our next case which is i t t corporation versus lee morning morning here on earth may it please the court my name is russell jones and i'm here for the hell of i t t corporation what happened here was that the district court ignored the rules that govern the disposition of a twelve b six motion this court less than two months ago just a little over two months ago dover says columbia university july twenty ninth outlawing the strict rules of how courts place to handle such a why is it plausible to allege that they didn't do a reasonable in the record we alleged it is is plausible in the record it's plausible because it was implausible to us that seven years later mr lee's new company could come up with this idea in very plain sixty minutes very plausible because you were saying the patents are in fact valid right that's correct and you were correct well not exactly well then the u s patent office say that you're correct what happened at the patent office the patent office says that office doesn't say the the patent office says the claims that the that are claims to be and we do not find to be invalid based on the references and the arguments made to us by the challenger to the challenger is wrong challenger wrong it doesn't mean the whole patent is valid it only played and in fact isn't he isn't he to stop shouldn't have been a stop for making that argument in the first place because he had made a representation earlier we would think he would be a stop for making that argument the first place but the district court in the western district didn't do that so why does the fact that a guy brings a frivolous lawsuit that he's a stopped from bringing and that you have established in the patent office had no merit whatsoever mean that he must have believed this in good faith because he didn't do research back in the day years before that he represented that he did i mean at isn't it at least as plausible and more pla that he's just bringing a lawsuit for that you know because these hoping to get away with something well he may have been hoping to get away with something but your honor what the contract said was this was not as a district court characterized it a standard rep and warranty right this was something very different than the standard rep in mauritius standard rep and warranty and you know ip matter is we have no knowledge we have no reason to believe that there's anything wrong with these patterns that's the standard rep and marty that's not what was done here these patents are bad but we have alleged in the petition in the committee things around the leader except when it comes around later and he lies and he says it isn't valid well and it turns out that it is a lie because there's no merit to that argument at all why why does that mean he didn't do an the straightforward answer has to come from something that is not in this record and that makes me very nervous it's not supposed to be that way but for example we know we knew this after all the briefing was done in this case we know that mr lee has admitted patent six months before there would be a question of fact as to whether any investigation that he did was reasonable we never got to the issue of the to the point of looking at what he did whether he did anything at all and whether or not it reason the reason i ask this is because you've alleged also that the competing product was as early as two thousand that he should have known about that right absolutely it was just his company's prior product but with his no and there's no allegation that he knew that from that and i understand you bought these patents and you're entitled to representation that they've investigated this and these are the these are legitimate patents then this character comes along later and suzi you and says aha the patent is invalid not understand you're mad about that and you should win that case and you did win that case and i also understand why you'd want to open up a second front and go after them on you know either the patent is valid and we're golden or you breached your warranty because you must have known that fair enough but now you've established that the patent suit that they brought was invalid and now you're bringing a lawsuit in which in public you are proclaiming that in fact they didn't do an investigation therefore our patents are shaky and everybody's going to think our patents are shaky and all you're doing is undermining your patents where in fact what you've got is a patent that the patent office has said is claim that there is invalid is wrong and you've got these certifications what is what is the problem why are we here you're here your hon because not only did i t t as we've alleged in paragraph one all six of you complained it not only did i t t we've alleged pay for a certified car we're all got was one off the lot therefore we paid more than we should have paid that would be a question of fact to be explored in discovery in this case if we're allowed to get as we also alleged in the complaint the damages include the maintenance fees that we're having to do on all these patents the amount of attorney's fees and time and so there's that there's the fact that we paid too much we allege and there's the fact that we've had to pay to defend the western district case which has not been cheap and has included having to go to the patent office to do all these things that's nothing that's because he filed a frivolous lawsuit with that's why you had to pay that but that's not because he because europe there's something wrong with your patents and if i was there never was anything wrong with your patents if well if that lawsuit is determined to be frivolous which it has not yet been determined to be the fake it is  but we don't know what the western district judge is going to do with it if the western district judge says you're right frivolous lawsuit willful infringement i'm going to treble all the damages i'm going to award i t t it's attorneys fees it might do that but it might not do that and we don't know for sure but we do know is that mr levy and mr foley mr seen no knowingly allowed the representation to be made