good morning your honour's thomas boyd here on behalf of the appellant now line packaging the party to the subpoena on manufacture and supply the scepter food packaging products graphic controls ninety five percent of the scepter business in the united states by dominating the sales to five major customers who purchase over ninety percent of the packaging products in this country and line is currently graphics only viable competitor for these major customers but graphic has deliberately and aggressively campaigned to maintain its ninety five percent with happily and exclude in line from competing for the business with these customers by using a variety of me and i competitive means those include falsely claiming to be the sole inventor of certain packs a step or packaging design concept sham claims for patent infringement and invalid patent bundled discounts that effectively price the competitive segment of the shopper business to these major customers below cost and long term exclusive supply contracts that are in line from competing for eighty five percent of these customers business for which the current under our jim stark case tell me if i'm wrong is certainly right or are our position is the evidence demonstrates the individual who claim to be the of right or it's not the inventor is not an inventor but even if there were support for that proposition they clear and convincing evidence demonstrates that it was a collaborative process so graphic and fitzwater cannot claim to be the full inventor didn't it's not didn't nestle's main witness  not suggest that he was a co inventor that's incorrect your honor he provided facts that effectively defined his own role his role in two thousand and one is as well as two thousand and five in this collaborative process to be at the very least a couple and better and that his colleagues were co inventors he was asked these questions years after the fact he was not familiar with what the legal definition of were at the very least co inventors they directed fitzwater i was involved in the two thousand and one development of the concept that was the starting point for the subsequent two thousand and five activities those activities were inventor ship and exclude bauer or nestle and their involvement that had to be disclosed to the patent office and they failed to do that and we believe that a jury could readily find that by clear and convincing evidence to be a fraud on the patent office also failed to disclose prior sales under that two as a separate matter supports our walker process claim the district all these facts and instead applied created and applied a rule from chrome old federal circuit case that is readily distinguishable from the facts in this case but you ignore the facts and instead determine that we could not proceed with a claim unless mr bauer or someone else affirmatively asserted inventor ship that's not the law and it never has been improbable there was no evidence of active it's undisputed that graphic made prior sales on this the two thousand and one concept that was the starting point for the patents that were later shot in two thousand and five those are undisputed facts its design was design this is the design samples yes don't you have to sharbat that the design samples were the same as the limits of the final patent i don't believe we do i thought you had to compare the design samples to what's in the patents and their claims and see if there's obviously as they got the same limits tell me if i don't understand it well perhaps i'm having a disconnect here but i would refer to our patent expert mr c prior sales it seems to me that they could be characterized more as experimental rather than commercial and there was very small amount very small dollars what's wrong with that as well that that may be something that  people could debate about but there's absolutely no question those were things that the patent examiner would want to review st of all i would i would reject the proposition that they wired relevant to that as prior sales but secondly at the very least they had to be disclosed the examiner could not access that information otherwise so it was fragile it and it was improper conceal but chose to not disclose those to the patent office moving i quickly to sham litigation there the court erred the district court erred by simply characterizing those claims as a recycled version of laugher process that was entirely inappropriate those are completely separate claims with an entirely different standard or not completely and your adverbs there i think gave you away i don't mean completely completely not completely in terms of the facts known tast to both or indicated that both would apply but in fact may be an appropriate test to examine the bundled couch that was an inappropriate test to apply to the exclusion of supply agreement assert that those requirement contracts are violations and are in a bike competition more importantly everybody in the case understood that we were asserting what was section two sherman act violations that was letter gaited it was discovered as part of our count three and four they were squarely addressed by the experts there was never a determination by the judge by the district judge there was some kind of prejudice because it hadn't been adequately plated and i would say there was never any assertion let alone proof biographic that it had been prejudice way of how it had been played and played it in the complaint so that was squarely within the case throughout the entire lawsuit and wind was properly proved that it has a triable bundling claim in this case the district court improperly construed this case or those claim the bundle claimed as if it were a type a claim and that was a mistake primarily because the district rather than required that our expert my client demonstrate that there was monopoly power in the leverage market specifically