eight one zero four one on top of all of these things so i thought first i would inquire if there are any questions or any areas you want me to focus on and in my and a minute let me get can go ahead and just the plot assume that we understand the a repeat of what the factual background i think the i have to have to acknowledge initially that the end zone has moved on me since we  clear now that there's a high pleading requirement as a relates to these antitrust case so i think on the basis of that little bit of a disadvantage my client's a little bit of a disadvantage because we entered the game at a time when the rules were a little different still think that there is ample factual pleading in the complaint suffice overcome the limitations of bell atlantic the complaint is long it states a lot of a lot of material are coming into a market that appears to be lucrative what the cook what the complaint was articulating was that the patent pooling arrangement that the three c group employ had the risk of eliminating competitors limiting output and causing prices to increase by applying this level of cost that was not a part competitive affects of the practices that are involved are just the anticompetitive effects of a pet insist mean if somebody has got a patent that person has the power to limit the market dramatically assuming that there aren't any ways readily available to go around the patent including to make the market dry up entirely those are any competitive effects but we are at them because we think the patent system provides other how does this patent pool give the defendants powers that they did not have pursuant to their patents in the first place is thank you for the question  and i am respected as a practitioner i respect the fact that a patent is it is it is an accepted monopoly within a space of a technology or an invention the problem here is that when you have a group of companies come together the laboratory we're talking about a system that is comprised of a number of different components that ultimately creates a punish product i'm talking about even the player here the risk is that if they corner the standard and the technology then they begin to dictate to the consumer and manufacturers and want people who want to participate in the business how is your participating business now if i was going to plead this complaint again today i would be able to say with some clarity that the production of d v d players has declined since this complaint was filed that the prices of d v d players in the open market has gone up and has stabilized at a price in the thirty to forty dollars price range when they were at the one thousand dollars price range back in the good life file i'd also say that let's take a look at what happened in the high definition format which is called out in the complaint that blu ray a shiva's standard of h d d v d dishy with just abandon it just rot away from it well why well they were part of this big consortium initially was there some understanding where they would agree how to move forward  next evolution of laserdisc technology couple on top of that is the troublesome fact that there are several content providers who are intertwined with the group warner brothers for  the combination has driven a business the patents when i talk about one pad docking about over one hundred patents have developed event around  business practice and that's where the problem lies it's not about the patents it's about the business practice it's about the anti competitive behavior to corner a business model which is the delivery of content in a digital format via these players and the development in the evolution of technology around that product and run the business model and i think that's concept that we're talking about here is just patents any eak spec that in the complaint that we would call out which paths are our non essential well the time we didn't really know but if i was going to plead this today i would say that those patents in the pool they relate to their a c three technology a c three being audio compression level three technology and an  market so what if they decide we're only going to going to license one patent and it's at twenty dollars per unit or we'll give you the rest of the patents for free you what is done here is that no one of them has a single thumb at they each have corners of the standard but when i said done and i mean that without which without a license to which you couldn't enter the market there is i guess soon that there are some patents that you need to have an order to enter this market yes ok or so assumed that is the case and that assumed that they charge they put all the freight in terms of the license on those patents and they say you know what we're giving you the rest i'm for free because we're so nice what's wrong with that i think that's what i have i have a problem with that in that they come together to do that instead of being competitors against one another to battle each other out to determine whether the claims of each one of their patents are are solid stable enough to support support the challenges of those patents they don't they don't because it's easier for them to put them together and charge everybody else on the outside if he whether it's twenty dollars one hundred dollars or five dollars and that's where the complaint talks about or talks in terms of suppressing competition between them for the have to show up some form of bad announcement and there's an obvious commercial and neutral reason and maybe a good for the market as well for them to do this a bunch of people holding  all the petty differences between the there is a perfectly obvious reasons to why we go release and why they would or whether they can get the product on the market and benefit all and that has nothing to do with intent to monopolize and the problem with your complaint is it was a problem i think that existed before tumulty is you don't allege anything that makes it even the slightest its  ok thank you for the clarification and we are talking about allegation though i don't mean to argue my case here it's not a closing argument but it would seem to me that these facts are go toward establishing an intent to monopolize  this group sits on a standard setting up that articulate the standards for the direction of the of the industry they then have an acquired philips hats with a standard or said hundreds around the patents that they have because it didn't fit within exactly the standard then they go out and they license each other for free they don't pay each other royalties on the products in these products because then they enter the but with people who are not part of the group and better price terms because they don't pay a royalty because they're part of the select group then they go out and they set as the established relationships license agreements at multiple levels of the of the production the i c level the o p o which is the optical disk manufacture the assembler the manufacturer who she is a is a member of the assemble tier then they grab the license a brand holders with of the right to use the same groups of pat so their their patent thing or their licensing and controlling at each one of these levels and the discrete provision within their agreement