[00:00:01] Speaker 00:
Our final case this morning is Fraunhofer-Geselshoff-Sor-Foderon-Durand-DeVante-Forsen versus Sirius XM Radio, 2023-22-67.

[00:00:30] Speaker 00:
Let's make a film when you're ready.

[00:00:40] Speaker 02:
Good morning, Your Honors, and may it please the court.

[00:00:42] Speaker 02:
The district court erred in granting summary judgment of implied license based on equitable stopple.

[00:00:49] Speaker 02:
Sirius XM simply failed to meet its burden to present undisputed evidence satisfying any of the three equitable stopple factors.

[00:01:00] Speaker 02:
In fact, the page and a half that Sirius XM dedicated to this issue in its opening papers before the district court

[00:01:07] Speaker 02:
failed to present any facts from which anyone could reasonably find that any of those three elements was satisfied.

[00:01:15] Speaker 04:
Really?

[00:01:17] Speaker 04:
No facts that would enable a jury to conclude that was equitable estoppel?

[00:01:23] Speaker 02:
I believe so, Your Honor.

[00:01:23] Speaker 02:
And that's why we've asked that not only should the district court's decision be reversed, but that summary judgment should be granted.

[00:01:30] Speaker 02:
But you can't do that, right?

[00:01:32] Speaker 02:
You can't appeal.

[00:01:33] Speaker 02:
Well, Your Honor, if you look at the Crown packaging case, for example, that's a case where this is not a pure legal issue.

[00:01:42] Speaker 02:
I understand, Your Honor.

[00:01:43] Speaker 02:
In this case, we think that the utter failure of evidence on the reliance issue in particular

[00:01:52] Speaker 02:
leaves it an appellate for granting summary judgment.

[00:01:54] Speaker 04:
And Jerry couldn't infer that there was reliance here when they paid one girl a special fee to make the thing irrevocable, and went ahead and did something that required a license, and they were going to be non-infringing?

[00:02:10] Speaker 02:
So you have to look at the evidence that was actually presented in the record and the question on reliance is not it is not simply was the reliance on something or as Sirius XM would put it was there some Consideration of options option one or option B Sirius XM says we had two options high band and they thought they had a license right and

[00:02:36] Speaker 02:
And that's part of the point, Your Honor.

[00:02:39] Speaker 04:
Simply... But doesn't the record show that they thought they had a license?

[00:02:43] Speaker 02:
This was not the main argument that they presented, but it is true that Sirius XM did point to one of their witnesses who said, we believe that we had an irrevocable sub-license.

[00:02:54] Speaker 02:
Right, Your Honor.

[00:02:55] Speaker 02:
That is not reliance on something that Fraunhofer did.

[00:03:00] Speaker 02:
Ackerman and other cases from this court make clear that reliance has to be substantial reliance on the misleading action or inaction of the patentee.

[00:03:11] Speaker 02:
In this case, what do we have?

[00:03:13] Speaker 02:
On the sublicense point.

[00:03:15] Speaker 02:
We have a witness who said, well, we put in the word irrevocable, and so we thought that the sublicense could not be terminated.

[00:03:22] Speaker 02:
Well, this court in 2019 already rejected that interpretive argument.

[00:03:27] Speaker 02:
But set inside, whether that was a good argument or a bad argument, a good conclusion or a bad conclusion, it was a conclusion that was internal to serious exam, something that they decided based on their own assessment.

[00:03:44] Speaker 04:
The fact that they think they have a license, if there was misleading conduct here that suggested that there was a license or there wasn't a problem, they can rely on that as having given them a license, right?

[00:04:01] Speaker 02:
they could have relied on if there were a finding that there was misleading conduct.

[00:04:06] Speaker 02:
Setting that aside, the question is, did Sirius XM present actual evidence that they did rely?

[00:04:14] Speaker 02:
And there was no such evidence in the record whatsoever.