paperboard that is not a requirement for a bundling claim that's only a requirement for a tie in and the cases cited by the district court to impose that requirement were all trying cases mr labyrinths or professor levinson referred to market power but it's clear in his report as well as in his deposition he was referring to sufficient margins to be able to cross subsidise the discounts and those who show up to market that was proper for him to do and it was proper for him to rely on the margins margin data to do show and applying the discount attribution professor levenson also took into account the contestable sales in the competitive product market that has been a bone of contention in the briefing but interestingly in reviewing the record as well as the expert report the record well supports the proposition that you must include contest ability as part of the test that's important to determine what is the actual competitive product it would be inappropriate to simply assume a customer would be willing to switch one hundred percent of their sales many many of the scholars it's well it's well accepted that that would be an appropriate approach but if you get that part of the market very very very very skinny then you can easily prove any claim well you can't just make it skinny you have to really small get it you have to have data and here interestingly the debate when you when i'm sure you've already done this but when you go back and review the expert reports from levinson  their dispute is not over whether you take it in a couch it's have any right whether it's twenty percent up which our expert says that's conservative it's really much lower when you look at all of the data points our experience what the customers of said and what graphic itself knows about the market we're cerevisiae says no it's really more like forty percent so it's it's that debate over what the facts demonstrate that is the difference not whether or not it's relevant and appropriate to take that into account in applying the discount attribution test says become kind of an issue rack right off the beginning it's not really a material issue of fact but it's really an issue of law to say without this economic theory so to speak governs and this one doesn't and it doesn't it's not really a true genuine issue of material fact because i think that all of you basically agree on the economic facts  well let me take that into pieces that begin with it's not a question of of law because as you said the parties agree the discount attribution test is the appropriate test now the district judge went  well you know what i can see how contestability may be appropriate in some cases but i just don't think it should apply her without explanation only commentary about life from a policy standpoint she doesn't like  templi said i don't believe this expert i believe that expert dobber to add a hair well those are two different things what she did was pick an expert but she did so in appropriately it's for the jury to determine which expert is more rebuttal time so i'll just wrap up but finishing up their response to your router i took all of you with regard to don obert that would have to that would require a review of this area of economics and such a review while there may be a debate here and there such a review would establish that levinson's application of the discount attribution test was sound and in conformity with  theory outside of the commentary real quick is any chord adopted contestable share a variant of in our view a piece health did so at least implicitly when it required that the bundle discount be attributed to the competitive product again economists can't just assume a customer would switch one hundred percent of their of their business showpiece health and at least implicitly if not expressed recognize you have to determine how much of that business is competitive so i would say the th circuit and then the justice department the scholars invent judgment governor he said and appropriate circumstances that's relevant just seems pretty loose to predict how much is contestable actually not in this instance we certainly understood how much market or how much business we could contest for  graphic who control without end line being in the business graphic controlled one hundred percent so they know very well what was contestable because they knew their one hundred percent it went down to ninety four percent not quite as tall as mr boyd good morning honors may place the court my name is david hamilton and with my partner jason hicks represent the athlete graphic packaging first i'd like to make a couple preliminary comments one is that i'm prepared to answer all the questions you ask mr boyd and those are probably more interesting to my presentation so i'm happy to answer your questions i would also note that in response to judge ben's question the october one opinion was that claims construction opinion and apple  did not address the tortious interference claims i mean not be able to do that i'd like to come back but i'd point out that judgment coming made short work of those claims because there just was no evidence of the contract sufficient to sustain the tortious interference claims i hope to be able pricing practices in patent practices i'd like to address the pricing practices st these are the fundamental elements on which there's been a failure of proof by in line st and again i'll say on the competition that in that that is enough to sink the in line ship here business and you have monopoly power in there i don't know i don't understand your harmed competition bottom line well putting it putting a competitor out of business is not a competition that's an awkward looking way of looking at the market establish harm to competition the traditional majors of harm to competition include things like reduced output which there was no evidence reduce quality