well this is a historic and happy occasion for the federal circuit this is the first time that the court convenes with judge hughes and attendance and participating i'm sure you will have a chance to hear from him for decades to come but you know we all wouldn't have him if his parents had not blessed us with him and they are in attendance and we'd like to acknowledge them as term multi level structure that was a term made up by the inventors and in the patent the inventor say that this is the essence of the invention in fact it's the only thing that distinguishes the invention from the prior art and a multi level structure is defined by very specific limitations five specific geometric limitations none of which were satisfied by any of the antennas that samsung produced in this case and yet through a series of errors all fifty one antennas that works used were found to infringe but if we were to if we were to change the construction of multilevel structure in means that you advocate which would include shapes a each level being grouped in a manner similar to the basic element of that this these the construction you are advocating that is one of the areas that that second level of detail was a construed well i guess the current difficulty i'm having is how a fact finder the jury in this case would be able to reasonably interpret and apply that claim language with an appropriate construction i believe it would well ok so let's look at the one we're talking about groups if we stay grouped in a manner similar to the basic element that's what i think you advocate that is one of our parts and how do you apply that every illustration all sixty six diagrams in the patent clearly apply that each upper level structure is similar to the lower level structure xample it very clearly says that a characteristic of a multi level structure is it has to level the right underlying polygons must all be the same polygons and i'd like to discuss that limitation an multi level structures each of those multi about i don't see any symmetry that shows symmetry we get we don't stray that in our brief with an axis that shows that those hexagons figures are very symmetrical but this is this we don't even need to get to that issue because there was a basic error in that all polygons must be of the same type there's not a single antenna that was at issue in which the underlying polygons were the same type there were a mixture  know that in column two lines thirty two and a column for line forty four where the inventors are very specifically say that same type mean things like a triangle a square a hexagon what we would understand to be the same type not merely a number of sides practiced in presenting its case and argued that the two mean the same same number of signs same type of polygon but that was not the claim construction disputed the parties that we don't know often by the time case gets to appeal people have sorted out the numbers and what infringes and what doesn't and here there seems to be a huge gulf between your view which is that if we change this cl construction it would have a a major effect on the tos products and your friend's argument which is just a couple do you know what i'm referring to here and can you shed any light on that dispute yes and it's a fundamental figures on underlying parts of antennas that had multiple sides he would take a twelve sided object and draw four sides on it and it was through that process that they claimed that they could prove that multiple because of the connectors that gave it to grooves and a left sees here and there sometimes it would be the actual size of the underlying object that he would ignore sometimes it would be curved debits and he would ignore but that was dealt with rather clearly by both sets davis and the jury was no not at all he dr long emitted your honor that he made up that method it has no basis in the prior art it's not that they are clearly visible by outlining them in front of the jury and you had a chance to cross examine him at length jury for for the alternative out but essentially what dr long was require that a majority of the polygons more than fifty percent of the perimeter of the public on must be free must not be in contact and so what dr long did was to follow he said there are only ten to fifteen percent of these i can only see ten or fifteen percent so what i have to do is create contrived manipulate the pictures to come up with the remaining polygons and i believe these are all clearly visible because the way i draw them satisfies the fifty percent limitation and it was he was conflating clearly visible with fifty percent if i can draw them so that fifty percent of the parameters are open then the clearly visible limitation is sapphire but those are separate requirements both in the specification and in the courts claim construction over objection he was permitted to do that effectively reconstructing the patent to read out the limitation that the  and individually distinguish a nice move on to if we had time runs out to the question of damages yes now too even assuming that we agree with you that there was an improper advocation of the entire market value in this case why is that it ok i mean you say well they haven't cited any cases that talk about a harmless error leaving that aside what i mean they pointed to stuff in the transcript in the record where this thirty five percent number appears and that is the number that the jury ultimately came up with and as far as i can discern the discussion of the thirty five cents is not in connection with the overall price of the phone six that drive it's another calculation that's based on the sale price of the antenna between samsung and practice why not withstanding the entire market value of little can we not affirm the jury verdict on that basis the thirty five percent figure is not on its own supportable but more importantly this was a clear violation of this court's rulings in both uniloc and later dynamics this court made very clear in those cases that once the entire market market price of the final end product is out of the bag that it inherently skews the juries but what if but what if we can look at the record and say that wasn't the case here what if the jury is presented with two clear alternative you can rely on the  hundred forty dollar price of the phone and here's how you get to this number and you can rely on the sales number the sales figures with east historical fields figures with the steps to the antenna between these parties and you get to this number and the jury clearly pick this number we still have to send to that for a new trial because you say we assume that it's infected the overall analysis absolutely that was the that was very argument was made in both uniloc and laser dynamics now the thirty five cents is a royalty right it's a thirty five percent royalty and now there's also evidence from the record that when used started your relationship with practice you were buying these and ten as that up between fifty and sixty cents correct that would mean that the