independent reasons first the lower court's decision regarding equivalence is erroneous it places mere knowledge as an equivalent under chinese patent law and that as an equivalent to actual physical structure that is wrong second there is no other basis upon which the decision structure and therefore an instruction manual is equivalent to structural relationships that it teaches someone to create this is not correct under chinese law to determine chinese law we look to chinese sources according to novelist his own expert witness there are three sources to which this court man appropriately look one is statutory another is the supreme court and its interpretations and the third would be the beijing high people's court and the articles that issue as part of its guidelines now it is important to recognise that the statements in the statutes which we have placed the pertinent portion of the patent law in the record are completely silent with respect to what an equivalent might be or what might it might not be so much like the american judicial system as it relates to patent law the issue of acqui under chinese law is a creature of the courts and not of statute we can then look to the supreme people's court and its interpretations those interpretations although recognizing establishment  fringe infringement under the doctrine of equivalence that is not in dispute they do not make any statement or reference or interpretation in its provisions that would define what it is that constitutes equivalent an equivalent work within and structure under the chinese patent regime now we have to turn for the first time to find the answer to what an equivalent is to the beijing high people's court in those apt in those particular articles we find the answer now as i mentioned before we can look to this source of law as an appropriate source of law for this court to base its opinion upon because it was even novelis own expert that pointed out this is the appropriate place to go now she was right to do so and she was right to tell us to go to this source it is the beijing high people's court that corresponds to this court it occupies the same tier as a federal circuit court of appeals so it's to see its pronouncements its judgments and the articles that issue or arise out of its statements and guidelines are powerful and persuasive turning to those particular items of law that we find in the articles of the beijing high people's court the guidelines teach that in order to qualify as an equivalent a feature must perform substantially the same function by substantially the same means to achieve substantially the same effect now that's important in that in the pr article forty four for example the definition of what means are is fact it says that it is a common replacement now if we just think about this logically a common replacement can be and is considered to be an equivalent but you can't take an instruction manual and make that perform the function of actual physical structures in an exercise device it's not just the manual as it is the manual plus the parts let's say i went to china and brought home a bike with me fully structured fully put together and i wanted a second bike or a placement bike in the company sent to me not a fully built bike but the bike in the box with the instructions you're saying chinese patent would not protect would protect the first but not the latter yes in in terms of chinese patent law if the product is assembled in this case we have one independent claim in the chinese patented issue that cotton to requires an exercise apparatus that actually functions has all of the relationships established between the various bodies if that's assembled in china then there is an of chinese law that would provide for infringement that would arise out of the export of a package or parts for assembly in a foreign jurisdiction now this takes us in and it's very instructive to look at the case authorities that existed in the united states when a similar gap in the law existed here under american law in the chinese this is deliberate that they didn't modify it there are no longer wait the way we did they didn't deliberately change tomorrow along i think i'm still agree there is no other explanation your honor because if we look at the articles themselves you have complete correspondence between our the american patent code if you look to see for example article eleven you'll find that it is a similar provision to section two seventy one and veges protecting their manufacturers their choosing to employ a law that was in existence here in the united package of parts just like we have in this case to four interested for assembly the united states supreme court in the absence of section two seventy one f found that there was absolutely no infringement there couldn't be infringement because as it was later recognized this gap in the law made it so that those unassembled parts could be transferred now when we look at the chinese law there is obvious a conspicuous absence of any counterpart to section two seventy one we have to conclude that they have not determined as it was later determined in the united states to enact legislation that would provide a statute for such findings of infringement so as we have it now the status of the law in china is that those unassembled parts can be sent to foreign jurisdictions for simply and that will not constitute any act of direct infringement and certainly not an act of infringement as was found by the lower court other possibility is that they thought that the supreme court decision was incorrect or that the statute was clear and that the our court misinterpreted and there was no need to change their regime a careful provide if you don't have the product assembled in the in the jurisdiction where the patent exists then you don't have an infringement of the patent if you send it into a foreign jurisdiction it's assembled there the  act of legislation here in the united states in one thousand nine hundred four was intended to fill that gap that gap still exists in chinese law they've intentionally is not a matter of interpretation but that brings us back to the issue of what is an equivalent this leads to ludicrous results if we if we examine the lower court's decision that anything can suffice as an equivalent as long as it conveys knowledge that means that you when you go to the gym you would be told well we don't have the actual panda device but we have an equivalent and you would see everyone else sitting on an exercise device and they would be exercising and sitting in the place where you're to go to exercise would be an instruction that because remember this court decision says that any mental mollett is sufficient it says that is the important thing and then it says anything that conveys that knowledge is sufficient that is not the case with equivalence law in the united states and it is certainly not the equivalence