does not infringe them but alternatively we are secular request that you have a minimum remand for a new trial on damages because no reasonable jury could have found that fifty cents a chance on worldwide sales represents a reasonable royalty for any domestic infringing use of him his claims i'd like to cover him with a very briefly if i may have boils down to two very simple points your honour's were still anticipate both limitations you need look no further than the plain language and we're still to find both of those limitations disclose i respectfully refer you to worse the column can line fifty two that's where you get the set of signal dependent will be greater for the one branches and zero branches that means there's going to be two equations it doesn't matter if you multiply the zero branches i want that may mean that you are selecting the longer functions based on a signal that doesn't doesn't matter if you keep the zero branches constant or multiply them by one the comparison to the one branch is going to yield two different equations two different functions because the sigma fraction is going to differ for the one branches in the zero branches  all he disagreed about is whether both equations in the set were signal dependent we believe that's impossible to argue when he's conceded that the trend that the signal transition lies which is measured on both branches is signal dependent differences between the one branches and the zero branches and that's the set and how to approach again a simple from the plain language of the patten column twelve line beginning at lines forty eight the modified metric in this by this he's referring to the further modified metric takes into account not only a presently sampled input signal but a previously sampled signal as well your honor on invalidity we respectfully suggest that it was not a matter of the battle of the experts the plain language of worst all couple noise when there is a transition so i guess i'm wondering why is that signal to noise based on the claim construction provided for signal and annoyance which was a noise structure of attributable the trends that transition or no transition is expressed in a series of bets ones and zeros and we believe those are covered by the term simple but why is symbols the same thing as that because when i look at the eight three nine patent and i try to understand what the disclosure is that it repeatedly makes reference to symbols and written symbols with reference to the funny symbol that they plus plus with a circle around the minus minus with a circle around it and so what that each nine it's nine times telling me is that when it's talking about the civic the coins of symbols it's talking about those particular pluses and minuses which represent a transition between two different bits so now i'm beginning to wonder if the best understanding of the claim construction is it's referring to annoy structure attributable to a specific sequence of transitions and what we're still is trying to remedy is noise that a single time so you see why i'm now seeing that there is a light between work so it's close on its face in my understanding of what is being claimed when the claim references singlet the signal dependent on i do see your point but the claim construction did and because we reasonably believe that there was a set of signal dependent branch metric functions and we reasonably believe that it was applied to a plurality of signals and the further details of the c honor he had just reviewed the disclosures so your honor if i could because i really do want to focus on the damages issues in the case the extremely brief about non infringement again i want to suggest that at a minimum we have a reasonable and objectively reasonable  which modifies both brands metric function and brands metric value and i remembering right or wrong there was a quite substantial dispute in the clean construction process about whether the post process  to include the post processor in the application of the function is incorrect under this ezekiel lated claim construction about branch because branch is defined as a transition between two nodes or states in a trellis and that's confirmed of course by catholics admission that his claims operate in the trailers and not in the post processor so your honor with without it however we draw the line around the thing that is doing the detection we think the application function which is in the chip stipulation so it's part of the technical documents that are binding in the case on both parties applies the branch metric function to a signal signal sample that's output in by the pre just ask you about about that it seems to me that the patent is so for made clear times for two a kind of ordinary english reaction to the word detective this this is not a sincere of the magnetic get data from actual hard drive and then feed it into the processor with a toby like processor it doesn't matter whether you call that a computer or not it's still a relevant detector because depicting what that data by running our process to figure out what the true work director are but in real time and in fact the opening of the directed to high density magnetic recording sequence detectors and other aspects of the claims that we detail in the brief refer to the notion of a real time hard drive data detector not a simulation using a computer and alice problems because if it's just a patent an eligible mathematical equation that doesn't have a structure we think it would run into problems of eligibility but your honor i would run as i would like if i could because they're complex to spend the rest of my time on the damages issues and i'd