royalty would be somewhere in the neighborhood of seventy percent that that is correct and that is that is i said earlier the admiral's really not the support that strikes one as rather out of harmony with any sense of reasonable royalty doesn't absolutely particularly on antenna that only one year to practice make a profit the profit was one point eight cents and so we have a  in no way supported in the industry in experience and it would indeed be exorbitant and i think this is why the court established in laser dynamics and uniloc this rule that unless you can prove which there's no dispute they did not prove that this particular structure of an antenna was to solve drive or a consumer demand they didn't prove that so they should never have been permitted to introduce the hundred forty dollar price of oil they come up with the ten percent the district court seems to have been ok with the using the ten percent where did that come out of thin air and that is a separate air under laser dynamics if they had proven that this use the terms whole driver that's not our case law isn't it says a demand driver right a demand driver but in later dynamics the court goes on to discuss that it has to be more than just an important part of the product needs to invalidity and your anticipation obviousness defenses were particularly reasonable is there still enough on the claim construction and in the infringement issues for us to find that you weren't willful and how should should french well i guess i should have made my hypothetical a little bit clearer i left to mean that we're rejecting your your appeal on those issues and going with the district court but i'm just focusing on the willfulness question and whether there's enough there to reverse  finding of willfulness just based upon your defense of claim construction and infringement absolutely because the positions that we took at trial were objected to a reasonable and i just am suggesting one indication is that the district court  agreed with our position and so now what better test of objective reason than this then two judges agreed with our position they later changed their position but that is clearly objective reasonable all right thank you mr the function of the phone and of course batteries are important of the function of the phone displays i suppose it wouldn't function if i remove one screw in the right place so it isn't the function we're talking about it's the demand where is there any evidence that consumers voght this phone because it had your antenna and it well we went through marketing studies this is from a twelve sentence in season eight twelve eighty two through twelve in seven of our experts testimony of all of that the let's just don't just second see them there's a fundamental mental disk connected here you are citing as demand evidence functionality that is an incorrect principle because i bet we could pull the consumers in this audience about antennas and they'd be surprised well they figure their phone has one but they would not be able to tell you one distinguishing feature of their antenna as opposed to one in a neighboring phone if they don't even understand the differences how would they find the phone based on that feature well your honor the carriers are the ones who are actually buying the phones in the first instance and the carriers care very much that there is an internal internal but most but just a second you're trying to get the phone price one hundred forty dollars as your royalty base therefore you have to go with the consumers that royalty base product that's the people behind you in the audience the one and you didn't show that any of them bought their phone because of the antenna the hundred forty dollars price is the price of absolutely and they sell it to the carriers that's absolutely correct that is that is not what consumers pay the list price for the consumers to ninety nine or three ninety nine or something else like that we have this is the site of the sales price from samsung to eighteen thousand factories or something else like that and their demand and they're buying it because of the antenna very clearly if you go for example in two thousand two hundred they're buying it because it functions yes and that's not demand that it lets you run and there is more than the battery or that one screw that i can take out that doesn't function as demanding samsung contacted frak to use and said that the key feature of their phone was an internal intent that the carriers were requiring if they wanted to because the consumers wanted to let's just assume for a second that the district court abused its discretion on that this case comes in a very different procedural posture than you know locker laser dynamics this is on a j m all review for substantial evidence and as long as it's the the word itself is not grossly excessive or ally you just showed you how it was grossly excessive because you can have thirty five cents on a product which is sales for fifty cents that's what seventy five percent royalty that is i believe the record does not support that the average sales price that the sales price is just fifty cents in fact all at one point to solve them at one point and then immediately after that the patents issued that sales price rose to a dollar fifty i want single comp own well it shows it shows that yes on a single component it shows that the price for issuance was the average price was about fifty three cents immediately after in issuance and up with the court a ninety two thirty three and thirty four which this is on and jamie all review and post issuance on the post issuance purchase prices which is should be what matter certainly a jury could reasonably conclude that the post issuance sales were what mattered that was on a dollar and fifty eight with  dollar twenty five or so as profits as profit due to the sale because of these patents and yes it was awarded on a thirty to thirty five cents basis why does it because of these paths well because that's what  price was the on average fifty some odd cents or the eck record showed it was sixty five cents for the samsung sales immediately after that price went up because of the patents because of the patented techno we could use that delta maybe the delta the delta  due to the patent itself is would be about a dollar about ninety five cents or so that is due to the patented technology and then the question is will how much of that is going to be split between the the infringer and between the  why would we give a thirty five percent royalty well the question is what is the value of that technology and it may have been rocky it has to be shown before you can use that that you're a driver of demand so let's look then let's not all you've shown us is that well we were essential to function which is the wrong test why don't we send it back because the wrong test well because again we are on a j mall review about whether there is substantial evidence in the record and not it's not just a sales price the jury also heard that the licenses which came in without