a hygiene products versus first quality baby products issue in the case or got disputed as ca sent a letter identifying a patent and inviting first quality to comment first quality responded the patent is invalid period case closed mr dimaio who testified in the case said that after quote after sending this letter this matter was never thought of again following that s c a did what we believed was the right thing they took the piece of prior art that had been identified by first quality and then went off to the patent office and filed for examination on their own pat that doesn't happen very often and it was a signal of good faith on the part of  that they were interested in getting the right answer from the patent office before starting potentially costly litigation and they did so the patent issued from resented nation with new claims some of which were narrower than the original claims if they asserted by first quality is of course happens all the time it's rare that you send a letter notifying someone of a patent and they write back yes your patents valid infringed and we'd like to pay you there's usually a different dynamic going on this was a very typical situation the argument in great detail but it does leave a little bit open to interpretation our view is that if the certainly if the plaintiff rests on the view that the defendant has to make the case then they lose because the presumption applies the plaintiff would have to come forward with some reasonable interpretation of the facts which would a reasonable fact finder could conclude justify the delay or that there was in fact no real prejudice once that happens the quote bubble has burst under federal law of evidence three zero one and you're back to square one where the defendant bears the burden of proof and that you have let me ask a question of allah crazy straightforward  defense and the district court found economic prejudice but not of an entry prejudice which was surprising because the principal defense in the case remains validity and not infringement neither of which depend on any potential evidence that was lost there's been no assertion of that and to the extent it was argued below the district were actually rejected that subs when she when he concluded that economic pressures apply we got to the prejudice point which cuts across both latches and a stop the question on summary judgment not after trial but on summary judgment is whether reasonable fact finder could conclude that there really was doe prejudice so we have three different applies we can test that because of the rigs and three we don't think the reexamined theory it should count but even if the period counts and you know the courts are comfortable with that position we believe that under the law it's very clear that the reason reasonable behavior after that when we did but you have to at that point you have to analyze the case from the perspective of the rig sam ended in two thousand and seven and we sued in two thousand and ten so then we read a situation where the delay periods three years  period is still seven years it's just you have a good reason for part of it you don't have a very good reason for the other part that i understand your point your honor and the question here for us in summary judgment is whether that justification should have been weighed against the prejudice point and they're the strength of their prejudice argument the strength of our prejudice argument well i wasn't asking about prejudice though i was asking about what the play itself was recycle and you seem to wan out the time during reexamine say well that's reasonable so then you only look at whether three years after the patent issues is reasonable or not but you go look at it like that to you you look at the whole the leg the whole seven year period and you say overall maybe part of that was a good part of it's not and and what's the genuine issue there over why because the district court was very clear i think that even if the reexamine proceeding was reasonable that three and a half years after was so unusual and most importantly even then it's not just three and a half years if you knew of what they were doing for seven years part of it you're going to get a reexamined but you should have been in it should it shouldn't it incumbent upon you as soon as you got that geisha i don't agree with that your honor i don't believe they had any apprehension of litigation i think mr dimaio was clear that once the lawyers told him the patent was invalid they considered the matter closed and they went about their business that's because you  respond he said his quote was as soon as we sent the letter the matter was we consider the matter closed soon as we sent the letter and a reasonable way to interpret that is that my lawyer told me the pads invalid i don't worry about invalid patents business people have to deal with these things all the time i'm going to deal with the issues that are front of me i want to trust your point about the again about the lay sometimes the latches cases methodically march through all of the elements and finding one after the other and then mechanically reach the result of what the law actually requires is you look at the delay in any justification for it you look at the prejudice and any and any issues of fact around that and even if you meet those two requirements then and only then do you do the balancing test to determine whether or not the bar the claim and you could bar part of the claim it could be all or all the claim we have we have had claims that were issued before or in the original pattern we have had claims that issued after reexamined we have products from covidien we have products that were with first quality of district court didn't consider any of that because he didn't get to the overall balancing of the equities that even if we missed on a delay point your honor we missed by a lot we missed by less than a year with a sam pending so even if we get over the