case in china china is very clear if we look at article forty four for example the expression substantially the same means in order to reach this this idea of what an equivalent is generally it says generally refers to a common replacement technical feature so taking the analogy again you're sitting on you're going to work out on the next exercise apparatus and there's been a finding for example that there is an equivalent structure because there's a description of paddles or are you go to the machine and in place of those pedals or arms you find paper or a picture that shows the relationship of those structures this statute when carefully examined and even cursory examined demonstrates that the mental knowledge cannot constitute what the lower court called an equivalent an equivalent must perform the function and equivalent of that when we get to the part that talks about substantial means sentient by substantially the same means it's talking about a common replacement for the physical feature the physical structure deep south was a five four decision deep south was a five four decision yes let's keep south again on the other way right so instead of the white majority it's not a black majority would you lose in our case would you concede that chinese law no because the the gap is still recognized even through subsequent  make knowledge knowledge into structure thing and we need to and i need to separate these ideas your honor because we have on this side equivalence point that if black men were the law then he'd be wrong that no section two seventy one year on earth does doesn't implicate at all the air at with respect to equivalence equivalence stands as a separate doctrine what two seventy one f did was create ability to to create infringement liability arising out of the sending of an assembled and unassembled package of parts into a foreign jurisdiction what you have to have in order to have for infringement here is either the device which it's acknowledge we don't have that divide us we don't have an exercise apparatus in china to infringe the chinese patent so if there's not direct infringement is there an equivalent this court says that anything that can base knowledge can be the equivalent chinese law says absolutely not chinese law says that you must have a common replacement that performs substantially the same function in order to accomplish substantially the same effect so as as we look at this case in summary we can say that knowledge is not equivalent to structure and that's separate and apart from any determination of deep south because that is a completely separate statutory realm we know that that structure knowledge cannot constitute the physical structure the common replacement necessary under chinese statute but what if they sent the part with that instruction manual have an assembly in existing products in china in order to it because the the claim of the pump requires an actual exercise apparatus that can function for its intended purpose what if it was all put together in china b they sent the last part the pet owner something with the instruction manual and you took a small mark and put it together it still wouldn't infringe because it wasn't totally particular in china that's exactly right because under chinese law know let me address i see that my time is expired but i have leave to respond to rather you can always answer a question thank you with respect to that case your honor there are several points that i would like to make first we don't have the case the shanta case is all we have is a reporter's note certainly not a reliable source of information upon which this court would justifiably rely secondly we know and i  responded that none of the cases had presidential value or were even on point and we noted specifically that in all six of the cases relied on by novelist all actions by all parties in the matter occurred inside the what we can glean i would also distinguish the shanty case on at least five or six scratch your honor the scant record at face value still doesn't speak to the issue it doesn't address the issue of what  utility patent and we do not know what is meant by indirect infringement in the reporter's note it's just simply not reliable and for that reason it had no presidential value for the lower court it shouldn't have presidential value for this court we should look to the detail number two but the statement that chinese law hasn't addressed the export or assembly of component parts and instruction manuals is flat incorrect i council's great deal of trying time trying to draw a parallel between chinese law in american law and the easy answer is they're not in parallel they use the deep south case as an inflection point and the deep south case decided by this circuit if i recall found that export of the us export of parts did not in france it went abroad to seventy one f twelve years later address that in china that was squarely and has been squarely addressed by case law the statute wasn't required because they have addressed it with case law and i have more than the shantelle case to discuss there but the case law and expert opinion in testimony supports the position that these province where the infringing activity occurred adopted by this level of court in that province and councils trying to of course run away from that decision but it does have presidential values and the reason not and china is obviously different than here your hon s not all case reports are captured in the website and administrative reports somewhat less so but it is every bit as persuasive and or precedential as any other case they got it from those products as packaged and and including the instruction manuals did directly infringe the chinese patent was that was inside of china or at as counsel alluded to he said gleaned it's not clear but it doesn't matter they didn't find there was no decision in the products as they existed in china infringed in the box there was no requirement that they had to be assembled by the end user in china of course that might be the assumption but and they th chinese decisions we're talking about didn't turn on that's correct they found that the products as they existed with the components and the assembly manuals infringed period and it's interesting to note that their expert actually conceded this point in her deposition which is in the record i asked of their expert if the sale of these products packaged with the instruction manual sold within the territory of china were never a symbol by the end user would district court asked the proper question which what there's no dispute that all of the components exist in this box with the and that all of those components when assembled operate a functional machine that's not in dispute the only  whether this has to be fully assembled to infringe the instruction manuals are present the this is the district court asked the appropriate question which