objection in fact they were an important part of samsung's rate and calculation that those licenses were between twenty two and eighty four cents or in ten or so of them were for past licenses only so it's not just the fact that we have the sales price it's not just the fact that we have the evidence we've been talking about we also have to supplement licenses admitted without objection sams doesn't even address those licenses at least in their opening brief they dismissed them in their reply brief because they say well they're not relevant but they were a critical feature of their own damages model and they came in as a settlement licenses here for twenty two and eighty four cents based upon the units sold many of them were passed licenses so just on that basis i can underwrite hiden for side on the other cases the question is whether was it grossly excessive based upon their evidence in the record and thirty five  but of the phone in general the entire market value rule is the question you have to answer and i've heard nothing except you arguing we were essential to the phones  well that is not demand driver evidence i don't think that that is correct because we did also rely on again we relied on other avenues and i think the districts were quoted in the evidence that the people behind you bought their phones because of the antenna well look for example on page a twelve eighty three to eighty four of the records that all eighty three days of the district court are the our expert  themselves were the key feature that was allowing them to sell the devices so that is all and why the ten percent the value that is created that of course enable a lot of the other features on the phone but we're not trying to get we're not seeking on a price on one hundred forty dollars it is not a percentage royalty here it is a royalty that is a per unit royalty that did not deviate based upon the sales price at all but the evidence presented to the jury very forcefully was the forty to sixty cents that you kept on repeating in tying it to the one hundred forty dollar price so how are we so you're saying that in hindsight we can look at this and we can go comb through the records and find independent support independent of the arguments made with respect to the forty and sixty cents tied to the one forty and therefore we should affirm it is that your argument yes that is one of the arguments but i also disagree with some of the premise which is that there was we did not argue for example on the profit of the dollar fifty eight it was very much a critical part you can look for example in the at the closing statement i believe that's at eight hundred seventy eight which is where samsung votes us by saying by quoting the entire market value price but immediately after that immediately after that we also discussed the fact that what the profit for these variant ten is worth which was on the average post patent issuance was a dollar and fifteen cents profit that we made this is sales that we made to the that you would have made every sale that was made instead to the infringer we're not seeking a dollar fifteen cents by any means that that would be absolutely that's true if we were seeking a lost profits case but this is we have we there is sufficient and the records know that the value of these patents issuing was close to a dollar the question is how you split that up and the evidence in the record looking at yes you can look at the importance of the intent as you can look at what samsung said about it being the key feature in the marketing materials and you original claim construction ruling where it cited the claims of the two zero eight patent that a portion of a circle is one side of the patent and so their arguments on infringement have no support in the specification and it was not  claim construction issue is very very close and very hard and other silly it is very hard then how do i balance what i think would be a very reasonable to the claim construction with less reasonable defenses on the other side  and where is the law and is it enough that part of the case was a really good part of their case was less good for me to find no will for less and all fairness your honor under bar and i think that if there is an objectively reasonable defense that  under my reading of bar that if they have an objectively reasonable defense we disagree without the asli but if there is an object we reasoned and so will from its verdict in other words if the claim construction was closed and we think objective really reasonable but given the claim construction circumstance and part issued after this right the timing with the little the district court the verdict the jury verdict came back in may of two thousand and eleven the jury the district court returned its motion excuse me an order on the motions in june two thousand and twelve right after bar of the district where did address bar in its opinion and discussed it and saw that they were objectively and reasonable now again we disagree with we certainly think that for all the reasons that are in the record that it was objectively unreasonable for all for many of the defenses we think that they were all objectively a reason will they don't even challenge this subjective call they don't know they don't that's the way but it will isn't it will because i do think that that actually should affect whether it's objective y unreasonable here because they they try to second that that is a critical factor because in judging it's not just the claims instruction we gave them drawings paten numbers describing and they are remarkably similar but how what we showed them in terms of what their intent is actually looks like and so in conclusion i unless a court has other questions i know we're running i don't want to cut this court short but i do think that the district were spent a lot of time going through this there was an eighty page opinion that the district went through discussing the issues the really addressing including chief judge rader on the damages issue going through the record very carefully and closely because of the number of issues that samsung raised we have course did not have the full time to raise many of these issues but the district court went through sport early and did district court originally adopted samsung's construction of the term polygon that construction was later changed i would submit that it was clearly objectively reasonable for samsung to objective leon reasonable on every possible defense not just on one and they failed in that bird and in the same type and clearly visible and individually just distinguishable our faces on which this should be reversed and fine with regard to the entire market value of room i believe the questioning shows that all practice could show was that an internal antenna is a key feature i would submit that is not the correct question the correct question is is the patented feature is a patented feature the driver of consumer demand and they have no studies they have no documents that show that a multi level structure is the driver