good morning you have a busy morning this morning we have more cases for argument and we have one case and has been submitted on the briefs and we're ready to proceed now with the st case capital partners in golden gate national senior care i will refer to these parties collectively as golden gate i hope the panel is safe and well our main issue on appeal relates to tech pharmacy sometimes called advance pharmacies breach of contract claim against golden gate there are two parts to the argument we've made st the district court's judgment as to the breach of contract claim against golden gate should be reversed and render in favor gold and leveling because tech pharmacy fail to offer any evidence demonstrating the golden gates alleged breach of the two thousand and nine confidentiality agreement caused tech pharmacies lost profits and then nd and relatedly we are entitled to judgment in our favor because tech parmer see completely fail to distinguish between the alleged damages attributable to the breach of contract claim the fraud claim the pet infringement play and the trade secret misappropriation claim the last three of those claims all having been rejected by the jury i'd like to start with proximate cause and to do that we have to st look at the records to determine what confidential information could have conceivably than the proximate cause  we raised this question in our brief and tech pharmacy identify three alleged confidential information one was the general site visit to machine location with no specific confidential information th i another was a conversation between us and the former c e o of tech pharmacy again without any identification of any information and then finally the call the cost of goods so that tech pharmacy points to one appeal has nothing to do at all logically or recently with their claim of lost profits remember that fifteen million dollars is a reference to offer that that golden gate made for an eighty five percent interest in all of tech pharmacy which would have included all their trade secrets their patents their property anything eighty five percent interest and that it is not the theory that they went to the jury on they did not go to the jury on an issue of the value of the company so just because that number's out there and you know the district to explain the fifteen million dollars damage number said well they could the jury could have looked at this and that maybe that they could have looked at it but the problem your honor is it has no evidence of what we valued an eighty five percent interest in the company that's true now it was not it was not accepted and we were under no obligation to make that but your hon that's not their claim for damages their claim for damages says is that but for our use of confidential information this is what their expert says starting at appendix seven thousand two hundred and fifty eight they say that but for our use of we wouldn't have been able to create a competitor to them and because we created a competitor with that information they allegedly lost profit our valuation of an eighty five percent interest in their company is not connected to that in any way and i would submit that that is simply a bridge too far for this court or for them to retreat it is a number that is in the record and if we were arguing if this case was about well what was the value of their business and they had an expert that said well the value was one hundred million we had an expert the said no values one million then you'd have a classic case where the jury would be entitled to look at the evidence and come up with their own number that is not this case your honor this is a case where they specifically were limited under delaware law to lost profits of their business as a result of our agreement and they say in the but for world we wouldn't have been able to have a competing business and they offered no evidence as to perform which a reasonable jury could have drawn any number their expert do it and there's no evidence in the record from which the jury couldn't could have done it i don't believe that the fifteen million dollars even though that was a stay a good number that we offer that was in some sense our version of  expert did do your honor is he attempted to identify to show a causal connection between the breach and tech pharmacies lost profits now the truth is they threw a lot of stuff up against the causation one that there were certain benefits associated with remote packaging and dispensing of pharmaceuticals no one can test that and it's not confidential he cites the fact that tech pharmacy was golden living or golden gate most highly recommended provider for services again no one contests that that's not confidential rd he stated that will golden living headset or golden gate had said that it only wanted one pharmacy machine was functional equivalent this generalization still fails to show how any specific confidential information was used to form a competitor and finally he says that alexa the company that golden gate formed stepped in and took facilities away from tech pharmacy now it's true that alexa became a competitor and may well have taken business from tech pharmacy but that's not show no track transaction between the parties at all and the parties can go on their what the only restriction is is we can't use confidential information as specifically defined in that agreement now  contested issue in front of the jury the issue and that was management and control whether or not the the central location of the central pharmacy  the dispensing of the medications in the nursing home and it was a hotly contested issue there or they are if i might use footage that answer your honor and i  that is an issue where we argued that the nurses on the ground in the nursing home had control that they had a some semblance of control that that that the medication could not be dispensed without the nurse taking action we argued that meant that the simple pharmacy was not controlling the plaintiffs argued something different the jury heard both sides of that and concluded that there was not the management control as required by the patent and by the by the courts martin construction they are the plaintiffs here is trying to rewrite that construction to make it wreaked control to some extent i submit and that's not the construction that's not what the jury heard cause ation and one about damages i want to be clear on what their appeal doesn't involve and that's an appeal of the district court finding that the jury was within its discretion to find that there was a breach of the agreement the defendants reply brief they suggest that they are also making an argument about whether there was a breach of the contract that argument was not presented in their opening brief and it's waived so that leaves them with with two issues and  proximate cause and damages and those two issues really go together this was a three week trial to a jury who heard extensive witness testimony and saw extensive documentary evidence showing that t pharmacy shared extensive confidential information with the defendants under a confidentiality agreement that limited the defendant's use of that information and then the defendants turned around all it violated the confidentiality agreement if the defendants used the confidential information even to just accelerated the research and development of their own device and system here under delaware law which apply and just requires an estimate of damages you have an expert who testified extensively for twenty five dollars pages how he calculated the last profits tax pharmacy would have made in the absence of wrong conduct by the defendants and the jury was instructed to use lost profits for the contract claim if you look at dr hugo's testimony about how he reached his calculation and it runs from roughly page seventy have looked to test pharmacy to fill its needs he walks through the revenue the