good morning to me please the court after originally granting a new trial on damages here the district court did a complete reversal on remand and reinstated the verdict the evidence doesn't support that verdict for multiple reasons itself again and made further errors on its enhanced losses before you get to the substance of our damages argument i'd like to address amex waiver argument both am after the district court in this case are wrong  cochlear can't challenge damages at most a waiver in this case might preclude cochlear from arguing that based on the lack of differentiation in the verdict form we can't challenge that cutler made many other arguments and particular the failure of am of expert to apportion the wealthy right in the license agreement down to the patents in suit when there were multiple patents and know how or the experts use of the stock price which was speculative and on forseeable six years after the hypothetical negotiation or the expertise of the entire sales revenue without proving the entire market value we raise these arguments in a motion lemony before trial which the district court denied and a cochlear raised them again in this new trial motion and again one remained these arguments don't in any way depend on the verdict form and can't be waived by any failure to object there's also another problem here though on this record the evidence doesn't support a jury verdict based on the six  f could have accepted the new trial and presented its evidence tailored to the sex one sex ben but it argued that the verdict should be reinstated because the entire damages award was supported and after the vernix case was decided apportionment down to the smallest syllable unit couldn't be done either if there had to be further abortion so there would be a problem and and of said we're going to go on this record and argue that there's multi patents in a in a case and in a verdict that doesn't specify between them one of the pans is held invalid the normal rule is you get a new trial that was one argument raised in our new trial motion i've already  listed several of the other ones and that's not our argument here though consistent with the jury verdict we assume that the jury awarded all the damages based on six hundred and sixteen but that's what the jury did but the question then is does the evidence support that and this is the approach this court took in the omega case where the court could have applied the rise in robot stead said and there's one claim well after there's no substantial evidence to support it and remained it for a new trial that's the approach we're taking here now in arguing that the damages where it should be reinstated and have said we can stand on this record the problem is the se form was a general question that said you know does the party and french either patent well as to infringement they were they were broken out separately it was on the damages question the damage what you're asking us to you is to separate them out as the jury again now go back and do it by patent well that's what would happen if we were granted a new trial is the new trial would be limited to one patent what i'm asking the court to do is regardless of what the verdict says we can assume the jury found the damages were based on the six hundred and sixteen patent entirely in fact that's not the case then there's there's nothing to support the verdict normally in these situations like the horizon rule the problem is you don't know what the jury did and so they could have relied on the six hundred and ninety one pound for that image and that's not our argument it's not based on the verdict form it's just a straight substantial evidence question and here there isn't any where there was a portion went tailored to the six hundred and sixteen patent alone which is narrower than back to when the tree generally and as i said at the beginning there are other arguments that we have that have nothing to do with the verdict form or even this one and versus the other such as the experts failure to value the other patents in the a b license agreement something more was required than an expert to say i talked to some people and they told me that all the value is due to these two patents the expert said i assume the primary value was attributed to the p an expert can do that that's not proof of that fact so where is the evidence the experts said there's been no basis presented for identifying any portion that could be attributed to other things you know what she was opposed to in cases like this you have a multi patent license agreement only to the patents are at issue there's also no how license you can just take that one theory you have to figure out what was due to those two pounds and the expert completely failed to that or methodology was unreliable and if you actually look at what's in the record nobody testified and the fact that this no other expert testified the value is due to only these in fact you have a mess witnesses testifying about all the other great features in their products that all these features contributed to its success there were such things as the hermetic seal they they listed them all as they were touting their product well those are covered by the patents in this license agreement and nothing if it's by onyx they mark their products with every one of these patents in the license agreement so that they cover the product and then to just say well we assume that all the values to these two patents that's wrong that's wrong methodology it's very much like the apple versus motorola case or an expert did that exact same thing she relied on another witness who said well in this multi patent license agreement i would give forty to fifty percent to just one of the patents this court said