including the decision issued last friday in microsoft research david turn case were instated turn correctly have made it clear that when an allegedly accused product capable is capable of multiple uses a claim against a customer for for infringement would not automatically give rise to an indirect claim against the supplier here you know addition to the fact they were serving that that if you're acting illegally because we have a patent here you're out of there is evidence in the record that they communicated with customers of theirs as well as potential respectfully i would characterize your communications differently both and you are in the because of the district court that the communications with their customers referred to their patterns if you look at the actual customers with whom they communicate they communicated with the customers with whom they had an exclusive supply relationship savior and bridge but they mention that they do mention the pattern they mention the fact they were in the process of prosecuting had issued at the time of any of these communications and in fact at the time of some of the early communications the pan had been rejected it had been approved in europe but had not been approved in the united that there's a communication in an e mail a one seven four where us water told the potential concrete customer i need to speak with you later today about the kim treaty offer and what has happened they are very one of the customer with whom their communication was made was a customer who had already entered into an exclusive supply agreement u s water that customer was the customer that passed along and an advertisement that it had received from chem treat to u s water u s water had been unaware that chem treat was promoting its products was promoting the fact that it had a price advantage over us waters find out process and the communication was a community a personal communication between two individuals roy johnson one of the inventors and the customer who had a longstanding relationship and was discussing the status of what was going on the marketplace  what do they mean when they say the consequences get too many attorneys involved couldn't the district court reasonably rate that is relating to the patent as opposed to the exclusive honor i don't think in the context where again you had an exclusive arrangement you had a customer who did not but the problem is that the question of are fleeting and it appears that that your you or about to be pending between us water and can treat that was the trade secret litigation i'm confident of it's not in the record i'm confident that that's what was being referred to spending too many too much money on lawyers is a common been involved in a breach of an exclusive squire agreement that had already been signed but the second meal isn't related to that i mean that's i understand what you're say that you have exclusive relations with a lot of customers and you hear that kim trade is going around the undercutting of price and you go back to him and say look you have an exclusive relationship you can't do that we'll see you you didn't stop there though you went on and so we had these patents pending and that's going to put people at risk too and not pursue it suggesting other people including likely country who is going around in your view violating your patent so if you would have confined it to the the contracts it might you might have a better argument but why isn't the fact that you're referencing pending patent applications to your customers and suggesting to them that that matters i mean it's going to get back to kim treat that the customers it's approaching are getting told by you that you better not go with them because we're going to sue on patent claims that's enough if they hear that and clearly they heard that that's enough for declaratory judgment apps and isn't it microsoft versus state attorney and in the cisco decision i don't think it is because there was no threat to treat being communicated gentry has never has never been threatened with an infringement does it have to be a direct threat no it doesn't no uncertain terms it gets too many attorneys involved it may be a little classier than that but i go back to what i asked you which is couldn't that district court reasonably determine based on this that in fact this was a threat your honor i don't think in light of the other evidence in the record in light of the fact that as i've explained already that this was a customer who was voluntarily cooperating with u informing them of what a competitor was doing that this particular communication could be viewed as a threat or i don't think the other communications where they proudly announced the issuance of their patent to the marketplace are a threat i don't think we have to distinguish between references to the fact we've got a patent and the sec that and the allegation that it was a threat against a particular company let's take a look then add at your complaint this is that a zero zero six communications to declare them see a tire there the reason that it's tied together in the complaint is so that it could be clearly distinguish in a published patent application anything published in the patent application would not necessarily be a trade secret it's published and so there was it was important to make it clear in the complaint that there was additional information which was a secret which u s water was seeking to protect you here in your rebuttal time and you want to say that brave chem treat says as a result of u s waters assert assertion of its patent of particular producer cancelled its order for chem creates products where in the cited patent rights i think that's the testimony of mr john winger and he does say i'm very green planes from the energy i believe that is the customer cancel their order and i think he says because of the legal ramifications and when situation why it's not contract as opposed i think that goes back to what the district courts as if this was about contracts if they were communicating with countries customers about contracts there was absolutely no reason to mention patents well for instance in the in the media but you're doing apples and oranges there i'm asking you you gave me a cite to seven ninety two saying that it was a result of assertion of its pet but you're citing to something let me ask you these on page thirty one can create says that a representative of a renewable fuel company expressly affirm that he would still be buying one thousand from c but for us water statement that's a quote ok ed in the testimony when he's asked about that his response to a leading question at eight forty seven is that now i have a real problem with that with your then saying after you have a leading question which wasn't objected to i'll give you that but nevertheless he says that's probably fair how is that an affirmative express affirmation well i think he was he was asked a question there was no objection and he agreed to it he didn't say well no i don't agree with your equivocated he said that's probably fair which can mean it's not fair right i think when he says probably that means more than likely it is fair i think it doesn't mean that it's not fair i think i think when you read the statement the clear import is that he's agreeing that the question that