give you up to thirty minutes although you may not need it to argue in both cases and then serially will give mr randall and then mr shelton each up to fifteen minutes to argue with the restriction on mr shelton being that he's not to repeat anything that mr randall has already said it so fact it may be less than fifteen minutes as that clear enough to everybody i result in a contract a license or say well we know the facts is there's no question at all what the contacts were and what they resulted in and didn't result in but isn't it true that a contract was proffered to each of the alleged  infringers which would of clearly become a binding legally enforceable contract if the recipient had simply signed on the dotted line as requested that's correct or no question and that's where no why why isn't why isn't an offer of a contract for execution a sufficient commercial act to avoid the immunity for two reasons you're on the staff to draw the line and they will get a moment  client simply flew to the united states and said to me no no let's stick with the question the question is when they proffered a contract that would be fully executed upon signature why isn't that proffer sufficient commercial act to settle the issue because it does not result in and because he didn't sign it just the fact that the recipient didn't sign it that means it's not a commercial issue it doesn't let me say it was the legislative history the government of nature but we don't know mr wagstaff the problem i have with your completed contract are you really isn't it a bit of an oxymoron to say that the only time you will have a an exception to the far in state immunity is when there's a completed contract executed in this country because once there's a completed contract presumably there's no reason to sue anybody before us your motion to dismiss the lawsuit on the basis that york client was immune yes right so i don't understand how you can complain that a sovereign let me return back to the to the point you were making about the need for contractors of because of irreducible minimum of commercial activity suppose that following the fabulous success they decided to make the the austro let's say a car and they advertised it widely in the united states during the fall of two thousand and six available orders will be taken as of that's going to be present in every case in which somebody shoes and that's why it and therefore your commercial i'm not sure where your commercial activity limitation comes in if if you accept that any activity that creates a cause of action constitutes commercial activity i let me preface it with this is it would you agree with me that our foreign immunity statute is essentially designed and i too would read the legislative history is essentially designed to separate out sovereign act you don't look at purpose otherwise the government could say i'm buying the shoes and example one case for to supply our military is a government per the binary division between government and non government  sixty six zero five of the legislative history which i believe is the house report and this is what they say first the bill would tata side the so called restrictive principle of sovereign immunity as presently recognized in international law under this princip the immunity of a foreign state is restricted the suits involving the foreign states public act as your thirty i'm not sure my latin is perfect and does not extend to suits based on its commercial or private acts so they do seem to have that in and if you can see that much to me just for i really ron i just argue with purple and for more ok then let's ask this question let's assume a private organization  product with that commercial i could see if the cause of action derives directly from that the act of getting could be in that sense for the act of getting the patent but not from the patent itself we don't we don't separate out the phrase based on that there's a possibility of litigation voluntary licensing program closes one hundred eighty seven days from proper we may then commence litigation against one or more firms of which you happen to be one come in and talk about licensing if you suggest that maybe they'd have to do it and maybe there was something alive you're automatically in the door or something has to happen pursuant to the legislative history and there's a reason for that it's not only to avoid the slippery slope because something happens you're on your you say i'll fall off a cliff or something happens when i'm flooded i stay to sit at the meeting or make a telephone call or show up at the meeting at what point and the reason why i think the low end of the spectrum in this con because if we don't know in saudi arabia because the saudi arabia case the supreme courts and yes but for a beer or wine does a person place in the situation there would have been no torture but that's not but for and my dad used to tease but from my grandfather moving from canada we would exist but he would have never met my mother and father and this actually distinguishes that it tells us i submit it tells us that the part not just in connection with not of the relationship the cause of evidence of the negotiation is not going to be the basis of the call back that the case for let me return if i can to the point that you made in response to my hypothetical earlier i just want to make sure i understand exactly what you're saying with respect to the meaning of commercial activity if i correct me if i don't restate your position correctly but i thought you were saying that if there is a cause of action which a private party would have under the same circumstances then the conduct by the foreign sovereign that leads to and creates that cause of action is commercial activity activity the kind of sovereign