that they had done an investigation the named as a people among those who did the investigations we don't believe that they did we don't believe that they did the investigations unit information act leaf you think they did because you're guessing that they didn't want to we we've made what we believe are good faith allegations the testing of those allegations should come in the form of an adult what makes it plausible it's that somebody gives you a representation and for all you as far as you know the the validity of the patents that part of the the representation you think is correct they say they didn't investigation and you just say i'm sorry i don't believe that anymore we believed it until they s if there's an association if you have three people make a representation that we did an investigation there and one of them it let's say for the moment one of them is determined absolutely did not do that what is the basis  other two did not do that because one guy is a sinner the other two must be mr mr as i said and it don was the owner of this three sixty seven mr so you know was the c e o of energy he was also a shareholder he was also we think we've alleged he was a some associated affiliate with mr lee to us it is very plausible that not only did mr levy not do investigation and yet say that he had but it's also it's frankly it's at least as likely that mr c e o was the one who  supposed to do the investigation about the anadan patents which was the three sixty seven he said he did we would have we were happy to accept their represent your new circus where is there any reason to believe that he did not there's reason but let's give you for the sake of this argument that there is a reason to believe that lee did not we believe that mr lee and mr c you know were very close we believe that if there was an investigation done since least it's likely that mr so you know was supposed to have done it it excuse me it's at least as likely as he was supposed to have done it what is the basis for saying he didn't do you have you say not in the record at all except for the moment that mr levy has said i never did anything but why does that tell you that see no never did anything when you just told me it's at least as likely that it was seen who was supposed to have done it we thought everybody had done what they said until the lawsuit was filed in twenty fo  we filed the motion to have do the reeves emanation the other side asked the western district judge to stay the litigation pending the reexamination i t t opposed that request it was granted anyway and send since the reexamine was finished it came back in the district court and they are in the process of doing discovery in that case and i believe from this my colleague who shaking his head they have not been deposed mr levy or mr sheen or anybody else so we're just not there yet i think i might you can ok just to clarify the status of the kin to case their case was really proceeded through almost no merits based proceedings because the parties stipulated that they would await the outcome of the expert a examination before the p t o so their case resulted in the p t o invalidating the patent which has ended the no the parties stipulated to be bound by the outcome of the p t o proceeding somewhat but with it so is there a case pending or not on the record on the docket is there a case that exists or it is not a case that if all that exists  over attorney's fees the merits of the case have been fully determined the parties stipulated that they would abide the outcome of the reeves e m t for the p t o there's no infringement claim either it has been and i think that's important here because there is no longer any possibility that mr leader they can attack will be challenging their patent in the future and that's one of the reasons a judge force found that there is no damage here because  existence which was the basis for judge forests decision that there is no damage scale because they have always taken the position of yet is valid and they've now prevailed no ms but mr levy to get back to this this case made a warrant warranted that this patent was valid when then he turned you disagree with that he absolutely disagree with the section at issue is found in article three of the contr three of the contract is in title representations warranties of the company owner understands i and i misspoke the company that mr levy was one of the principals of made this representation and the representation was purportedly based on the knowledge of mr levy and mr kind and the other the third guy where he is only only right and that's and that was the measure of the knowledge of the company in making this representation  so the cop whether or not mr leak could be sued for a breach of warranty because you argue he didn't make on the company represents that he did this investigation that's correct ok but then a company that he's a principal of comes along and says actually these patents that the company that i was principal of represented were valid is not valid seven years later than years later now why is mr jones wrong that if he says that that must mean that he didn't  certainly makes it a plausible allegation that he did not in fact do the kind of move work that the company represented that he did first of all in the intervening time we get seven years and nothing is played in the complaint that would allow this court or the court below to draw a conclusion that in the war to infer plausibly and for which i guess you know that additional information didn't come to mr lee's attention in a seven year time frame this isn't like he brought this case three months six months even two years later where the court might infer that he should have had that knowledge earlier we're talking about a seven year time period which of course is really the basis for judge force decision that this case is time barred six ways to sunday so we don't we don't know whether he had some we don't know he may have had a good faith that would allow the court to conclude otherwise and that's the burden that the plaintiffs here have they have to show this court some reason to