cost and the profits on a per machine basis tech pharmacies manufacturing and marketing capabilities the cost of making machine and and of course is number that he that he presented to the jury was sixty five million dollars but then the defendants cross examined him and they argued that type pharmacy system was only approved in three states and golden living operated and twenty they talked about there being no basis in their cross examination for thirty placements at non gold and living facilities and then they present presented their own expert on damages to opine that the damages number should be adjusted down to approximately a one million so you have what happens then in a fairly routine setting at a trial where parties give juries that's if numbers each of them offer and their basis for those numbers and the juries get to weigh the evidence weigh the testimony and make class the credibility and judgment calls that course give deference to like the district court did below after having sat through the trial and denying the j motion for the same reason for the district court you a question on a different area if i could what do you say about the one hundred and one argument that is raised by your colleague on the other side that really what you have here is a situation where the claims are related to nothing but the traditional process of pharmaceutical approval and distribution and so forth so that they're what is your response to that if you could certainly your honor that the defense argument on one hundred and one dollars essentially boils down to the fact that there is technology involved in this and that whether the support comes get it through alice step one or alice step two the question that the court is ultimately trying to answer what these two out of step get at is whether there is some improper attempt to novelized in this case an abstract idea and if i could your honor i'd like to just give you five examples from the claims that show that the claims methods and systems are not a monopoly on the idea of remote dispensing and i'm going to use claim seven of the nineteen patent because that's what the district court looked at below and the parties have used at various times so st that claim requires that the machine package and dispense the drugs into disposable packages does the one question here how do these medications physically get into the car somebody has to put them in their correct that's right and one of the things that is described in the patent is the way that the pharmacist at the central pharmacy is in charge of reselling and maintaining inventory within a part and that brings up again another thing that i think shows that this honor i think that the software plays an extremely important role here because this court has routinely held that where software claims are directed to improvements in the functionality of a computer or a network platform so what i intended to say was that there was no generic computer this is not generic computing technology there certainly are computers involved there is a computer at the central pharmacy that is the one that manages and control that remote dispensing unit and then the remote dispensing units that are connected via software and it's really that software technology that enabled a pharmacist sitting in one location to enter some instructions  that result in medication coming out and individually packaged envelopes or identified for specific patients in many other locations that whole system so a computer on  a dispensing card that has a computer on the other end and software that can bridge the two is the invention and then it is limited to particular types of machines operating at a particular distance from the pharmacy the claims require multiple dispensing units used so if someone set up a system that just was remote control of a single dispensing unit that's outside the claims the claims also require dispensing into a separate and requires a particular way of getting the prescriptions from the long term care facility to the pharmacy and that's through use of a document scanner so in systems that are set up other ways where scripts are phoned in are hand delivered or doctors use prescribe ing the system again it is not covered by the claims so here we really do have inventive software that enable these dispensing units to be used in ways that they had not been if i could turn just briefly to the cross appeal yes go ahead go ahead and the reasonable nearly a reasonable jury could not have concluded that defendant system doesn't practice the control element in all six claims and just to very quickly give the court a comparison and analogy that i think shows why if you imagine get selling a prescription through a mail order pharmacy the pharmacist has to receive the prescription fill all put the right number of pills and put them in a bag a plate shot put your name on it and send the package to you the fact that you have to open your mailbox and then open the package doesn't change that it is in fact the pharmacist to control the dispensing of the medication and i think that shows why the jury here no reasonable jury could have concluded that the nurse pushing a dispense button changed the control of the dispensing i'd like to reserve the remainder of my time for evidence and there's competing things when the jury is free to infer that's just not the right way to look at this under these facts their expert never calculated lost profits relate to the breach of contract we did not offer a competing theory on the breach of contract so this is not a case where there's all this evidence out there in competing theories the problem with this is the and this is true if you if you look at their briefing their own briefing is pretty light on record site because they know that the argument they're making is kind of causation in the air they're making the suggestion that well somewhere there must have been some causation because there was information out there and that somehow the jury should have been able to find causation that's not the way this court's precedents work that's not the way delaware law d works they decided to put four or five different theories of from the jury they on what information would be assuming that we used it how that proximately caused damage and again with respect to the valuation of the company that could have been a theory of damage in some respect but it's not lost reasonable and it has to be based on the evidence they can't simply look for causation in the air or pick up causation like lint in your pocket they've got to have some link between what was used and taken by us allegedly and remember their theory was but for causation it was but for this breach we would never have been able to set up this competing business they could have offered other theories of damages even with respect to breach of contract they chose not to their expert assumed all world in which every lie bill the theory was present when multiple assumptions underlying that but for theory fell apart no patent fringe meant no trade secret misappropriation no fraud you were then left to look for the in the record for whatever information was used in the breach of contract claim that caused that same according to him but for world and that simply is absent from the record now with respect to the one argument your honor we believe that this case is plainly covered by charge point the court questions have have drawn out the idea that the machine here the a d e the automated dispensing unit was that knowledge to be well known in the prior all they've got is a network just like the network system in their charge point and if i might finish your honor i can i can stop right there you can system as to what medication to package in what dose at what time and for what patients no nurse can change or a fact what medication comes out of the machine for those reasons as further explained in our brief we request the court