buy tech some grief before you raises three different issues on appeal significantly none of these issues are you to make new law or to deviate from any of your existing precedent and i'd like to start if i could by addressing the infringement issue for us for biotech to prevail on the infringement issue you need to be convinced of two things that as of april two thousand and seven there was no longer a direct infringer of my patent and that because there was no longer a direct infringer the district court of used its discretion by granting an injunction in the absence of any evidence of ongoing or potential future and friend why don't we have to direct infringers by text is not a direct infringer for two reasons one bite it does not sell make or use any it's violation of the i think it's the fourth clause in the settlement agreement that it had by importing infringing materials there's no evidence and there was never evidence raised that samsung ever violated the abide by clause the fourth cause of that settlement agreement the only evidence of direct infringement by samsung and this is in the record was five purchases of samsung monitors made by o two micro in two thousand and four by their employee mark ram and it was those five monitors that were the basis for the suit against buy tech and the suit against samsung if those monitors have infringing material as the court found that those the court found those monitors did contain infringing by tech chips why isn't that direct infringement that was direct infringement in two thousand and seven samsung took it and got a covenant not to sue an unrestricted government not to sue which is the same as a license on that day direct infringement halt if this was a case where we were talking about past damages it might be of the moment that there was a past infringement but this is a case where the two micro only saw an injunction and an injunction can only be used to prevent ongoing or exactly that point where a covenant not to sue was held to be at least for purposes of patent exhaustion the same as a license to lie on the supreme court's decision want and hear if the sorry of samsung has a covenant not to sue it is an authorized party and its sales of goods are authorized it cannot be a direct infringer under two seventy one a then if it's an authorized seller and without a direct infringer by the law of this court the supreme court there cannot be and then direct infringer that can be n government not to sue that they received as unqualified unrestricted it is it appears as sub paragraph d under the sales agreement there is nothing in that covenant not to sue that says provided that samsung abides by the rest of the terms of this agreement then we will not sue them it is a unqualified naked covenant not to sue on the patents so if samsung was violating some other provision then it was up to zero two to take that in contract and find that the abide by clause if they don't adhere to the terms of the injunction right now you get to the issue of when are we talking about a time there was an injunction in two thousand and seven this court two members of this panel actually vacated that injunction in two thousand and eight so at least by the time this case was back for trial and judge every important two thousand and nine there had been no infringement because there was no injunction in place and had been for over a year there was nothing for samsung to have to abide by that point in time even if they could have proved that samsung was buying by taking chips which was never put forth what about l g there was never any evidence of any l g why can't we follow our lucent versus gateway reasoning that it was more likely than not and look l g sells most of its products into the united states they contain the by tech shi even if they didn't tear one down and prove that isn't it more likely than not that one person somewhere in the united states had  i don't think that necessarily follows companies do not spread their products out throughout the world they tend to make classes of products that go to specific jurisdiction specific areas they'll make a class of refrigerators that go to europe versus the united states  bice chips from lots of people including go to micro including a company called m p s micro semi it is perfectly plausible that whatever chip they may have bought from buy tech in the past went somewhere other than the united states interestingly otunnu had no problem to l g being a direct infringer in this country back before april two thousand and seventy s by tech was liable at that point for inducement based on samsung's direct infringement if this was a case of damages o two could have sought damages for that but they only wanted an injunction and injunction is a prospect of remedy it's not supposed to be a punitive remedy based on some past act it's supposed to prevent future infringement prevent the irreparable harm of ongoing infringement and there was no evidence of that in this case the district court actually looked at transf said that the exhaustive context of trans core was different from the direct and frenchmen context of this case my i think reasoning much as judge laurie just did why isn't that  very appropriate way to look at this i disagree with his narrow analysis if the right is exhausted when it gets to samsung samsung is then authorized to do what it wants with the product and an well that's the issue of course yes if you just say you are in a direct infringer if they violated the abide by clause they are a direct infringer in the sense that they have  committed the acts which constitute infringement even though they have a covenant that prevents them from being sued i would disagree with your honor's interpretation that if they violate the abide by cla the abide by clause they're not an infringer to see your whole point is that they're authorized and therefore not an infringer under two seventy one violate the terms of their agreement they're no longer authorized then they become an infringer