[00:04:18] Speaker 02:
In fact, what the record primarily shows, including the very citations relied upon by the district court,

[00:04:25] Speaker 02:
is that the decision to go with the high band system was motivated by something completely different, what Judge Battalion called physics pragmatics.

[00:04:33] Speaker 04:
It's something completely different.

[00:04:35] Speaker 04:
They assumed they had a license, and in that circumstance, they made a choice between the high band and the low band.

[00:04:40] Speaker 04:
I mean, that's their argument.

[00:04:42] Speaker 04:
And it seems to me that a jury could perhaps infer that.

[00:04:46] Speaker 04:
Now, you may have a better argument about summary judgment.

[00:04:49] Speaker 04:
But to say that there's no evidence here that would allow a jury to conclude that there was reliance seems to me going maybe a little far.

[00:04:59] Speaker 02:
I would say, Your Honor, that reliance on the business pragmatics is utterly inadequate for a jury to conclude that there was reliance on misleading action by Fraunhofer.

[00:05:12] Speaker 02:
There simply is no evidence in the record of that.

[00:05:16] Speaker 02:
The evidence that we do have from Wadden, from Berks, Kriessky, Karkos, all focused on that business issue.

[00:05:24] Speaker 02:
And we see from cases like Hem Street, looking at an internal business issue, not reliance.

[00:05:31] Speaker 02:
You see a lot of statements from Sirius XM, statements that, well, we were ruled into security attorney argument in a brief.

[00:05:41] Speaker 02:
At most, what we have is conclusory post-hoc statements of the sort that this court has repeatedly found does not suffice to establish summary judgment for the party urging equitable stopple.

[00:05:55] Speaker 02:
That's in cases like Hall and Myers and Gaster Chair, over and over again.

[00:06:00] Speaker 02:
Those kind of conclusory self-serving statements are not enough.

[00:06:05] Speaker 02:
You need actual evidence.

[00:06:07] Speaker 02:
And no such evidence was presented here of reliance on something that Fraunhofer did or did not do.

[00:06:12] Speaker 00:
You're saying that summary judgment was inappropriate.

[00:06:16] Speaker 02:
Summary judgment for serosexum was inappropriate.

[00:06:20] Speaker 02:
And we would submit that, in fact, summary judgment would be appropriate for Fraunhofer based on the utter failure to satisfy the reliance element.

[00:06:30] Speaker 02:
I do want to touch on the other elements.

[00:06:31] Speaker 02:
Prejudice, same issue.

[00:06:33] Speaker 02:
No evidence of actual prejudice that was caused, and this is the key part, that was caused by allegedly misleading conduct by Fraunhofer.

[00:06:45] Speaker 02:
And what this court has said is that simply pointing to, for example, expenditures made isn't going to cut it to show prejudice, to show harm, especially if there's no evidence that that's money that just would have been spent anyway.

[00:07:01] Speaker 02:
There's no evidence, if you look at the citations that Sirius XM provides, do not support the idea that there were hundreds of millions of dollars spent on infrastructure.

[00:07:11] Speaker 02:
But even so, there also is a lack of evidence showing that that was money that wouldn't have been spent anyway.

[00:07:18] Speaker 02:
Either way, high band or low band, you've got a satellite radio system, you need satellites, you need infrastructure.

[00:07:23] Speaker 04:
You look at a prejudice because all of a sudden, they're in a situation where they're being sued for infringement.

[00:07:29] Speaker 04:
Whereas if they'd gone with a broadband option, that wouldn't have been a problem.

[00:07:34] Speaker 02:
The problem, Your Honor, is that... Isn't that true?

[00:07:38] Speaker 02:
They would have been a problem, because there was no way for them to do it right away.

[00:07:42] Speaker 02:
And that's what Mr. Wadden, for example, consistently testified.

[00:07:46] Speaker 02:
He said, we were in big trouble because this was going to take us years and years and years to wean ourselves off of one side or the other.

[00:07:53] Speaker 04:
So they would have had a lot less exposure, though, right, if they'd gone with a low-band option.

