can assume that i'll be that generous with the clock every time but it has to be there were reasons for that in that particular case the next case before the court is losing technical enterprises versus western digital corporation dock number binding contract to settle a major piece of patent litigation was entered by the parties or whether the parties agreed to draft in good faith that settlement agreement in the days ahead on its face gigi's position is that is in agreement to agree let me direct your honor to the term sheet itself of the plain language of the contract and that is at the appendix had a one night three he material terms  as conditional obligations if you turn to the very first provision settlement in payment it stated that western digital is not bound to make any payment until within thirty days after execution of a subtle meant agreement and a purchase order agreement we've heard but that really make it a condition or effect of the timing for it your honor it makes it conditional and in fact the record below shows that the parties did not in fact provide a settlement agreement a settlement payment excuse me because that was conditioned upon the settlement agreement being drafted and executed also conditional items milestones which did not occur here if in fact this was an agreement to settle finally this major piece of litigation this consideration provision would not have been conditioned upon thirty days after execution of the settlement agreement and purchase order what would have happened which is most of the dispute that erosion in the last hours during this process has not arisen and have triggered this thirty day period yes your honor the parties actually worked quite diligently in the days after they signed this term sheet there were four agreements and the confidential settlement agreement was your honor actually it's the purchase order agreements that you did in fact try to incorporate some of the key terms in the term sheet and the settlement agreement would have said to the lawsuit is dismissed without prejudice on the counter claim to dismissed without prejudice to each and the pricing of the purchase orders that would have constituted that future purchase order obligation so there were a number of different agreement that the parties were trying to work on and finalized but what i haven't tried to get at is what is what is it that would still to happen that was really important to the parties that wasn't simply paperwork and setting aside the dispute that arose with respect to portions of this term yes you are being is what other than these lines were the parties still negotiated there was an amendment to a master purchase agreement which governed the parties business relationship between western digital and g g sir that was one of the four documents that was remaining to be to be executed and finalized there was also i believe your honor a mutual release with regards to neutral release stand so those were the documents that the questions really that the that the district court had to analyze whining is did the parties intend to enter into a settlement agreement and were the terms reasonably reasonably understood between the having a hard time with your debate over what the district court did now i mean it could have been a little cleaner in the way the district court set it but in this particular instance as i understood it the district court i did place the burden of proving the formation at that point isn't that really what the district court did no your honor i would respectfully disagree there are two categories of cases where these settlement agreement disputes arise one is where the parties do not dispute that a contract has established this case your honor falls in the second category where the parties vigorously disputed whether contract had been formed at all and in that case your honor they did surely for you say you vigorously disputed your only disputers aftereffect you stood in front of the district court judge and said we have settled this case it's over it's done let the jury government i mean how do we not hold you to those representations to the district court your honor i would request that the court look more carefully at the representations that to the trial would be taken up the cow color well they've memorialized the term sheet in further agreement moralize does of to me like they need to do to further negotiate a settlement agreement it sounds like they need to put these so them an agreement reached into i would agree that the label of the pleading perhaps was not the most articulately or accurately phrase for if you look at the content beyond the sentence that your honor quoted the parties expect this process teresa in the dismissal shortly it reflects an expectation you're on or not a certainty and if you look at the representation that was created i mean all that seems to me to suggest is it's going to take us a few days to memorialize our settlement agreement and  court we need a couple more days to put it into writing but it's not that agreement hasn't been reached it's that it hasn't been put into the final legal form and if that's the case then it's an agreement and the district court can determine that the agreement wasn't what happened here because in those majority of cases your honor there is a meeting of the mind in agreement as to the same material terms in this case getting back to judge o'malley's excellent point with regard intent of the party that meeting of the minds did not exist here and that was made evident when the parties tried to sign a line the negotiation with regards to the settlement and in fact your honor i would respectfully disagree w very specifically in the only thing you seem to dispute is how you interpret the specific portion of that time that to me it's more like a question of either is too indefinite to be enforced not that it was agreement or actually left over for every question of whether somebody is living up to what was actually termed by the the flight your honor with regards to the with regard to the term sheet i would submit that the various terms here both with regards to the settlement payment with regards to the last term of the term sheet where it clearly says that the parties are to in good faith draft a settlement term that said ten days after this agreement is by one party will pay the other party x amount of dollars ten days after that they will file a notice of dismissal that's conditional future language that doesn't mean it's not a settlement agreement it's just for the players but things for your honor this goes beyond that because the paragraph the final paragraph states and cabins in condition is the terms that are set forth above it says that the parties would in good faith draft within forty eight hours of settlement agreement and it's not simply a matter of timing as to certain events because in fact your honor a number of these milestones were not met and there interpretation under california law but this is the question that we're addressing here is contract formation the first question the initial question fredricka yes you're on and have how do you deal with the fact that under california law that's not a question of  overview for us see this trial court had a hearing had you know the parties then went through all the terms used when i was living with you back and forth in terms of the representations being made to