blue bell pennsylvania we represent second suey plastics company limits the the case we have contended all along is a very simple case and i'm going to make the essence of our argument as a very simple argue the case is not a patent case it's a case of the licensing of technology trade secrets at the end of the day and that just by way of background that the product involved here is what we would commonly look at as as styrofoam but the the new and improved product is what's called the old salon on the japanese side in our cell on the from the novus side believe i'm sidestepping it i don't believe this to patent case i'm prepared to address the issue that the court requested but this is not a case it is a licensing of know how and technology it also involves patents but the patents themselves are not even referenced by number in the e u do you have any proprietary rights or equal rights to the technology yes where are those rights the rights are that there are trade secrets any confidentiality obligation they have with astrology has expired by the terms of the agreement itself is not right and i think that if we're reading an article for we could get in another argument but i think the facts speak for themselves f is an obligation that expired by the terms of the agreement it says that the the confidentiality provisions of article four expired at the conclusion of but you're not contending are you that article or somehow different separate from governing something other than the substance of the rights that are at issue here aria i'm saying your honor that the license it involves the license of know how and other things if it provides for an agreement of second sunni personnel to the train and educate nova personnel and it includes something more than patents and and that the facts speak for themselves that underlying rights intellectual property rights you say yes we have trade secrets what i'm trying to get you to respond to is that assertion and i understand the other side you make in that you don't have trade secrets or you share the technology in the house with them and you did it in a way that by the terms of the agreement itself releases them from a obligation to keep it now i'm just trying to get you to respond to that arianna is that an accurate assertion or not according to the terms of the itself the agreement your honor i'm not trying to sidestep the issue believe me the agreement says that those those confident she'll confidentiality arrangements under article four and at the end of the agreement then how could there possibly be a trade secret underlying freeman at this point because you're one of the parties agreed to license to a permanent license why would they agree to a permanent license if there was not something for a license so your argument is it's true we don't have a trade secret anymore because of all the article four but they're still bound because there are something there there must be something there or they wouldn't agree to have a guy yeah i think that's one way of putting it yes ok but what that something is that's underlying the agreement it's clear it's not a patent at this point and it's clear it's not a trace of this but it must be something it is it is something that that the parties felt was important i'm sorry from it if i appear to be elusive here because this wasn't really an issue that was litigated factually a lot so there's there's a little record on it but but the the basis could have been both the for the license the concept of granting a permanent license subject to restriction the basis could have been that second suing trained the arco personnel how to make this product and gave them a leg up in the in the market the ability to do it when no one else good and for that reason it might my point is that there are independent reasons for supporting the the restriction beyond the secrecy it doesn't say all of this changes on our finding that there was a separate ten year a separate agreement that was perpetual not not a separate agreement that was perpetually on it finding what i think is plainly evident from article eleven section two is that there was a permanent license now i don't know whether a permanent license means that that's perpetual perhaps of thoughts but there was at the at after the the agreement says in article levin that after the payment of all of the sums called for under the agreement and it refers to article six which calls for payments of lump sums running royalties for ten years for the period of the agreement it's article eleven says after all of these things are paid nobody has a fully paid up license and you can you characterize that in your briefing as a separate agreement to you nother animal it's a fully paid up license and i think that's what judge this is going to mean for us to buy your argument we would have to agree with you that article one has in essence two pieces one reaching back the parties viewed it that way when they did it they viewed it but after we've over intellectual eyes this this document with all due respect the lawyers have it made it much more confusing that it is the agreement simply was that we're going to give you certain things the parties agreed that a license was necessary for nova to do what it wanted to do to make and sell the parties agreed the license was necessary for that they  ed in article levon that at the conclusion of of the of the agreement nova would have a fully paid up license to sell anywhere in the world sub to just subject to restriction one of the secure tsui it managers or person instrumental in the drafting of the first agreement testified that there was no discussion about how long the proposed restriction on or close ability to sell products to sell products in a major sector i think are i think nova did and i think they did because this was the deal the deal was seconds so we can manufacture this new product that is going to take the place of styrofoam seche so we didn't want to give up asia second so we gave nova the rest of the world in exchange for no it was agreement to give up to give it up for