relatively simple and relatively clean and that is who owns the technology known as tamper reactive secure storage for purposes of argument today i'll refer to it as t r s s and that question itself turns on just two agreements and one confirmed bankruptcy reorganization which was never appealed the first remitted issue is pro marketing's security interest which was in relation to a loan that pro marketing made to prevail in two thousand and nine the second agreement occurred almost three years to the day after that initial agreement and occurred in the middle of a very difficult bankruptcy proceeding and that was cyber securities design in license agreement  that agreement became the centerpiece of the bankruptcy's reorganization confirmed reorganization now the design and license agreement was not some secretive document designed to take away rights from pro marketing and its security interest in fact it was the exact opposite it was conceived and executed in the brightest possible light of day the parties were allowed to object to it in a bankruptcy judge had to make the ultimate determination of appropriateness and nobody ever objected to the design portion of the design and license agreement and the design portion of the design and license agreement makes it abundantly clear that when cyber solutions paid for improvements to the underlying technology which i refer to as schism it's the best thing i can come up with when cyber solutions paid for the upgrades to that skews a technology cyber solutions would that technology documents themselves the the security interest that that that pro marketing has as defined in the security agreement attaches to collateral that prevent that makes sense they're at their lien can only receivables intellectual property the wording is is sufficiently broad that it would i get billing compass the licensing agreement between cyber solutions but your honor there's no dispute in this case that marketing has the rights to the schism i p that there's that's not that's not the dispute the dispute is once the design and license agreement comes into place and this i think will answer the second part of your question the design license agreement makes it clear preborn never owns the developments made to the improvements made to the sky as a guy p because under the design and license agreement it is it is cyber solutions that owns those so that yeah but it was pursuant to the remove between previewer and and cyber solutions the problem you would have would be if that if that agreement is subordinate to the prior agreement between previa and pro marketing that's not that's really the problem that defines collateral as including intellectual property which includes copyrights and copyright licenses so that's sort of following up on jack's claims question like why aren't you supporting it well so the first answer is that the agreements are clearly crafted to create a difference between the two but the the answer to that your honor is this was a part of the confirmed bankruptcy reorganization plan and signed for cyber solutions to come in and invest hundreds of thousands of dollars not just on the license portion there was a hundreds of thousands of dollars to just get the license to use the to then turn around and invest hundreds of thousands of dollars to make these improvements it is undeniably clear and the bankruptcy judge was clearly aware of this there's two pieces to this one is the license agreement to try to save this company and keep it alive but the other is that cyber solutions has the incentive to come in and make improvements to that technology which it did it paid for with its own money and clearly under the design and license agreement they own it that's the exact language in forward with confirmation only after first receiving assurances reprieve of that pm masses and that's pro marketing right because human interest will is not being so impaired that is that cyber solutions was gaining its license rights to the cystic technologies subject to p m s is only in of rights in the same and therefore cyber solutions was assuming the risk that these rights might be disrupted were prevail later to default under the separator grangemouth it had with p m s concerning it claim and attendant land rights under the confirmed client so your client knew that it was taking this it was in effect assuming the risks but i think your honor here's the important part about that opinion the judge is talking about the skills it technology which we agree and the design in license agreement is up front about that the second amendment or excuse me the second recital in the design and license agreement states very clearly the pro marketing's leans on the underlying technology remain but what the bankruptcy judge isn't talking about there is the t r s s and the payments that that that he has as an outgrowth of this is the technology right that's absolutely right your honor but just like any derivative product it's independently ownable and it's independently supposedly transferred to cyber solutions under the license agreement not of had some ownership interest on the on the design portion it was very clear that it was cyber solutions that would make these developments and that it would use pre bought this is another way to get them through this bankruptcy they made the exclusive essentially contract or if you will to support them in that but but no your honor under the clear terms of the design and license agreement that is that is cyber solutions property the agreement three years later with parties that it's not i don't think i don't think priebus lost anything pre buy has still has the rights i'm sorry i'll just a pro marketing hasn't lost anything they still have rights to the underlying higher level of ship by virtue of the security agreement in the language that i was reading about what is defined as including copyrights and copyright no i don't think so your honor because i think it's clear that they have  a some sort of a copyright license continuing interest in the in the underlying schism technology but to the extent that cyber solutions has improved it and they own that under the design and license agreement and i go to two things one your honor back to the bankruptcy decisions in the most recent bankruptcy decision the bankruptcy judge was very clear he said i'm not going to get into this they're trying to bait me and answer who owns the r s s that's i think it were either use the word complicated or difficult he said that's a that's a question that a court with broader jurisdiction can have to answer and it's complicated i'm not getting into it so the last bankruptcy judge recognized there is a question a legitimate question about the ownership of the t r s s and a judge more back to your point i think when the when the confirmation plan when the bankruptcy judge said notwithstanding anything in the security agreement the judge is trying to balance this i'd