good morning immediately portland there were only a few issues on this appeal the primary issue is one of contract interpretation which this court reduced on a noble basis and that interpretive issue is whether the parties settlement in license agreement can summon patent license agreement requires a clear plan to use the specifications to determine subjection of the objectionable ness  vs oranges what they are you did they use specifications but what they're arguing in reality when you look at the record admissions that was cited in the briefs are not the relevant use of the specifications they said suffocations but they know where i have said and there's nowhere in the entire record of this case where they've ever offered any evidence that they use the specifications to identify what's objectionable when they make the filter  they have said is and what they're referring to every single one of their citations when they say we use the specifications what they're referring to is they're using the specifications later on after they independently in their own ad hoc judgments decided what they're going to filter they then say they use a specifications to label that content that's not what we're talking about is the duty we're talking about here is the duty to use the specifications to identify what's objectionable in the first place you are not required in your opinion to identify the content is objectionable based on what the custom laozi specifications set forth as objectionable content answer yes that's correct the special master in the prior proceeding asked his own question of their president during this case and said this is on page twenty three of our previous so the way you use the always best occasions is once once you use your artistic judgment basically yes your honor what happened was we kicked out with this court reversed the prior that the contractor protection we went back down on remand we the court ordered us to use the same procedure as before i even same sample set procedure as found to be substantially non conforming and that there be breaches akaroa the order which set up a sample set which was stipulated to by the parties and entered by the district judge was such that the ruling on the sample would be presumptively binding on the universe from which the sample was drawn i e if the sample findings were that they're not of the danger compliance then the whole universe would be sort of set in play when they withdrew all the examples and they said we're  going to take them off the shelf and we're no longer going to work with those eight samples isn't that a concession or isn't that an admission that all were substantially non conforming and there was no basis of upon which to grant relieve the motion to enforce the the agreement which is to pursue this proceeding that we would have you know we ask for findings of noncompliance and breach they came in right give the concession they didn't make the concession in fact they explicitly said we're not conceding these noncompliance but if they take them off and off the shelf off the market isn't that an admission of concession i'm not compliance not an explicit when we ask for a finding a breach and the reason it's important your honor is because there is a whether or not they breached it is not only important in this case but that if there is a it had collateral consequences in another case but when the saying it was completely improper and he did not have the right to relinquish jurisdiction over the other one thousand nine hundred ninety two filters no evidence of which had been presented in any sort of trial or part of the case at that point in time are you saying that you use discretion by saying i'm not going to exercise or sixteen over these additional filters which have not been subject of the you know these are problems i think once this court remanded for him to read decide the motion and the we do not dispute that the district court had full discretion to withdraw jurisdiction over any future dispute that might arise what we what we think is an abuse of his discretion however is refusing to do the case the dispute that he had already exercise fancy to figure out what context the filter they are supposed to use it to figure out what to filter to write ok so and what role and then he explains well gosh none really because he came up with the content before he descriptors for the type of content that was described in the custom play over the specifications that i had already put into the tweaker to software so it looks like he went back and use or at least the testimony  i'm not saying this is true you might well be able to disprove it but why doesn't this create a question is that sufficient to justify what the district court did well first of all the distributor because you didn't recognize the contractual duty as an interprete can correct yes like even if you're right and you should recognize a contractual duty the factual record establishes if they have evidence that they didn't recognize and do exactly what you're saying it was their duty to do that you may well be able to disprove that ultimately the trial but why isn't this enough to preclude a summary judgment because what they're referring to in this testimony your honor is labeling the content once they've already decided it's not such a question of fact i mean this testimony says that he used it put them in the know for a fact question possibly get through to people you look at the admissions from the president that i referred to earlier in this argument where we specifically say what do you do to identify the content to do you use the specifications they say no we didn't ok they're talking here about finding descriptors to label stuff that they've already decided on their own judgment not according to the specifications and under their own judgment to to to to filter as objectionable and but he says that right he said that on the bottom eighty seventy four he said he didn't know then what the court on to do is tell the district judge it erred in an industry in the contract that there is a duty to use the specifications