the court and had a signed agreement in front of them however we did say that that the trial court committed clear error when it made the factual finding that a contract was formed your honor i believe that the issues here are actually legal issues the court said that this inquiry was a legal one my honorable opponents also agree that the heart of this appeal pertains to legal issues and with regard to although there are cases where the court factual findings are reviewed for clear error in this case the court looked at the terms of the settlement of the term sheet itself and it was relied upon incompetent evidence we've cited your on a california supreme court case persons versus bristol development where the court is looking at either incompetent evidence or if there is a legal dispute those are clearly matters that this court can review as a matter of the noble review we believe that this is a legal issue with regards to interprete ing whether in fact this contract has to return to i think it was judge hughes question a little earlier that i wanted to follow up on i think you said in response to this question that there was no meeting of the min here and the reason we know there's no meeting of the minds is that there was a different understanding of the scope of the clause that deals with purchase orders right yes your honor well wouldn't that suggest if that is the definition of meeting the mines would not suggest that any time there is a contract interpretation problem that arises at some point during the existence of the contract that that would suggest that there was never any formation meeting of the mind that this term issue was intended to settle the litigation ok ok in terms of the object of this term the second issue which i think the partisanship voted a lot of time is whether there was a meeting of the minds as to the that's your argument why isn't that simply saying that anytime there's a construction actually a contract construction problem that that shows that there was no meeting of the minds there go no formation contract because your hon this case that's not all we have we have yes yes but i want to know why you said you're making the argument that the fact that there was a disagreement about this term in itself is sufficient to a problem an infirmity with a contract being formed versus a disagreement as to a material provision and in this case because this was negotiated and signed as a document which would give the parties further time a little bit more time beyond the december two trial date to finalize the settlement negotiations but that so this was a settlement agreement that if a signed settlement but that part of the settlement agreement included we're going to have a settlement agreement and you can't negotiate the second agreement on purpose orders disaster render settlement agreement not an actual not a form settlement or is it a again it's not a formation problem interpretation from with regard to your hypothetical your honor i believe that that would be an interpretation problem and that that's a problem that we are not faced with here because i believe that the fundamental issue they would in good faith draft put into a settlement agreement this can't be the settlement agreement because as i noted your honor the dismissal and believe there's no right obligation because that was contingent upon the settlement payment being made there was no obligation in terms of the consideration don't understand the question on your say because there's no settlement agreement and told the payment is made with the payment of that lady and told that settlement agreement is affected that seems completely circular and also contrary to almost the way all sort of what affirmative what you find settlement agreement and then you make well your honor if in fact this were the settlement agreement then it seems to me that the parties that would have drafted this in a way such that the payment was due within thirty days of the signing of this document that's not what this document said moreover between november when this was signed and march when the court issued its order granting the motion to enforce there was no settlement payment that was me because you didn't honor settlement agreement you're out of the district yes right let me let me answer a question because this is important people keep talking about the terms and we keep going back and forth and yet we're supposedly not allowed to talk about them here in open court are both sides insisting on the confidentiality of the settlement terms or can we because some of them are important to discuss yes your honor with regard to g p s position we've always insisted from the inception of its appeal that this should all be public and so we do not have any objection to this that was the product of weeks of negotiations between the parties and that was used by both parties to rely on that to ask the district court to vacate a trial that was to start the fourth the following monday it would take on a friday to ten i start with the same question i started opposing counsel what really needs to be done here and then we have references to this settlement agreement and it may be that this is being used as a term of art but i don't understand and things along those lines but i think companies like western digital includes a comfortable with as a formal document but it doesn't change the substance it wasn't intended to change the substance of the primary agreements the material terms that were with without any sense when it comes well the draft your honor started to go back and forth and i'm trying to find the best starting point for that distance argument is that there was this concept of settlement agreement which is the ultimate agreement which has not yet come into being and that that's the basic thing that this is really just in the thirt really a slightly different question so i went but that's really not core which concerns secure honor so the most of the four corners of the agreement itself show you that it's got material terms it says it's expressly terms of the agreement or expressly there to resolve the disputes between the parties for all claims pending or previously pending in the lawsuit the signatures are of the principals not a legal document that's a place holder the c e o of their be taken off calendar so you have the agreement itself you have the joint statement of settlement to the court then you have the party standing up in court monday morning when trial was supposed to begin you have goozex lawyer saying all the material terms mcdermott lawyers there's a a document it comes from mr gilliland who's the kilpatrick lawyer saying i've been instructed to provide this holding a written settlement agreement it's a one page document  after after so so there's two appearances before judge perry want to relevant the first one is the monday the trial was supposed to start on december second and there's a signed settlement agreement beginning at a one ninety nine there's a joint notice of settlement we get up and we tell them there's no sense of jurors hold me under submitted order cases settled then the parties negotiate and when we get this nine point one page document that removes the protections for western digital then we're we're done and we have a said looks fine to me please go ahead and fuck so we file the joint request for a status conference calling the agreement a settlement