activities i think judge player was talking about is being intended to be protected but nonetheless it is committed by a private person assuming the private person could commit that that particular kind of conduct would be tortious you're saying that as long as there's a tort which if committed by a private person though the immunity goes away we are back to clear there's a separate immunity exception that we're not talking about here today to the commercial use of the torque exception that got some limits that would affect your answer but work well that's a purposes of commercial activity you're saying if there is a cause of action that would be present in the case of of non sovereign activity the question because purpose is to quote the last are irrelevant in this context what's relevant is who is the actor or governor not and what is the quantity of commercial activity and ultimately does cause of action right th campaign to collect hundreds of millions of dollars from the u s wireless industry is ongoing commercial activity under section sixty five a two and that's i was subject to suit just slides in the other private things that he didn't race certainly the i believe the counsel was arguing and placing defendants or potential defendants and companies in the u s like dell and like intel in the ultimate catch twenty with would be applicable here and the exception not applicable that's what we need to address there is no bright line test as he indicated that there is acts and commercial transactions that could support defining a commercial activity and eliminate any immunity and that is the u s supreme court in both wealth over and nelson has also made it clear that congress intentionally left commercial activity largely on the farms however well so i had his its arguments yeah largely undefined but with one clear line that there has to a completed contract now if he's right he wins if he's wrong he's a loser so yeah that's what you want to help us with his argument that there have to be a contract ignores the fact that there is a host of commercial activity that can give rise to suits short of a contract the litigants dell and intel should not have to sit back and be subjected to threats of litigation and suits on the pat weigh in this balance this is a legal issue we need to do address the statute and the legislative history well the letter i've addressed lesley's history makes it clear that there is a broad spectrum the us supreme court in looking at that issue there is insufficient commercial activity in the context of this case in the absence of a license agreement having been signed by one of the accused and obviously you disagree with that but you want to tell us why because under wealth over the wealth over case makes it clear that when a sovereign and to see action not as a regulator of a market but as a private player in the market then that is commercial where where in that range of activities is commercial activity could purposes obstetric occur is their acquisition of a patent enough well certainly that is not a sovereign act and under activity and so that point they step out from their public role and into their private role of obtaining it happened and that is a commercial activity you have any authority to support that proposition no other than well over that gives guidance and says that when you step into the market it's a private player as opposed to a regulator of the market i mean this wealth over the sumed is sufficient nature and quantity of assume that the nature and level of the activity was sufficient if the predicate for its discussion about whether the activity was of a sovereign nature or of a private nature no i don't believe it does or don't but i don't also your honor believe that there is a requirement about the want of evidence that is required i think it simply means that if you step outside of the public role into the obtain a patent you are engaging commercial i tell you didn't you didn't need any of the negotiation and license offering evidence that all you really needed to put on the table before the district court to establish the first point was the the fact that cyro a pain to us that that was a commercial act certainly but the suit was based on their ongoing campaign and there was so much evidence to put on the table what it all we put their entire the good do you agree with me that under your theory of the law there was sufficient commercial activity and no sovereign activity simply by obtaining the patent there was some yes sufficient activity by obtaining the patent however that's not our  that's the lower threshold i'm not i'm not going to sit here and argue that that is a and how do you cover the other point the based on because our suit is based on the the actual controversy between the parties which is the proper scope and application of their claims they have asserted throughout the industry and to individual participants including dell and others that their patents the proper scope and application of the patents covers all wireless compliant products including those declaratory judgment action doesn't create serious fiction it creates a cause of action or otherwise would exist but it does the creature is fiction so on the issue of jurisdiction versus sovereign immunity i think you respond well that one of the the issues that we have to prove in order to go forward certainly whether you call it an element or whether you call it in the ninth circuit takes the sun the fact that it's necessary for us to  we have to show that there is an actual controversy we have to show that we were placed in a reasonable apprehension of sue i know you're no question about that but that goes to a different issue and on the issue of whether cyro was under the the negotiation says mr x that calls them well