give great credit to the bankruptcy judge he says the liens are going to continue notwithstanding the design and license agreement on the underlying skills it but at the same time has to be able to fully execute its duties under the design and license agreement not withstanding anything in the security agreement in the in the in the in the bankruptcy judge clearly understood there were two pieces to this there's a design piece that is separate from the underlying license which we paid for a couple hundred thousand dollars to use the skeptic which they have a lien on pro marketing has a lien on but the incentive for cyber solutions to come in at this bankruptcy and save this company it just makes sense and i think the bankruptcy judge realized and that's why the design and license agreement was incorporated into the  confirmed bankruptcy opinion the design portion gave them the incentive not just to pay for the underlying license but to put money into the technology to develop it and to make it commercially marketable so i think it makes entire sense that  balance was struck and what the district court did was say you didn't have the right to give these ownership interests to primm that's the holding of the district court's opinion why is it the sort of like a galaxy of say somebody decides to loan money on a second and get a second mortgage you know is that security interest knowing that hey if the the borrower defaults the first mortgage is probably going to win out and wipe out my second mortgage in that sort of what's happening here that's exactly what happened with the skills it piece but this is like coming in and saying i'm going to build a second house on the property and i'm going to own the second house without the mortgage the first house will be subject to the mortgage but the second house won't and that's what happened in this case ay please the court my name is eric olson and i represent sales going back to what counsel for cyber solutions was just saying in response to judge gilman's question regarding isn't this the case of the second mortgage happens the answer from cyber solutions was no this is two totally different because this is two separate houses well that's not the facts of this case the tamper reactive secure storage technology is solely based on the secured key storage technology or what's called s k s i see technology so going back to judge gilman's question to cyber solutions the proper analogy in this particular case would be if a mortgage company had a mortgage on a house and a there the  rent or to a house builds of a bathroom as an addition exactly your honor that is this case so what happened by order of the bankruptcy court in the confirmation plan the court said we've gone through this confirmation hearing we've had two days of testimony on june eleventh and june twelfth of tw twelve in grand rapids michigan before judge judge jeffery hughes the bankruptcy judge heard testimony from representatives from cyber solutions heard testimony from the officers of  and what was pitched to the bankruptcy judge what is the use of this s k s i see technology and cyber solutions project it that they were as words of counsel were going to save this company and they projected sales in the billions of dollars based on this s k s i see technology which if that had happened we would not be here and that is because pro marketing would have been packaged the whole deal here is pro marketing came into this chapter eleven kicks as the senior secured creditor owed money and they were sub pro marketing was subject to a cram down in the chapter eleven plan of reorganization they objected to this arrangement with cyber solutions because of those facts pro marketing became the beneficiary under eleven u s c eleven twenty nine b of the absolute priority rule which states that no body can gain priority over the property of preview technologies these a v pro market so when when the court enters its opinion on  planned confirmation the court states and this is and i believe judge gilman you reference this page forty three of the record the court would also add that while the technology is being license it would be able to recover that license in hope notwithstanding or excuse me the s k as i see technology and hope notwithstanding the license that is being granted as part of this point not what the plan since they are the plan is eighty nine pages and it's in the record beginning at the plan doesn't say anything about it right exactly that that that's the point i'm trying to make your honor is the plan does not state anywhere in the eighty nine pages of the plan that cyber solutions acquires improvements to the s k s i see technology that's nowhere in the point what they what cyber solutions points to is this license agreement and cyber solutions says that the district court if this were rated the terms of the license agreement by holding that pro marketing is allowed to take possession of the technology over cyber solutions that this language in the license agreement the court completely ignores as a matter of contract law is is the argument from cyber solutions the the problem with that analysis is once again it ignores the fact that pro marketing is the beneficiary under eleven twenty nine be the absolute priority rule of this property and that's exactly how the plan reads and that's exactly how the license agreement reaches the word this property where is there a definition of what this property is the plan language your honor if we take a look section five point two four of the plan is page one one five first of all that just your honner as a prelude to answering the question  section five point two four the plan page record one one five states the pro marketing retain its lien on the s k s i c i p in accordance with eleven twenty nine b to the bankruptcy code not withstanding the reorganized deaders in tree into the license a creep so the question that you're being your honor i believe is asking is what what is the s k s i c i pick and that's defined in section one point one eight five which is page eighteen i'm sorry ninety eight of the record your honor s k s i c p s k s i see ip means all proprietary rights and forcible by law including without limitation patents copyrights mask works and trade secrets incorporated in or specifically relating to the s k yes i see there is absolutely no doubt in this case that the tamper reactive secure storage technology incorporates the s k s i c i peek into that technology what we're talking about here is an improvement we have a base set of code that creates the s k s i see technology you add a little code to improve that technology and all of a sudden what cyber solutions is doing is rebranding this the t r s s and saying that they own it over and above pro marketing's interest to that underlying ip and the bankruptc plan of reorganization simply does not allow them because it does not preserve pro marketing's rights as required under