that's unreliable was unrealistic you're the expert in one hundred percent in that case the both the expert in the other witness where excluded is unreliable so we have a fundamental problem with what the expert on the license agreement that's not all the stock price the agree that's just speculation and fact mr mann the founder of him f you said that was a crazy deal and he couldn't even expect and that was used to inflate the royalty rate to almost nine percent in the agreement otherwise said two to three percent wasn't that are the experts analysis following these will go with yes your honor there is something called the book of wisdom us why that was who are the book of wisdom allows you to look at some data in the future i'll grant that where it was something that the parties would ordinarily estimate at the time and to if the book of wisdom stretches this far then the time of the hypothetical negotiation really doesn't mean much if you can do that six years later and look at a stock price that no one had any idea would increase this much then the book come in same with the entire market value rule the expert was allowed to testify that the entire revenue base was at the royalty base without proving that these particular features drove  demand and we know now from cases like power integrations that the features that are patterned have to be the sole driver of demand and yet we have an absolute misses testifying about all the other features how they contributed to the commercial success of the product and how important they were in this case using the entire one at the base without proving that it was a whip without proving that that demand  unreliable and it should have come in even if it did it's not enough to support them or i mentioned willful infringement at the beginning we maintain that cochlear was not willful infringer these are not the kind of agree just facts that rise to willful infringement i could just touch on the enhancement part of it though the judge here doubled the damages and under this court's law if the court makes mistakes in its assessment of those factors this court vacates and sends it back i think that's the polar case that we cited where the court made a mistake in evaluating the closeness of the case that was enough to make eight and remain on the enhancements can we believe that should happen here too because the court made a least for mistakes in those factors the most most problematic i'd say is the finding of litigation this conduct based on cochlear filing and x party reexam claims are invalid on an x party readings that there's nothing improper about that it has happened that the judge didn't seem to appreciate that that could happen you somehow thought that cochlear was trying to  litigation the request for examination was initially granted as a substantial question was ultimately denied but it's not the kind of litigation misconduct that the court could rely on to double the damages here a please the court my friend describes this in large part a substantial evidence challenge and and and that obviously brings with it some very important deferential standards of review but there's one point i'd like to do it at the outset which i think you need to also keep in mind when you think about this there's no doubt or challenge here there was a dauber challenge in the district court but it hasn't been renewed in this court and this court has recognized there's an important distinction then that comes with that which means that if the objection is to the methodology of the expert my friend and coakley are complaining about in this case and so we've got to keep that marker line very much in mind so i'd like to turn st then to his point about the weaver as as judge newman noted in her can separate opinion in the last go around here there's no question that that coakley or propose these forms that that that's the way the submission was given the foundation proposed a form that would have broken down the damages by claim there's certainly a waiver with dollar plus one billion dollars their own expert mr parr testified i couldn't come up with another way to derive the base verisign it i'm sorry coakley or itself has said that using the royalty rate as the means to have just the base page twenty of their reply brief is perfectly permissible exercise so when i hear my friend in the other key point with respect to the two patents is both experts kept the royalty rate upheld because there was no prejudice based upon the partial reversal but more importantly this is an issue which is governed by regional circuit the th circuit has there traversed factors which were derived by justice kennedy when he sat on court and they go through and talk about when it becomes necessary to upset a general verdict based upon of harsh will reverse will and if you apply those factors here which for which coakley has never even tried to do it becomes very clear that there is no basis whatsoever for suggesting that the verdict has to be reversed with respect to the six hundred and ninety one patents presents now my friend talks about the entire market value the vernet excuse but stop for a minute the entire market value rule the single smallest saleable patented product rule those have to do with the base here both experts agreed on the base  was decided in two thousand and fourteen before the remaining proceedings occurred it was never presented to the district court the entire market value argument that you heard this morning was never presented to the district court it doesn't have any relevance in a case where you use the rate and even after the vernet excuse was decided in the commonwealth scientific case the chief judge who wrote the fanatics case wrote yet again something this court has said