please the court david berman for point of sage t c absent standards a company making a product that might infringe patents can look for alternatives that are cheaper perhaps even free and perhaps even better more effective technology it can design around and compete but once the patents are made part of a standard standard essential patents or seps there is only one choice and it's an essential choice for that implementor if it's going to compete at all and that choice true whether or not the choice is better or cheaper than the pre standard alternative technologies and that great ten acknowledged power in the su kyi alone or in bargaining a license with the implement so in return standards organizations who codes rules on what the s e p owner can demand the parties here agreed that france is a global effort to limit the potential harms of standardization for end preexisted and was adopted not created by sea brand is not a creature of french important to us law contracts identify the global universal objectives h t c appeals the trial courts refusal to instruct the jury as to those universal agreed basic objectives of france i'll start with reasonable parties and the us agree that france objectives include keeping sep owners from using the bargaining power disparity to inflate valu reflect the entire product value or unrelated features or the value of the standard so as to both product and standard apportionment the u s says it's sixteen quote fact finders must must not only separate the patented technology from the product but also the patent technology from the scanner and at nineteen the u s says quote juries should be told that a reasonable royalt that pays for the use of the technology not the value of standardization or other factors close and the government says that even in the context of past negotiated licenses the link decided by the federal court with great expertise in valuing patents makes clear that the jury cannot be expected to fulfill the essential objective of course and meant if it is not instructed to do so that arguing that h d sees apportionment case was built only on the s p p you methodology one possible technique to serve the apportionment mandate and that the instructions that issue would require the specific s s p the methodology both assertions are fundamental to eriksson's position and fundamentally wrong the trial court ruled well before trial that s s p p u was not even required nor prohibited as put h d c's earlier use of s s p p u in context luke yury even if the communications standard implicated some features beyond the communications chip the modem chip there was no way to get t ericsson's high number through any reasonable portion particularly in light of the cost of the chip compared to the entire phone not the problem even the cost and in fact ericsson never told the jury that it ever try to apportion out the value standardization or apportion out even a single one of the other main features of h d c's smart to the contrary erickson introduced evidence of the entire smartphone value and even now it justifies charging h d c differently than h t c competitors even though the cellular technology in each t c s phones is identical to those competitors are technology but  sees prices higher because it's smartphones include other expensive features ericsson similarly asked the jury to consider the value of the standard the four g standard pointing out concluding in closing the price values was necessary in the trial court didn't work for them it embraced eriksson's theory of the case by explicitly telling the jury to focus on quote negotiation without telling them to negotiating s e p license according to erickson all it needs you say that it generally keeps friend in mind while bargaining and that it is not racial business that would try to get the best you can but the results are exactly as you'd expect when there is an equal bargaining tunnel an unequal access to information about past eels and all of those past comparables to define a range growing higher each time eriksson gets the best of the let me turn flee to the questions continue thank you let me turn briefly to the nondiscrimination problem nondiscrimination must mean something it should mean it's plain language and the logic and objective apportionment deserves a retrial reversing a five day trial the challenge there are three so i'm getting to you all quickly and then you can choose not to answer one is did you waited when you opposed eriksson's apportionment instruction abortion that was essential and related to that it's built into the comparable licenses that were offered to them you want to try to tackle waiver and harm yes yes sir as to waiver we did not oppose all of erickson support from an instruction we said it was incorrect but certainly logically were its language was identical to ours we were not opposing which we were opposing other parts of it and we emphasized to the trial court in the conference off the record and then in our objection that the mission was prejudicial as to the evidence we proposed a motion and women a the judge denied it and the judge made it very clear that the evidence could come in we needed it than it is logical that some of that evidence is a starting point for a portion so we did not appeal that issue but it is critical then that the apportionment instruction guide security and how to apply and not misuse that evidence as to harmlessness their experts did occasionally agree with us some of that that seemed the record cited by erickson it's outside of the trial record and therefore not in front of the truth he but the instructions were critical for the jury to understand and when the court instructed the jury instead to focus on negotiations and the facts and circumstances of those and then said there is a new methodology the clear understanding from the jury would be that there was no real stand sensual in our view that the curia understand and apply the undisputed objectives and i think your last question was whether it was built in the comparables there is no reason to assume that i don't see him do you have to know that they're there they're they're not on line  another place in the record besides your offer of food or do you actually discuss any and all are with the port on the record in such a way to overcome the objections they will raise by the did not happen on the record at that level of specificity the procedure chosen by the trial court and the trial court acknowledged when we came back onto the record that the trial understood the prior agreements that had been made and that they should not be made again so ian erickson cited the district court to the dealing case which as the government points out specifically says that the jury must be instructed