are some issues regarding the terms of the license agreement itself that if those are set out specifically they're not really set out specifically in terms of royalty payments i honor so i suppose because the word patent was implicated and thus the district court found that there was federal subject matter jurisdiction over the claims in this case heard in a couple of respects i'll spend a good initial part of my argument in the bulk of my argument on the jurisdictional issues it's undisputed that federal law did not infringement but i can't think why none my ability would be any different in a claim arising under federal law because you look at the threatened patent owner of federal subject matter jurisdiction the first is does the claim itself the breach contract claim arise under i mean i don't i mean norm that you don't have to get to that if the counter claim is sufficient well you have to get to it in terms of whether there contract claim arises under federal law and which straight to the fourteenth fifty four saying that because there's a counter claim that the apple ysaye is compulsory and she made no  first is whether the police had standing to bring the counter claim in the first place there has to be an injury in fact something concrete something real to base the counter claim on there is no such thing here there's a breach of contract claim there's no right it is it would be a permissive counterclaim therefore they would have to base a separate basis for jurisdiction you don't have diversity of parties here actual case in controversy that the district court said no she linked the counterclaim to the language of the terminations here at the terminations paragraph of the license agreement and then once she determined that the license agreement had been terminated she found no independent basis for the counter claim and then dismissed it as such there's also whether the the transaction and occurrence is the same that the counterclaim arose out of did it arise out of the same transaction occurrence as the subject matter of the coin know they the claim is a breach of contract like there are there elements to breach of contract the question here is whether the apple lease failed to pay the royalties that like some claims that they are owed under the infringement claim that implicates prior art and and claim construction and those sorts of things are so totally different set of circumstances set of facts also for there to be a compulsory counterclaim here you have to look at whether it serves a useful purpose in this case you know but under c chemical i think it's the right things that we're supposed to do for the eleventh circuit judge about whether it's right well that is true but if you look at the eleven circuits order it's very similar to the district court's order and that there is no analysis of whether there's an actual case in controversy does it arise out of the same set of facts as the as the claim there is no analysis whatsoever perhaps you don't deny this i think beyond the date of the complaint those damages will be accumulating until such time as the contract is terminated if a little invalidity judgement will under the terms of the contract terminate the contract and there by cut off as i think you agree in your brief the amount of damages that might be recovered and in this case wines that are not as that not satisfy a logical it does ok forget about infringement ok well but the the language of the of the terminations provision which the district court relied on and terms of attaching federal subject competent jurisdiction the district court took that as an invitation to say that you could attack the validity of the patents as a way to terminate the agreement the licensing agreement was put in place to it's different because the language of the contract is different or scares me of the of the complaint is different and the language of the contract is different the complaint has one line in the entire complaint that says that references the patents it says the license agreement details the obligations of the parties with respect to the patents owned by alexa that's  sections three paragraphs three and four of the license agreement detail what is covered what the covered processes are the cover not suit provision the most favored nation is provision the timing of the sports section of the agreement all refer to paragraph three and four they do not refer to the patents so one way to look at this is if the patents did not exist the court could still interpret this contract in the plain language that it's written and determine what's covered what if any royalties are due to be paid that sort of thing so you can't overlook the claim itself t though is a it's an affirmative defense to an infringement allegation we have no nothing that even hints of infringement in this case are still a controversy about whether the contract should be treated as sort of says that it does the facts are different in that in the in the supreme court has also held that that be a third party and leader in fact the supreme court said that a third party that he licensee could stop paying royalties if a third party attacks and seeks invalidity and it's and is successful over the the basis of the patents not the licensee that day and i believe that i don't believe  the parties ever meant to create this sort when they're trying to resolve the conflict there's a settlement in license agreement where the parties are dismissing with prejudice all their claims or potential claims arising out of that occurrence if we go down this road where this counter claim is deemed be compulsory then it opens the door for these attacks on license agreements by license fees and everybody every breach of contract case is going to end up before your honor's whether it was well pleaded under the state law of the form where it was fouled the state courts or not so it would up in the well pleaded complaint rule if the plaintiff is not a master of his complaint if there are no allegations of infringement patents are not implicated in any way there's no need to construe the can the the claims there and in fact the gun vs mental case is instructive on this where they where it was  granted it was a legal malpractise case but it was much more detailed in terms of patent issues it was a patent issue that was asserted it was patent wall that was applied there was a case within a case of patent case and yet the supreme court says the patents were only indirectly involved in this matter and the state court is completely capable of handling these issues here as well the the state court is completely competent to handle