debtors home country in all but the most extreme circumstances chapter fifteen therefore mandates comedy to foreign proceedings subject only to a narrow exception a court may refuse to take an act that would be manifestly contrary to public policy of this nation that standard is familiar and international contacts such as enforcement of foreign judgments and forstmann of foreign arbitrary awards and it's long been limited to notions of morality and justice not garden variety economic legislation but differently about the trust laws that the public policy we recognize in a variance with our monopoly bills i think congress has already addressed that trust laws would be with in doubt exception public in force with the governments and for some it involves separation of powers of issues that are different in kind than simply eliminating private rights of action and congress specifically addressed that in section three sixty three which is man some i would like to look out for that's certainly on our old things and on yet certainly honor and we're not to say that you don't the court would not have to go so far say there's nothing with economic consequences that could ever be the fundamental it seems to me that the parties have tended to this set up a tension between the german bankruptcy court and the american accuracy or and i'm not sure that i see that in this case and my question is really would be focus based on a notion for instance if we had three american plan manufacturing plans a german company and each plant was subject subject to a mortgage held by an american bank would we be justified in releasing those assets to the german court subject to the liens of the banks on the property and of which we would say you can take these properties you can sell them you can dispose of but you got of deuce the subject of the liens that are recorded under american law and if you want to strip those lands in germany fine but with respect to what's going to be done in the united states now that's my question is can a united states bankruptcy court say or protection of licensees who have spent billions in reliance on the life why can't an american bankruptcy court say you take these patents subject to the li that are on those patterns and you can do with them what you want but as far as american law is property all it's sort of like an in ram declaration these assets have this characteristic now that is one way of looking at the way that the government has postured the issue and your friend in a posture it is we're fighting with the german court and i'm not sure we have to do that  all i think your honor with respect to property in the united states section three sixty three which deals with that issue is mandatorily applicable but german law and the united states law has long distinguished between contracts non exclusive licenses to use patents and the property right that is the patent itself the bankruptcy court point this out in footnote seventeen that's fair enough that's fair enough but it's still for instance let's just stick with that for a minute if the american patent law said you have an exclusive right to use the patent for seventeen years and the german patent law said you have an exclusive right to use a patent for fifteen it seems to me when the german court takes the american patent they may say over there we're not going to enforce it beyond fifteen years and we're not going to interfere with that but we're going to say with respect to the united states when you're going to enforce the patent it's a seventeen year period and that's the nature of the american patent and so the question is could an american bankruptcy court say the same thing about license opt out saying this is a license that attaches to this it's lawfully entered and you're going to take that atman to the  and the court at least and respect american enforcement subject to license right and i think even with that i think the answer question is no because american law is very clear as is german law that a non exclusive license doesn't actually give you any property interest or right in the patent itself to a personal contract you promise not to sue in the case and somewhat not seventy in and join next to fifty four explain the german law on this so that let's stay away from a german law let's look at state of american law is absolutely clear beyond cavil that there is no property right in the patent by virtue of the non exclusive license it's nothing more than a personal promise not to sue as a result german law doesn't need access to the patent to act on the debtor comus not to sue you more than  mean give your hypothetical i you're making a lot of general statements which provoked a lot of questions if you had a patent but you gave an exclusive license to another company for the period of  same to me a person who has a license under a patent for x number of years has an interest in important just on which the american system that you can rely with the american system says that you are entitled to rely on the promise but it credit with them but when they go into bankruptcy that contract can be rejected you can lose the credit and end up paying for the same thing twice that's just the nature of bankruptcy law and the difference between german law and american law here is soley who bears the burden of that to the creditors here do the licensees here continue to enjoy the benefit of their licenses without paying anything because the consideration i think i have to set up attention what i'm suggesting to you we're in an american bankruptcy court applying chapter fifteen and then in that chapter there is a discretionary provision under fifteen twenty one which can link in fifteen twenty two protection and the bankruptcy judge exercise discretion and said we're going to afford protection in an american bankruptcy court with respect american assets and the criticism that german court can take those assets or the trustee can take those assets administrator mr young they can take those assets and sell them subject to the license but the question is to take that away put it risk this investment and then say oh we're going to renegotiate this right under some international law that nobody knows the outcome  change is what an american court would do the critical point about fifteen twenty one fifteen nineteen and fifteen twenty two your honor is those apply to authority that is given to the foreign minister under u s law so if the foreign minister to ask for it limited to just those things that yes well section in determining the condition that he can put on it one really right and fifteen twenty one relief is