was do the user manuals disclose the structural relationships and the court found that it did and the court found that in france the chinese patent the doctrine of of equipment analysis is completely irrelevant that is something that's a function of american law they've cited from the beijing people's court the definition which is no more presidential th n they were talking about the lack of presidential value of the show case that's actually from the province where the infringing activity took place but the beijing higher court has no more presidential value it doesn't matter that implements has no place in this analysis that has nothing to do with what the district court did now the district court did make reference to the term equivalent a couple of times perhaps somewhat in artfully so but the decision making that that the district court did was to say do the components and the instruction manuals contain all of the technical features as required and that's what article seven of the interpretation of the supreme people's court on issues concerning patent infringement cases requires and with an instruction manual sold missing a key component it was a refrigeration product missing a key connecting pipe and the court still found that in that case there was direct infringement because all of the technical features were includ specifically it said that the instruction manual the instruction manuals explain how this was to be put together and it was clear from those manuals that this connecting piece that wasn't even in the box was required and therefore under chinese law they found direct infringement these are the cases that i'm referring to that are different in american law american law may have implemented two seventy one half chinese law didn't have to the deep south grounded law derivative l manuals and they disclose all of the technical features and infringes there is no doctrine of a quick glance and now it says the district court used the term equivalent because equivalent equivalent occurs in the statute itself but it didn't undertake a deal we analysis to say that the manuals are actually performing the same means and same effect that's not what the court did i don't think the court was even thinking about that so what icon's counsel is down his use arguing before the district it was not and that's my next point and that was never argued before the district court and despite icon councils argument otherwise it should have been if if they really believed that was an argument to be made acquittal it sits right there in article seven and seventeen of the supreme people's court interpretations if their argument was that these manuals couldn't couldn't be the equivalent under that the way the beijing people's court defines them that argument should have been made and frankly the reason that argument wasn't made was because this doctrine of equivalence analysis doesn't make any sense it has no place in this  is the district courts analysis was very straightforward he relied on the toy case and the and the york case to say this directly infringes it doesn't have to be a simple we have case law that says so here to the toy case in the your case which didn't even include all of the component parts to your hypothetical your honor so these cases say that is direct infringement and the doctrine of equivalence analysis would be really clear has no place in that analysis whatsoever the district court may have used the term equivalent in its order but it was not intending to delve into dio we are talking of equivalence analysis that's something icon's council has grabbed onto because there are no other arguments to make but let me also make the point that like i said they are their own expert conceded this issue during depositions so we have the your case we have the toy case we have not us is expert testimony in opinion from me a choose as seventeen years of patent geisha experience and a concession from their own expert that selling these products as package within the tearing of within the territory of china would directly infringe even if they're never assembled it completely undercuts this entire argument i would also offer that we've already discussed that they didn't make this argument and if this report level one should have therefore i don't think this argument should be considered as all at all there's also i think worth discussing that icon's course of conduct in this case supports both a waiver and a stop all to contest that royalty should be paid shouldn't be paid on these products for years i can was paying royalties on these products sold in territories that were not covered by the p l of that included australia brazil colombia the dominican republic ecuador malaysia and panama from at least two thousand and twelve to two thousand and fourteen you have these products export it out of china they're paying royalties on the argument never came out that those products shouldn't be paid royalties on in the owner and because they're not covered by a patent that means the only pattern that would cover them would be the chinese patent the same argument applies to those sales that applies to the sales we're talking about that never came up and the reason it never came up is because they didn't believe that that argument had merit the they didn't make this argument they didn't drop the hammer on this argument until after the entire term of this patent license agreement had run and they weren't going to risk any interruption to their manufacturing or sales whatsoever only then when only money was at stake did they say and they waited until december two thousand and fifteen to actually tell us did they say oh wait we don't think we owe royalties on these royalties in the exact same situation at least seven or eight territories for years that constitutes a waiver and a stop of making that argument the other thing that i think i mean that's the classic definition of a stop aware and they've been receiving a benefit and then taken it in because as the inconsistent position to our disadvantage finally i think it's worth mentioning that course of conduct is given an extraordinary amount of weight is given great weight when determining how contracts should be interpreted their course of conduct in making these payments on these products sold in territories that are not covered by any patent whatsoever goes to show the way this contract was drafted and interpreted by both parties section three point three when we go back these parties anticipated that icon would pay royalties on all of these products the ellipticals for the term of the patent for that until the last two expire of these patents which was the chinese patent january twenty fifth two thousand and sixteen section three point three of the patent license agreement is a provision that discusses we're going to pay a flat five percent royalty rate we understand that different claims may be covered in