zero patent served to divert divest cascades advantage for a standing the second is whether the verdict on infringement which occurred more than three years after the alleged antitrust violation of that violation possible turn into the first issue into trust standing or more specifically the requirement to plead antitrust injury the district court's opinion does not set forth that it's so forth it's reasoning as to how the two thousand and fifteen verdict could effect an injury that occurred in two he's inability to license to patent is unsupported unsound view and cannot apply here to cascades first the two thousand and fifteen finding of not infringement cannot fully account for the injury case kate cascade suffered two thousand and twelve because that finding came more than three years after the injury the cause cannot come after the fact well that's only if we think that the jury was doing something other than telling us something that was true right if the finding in the chicago court was there never was a license that was needed here there never was infringement that and we think that's true then that was true in the earlier time as well three years earlier all the jury's finding can lead to all of the jury's finding could mean it could lead to an inference that the manufacturers in two thousand and twelve also thought that there was no infringement but that's that begs the question of whether there was a conspiracy in two thousand and twelve or whether there was independent conduct based on independent conclusions about infringement what was the injury to competition as a result of the alleged conduct the conduct was in itself in injury to competition it was like competition i'm having real trouble understanding and part of the problem is we're in that we've gone through the mirror into wonderland because we're dealing with a patent here so we have a legal monopolist on one side of the equation and i'm having trouble understanding what the competition would be and especially what injury to be suffered by a consumer out of any of this injury to competition is from the manufacturers who are on the purchaser side of the market agreeing that they would not independently deal with cascades so instead of competing for this for a license the patent for instance but i wasn't an exclusive license so they never really work competing with each other were they but it could have been exclusive license the agreement itself is it it prevents any competition if the manufacturer in the end there was i mean i'm i'm kind of lost as well because what i mean no deal was done and there was apparently at one point an offer that was withdrawn because somebody decided not to pay the price and so that's kind of the antithesis of an agreement because they didn't have an agreement some party didn't agree and so there wasn't an offer made to your client on a collective vases and there apparently weren't offer isn't made to your client on an individual basis you have a bunch of people that decided that they weren't going to pay for this patent and how is that an antitrust violation that was defective there was an offer on a collective basis that offer was t get you wholesale pricing if you if you negotiate through us alone as we if we service your agent then you'll have to pay less but the offer went through our p ex but you made a big point in your briefs that in fact none of potential buyers actually responded so the offer was even through our p x at least it was an invitation that all of these buyers would come forward and deal with you directly and your argument about competition is well that competition was prevented because they all gathered together and refused to talk individually as well as as a unit under a p x is not isn't that what your point was i may have misunderstood yours to your question our point of this and if this answer is that the manufacturers decided if we're going to negotiate for a license this patent we're into it through our p x as a collective but we're not going to individually negotiate for license this patent and our p x then came forward with an offer hi seven figure offer which shows that somebody wanted to license this patent but then withdrew the offer because it least one member refused to pony up for the for the collect does that enter question well yeah but then the next step was you then criticized all of the companies samsung etc all of them because they didn't respond individually because even though the the the offer was made  motorola saying we don't want to rock to go shit with you to be julie we want to deal with this through the b s so it affects competition maybe it affects the ability of your client to get money for this patent but it i would thought your answer about where the harm the competition was was that somehow this undermines the rewards for invention that the patent laws protect and that that's the harm to consumers i mean there's no harm to consumers of how much samsung pays for this infringement so i lose stuff i mean i don't think that's a successful answer the question of what's the harm to competition the harm to competition i'm struggling to find what harm there was to competition here i don't see an didn't agree the their refusal to deal individual our client was because of the agreement not to compete now if they had made only a collective offering your client said i'm not going to deal with you collectively maybe somehow or in the world of competition but that's not what happened there wasn't an effective offer made collectively there weren't individual deals negotiated there just wasn't anything here and out of that you're trying to construct an antitrust injury and i'm still waiting to hear what the harm t competition is again you're out of there was a collective offer made through r p i but withdrawn because you just acknowledged one of the parties behind that collective offer decided not to pony up and the rest of them didn't reform the offer without that that just nothing happened in the end again that there are facts here which show conspiracy and this goes to the issue but there's no actual going an injury as a result of that yet alone an antitrust injury the injury was the inability to license the patents and that that injury resulted from the conspiracy not to deal with cascades which is an which is an antitrust injury flowing from reduction in competition which is the essence of antitrust injury there was r p s a high seven figure offer showing that somebody wanted a license to this point with or anything that prevented the members of that group other than the one