clear that is for the protection of all creditors in granting powers to the bankrupt into the foreign represented in the united states it's not a license for the united states courts to reach across the ocean and determine what the scope of bankruptcy law should be in germany you know you asked them something least in terms where we have a shot at out of a policy session and this interest between twenty to touch and over fifteen twenty one and i just don't understand how it is from that perspective maybe i should actually explain one of the judges fashioning those release and his broad discretion that's given to the  say we're going to refuse to recognize the effect of foreign law all it does is the court is saying i'm giving you these powers form bankruptcy administrator i'm going to ensure that in the use of those powers everybody is sufficiently protected that is my the order the request by mr yacht pay was to take these american assets and dispose of them in the american and the german bankruptcy and the authority granted by the bankruptcy court was not to reach over and tell the germans what to do what it was is we will give you with bharti to take these assets and dispose of under chapter fifteen but subject to this protection which is authorised by fifteen twenty one fifteen twenty two with all due respect there has not been a to an asset turnover order or a sales order or anything like that the only thing the administrator asked was the authority to realize and manage the u s property and there's nothing about that that would enable the district what  terms means protection against the powers you're granting second it says that you're supposed to protect the interests of all concerned all creditors the estate and one of the things that's odd about this case is that if you protect u s creditors if you put and you give or in this case these are international creditors and the doctor's judgment be needed as long hearing and then in the process of the hearing so when the middle of that it seems like you pointed out you're not without you're not here with a worthless asset i'm not making is totally worthless there are other things you can do here yes but there's sort of balance that interests all and when we look at our review of what the judge did because of this broad discretion is there why why is this limit then your honor this is the single most significant asset of the estate i think the testimony is that's at least half of the state's value so at this point this is critical to the estate and critical to other creditors and have you have on the one and you have in is with this technology think about innovation and all of the possibilities they are it estimates there on the other hand you're looking at a value to the estate and then the judge makes this balance and says ok you still have something valuable here and you can access it too but discretion in this case is not discretion sort of rejigger priorities that we provided by u s law or foreign law decide which you think is better or how to calibrate them is to protect legitimate interests  property and property interests and the order does in fact talk about staying away from transfer and distributing and asking that right be given to the administrator and the right is given to the administrator to take american assets only and that's the limit of the american court is focusing on the american assets and saying we're subject this protection i think and the germans take that is just like a if the bank account has six dollars and it subject to a one dollar charge for handling seems to me the german court only gets five dollars you don't get the full six dollars and i think that's the key distinction here is they are acting on promises not property it is clear american law undisputed american law footnote seventeen the bankruptcy court that a promise of a non exclusive license is not property or any sort of lean or any sort of property interest in the patent it is a personal contract between the business and it's it's clear isn't it don't we each have some kind of proper interest in iran or if that were the ruling this court that anytime you have a contract the concerns if you will u s property that the contract are property interests they're not property interests in the in the patent and that is the foot footnote seventeen the bankruptcy court opinion there's federal circuit case after federal circuit case after federal circuit case saying they are personal personal contracts they are promises of performance not stretched themselves to be property in the way they could but that my part of the path that they could but the debtors home country has a natural matter acts on the debtors promises in the debtors contracts the moment you take that away from the debtors home country chapter fifteen and review how we go about reversing that if he has exercised that rought discretion the first time what it limited the limit is your honor that this is limits and conditions imposed in got this article fifteen that allows this ancillary proceeding that allows this this balancing of the interest and that very broad discretion he's given and then i will review then looks at this see is it not section fifteen twenty one or fifteen twenty two your honor and go right to that that is the court may grant relief under fifty one thousand or fifteen twenty one or may modify it only if the interests of the creditors and other interested entities including the debtor are sufficiently protected that means in granting this authority or if he does those things where is the subject to protection your honor if that were what we intended under three to to happen at least in this within three sixty five would be a mandatory provision like three sixty three of which handles that type of it mandatory because it's discretionary it may not need protection and are conditions of why there's protection three sixty three provides that sort of protection with respect to actual property these are promises your honor and this is the type of thing they're entitled protection it says interests the creditors interests yet it's legitimate interests your honor and legitimate interests are not being treated better under u s law than your treat under foreign law they have no interest in being treated better than other creditors were operating under german law you keep adding these things and you keep thinking this is a question of german law and we're not it's capable of decid as actually which is why all of this should be in the german courts the german courts to determine with and without a super imposing imposition you know the usa has participated in this