like to begin by simply let's break it out into the base and the race and let me begin with the problems with the royalty days and i'd like to begin with the instruction because that's what we think is the root of the problem here the judge instructed the jury that it was entitled to conclude as a proxy for the domestic infringing use all sales including all foreign sales all sales of chips manufactured sold and used abroad all sales including foreign sales resulting from marvell alleged infringing use during the sales cycle now the problem with that winds are another say you may consider all sales resulting from marvell's alleged infringing use during the sales cycle as a means of valuing the domestic infringing it so she says you can't literally or damages for the foreign sales but you can use foreign sales as part of the royalty basis for creating this proxy for the valuation of the domestic infringing use in the sales cycle now there's two problems with this your honor i'd like to start with the first problem plain cruising foreign sales at all if we license now i want to just say that there isn't a single case that cmu can cite in the patent context as opposed to the copyright context that suggests this kind of fruit of the poisonous tree theory that lets you get out to reach out to the foreign sales we have something of an in between case i agree your honor i think there is no clear case either way and what we would respectfully suggest is that you should make clear in this case that the principle of power integrations which of course expresses a long line of territor cases in the patent context requires you to send the case back for a new trial with an instruction that excludes the foreign trips from the royalty base now let me say why i think the closest case to our side is power integrations and i think the reason for that is her integrations obviously involved an apparatus patent were sales were potential acts of infringement where a method patent the infringement here is used that area makes no difference because what this court rejected in power integrations was the idea that mere process in a conversation are reasonable for see ability was enough to allow the patent holder to reach out into four injures fictions and include the foreign ships in the bay we think would happen here is even worse her integrations at least involved  proximate cause ation notion of that reasonable foreseeability here the instruction is just about four causation instruction that says you can use a jury can use foreign sales as a proxy for domestic infringing use if they resulted question the record does not say the record does not say for a very basic reason we saw at many points pre trial and during the trial to exclude evidence of foreign sales as part of the royalty base that was denied in the court repeatedly ruled both in pretrial motions motion in money and in response to our trial objection that all sales including foreign sales could come into the case so there was never an opportunity for the jury to decide what  sales cycle mean where did the sales take place there was never any joining of issue on that because the court's instructions precluded a definition of the sales cycle or a definition of where the sales took place and that's an additional reason but the that a requirements contract are better numbers around or i can't answer that because it's not in the record and i think this is one of the central reasons why you need to send it back i mean i could try to give you answers from from personal knowledge but that isn't the point the point here is that the record does not have any evidence of what sales cycle means where the contracts are placed and as this court there recently and hello i'm your offer in the united states is certainly not enough to establish that a sale took place in the united states you might want evidence about where contracts were signed where sales were made so your are two separate problems with the instruction one is included foreign sales you have repeatedly said as a matter of law that foreign sales ca basis for determining a royalty base and you asked what case we have the closest case for us power integrations the only case for them your honor is relative dynamics and we think that railroad dynamics is a case that allows the inclusion in a royalty basis of some foreign sales of her sets containing infringing snubber components and but it does so in the only context in which you never approve the use of foreign sales as part of the royalty base that is where the infringing car sets were domestically manufactured and the manufacture was but it's going to have if the underlying concern about extraterritoriality as a common sense matter is trying to prevent  attenuated chain of causation between the domestic act of infringement the dems use of demonstration ships and simulations in santa clara to create a relationship that becomes contractual at some point not specified in the record that's very different there's a wonder one correspondence between the infringing manufacture and railroad dynamics and all the other cases that samuel has cited for this principle and whe also believe that when parents gratian said that the act of foreign sale manufacture or use created an intervening cause that breaks the chain of causation there is a real problem with this kind of case the reason why the chorus that might be understood as an acceptable proxy is that the car set is not a consequence of the infringement in the united states it's literally a measure on a one to one basis of the infringement in the united states because the thing is completed before it leaves our borders we think that our case is this