who refused to pony up from reformulating and making a different offer the conspiracy on the no that's not an answer to the question because that means if there are six people on the market and five agree to do it together they could do a deal if they thought they needed to do a deal the only the more plausible explanation and this is where i pay raises promptly is that they looked at this and said well we don't really think we need this patent but we don't want to be exposed we don't have to i don't want to take on a cost that my competitors aren't taking on so if everybody pays something to get rid of this guy ok but if other people aren't going to pay i'm not going to raise my costs and put myself he's a v the competitors in a disadvantages position so that's why it makes sense for me to get a board that train only if everybody else is a board that train that's an individual decision that maybe if that if that's what happened your honor that may be an individual decision that's not an interest file but that's that's what will explain why the five who were apparently in agreement to pay in the sixty wasn't wouldn't come back and say let's do a deal with five what do you have to offer that's at least as plausible i don't disagree that there is a plausible x because the they agreed that they would only negotiate together why do they care about number six being outside the circle unless they don't think they really need this patent and don't want to be cost if this stage i don't know that we need to answer that question your honor but to try harder to figure out what happened i'm having trouble finding another plausible explanation for this other than a set of individual decisions motorola statement marketplace because it's not paying this unnecessary cost that may be the case but it also may be the case your honor that the that there was an agreement that we were all going to take a license or none of us what if that was the agreement if these were not decision if they thought they needed the patent then there's no reason for them not to either negotiate individually or collectively with leaving the guy out who refuses to play ball but as there isn't there is another shows that it shows that they did they're willing to pay some insurance against the risk but the fact that none of them are willing to pay individually and of the what the other five wouldn't pay anything without the six suggest to me they weren't in great fear of this patent the what shows that they did was the r p x is offer which shows that somebody thought there was a need for a license and that was completely withdrawn well not literally it was not but a benefit  obtaining a license i buy insurance your house i don't expect there to be a fire but i buy it anyway because it's worth it for the insurance policy makes perfect sense for them decide to pay something to cascade because there's sufficient risk here but do they feel so much at risk that they're willing to strike a deal individually apparently not and it turns out they were right turns out that they were right but that's not the question the question is what was there a broader question a little  bit related essentially is this the kind of situation in which there really is there should be an antitrust injury here this is a situation ultimately when there's a determination that there is no requirement that you get a license from the broader perspective vantage trust law is this the kind of injury that is supposed to be covered sure maybe they were noncompetitive earlier on but some of them allege would show conspiracy that could be analyzed under under a per se analysis under section one the sherman and the district court in denying the police motion to dismiss said but this is that's not why this case was dismissed and that's a question for down the road are there any cases challenging r p axis conduct in a situation where the patent was infringed mean this doesn't seem like your best test case for this and this and i trust the theory it may not be put but i can give you the third circuit opinion as well i'm sure we can find it ok thank you we'll give you a minute for about all of us we took you three the time you wanted but i'll give you a  good morning your honor said i may please the court my name is mike scarboro i represent samsung electronics and i'll be arguing on behalf of both of the defendant pelleas today i'd like to start just by noting a couple of things that we didn't hear any argument about and it's our position we didn't really see any meaningful briefing about but i think our important building blocks that allowed the district court to get where it did alternately one is what we didn't hear any argument from from mr ferrie that the non infringement verdict as to samsung didn't apply with equal force to all three of the manufacturing defendants so we don't we don't think there's any real contest there but that is an important building whether to apply the others in the brief he did there was in the opening brief there was one sense that said it was a i believe an improper quantum leap to take the samsung non infringement verdict  yes it is a memorable one but we presented a fairly overwhelming record in the court below and again through to this court that it really does apply in the theories of infringement as between samsung and t c and motorola it's all the same infringement theory and that came through submissions directly from cascades admitting that they had the same infringement theory it came from ruling from the court you've got to remember that the district court in illinois hearing all of the patent actions samsung and motorola were sued together there was consolidated proceedings a consolidated claim construction order there was a patent exhaustion order between sam c there is no serious dispute that the non infringement verdict should not be applied to all three manufacturing defendants so i think that's important to note and another thing that we heard a lot about at the hearing on the underlying motion for judgment on the pleadings a lot less so in the briefing was the idea that there's more to this case than just the seven fifty patent that even though that's the one that's mentioned seventy three times in the that android is what talked about that there's this portfolio of other patents that have value and that matter and i didn't hear anything about that today and i don't think i'm not sure that you didn't hear something today is very meaningful is mr perry didn't have a whole lot of freedoms to talk about whatever he wanted to talk about and he kind of directed