cooperation only subject to the terms of section fifteen that's correct your honor which mandates comedy and provides a limit on giving powers to foreign ministers in the united states but the one last thing if i can do i'm well into my time but one of the key things is it requires you to balance the interest of all creditors what is happening here is rights for them to use their patents and you have that you had these this agreement which both parties completed and gave rights to and then relied on there's not continuing royalties were up to this point there was a continuing change you allow us to use to yours our proposal in the rand offer is simply to can say you that is no longer of value to you to give to us we're no longer your competitors no cost to you and no value to us a problem pardon the licensee's problem i mean they made this deal in the beginning knowing all risk was an inherent aspect of the deal also as when you deal with the credit it radio with a counterpart under foreign law you know that they're going to bankruptcy foreign law will apply to the promises and that's as true for predators based in the us as it is the answer your honor is both we've our take articulated both both that he of it exceeded the power of the lamp that they quit it was given to him got to give me anything other than you just said that that's not trying to understand how to put it in a context that i can you can figure out what what i'm trying to understand terms our view is the abuse of discretion that you uptick elating is that there was an improper balancing of the interests here so much so that it created this i think there's when you went take one group of predators and they receive a set of rights the other creditors are similarly situated do not get under foreign law one group is being treated more favor in the other and the point of sufficient protection that may or may not be so because the american courts not looking at the creditors in germany well i mean the american looking at the american assets and the what it weird how many patents are we talking about here or thousand probably yes american courts look into four thousand american issued patents that have been licensed and the court saying that you can dispose handle these in foreign courts objectively i think under the american court's order the german court could strip those licenses off for purposes of german thank you your honor may please the court mark freeman for the united states the government appreciates the opportunity to address the court this morning just me my family go directly to your concern first of all the united states appreciate of the united states bankruptcy court potentially and this goes to your question judge and you are stating that foreign law has to operate in compliance with an exception under u s law now i appreciate that the court doesn't construe the bankruptcy court this is a sort of find order appeal which one you're talking about i'm talking about paragraph one of the order entered by the bankruptcy court on october eleventh and he says and i'm quoting the protections of three sixty five and shall apply to licensees of the foreign debtors u patents now to the extent and we're worried here because remember there were two bankruptcy court orders in this case ages that in the i'm sorry i don't because we didn't have the joint appendix i'm looking it's it's the one page order issued on october twenty eighth two thousand to the entire inquiry that the bankruptcy court undertook in this case and that's clear in the face of his order was whether three sixty five n should or should not apply now that we think was ever because what three sixty court undertook here to try to make a threshold point was the wrong one three sixty five and cannot apply its own terms now what i think the court to be saying is that couldn't if the bankruptcy court issued a slightly different order and maybe this is what he meant conditions it may impose on affirmative relief and i agree section fifteen twenty two says i want an affirmative relief your brief and i'll start there with my problem your grief starts off with an issue that's not i  think or you're trying to set up section one hundred three of german bankruptcy code tension with section what the bankruptcy court did under section fifty i'm suggesting there is no tension ok that i'm suggesting in this matter of fact the order of the bankruptcy said it says the application of section three sixty five to the instant proceeding shall not in any way limit or restrict the right to demonstrate or collect performance on performance agreements under section one of the government code so there was of the as i believe that so did it conditionally as authorized by congress and that if that is the order i'm respected we don't read the order that way particularly going to the backdrop of the two bankruptcy court orders you're troubled by i'm troubled by the language in paragraph one of the court's order saying the protections of three sixty five and shall apply i'm looking at supplemental war that's the only one that dealt with three sixty five that's right and i don't see that let me back up if i may your honor i understand the court's question to be couldn't you apply conditions on the treatment of fifteen twenty two b says the court may impose conditions it deems appropriate on the granting of a form to see your questions what's the standard the standard is what's appropriate in fifteen twenty two b now i would note fifteen twenty two b says it gives as taught as part of that but and i think that this is just a statutory argument i think that the point that the question here really if we're going to ask the actual question is whether the limitation that the bankruptcy court imposed in this case is one that is consistent with the with the sort of conditions that congress anticipated in section fifteen twenty two and the united states thinks that's a difficult question because what is really going on what the bank what what the objectors really want here is the condition is we're not going to grant comedy to the outcome of the german proceedings and we also know in this chapter fifteen section fifteen twenty five a says the united states shall grant comedy and cooperate to the maximum extent possible construed as a condition on fifteen twenty one and i think your honor if we're going to be precise about how these statutory provisions operate we have to be precise about three sixty five as well ok three sixty five is a power be us trustee in a domestic case three sixty five contrary to the disk the bankruptcy courts initial supplemental order which was mistaken