[00:07:59] Speaker 02:
We don't know what the overall outcome would be because SiriusXM didn't put in evidence.

[00:08:05] Speaker 02:
For all we know, SiriusXM reached tremendous rewards from receiving the benefits of the high-band system, and there was just no evidence that they were put back.

[00:08:16] Speaker 02:
Certainly those know, for example, this is not a situation where a SiriusXM created a system and now can't use it because there's a risk of an injunction, the patents are expired, they have the high-band system, it's working great and they're using it.

[00:08:30] Speaker 02:
And I'd just say on the first element, misleading, where SiriusXM has claimed that there was extensive ongoing engagement between 2010 and 2015, and that it's plausible to infer from that that there was some sort of indication from Fraunhofer that there would be no suit on the patents.

[00:08:51] Speaker 04:
You were trying to collect for that work, right?

[00:08:55] Speaker 04:
I don't know what you mean.

[00:08:57] Speaker 04:
You're trying to collect.

[00:08:59] Speaker 04:
After 2011, you were trying to collect money for the work that was done earlier, right?

[00:09:05] Speaker 04:
Yes, that is definitely correct, yeah.

[00:09:06] Speaker 02:
And we'd submit that even if you accept the argument, which we don't, but if you accept the argument that you could have inferred from the simple fact that von Huffer was trying to get paid for this work that he had done before 2010,

[00:09:21] Speaker 02:
Even if you say that's a plausible inference, we don't think it gets close to being the only possible inference, which is what Ackerman demands.

[00:09:30] Speaker 02:
There are so many fact issues here.

[00:09:32] Speaker 02:
We disagree on the facts, the nature of the interaction between the parties, as well as the inferences to be drawn.

[00:09:41] Speaker 02:
I do want to address two other issues just very briefly.

[00:09:44] Speaker 02:
We'll submit on the rest.

[00:09:46] Speaker 02:
There's another defect in Sirius XM's implied license case, which is the presence of an express contract between the parties on the same subject matter.

[00:09:58] Speaker 02:
And this court has made clear in cases like Endo and Atlas that having that express license, this court is not going to go in and try to rewrite the parties' argument.

[00:10:09] Speaker 02:
Here, we have an especially bad case for an implied license, because it's not just that the FFPC was silenced.

[00:10:18] Speaker 04:
Can you identify any case where an implied license as a result of equitable estoppel has been denied because there was a contract between the parties?

[00:10:28] Speaker 02:
I can't, Your Honor, because, in fact, Sirius XM's theory is something that has never been... I haven't seen this theory adopted in any case of this court, that's for certain.

[00:10:40] Speaker 02:
On the implied license, the FFPC is not just an agreement that is silent.

[00:10:45] Speaker 02:
It actually expressly excludes the patents at issue in this case.

[00:10:51] Speaker 02:
And all of the deposition testimony that we got from all of Sirius XM's witnesses confirmed the self-same thing, that there was a caveat for these patents, that there was a carve-out for these patents again and again.

[00:11:05] Speaker 02:
And we cited that testimony.

[00:11:07] Speaker 02:
And I'd submit that it would be highly improper to find an applied license in that case.

[00:11:11] Speaker 02:
Finally, again briefly, even setting aside all of the other issues that we've addressed, we'd submit that it was highly improper to dispose of this case entirely based on a defense that was only raised for the 2010 termination theory.

[00:11:29] Speaker 02:
Fraunhofer had multiple theories under which Sirius XM's activity was unlicensed.

[00:11:36] Speaker 02:
This court knows that because it pointed out that Fraunhofer had multiple theories in its 2019 decision in this very case.

[00:11:44] Speaker 02:
Sirius XM has conceded that its defense here, its motion, was explicitly assumed that the sublicense terminated in 2010.

[00:11:54] Speaker 02:
That's from page 60 of their brief.

[00:11:56] Speaker 02:
And so to have the district court go on and decide that this one defense on this one theory somehow wiped out the other case, the entire case.