to determine objectional in the first instance and remand him at the district court decide the disputed by question if you believe there's a disputed but the the error of the district judge in observing the contract is one that doesn't require correction from this court so only way it's going to get that it was going to get fixed and the district court of iran is a rule that they don't even have to use the specifications to identify of the agreement we want in order just tell have the district judge tell them to use the specifications to make the product for the rest of this agreement we've got fourteen months left to this day they don't use the specifications it's no wonder there's thousands of noncomplian create the industry standard for this product and he wanted it to be adopted across the country and have all the products work the same way consistently filter out the company the bad content make sure that if user wants something taken out the pick go you pick five i pick violet we set him up and as we're going through the review you can see that some of them are bent and so you can see some are bad as we're going through that and the apples are taken off off off the shelf i say i would take all the apples off we don't want to have ten apples to look at and that's pretty much what happened here right i mean the court the district court at that point said intended to represent the entire universe and we decided based on these ten we're going to sigh the remaining apples isn't that the case of when you're climbing move the eight filters off the market conceded problems for some of them that that means that all the filters all of them are substantially noncompliance it would your honor if you were using a sample set procedure however in this case there were significant out with a motion to and force an original order referring to a special master and in that original order to the special master which was entered in july two thousand and eight the parties agreed to look at a certain number of filters there were two phases and it was a certain number losing the reply to your correctness and we agreed to that ok and then we went through that procedure case in the federal circuit it was heard by the court the court sent it back down to the on this issue it was there were critical statements in the federal circuit opinion that was issued in may of two thousand and ten that eliminated the capability to use tables sample sat in both parties perspective so for instance the the order by judge moore dictated that the standard is substantial compliance which is determined on a case by case basis so you wouldn't look at ten apples and apply that to the whole basket good look at circuit's opinion in may of two thousand and ten and i can't remember the exact date but it was well after the original order and it said we're going to the special master was cast to determine whether each of the filters they were identified in a different paragraph separately and individually substantially complies with the custom play objectionable content specifications that's a j fifty nine thirty and if you look at that what it says it changes the nature of the dispute completely we're not taking ten and applying it to the bushel we're taking each one and we're reviewing each one and so every day a sort of explains why we did what we did we got to the point where we're establishing a procedure to look at these eight and next thing you know we have unlimited depositions briefs before and after the special master proceeding two weeks of hearings on eight movies and we say this is eight of two thousand how do we possibly pay for this  ninety hooters i mean it i'm sorry i didn't know her up it does take you to the other one thousand nine hundred ninety two however those have been determined by the court to be dealt with under four point six which is a different issue it's the jurisdictional issue if we get to the point where we agree that there are eight movies before the district court and we've given complete relief on those movies then the issues before the district court are done and so the parties agreed that eight movies will be dealt with individually individually individually in a special master proceeding so the limitation to the movies is is there then the second question that the court has to look at is that we give full relief on those eight movies and that that takes you to the issue of what was the relief that was a request the first off what did we offer we offered them either to change those eight movies to comply with exactly their version of what they should be or we would take them off of the market and we would remove them from our catalog of thousands of movies and those eight movies would never be seen unless the parties eventually agreed to change them to however four items are one of five in the clear play has breached the settlement agreement by making industry bidding nuclear play filters if you look at that items are just not entitled to that for for several reasons the first of which they didn't file declar judgment they fought a motion to enforce a settlement agreement asking for specific performance of a contract they didn't really listen do no and once it was they pointed out that there was no specific say there are disputed issues as pointed out by judge moore on this issue we have plenty of testimony that we did we went to all it is to incorporate this into our business processes just because we didn't hand every single code or anything yet for contradicts the testimony of the company he says no we do knowing it and if you think about the way the business process works it's explains that testimony because the business process that you're looking at going he says no perfectly straightforward honest answer we're doing our work and when you look at the what the actual questions are asked is do you have people this book and they look at it and identif this this objectionable content and it in a business where you're looking at thousands of movies an eight page book that sort of makes you look at individual things and go back and forth would would