three sixty five does not apply in chapter fifteen congress told us that that's eleven u s c one or three day it says chapter three of the title eleven disagreeing that a court may balance interest but we have to understand the predicate the background against which it's balancing the interests of those that i'm saying it's a good thing to do you know you want to if i if i may be clear about this i'm saying the bankruptcy court erred in coming into this case on the assumption that three sixty five applied and the question which it asked expressly in its order was in the law i mandatorily the court invoked it in order to  protection court said i'm going to get that type of action in this case after balance in the interest no i don't think that that's correctable but that may be what he meant but that's not what the court said what he said was i'm asking with a three sixty five and should apply  o the bankruptcy court was right the first bankruptcy judge was right in his first order when he said three sixty five n applies to the extent the the foreign administrator is exercising a power under three sixty five comes before the case becomes before the court but but if i may you're going through a red light when it's your son's thank you your honor we think that you would the u s courts can't affect what happens in germany and if we are to say that a condition of granting relief in the united states is that we will not recognize the operation of german law me ask you that we should be but that posits it again right the way you did in the brief and the court did not purport  the germans can strip right even with this order the germans can strip it but the problem is the germans are going to take merican property subject to what the american law says that property is it's a little bit like the plants that have the record liens against the property american court could say you're going to sell the american assets in the united states right but you're going to have to protect the banks who have liens against those assets and that would agree with that it accidentally that nobody seems to that's you know assume i agree with that i agree that there's just no need to address the german law i agree but in your hypothetical you would say that one law provides for some outcome and the question is is the united states going to recognize that outcome foreign court has taken it is in a bankruptcy proceeding yes and they're asking the united states court bankruptcy court to authorize the picking of these american assets and put them into that est fifteen says we're going to lao that allowed the distribution by the foreign administrator subject to the ruling of the bankruptcy court which is fifteen twenty two fifteen twenty one which is discretion if i may just make this point i don't think that's right about how chapter fifteen relates the german court german law imagine nothing required the foreign ministry come to the system if september fifteenth proceeding at all imagine imagine that there had never been a chapter fifteen proceeding the german court would have run its course there would be some judgment some final resolution of the german insolvency proceeding but it isn't that he he actually commented we'll just release it on the fifteenth what it was and what it is you're on and what what incidentally i agree that it's not clear how german law operates but german law has some treatment of these cross across licenses and the question is is the united states going to grant comedy to that result where is it going to impose a condition judges american bankers and i agree with that and i think we should just be honest about the question we're answering which is not three sixty five and whether it's important it is a broader question it is is the united states in this case going to grant comedy to the outcome of the german proceedings and it's of the issue we are not going to address how the outcome on the german proceedings are going to be i agree you're not going to draw we're not addressing whether it's equal whether it's unequal we're addressing american and you're licensing and as i understand the court the court would be saying that process runs its course it embody some german judgment for german purposes and the question is whether in the u s we're going to honor that duty that the german court could take these assets these american assets and for purposes of the german court could strip them all and they if they wished right and we wouldn't interfere with that and i and i understand that we wouldn't interfere with that i'm i understand the point but that isn't the way you're stating you're stating that that we are telling a german or how to do with no no what at what i'm saying is when i speak of granting comedy i don't mean telling the court what to do but what i mean is are we going to incorporate as a matter of u s law are we going to give us domestic legal effect to what the german court did that's comedy and what we're told under fifteen we're told the petition was to address american asset it's sort of like an enron it's got characteristics i mean and rahm it's not going to  proceed it's declaring the american property nature and again i suppose we're just talking past each other's point but i do think that well it's important because it seems to me that if we start yes what german outcome doing that and we're gratified to hear the court doesn't appreciate and think that it's doing that but i do think that ultimately the end of the day the question for this court the reason why the licensees are here is because there's a german proceeding that's going to do something that they don't like and or may do something that they don't language i see it's just the opposite that bankruptcy court was saying we're dealing here solely it's that soley with respect to the contracts subject such motion that's one year and the right exactly said we're leaving alone what the german court's going to do under section one made please the court my name is bill pratt from the law firm of kirkland ls on behalf of the appellee licensees we have said that we do not believe that the actions of the u s bankruptcy court in this case interfered with the application of german law in the german bankruptcy a subject some of the questions this morning have addressed what the u s bankruptcy court did was under u s law issue an order in response to a request from the foreign representative to be able to sell and distribute assets in the united states if you want to order that condition under u s law the sale of distribution of those assets which were u s assets u s patents the court by doing that in effect