the patent claims and make a ruling on it if it's federal court it follows to other federal courts of if it's a state court in the in the the grable case talked about this the gun v metal case talks about this where a state court is probably stated it as clearly as anywhere else they're arguing that the kind of claim did not arise under patent law but instead arose under the license agreement but there doesn't seem to be any legal support for that theory a cause of action doesn't arise under a private agreement between two parties it arises under a statute or under the common law in other words private parties cannot get together and create their own cause of action that doesn't already exist somewhere in the law and here the only source of a law that supports  which to be honest with your honor i did not consider before standing up here today but under that hypothetical i think it might be possible that there wouldn't be a case or controversy for invalidity counterclaim because they've disclaimed any damages going forward and under this studio  determine if a counter claim is compulsory and i think the most clear explanation i can provide is that the license agreement included a validity provision that would result in terminations of the patents were held invalid and so clearly there was a logical relationship between the two claims because a successful counter claim happened invalidity would terminate the agreement and reduce the amount of damages recoverable under alex sanz contract claim and not and so i think that's the clearest explanation but in addition to that both its own test for compulsory yes i agree with you that an a but for that footnote that you should defer to the eleven circuits ruling on whether an eleventh circuit counterclaim is compulsory but i would but that the footnote gave me pause as to whether this this court was now going to impose its own independent compulsory test so that's the answer your honor with respect to the other ground i proposition which i don't think is necessary to your argument that just taking the affirmative contract claims and ignoring everything else that those would be claims that in order to get you to there it would require me to terminate because that agreement is written to define the subject matter of what you cannot do issue it is necessary under alternative argument that there was a rising energy restriction under the gun test but to answer your question directly the license agreement was a settlement of a patent infringement lawsuit and the license agreement does state that that this is a license of patents and even the grant clause article three says that there is a grant of a license under the patents for the following activities at the activities are described in terms that use claim terms they use claim terms such as transaction and prepaid phone card and other terms that come from the claims and it's our position that in order to construe that to term to determine whether a product was in or with in or out of that grant clause you would actually have to construe those the claim terms as a matter of law and i understand there might be a difference of opinion about that that is our that's our position on that but you're absolutely right that has nothing to do it is not required to make a finding that the the counterclaim is compulsory given this court jurisdiction under twelve ninety five  contract interpretation i'm not seeing why there isn't term a nation when one of the conditions of the terminations i eat breach has not actually been shown to exist well again i would point to the word alleged i understand your point that that doesn't necessarily that doesn't refer back to the a previous clause but it does use the word alleged which i seem to think suggests the part is understood that this would be an allegation of breach i'm now forced to go back to florida lawyer or even though you didn't want to hear about it i'm happy to hear you are a lot of  law as as filtered by the seventh circuit is not to me is not his factory is giving me something that's actually coming that's florida law coming walk and talk to the lucas case the lucas case the question here the lucas case involved a similar situation a point that was it was a a an agreement in which the terminations could be unilaterally invoked right but it required a condition precedent to require it require that there was a sale of property and the dispute was whether that condition precedent had occurred and the court said essentially it doesn't matter whether occurred or not because you terminated the license now the only question is whether that terminations was wrong for the same thing here there's a condition precedent required that's a breach we say we didn't breach they say we did breach and so there's a dispute just like there was a lucas and the floor in florida law says there is a terminations because they sent us a notice of germination and the only question now is whether that condition precedent actually occurred which would make the termination either wrong  or not wrongful and so i disagree a little bit that florida law is not on point here i think the lucas case is on point it seems curious was a pretty big state and you know contracts there are a lot of contracts out there it seems odd to me that all  have on this really basic question is what happens in the contract that invokes this notion of terminations when one of the conditions is not being satisfied is this one intermediate appellate court decision plus the sentence that you didn't find anything out there your honor i think the seventh circuit case applying florida law is directly on point it's a very strongly analogous case involving a patent issue with similar facts and i would submit the facts are even stronger there because in that case the the the licensee actually tendered a royalty payment after all terminations which was accepted in cash by the license for whereas here we tendered a payments that were essentially not cast until the last minute just before falling asleep but even then they found it was terminated for this for a boy here in this respect is consistent with general the general approach terminations you're either i believe it is or this is just a couple of quick points on page forty five of the record the district court said defendants have filed their end invalidity declaratory action as a counterclaim to an action for breach of requirement mr barnett was correct there is no legal precedent for that and yet that's what the district court ruled was that the term that the language in the terminations provision relative to the the license agreement terminating if the pat