in every sense the question here is the term authorized into seventy want and they're not authorized if they violated the terms of their authorization i would disagree with your interpretation of the sampson agreement and would ask that you have a read of it again about it much and write out it there is nothing in there that provides the samsung violates any provision in that contract that requires samsung to purchase the certain amount of product from zero two if that's a later clause but you're right it comes after the abide by before the covenant not to sue that specifically provides that if they don't make the requirement they're allowed to make it up the next year so in fact there are clearly remedies under this contract that if you don't comply with the term it does not immediately return render the agreement null and void there are remedies are there terms to that effect in in the contract that each of these  provisions are several and separately enforceable not to my recollection that is standard contract clause if that's the intent isn't it yes it is and that doesn't appear so we would presume that if they violate a your honor that injunction was vacated in two thousand and eight so if you don't decide that samsung is no longer an infringer in two thousand and seven they're not infringing two thousand and eight when the injunction they were supposed to abide by was vacated by this court after by tech for inducing from it's because of their choice of remedy here and the fact that they released samsung either in the april two thousand and seven agreement or at least by you from two thousand and eight when the injunction was was very paid and dissolved thank your honor may i please the court well counsel noted that there were three issues in the case of that discussion that he had during this conversationally only took into account the first of those issues which is the issue of was there direct infringements supporting the indirect ok all right well then i will quickly touch on those issues and then head to the infringement under the spoke with the injunction issued which is the last of those issues this is the case if you get what you ask for a different have actually go to micro there is an admission that the finding of infringement was supported and correct the judgment of infringement was correct there was an infringing act that took place two thousand and four predates any sort of agreement that was a direct infringement that was induced by by tech that is enough to support the judge but ok so that means this court must affirm judgment now the question is what do we do about the injunction well the injunction is supported because there what there is now been a finding of infringement now using a biotech product is known in the united states is known to infringe and that is something that that should be enjoined no matter who does it whether it's samsung or anybody else who does it now what they're saying is we should if that's true then the only thing that would happen in this case is the injunction just because a party samsung has even if that was right just because a part of one party has stopped infringing because it has a license doesn't mean that they get to sell the whoever they want if that was the case the injunction still stands they they still have been found to induce infringement their products have been technically injunctions and says we don't you are not going to use these in joint goods and judge best judgment but that injunction was vacated that injunction was was vacated in two thousand and eight but the intent of the agreement and what the scope of the agreement is is that when it was entered was that you're not going to be using the by tech good i mean that that was at the time that the parties samsung and zero two agreed that's what it was but the way the thing this contract remains in force even though the junction that first two was vacated what i'm saying is that the samsung deal remains in force such that if any product is the subject of injunction samsung has to abide by that ok so what we've just discuss they still obligated to all of the abide by clause under the abide by cause him some would not be obligated at that point but but that doesn't affect the finding of inducement because that would be it was based on a prior oral argument there was an act of direct infringement that supported a finding that by tech induced once there was a finding of my tech induced the question is is an injunction appropriate remedy well it is because by tech products infringe now the question is does samsung have an out a loophole about buying these products going forward because there was a time when the injunction wasn't there i don't think that's a fair read of the of the agreement additionally the agreement was not framed as an affirmative license i actually think that the proper case that's better suited to this is the jacobs versus nintendo of america case it distinguishes between affirmative license language and negative covenant not to sue language and what the parties intended to do here this language is not in transport and doesn't relate to any of the cases that we've seen which is that the parties actually say in the agreement if we find somebody infringing out there we're not going to have to use samsung because anymore we're not going to sue you and not let me just ask you it seems a little circuitous to me i mean when we're talking about the injunction referenced in the point there is that if you had sought damages or what a record in two thousand and four that would have been an appropriate remedy and injunction going forward from this point of time is dealing with ongoing infringement and you've presented no evidence of ongoing direct infringement i think that's mr macphail and one of the issues here is proving ongoing direct and frankly that's never that's never actually the case when an injunction is entered it's because the product has been infringed in the past and you're stopping it from being infringed in the future