possibly different from our dynamic then it would take a new carve out from the territoriality principle for this court to affirm i see my time is nearly up i wonder if i could switch to the royalty rate and just briefly make a few quick points  on the on the on the base there may be one more thing to say if i can interrupt myself on the base i think we i made the argument about what's wrong with the instruction includes foreign sales and the resulting from about four causation piece is undefined giving clarifying principles about foreign sales on the causation standard no reasonable jury could have found that the foreign sales would have been included in a hypothetical negotiation in this case so just on the record here three quick points the parties must be assumed to bargain in the hypothetical negotiation in the shadow of the law she knew had no evidence of any analog foreign patents here so cmu was not in a position in the hypothetical negotiation here to bargain for a worldwide license second quick point there was no industry practice data or any other real world data point in this case whatsoever to suggest that percentage of worldwide sales was ever the kind of license given in this industry for this kind of venture project of the university to the contrary as i won't be labor all the real world evidence in this case such as the two hundred thousand dollar a year limit and it does have this seemingly quite appealing economic rationale of everybody getting the money bussing turns out to be a success and you're getting basically three quarters of it and they're getting one quarter when the alternative is maybe maybe much much worse for you your honor the there's no evidence marvell would have signed a license that six hundred or six thousand times more expensive for us than it could have gotten by joining the d s s c or taking the deal offered to intel or taking the deal the two million dollar annual deal that cmu said post date of the hypothetical negotiation two thousand for two thousand the answer is that judge chan is we don't concede that if the sales cycle begins in santa clara the manufacturers and and and sailors abroad and the ships come back into the united states we don't concede that that necessarily is a of a piece of the royalty base we don't concede it because there's been intervening causes but your honor this record there was also a contributory and induced infringement verdict and so the notion that the trips that come back into the united states might be fairly encompassed might be fairly can encompass by a secondary liability theory might allow you to sustain that piece of the verdict but then at most the liability would be for the domestics the chips that are come back into the country we don't think the evidence on that was was proper it was based on industry wide p c data and not data specific to marvell there's a lower number that's more data specific three hundred twenty nine million trips but your honor we don't concede a person don't conce infringement but we don't concede that causation that takes a round trip out of the country and back again is necessarily proper you'd have to ask what is that the direct and immediate result we want to extend the causal chain that far to include for direct inference and so to morning your honors me please the court joshua rosenkranz representing carnegie mellon university if i may i'd like to take an unconventional approach and begin with damages first and then circle back to the merits and willfulness but just to frame it all up in one package this case truly is extraordinary but not for the reason that mar vell has recounted you almost never see being as blatant or as reckless as this you almost never see again where the accused infringer has admitted and never argued that it has anything by way of a non infringing alternative you almost never see such a stark before and after picture the picture of a company struggling in a life and death struggle about to go out of business and then rising to the top of the market where the company itself says that the reason is this particular invention but on the on the damages point in particular the extraterritoriality point that point at least i take it to be independent of any questioning that tightness of the causation from all of the activity in santa clara is that we're in this year in santa clara and taiwan and other places that the  resulting chips were made and delivered and most of them used so why is it that even if your basic narrative is accepted that the alternative to infringement here was marvell going out of business and the amount of twenty five percent of their multibillion dollar profit resulting was this is a reasonable price to pay nevertheless the extraterritoriality argument is you reach too far understood your honor and actually been narrative links directly to extraterritoriality not just was it necessary for marbella to win friends to save its life it was necessary for  infringe in silicon valley that was part of the new nine infringing alternative and that makes this case the diametric opposite of the power integrations in power integrations there with absolutely no linkage damages on foreign sales that were connected to a related tumor caused by the method from the you know your honor actually the word was foreseeable i mean it was a completely crackpot theory of damages in that case they were domestic sales and of the plaintiff said because it was foreseeable that we that there would be foreign sales we've got to claw back the lost sales that we would have meet in foreign territories and this court went out of this way to say that the expert admitted the damages estimate was quote