refused to recognize for purposes of the u s assets in the u s court under u s law the rejection power the doctor u f a is claiming under german law but there's no tension between the activities of the two courts it's not ask you this yes  your honor he could certainly make that request and i suspect that the analysis in the german courts would be somewhat similar to the analysis that took place in the u s when the reverse situation occurred and it may well be as a matter of german law that the german court could make such an order i don't know german law i think the important point is that the reason dr u f a came to the united states under chapter fifteen is that to in any way realize the value of the u s patents and u s assets at some point he has to deal with the u s courts government acknowledges that by saying they have no issue if the issue of the licensing rights were dealt with later in the chapter fifteen i didn't government's interest and i'm hoping that the dialogue leath where i think the bankruptcy at it is not to interfere with the german court i think the interest of the justice department comedy and the harmony that's created by this scheme and i think that's quite somewhat in the nature of an in ram process what us are how long they lasted if it's a seventeen year issue versus a fifteen year issue i don't know how long the german patents are but let's just assume the german patents are fifteen years in american pounds seventy yes of years they can't all be treated the same unless they want to change the american pop and they in an american court they couldn't do that and if the license w patents then you would have an issue of somebody tried to change the law the germans would have to treat the german patents on it under the law issued by the german office and the american patents on a law under which the patents where should the united states at least as far as the american pounds apply and i suppose if we had this ultimate tension then the patents would have different force ability in different countries i think your honor the practical reality and i do believe  is reflected in the position the government takes which is you've got to study their entire brief to understand their full position the reality is that whether there'd been a chapter fifteen case or not whether the court had issued an order in a chapter fifteen case that was later disagreed with in dealing with the united states court under u s law the government said this could all come up later in the chapter fifteen proceeding in the so called section three sixty three sales hearing what there never been a chapter fifteen case doctor you fate would have had to come to the u s and file a series of pat infringement cases against all these objectors at that point in time the objectors could have made all the same arguments in the context of why the court should not give comedy the u s court s t u s assets give comedy to the actions of the german court what do you say is the bankruptcy code in chapter fifteen let's take them one at a time and see how they fit together i kept a fifteen twenty two as your honour's questions earlier acknowledged and being separate you say that i'm either one of those  there are two separate grounds that are separate and independent in the bankruptcy courts order if this court agrees with either of those the decision should be affirmed yes or like there's a lot of time a lot of policy said yes or because in part i think the section fifteen twenty two analysis of the reasons why the court's decision there should be affirmed is very straightforward i think it's very clear in the language of section that a lot of time on public policy on the fifteen you know six because you think fifteen twenty two is very grateful i think it's easier so you don't need to spend a lot of time i think it's easier to explain in a very strong way or a position under section fifteen twenty two i think we're equally stronger section fifteen zero six but i think it involves more than simply thought of it is i would say is weaker would you not say i mean given it back the way you with the fifteen twenty two why do you say that's a straight forward because i've provided less that out and i'm not sure i'm i'm there yet but i'm trying to understand it what is that limitation that that you know that he's saying is there on fifty well what it not is that the court under fifteen twenty two was somehow limited to imposing conditions only as to specific statutes that the foreign representative asked for that's not the limitation section fifteen twenty two  d it can it can do so if it terminates under sections a n b a fifteen twenty two and i believe both need to be read together to understand the depth the breadth of the power given to the bankruptcy court the brought the discretion it can do so if the court considers it appropriate in order to sufficiently protect the interests of creditors and i think what's important is that fifteen twenty two and this goes to your distinction between that and section fifteen zero six section fifteen twenty two emerges only when the debtor comes to the court under chapter fifteen and ask for a from it if discretionary relief under two sections fifteen one thousand and fifteen twenty one he's done here on day one when he came to the court under fifteen twenty one he asked the court for the full authority granted under both fifteen twenty one a and b which included the authority to have full responsibility for all the u s patents to sell and distribute them in any way he chose at the same time as we said in the record he was sending out letters to our clients threatening pat infringement telling them what had happened in germany and that we had lost our rights and at that point in time we went to the bankruptcy court and we said your honor we believe that in order to obtain the sufficient protection to which we are entitled before you grant that relief under section fifteen twenty one a and b you need to fully consider our interests as well as dr your face that was the four day trial we had it was an extensive record created on these issues your honor the court went through in its decision the careful balancing process that didn't ignore you dr you phase interest  here it covered the interests of both parties and explain why in its discretion the interests of the creditors here in this case the licensees of deserve sufficient protection under section three sixty five like abuse and i was good yes  based on what he said in that framework the district court sent it back remanded so that he could then put it in the right framework that's when he reversed himself and