the conversation so the argued in the brief it's not been waved in the fact that he never got to it today is just kind of what happened seventeen percent market for that particular claim so that becomes less significant correct correct your honor the the one thirty patent it's clear that it's only samsung that would need the dram pat so your fundamental allegations of conspiracy you know why would samsung agree to collude with anyone else nobody else needs this patent their motivations to enter into any kind of conspiracy just just don't don't make sense and are only seven seventeen percent of the market power allegations with respect to respected dram in any event it would only work apply it with respect to the samsung but i want to turn now to to the thrust of counsel's argument today which was having to do with any trust injury and having to do with the possibility analysis i would agree on one level with them that you could you could argue that there is at least on the pleadings and any trust violation alleged here  at least initially which you can have and any trust violation and you can have injury in fact but you can still not have a case because you don't have the type of injury that the ana trust laws care about and for purposes of your analysis of any trust injury with respect to the seven fifty patent i would submit that that's exactly what the what the court has to consider here we cited three different cases granted none of them are of from this court of the supreme court that looked at this situation the sound you case which dealt with a non infringe patent the jones knitting case and the hayes microcomputer case which is an unpublished decision from from judge conti here in san francisco and they all they all say in this type of scenario that there's there's no any trust injury this is not the type of scenario that the n h s laws weren't and it too attended to address they do it through different angles the soundview case says gee this is this is kind of a proximate cause element of any trust injury jones knitting says this is really an on and unjust enrichment principle and the hayes microcomputer case says this is this is just r p x makes an offer it's not an offer that's withdrawn actually makes an offer and says and and r p x s own materials seem to say to its members you can save money by digging through us because we do it collectively we g you wholesale so there's at least some evidence to suggest the business model is intended to make it hard for in this case cascade that whoever has the rights to a patent to go negotiate individually r p x says we can get it for you cheaper so come with us and do it collectively well as soon as you start talking about do it collectively and don't do it individually doesn't that suggest what and i trust law tries to prohibit well i think the the difference here is that you don't have the second part of use of your scenario there is not a suggestion by our p x two don't do it individual but there is enough there is evidence in the record that motorola think it was said we're only going to do it together not separately so it can't be the case that r p x says to its people go ahead and do it independently if you want to but do it collectively too and those are alternatives there's at least some suggestion that it's collective or nothing and so from an evidentiary point of view that might be enough to create a question of fact as to whether there in fact was an agreement not to deal independently and your honor i think that's exactly probably the analysis that the district court did we had two motions to dismiss the first one was granted for failure to allege you know specific allegations of conspiracy failure to define a coherent market and then the second time around the court said in large part what you did which is i think there may be enough here i have a statement of someone from motorola such that balancing the plausibilities of the of the two different possibilities here there there's enough to get past a motion to dismiss stage and to move forward but it best all that says is maybe you have at least theoretically and any trust a violation course we deny that and would have disputed that at a trial and it and it's summary judgment but that doesn't matter for purposes of any trust injury you can assume that there and there isn't any trust violation you can assume that this plaintiff was actually harmed that there is injury in fact caused by that and a trust violation but it can still be something that the any trust laws were not designed to redress and that's exactly the situation we have here the n h s laws were not designed to enrich a plaintiff who suing on a patent that we know now for sure is not infringed well this idea   to take licenses to avoid precise precisely those uncertainties but a patent is a legally created monopoly so when we have something like we have here which is an at an after the fact judicial determination that in fact this patent is not infringed and we know also from other judicially notable facts that we know it's not infringed as to any of the relevant conspirators then the patent loses any validity and the any trust laws can't be used as a vehicle to give windfall profits to a monopolist in space that it doesn't deserve that monopoly and we know for certain that that it doesn't doesn't deserve that status so that you don't know that at the time of the alleged conspiracy or the alleged agreement so why why are the parties to an agreement allowed to take advantage of knowledge they don't have at that time to justify the agreement and if the patent if it were later determined there was infringement that might make it a case with more curb appeal from the plainest perspective but it doesn't really change the nature of the agreement between the parties at the time the agreement was made because they don't know one way or the other how that pat i mean those made me change the facts entirely suppose the competitors it's not about a patent it's about these guys are making cell phones they need a rare earth material that's only available from  botswana they control the market and so you've got to deal with that kind of monopolist and somebody says well let's band together so that these guys can extract too much from us and so we're going to make an agreement that we're not going to deal with botswana minerals except all of us collectively the kind of thing that would sound like an antitrust violation and then three years later before the case goes to trial it turns out they figured out a way how to make these phones without that rare earth