technical hurdle one way or the other it surely should counter our favor but that's not the that's not the district court's analysis of what you like i do want to talk about their theory with you please the court i just want to start with mr demographers testimony and what he really said was the fact that we never heard back from s c a once we sent them this letter that you that you have put in front of me we never heard back from them and as a result we did not consider to be an issue because we did not know what if any issue existed for us to follow up on so that the oversight yes i do your honor it's  zero three three doing in fact even knew about our acquisition of th r g before it happened and i can point to a record pages nine forty one in nine forty two so this is an essay document and the date of the document is december of two thousand and seven now what's interesting about this document is that the reexamination issued in march of two thousand and seven so this is months after the re exam and if you look on page nine forty two there's a bullet point market there's no reason for them not to come to us and say you're wrong he said the pad was invalid but you're wrong and now you have to start they didn't say anything not only did they didn't say anything but they were watching everything we were doing and they knew that we were  we were going to buy this company which we ended up doing and he parole of two thousand and eight so they really did sit idly by and let the damages approach if we find that the motivation for purchasing  products the last one of which cost over ten million dollars we have sales going from forty five million dollars in two thousand and four to three hundred fifty million dollars in two thousand and you know stuff this took off we bought more equipment we made capital expenditures and we also have testimony from mr salon admits that he abandoned an alternative design because at the time it cost too much money in there was no complaint so sorry yeah the reliance here on the on the misleading conduct was total and complete we had a letter saying that we in french we wrote back and said we think the pants invalid one months later they sent us another letter about another patent and they said oh ok you win friends this patent and it's a different pattern different product we referred to the old correspondence they said nothing they said nothing about the  and that testimony is supported by mr de moggy at a three three five to three forty and in fact a georgie was involved in a lawsuit with kimberly clark and mr time testified that part of the deal was they like that lawsuit had to get settled and it was it was a mexican facility that had an ip problem and so we didn't buy the mexican facility we just what the assets we went through great pains to make sure that there were back to us so there was nothing for us to follow up on and two it was this was never thought of again this is the ultimate in reluctance they did an excellent job convincing us that there was no issue here in the law and after that we was going out of for the that's not true which material of this is what would have this infringer alleged infringer have done differently and there the evidence is crystal clear that the and it's undisputed that when we went and bought th argy we would have done things differently would have structure the deal differently and there's no dispute on that and that's what mr oppenheim testifies you know there were three parts of that deal there was baby diapers it high pads found in one thousand pads and ai and the testimony is that the adult incontinence which is the subject of the suit was the least important and if there was an issue with those we could have separate and i'd like to just why is that good enough in her case all to melt a misleading communication it seems like if our kids are suggests that just silence is not enough we have more here than silence we have the initial silence of not responding to the initial to letters well it's the it let's go through the letters the first letter they didn't respond to it all the second letter they said we in friends do different or they responded by going to write which they did not tell us it's public record  and that's true it's a public record but the case law requires that they tell us and they tell us that preceded your own risk when you're done we're going to if we get a pattern we're going to come after you and they never did that and you got your out of the funny thing is it is a public record we were required the key question in argument is this if the if the alleged infringer had reason to believe that it gave me reason to believe that this manner was normal we say that i'm sorry y you i'm reading from parker men at page nineteen of the lexus version and it says there can be no rigid requirement in judging the latches defense that such notice must be given well if i can keep going your honor if i may it then says for example if the defendant is aware of litigation from other sources it would place form over substance to require a specific notice and then it says citing the v case where there is prior contact the overall equities may require appropriate notice as in james perry it says in may right and then if you live are you actually write a letter and if you look at james bearing you look at  five eight three three five and the question beginning at line for a just just show i'm sorry ok but this is the question asked to mr de moggy but you enter stand your testimony correctly that had s c a suit earlier it would not have impacted first qualities decision on whether to buy the tyco group and mr de maggie explains we would have taken a different approach in a sense that my answer would be that we would have we would have definitely followed through with the acquisition but we would have asked committee and as the owner of to georgie to make sure that they gave us a full clearance on that particular patent amongst other clearances