may please the court inducement under section two seventy one day has the most rigorous proof requirements of any of the infringement liability theories that congress has put forth now in this case power integration and did not want to sue direct infringers who are also its own customers or even to take discovery from its own customers instead and you know they're going to move the product to the united states and sell the product is that not sufficient for do cement and that's not why not that would get you to one act of liability under lucent perhaps your honor but the problem is when you read  managua when you read nine a core when you read standard haven there is a separate analysis that needs to be formed with regard to damages or the scope of the liability and that's where direct intrenchments become extremely important also let's assume there are products being sold that incorporate your your client's product in the united states and that that's that's that's infringing why isn't that sufficient for  because you need to link your honor the specific content to the indecent inducing act so in other words there's a causation requirement and the causation requirement is that a party has knowledge specific and can't and that they know that they're active they're ak a so if your client knows that it's far more likely than not that twenty percent of the products it produces again and up on the market in the us is that not sufficient that that  exactly the scenario of power integrations want twenty percent doesn't get you there because it's plausible that it's twenty percent of consumer electronic products there are multiple chip manufacturers and there are multiple power supply inducement the scenario came up you could have twenty percent theoretically your honor but you could also have zero but that isn't that a matter of calculating damages yet they've got approved so if you happen to cement and they can move up damages as as your running out are inextricably intertwined you do not have damages unless you have liability because the court is certainly going to have liability if you identify one direct infringer you might not get any money out of that you might get three dollars out of that but that's the distinction you need one and only one to a south with direct infringement or your right that then when you want to calculate damages there's gotta be for every act of inducement there's got to be an app of direct infringement but a get isn't isn't one enough for liability and then the rest remainder a question of damages so one who's enough for liability listen tells us that but then blue suit and other cases tell us in order only deciding here liability so ones are not right and why why was the evidence therefore that they put on to the extent we can talk about some with it or whatever i don't want to cross any lines on were found in the united states there is no evidence in the record as to when those chips remain you factored there's no evidence as to when those chips were sold there is no evidence of any encourage mint or and they know that it's infringing in the united states and they know it's likely impossible that that distributor is going to sell the product in the in the united states what more do you need what kind of  manufacture defendant does not know where any of them go they don't know that they go to the united states john or they know that they may go to the united states but the law from the supreme court is eminently clear looking at sony looking at m g m drugs  people infringing but there's no evidence that fairchild knew that the products that ended up in the united states knew they were going to end up there let me ask you a pathetic i mean i i think i can agree with you to the extent that in these very complex web of supply chains there's a lot of widgets being produced by a lot of different people that are getting combined and they're getting stacked on to get other widgets and then ultimately distributed around the world and those widgets you don't know where they're going to end up they could end up in europe and united states and they function you know just the same in all those different countries but what if a particular product is highly regulated every single country and then it's a place like the united states there's some particular technical requirement it will not work in the united states unless it satisfies some specific technical standard maybe a certain amount of voltage coming out of the socket or or something else that is a technical matter it just won't even work here in this country and the united states is unique with that particular attribute and so there's somebody in china that is making this widget and is designing that widget so that it will fulfill that technical requirement for it to operate in the united states no other country has that requirement but the united states does and the company in china knows that and so it makes the product so that it fulfills that u s requirement isn't that show a particular ised intent to get that product into the united states particularly when the customer that it purchases these widgets also knows that united states have this unique requirement judge and i agree that if there is a unique technical requirement that a product would only operate in the united states no it can operate everywhere else but the united states has a plus requirement this additional unique requirement that's only to the united states and then the chinese company goes out of its way to make sure that the widget it's producing the fills that additional unique requirement i think if there was evidence of that nature in the record which there is not that you'd be getting a lot closer to the causation requirement that we see in apple and in common in that line of cases here there's an energy star requirement in the united states that has to do with energy efficiency that same standard your honor has been adopted by many other countries so the sit same standard applies to many other countries and consumers require our consumers in asia the we satisfy compliance with all international standards and that's because w designing is international and here's the trouble that i have which is when i look through you know the cites to the record and i was reading the trial transcript i didn't see and i'm trying to put my self in the shoes of the complies with a french energy standard or japanese russian standard it necessarily also will comply with the united states energy standard such that the united states standard whatever it is is entirely quote me