thank you judge sanna may please the court john o'quinn on behalf of time warner cable i'm happy to address any questions the panel may have this morning on any of the issues but i intend to focus on two improper admission and use of the vonage verdict and the finding on written description of starting with the vonage verdict there are a number of reasons that it should not have been admitted and should not have been used in this case any one of which requires vacating at least the damages award i would submit the entire verdict let me start with the most obvious problem the vonage verdict is evidence relying on the twenty five percent rule for which this court held was categorically inadmissible in you know walk and so the question before you then is whether it is permissible for a second jury to be exposed to you and invited to follow and of earlier jury's verdict on damages when that verdict is and minutely infected by legal heir let me ask you this question since where we're talking principally about the role of the vonage verdict in the negotiation that's the way the parties characterized the use of the fund its verdict in this case as i understand the vanished verdict height of the excuse me the hypothetical negotiation would have taken place no later than two the gets decided and could be considered at the time of the hypothetical negotiation but it subsequently then gets reversed on appeal are you saying that they can or are they saying that they couldn't rely on their verdict in those situations and this court has think not but but the question is if all you you look at is the vonage verdict you say ok the parties would have been aware of a number of circumstances they would have been aware of pay tech license they would have been aware of the boy school license and they would have been aware of this verdict which was not something that they could have looked at and say we can disregard that because it's obviously invalid under the you know i can't say you know it didn't exist so they would at best have had a supposition that they might have been able that somebody might have been able to get that verdict overturned but why wouldn't that be at least a fact the existence of that verdict could be taken into account in the hypothetical negotiation  between other companies and it excludes information the parties would have known in the real world so for example not all comparable licenses are admitted settlements are kept out if there are too influenced by the coercive effects of litigation and he what you're talking about is a verdict that is ultimately is a matter of law whether it was one of the known at the time or not wrong and whenever a jury is exposed to a prior jury's verdict there is a tremendous risk that the second jury is going to fall but that of a verdict or any kind of use of a verdict at all but when i think the first one is now with the benefit of hindsight unquestionably infected by legal error well suppose just if you took complete the suppose that you know i had not yet been decided and in fact was me undecided as of this day do you think you would be entitled to come in and say that foreigners verdict was infected by the twenty five percent rule which we think is invalid and we think you in deciding whether the v infected by a legal error and it wasn't offered for some ancillary purpose it's not like the verdict came in to be used to test somebody credit you're some entirely ancillary purpose it was offered precisely for damages the very issue which the error occurred and the jury comes back in a war of the same person scriber royalty of a dollar thirty seven respectfully this is all wolf and wolf clothing there is too much risk that the second jury is just going to simply follow the i guess isn't it right that the jury was informed that this wolf was in fact a wolf when i put it they knew that that van and verdict was premised at least in part on this problematic twenty five percent  van in the vonage verdict itself and that puts again this goes to why i think it is a general proposition these types of verdicts should never be admitted in order to prove damages or otherwise because i now have to convince this jury the jury i'm in front of th see verdicts in case coming in in case after case after case where they're going to be many trials where plaintiff swearing in the damages verdicts that they like from you know one jurisdiction defendants will bring in the verdicts they like from another jurisdiction and that's that never happened  it's never happened what do you say to the applied medical resources case in which the court as i read the court's decision said that the prior verdict could be used for purposes among involve a verdict as far as i'm aware that was infected with legal where well the case starts at the twenty five percent argument aside your doing now for a per se rule don't let verdicts in and i'm wondering why that person the rule isn't inconsistent with applied medical r same issue that was was presented here let me in that in the time that i have let me make to one other point with respect to the vonage verdict as it relates to the issue of apportionment because whatever you think of the vonage verdict and whether it should be admissible methodologies assign value to those aspects of weight that are not covered by the claims there's no carvel for ikea ip calls that don't enter connect with p s t n the and in fact there was testimony of the trial transcript each twenty five thirty five the majority of you see calls for the end of the images period didn't involve interconnecting with the p s t n is it fair to say you know if if you need a little more time we will give you a little bit more time thank you judge samuel but is it fair to say that the two verdict in the they have fair to say that we have three that could be fair to say that there are three data points here and they all lead to the same conclusion five percent i don't think so judge why is that what the reason is because  sara where in both those cases there were licenses that were being admitted with rates based on the entire product or in the entire service oh and injunction erikson it makes explicitly clear that when that we accept the dance that the pay took in boy's clothes licenses are comparable licenses and why wouldn't that be evidence that in fact those willing parties are negotiated to those licenses did build well that's that's fine to say but but then mechanically it's difficult for me to see how you can do that if all you've got for example as as a way that