material so they never needed the conspiracy in the first place that wouldn't seem to be a defense that well it turns out we didn't need it so nevermind in this case they learned three years later the patents not infringed but at the time they make the deal that's not within their knowledge so they're making their decisions at that point why does a conspiracy become lawful because another context of is not driven by the patent law and a trust law could apply because patents are involved here you say that the persons that you can't have an antitrust file ation based a conspiracy of people again presumes knowledge at the time of what's going to happen in the future and i'm not sure i understand the basis for that well a couple of different answers to that one is that any trust standing as to which any trust injury is is a core element something that can be raised that at any point of the litigation so it's until it's completely over and the other thing i would note for your honor is that when the district court was entertaining the motions to dismiss it was entertaining t different plausibility analyses it had on the one hand cascades saying it's plausible that they all got together through through our p x or through some other means and they agreed not to negotiate individually with cascades that was one of one of the explanations the defendant's explanation was no we didn't need this patent we weren't infringing this patent and the price that you were asking for it was too high even considering a nuisance value analysis and ultimately the district court said and this is actually in the in the first motion to dismiss at two twelve of the supplemental record said defendants i'm not going to credit your plausibility the theory to the extent you want me to if it requires me to assume that the allegations of non infringement are not true so i'm not going to go that far your  plausibility analysis has to stand on its own giving some credence to cascades theory that there is infringement we now have a changed universe where the court cannot cannot indulge in crediting that and that in the case universe because of the rules of preclusion our legal rules of pretty issue preclusion i mean is that what causes this i mean it seems like you have to have some theory about what the jury decided then and in the infringement case that sort of changes something from three years earlier that either has to be about we erred required to treat it that way because of preclusion or some metaphysical truth that we're required to assume the jury found or something i'm not sure what your underlying theory is about why this changed something from three years earlier yes it's collateral stoppel it applies and there was never there was never any objection there was we didn't have to spend a whole lot of time arguing about this in the court below that that that verdict in the in the samsung infringement case had immediate application as soon as it was entered to to be used in this case and it and it's it's relevant because it basically suggests that all during that period of time to three years in fact there was no infringement which differentiates your situation here that you're going from one judge person is just used as in the other hypothetical it's a situation where all of a sudden the another product happens three years down the road and you didn't know it necessarily was coming so your basic argument i think is essentially going back three years clearly there was no infringing and they would theoretically be aware of that well said your honor i agree completely well said oh great and i put that on my resume oh no i'm sorry but so the federal circuit in valuing patents has sometimes given a different value before and after an infringement verdict doesn't that approach kind of contradict your approach here it's certainly doesn't contradict the case law that we've seen i mean we granted there's not a whole lot of case law looking in either infringement or invalidity but the case law we've seen has said look from from an an trust point of view more or less this does this doesn't feel right this isn't what this is about you know any trust and patents are at loggerheads anough certainly what we're not going to do is if someone loses an infringement case we're not going to allow them to use the any trust laws as the vehicle to in a to vindicate a patent right which they've already been shown to not have that that's just that's an abuse of the of the any trust laws and would give windfall profits at this point and that's just that's not what an interest is about thank you thank you we gave your opponent two extra minutes i think you get three minutes for about the not infringement verdict does not matter to antitrust injury antitrust injury the interest in requirement inquires into the cause of the plaintiff's alleged injury here the cause of cascade inability to license it patents in two thousand and twelve was a conspiracy in that same time frame the not infringing verdict cannot interfere with that alleged causal relationship in the us cannot affect antitrust injury turning to paul plausibility says there can't just be a leisure allegations of parallel conduct but here there are much more than just allegations of parallel conduct although there is that but other allegations that show an intent to race restrain trade through only dealing through our p x and not negotiating individually and again those include r p x s statement in there also laid out a brief or p x and statement that its clients insisted on a license the entire portfolio is part of the seven five zero patent that shows discussions  absolutely to the jury can be one hundred percent right it does not mean that in two thousand and twelve that the manufacturers refused to negotiate with cascades because they thought that the patents not infringed pens or  black box this was extremely complex technology involves an evolving operating system if the reason that they did not negotiate with cascades was because they decided we're only negotiate through our p x we win whether there's infringement or not you think it all that matters is what's in their heads rather than whether they actually had a risk of infringement i mean if they're like all delusional and think that they need a copyright license for mickey mouse i mean that raise and this is an issue for another day is whether there is a pro competitive justification for group purchasing agreements with respect to patents but that that does not go to antitrust injury that goes t thank you the case is submitted and her attorney for the day