not actually rooted in the defendant's activity in the united states was quote not related to any parts that were manufactured infringing for trillions of times per chair over the course of millions of ships hand in hand over the course of several years for each design when in the red very you describe pads and suit is a must tutting edge technology does every other chip use and if you sue the chip manufacturer the answer to the first question is yes every ever every other chip in a hard drive has according to our industry expert by your it it's become industry standard everyone is asking for already so you see there was the answer the second question is no we haven't to do it it was a big left to sue more about now understand that the reason it took so long to sue more val its beak is that you can't like pry open the chip and see that someone's infringing you have to actually get their documents to figure out the nature of the infringement i want to turn to judge chan's question about what the record says about a design win because of its supply is the rest of the nexus it is a winner take all market and on page forty two one twenty four you have a clear quote from our industry expert that says when you when you get all the chips on the drive in that generation he says that you've never heard of the case where some other chip gets put into the drive points you get the design win so yes judge toronto it is like a requirements contract of oh we don't actually have a record containing the contract or saying seagate or western digital or the other five for customers or something they come meet to buying there are certain amount or everything that they're going to use when they make hard drives for a certain period agreed the best that we have is forty to one twenty four online for this is our industry expert and so to my knowledge no drive company has ever taken to rechannel suppliers to production on the same drive on the same generation at the same time that essentially says winner so i would say the more valid completely punted on the question of where the sales occur we put into the record that we were all about uses it was a winner take all market we had a clear testimony about that per well your honor the three licenses that were put in the record were all licenses on the same exact shift the systems on ships that our technology was incorporated into and all so why is fifty cents a chip royalty reasonable at the time well say are few things to say about a first of the same licenses that i mentioned or per chip licenses marvell said we don't really care much about the form of the license what matters is is on a case by case basis how much money we're going to make the difference between fifty cents a chip or a certain percentage but the other thing that ms ladin testif so that's why it's reasonable and the only question here then becomes whether her methodology is reasonable or more specifically whether the district court erred in adopting in approving of her method or methodology is a matter has that rule and it is called the predicate act doctrine the predicate act doctrine says that when you the when the predicate act here is is the infringement that's what is necessary for it to occur in two or three to occur in the united states but in keeping with google and railroad dynamics once you have that predicate act in the united states you are allowed to measure damages based upon benefit the classic way of measuring benefit is based upon sales and it doesn't matter once you are allowed to measure based even on nine infringing sales it simply doesn't matter why the sales don't infringe whether they don't infringe because this is a method patent and that's an apparatus or because this is a patent on domestic use and the ultimate sales were not infringing because they were painting the case like microsoft not only would the supreme court say it but the supreme court did say it in gould's includes the act of infringement was domestic and what the plaintiff was allowed to get were royalties on the foreign sales as well  your brief all you do on page eighty three is quote what j two fifty where the does not this report is conclusion that you don't make the argument that in fact under normal location of sales principles which i realize domestic uses or essential i mean we're not extend we're not talking about in the extravagant theory here we're talking about an extraordinary possibly unique linkage where everything that happened in the united states over the course of three to four years per cycle every act of infringement has to happen in the united states precisely because that's where marvell's customers or that's where the design centers are so i understand i have to think about only the frenchman's that when you have an active infringement you can value the benefit to the infringer based upon the resulting sales even though in every one of those cases the sales were not infringing and when you marry those cases with gould's and especially railroad dynamics railroad dynamics says when you've got the active infringement in the united states you are allowed to get your life to measure benefit based upon the non infringing sales including the non infringing sales in other countries can i ask you this this is suppose for purposes of this question that we were to think that the jury instruction was improper on extraterritoriality grounds and that a new trial was needed as a result we don't know if the jury found on any other bases in such a new trial i take it your position would be that at that point there could be a much more well joined at that entry dispute about location of sales table there was our instruction in the