different degrees in different countries but to keep things simple we're going to pay a flat royalty rate until the term of this patent expires which is generate twenty fifth two thousand and sixteen that's what we understood that's what they understood that's what the contract says and that's what their course of conduct shows they agreed to and our arguments i think were somewhat misconstrued we have not been arguing that the contract means that these products are covered no matter what we've been arguing that icahn agreed that these products in the fringe the chinese patent and wherever they were sold that's what section three point three supports that's what the term supports and that's what their course of conduct paying royalties on these products in all of these various territories that are not covered by any patent supports as well so they just want a refund of how from last year that's exactly  ah i have one more point if you if you don't mind i want to address there is there is also the court went on to after determining that the products as packaged with the manuals disclosed all the structural relationships and contained all of the technical features which is what was required by article seven of the supreme people's court interpretation it also went on to address the fundamental article which was article eleven of the law an article levin the court addressed the three prohibited activity that icon had undertaken manufacturing selling and offer to sell clearly the court found that the manufacturing was packaging and having these but these components made it put in a box with the icon logo on them with the user manuals that had been established by the fax selling there was an issue of the court expressly recognized that the chinese cases supported that export ing constitute selling under chinese law so again that goes back to how chinese law has addressed this quote unquote gap that they have suggested exists there is no gap under chinese law there are two cases both of which are side in the court's opinion and twenty two seventy seven to seventy eight that expressly say exporting constitutes selling those cases combined with the toy case and the your case clearly established that under chinese law the case law has addressed th issue a statutory intervention was required components and manuals export of their souls constitute direct infringement no doctrine of a cold analysis is needed and they don't need to be fully assembled finally the offer for sale that these were of course offered for sale out of china was the third prohibited activity and the court was a fairly straightforward analysis and how the court came to its conclusion that direct infringement existed under  your understood absolutely does matter with respect to the york decision having occurred as wholly a transaction that transpired in china consider the following with me as relates to the in china that's infringement we've never said anything other than that this is a straw man set up and conveniently knocked down that's why this case doesn't appear in their briefing that's why it was relied on by the court below it has nothing to do with the central theme of the district court's opinion now your honor you point out what about the issue of derivative infringement well certainly there is a derivative infringement provision under chinese law we need only look to the articles that we've cited article one thousand nine hundred twenty one and it shows if there is a direct infringement then you can have in china then you can have a contributory or an induced infringement situation but that occurs china this case is not that this case is an m assembled packet your parts that is sent to a foreign country the united states in this instance that is not something that gives rise to any infringement liability under chinese law the court below got it wrong and equivalent cannot be substituted with a simple mental knowledge of relationships that the pat is one to create chinese law requires more chinese law squarely requires that there in order to be an equivalent and these are words that are not used casually the district as it's been suggested the district court was very clear that it was finding equivalent structure in fact at the record at pages twenty two seventy five through seventy six you'll find that he's very clear in annunciation a standard is fully a political two a in equivalence analysis in fact the court goes so far as to suggest that we have to define what an equivalent is he does that by suggesting that this is supplied by the mental knowledge alone that cannot be the case under chinese law it cannot be the case especially under the circumstances here so york is in a positive in this case we have further that and this is important to your honor as we look at these cases such as they are we have the following that is clear with respect to how these issues were addressed q the expert for not listed not opine on the meani es novelist told the district court that the basis of q s infringement opinion is chinese law but then that law was ignored the shantou decision which now is is front and center in their presentation i encourage you to look at to reply brief it page thirty eight where it states it does not matter because the district court did not consider it binding in other words shantou if we look at that court's decision the district court's decision china protecting it's manufacturers but and and novelists has to address that issue just as icon has to address that issue as products are made in china they enter into an agreement that has a portfolio of patents that cover the world under those circumstances rather than no one understand what the laws are they go into this knowing and that's why when we get to this idea of waiver of your honor this this is not a case of waiver the district court specifically found that there was no acknowledgment of infringement this is the core specifically found that the anti waiver provisions in the contract were still binding eight point five eight point six of the patent license agreement still at work and even if you are tempted to consider what they suggested in terms of course of conduct this court well knows that that's poor old evidence and they also know that the patent license agreement in this case requires a writing to alter the agree under all those circumstances you cannot rely on the waiver argument you cannot rely on the your case or the shed to case which by the way conveniently they didn't cite your case or have any reliance by the court on the shanty to see what this comes down to and always will come down to is what is equivalent under chinese law and the conduct of why come to us and not fall within that there is no infringement on that basis your honour's we seek reversal of the summary judgment and we also seek we mandate as it relates to all of the comp claims that should be addressed in the context of that reversal