it seems odd because if the bankruptcy judge had only said in the first instance i inadvertently put it in and didn't give a framework if you caught it then go back and do this balancing at that point yes your honor in two different ways that could have a reason one is simply under the language of section fifteen twenty two let's assume that it water had been issued by the bankruptcy court that didn't include three sixty five in the first instance we would have been able to go into court at that point under fifteen twenty two and ask the court to modify the relief granted in a way to protect the interests of the of the creditors and that that relief can be modified in ways that the court considers appropriate we would have introduced all the same evidence is another very important point under section fifteen twenty one itself and referring specifically to fifteen twenty one b which is one of the a from a released the representative sought any grant of power to him to distribute the u s patents in the united states can be provided only that the court is satisfied that the interests of creditors are sufficiently granted socially protected what's important about that is the relief sought itself in that provision contains a sufficient protection stand no notice was given to all the licensees would receive threatening letters about the initial petition for up i i i'm having some difficulty understanding how band he gets into a balancing is a different question if he gives it and then the question comes up that he probably about so i mean he's not compelled to give it in the first  there anything that would come ellen to get it or is it only comes out because he did in fact give it in that supplemental or your i'll address that but if i could just finish the point i was about to make we should have received and did not receive notice as creditors of the initial petition for recognition and the initial request for relief under fifteen twenty one b had we received notice we would have gone in before the court ever issued any order under the sufficient protection standard of fifteen twenty one b and made all the same arguments you go to your honor's question which that sort of relates to it and i'm trying to understand what that means because again i'm i'm only dealing with in the first instance how does an issue is not this case because he did back put it in yes but the way to district court remanded is thing was i don't think that's required in a in a in a case going forward it could come up in either of two ways in a case going forward a foreign representative supposed to provide notice when seeking a petition for recognition particularly when seeking affirmative relief to affected creditors at that point in time the creditors could come in before the court issues any notice whatsoever any relief whatsoever and argue under fifteen twenty one b before we ever get fifteen twenty two before any relief is given argued that in order to be sufficiently protected the court needs to condition the request fairly that's one way secondly if the court goes ahead an issues the order and does not include the protection then under fifteen twenty two interested creditors are permitted to come to court and seek a modification or terminations of relief is that the relief sought by the bankruptcy debtor in this case the former representative was released to sell and distribute the assets and whether we came in and said the condition needs to be call three sixty five n or whether we come in and said put words in the order that says any ability to sell is subject to our patent licensing rights either way it's that's the condition that would be imposed and we were entitled to argue for that condition under the rubric of sufficient protection very clearly under honor the and those questions i believe from judge that address this the contract that was formed between the parties at the time the patent licenses were entered into were contracts that were fully paid up on all consideration was exchanged at the outset both parties could have anticipated and build into the contract some conditions about what would happen in the event one of the parties later went out of business that was not done the contract was fully formed fully paid up on both sides and went forward the fact that there was an event later in the market the change came on disposition doesn't the sanctity of the contract was entered into so we disagree with that characterization of what happened here i'd make it make a second point which is typically in bankruptcy when a contract is rejected in the united states the entire contract is not voided a rejection of a contract means that the debtors obligation to perform going forward is terminated and a breach of contract claim is arises on behalf of the creditor a to proceed in the bankruptcy court that distinction was made another fundamental flaw with the government's position and dr you efface position that with a court like me to address fifteen zero six next are going anywhere the court would like you handle the argument the way you think you're best for your client yes it authorizes the court not do anything under this chapter if it would violate public policy but it seems to me it was not that's a catchall  from fifteen twenty two to go back to an earlier question from judge when is that section fifteen zero six is a provision that applies throughout the entire chapter fifteen proceeding it's not triggered just upon the request for relief and here we believe and certainly argued and we believe argued effectively in the evidence supported the proposition that there is a fundamental public policy in the united states having to do with the prohibition on the rejection of intellectual property rights is in bankruptcy that would be violated if dr if a were to prevail here and so we did introduce all the evidence no substantial evidence in the record in the joint appendix that we're can see that evidence of the reasons why that policy would be violated and the reasons why that policy was fundamental  it was a very fact intensive inquiry were fundamental and that always triggers some constitutional questions in my mind it it's manifestly public policy i think is what the word is andrzej means openly contrary yes are there and there's also some policy but the public policy has no action that's correct your honor but there is some authority in the law which we discussed in our brief that when the when the congress uses manifest yes or unless it's reported that a supreme court interpretation of manifestly you're one of the cases i'm thinking of are from the federal circuit courts there may be