something because i mean there was there were a couple statements that said all these different countries have a similar stance and then there was another statement that there is an assertion that france or europe and japan are ahead of the us in terms of energy standards and none of those necessarily state that the fill one would necessarily fill the united states when in fact there's other testimony that says  from chang you have to want your products to comply with the us spec with the china spec with that europe spec with the japanese spec you name it and so what the jury heard was there's a lot of different spec there's a lot of different standards and you want your product to meet the standards because you want to push your product globally into every single market possible that's on the planet including the united states it corrected cite a one six seven seven eight shows that energy star has been adopted in many different countries john and i agree with you my point with regard to how the last six seven seven eight is also the same age where chang goes on and says there's all these different specs for each individual country and they have to make sure that their designs comply with each country's that so so again we're talking about the keep ability of infringement we're not to these products do not necessarily in french and so sampson for example taking power one and say how many products did you send to the united states and if you could then link the knowledge of fairchild and encouragement you would then have inducement but to your point what the jury was told here your honor is that they could find inducement even if encouraging acts did not result in infringement we know that was two thousand and twelve we know that akamai says that is wrong as a matter of  they were sorry are you talking now about the jury instruction or ok and so they were also told your honor this is the most troubling part that inducement of the two seventy one b could exist even if the encouragement by fairchild was never recei so the total break in causation this is what was advanced by power integrations they advanced this instruction because they knew they did not have the evidence of direct infringement and to your question ch what's the problem the problem is the seventh amendment we cannot go back to a second jury and ask the second jury we have one finding of liability that involves you know what one one per one product involves a  single a single a single sale we can ask the second jury how broad is the scope of infringement and which of the damages number because they'll have to do the job that the first jury should have done which is to identify who the direct infringe an appropriate solution here however our point with regard to that your honor is we don't know the date the activities so again specific intent under some seventy one b requires more than this people billet t of infringement and that's all we have here your honor i'm at my time subject any question for the but there are so many issues here many many issues the claim limitations sometimes but then other times when a proper references the product is operating it doesn't meet or the claim limitations does that count as a one of two anticipation reference it does around or as long as you satisfy with a single reference if we're talking one of two all of the elements the fact that in certain other circumstances you don't satisfy all of the element you would still have the one of the two anticipation if you can establish that in some circumstances it does do that and that was the evidence of record here doctor we provided that provided that evidence you put that evidence or word and it was largely undisputed dr kelly the expert for the plaintiffs largely acknowledged that this threshold would increase during the whole process of start up so he largely ignalina that the elements w about that spring shot from the a so let's go where it looked like the current was flat lining across during the cycle do you know which figure i'm talking about i think that was just at the macho gym that was that was fake it was i don't think it even made its way into evidence your honor that was not strong the prior art so that's you know it was wasn't something that wasn't something that i remember i don't remember it as being i don't remember it being in any way to invent anything if if anything fairchild is contending for a rule that's that is not supported by this court's cases and has never been applied to our knowledge before it's actually striking neither side can find a case that says anything like there has to be a direct connection between a given inducing act and a specific act of direct infringement by a specific customer no case says that in fact as we cited in our brief there are at least three cases of this court that make clear that is not the standard the last two thousand says of the jury instruction say in context is you don't have to have a direct causal connection between the inducing acts and the direct infringement that results from those acts well are you trying to say that that we should interpret these two sentences as saying that you can prove induced infringement by circumstantial evidence yes she goes i think it's it's a little too much to that alleged inducer can engage in a whole bunch of activities in a dark room all by himself and then all of a sudden there happens to be direct infringement on the other side of the planet and then we misread but of course their part there at the very end of each for some instruction an inducement that actually begins by telling the jury that the the inducer has to have taken some action intending to encourage or assist actions by others with knowledge and awareness and then used by others infringes and so it is viewed in the context of the instruction over the last and i think that doesn't that summarize what judge chen was just talking about here in your room by yourself and you do this and nobody else hears you and this is a fish and that sufficient to establish inducement as long as there's some direct and well i don't think so your honor with all due respect the first requirement of a jury instruction here is encourage or assist actions then it goes on to clarify so whatever you take away from the beginning and assuming and we assume that that portion of the instruction is a correct statement of the law that doesn't override the sentences in fact the last two sentences that we're struggling with that we think waste and question however there are many whatever was said before so i don't understand if