the same time that their license existed you can have both you either have a fully paid up license to sell for however long that lasts subject to a restriction or you don't claim that when the district court disagree with your right i mean you you pose this as a if your if you don't have the right to do it then by definition and by the terms of this agreement you're forbid do it by understand your argument and as you reiterated here today license has and the license terms are you can sell it usually subject to not being able to sell it on a ship however long that license lasts the the restriction lasts you can't have it not take account of paraphrasing loosely it did not take account of an understanding of the license as pinned on intellectual property long as the rights claim to be given last and since you don't have rights to give anymore the restrictions can extend either that's if i understand correctly license is based is gone by definition they can do whatever they want wherever they want but you're writing off the permanent license the fully paid up license in order to what's the point of having a fully paid up license at the end of the agreement if there's nothing for a license there's no point so to do that you're you're saying that this entire provision of the contract is meaningless well isn't that doesn't that ignore the possibility and indeed isn't it relatively common for licenses to include sell off provisions for something that was made before the expiration certain rights and then allows you to sell off after the license period hands i don't know whether that's correct is a factual matter but certainly not in this record there was a a license the parties negotiated for a fully paid up license that you can't you can't rationalize it any way other than that bully paid up license started when the agreement was done and the fully paid up license was to sell anywhere in the world except these countries whether that's a proscription or or a description doesn't make any difference because  product yes it's patents have expired yes you know anyone then manufacture piously anyone that anywhere that takes the trouble of going through the patents and figuring out the technology kno because they don't have the they don't have the trade secrets they don't know the processes well but they don't have the equipment there was there was other nobody knows those the secrets can't you know over there and share that with with another manufactur thank you ron it may please the court i'm john mcintire counsel for the apple e o chemicals incorporated let me start by following up on some of the court's questions because i think i can shed some light on the questions that you've asked about certainly the consideration that was provided by second sui in the license agreement was to grant restrictive patent rights and trade secrets from second suey to arco is this court has recognized and is that the record is absolutely clear all those patents have expired with respect to the trade secrets article four is very clear article four said that in paragraph four point three that the use of the trade certainly arc when nobody knew that there was something binding done obligating know that going forward where they would not have transferred the license after the expiration date certain here on what you know what would be the purpose of doing that if there was nothing there and indeed what would be the meaning more importantly does that does the position that your client is taking here render the fully wasn't raised below if it had been we would have pointed out that article four as we have discussed right here ranted arco and subsequently nova free use of the trade secrets once the patents it expired anybody in the world was free to use the technology but we were granted a right under the license agreement to these trade secrets and we are free to use them now as we please therefore there was a property right that vested in arco and now and that was the purpose for the some other point that i would make isn't as are you or are you then conceding that these are trade secrets that that thing you took even though they gave it to you and you don't have any confidentiality obligation that that those could still be trade secrets under the law whether they are or not your honor i think that they are frankly and if we were to say was how is that in your client's interest to take that position and how could it be that as a matter of lawson's you're under no restriction could deliver that that information to anybody it's in my client's interest because we're maintaining them as trade secrets ourselves violation in fact article four specifies that ten years after the exercise the option all obligations with respect to the secrecy under the trade secrets shall expire and they did expire with the rest of the license rates of though now it's your trade secrets it's not their first well it's long as you can share with anybody and they have no control over the secrecy if i could be there's actually iran or they think they have the same interests they ate they are free there's nothing assertion that as far as your client is concerned you can keep it close and secret if you want or you can share it with whoever you want and that's your position right absolutely so as a matter of fact and a lot doesn't that take the control of the secrecy away from sex doing i think as a matter of law if it does ok and like why since they could share with anybody they want you don't have control of the secrecy absolutely and if they did this report address the issue of whether they were trade secrets that are given every it did your honor the district court's opinion specifically states that that we were free to use the trade secrets as we wished after the expiration of license agreement and that was the expiration of the article five ten year period correct correct it was there it is is there any difference between that ten year period and the ten year period that's right in your article it turns out your honor that's it's the same the way that article four was written it