others have approached this is a five percent of the entire v rao could not say that they supported the use of the dollar thirty seven figure is you don't know what the basis on which they would apply and what kind of actual dollar values that you are talking about it in the end of the day whatever you think of the the five fifty eight ninety seven that they were relying on the vonage for and i realize that i'm i'm well into my time if i'd like to turn and address the issue of written descriptions just take a minute of that and then we'll give you some of our thank you i appreciate it so the setting up a communications path between points the very thing that a t m needs and that ip does not and so the problem being solved is a better way of doing that meanwhile the claims however cover systems and methods where broadband patents which this court previously referred to as the a t m in are working patents in the cox appeal they do not disclose and there is not evidence that the skilled artisan would understand using an a t m in a working multiplex or the translate it thank you thank you please the court this was a fair trial the judge very carefully cabin the vonage verdict with three limiting instructions at the time warner's requests it did not in fact the entire verdicts playing such a central role because instead of simply taking the five percent number we go through the niches revenues and come out with it at one thirty seven per  number why didn't we simply say that maybe because the district court for a bit but why didn't we simply say that number was five percent and the the other two license were so or five percent and therefore no need to go into the person scriber basis because i think you were around thirty six to thirty nine dollars per subscriber total profit five percent of that would have been more than one dollar and thirty seven cents so i'm not sure why we ended up in this very strange circular maneuver right first and say the vonage verdict is not a central as it was made out to be if you look at dr us and the reason was your honor is that sprint was trying to translate this amount into something that had previously been the basis of the parties relationship which was a person subscriber per month c now sprint is also true to avoid putting up entire revenue numbers and running into problems of uniloc so they think they carefully tailored it to the dollar thirty seven rather than saying five percent of a billion dollars so that was also deliberate as well to make it focused on the purse credit for per month royalty now they don't vonage verdict was used to translate that five percent but there's no doubt that five percent was a reliable number these were comparable agreements there's no per se rule against a jury verdict and in fact even the time warner's expert said that verdict would have been in the mix and based on that i'm not sure the reliance of two licenses and their five percent numbers because now we're no longer talking about a rate on a particular base but now we're talking about these monthly subscription numbers for years for each customer and so now maybe it's a little bit of an apples and oranges situation in terms of trying to understand to what extent the jury was really looking to and relying on those paid tech invoice quote li well we can't really speculate about what the jury did but what we do know is both of those were at five percent leave we saw right p revenue but i'm you know obviously i have to be a little bit concerned as to whether this jury simply li push the number down in the hypothetical negotiation because if you looked at apportioning the expected profits the actual profits would have been something more like twelve dollars or if you take the actual in the goshi ation for funny fundamentally different from introducing the verdict of eight laypeople at the end of a trial well first of all you presume the jury was correctly instructed we don't think let's assume that the experts were all correctly instruct you now they didn't make that argument it was not words but doesn't that argument loom large in this i mean i don't believe it does because of the instructions that the jury was given the court was very careful to say this is one factor that you may consider on damages it's not something that you have to defer to the argument that the jury was supposed to defer to this that was never made it was very carefully limited on validity and infringement and some of that that she did not in fact the overall trial was a fair trial about your concern the interest in generally allowing jury verdicts i think that's overstated i don't think there are going to be that many circumstances where a prior jury verdict is as comparable as this one here we have the vonage case time warner was acutely aware of it they sent somebody they had somebody monitoring you have somebody in the courtroom because they didn't want to be discovered but and that they miscible as evidence now but what we look at what's the what would be the rule i mean it has i don't also shared drug prices concern that we just can't in a free wheeling way met jury verdicts left and right there as to be some kind of living principle and what is that limiting principle it should be the same as when we look at either settlement agreements or prior license agreements is it comparable and is it would it be something that would be considered a hypothetical initiation and the answer to both of those to me your argument would be stronger because the court instead said damages which means it could be used for any damage related issues including this is what was given before quite why should we give the same amount again i think the instruction was a little more careful in how well though to understand your honor it wasn't to that exact to that extreme but the judge said that this is something you may consider not you must consider it was among the factors or was a complete instruction on  things that need to be considered was there any request for a more restrictive instruction and the judge said that he would give a limiting instruction in the matter what whatever time warner proposed and there is no proposal for a more restrictive instructional so we can assume that the parties in the negotiating them or the jury in the vonage case then some apportionment down to five percent you know from like the ex mark case and others there are different ways to do apportionment and when you have a comparable agreement that would be part of a hypothetical negotiation that may be what you need to do for