but there's a five year gap here there so they could be question is whether what happened five years ago can support an injunction in two thousand i right so unquestionably by tech with there's evidence that's in the record that cited in the findings of fact by tech his position that the products to sell in the united states it wants to sell its products in the united states if they sell the products in the united states they infringe because that's admitted in this case  i'm a little confused you just said it wouldn't be in the the injunction goes to stopping infringement of you right and i thought mr mcveigh else point was and maybe i'm missing something is that there's not going to be future infringement because under this agreement there can no longer be draft and therefore they can no longer be inducement that was only us to sansa right by tac sell the product wants to sell the product in the united states it has all the products in the united states invention we've got sampson here in l v those are the those are the evidence of what they used in the past so that was terms of the injunction presumably the injunction issued in this case it would be connected to the the infringing come down and it's a growth of that you don't get to do other things as well right and you wouldn't the injunction be tied to the past infringement by stamps on one two thousand and once you have is that what happened in this products where we're guilty of infringement that's what the findings of fact say so and there's an implicit finding that that includes l g as well but as long as there's any finding a valid finding of infringement then that can serve as a basis to say if you're going to keep doing that act that infringes generally you want to just open your sales to the market you can't do that that's that's enjoined activity and once there's any injunction entered against by tech the samsung agreement says it replies to samsung too so the abide ongoing hook to enjoin their infringement that's correct that's that's the fair read and in fact i mean this is one of the differences beyond that this is one of the differences between this is this so therefore you are saying that the in the injunction the by clause which is where i started my question to you may not have been clear but mission lee were saying the intent of the parties they were looking at the injunction that was that effect in two thousand and seven that was ultimately vacated by this court now you're saying that the injunction in that samsung's actually not allowed to sell the products no matter what it's just that the agreement that the two micro and samsung actually reach was about who michael was could actually bring to court about this this was not an affirmative license this was a covenant that said well samsung for your peace of mind we won't sue you about your infringement you can continue to infringe we won't sue you about it but we will go after your supplier because they are the ones that are actually responsible for the infringement a judge the chief earlier you're not going to get a boiling litigation i'm not going to i'm not going to go after you in court then it's not fair for me to go after your customer who's just going to ask you to get in if i that that's actually that's actually the statement in the case none of that applies when you're going after the source th policy rationale behind the entire exhaustion doctrine doesn't apply to upstream sources in other words this was not a license this was not a license i mean there's the by it's own language and in the fact that it says by the way sampson that what this was was a give market reality to the situation which was it said samsung we're in a lawsuit with you we'll stop on a lawsuit with you because we realize you're not the one who who decides if this design is going to infringe or not these are a little chip that goes on a little circuit work that one piece of a big monitor and we realize that it's really the supplier who decides whether they're going to do the infringing thing or not so rather than continue to drag you into court at the direct infringer we're not going to be a license but we won't actually sue you want it we'll go after the source so your ac infringing but we won't bring you into court about it we'll go after the source in the context of something that says we will come in not to sue you but if we get injunctions against your suppliers you have to abide by that that is that is not covered by any of these other cases that the on the the licenses or those companies that you that you can't even transport twelve seventy six says hatton license agreements can be written to convey different scopes of promises not to sue and are stuck with a promise not to see it was we promise not to sue you for but a half minutes thank you i would actually just like to touch on three points if i may assist any questions on the court on the first thing is i think that empties reliance on jacobs is misplaced the panel in trans core i think made it clear that the  opinion from the supreme court overruled jacobs but their reliance on jacobs of being controlling was misplaced here too mr perkins overstates our admission of direct infringement what i am saying is based on the record below there was evidence of direct infringement but we all know that because of the court sanction precluding by tech from putting up its technical infringement expert that it was a done deal that there was going to be infringement below we don't have evidence that the chip doesn't and because we weren't allowed to put that  come but these were sophisticated parties so to sue him by tech samsung had been sued by him too because of buy and yet as a district court found i take is never mentioned in that agreement anywhere if they really meant it to block sam chips in the should have put it in there instead they put in these nebulous clauses and now contend it was meant to cover the old injunction then the new injunction then any injunction in between if they wanted to do it it was