paralyze a company and so what you try to do is you try to create things like wrong there are just there are different there's different testimony on this fish there's the president of the business and then there stood the gentleman mr kid who created the software program who is in charge of the process of complying with the o c specifications and ran this whole process over the course of a year of those women in this across thousands of movie career telling us that same thing subordinate in the company disagreed with the head of the company that the trial judge correctly was moved to subordinate and so they don't bother me with all this that that's there's no that is not not what i'm saying here i'm saying that the that the president of the company was speaking to a different issue that the presence of the company is speaking to whether they look at anything to breach of the contract was a direct question and if you will move greed to do are you doing is he saying no and if you look at the actual contract if you look at what it says to do as far as the actual implementation of the o c specifications what is specifically discussed in the contract is facing these thirteen categories and these four levels of explicitness and implementing it into the clear play business process it doesn't specify some two step process where you use something else to identify and then you use the o c specifications to cattle to categorize and that's not what anybody does here it is when you think about it you're looking at a movie and you're trying to determine does this particular scene have objectionable content in it some of them are easy and some of them are hard but when you're doing that the idea that you would have these categories and levels of explicit in your computer programs in your business processes and such like that and then you would not use them to identify the content because you also for information finding that the trojan to the thing you know your in your arguing process it's old oil step and there are the determination as as governed by the prior federal circuit opinion is whether we substantially comply that's the only standard that's in the contract is whether we substantially comply with the o c specifications movies that the finder of fact was to look at were were a isolated aspect of the use and the only question that was supposed to be determined is whether they substantially complied with the o c specimen which in turn it wasn't determined because we offered all relief that was asked for as to buying it because she's yet to be hanged but that's the only you know if that were before before the district court if you look at this from the federal circuits prior opinion that substantial compliance is determine on a case by case basis we seem to they were supposed to be the only ones however this is the subsequent order for the special master proceedings that was that that i had previously quoted from made it very clear that the parties agreed and the machine could not see i am saying that the federal circuit was absolutely correct i am saying that when it came back to the district court there were changes in the procedure that had to occur and that once that those priests changes in the home i was asking about the remaining they seem hundred filters correct the judge has withdrawn jurisdiction over those movies or the judge said it was moot so the judge did not say it was moot as it relates to the one hundred ninety two the judge said it was moot is it relates to the eight that were before the court and that the limitations of what were before the court were eight movies and that was it after the federal circuit and free and they're free to bring a suit through the arbitration clause four point six against you for the other one thousand nine hundred  arbitration yes there was a a hearing held before judge truck in which the parties discussed whether they were going to use the procedures a four point six or something different at that hearing what was something different forever correct and the parties agreed to them to forgo our creation and to proceed with the litigation correct and however at this point it's not a question of whether we've compelled arbitration we're at the point where we've resolved all disputes that were before the court and now the judge said i would draw jurisdiction over anything that happens in the future on this motion to enforce i am not exercising my ancillary jurisdiction anymore and you deal with it how you need to and so his job has been done as far as what he was told to do by this court and by the partners and now you have to the parties have to go and figure it out on their own basically starting over on the one thousand nine hundred ninety two to a special master and that special masters tournaments whether the movie is substantially complying or not which there will be guidance from the federal circuit's opinion about what that contract mean make them a question actually have a representative sample of the to th hundred or twenty it and decide on have basis it might your arm however the federal circuits prior patient may two thousand and ten makes it a possibility because it is done on a case by case basis the substantial compliance is the rule and whether it is whether a particular movie is substantially compliant is determined on a case by case basis as in the scene set itself there is no such thing as a compliant or noncompliant sample set there are only compliant or noncompliant individual filters that's what they said after we came back from the federal circuit it there who is that is saying let's see this she made this argument before the on the friends and to fill in for filtering purposes what if we think there was an error in his analysis or his interpretation of the contract do we need to how  like either way it creates a question of fact and what happened here is the district court judge said well i'm refusing to grant summary judgment because i think there's a question of that and then you withdrew them and took the whole thing away so the last thing sitting out there is this big in unity about