on apportionment if the jury is going to have a chance to do that job it's not an intuitive issue for the jury apportionment of value was a technical issue that yuri needed to be told to do it case and i think it was your co counsel put to the jury a very simple little hypothetical that showed if you i think it involved tires on a truck or something and if you were licensing part of the patent for the charging ology you shouldn't have to pay based on the value of the truck points or words to that effect over i than a larger income you know my out of the final product why weren't you why wasn't that effectively saying that you're fired your argument to the jury based on the facts and then final thing were you in fact that any inkling in the trial arguing as you're negotiating position had been that the proper  try to sell the jury on so yes those were facts that we dealt with but we indicated to the jury that it did least showed that there was such a goal when you applied a possible method of apportion was clear that eriksson's failure to apportion was prejudicial us as to the arguments in closing the judge contradicted them by telling the jury that what counted was the negotiations and that there were no standards we had asked we did not include negotiations as the north star in our instructions we said that the north star should be apportionment and nondiscrimination in explaining this and the court refused to do had we as close as the trial was concluding a verdict in our favor on unfair bargaining by ericsson the giving the clearly correct instruction consistent with what we ended up arguing i think would have been very important reopen negotiations with prior bargain licenses and change them that doesn't that's a technique but it does not undercut the fact that nondiscrimination has common sense economic competition leading and that meaning is that obviously there should not be any meaningful discrimination as part of the price of admission to get into the standard game and meaningful discrimination you'd find in terms of  different creates a competitive disadvantage for those banks as licensee then the offer royalty terms are discriminatory and seems to me from the perspective of the license or the only way they question the cases that we cite indicate that because this is a complex area that juries are not familiar with valuation that there needs to be instruction to have a meaningful opportunity for the jury to grasp these issues  and we believe that that is the case here we believe that that principle is not it doesn't matter whether it's not a french law or principle it is a us federal jury trial principle decisions like the may it please the court nic matter which on behalf of the united states and the u s p t o director the government takes no position on the outcome of this particular case but is seriously concerned with several legal propositions advanced by  c that would undermine patent licensing markets if adopted by this court as rules of law i'd like to begin with h d c suggestion on page fifteen of its reply brief that if you licenses are currently suspect as evidence of a patent value because that c p owners have unusual leverage we think that's wrong for one thing if you peel licenses are often cross licenses so both parties will have the advantage of seps moreover any license can be criticised as failing to properly value the patents that issue or being insufficiently comparable to the case at far as he'd be licenses are not unique in that regard nevertheless the supreme court and the federal circuit have both repeatedly said that those  comparable licensing evidence is generally the best evidence of a patent value and they have said and they have the federal circuit has emphasized in dealing consist cyro that challenges to licensing evidence should be based on particularized evidence and usually go to the w of the evidence rather than its admissibility here h t c provides no record cites for its argument that these licenses were inherently suspect on page fifteen if evidence suggests that a cat that had a license missed valued at that should be put to the jury but that is no reason to attack licensing evidence generally including f t p licenses if anything but the complexity of s e p license negotiations sure number patents involved and the helpful but you know going to the their grades but you also heard him point to your brief so i want to ask you about a legal proposition on page nineteen the page he wanted you to you'll recall that's where you say the jury should be told that a reasonable be appropriate in my correct then if you had then cited the same page and the link again the word would have been must well your honor i think it depends upon the particular commitment at issue so in this case at sea is taken and intentionally nonspecific approach and just left it fair reasonable and nondiscriminatory which are somewhat vague terms but we take that to know that you're mr you're not asking my question you're very familiar with the exact page you cite twice for jury should be told then you switch your verb to maybe total but am i correct that the federal circuit explicitly had said must be told in that last proposition is that the united states is that in a case where in essence has a more particularized definition of what the licensing terms would mean then we think that and apportionment instruction might not be appropriate in that case because whatever the contract is would govern but in a case where there is a more general frand commitment and if there is here yes we think and apportionment instruction must be given thank you now that to be sure that doesn't answer the question of whether or not the error was harmless or whether or not it was preserved and we take it we take no position on that because we don't have access to the full record and that's just right it's going to understand centrist thank you may i please the court this is a breach of contract action as the district court observed franz commitment is solely contractual in nature the jury and the district court alike rejected it she sees clearly the action had breached its promise to be to it such as the parties intent or consistent business industry practice and here the jury heard extensive evidence a whole party but at the same time and industry practice and on appeal it you see argues that the jury should also have been told by the include increased value that's attributable to the fact that actions technology is included in the standard but everybody agreed whole sides witnesses explained the jury repeated be heard time and again precisely those things the the rate compensates for the value of their technology but not for the value of someone else's technology or the value that comes from