contain provisions that would have maintained the secrecy obligations beyond the terminations only if the terminations have occurred prematurely so if for some reason arco were to terminate the agreement there was a secrecy obligation that would have extended beyond that terminations but because the i'm not sure i understand yet mr mack there what's the what's the position you have with respect to article and are you saying that they they did license you valuable technology which continues and there continues to be an intellectual property right underlying that license and it's fully paid up and you're operating under that license now we're not saying that you know because that would be the other side of it w so then what are you saying with respect to article one what how do you read fully paid up certainly let me address that first of all i think in order to define article leavened what it means you have to look at five point four and what what it accomplished article five point four dealt with the right to sell in the asian countries but it wasn't a contractual prohibition because no contractual prohibition was necessary second  existing u s patent rights and if we are arco had sold in the asian countries they could have sued for infringement here in the united states so clearly article five point four granted us an affirmative to where in the document that exists what what in this agreement says hey this license with respect to limitations on territory this is all about the patents not trade secrets first of all your honor i think that you have to look at where you'd be let's just be blunt sure it's not in there is it there's nothing in this agreement that says anything like that is no but i think you can tell from the context in which paragraph five point four is place that that's the case for example let me direct the court's tension to paragraph five point one paragraph five point one also granted arco a right to sell products prior to the time that the option was exercise program five point one says you shall have the right to in the united states and canada doesn't say you can't sell the asian countries doesn't say you can't sell in south america because it didn't have to they were already prohibited the only rights that arco had sprang from this impossible for the parties to say you're granted an affirmative right in the following one hundred eighty countries ok so they had to do was to say we're going to say you have an affirmative right to sell everywhere except here and that's language they used except right it doesn't tell you the bar to set but when you say that doesn't create a bar in order for that not to create a flaw or one has to assume the underlying rights theory that this record right i mean if i understood the independent rights intellectual property rights wrecked and on and prohibitions and the end of and the statements in the license about where you can sell and where you can't sell because i guess i'd have to agree with your opponent here that if it's as you consult everywhere but here that's another way of saying as long as we're under this license you don't have a right to sell i disagree on i disagree how what's the what is it other than the intellectual property raid itself that could possibly exist as a third way between you can sell here except there and you can't sell the nation what's the third way they say it's buying to you're saying it's not what's that what's the non binary just that the third way would have been arco agrees not to sell in the following asian countries but shall have a right to sell in all other countries of the world that's the third way that shows an affirmative agreement on the part of arco not to sell in those countries whereas the language here simply talks about the right to sell everywhere not basically said he saw his backyard no your honor it does not and the reason is so i did i misread that no your honor the point is you can't read it in a vacuum you have to understand that this is a license agreement that second sui has the doesn't really mean except now your honor it doesn't exist you can sell everywhere except there and except in this instance means you could sell there but not really i mean your own of you have taken us down a rabbit hole it feels like i don't you know you keep saying look at the context look at the context but i got to say i don't know what context you can point me to that doesn't end up with the words except meaning we really are like you sell here and not there your honor let me direct you back to five point one five point one says you can sell the united states and canada should with the court agree that under the patents we were prohibited from selling anywhere technology we're talking about here and the limits we're talking about here are the limits associate with the patent rights and not to trade secret rights then we would be having a different discussion but i've looked at this license i can't find it you haven't pointed me to it so i'm not sure where you get from this document or frankly from any of the evidence you proffered in this record and it's in the record before us that these limitations were tied to the patent rights and were not also tied to the rights which you yourself scribed straits yes your honor i agree with you that you could look at under either scenario if you look at paragraph five point one you would agree with me would you not that arco had a right to sell in the united states and canada but did not have a right anywhere else there were no other countries that were mentioned or you asked me you must and i'm saying that the point is that you have to understand this in the context intellectual property rights it can't be divorced from that even if just sort but even if the court were to conclude that arco agreed to a contractual prohibition on sales in the asian countries you then have to get to that it's a perpetual protestant absolutely your honor because what they were saying is we're granting you an affirmative right to sell in all countries of the world except here so that the reason that you have to name