many times which is in a prop in many cases it is perfectly proper to allocate the responsibility between the patented and the non patented features of a product by way of the royalty rate and that's exactly what their expert did and that's what our expert  plainly incorrect if you look at the two claims it's certainly true that claim one involves a physician tester but claim ten is a broader method claim with respect to back to lemma tree but we don't really know that you mean the alternative of the verdict form your honor that that the that it's either or yeah so will this this is a subject your honor addressed or thought about the last time we were here that verdict form was prepared by coakley or submitted by even district court said i want you to try to break down liability with respect to the separate path of the separate damages and link them up to the particular patent claims the foundation presented a verdict form that would have done that the district court judge went with the form that that coakley are used and as your honor suggested last time that that constitute a waiver of their ability to object and particularly again in a case like this where the damages both experts did not vary their is what the hypothetical negotiation is supposed to be focused on valuing the use of the infringing of the patent in the infringement what was the use it was impedance based back to limit tree testing and that was true with respect to the six ninety one dollars claims that was true with risp which which were there are claims but nevertheless certainly true with respect to the six hundred and sixteen claims that's what the case was about and it's true all of it had to do with the various testing that went on in the office and ninety one claims to not by their terms talk about the necessity of displaying these measurements that were being made but without the measurements they weren't of any particular use i mean if you have a thermometer in your head and no one knows what what what it's determining it's not of any it's not of any value and no value would be specifically assigned to that so there's really no differentiation with respect to the back to limit tree use nor is there any basis to differentiate between the two  like to turn my attention to the to the to the a b license my friend says that the a b license somehow was inappropriate because it is the the the expert in this case again whose methodology hasn't been challenge that the expert in this case in appropriately relied on a license which was to twelve patents and assign the value to two and somehow she had no basis for doing that it's not at all correct to say that she had no basis for doing that her testimony was that she talked to five knowledgeable people to help ascertain what the value was of this patent these various patent rights which were being license this included the inventor of the co inventor as to nine of the patents included the gentleman who was with a b c at the time of the the negotiation would have for the for the ab license which was one year after the infringement started in this case each of them would cost her to conclude that it was reasonable to assign the value to these patents there was no evidence that these other patents which are described in that license are not in the record there's no evidence that they were ever practice the infringing products and so there's there's there's no indication that they had any particular value in this particular setting and moreover my friend talks about a memorandum that alfred mann the founder of the foundation noted in which he made some comments about getting value for all the people various parts of the technology mr mann was an astute negotiator he was impatient by the fact that there hadn't yet been an agreement that he thought should have been reached by that point and most importantly he's also talking about a totally different technology in that memo called the beyond battery which has nothing to do with what brings us here and i reiterate none of those patents are in the are there was never an they're not even in the record of the case there's no evidence that they played any role with respect to the use that coakley are made of that of the foundation's technology which of course is what we're trying to view in this kind of a context i'd like to turn to the stock and to the book of wisdom with respect to the stock in this case let's keep something in mind a b it was not some mere start up company by the time we're doing the negotiation it it entered into the market  seize thirty percent of it from coke clear which had been the undisputed monopolist up until that point it and it had gotten f d a approval to become the nd entry and in the coakley or implant art market my friend urges use of a twenty eight dollars of a two million eight hundred thousand dollars stock value which is book value of a nonpublic company it's an accounting entry which has no meaningful market value it's certainly proper for the jury again which is supposed to do the evaluation in this kind of situation to consider the evidence of what had been developed by the organization in this context this court has specifically indorse the notion that you look at the future not just through the book of wisdom integral there after been sold for a price which would inform the relative value of that lump sum royalty and whether it made sense true value six years later might have been a wish or a hope but if there's an element of guesswork made necessary as to all of this by virtue of the fact that it's an infringement and we're being forced to do it and the evaluation which was made necessary by the infringement judge the marquis in the frumps and case which the court also relied on the loose and case said of this