parties which is what our position it  is we can you know we can pursue what other kinds of damage remedies that we can thank make sense and there's been a lot of talk about valuable this stuff that i think if you know it has been literally dozens if not now hundreds of millions of dollars saved by using this software that money is clearly saved by private banks aren't even parties to this lawsuit the banks that own the federal reserve banks and so it patent d who has a patent that's being infringed and the and the party in it to great benefit of the infringer normally should have the right to go pursue that infringer and when that other party is a private party as it is here we ought to be able to do that in and if what i hear now that this is an effect of post  authorization and consent and it's become tantamount to a government procurement contract that wasn't done properly and my client set out from this that's why you should not affirm this decision what they're saying is that because we're physical agents of the united states we can do and act in their shoes but we don't have to actually act like them and that should not be condoned private parties need to be able to pursue their remedies against other private parties and thirteen ninety eight was never meant to be a grant of sovereign immunity to a private party by another private party and that's what happened here if that's what's going to be the result so you know i made a flip result response earlier in your question why not the court of claims and one from st louis that's true and from st louis and that's where we filed the lawsuit but the remedies are appropriate there for what happened  i don't know there are the the remedies are limited in the court of claims and there's no jury as you say judge so i think from a policy perspective it's the case should be should be reversed is think of it this way if the government wanted to do what they're saying now in retrospect post hoc that they wanted to do was very simple they could follow the federal acquisition regulation they could have gone out and p there's not a remedy in this court or in the district court for that now maybe there's something maybe there's a complaint that can be made earlier with some agency about that but to this day this is not the any government procurement and i don't know where we would say they have the jurisdiction to look at that kind of a mistake so i guess what i'm saying bottom line is i think from a policy perspective the right thing to do is to reverse this and send it back to the district court for the for the case to proceed a case between a private party who has a patent and a group of other private parties united states who are alleged to be infringing that and that case can be resolved as any other patent case between private parties and and you know and make it clear that if you're going to do a government procurement you're supposed to do it the way you're written or you're supposed to do it on the other hand if it's if you  firm and send me to the court of claims as i said earlier i i believe there's been a lot of time and money spent and wasted on this endeavor for the government to now come out announce finally that they're granting post hoc authorization consent and  you know i would be asking for relieve them that regard and that we've covered all the issues if there's any other questions i'd be happy to address