there's thomas boyd here on behalf of the appellant great go and great co respectfully request the court to reverse the district court's judgment and remand with instructions for entry of judgment in favor of gray go michael ryan and write acts purported to grant too great an exclusive license for their patent and for this great code demanded excuse me write x demanded and great go paid two hundred twenty five thousand dollars up front expressly for the exclusive use of the patent and then paid five percent royalties thereafter on the use of the patent but right x never provided great go with exclusive use of the patent we're not asking this court to reconsider the evidence we're not trying to re argue the evidence we're basing our arguments and our requests for relief on findings that judge grants  made as a matter of law and i'd like to emphasize those three specific findings first the district court found as a matter of law right acts of conduct provided three of reiko as competitors with an implied license to use the patent from two thousand and five to two thousand and twelve second the district court held as a matter of law that right act reached its duty to enforce the patent against third party infringe on august fifteenth two thousand and twelve when it dismissed a lawsuit against those three infringers with prejudice and third the district court held as a matter of law the right acts breach the duty to provide great go with exclusive use of the patent from august fifteenth two thousand and twelve when that case was dismissed as a matter was dismissed with prejudice until the pat expired on march tenth two thousand and fifteen so in short  write x and ryan fail to perform their obligations were in breach and never provided great go with the exclusive use of the patent from two thousand and five to two thousand and fifteen which is the entire term of the prevail on that claim that breach of contract claim because right x did not establish it had done what the contract required under iowa law it's a fundamental requirement it's a predicate to be able to establish breach of contract and this necessarily bars right acts from prevail at prevailing on its breach of contract claim against a grey co we therefore believe great go is entitle to reversal and re man with entry favor there are a number of questions that came up during the briefing or number of issues that came up in the briefing and in order to respond to those particular issues i want to provide the court with a framework in terms of how to evaluate the record in this case i believe there are four stages first the negotiations that went into the license agreement initially grey co was interested in a non exclusive license and right ex insisted that it be exclusive right x demanded that we pay for exclusivity so the terms of the agreement itself expressly state there shall be an exclusive license that's on page one that's one of the preambles we specifically paid two hundred twenty five thousand dollars for exclusivity and thereafter we pay five percent royalties which is the exclusive royalty rate as opposed to two percent which would be a not exclusive rate so the agreement itself expressively provides for exclusivity and also provides for reexamination we had been in litigation with right acts challenging the validity and enforceability of their patents so a fundamental term of the agreement was the parties would submit or write x would submit the patent for re examination during that period of time which took until april of two thousand eleven the royalty payments that great co made were placed in escrow and if the patent did not survive reexamination we would receive those royalties back it did survive  reexamination in the meantime there was no reason for either party to seek to enforce the patent because of the question about its inforce ability and certainly grey co could not have been foresight in force but given the filings that it had april two thousand and eleven and right x then sued the infringers in august shortly thereafter which was what they were required to do but they failed to fulfill their obligations in pursuing that infringement action they filed it in houston the venue was challenged it was transferred to wisconsin where wright acts immediately folded and unilaterally agreed to dismiss the claims with with prejudice which is judge kritzinger found greatly prejudiced my client grey co barred us from being able to recover a million dollars worth of lost profits that's quite material it also barred us from being able to seek injunctive relief so what did judge christmas say later than about materiality in the million dollars he said things that at least my in my view were inconsistent he read the agreement as if exclusivity was immaterial that it was not a benefit of the parties bargain or clearly it is he also ruled as a matter of law that these breaches had occurred and it was our understanding that that was a conclusive determination that subsume materiality i would note schumi i know that was your understanding but it which was confusing we had submitted proposed jury instructions that actually had a materiality instruction and you can find that appendix page two ninety nine iowa has a materiality instruction based on the restatement and iowa supreme court law where the plaintiff if the plaintiff has failed to perform the plaintiff could argue that it was not a material breach in fact mr monroe right next counsel argued materiality was a fact issue and therefore the court should not grant our motion as a matter of law on these various fightings judge christer overruled that objection right x did not seek an instruction on materiality the jury was not asked to consider materiality wasn't asked to decide it was what happened to your instruction we did we didn't i was doing it because we want as a matter of law so we understood going we're going to submit is struction well for that ruling exactly so there is no you no need for us to submit it given that