believe that this was information that a party at seven years prior and i w posit as the years go by that becomes less and less plausible and that we're at the outer edge of plausibility and beyond and in this case now we obviously have to put forth a couple of other reasons that we think this case has to be dismissed in the statue of limitations grounds on the country claims are essentially unrefuted here on the representations issue are made seven and a half years before this lawsuit was brought to the tort claims we've argued and we believe again no plausible response has been made that those tort claims are all based on the identical facts the constitute the basis for the before you you thought there wasn't any good but the patent is really fresh is there any reason to believe that in that six month period there was some evidence the patent should not have been granted at there has been not alleged  i'm not aware of any and i think to the extent that that's a relevant inquiry and i do think it is it actually cuts the other way because the prior art issue here obviously was years true that's one of the allegations out of yours that he should know about that so that that's me that's why i raised this i mean if the patent was issued in just six months before it isn't that kind of make it implausible that at the time of the of the product existed he has to have known that the prior product existed and that it invalidated and there goes well but that would go to that would go to whether the representation was false that it is a valid patent it could be a fair representation and if he is ignorant of something that undermines it but the representation that's being an issue here is more than that it's a representation that he did a proper investigation and  we're hearing whether it's in this record that he didn't even look and certainly he comes around later to the view apparently that there was a problem that's true but there's still no allegation that there's any real image here that they take the position that i'm ok so this is basically any duns patent i mean not only did did they is it a fresh patent but it's a fresh patent that their company itself in effect obtained it's true so they they were the ones who that the misrepresentation was not that the that by mr lee and the others was not that the patent is good mr potential as i know it's good because i did investigation again this is like the certified used car right the dealer would do an investigation for sure six months before when they presented the patent they didn't personally but it's the company that's that issue the company is financing this whole operation to get the patent they presumably did whatever work is nothing that maybe it's a fraud i don't know but as far as the the patent that you say is valid the patent office is valid they presented to the patent office everything they need to do to get a patent that's an investigation in itself right yes and the important thing to keep in mind is the basis for the alleged invalidity as mr lee's new company may he didn't say oh there was prior art therefore it's invalid he went way beyond they said this patent was procured by fraud our invasion lied for this patent to work for me committed fraud because they knew about all these other products that we had been making and they knew that this new patented product was just like the others and so they hid that from the patent office so mr lee is not saying oh we made a mistake we forgot the saying is the can tech lawsuit alleges we knew we hit it we did it on purpose and committed fraud on the patent we people that he'd maybe did not know at the time he's not saying i knew when and when my company saying because he hasn't even had to have file an answer yet and he hasn't been subject to he discovered let me quickly deal with the statute of limitations is she going to find first of all what the district judge did wrong again she took the she the district judge took the tort claims said these are really contract claims said therefore they're barred by the statute of limitations to two fundamental mistakes one of course is they were not contract claims they are tort claims allowed by new york law and as such by the parties agreement the four times in section one point four are intentional breach and fraud claims out is being treated separately the so the court was wrong what the court didn't do was take the claims at face he made he allowed this representation to be made he knew it was false he didn't say anything he kept quiet we pleaded everything one could honor it is it is it's an omission it's an omission case ice i know something was said i know it was untrue i didn't say anything about it i intentionally didn't say anything about it that meets ninety the statute of limitations for the fraud claims judge didn't really even talk about that statue imitation for fraud in new york doesn't start to run until all the elements are there until you know that there's been fraudulent conduct we'll let we didn't know there'd been any fraudulent conduct until tw fourteen we filed a lawsuit just a few months later that's an independent drawing she said your heart claim didn't have what is required to distinguish it from a contract but it but she she she was wrong on that your honor is to all due respect to the court and we allege the others knew was false because they knew they were the promise was they did an investigation they knew they had not done that is not a the duty not to lie is not a duty that arises under the contract is a duty that arises under the common law and the breach of that duty creates fraud the court did not make an analysis does to whether a fraud claim would be barred by the statute of limitations and if the court had made that analysis it would have had to come to the conclusion that it was not barred the court also glossed over any issues of equitable told and tolling if they are contract claims we argued wacko will toll and should apply to contract claims the district court just kind of blew through that was the air hearing thank you very much will reserve decision on this case the rest of our are cases