exercise that what it requires is is it that it permits and often requires support to look to advance there after and that could not have been known or even predicted by the hypothetical proved to be the facts of the case even though it might not have been fully predicted of the outcome but here there's plenty of evidence of foreseeability based upon the pattern of the foundation consistently taking equity and the fact that mr hank in the c e o pointed out that as the organization did that they consistently received greater revenue from their equity stake and they did from the revenue stream that they got and here the expert used those that's true litigation misconduct but it's not predicated merely on pursuing the read sam nation the keep the key part of that with respect to the reexamination was that coakley or took the position that with respect to an expired t that the foundation had to go through the entire process of litigating the ability of having its layers participate very expensive link feet litigation process whereupon they drop the issue and they allowed the attorneys to participate anyway but that's not the only thing that we're talking about the judge sanction coakley or for also the conduct that occurred in his courtroom among other things if you look particularly at page thirty seven of the appendix he talks about a kitchen sink approach to the litigation and in particular age thirty it was very strange that you have all these paths of attacking the pair and i agree i think it's very strange but it's in the law again but but the  one element we're talking about is that i you know i don't think you have you look at it as the the initiation of the reexamination you have to look at it more broadly as the conduct of disputing the ability of the foundation to have its attorneys present then dropping the idea and also the conduct in the case including refusing to agree to all sorts of very basic sort of stipulated facts that are routinely undertaken in the course of litigation and then let's not make the infringement honor this this this goes i think to the enhancement element that's what my friend was talking about this is one of the read factors that the court was talking about if if we're going to and of course there were fifteen of them and there's a whole series of them that they don't even c test establish the basis for the enhanced but if we go back to the willfulness the judge relied as as the jury was permitted to on the clear evidence of copying on the fact that they never ever had a defense that they asserted to claim ten on the fact that they there was a stipulated fact they finally agreed to let the jury hear that they had no opinion of counsel in the case a so those are among the factors that support the willfulness determination which again was a fact question for the jury and i notice my time is up and i don't want to overstay my welcome unless there's questions or you'd like me to address and you know there was you know thank you thank you we didn't challenge the experts methodology and emotion and limited and we've made those same arguments on this appeal whether it's styled as a daubert motion or not we have challenged the reliability of the experts methodology throughout my colleague says that both experts agreed on the royalty rate and that apportionment can be done by apportioning the rate their expert didn't know apportionment of the rate she only increased it her apportionment of came based on the an arbitrary adjustment that she did after looking at the at the income approach she testified there had to be in a portion of this profit premium because there were other non infringing preachers and she when she said but she couldn't find it in the numbers she didn't do what she was supposed to so then she arbitrarily reduced the rate by about a little over one percent based on her common sense and experience that's not adjusting the rate for apportionment where you use the entire market value i don't want to get hung up on this rising case in this role because that's really not her argument that's what the judge did the st time and that's based on the verdict our argument says ok we accept that the jury could have awarded all the damages based on the six hundred and sixteen and then it becomes a substantial evidence question as in the omega case not whether the jury made a mistake in awarding damages not by requiring a visual display when you call it a physician's tester visually any display it any sort it could be and the physicians tester are or laptop computer was basically found to infringe as a physician's duster so there really isn't a differentiation based on that there is a difference with the six thousand nine hundred and eleven there are other uses for back to let metry other than in the doctor's office it's used in the automated features of the implant when the patient turns it on there's no visual display what it does that same back to imagery testing it adjusts the power there's the live intro delivered to the electrodes all the patients were not in the office so that's a different aspect  it was established also a trial that none of them or there at the companies at the time of the hype that goes the point that a b is not a start up well i'm not really sure what difference that makes but anticipating this type of increase in the value of the company six years early so six years earlier even the founder of am i have said that was not foreseeable and finally on the actual value of the stock of the  time they said they were looking properly looking at the book value ok where was the market value of the time there were they didn't establish a market they could have said here's how we would do this here's what's happened in other situations instead the expert just