[00:12:05] Speaker 03:
Did it hit arguments on the other theories?

[00:12:09] Speaker 02:
There was no oral argument at all on any of this.

[00:12:13] Speaker 02:
So we'd submit that remand at a minimum is needed for that.

[00:12:16] Speaker 02:
If there are no other questions, I'll reserve the rest of my time.

[00:12:19] Speaker 00:
I'm going to say this for you.

[00:12:21] Speaker 00:
Mr. Baird, this area.

[00:12:28] Speaker 04:
Thanks.

[00:12:29] Speaker 04:
Thank you, Your Honor.

[00:12:30] Speaker 04:
May it please the court.

[00:12:32] Speaker 04:
Let me ask a real head scratcher.

[00:12:34] Speaker 04:
It seems to me that you didn't put in any direct testimony by your witnesses about reliance.

[00:12:39] Speaker 04:
It really makes me as come out of awe.

[00:12:43] Speaker 01:
Well, Your Honor, I think that there is some direct evidence on the point of reliance.

[00:12:49] Speaker 01:
And that is Mr. Wadene's testimony in connection with

[00:12:53] Speaker 01:
that everything they were doing with Faunhofer matched up with their irrevocable license and the amendments to that license that the parties entered into.

[00:13:02] Speaker 04:
Okay, but that falls a bit short of saying we relied on

[00:13:06] Speaker 04:
Fraunhofer's statements are silenced.

[00:13:10] Speaker 04:
It may well be.

[00:13:11] Speaker 04:
I mean, it seems logical that they would have relied on it.

[00:13:13] Speaker 04:
But you don't have any testimony to that effect.

[00:13:16] Speaker 01:
The only testimony that was submitted that the district court did not consider in connection with our motion was the declaration submitted by Mr. Wadine providing that type of direct evidence.

[00:13:29] Speaker 01:
If this court believes it needs that sort of evidence, that declaration would fill that.

[00:13:36] Speaker 04:
What did Mr. Wadden say?

[00:13:38] Speaker 01:
What Mr. Wadden said, if Fraunhofer had raised the issue of infringement, Sirius XM would have taken a different course of action under the circumstances.

[00:13:48] Speaker 01:
Because this is a case of silence plus conduct, which gets to the misleading prong of reliance.

[00:13:57] Speaker 01:
And as far as the evidence of reliance, Your Honor, OK, we start with the standard.

[00:14:04] Speaker 01:
Did the patentee's actions lull the accused infringer into a sense of security in making a decision?

[00:14:10] Speaker 04:
And under the circumstance present here, Michael, is there any testimony that your client was lulled into a sense of security?

[00:14:17] Speaker 04:
It's just really odd.

[00:14:18] Speaker 04:
Well, maybe you could infer it.

[00:14:20] Speaker 04:
Maybe a jury could infer it.

[00:14:22] Speaker 04:
But for summary judgment, you would expect to see some explicit, direct evidence to that.

[00:14:27] Speaker 01:
Well, the direct evidence is the circumstance, because at the time that that decision was being made, there was pure silence.

[00:14:36] Speaker 01:
You would not expect direct evidence, percipient witness testimony in that 2010 time frame to be able to say that.

[00:14:44] Speaker 01:
You could say it after the fact, like Mr. Wadden did in his declaration.

[00:14:48] Speaker 04:
They could say we

[00:14:50] Speaker 04:
thought we had a license, and they didn't disabuse us of that.

[00:14:54] Speaker 04:
We relied on that.

[00:14:56] Speaker 01:
Well, I think that is the undisputed evidence here.

[00:14:59] Speaker 01:
In the context of making that decision to migrate to the high band system, I think it's undisputed that everyone knew that the sublicense existed.

[00:15:09] Speaker 01:
Everyone knew the connection of the bankruptcy that a settlement agreement had entered into.

[00:15:13] Speaker 01:
That's the context in which the decision to migrate to the high band system was made.