it's it's it's not precisely based on the negotiation but it's based on is there the it's based on the proper scope and application of their of their cla enforce the patents and to place us under reasonable apprehension of suit intel and and based on that and that's something we have to establish some space concluded there's no question that if it were a private party rather than instrumentality the australian government that if they were sufficiently credible threats to you us the person threatened the company threatened we'd be able to file a declaratory judgment action and there wouldn't normally be any question about jurisdiction but here there's a question of serious fiction that arises from the peculiar fact that the patent holder here is not a private company but it's a government congress to set up a special protection for foreign governments whether without any shield of immunity of a private company that owns the path and then we had under the exact same circumstance we should be able to freely sue the government and his answer to that is  no you don't have a quality of creed because congress has erected a shield that protects the australian government which does not protect general motors or some other private entity the shield stops the new stuff over the line from sovern public back into private acts that's what the new supreme court of well over indicated when you step across that line you entered into the area in which you should be sued and they knew it they tension we did it they want to raise nine plus million because they were not confused about what you're trying to do it and we all understand the fact none of the facts or contest and i have courts are kind of enforce their pattern of course they really threats of course they're trying to collect license revenues of course of course you wouldn't need to put it simply isn't and when you step out of the cover and the umbrella of a deal i don't think he did argue that i think his argument was quite different and i'm trying to get you to respond to what he did argue not what he might have argued but didn't argue well he argued that there was some quantum level of evidence that is required commercial activity there's simply no support for that there's no support that there is some quantum level number one number two there is no right line that is established either under statute the case law that indicate that it has to be a contract and back to the conference room and the the case law indicates that once you step over into into the private acts you are stepping into commercial and i know that you've indicated this but we should not have to sit by through liability stop making up products or signing unilateral contract to me do you understand mr x caps argument can be and with specific reference which is the basis which as to which the conduct in question pertains it's a nice theory but there's no support in law for that there's no support in law that says that the that the basis of the suit has to be you otherwise would lose if you didn't prove and this in his case there was no there's no support for the idea that you have to have it completed clause of action that is the basis for the commercial activity that you form a suit on but it doesn't matter in our case we time has expired mr sheldon we have a problem here and that is we have two very bright lines being drawn in front of us one bright line by mr wagstaff who says are relying on the bare issuance of the patent as commercial activity we are based we are basing this these to defer to or judgment actions exactly on the commercial activity that started in april two thousand and three which no the letter is not sufficient not in this case but you know where we're at what point in the downstream trip do we finally get sufficiency we could sufficiency are honored with the formal offers ever made with a license from  sufficient terms so even a term sheet could be sufficient because that that would fall under section sixty three these definitions of a commercial act so clearly making a license offer is a commercial act whether or not the transaction occurs i'm having a disconnect here and i want you i think it's my my problem not yours but when you say sufficient what you are saying i think was was not that so sentient in order to get you to the level necessary to give you a right to declaratory judgment under our case law as opposed to sufficient to constitute commercial activity i think would you just said correct me if i'm a separate and do it that the first letters commercial activity yes right now that may not get you declaratory judgment because of all of our case law from arrowhead to phillips plastics and all that that says you got to have more than that when you said sufficient you weren't saying insufficient to be commercial activity as i understand your saying insufficient to constitute a only question really presented here is not that there that they have never claimed that their activities were those peculiar to a saw they have even admitted their own let me give you an example to go back to my lanham act case had i'm not i'm so wedded to it seemed to me at least to be hoping you could have expensive advertising let's say which doesn't constitute a contract but seems to me plausibly enough to get it to construct commercial activity in anticipation of ultimately entering into contracts and making sales now that you could have lots of that activity as long as you don't do anything you don't say anything disparaging about somebody else's product or whatever you haven't you haven't generated a cause of action but it's pretty commercial activity just as commercial activity on which no claim could be based exactly was the word bitch that's right but you but you wouldn't say that that isn't commercial activity and two