apportionment dr rao did more important than the mage upset he did apportionment in his analysis he looked at the expected profits the actual profits and he did take away those things that were not attributable to the invention he took away the typical telephone service that wasn't part of the cos you know that was there was another expert witness who testified extensively on the profit analysis and then dr rao did three things he put on a chart here the three things to look at comparable actual profits expected profits and he went through each of those and he said if you do the comparables you end up with a dollar thirty seven if you do the expect their actual profit to end up with a larger number and then you look at the last minute offer and how much sprint stood to lose in profit right and and that seemed to me not to bear any relationship to the dollars well it's more and that's the relationship it's twelve dollars more but if you take for example five ld and these were all given as alternatives now i don't think the twenty five percent will also painted things to the degree that time warner says there's a there was a case that followed you know walk where one of the experts testified about the twenty five percent rule but there were other things supporting that verdict and that was a lot of think that's the energy transportation case we have that similar thing here both in the bonds case and in this case there's additional evidence supporting the percent rule of men that proposed a certain rate in the jury came in under that plaintiff's proposed rate and then yes this court nevertheless that this all started from a tainted place despite the fact that the jury didn't adopt what the also five percent and one of those there was an evidence of the twenty five percent rule introduced in the case but that was not what was what was actually awarded so i don't agree with that there was premised on  now to go back and try to parse that out especially since there's testimony supporting the fact that if any of these patents were infringed it would be the same royal it was that standard that if there's a conceivable way of reading the jury's verdict as as granting all these damages just based on infringement of any one patent claim that's good enough to preserve them just verdict as opposed to asking the question little differently which would be is there any possible way that the jury  needed to rely on those broadband patents in order to reach two hundred thirty nine point eight million dollars judge i think it's the first the right yes because that was not the way the case was presented if the case had been presented that these are separate that you need to award damages separately and we would have a basis for going back and and on parsing what the jury out given the way things are now i think it's fair that the assumption is on sprint's in sprints favor that the jury found all the claims infringed as they did on the verdict form and that is not challenging on appeal except for the doctor who can you go to the broadband patents and sure and  e inventor here dr christie show the world that he contemplated something like that in his best behavior first of all i'd say that it's a factual issue and this was testified to at length for hours between the two technical experts and they both presented their views on that that a person of ordinary skill in the art would read the specification in the way that sprint's sense and read it broadly enough that it could cover ip but even if i were to agree that ok at the time of the invention there were a t m based in our networks and then there were these packet switching networks but what is the evidence to give us any comfort m and the ip were compatible at the time and if you actually look at the media gateway it operated well it was basically an a t m multiplexer but it could modify bias switching the cards so that it could talk to ip on either side so this is not something that was unheard of this is something that actually exists or that something the time warner used in their in their network and the experts testified the a t m and working pens or the call control patterns that shows that you can mix and match between t m an ip and indeed an ip in a working multiplex or which is what you would have if you switch out the cards is not translating to or the court articulated in lizard tack and in rivera versus i t c you have the question is what a person of ordinary skill in the art take away from the call control patterns an understanding that you couldn't accomplish interconnecting understand that you could assist you that you could interconnect simply by going to find a destination and that is how they prove infringement at trial next thirty six forty two to forty five the network code was just the ip address so  should all and the the car control panel should be found invalid if the court were to find that the broadband patents are invalid but that the coal control pans would survive of course under verizon the general rule is that the verdict would have to be vacated shows the the intellectual bankruptcy of their position visa v apportionment it shows that there is no apportionment to the incremental value of either side of the patents if you can return the exact same dollar figure for either one now that actually back into some of the other questions and just price and you're absolutely right none of this photo apportionment that was done with respect to other numbers that were thrown around in order to skew the damages horizon and they've literally did it look at appendix twenty three fifty eight so they can organ causing we're not greedy we're asking for the smallest amount none of those numbers fed into that dollar thirty seven figure and why is it that they put went through all these hoops to come up with the dollar thirty seven figure as opposed to just using five percent because they knew they wouldn't run headlong into problems under the entire market value role because the base that they were going to use is on a portion of voip revenue and that is exactly what you cannot do you cannot use on a portion voip revenue because that again doesn't reflect the incremental value of the invention now turning back to the issue of the jury verdict of course the promise of a hypothetical negotiation is about voluntary agreements voluntary a verdict comes with the imprimatur of authority it is highly influential when you bring in a jury verdict invites the prior jury as he's made a second jury to follow it that raises very serious due process