[00:15:18] Speaker 01:
And all of that evidence is undisputed.

[00:15:22] Speaker 01:
And we go back to the Aukerman standard, we believe it satisfied that.

[00:15:26] Speaker 04:
I think that's all true.

[00:15:27] Speaker 04:
I mean, I think the record discloses that they assumed they had a license and relied on it.

[00:15:32] Speaker 04:
It seems to me that's correct.

[00:15:34] Speaker 04:
But that's a little different from saying that your client relied on Fraunhauser's silence to infer that there was no problem.

[00:15:47] Speaker 01:
Well, I think I understand the question.

[00:15:51] Speaker 01:
I think the reliance element is met because whether you consider direct or the inference to be made, when making that decision in that context, CSXM is undisputed that they conducted an extensive analysis about whether to go with the high band or the non-infringing low band.

[00:16:08] Speaker 01:
That's undisputed.

[00:16:09] Speaker 01:
They found the two systems economically and technically equivalent.

[00:16:14] Speaker 01:
This is all in the context of Fraunhofer's silence.

[00:16:17] Speaker 01:
And then you get the conduct from 2010 to 2015, while they're migrating, that reinforces that decision.

[00:16:24] Speaker 01:
They maintain that decision to migrate.

[00:16:26] Speaker 01:
So Fraunhofer's not saying anything at all in this context.

[00:16:29] Speaker 01:
And the only inference under those circumstances, while they have an alternative option that obviously they didn't go with, they went with a high ban.

[00:16:37] Speaker 01:
Had Fraunhofer raised an issue?

[00:16:39] Speaker 01:
OK, that changes the equivalency under the circumstances and changes those dynamics.

[00:16:45] Speaker 01:
The issue of the display.

[00:16:47] Speaker 00:
I'm wondering about the appropriateness of some of the judgment here.

[00:16:51] Speaker 00:
There seem to be a lot of issues.

[00:16:54] Speaker 00:
The court says there's no use complicating matters.

[00:16:57] Speaker 00:
Assume this, assume that, and ignore this.

[00:17:01] Speaker 00:
Why the wait?

[00:17:03] Speaker 00:
It looks to me like the court just jumped in and said, I know what the evidence will show, but don't we need to ever resolve the facts?

[00:17:16] Speaker 01:
Well, Your Honor, I don't think so.

[00:17:18] Speaker 01:
And here's why.

[00:17:19] Speaker 01:
What the court did here was assume Fraunhofer's theory of the case.

[00:17:26] Speaker 01:
Fraunhofer had multiple arguments about why CS6M no longer had a license.

[00:17:31] Speaker 01:
It assumed that Fraunhofer was right about the termination in 2010.

[00:17:35] Speaker 01:
about a termination in 2011 and a termination in 2015.

[00:17:39] Speaker 01:
And in fact, the alternative argument we have over the FFPC, he assumed Fahlhaber was right about that.

[00:17:45] Speaker 01:
So let's assume Fahlhaber's right the license terminates.

[00:17:48] Speaker 01:
Where do we go from there?

[00:17:49] Speaker 01:
What does the undisputed evidence show us?

[00:17:51] Speaker 01:
And the court went through that undisputed evidence.

[00:17:54] Speaker 01:
It went through the context of a 12-year relationship.

[00:17:58] Speaker 01:
Everyone knowing about these licenses, the FFPC, the sublicense, and then the settlement agreement that happened during the bankruptcy, that just simply evaluated these systems, made a decision to

[00:18:10] Speaker 01:
to migrate to the high band, all in the context of Fraunhofer's silence, including the ongoing relationship between 2010 and 2015.

[00:18:20] Speaker 01:
All of this is laid out in detail in the district court's opinion.

[00:18:26] Speaker 01:
And as far as the decision about going into the business pragmatics, that was ultimately a tiebreaker.

[00:18:34] Speaker 01:
And they used those business pragmatics as a tiebreaker between the two.

[00:18:39] Speaker 01:
Had Fraunhofer raised the issue of infringement, the equivalency is no longer there.