which there was no evidence any increase prices and in fact just a opposite price lascaux it i'm sorry you said higher i don't remember what was forty percent or something like that another important point is that we disagree with your line on this is that it offered no proof of monopoly or substantial market power it's going to be dangerous to try and interpret the southeast missouri hospital case back to your honor because you wrote the opinion but i think we're going to come back to that in a minute with happily power is a stated element of a section to claim the concession that they didn't establish market power was obtain claim judgment gomery added that market power and paper board which is the leveraging market which is appropriate in a discount bundling claim is fatal abandon claims because is part of what you have to establish in that section to claim now you've not had a chance to reply to their charge on page nineteen of their reply brief which does address this very issue you're talking about do you have a short explanation or you want to make a long practices there is no evidence at all that graphic graphics pricing was below average variable cost which was the testing conquered boat and in southeast missouri hospital now this court has not adopted yet the piece off discount attribut rivals are it has an expert your expert agrees at some point there is a limit about how much they could get dest you know capital and access to markets or all kinds of other factors right so you agree that there is some part of this contest will some part that's not she does agree there's a limit on the contest will valid barket when you've been a business you've been controlling the market right but then were subject to other tests like harm to competition so you know again the overall theme in areas although it's traditionally analyzed at the exclusive contract issue the court probably knows the judgment contract it has to satisfy a price control price cost test and it did there was no evidence offered by enron that it did and the rd point there is this was not in the opinion the contracts are not exclusive and the best evidence of that for me and for the court is probably appendix eight to dr sorabjee his report where she goes through on a contract by contract basis an analysis of the various tomes that are part of the contract in each of the contracts there are some escape patches but they become affectively what was rejected in the concord both test and rejection about the fact defacto exclusionary contract because the customers can walk away they can walk away from new products they can walk away from packaged products they can walk away from certain terms and certain prices i hate all of these terms because it essentially renders the contracts meaningless the contracts that were negotiated between graphic and its customers included negotiating contracts way before the terms ended right after the it was dried the customers began pinnacle as well as some affidavits from nestle but they all point out the fact that the customer control what happens in these contracts not you graphic in this market this scepter market was there any discussion by your experts of how we concluded that in line was unable to identify a co inventor and approve actually included a disclaimer for mr brough who was referenced earlier and an affidavit from judge of bedell may have had the duty of candor but had no knowledge of the prior sales because he was not with graphic at the time kelly fitzwater may have had a duty of candor but she had no knowledge of the prior sales or the materiality of the prior a shame litigation claim i'm not going back to that could assert could we also offer from on the basis that these prior sales were experimental rather than commercial and therefore not material you know interest the question about the amount and the  they didn't argue anything different when they argued same litigation then when they argued their locker process for a claim and so the record has nothing other than the good faith the good faith of graphic filing a suit on a ballot issue when the minnesota i don't think it's a judgment grammar case but it's the sleep comfort case that says when you're doing this and you've got a legally protected interest you're notifying the parties that they might be doing something wrong that's a smart thing we encourage that as a matter of thank you ron or i'll try to be very precise st with regard to the sales experimental versus commercial it doesn't matter that wasn't addressed a low or brief but my colleague indicates it was addressed by the supreme court last term in a case called i believe and with regard to the application of the price cost test that does not apply to the exclusion the exclusion of supply agreements that is does your exclusive those are de fact those are not de facto claims it's there sure and therefore it's rule of reason the district court failed to apply that with regard to your inquiry judge benton regarding how to find the information about the sales in the majors look evidence regarding the and i trust injury here i would start with the most significant of that is graphics margins and so shopper there are three times higher than their margins in paperboard the difference they have competition and paperboard no competition and so scepter clear harm to the market and the customers that's in addition to everything else that's in our expert's report as well as in their own own competent their own i trust competition manual business that's what kind of potential is about and that's what we could bring with regard to name a discount attribution test something i didn't have time to address at this particular point contestability was essential to that but even if you ignore it our experts said some of the supply agreements still fail the heinz agree much in particular we would also note in our expert i'm sorry