there their standard agreement is that you can't buy or sell any product related to this except the somebody else is licensed under our plan soprano kind of went right by that but i don't think he saw that that was part of the the rope around the the the group that pulled them all together and i think that establishes at least an intent to control a monopolist intent they have their hand in every aspect of the d v d industry from the the laboratory to the living room where the customer puts a disc in and plays it and not just that the technology is beyond and that's where the risk is because they're so ingrained that there's opportunity to replete in light of that and i think that the answer is quite clear that that's simply not the case in probably itself the court in retiring the conley v gibson standard observed that most of the lower courts had opinion there noted that the courts had already for a long time been requiring that the complaint be supported by more than conclusory allegations and then finally and perhaps most important the law on the ninth circuit which is the controlling law with respect to pleading standards in this case has been clear at least since one thousand not eighty eight that's twenty years now that in order to state a claim under the any trust laws the outline the any trust violation with supporting factual detail and the ninth circuit reaffirm that this last march and its decision in kendall applying twamley and holding that in any trust but the business practices and that these companies set the standard well the currents most recently the d c circuit in its rambis decision have long recognized that standard setting can also be very pro competitive because it helps to promote interoperability the pro competitive nature of standard setting and patent pools couldn't be more obvious than the facts alleged by mr handle himself in this complaint here namely that this pool is licensed hundreds of manufacturers of d v d s that the industry has grown dramatically over the ten years the patent pool is created and the prices have dropped dramatically from more than one hundred dollars third mr handel says well but that's changing since my complaint was dismissed the growth of the industry has slowed down prices are going up well of course supply and demand changes all the time that's when markets work in any of that those are all new facts they're not alleged in the complaint and there's certainly no reason for reversing the district court's dismissal of this complaint last two points your honor the mr handel says that what's really objectionable here is not just the creation of the patent pool but the fact that the members of the pool licensed each other for free  course the grant of the license itself is valuable consideration so when someone grants a license in return from for a license from someone else that's not granting a license for free and then finally he says the further objection he has is that under the license agreement you can't get a licensee can't buy or sell to anyone who is not licensed under our plan that constitutes an act of monopolization fortunately we have the terms of the license agreement in front of us the district court relied on it is a license agreement that was submitted by the of itself to the district court and if you turn to join appendix eight to fifty one you see th you see that what the young the license agreement actually says in paragraph three point two is that licensee shall refrain from purchase or selling d v d players manufactured by any third party not licensed by philips and here's the key language where such a purchase or sale would constitute an act of infringement of any of the license patents licensees are only being asked to agree not to infringe t patents they're licensing let me just close very quickly fry focusing for just a moment on what we view as the key part of the district court's opinion mr handles case and that's this allegation that somehow a patent pool is a price fixing conspiracy there again i think the case law is very clear your honour's that patent pools server pro competitive purposes they help to reduce transactions costs they help to reduce uncertainty the members of pool actually have an incentive to license that lower rates lower royalties than the individual members of the pool  would have an incentive to license but for that pool for all of those reasons the supreme court in the broadcast music which involved a copyright pool held that copyright pools and by extension pack pool not per se unlawful price fixing mechanisms first of all they don't fix the price of binge of of individual patents instead they offer a new product a package license to all of the patents in the pool that no individual member but offer and second as i've already said they're not and it could restraint of trade because they help to provide pro competitive benefits through lower royalties less than certainty lower least twenty years there are no facts in this complaint alleging any harm to competition at most it alleges harm to one or two competitors where there are hundreds of competitors in the market and a vibrant competitive market kendall they did eighteen months but they did it is a significant discovery we know discovery in this case to flesh out issues of intent or other issues the issue of broadcast music broadcast music didn't hold that pools of intellectual property do not violate section one to the sherman act it held that under the analysis of the facts in that case under rule of reason the program that was presented didn't infringe the fishermen that but what's important here is that the plaintiffs were allowed their day in court we alleged essentially the same type of sherman act violations a combination of electoral properties coming together to be sold as a package which created a new product the facts in our case i think are significantly different than those in broadcast music and we should be afforded the same opportunity as the plaintiffs in broadcast music the one thing you don't understand is about the at the  and the question is under those circumstances where i would you have not thrown in the kitchen sink in given absolutely everything you have why were you what were you with all and why were you withholding it under those circumstances but the biggest obstacles obviously rule eleven as a as a practitioner for over twenty five years we don't just throw things in that we don't think we can prove since the case had been filed i've been involved in other litigation of philip's i have come to see certain things related to their practices i can't be under under protective orders in those cases i can't include them i can't discus i believe now that given the facts and information that is of it been available and can be available in discovery that there will be more and more on the issue of of this this this cross licensing i mean that they there is members of the standard setting body that really is the most offensive to the to the to the to the claims that the sherman act that that's what's really the driver of this is not that we're attacking their right of a scientist or developer of technology to to to protect his invention it's just that would you do with it with it afterwards needs to be in conformance with community