was with me when i read it i thought this doesn't support what's that express affirmative statement that's made in the birth i think that if i may or honor the the other thing to keep in mind here is we cannot separate this from the context of the other statements as errol head gives us guidance when someone is creating insecurity and uncertainty in the market i don't i don't communicate agree with you overall about this that weight of evidence that's why i asked or opposing counsel those questions but what i am saying is you've made some specific statements in your breakers and i look at it then i turn to the page that you  and i don't see that it supports it so i have some more questions ok the this one we've already discussed j one seventy four that e mail  court where to create subject matter jurisdiction the magic words don't have to be used litigants in their parts get very very good at crafting their statements in a way that don't trigger the magic words and this is just one of those instances they don't have to come out and say we're going to sue them for infringement of our patent application as soon as it issues this is another way of saying it's painfully slow we have our european patent when  technology and its patent in all of its communications how closely tied does that have to be i think there may be a case to revisit the goodyear vanguard are kemah lot of cases but this isn't yet from the very first complaint all three of their complaints here specifically reference to then pending application second many complaints operative trade secrets complain according to claim language attach the patent application as an exhibit to the complaint and use the application to help to find the technology that was an issue in the trade secrets complaint so do you think i'm sorry  they had written their complaints more carefully and just made allegations about the trade secret action and the like and hadn't referenced the patents do you think that you wouldn't have declaratory judgment standing here you know for other reasons is that reason yes which i assume it is that's where it seems to be a little bit of a problem because any good business when they go out to talk to their customers is going to say look we have exclusive agreements based upon trade secret process and what whatever but also there's  potential for pat litigation you should be careful that that too that's just makes common sense and that seems to suggest that just by doing good business practices if they file what they only want to be a trade secret action and don't intend to continuum of where these cases may land i think that the hypothetical of removing all of these allegations from the complaint pushers would push your case down farther on the continuum  really would be that even if they had filed this trade secret acts case you would still have had standing to bring your own declaratory judgment action based upon all these allegations that they're going to their customers and to their suppliers and stuff and that in their patent and they  european patent application or european patent u s p t o will use your applications soon they are going around our patent application we've sued them once and we're going to sue them again  i mean to me those are threats to push this way farther down the continuum tore a case for controversy even aside from the prior litigation if i could address the cisco and microsoft cases for a moment your honour's cisco distinguished our kemo which we believe is much like our case nearly identical on the basis that there was no prior legation in cisco there was no prior litigation against microsoft in that in the case that was issued friday here we have u s waters express action shown they're willing to sue chemistry to enforce this technology we believe that's a distinguishing factor from its cases said it with a decoration of the ph d patent attorney it's also a chemist who wrote the patent and if if u s water was was and i think this is the most important factor of u water really believed there were non imprinting use you would have seen that in the communications to the customers so the customers were talking about too many lawyers getting involved or the the communication to the supplier  where they say they're going around our patent application they would have qualified and said look there are uses some uses a fight ace that might be not infringing that seems unlikely i mean if they want to be the supplier of the product they're not going to suggest to their customers and the people they get the product from if you don't what to get from us here tonight i mean that's that's really stretching it is that i think it's unlikely if they're communicating to them about contracts will issues says in violation of our supply agreement getting back to the same reason the district court found these statements to be threats that if it was really about the supplier agreement and there's no reason to bring about navigation and say they're going around for that simple reason you water supplier and well and it was us waters position that by selling fi taze to chem treat that agreement had been breached and the communication was directed to the supply agreement entirely to supply agreement mentioned the existence of the patent but was there was no threat and could be no threat of pat and for enjoyment against that supplier was simply don't sell them fight it is you've got an exclusive agreement with us and again you've got to a company that's excited about they haven't why mention a pen at all of them because you've got a company president who was excited about the fact that he's got a patent and who is you know talking to someone else in the industry about the fact  your new breach of your supply agreement to us you need to stop supplying that what about you what about the fact that we would over this with your opponent that your complaint ties together the patent and the technology that's supposed been confidential but as i explained your honor the purpose of the reference to the patent in the complaint was to distinguish between the confidential information that was not included in the pad one of the things that that was not mentioned in attached a pen to the complaint and you bring it up in your account and so it seems to me that you you created or rather the complaint kind of affirms what was what happened before by tying together by overlapping trade secrets and infringement i mean the courts looking at that they have all and they have a patent before them there's a discussion of the patent doesn't that by itself public document us water was assuming i think probably correctly that had they not raise the issue of the patent in some fashion in the complaint the response would have been these are traits you could see that are all disclosed in your p if i may dress one more question quickly merriment into the response to the summary judgment motion again dealt with a complete hypothetical there was no chemistry customer that was being discussed in their brief or in our brief it was always a hypothetical customer it's heres what we'll do if we can sell our p e one thousand product to somebody we don't have any buyers any active users yet here's what we'll do in our response was well if you do it this way you'll still be infringing if you do it another way but thank you thank you