those countries is to make clear to the parties where you were not granted an affirmative right doesn't make sense that this is simply said he saw his backyard they were also selling the product and didn't want you competing with them that's fine your honor but the supreme court relied as held that back to your very first point which is that all the trade secret restrictions have expired so if the patents expired in the trade secrets of expired we don't need a license then then explain to me what you have and are operating now it really does go to the first place they say there must be something that the other side believes they are licensed under they claim a fully paid up license article of an talks about a f paid they assert that there's no how that they're keeping in confidence they're operating under a license and as long as they're operating under that license we are entitled to enforce the restrictions associated with that one so if you're taking the position that wait there really is no trade secret tell me what it is that article level fully paid up license is talk about what article that only paid up licenses talking about is as we point out in our briefs is that i wanted to make very clear that as long as they had a all of their running royalties from the term of the agreement that they had a fully paid up license they couldn't be sued for infringement if there were some technical violation of the agreement in other words exist and i know if it was done if i can get my head around the notion that whether you call it a trade secret work pattern there has to be some intellectual property right underlying license for the thing to make sense and i can also appreciate  understand the position that's been taken that hey we don't have an obligation to keep things secret and so in that respect they don't have any in forcible trade secret right against us and therefore there's nothing underlying this license an we can do whatever we want wherever we want because they're done i can understand that situation but i have a little trouble with is and what seems to be contradictory your presentation here today is the how you deal with their argument that that would render the second sentence of article level nugatory would make it just meaningless there there was some something out there that they were willing to pay money for and take a license for and maybe it's not a patent maybe side trade secrets but it's some kind of electoral property right and they paid for it and therefore there's a restriction that still exists on and i'm still not understanding your position on that assertion you paid for it you seem to be even saying here yeah we've got a license of some sort whereas i would have thought your position would be there is no license because there's no underlying lot in life will propagate your r must not have been clear i guess my point was that our position is that second sentence for article eleven relates to a fully paid up license during the term of the remit our position is not that that we bought some license or that we needed a license beyond the term and i think that our point would be even if the court were to conclude that article eleven read differently i think you could say you know it's unclear from the record if the patents were still in effect at the time that the license agreement expired but even if you gave such as most generous interpretation possible and the felt the patents were in effect the day before the license agreement started in january of one nine hundred eighty three those patents would have expired in january of two thousand  paid up license referred to the fact that if we were making our running royalties as they were coming due that we had a fully paid up license during the term and not post expiration and thank you very much i would just like to make two two brief points in the first one is that we we must remember to state to the record here the issue about patents if if you read the agreement there's no patent numbers there's no description of pat and i don't think we can be making arguments about as mr mcintyre does about looking this as an overlay over who had patent rights where because there's nothing in the record to that effect and then some of the facts that i've heard bandied  agreement is not based on a framework of patent technology if you look at the agreement what was license under article one the most of them are the equipment them were being dealt with by dislikes disk that's that's correct that's correct you you agree with your point that there were certain aspects of the past rights that then expire until those two thousand and nobody knows when patent rights expired it's not in the record  preposterous if a fully paid up license it's plain english we're going to say a fully paid up license is something that's fully paid up and the agreement says that but upon payment of a fully paid up license under six point zero one which refers to the running royalties trading it grants them a permanent perpetual license to sell everywhere in the world that they felt was of value they don't have to pay anything that they paid for it to they would have never gotten the technology for the for that actually sixteen years that they had it before before the agreement expires i mean if you want places that brands according to you right when when it real sounds but you can't you can't look at only one side of this agreement it's you know i'm going to buy your car for a thousand dollars but i'll give you the thousand dollars i don't get the car not when i try to look at it from one side factor where my question is specifically premised on your of this license which is to say except is is the say you cannot that's correct right and so under your reading of his license they cannot ever before after selling thing into asia that's covered by this li is that correct that's correct because their license lasts for that  and that's all i have to say your honor if you don't construe the article eleven to impose exactly what your honor said then the fully paid up license is meaningless there can be