agreement we go in then have a status conference in which judge very well at two thirty five says i thought the case it set up so this is a sample under there's probably five more things like to come up with that will show you that this was a settlement agreement and everybody knew it and to go back to circle that one more time just just to make sure i understand what remained to be some of the terms they had in their prior business agreements that was i think completed there was a purchase order agreement and this is most of the work your honor with put into this in the negotiation of the ancillary documents not the settlement but the purchase order it and the reason for that was the parties that already had a lawsuit as you know from the record the consideration being paid a substantial was a meaningful lost and instead of finding ourselves back in court again the parties were hoping to come to a resolution that would govern the trying to find ways to at least times really the details of the distance relationship so hopefully the parties will be fighting with each other and you more they're not on the court terms of you're going to release me you're going to dismiss me you're going to pay me cash up front you're and correct me if i'm wrong here but it looks like that the nine point plan that came from the the new lawyers who came in and decided maybe we don't want the settlement agreement that was agreed to as to that once what alarm and it says it could you could read it to say that the scope of what could be counted towards the purchase order commitments was limited to things on the price list western digital immediately responds a three way says no and the four paragraphs of that provision become what they are in a one ninety nine first one about pricing three about what's included an exclusive about sco so that's the first bit of expense of governance is the lead up to the agreement itself then you have the red lining of the purchase order agreement the ancillary document after that the first one from western digital from goozex i mean does it again says you're going to be limited on your purchase or commitment only so what's on the price list i sent an email a four four this is that's not what we agreed to and you'll never see it again the next version of the agreement and one after that and one after that and the one after that all reflect the understanding that b purchase order commitments would not be limited we've hammered out the material terms we're working on the details it's only ancillary agreements all those things we've talked about and so if there was a real failure of a meeting of the minds it would have been clear to  that email a forum for the saturday before the hearing with judge great role they would have said something about it such as free will they did all the purchase orders address go back to court they they dropped the issue and then dr  he probably would want to offer these nine points he sent it to the president of western digital personally and annotate and says here's the only thing i'm going to agree with the lawyers have screwed this up it's too legal istic let's get simple and even there we're now you i don't think it does your honor in light of the context of the back and forth that's gone through this case where they've tried twice to put that in maybe this is the third try to do it again ok but i don't i see your point because i have an actual question that the relationship between western digital western digital and seagate there are three large competitors western digital acquired into g s t i think it's two years ago now something along those lines because of certain antitrust concerns from china they've been held separately so while it's a subsidiary company it's independently run and operated and i'm glad your honor is excite think that's the idea to see if the provision in the scope and pricing dispositive of the question of whether things only on the price that should be counted because what the agreed terms document says that eighty one ninety nine is future purchases from each g s t not counting some of that already been committed will count but they're going to be applied only on exclusively it says on the commercial terms that already i forget all the words but the sensually invalidate any agreements that exist between each g s t and through six so we know future purchases can be made by a g s t not on this price list and that they will count towards the purchase or so it can't be the way they read it they want to address a couple of points that my posing council needs a first with regard to judge present regional question as to what was to happen in the days ahead with regards to the importance of the settlement agreement that can't be over estimated because the business relationship of these two entities was such that the scope and the pricing of that was critical and there were disputes with regards to not only whether competitor products would be made available to western digital what the backdrop to all this to step back was that on november fifteenth and twenty two the two principal dr buzek and mr bobbitt kenyan had worked out what the scope and pricing of the purchase order provision would be and those that provision was the subject of much back and forth and there were many items in which the parties disagreed in our kiwi focus of course on the purchase order scope and pricing provision excels but whether it's whether products that were made for customers competitors excuse me were going to be included or whether in fact the two thousand two testers which there was no evidence with regards to western digital argumenta that this would be the bulk of the purchase order provision and therefore allowed the district court to minimize the importance of the dispute between the parties all of these things your honor had still not been finalized and getting back to judge hughes is excellent question as to whether our predecessor counsel statement somehow gave rise to the district court being able to rely upon the statement that a settlement had occurred if you look at the actual statements your honor they were always called five they were made in good faith at that time and their counsel predecessor counsel said we still have a few issues we're working on this is a one sixty eight on the ancillary agreements so we the bottom paragraph i would urge you to look at that because that i had and conditions the fact that these terms were going to be set forth in the southern leaman with regards to mr lim issues a comment for instance that the dismissal was just an easy document that's not what the term sheet says the term sheet says that the obligation to dismiss it doesn't even write that until after the settlement payment has been made that has not happened here this is a conditional document and and we believe that the evidence supported this now with regard to the minute order for instance that is causing counsel relies upon if one looks at that a one sixty five beyond it saying that the case has settled there are numerous turned indicating that the force and ortiz knew that they were close to a settlement but had not settled all pending motions or denied without prejudice why would the motion be very close at that time and in fact your honor if you look at western digital's contemporaneous description of the treasury and i believe your honor this is  much and we thank you for your time