you'd say something on which you claim could be it's two separate questions commercial activity versus base i was understand you to be saying well you could have minimal commercial activity but until some claim could be based on it it's not really commercial activity it's not what you say right well your honor i'm suggesting that in certain cases where it's not clear so for example a breach of contract action it would be pretty clear to district four that not the commercial activity that would be related to a breach of contract actually be either because she action executional performs the contract that's easy this is a little harder because this is about the commercial or service council argued that and it made it to you to your question to present that in the case of a commercial tort like the lanham act violation or unfair trade practices that would be sufficient what is a d j action if not in a commercial tor in reverse in other words there is an allegation that a commercial tort has been because because it's happened in the d j action it seeks to clear the air of the commercial  say your honor it really doesn't matter whether i alive the based on with commercial activity because for the purposes of the statute the only kind of commercial activity that is relevant to escaping from the immunity problem is commercial activity on which an action can be baked because that's what the statute says so whether something is commercial activity in the abstract is really not important to to my case you agree that that's that's really a slice of what i'm trying to say is that is that sort of coming to court and said you must have a tort for a contract and they don't even go to the statute they go to the legislative history which is a form of congressional dictum after all it's helpful but congress specifically specifically left it to the courts to determine what commercial activity is so we go to the statute and look there was look at all these cases and all the wealth over told  the supreme court announced well presented look at the fundamental nature and that's not even at issue here so i was not coming this forum saying that these were sorry activities and not private so we can just go right past the hurdle so in a sense because that based upon aspect of the claims that are at issue here is the district court or is the d c circuit made clear important versus society or france at least one fact without which the plane it's  actual controversy under the declaratory judgment act so that is the facts upon which every claim that is at issue here is tied to the commercial activity of sorrow and so there so all of this question about hasn't been enough to be a contract and all that you really do going back to to your question a good price and you really do have to look at what the nature of the clearance and we admit that this is certainly a case of first impression it's not common that foreign allegation that four dollars is not reasonable it's true and that's again just going back to the fact that their their license campaign in the united states is the basis of every single one and so when you when you when you see if there is a bright line or if you even need to find a bright line you have to look at the claims and then look at whether there has been another commercial to do you think changing the issue for a moment and that you think that the  arises whether we can exercise jurisdiction under the standards applicable dependent appellate jurisdiction or whether where the those standards say that we can't reach that issue but i believe  action are intertwined with the sun because the all of the facts upon which the d j claims are predicated are the seed facts related to the sovereign immunity issue because that is the commercial activity there when the same i think commercial activity in the stack professor wagstaff let me try try something new if i were arguing the case for dell which i'm clearly not you understand but if i were here's what i would pose to the court i would say in order to escape this immunity problem we have to have an action based on commercial activity we would agree and so i would say the commercial activity that's involved by australia what however we pronounce your shortage is the following it's inventing a product and making a profit by patenting that product and licensing  use that's the commercial activity then i would say this suit is based on that activity when it addresses the enforceability of the patent for licensing purposes and then licensing is to use it is that not commercial i have not sufficient commercial activity as congress tells it is commercial activity but it's not sufficient commercial activity under the statute because it doesn't reach the level of the bright side of the spectrum the intent to commercialize the the products of the convention on the pen would be commercial activity but not enough now if if congress were to morrow to enact a statute which it would say it path for someone to invent with intent to improperly enforce a patent that's the tort as would that convert that commercial activity one if congress changes the law it's not changing the definition of commercial well it's changing all it's doing is adding new cause of action which leads us to the question of when added the declaratory judgment x is a cause of action why very figure out it's called off archaeology we're doing our best but the based on is a specific limiting limit other aspect to the exception it must be based on not connected with not blood for not related to and that's why i say three fifty seven because you know what there would have never been any torture inside the city were the case if they'd never ploy and here we don't need the negotiations for the affirmative climate offenses we're not talking about misuse defense