we have prevailed in our motion as a matter of law i understand but let me let me go even further and say if you consider those issues there's no way on earth a reasonable jury could determine these were not material breaches again that's the expressed purpose the stated purpose of the agreement and the the jury a supposed to look at the agreement that the written agreement and decide what's the benefit we paid two hundred twenty five thousand dollars plus five percent royalty for exclusivity we lost a million dollars in lost profits claims against these infringers we lost the ability to seek a permanent injunction against them for their prior behavior because it isn't the real question here whether on the they breached as a matter of law and all of the evidence supports that and none of the evidence is contrary to that so if that's the issue for of this court we would respectfully submit that you must find that these were material breaches as a matter of law and therefore remand are reversed on remand for entry of judgment in our favor if you have any question about it that might not be the issue i gather the question comes up because the district court said that would be a just for closure and for the verdict and a reasonable jury could have found no materiality and so why isn't that the question because it's undisputed they breached the terms of the agreement and under iowa law if they fail to establish performance they can't they can't prevail on a breach of contract now that particular element does not discuss materiality simply states if you fail to perform and everybody agrees they fail to perform from two thousand and five all the way through two thousand and fifteen then they can pursue their claim period now if they want to make an affirmative argument of materiality that's up to them and i guess that's my hesitancy as as the defendant i don't want to be put in the position of making the plaintiff's argument but if this court concludes that as a matter of law should be if this concludes that somehow they could get past that essential element to prove a breach of contract and if this court concludes there's a whisker of a possible issue of fact on materiality then you should reverse and remand for a trial on that issue so at the very least there should be a reversal and a remand for trial on materiality but we believe you me because you say that issue is never tried it can the verdict can be right x did argue materiality in chambers or before the court outside what was the issue for the jury the as you see it what was the argument there was an argument the judge instructed that they had breached so there was no way they could prevail on their on their contract claim period i don't know if judge grits there was doing a judge see em born and just wanted to have the jury make the decision but i don't i don't know what was the argument it's no big deal don't worry about it these were small competitors deal's a deal forget about it yeah we know we breached but just this don't worry about it that's essential to the argument you know in iowa with the breach must be material the the instruction on the elements of breach of contract do not call out materiality they say the plaintiff or the party with the burden has to establish they performed if  minimalists that it doesn't really affect anything it still that that would be the plaintiff's argument if if that instruction was given and the jury was asked to decide that in this case the record would not support minimus finding all right i'll have to save the time for a bottle thank you very very well mr monroe long hear from you do a review of the contract will show two things one is is that and this is outside the contract in the record as well both parties to this contract knew there were third party infringers when the contract was entered into break i was fully aware that that the badger defendants as they were stated were out there that they were infringing on the contract they knew that when it fell and contract with yours no your honor i'm not what i'm saying then is is that the parties specifically agreed that neither great nor right x was under any obligation to pursue third party infringers the contract specifically says that the steroid said that we brought the infringement action because that was what we were required to do we want required to do that judge groups are breached then well judge great singer and if the jury decided on differently or honored to be honest we would be up here and you in the breach issue i don't believe we were in breach of the contract was what right x did was they brought an action against the badger defendants they were under no obligation at all to do that they brought the action and in discovered during discovery is a record shows that the badger defendants from two thousand and five to two thousand and fifteen that their total sales were less than one quarter sales break zero per year in other words that great co from january to march of two thousand fourteen had more sales under the terms of this under this license than the badger defendants combined had in the entire ten years they were supposedly breaching this contract as the evidence showed that both parties knew  honor specifically on the record both parties knew about it when the contract was entered into that was admitted to by mr farrow who would subeditors patent counsel or not badge or was great patent counsel for your big picture a point is you don't think there was and it said in order to predicate the discharge of one of the contracting parties upon breach of condition by the other the party claiming discharge most showed the condition breached constituted the entire agreed exchange by the other party and materiality issue of law materiality had i believe would be an issue of fact as judge aggressor stated that whether or not this of material breach can and should be determined is an issue of fact in some instances clearly it can be it can be an issue of law in this instance what