just being part of the standard page one of seven dollars and eight dollars of the record label witnesses eriksson's robert earl you do not include to the patent the fact that it's part of the standard it's the addition of the technological a value addition that's record one of thirty five dollars for ericsson christina peterson it might reflect the value of the technology question but you've got you know you're not entitle to get paid for the over and over again on a cipher the principles that she sees claim that a district court should repeat on appeal it just can't show prejudicial error from the court's failure to repeat something the jury heard from both sides and it was whol enough they agreed to pay for its technology usually as a percentage of price but each p c insisted that the value of their actions technology should be based on the profit margin or even the price of a tiny chip actually a fraction a tiny ship fourteen percent of the time at that time the ship because it said that's where the technology resides but that doesn't make sense because miniaturization is a virtue not a vice and no etsy member had ever license on that basis they could identify that's commercially unheard of  and i know that as a matter of that fit mr berman says look i was injured because there was a value of cellular technology as a whole was presented to the jury and i should point out exactly why that was brought in that was brought in to combat to counteract an argument the fifty one dollars because well fifty one dollars is exacting and it's in fairness to the jury i'm a trial court than just a huge amount of time into these cases and it requires the party to object to the court's proposed instruction by distinctly stating the matter objected to and the grounds the objection it covers not just u s patent but patents all over the globe and given the witnesses unanimous agreement to the two constructions a t c now asserts he had to tell the district court hey i know it's a contract case but if you don't repeat this information that the jury  already heard the standard that your is already heard from both sides witnesses they're going to be at sea you're not going to know how to handle this the st time we heard that objection was in this case on appeal and finally what is d c did is it listed its eleven omitted proposals spanning nine pages and it said it objected to their their being omitted for the reason stated in the objection and they proposed instructions but as this just case we supported site pointed out just listing a lot and a twenty one instructions is a virtually no help to the district court arson for his will because is not an accurate statement law a t c objected to the very instruction it's now saying the court shouldn't given finally the district court didn't commute in the abuse of discretion in refusing h d c's instructions because the unbalanced and confusing especially in the context of the dispute here which the district court was very familiar with those instructions departed from the patterns in a way which would confuse the jury into potentially falsely equating apportionment with  court simple have those parties can vary a few unobjectionable sentences or potentially correct sentences in a large span and long reconstructions and expect the trial court to have to get out and find the one piece that they think the jury absolutely must hear without having heard that from the parties so i would like to at this point i would like to turn my time over to the court to ask questions of except of course mr rankin on what basis do you think jerry found that not  objectionable the good faith requirement that the contract talks about a friendly manner is the way that it's been translated in our expert described it that way professor huber and i think that you're a probably found that the some of the contacts there was unfriendly but this is a district states but worldwide are are emerging and it's very important for us to be as clear as to what the law actually is putting aside for a minute harmlessness and waiver so would you my st question but it's a three part question so just disagree with any part would you agree that it is correct legally that a jury in these brand assessing whether the rates offered were fair must be told to separate the value from values from standardization or other features like camera it looked to me like in dealing with the federal circuit said that erickson in an oral argument agreed to that and if you do agree that the jury must be told then which is your stronger argument  they waited here or it's harmless and i'll show my cards i have difficulty with harmlessness because although mr mills did testify as you said about apportionment at pages you probably know them like eleven thousand and seventy three  also told the jury look at the value of the cellular connectivity it's to be one hundred and fifty dollars and that led to the closing opening statement use your common sense what's the value of the cellular phone and when i look for harmlessness then you get that question back in the jury saying we don't know what to do with question one if you agree that it's correct legally required and that it isn't harmless the difficulty in this case for me really is waiver and they don't you know here's my final question i see you writing it down i appreciate that you heard opposing counsel say in the off the record pre jury charge conference they did object and said failing to give a t would be pro prejudicial do you agree with that we don't have that off the record trunk transcript what do we do with that ok so i'd like to start with whether or not what dealing requires these instructions to be given in the absence of any damages case under u s law where the jury is calculating the amount that it's going to get as damages dealing says that it's him you must give these instructions now the question before the trial court in this case was does that mean when the jury is trying to figure out whether offers are reasonable under a contract the jury has to apply that to the negotiations and i don't think that the federal circuit has ever sent in a contract case that you're going to have the experts and the witnesses and everybody coming back without extrinsic evidence saying you look at the value of the patented technology at the end product you don't count the style you standardization you don't get that necessarily every case and so it might well be that the better practice even in a contract case is for the court to repeat that to the jury what happened here is that a c c simply failed to make that point to the district court and the fundamental standards could not possibly have been lost on the jury if i want to i think i should turn then to the issue of the off the record