whether you have to use them in order to come up with the filtering would be useful for us to issue an opinion that explains that you do have to do that wouldn't it be helpful in the future arbitration to have that portion of the contract court i think it may be a situation where the court is limited by what's presented to it it's a motion for summary determination if they're asking for a determination that factually we didn't do this but they're required to do this in the context of rolling motion like that you might be able to give advice on what that you would be able to somehow be asleep to give advice on what the contract means in your your interpretation of how the procedures might work to  however the motion is to determine that we didn't comply and i don't know how with the factual record that's before the court it appears that it might be one clear cut it mission is on page twenty three of our brief i read part of it before the special master asked the president so the way to use the o c specifications is once you use your artistic judgment to determine objectional miss you then turn to the by vibes specifications and determine are you going to categorize it answer yes special master went on but in til you look at it and determine this is going to be objectionable content you have not yet used the specification in your decision making process of the witness yes that is accurate if these admissions are all over the place that they don't use the specifications to determine what they're going to filter they only use them once they've made up their own mind about what they're in a filter they label them and the testimony of the judge more limited to earlier that the trick the key there is that customer related to descriptors that those are the labels that's the labeling step the second step not the identification of what the objection will not the first step if however the court has any believes there's ambiguity here the key thing is the district court when he denied the motion for determination the reading denied it he actually assume seems to be about whether the agreement requires third place one to use a specific process or methodology to determine what decoders object what content id use the specifications in the process of deciding what to pose as objectional contents when creating its filters ok that's the interpretive question that we respectfully submit he erred on the agreement does require them to use these things if they don't use of specifications to make the product we have what we have wh the joint pending where we have the testimony of their vice president who says that he made all those he had to hire new skill to develop arms and make them go back and re why all of these things in order to make sure that their compliance with the of the specifications without that sounds like you may well be right that they didn't do it on the first time but once they were told to do it they hired additional people and went back and made sure that what they had done not with reference to your specifications was actually consistent with and then make changes if it was your own or that isn't this is just kicking up dust here which is the sort of statement that this author developers they weren't even talked about we didn't give them all the specifications they gave none of them the specifications it's undisputed that none of the filter developers were given the specifications it's on i mean what we what we are seeking is in order recognizing your duty uses specifications and have the district judge ordered the use of specifications at least from now until the end of disagreement at the end of twenty thirty we believe that not much to ask for and that will at least mean we don't have  that large and the largest paragraph at the top of the page last sentence district judge says it will be more efficient and fair to use the same procedure as before with the results from a representative sample set of filters being presumed to apply to all the filters from which the sample was obtained so we were sent back to redo the samples and we made some arguments about it but that was what we were supposed to do that's what the court orders to do and we were going to go forward with that and then a month before the hearing was to start they say eight off the market and they were done i mean you know now we did not make it wait a minute i remembered i don't have them i think perhaps but i certainly 's nothing in the record that we did that they would be ludicrous for us to do that why would we do that if even if there's no examples that i think the vamps that can apply to the party stipulated to agree to it for one thing so there's no due process issue but whether or not there's a sample set if you know that's the contract interpretation and we asking this court to fix that in and then fixing that there is nothing you just said the judge newman you wanted us to find them in breach that's what you asked her to do for this court to do i don't see how we could possibly do that so try to figure out from you is there a way we can do that and now you're saying you're backing away you're saying no i want you to just say this is what they have to do then the court or the special master or the arbitrator whatever implements it with then say did they comply you want to say what they need to do to be make any fact finding three card to all the filter he didn't make any decisions on them do you agree that there is no decision by the district court factual or legal on the one thousand nine hundred ninety two filters there's only on a he  case and we cited this decision to the court that for six is optional that we didn't exercise the option and they never exercised the option to arbitrate so this case was never under force it now we can go to force it as just things that arise in the future if one party demands it which they and they said something to that effect they never moved for arbitration they never formally asked for arbitration they never you can actually literacy irinel on that issue not specifically on that issue there was not about was there was some talk about