your point is that if you read it together the first stuff overcomes the problems with the last two sent say that well i'm not actually saying that there are any problems with the last reception is what i'm saying is if you if you read them together with what comes before it's a fair statement of the law and i don't have any problem with the last two sentences in fact the last sentence in particular is almost a straight paraphrase from the regal case which which explicitly says the inducing actually not even have been communicated to the to the alleged direct in friendship but if you look at rico the statement that you taken in the context of the narrow question of whether they were circumstantial evidence of specific intent and with that that could include unsuccessfully communicated encouragement i don't think that statement went to what we're looking at circumstantial evidence of specific intent can include unsuccessfully communicated encouragement but it's also true again look at lucent look at bill of lading those two cancer but that there is no requirement that the inducing acts in fact be linked to a specific act be linked to a specific infringer that was really the whole issue when in fact was you had a category of customers who were being induced by the the infringer the defendant who got sued and there were inducing acts that were proved and it was reasonable in that case to infer that at least one freshman had happened somewhere by someone and identified with no direct linkage at all and that is really the law an that there's a reasonable inference that can be made that all these actions that are throwing over here in asia there is a causal link between those actions and the ultimate direct infringement it occurs in this country correct and that's wh infringement need not have been actually caused by the parties actions that's a true statement they don't have to have been actually caused by the specific inducing acts that we're talking about that's that's clear in the cases i cited it's clear in other cases  inducing actually ultimate direct infringement yaps we don't dispute that we prove that in space this is not a dark room case this is a case where fairchild did a very substantial amount of went through a very  drawn there is again this is all in the brief there is that there are four or five specific examples of targeting u s customers specifically can i ask you hypothetically if you're producing something in germany and you're selling it to distributors and there's a long chain of people and it's it radically possible or even you know that some of these products may end up going to the u s but there's no specific targeting of the u s market whatsoever but there might be some knowledge i mean if asked you might say a lot of one of these distributors probably sell something in the u s is that sufficient if it's only knowledge it's not sufficient in your hypothetical w said knowledge and you're saying knowledge is an up but no no not i'm sorry not knowledge alone they intended for those products to come to the u s and they took a number of affirmative action to us to encourage them coming to the u s like pardoning us customers erodes it was driven clearly by this litigation that the jury heard about the timing of it in the context in which it was rose and then the other thing i would say judge crossed is in terms of specific evidence of encouragement is this regulatory point the judged then race i mean you've got products that these are highly regulated products they're power supply chips and they have to comply with energy star in the u s and actually there's even a california standard the california energy commission c e c standard and there's lots of evidence in the record again cited in the brief about fairchild customers telling fairchild we have to meet those regulations fairchild say the same substance ok we'll help our ship can meet those regulations when used in a power supply and i mean that's again a clear link to we want your stuff because we have some sort of encouragement and some of the sales information you have on the record in terms of e mails that they were trying to promote sales in the u s doesn't there have to be a linkage between the actual acts of direct infringement being the result of those sales affix why not i depends on what you mean by direct i think i think hat in the us is that a problem for you no i don't think it is because the circumstantial evidence when i write this just keep just comes back to what search als argument really is i think which is you've got to have direct evidence not just circumstantial direct evidence of a direct link between a specific inducing act and a specific customer i mean that breaks down at every level when it's articulated in there but just to follow up on the chief's point yes is that a dry hole for you if you have evidence fairchild's it's trying to make sales with very specific certain american companies but then no sale was ever made and so therefore there was no direct infringement that resulted from those attempted promotion effort well again it depends on when your question is hypothetical or tied to this case in this case the child's activities were the same with respect to all customers i mean this is not a case where they did some sort of activities for some customers and not for others and so the jury but right now we have just have in the record very limited evidence of direct and frank if were you i cited sales and then maybe some distributor has was selling chips but other than that all these other examples of targeted efforts at certain companies to made sales with there wasn't any additional evidence in the record that said and they made those sales and those sales are in the united fairchild had indemnified against patent infringement as a result of litigation between these part of so so that is a direct one for one relationship at least one example the second thing i would say judge chen is there actually is circumstantial evidence of reason we're going to be able to rely on those you know purported sales that weren't actually deemed to be sale of art when it comes to damages bifurcated case right so so you're going to you're discovering so and so those issues will be vetted in the damages portion of the case and so my answer your question is yes it may well turn out we know that they were induced and the the damages that the sales data will we equivalence the issue there is fundamentally whether dr east testimony is sufficient as a matter of a lot of sustained verdict and this this court you're you're