resulting from instruction which comes directly out of for example this court's opinion in king instruments which we didn't cite but but it says resulting from or marvell's instruction which is is only cause which is even more extreme than an e m t art instruction so that what's what's what's the law on the question in their instruction was incorrect but so was yours and yours was adopted too they get to get a reversal they don't your honor what they get the benefit maybe they give the juries improperly you're saying the jury was improperly instructed but forget about it what i'm saying  hypothetically the court concludes that the jury had the wrong instruction and the reason it was wrong is because it should have been a bust for for what you know but for instruction and marvell never asked f but for instruction absolutely marvell waived that argument if even in the system suppose that the error is it needed to have some sort of territorial limit it is that preserved or waived or what it depends what the territorial limit was what i mean the more bells objection was that the district court erred in saying the act of infringement has to occur in the united states that is what the district court said do not count as infringement in the ne and right just like you can count yes that's preserved but you can count all sales the entire benefit now that comes directly out of schools and railroad dynamics this notion that you count the benefit of all n specific parties as we recently is not completely tied it's somewhat related to the position of the particular parties but not completely tied otherwise for the purpose for various reasons it's also under those hypothetical constraints you may negotiate only about intra territorial interests territorial activity whatever that may mean the extraterritorial is tied at the hip in a causation way to the domestic activity i was with you up until that last sentence sure you're negotiating about infringement in the united states that's what the predicate act doctrine is about that's the only doctrine that the supreme court has ever used when it talks about extraterritoriality i mean marvell has never cited a single case that is said damages need to be limited for the benefit needs to be measured only with respect to x that is the only with respect to sales that are domestic i mean sheldon which is versus m g m which is a learned hand opinion that talks about the product of the that was about making of a negative in the united states but what ended up happening because the negative was made in the united states and exported abroad was all these copies were made abroad those acts were all abroad but because the benefit to the infringer the infringer infringed here and because the benefits of the infringer is measured by sales the act of infringement as measured by all of those failed to reach a different conclusion here would mean that the courts ha contemporaneous actual licensing was flat fee and i wrote a note to say i think that's right but i wanted to give give you a chance to discuss it with what i think they say is that the only into evidence that's why i want to get it so we put into evidence a license that was a running royalty with a nine hundred ninety eight license it wasn't on this specific patent but i need to under sensually partners in a joint venture let's go together and figure out how to solve these problems it will cost you a quarter of a million a year to be a member but you're also giving hundreds of millions of dollars worth of research support and participating in the exercise of identifying and solving problems versus more val and by and by the way none of them actually know what you're going to invent of course is that by the way true  yes then there's the intel offer the intel offer was a completely different scenario intel with not in the read channel business so marvell went to intel said we know we have this license that is worthless to you but it means that it would mean a great deal to us if you would license it so we could announce to the world and say that that was posting venture that is post invention yes no i did it it's ok i did promise to turn to the merits and in particular which i think says in terms and cites that is closest to earlier decisions that say it is true that the defendant's bad conduct in equitable co infringement context and that's i mean that's unbiased aukerman which says that explicitly conscious copying may be a factor weighing against the defendant gasser chair or an explicit holding bought an explicit holding and the point is that inventor ship actions are just different from infringement actions and with a different well because in the inventor ship context if the inventors clean the inventor should contact the inventor who is a defendant will always have unclean hands under that scenario they will always know that they're cutting someone out of the action and sort of rafiq says well that means that you would never have a law that you would never be able to survive a lapse of defense here we've got the opposite in the infringement context you can be a bully infringer because you know about the patents for example as was the case here or you could be someone who accidentally trips across the line and by the way under marvellous theory no one would ever be able to present and when a lapse of claim because in the patent infringement context the would be infringement the copying however egregious was never the cause of the delay but i keep promising to turn to the merits unless the move the court has questions about the more questions about latches so the bottom line here is that these defenses were not just wrong but as the jury and