section eleven twenty nine of the temporary active secure storage technology be improvement so you can take this improvement which that the record in the bankruptcy court your honor i buy i cannot answer that for cyber solutions but i can answer the fact that what we're dealing with is a technology to tamper reactive secure storage that fully incorporates all of the secure key storage technology and to say that cyber solutions own the tamper reactive secure storage technology over and above pro marketing absolutely defeats their security interest in collateral rights that were preserved by the bankruptcy judge in the plan confirmation the plan documents themselves and even the license agreement itself which in the third which is also what cyber solutions relies upon if you take a look at the license agreement which is found  e seventy one of the record the the second paragraph under the recital states that the s k yes i see is subject to certain liens and security interests which continue notwithstanding licensors entry into this license agreement so just for clarity sake because i believe that there's been some confusion regarding these two components of the license agreement we've heard from cyber solutions that there is this licensing component and there is this design services component and that somehow this design services component is creating a new set of technology that's simply untrue the only technology that's issue at that at issue in the design service and intellectual property license agreement is the s k s i c that's all that they were allowed to do under the license agreement is could to continue to design the s k s i c technology it states in the first line of the recitals license or is developing and has developed certain technology related to the security of computers and computer systems known as the secure key storage integrated circuit so everybody knows that technology as within any technology you continued to develop and that was the plan here nowhere in the eighty nine pages of the plan of reorganization does it state that cyber solutions acquires ownership to improved technology it's no and and to state that that was a part of this plan is simply erroneous now does the license agreement state that cyber solutions would acquire ownership if pro marketing is pay it's security interest absolutely absolutely and that's i think the  eleven reorganization situation and save the company and turn it around because if they had we wouldn't be here because we would have been paid and that if that it worked out that way they would own the technology but what the court clearly said is cyber solutions you can't own that technology over this secured credit or we're not going to allow we're preserving that anything they took their chances and lost their absolutely absolutely your honor and the fact is that cyber solutions knew that they were entering a deal with a company who had been in chapter eleven bankruptcy for over four months or so and they knew that there was a senior secured creditor prove marketing that they were going to have to answer to and so if i can point this out your honor is the last point in the confirmation hearing the questioning from that that cyber solutions was there at participated in and this is found at  record entry thirty dash five and i can get the page number for your honor it's cited in brief although the court says to mr sieberg during the confirmation hearing who's the president of the debtor previ technologies ok mr siebert i have a few questions for you under the terms of the plan it's anticipated that pro marketing's lien will continue in the intangibles including the technology that is being licensed to a correct the witness answer yes it's actually yes sir the court and it's not anticipated that pro marketing's interest in the tech or probe marketing's lean in the technology would be subordinated to to see a stock is that correct the witness that's correct the court so in the event that previous fails in its plan it's anticipated and c s i understands that pro marketing will be able to recover the technology if it chooses from c s i the witness that's my understanding yes i think i think my fellow counsel and i may be talking past each other so i want to try to make this put this in a way that will clarify what i think is the key issue in the case  design and license agreement is a part of the plan it was incorporated it was the central feature of the plan it's the reason there was a bankruptcy reorganization plan so it's very much the design and license agreement is very much in the plan so all this focus in the briefing and a lot of the judges who dealt with this they keep focusing on the skills it ip the skills that ip well here's what happened of course everyone was focused on the skills a guy p which everyone agrees including us that they have the license to as it existed on the day that we entered the agreement the skills like ip we thought we were our client thought they were going to be able to sell and make a lot of money they couldn't there were flaws it wouldn't it wasn't commercially viable so what happened we exercise our rights under the very clear design and license agreement which is incorporated into the plan to put our own money clear in fact the design license agreement even makes this clear your honor if previous made improvements to skeptic after the design and license agreement that it paid for they would own it and it would be subject to their lien that's in our design and license agreement we understood that but what we carved out and what the bankruptcy judge allowed was in the situation in the future where we paid our money for improvements to the skills that we would own it and that your honor is separately ownable intellectual property now i will your client cyber solutions is taking over all of says it for free now you know what your are i actually i actually don't think that's true there's a question out there that is not before this court what's before this court is the is the decision by the district judge that we don't even own t r s asked which we clearly do under the documents the question you ask is a good one because cyber solutions turn through improvements that technology into something that is going to be commercially viable that's why we're here today in cincinnati there's a question in the future about what intellectual property rights they may be entitled to as someone who owns the preexisting a license on the lien on the preexisting work but cyber solutions owns the rights to the improvements just like any other derivative intellectual property there may be a question down the road about if we start to and i believe we will this becomes commercially viable the t r s s i'm sure there's going to be both business and hopefully not legal but probably business discussions about who's entitle to what when that technology hits the street but what the district judge did in this case your honor is it