we've got is a de minimus third party infringer both parties know that the third party's infringers other great co's arguing and screaming exclusivity they knew this was an exclusive contract was not an exclusive contract when they entered into it they knew we were under no obligation to to enforce the contract so the exclusivity argument as  obligation to enforce and there was no exclusivity agreement but that was the basis for saying that you breached the reason we're saying it's not material your honor is because they knew the third parties were out there  and they knew we didn't have an obligation to file suit what grey co licensed for and the argument on the last point though if you had an obligation to file suit what was the basis for the judge's ruling that you breache i have the same question judge he stated to the judge stated this the judge's ruling was this and that was that once we decided to file suit that we had to perform the breach and go forward with the litigation in a reasonable manner and he made a since we didn't proceed through an injunction or the denial of an injunction in this case that that's a material breach knew that injunction wasn't even an option and junction was going to be entered you asked the question judge as to whether or not materi wanted instruction on materiality the court did not allow the instruction on materiality at trial great co had the opportunity to make a record on the lack of a materiality instruction it did not do so now but you are the one arguing materiality in the trials i understand that we were your honor you wanted the jury to say this is not material that brings us to the next point it is asking why there was a why you didn't see a need to submit an instruction on the i didn't what were you wonder what instruction are you arguing your point then that we performed as a contract required the instruction that we argued this case under your honors actually more are onerous to write x than the instruction of materiality would have been i didn't see i didn't see materiality i did see materiality as an issue but we had to argue to the court either way that the jury either way one was that we argued materiality the second was that we did what the contract required us to do and materiality i think means that we did do with the contract required us to do that if it's not material if it doesn't go to the heart of the contract then we performed under the contract saying and i guess i'm they're the ones making the argument that the failure to include a materiality instruction was error and they didn't request the instruction they did request the instruction i want to wasn't granted they didn't preserve error on that issue instructions that we argued and that we were forced to argue in this case given that they were that the instructions given by the court specifically stated that among other things we had to prove that we performed on the contract and so we argued the materiality issue and argue that we did in fact perform on the contract that the actions that we took with regards the badger defendant specifically filing suit proceeding to the point where we realized that it was financially u feasible to continue with litigation that we weren't going to get an injunction that all of those things were a performance under the contract whether in breach or not they were not a material breach and that's the argument we made to the jury so right acts didn't know the extent of the badge or defendant sales at the time i was the attorney for right next to the time i can only state what was testified to or stated to by that tourney that they had the time he said they filed it with the expectation that there would be damages that there would be some kind of an agreement that they would leave the market the badger defendants vigorously defended that when it turned out their sales for almost nil that the recovery wouldn't wouldn't that's a good question i don't know your honor i think that was probably a mistake on the part of the counsel for right except the time but the fact that it was dismissed with prejudice without prejudice doesn't change the fact that gray co's coun admitted that there was going to be no injunction break or the opportunity to file suit to it is same opportunity we did they didn't take it in fact there's there's in the file this record stating that we want to grieco to join in litigation with us and he refused to do that so the arguments that great those making now are in the air i guess say i don't really understand i'm essentially honored answer your question we didn't request materiality instruction  requested one but i thought the instructions provided by judge griffin are one adequate state in the law that would allow us to argue the case and as it turns out i believe i was right that we were able to argue that the that the actions by right acts were in conformance with a contract that there was no material breach of the contract and because of that we could arrive at a different ways the other problem with materiality or honored in its it comes up later and i think it's also mentioned by judge gretchen has to do with the fact that there is an election by great co not to rescind the contract which is another problem i think we have and that is throughout the case great  argued that the contract had been rescinded that the contract was in effect and that the only damages we could get were damages for breach of contract on appeal they are saying that the contract all sides agree the contract was terminated that's in their brief it was never terminated the never made that argument they had the option to rescind the contract they had the option to say we're going to rescind the contract we're going to terminate it we didn't get an exclusive license and we're going to we're going to sue you for damages or even if our breach is material they had the option to do what they did and that is to continue on to basically acquiesce to the breach they have the option to bring a claim for