that they'd give us for various reasons financial related ip related legal related employee claim related we got a full clean bill of health from exactly where it's nine ninety eight nine ninety along around lines at twelve was that there there were two processes we had done due diligence and at some point within the process we actually walked away from the deal and said we didn't want to do it and it wasn't until they came back to us and we actually finished the process and finished the acquisition and if you look at the next page it was all about pricing so we put a price on the table and they said oh that's no that you have to do better we walked brief the cia makes an argument that that first quality's it's on page twelve at the bottom first qualities marketing director made it clear that it would have been page three forty three three thirty nine over three forty this is the deposition of mr demography question when did was there any particular point in time when first quality began to rely on no communication from s the day with respect to not relying upon anything that se a digger didn't do when they entered into this transaction well do you think that because he gave a slightly different answer than he gave out three thirty eight that's not the greatest you know issue because what on three thirty eight he  cia and this is the businessman to present the company and it's very plausible that somebody told him his battlers told them you got an invalid pattern here don't worry about it saying that we never heard back it is not saying we never considered th but there's no evidence as you were questioning any evidence that they ever thought again about the patent that it entered their minds that they had any thought that they were were not a real and appointed to what are the we structure to deal with and i can walk away from was looking back address that so what we would have set a trial have we got the opportunity as we would have we would approve the following the business issue here is private label products sold mostly in this country that means wal mart c v s and a few others the facts are undisputed that first quality has about one hundred percent of that market in united states they dominate the market and there are documents that are in the record to talk about how important it is to dominate that market in adult underwear and wal mart and other places and marketing testimony it was clear in order to be successful you need to be able to provide somebody like wal mart with a full live adult underwear feminine products things of that nature and that's the private label product for wal mart understandably don't want to deal with a whole bunch of i caution you on any confidential information that i think i think i've i won't talk about the sales numbers i was going to be very careful where they are in the record and they're very and they're very significant this is a significant business this was first qualities business plan but i understand all this i mean e mail those arguments of your proof that this is important to them and things like that but it doesn't that doesn't mean that they wouldn't have alter their plan marketplace and things like that the law as i understand it your honor is if there is a set of facts and there are multiple inferences from the set of facts you have to give the inference to us the facts here are that there was a very there are two very good reasons to alternative reasons why they would have gone through with this transaction and why had we filed suit not mattered all one they had a belief is or any testimony from anybody that suggests that they would have gone through no matter what their status in just a turning argument the testimony  in our brief of the marketing people and it's the whole story your honor there's the whole story here of what they were trying to do what their business plan was and what we would be able to prove a trial with respect to  the evidence we had document showing this was really important to them we have documents showing that they have to one hundred percent of the market we have documents showing that they could not have done it without the adult economists mark one last point this is a very odd form of prejudice the they are saying that if we had sued them not that they would have picked a different product that most of the other cases you have declarations from people who say well we had two versions of the product this is the aspects case one was very early in development we could have switched if i'm suited and brought earlier infringement and filed suit that they would have gone to a deal partner and said you know what we're not going to do this deal unless you go off and talk to s c a and get a license now that's not really up to wasn't covidien would have said why should we price because it may end up affecting whether they get a license with you when you see it and that can certainly affect the pricing of the deal the difficulty your honour's we don't know what would have happened we have testimony from someone who will have a lot of testimony from them and i don't see anything specific from you it's not the sort of testimony which can support summary judgment your honor it's testimony about their motivations and what they would have it i don't understand why it can't supports a summary judgment they make in their summary judgment motion undisputed facts and they point to testimony that supports the state of my got to rip up that student if you had the opportunity to oppose their witnesses and it was all consistent state of mind your honor is not something that could be downloads any time this is this kind of issue comes up it has to go to a trigger if there's two reasonable doubt if you look at all the facts and there's two reasonable determinations as to what would have happened here but your reasonable view of the facts has to cite that it can't just be and ordered the evidence we've cited is the desire to get into this business