a supreme court case but it does not come to mind right  now in any event the point i was making in response primarily to judge wins comments is we don't feel that the decision grounded on section fifteen zero six is a weak decision a weak basis we did feel like there was a substantial amount of evidence that needed to go into the record on that look more closely at the standard the district court set forth in the bankruptcy court apply now really two elements to it one was that there has to be a right at issue and it can be a right from the constitution or a federal statute and second there has to be a determination that it is a fundamental right that can't otherwise be protected so the bankruptcy court very clearly was focused and should be focused based on the directions from the district court on the policy being fundamental their word it could be significant but fundamental it said it page thirty asian inquiry therefore resolves to whether the application of the german law to the extent it allows us licenses to be cancelled severely impinges a us statutory or constitutional rights such that it would defeat the most fundamental policies and purposes united states law and so we do believe there was an element both in the standard and certainly in the proof that was given to that bankruptcy court before he issued his decision of the fundamental nature of the policy at issue here i'm happy to address that proof for the commented a week two weeks before the trial state of the union address talked about a nine times i know that's just that's just an aside but it in this country today we all know the economic problems of our country we believe an economic problem can qualify as policy we're no longer a manufacturing country to support our middle class the one area we remain preeminence in technology it employs so many people in this country so many of the great innovations in the last thirty years smartphones computers have come out of the sector and this sector can't survive without the certainty of patent licenses that can't survive in the way in the present form and our evidence was very strong on that there's a patent thicket there are thousands of patents that go into a cell phone and  house when there are thousands been issued every day it's true that way your honor and it's hard because the court recognized the gamesmanship that goes on people are buying and selling patent portfolio is every day just for the purpose of going out and trying to bring serious infringement cases you and apple solve all your problems and that will create a lot of these are your honor so that would certainly help links that would certainly help things your honor but the the evidence was very strong on the point and and we believe that all the way back to when congress enacted these statute issue congress recommended the fundamental threat to our economy even back in one thousand nine hundred eighty eight and not being able to protect that in licenses we think the proposition that that is a fundamental policy interest of the united states and it clearly would be undermined by dr you favor prevailing here was very strong evidence but i wanted to comment for just a moment on the government's position because we had a study that at least i had a study that brief a lot of times to really under i think i understand what the government saying and i want to point out to the court that the government is not at all saying that the issue of the rights of the licensees to their patent licensing is not an issue that the u s courts will need to decide and should decide they're not disagreeing with that they're not even disagreeing that the that the bankruptcy court and the chapter fifteen case is necessarily the wrong party to decided i've read the government's position and i gather talking with counsel today that the concern of the government is that we with the german law which i think is probably a very good point it's an excellent point but there were two very strong comebacks of that and one is already come up today which is that's not what happened here there's no that what the u s court did doesn't interfere with the application of  ok yes judge floyd and that's actually goes right into the point i wanted to make the government says even though the court did not have authority to invoke three sixty five when relief was requested it turns around and says a page thirty one of its brief but we were free to argue at the time of the section three sixty three sales hearing where there's a sufficient protection standard all the same points and to argue to the court that in a group letting jock be a face cell he needed to condition that sail responsibility on protecting our rights and they go to judge loads floods point that's a year or two later there was a section three sixty three hearing it was a year or two down the road that's another year or two of money burden expense and uncertainty it's unnecessary all the same issues would have gotten resolved and in fact when dr your face sought authority under section three sixty three this issue was in dispute so we reserved our rights to have a full hearing on that issue in the event of three sixty five and ultimately did not apply it's the very same standard as exists under fifteen twenty two governments not saying the court couldn't deal with it it's just questioning the timing of it and i think they got it backwards i think later was worse than sooner and sooner is better in a world in which the big harm is uncertainty cardoza said that we are not super eventually to think that every solution to a problem is wrong because we at home have country did it otherwise chapter fifteen recognizes that as a principle the rule before chapter fifteen was what are called the if you had a bankruptcy with assets all over the world each country would apply its own law to the assets that were located their unit was fragmented rules and different rules been applied her out the whole point of chapter fifteen was to end that way of doing things and instead have the debtors assets and liabilities determined under a single law the law of his what's called the komi the center of main interests of the debtor do away with all the local laws and in lest you have a fundamental public policy violation it is the fourth law of the center main operations that is going to control everything regardless of where the assets are located i say it the way you just said it doesn't say a lot to the contrary it authorizes a court  law has a different type of rejection power than the us it was one way you approach it the other question i think is just what judge when focusing on section