the district court both found they were unreasonably wrong on marvell's prop infringement argument was all about drawing boxes on ship diagrams and saying this is what you should focus on don't focus on that even when  construction the argument that more valid is making the argument have to be done in a trial and yes yes exactly what the district court said don't give me the seven words e mail represent the response to that i think i'm remembering so ok but then that leads to the argument therefore it's gotta be in there for a post processor cannot work now maclaughlin was very clear our technical expert was very clear it's going on and then as to belinda the marvellous position was simply too dependent upon rewriting a formula that our experts said is ridiculous really misleading rewriting it in a way that begins by saying on line twenty six that sigma swear to it is a constant is your little point zero five five it could be something else but but if constant but he describes it he goes further down in column refers to it as a constant and it is not different from branch to branch and i have to empathize with the calm column ten at the bottom of  twenty six it's talking about the standard deviation that being a fraction with zero point zero five five he's talking down here about each branch of the metric so with the same branches they're all being multiplied by the same number you can choose the first line was column ten line twenty six and then when you go first this is in the an further modified example yes so that's the standard deviation standard deviation is a fraction and then when you go down to the further modified he's talking about the standard deviation it's still a fraction and it's further modified by multiplying by a scalar it's a fraction it's could be admitted in the district court so there are two equations there's equation twenty and there's the a quezon twenty that's multiplied by a constant so one can call them two i mean they are two different equations arguably more va its expert admitted in the district court equation twenty is not signal dependent on our whole argument was well of equation twenty is not signal dependent you can't make it signal dependent by multiplying it by a fraction and ms sullivan today says it's a woman margot's entire theory was no no no it is the further modified equation that's the one that represents the saps precisely because of this be calm and see choose depends on the particular the particular value whether it's a one or a zero whether it's a transition or not which one you choose depends upon whether the selection has signalled attendant what you select in half the is no your honor because a transition is not the same as the sequence of symbols so you can tell that there has been a transition but that is at a different point i thought you you disagreed even assuming that a particular transition is a signal and a function that you apply when you have that signal is signal dependent even if you assume that that when you apply safley the same thing to all of the one all of the ones all of the transitions and don't to the zeros that the choice based on signal does not also an additional argument which is being able to detect a transition which is what in column one is described as the prior art which is no good that is not the same as being able to detect a absolutely yes it could be and it has been in post marvell cases like the france telecom case just finished in the northern district of california there was no evidence to support my friend's assertions about sales actually taking place in the united states or while ago that once you have one of these all of the chips are bought from the same source and what was no evidence was anything to the contrary from your side right so the instruction kept the jury from deciding where the between any so they realize in fact the contradiction in santa clara are subject to a lot of other contingencies like whether they'll be contract signed abroad but your honor my key point is the instruction was erroneous and i want to just go to the point about mr rosen granted we didn't object to the but for language of the instruction that's incorrect we strenuously objected to it and we proffered an alternative instruction that said solely resulting from the domestic infringing if that was denied so the instruction was incorrect both as to excluding the extraterritorial chips and to the weak standard of causation if you send it back we could join in this case it was marvellous for scores to prove the damages we were not given an opportunity to debate where the sales took place because they were all folded in and so i would argue that we were effectively precluded your honor judge chen you asked my friend well wouldn't a t n t versus microsoft mean that if it was redone is a reasonable run of the cases all the foreign windows sales would come in and the answer is absolutely yes he tried to say oh case and there's no causal nexus in microsoft that's not true the master document the golden source and microsoft was of course causally will hit told the foreign sales he proves our point that this would have a sweeping consequences if reasonable royalties could their damages expert mr hofmann said all were agreed they were not the comparable licenses for all flat state we're not saying the jury was bound to find a flat fee but certainly where the delta is six hundred to six thousand times the jury verdict in this case ruling later in time the district court said the only reason i denied watches was willfulness so in your view latches falls with guilt not with willful and that's absolutely correct your honor and if you if you look at her opinion she