aware of what the substance of the testimony is  can't stand i mean you either have to stink signals or you don't and again this court has has issued a number of opinions saying you know when you have a term that is a black or white term you have it or you don't you sort of degrees or variation you can erase if ideal we here we have it's distinct or it's not this thing but just hypothetically any time a patent claims device one does function one and device two does function two and the cures product example a means plus function claim that may have multiple elements it's ok to find in the infringing device perhaps one structure that performs the function of multiple elements so it so it depends very much on the term used but again when you have a case that uses a term like one or majority or distinct i mean you know it's either distinct or it's not is it sort of distinct is it distinct in part i mean this is one side by side with dr we stress them only it's actually striking how similar and how conclusion he is one it's one paragraph it's one answer there it is in this court said ah that is not sufficient to to create a factual  and to sustain a verdict under vo we the other case i point you to is the aga me case where there was even more expert testimony there were probably a half a dozen paragraphs in a declaration but there was no analysis of the way it was a function way result analysis just like here there was no analysis of the way in the court said that's not enough we don't really recognize this expert testimony it's conclusory that can support a deal you verdict so either way  and he testified about it he showed the jury the demonstrative and he said it's not varying during the time of the switch it just isn't dr we disagree decent title to disagree it's a classic that issue that the jury result in our favor and substantial evidence i think it is more than more than present on that issue will discussion regarding inducement with the court in power integrations council highlights the problems that we have in this scenario they're trying to take the same activity that's their argument and apply it across one hundred seventy one different customers in other words if we prove that eighteen t was induced and you had the same type of high level tortious activities regarding sony sony w necessarily induced that is not the law says a party must hide their claims of inducement damages to identified instances of direct infringement weren't tacked says defendants liability liability for direct infringement must relate to identified instances of direct infringement glares is very instructive on this case because glen air says the images assessed for indirect infring a copyright case obviously but the idea was there are millions and millions and millions of are not authorized downloads of copyrighted material using grokster as technology and then the whole question was ok to proctor take some actions to induce all of those hundreds of millions of downloads and you know i don't think it was required of the copyright holder to prove that for each of those individual direct infringe successfully communicated and enthused all those college kids to do those downloading right grokster grokster is a different scenario in that grokster intentionally targeted napster customers so in other words they knew that napster was being used in the united states and they actually sent e mails to entities in the united states and said if you're if you're looking for another file sharing system you may want to consider what grokster offers that there is no lou there's no argument with regard to the causation linkage when you look at drugs now if you go back and you look at sunny the supreme court's opinion in sony they find there that there is an inadequate connection in a inadequate causation connection the evidence that existed in sony at the supreme court is very very similar to what we have here we have scenarios where products may infringe if you prove that and they may also not infringed if they're sold in asia and if they stay in asia exclusively so the sony case provides a scenario where you do not of evidence just because you know that it's possible that your product will come in the united states and you make design down so that they do come in the united states they're satisfying an energy standard here that does not show the specific intent to cause  infringed directly and that's the problem with the jury instruction that chief judge provost pointed out in fact the jury instruction here says if you encourage if you just thought about it encourage it doesn't even matter whether that encouragement was received and it doesn't matter that infringement took place now we know remember this jury instruction judge starts mindset was given in two thousand and twelve so low tech had just come out and we told me opinion was a few months out and so when to get in there but at the law i at that time the law was that you could satisfy two seventy one b without proving without proving direct infringement the supreme court changed that and then clarif kamel all of those changes demonstrate the air in the jury instruction and the error in the finding that inducement exists here because we do not have the causal connection that was required  subject to any questions that the court might have on the inducement issue i'll turn to quickly the nine seven two and i'll just address the doctor to the well once section of the yard thank you so first we should understand that there were special verdict for former anything of that nature to indicate me which for me i only saw one period i didn't understand how i guess judge starr was able to identify two theories so the two th put that testimony into the out of it's and it could be that the jury accepted that his opinion on that was a battle of the experts essentially that's that's the only point that i have with regard to that with regard to the  libel providing regarding the functioning of the circuitry things of that nature jury heard all of that and they can use that in arriving at their doctrine of decision so the cases that counsel cited ar and he does that when you look at the totality of his testimony they're essentially criticizing his boilerplate function way result analysis saying there was enough there but there were a lot of other discussion throughout the trial matter of literal infringement whether it was distinct this requirement or the feedback signal requirement because the test at the end of the day is whether the evidence in the record on equivalency sufficient to prove the