fifteen twenty two and there's two problems with this section the bankruptcy court section fifteen twenty two section fifteen twenty two can't be the assets are local and we think that the assets should be treated under u s law as a matter of fairness because they're local because that was the grabber or congress got rid of it has to be something more then we like us law  something more than we think u s law is more protective of these people's interests it has to be that we have given the court some power under u s law is going to produce a result that is not fair because it's not the result that applies to all the other proceedings everybody else in germany or it's not a law that would apply if everything were in the u s it's an untoward result situations where i think judge niemeyer you pointed out the stripping of a lien in order to move the assets abroad well stripping of the lien and this happening i wouldn't actually thinking of moving  german law or foreign law would control the disposition of that asset it's all done under one country's laws now if there is something odd about the transnational nature of foreclosure yarden where would you allow the sale papers and so or not you know every state has a foreclosure that you you're saying that that would all be usurped no no your honor but i think you know when it comes to bail on the property the sheriff comes out in the mountains salem bids a submitted and i think that the trustee light would have the similar powers to what anybody else in the united states would have in terms of trying to comply with u s law but the bottom line is when it comes to prioritizing the priorities among competing creditors and there's no doubt that the objectors are creditors just like everybody else the question is what rights do they have and the rights they have in the assets of the estate of this embarrassed debtor in germany the answer is that is a question of german law absolutely violation of fundamental human folly is that let's grant that ok but that doesn't address the issue here i will i mean the next question i think section fifteen twenty two the abuse of discretion was thinking that the sufficient protection could simply being we want them to be as protected as they would be under u s law if we just allow german law to have an effect united states and strip away the  there in there because when you give you give foreigner representatives powers under u s law powers they might not have under foreign law that can yield untoward results for example the power to examine witnesses and and conduct discovery that could disadvantage creditors who are subject to that power but when the other creditors are not subject up power abroad that's the type of thing fifteen twenty two is looking at is not saying gee us law isn't just protect is more protective and we should think these people have more rights than they would have if this whole thing sixty five and it was therefore free to pull it out without said referring to section fifteen twenty two to sixteen twenty two only refers to relief granted under fifteen one thousand and fifteen twenty one only to relief that was rushed quested by the foreign minister and so he had the power to just correct his error with regard regard to fifteen twenty one i think you're absolutely right on that and that issue is before the court here the final judgment ruled out of wise generally is that if you have an interloper a tory decision a bankruptcy court decision reman is before you it's all open including the fact of the bankruptcy court sees me there just a court flatly made a mistake in saying you know judge mer i know you think you made a mistake and put in three sixty five by mistake it should never have been there you had the right to pull it out i think you i would fit the statute gives the answer anyway because section fifteen twenty one thousand and fifteen twenty one are relief requested by the foreign administrator we didn't ask for three sixty five it shouldn't have been there what he asked for his he said he asked for an order that the g in the united states that's right and that and so he's asking for control over those assets and the bankruptcy court is saying ok you get control but you're gonna take those assets the way they were created under american law and handles there cliches big court ruled looked at these assets and said they're subject to protection based on an evaluation following a four day trial but they're not there and it's not u made a judgment call right but he made a legal error in that judgment your honor and the legal error in the judgment was thinking that it was a problem to not protect assets the same way that u s law would protect them as opposed to the problem he's supposed to address is they the way the u would give them if this whole thing were if it what was going on in germany of this whole thing in germany what would their rights be if nothing happened the united states they're entitled they have every legitimate expectation to be treated as if they were there in germany and everything occurred in germany but think they're not entitled and they have no legitimate interest in is better treatment according to u s law because the how when they don't know we have asked and the bankruptcy court didn't make that determination well it's right i'm going to give you a better interest a worse interest the bankruptcy court said i'm applying the protection portion and concluding that these assets are entitled to protection right and is authorized by congress at the make the determination to give protections that u s law would provide and german law potentially does not as opposed to deferring to german law i think i should end with just one clarification your honor i think there may be confusion as to which order is applicable if the court is looking at the order on page two sixty seven to say that there was no interference with german law because it says three sixty five and only applies that the foreign representative rejects an executor a contract pursuant to section three sixty five and not under foreign law that was the order they got reversed that's the order they got remanded and in chat instead the ruling is basically a decline declaration that u s law will not respect german law they sent german law says that what where is that in just court opinion and then we had twenty four ten twenty four it says that the dead are three sixty five shall apply to the license of the foreign doctors u s patents that is in fact a declaration saying i don't we don't know what german law is going to do but whatever it does it cannot great council and proceed on to the next case