preservation issue and the answer is st it shouldn't matter because the requirement of rule fifty one says that you have to make your objections on the record that's the requirement and nd my understanding is that you know this is a total surprise to us that suddenly we're being told the jury really needs to be told these petitions particular additional bits of information not that we want our instructions  whole but we need to tell them one that you base it on the value that the technology technology adds to the end to the end product not other technologies and that excludes the value of generation i don't think that was pressed at the at the off the record here and but under rule fifty one dollars it just doesn't matter because the objection has to be on the record and finally as to harmlessness i would simply go back to the fact that part of and i mean reason that this came in and the reason technology and that's exactly how the district court understood it and mr stevenson came back and said people pay three hundred and fifty dollars more for solar technology that's starting point is wrong use your common sense and at no point was there an objection that this is somehow being misused or is unreasonable or is problematic there's no appeal saying it was improper to do that and it was perfectly fair argument based on the evidence because it's pointing out that h t c s starting point start with the sector to the technology is and that ruling isn't challenged on appeal but even independent of that the district court made its own assessment of the evidence so regardless of how far the jury went the district court went through the evidence for declaratory judgment and said look even apart from what the jury did based on the totality of circumstances it's fundamentally a factual question now the beach case that they cite is an instance where the judge sort of unpack the mix question the judge that well here's my legal standard here's my application to facts and in that case the court this court was going to say look since you  packed it i'm to look at your legal standard separately and look at it to know it all but when the court sat through all the evidence heard all the evidence saw everything that happened in the case says you know even part from what the jury found even apart from the we have a starting point use our friend offers ok let's make a deal in let's we have and at that point we just didn't have a deal and so there was a lot of controversy we need them to accept the friend offer and move on to any other details which is what the district court told us to do it sweeps again i think that's absolutely right and actually there was something the district court made very clear in this case at one point the district court was extraordinarily unhappy with repeated efforts made she fee to introduce statements from other courts or rulings from other courts to present to the jury and i think that we got a quiet can't take our victory and put it in front of some other set of juries and say this is the standard we can use it against everybody each cage each negotiation each of terminations is based on the individual circumstances individual facts and so we can sort of use it take an offensive non neutral collateral estoppel against other members of the industry and say here's the number now negotiated licenses of the government points out are a different matter sophisticated parties like kind of sonic sony fujitsu they don't agree to pay for more the more than the technology is worth they're sophisticated they know the path they know the patents they know the technology they know how to use that they have license they have of that and it's she simply failed to prevent the jury and there's no basis for requiring a do over based on the failure of the district court to pick one or two sentences from a nine page list of instructions that were supposedly objected to for that because the accurate instruction must be right and i think i'm i think that is our rd position is the canned al were not accurate or at the very least in the context of this case they are extraordinarily misleading and they're misleading argument committed correct to the district court recently said that they were confusing we didn't say they were legal incorrect and i think i stand without that it's confusing particularly in the context of this case and i could get three reasons but i'll start out with instruction which says seven to sixty five you'll see the judge basically said here this is the way we did it you had a full some opportunity you explained everything to me i get it now just tell me which parts were either omitted or which parts are included in your and that's not unusual for judge hill staff isn't it it's not unusual for judge goes drip and it's part of trying to cram something this complicated into one week there was just no way we could get the case to the jury which he insisted upon the time what's available also working say to the question i asked to the other side there is you're not arguing generally in the that are wristed intel and do you link says it is error not to instruct on pour cement and k l are common sense explanations of apportionment consistent with the caissons erickson simply that well maybe they were too much because this isn't a patent damages case it's a patent it's a contract case but that i believe that's not quite the standard if we had something in there that was wrong and we did not offer to take it out it could be excluded for that reason but there's nothing wrong in those instructions responsive to your efforts to lowball total value rather than to try to obscure apportionment eric said and mr mills had put that information in unrelated  to that it was in mr mills his expert report as support for the numbers that erickson was proposing and it was not apportioned our point on assets p was that you should look at cost of the component to determine what could be afforded to be paid for it but that it's not inconsistent but does not require s s and it does not excuse the failure to say if you're going to look at the total standard in its value you have to apportion it it's not just what eriksson's percentage of the patents was or percentage of the chip ones it's the value of its patents and there is no suggestion that ericsson had ever done that in any of the prior negotiations or with respect to h t c h t c use challenge ericsson look here is our proposal for a parson when you may think it's extreme tell us something better and eight and ericsson refuse to engage with h t c refused to come up with any sort of  apportionment that i believe is the basis for the unfair negotiation finding my two cheery and i think it shows the harmfulness of the failure to give the instruction requested