damages later on but interest case specifically states that there is an election of remedy that was available to great co their number of cases cited by the court in the order denying gray caus motion for new trial that stand for exactly the same thing and that is that of great instruction i guess is again your understanding here i remember things the materiality instruction wasn't given because it would have been a misstatement law if that if the state instruction was given to the jury that a material bre on the part of right acts which is the only this which is the breach we're talking about here that the material breach in the part or right acts would preclude right acts from recovering and that isn't the law once great though decided that they were going to continue selling products that  because the breach was not material you win the case but even if the breach had been material we still had the right to go forward with the damage claim yes your honor all right what's your best iowa thora to you on this question honor believe we've we've at least if there are any other questions on materially if there aren't i would go to our position with regards to our appeal judge gretchen or looked at the case we filed this an alternative theories one was p infringement one was contract clearly if there was a breach in repudiation and great co went on making our product we would have a patent freshman claim against them and i believe it would be a willful infringement claim or an alternative we played contract claim we didn't know whether or not the grey co was going to argue that the contract had been rescinded prego argued it wasn't rescinded there was well there was no finding on that i believe that everybody wants forward with this case as if it was a contract claim the court the record there was evidence that there was a valid contract that gray co agree that wouldn't question the validity of that contract and admission in writing by grieco the infringed on that contract the pav valid patent a break agreed that they wouldn't question the validity of the  it was alternative claims we couldn't recover under the contract and the patent so we went forward with the contract claim the court when they decided fees in this case used a mathematical formula which is specifically by ruling of this court and  all right axis obligation to pursue infringement actions is specified and paragraph eleven point zero of the agreement page five states should there be patent infringement relating to the licensed field of use by a third party and licensees notice license source of such infringement license stores shall have the initial choice and obligation to prosecute the infringement they did undertake to prosecute they dismissed with prejudiced judge gratis you asked the question why counsel had no response in fact there's a huge difference dismissal with prejudice barred my client's claim for more than a million dollars a lost profits the right to pursue injunctive relief and importantly and demonstrating the i think the bad faith if it could have that action could have resulted in a fine made of nine infringement which would have notified any obligation on my client's part till it was argue it in the jury found that we breached that we couldn't recover damages they didn't find that that wasn't a harm we suffered well it's a general for an act i guess you don't know what they were thinking  answer i don't with respect to materiality the restatement has a whole section on materiality it's five factor test it's not an element of the breach of contract claim it's an explanation of how do you determine whether or not the breach of the failure to perform is material or not the plaintiff had navigation pursue that if they thought it was still in the case we didn't think it was in the case we'd want as a matter of law so we expected that the court or the jury would find they failed to satisfy their i have so many more things to say you want to take one minute on the reduction of attorney's fees assuming absolutely and if i may just one other comment about closing argument counsel's right i wasn't there nor were you but read closing argument see if you find the word materiality anywhere it's not there that wasn't argued the plaintiff had given up that argument none of us thought it was in the case their council and a contingent fee agreement but it was not produced we believe since it's a contractual fee shifting provision not a statutory fee shifty provision plaintiff is only entitle to the actual fees they were obligated to pay their attorney this isn't a situation with a civil rights action where there is policy reasons why we encourage even pro bono lawyers to be able to recover their assurance even but you know those those lawyers who do not pay full or do not charge full freight can still seek to recover full freight or full reasonable fees because of the policy reasons underlying the statute but where you have a contractual she the shipping provision that policy or those policy reasons don't exist so here where the plaintiff recovered an award we believe improperly recovered an award but recovered an award for three hundred thirteen thousand dollars they should not be able to seek fees anything beyond one third or whatever the contingent fee agreement provides for because that would be a windfall there are a number of other reasons why what exactly did the contract provide for actual out of pocket costs that would be really a client for the client for act and you have any authority on that as that ever come up anywhere i don't know about iowa i believe some cases that say anything beyond a contingent fee would be a windfall and i believe those are in our briefs and if if i know i'm way over my time if i may just one point in terms of this new found election of remedies argument paragraph fifteen of the agreement the license agreement excludes any election of remedies that expressly provide will you take a look at all right every ok thank you and thank you very