[00:18:43] Speaker 01:
That tiebreaker turns and it's reasonable to infer that you would go with the low band system under those circumstances and not the high band system.

[00:18:52] Speaker 03:
When did Fraunhofer know about the implied license?

[00:18:59] Speaker 01:
When Fraunhofer about our sublicense?

[00:19:02] Speaker 03:
Your sublicense.

[00:19:03] Speaker 01:
It's undisputed, as of 2009, Fraunhofer knew about the existence of the sublicense because it was publicly disclosed in connection with the bankruptcy proceedings.

[00:19:13] Speaker 03:
So there's no dispute.

[00:19:14] Speaker 03:
And the switch from the low band to the high band, when did that occur relative to what you just said?

[00:19:19] Speaker 01:
Okay, that migration occurred between the 2010-2015 time frame.

[00:19:26] Speaker 01:
No, well, actually, it didn't occur earlier.

[00:19:28] Speaker 01:
It actually occurred after that point in time.

[00:19:31] Speaker 01:
In fact, the district court addressed this, that it was a gradual migration from 2010 to 2015 and beyond.

[00:19:38] Speaker 01:
And that's why the migration is not a light switch, Your Honor.

[00:19:41] Speaker 01:
This doesn't, you all snap your fingers and it changes.

[00:19:43] Speaker 01:
It happened over a period of time, and the undisputed evidence shows that it really didn't get going until about 2013.

[00:19:49] Speaker 03:
The point that this report did, it assumed... It seems to me, though, that the question as to whether a sublicense existed, a valid sublicense existed, should have occurred when the migration list was first thought out or planned.

[00:20:08] Speaker 03:
You're dealing with two different companies.

[00:20:10] Speaker 03:
You're migrating the activities of one to the other.

[00:20:14] Speaker 03:
These are sophisticated business people dealing with intellectual property issues.

[00:20:20] Speaker 03:
It seems to me that at that point, when you're thinking about migration, that there should have been some word out to the existence of the civilizations.

[00:20:29] Speaker 01:
Well, Your Honor, under the circumstances, and for purposes of equitable estoppel, we look at things from the perspective of the accused infringer.

[00:20:38] Speaker 01:
And in light of the silence by Fraunhofer under those circumstances and the undisputed events that occur, it's that silence plus conduct that results in satisfying the misleading element here.

[00:20:51] Speaker 01:
There is no case law.

[00:20:52] Speaker 01:
in a silence plus conduct scenario where the onus is put on the accused infringer to raise an issue in the circumstances we have here.

[00:21:00] Speaker 01:
Counselor mentioned the Hem Street case.

[00:21:03] Speaker 01:
Hem Street involved a situation where the patentee alerted the accused infringer of an infringement issue and there was back and forth between them.

[00:21:10] Speaker 01:
All the cases that counsel mentioned in the context of equitable estoppel were not silence plus conduct cases.

[00:21:18] Speaker 01:
They were cases where the patentee raised the issue of infringement, and there was back and forth between the parties on that issue.

[00:21:26] Speaker 01:
Here, now the situation is this court's case in High Point, where it's a silence plus conduct case.

[00:21:34] Speaker 01:
That's what we have here.

[00:21:35] Speaker 01:
And I submit to the court that there is a case

[00:21:37] Speaker 03:
We understand the silence.

[00:21:39] Speaker 03:
What was the conduct?

[00:21:41] Speaker 03:
Well, the conduct was... And I say that because in a lot of these cases, you have something apart from just pure silence.

[00:21:51] Speaker 03:
You may have a letter that tells somebody or alerts somebody as to that patents don't exist or a certain interest is vested.

[00:22:01] Speaker 03:
So what do you have here?

[00:22:03] Speaker 01:
What you have here, Your Honor, is the entirety of the relationship from 2010 to 2015.

[00:22:08] Speaker 01:
You have ongoing work on the high band system with this hierarchical decoder.

[00:22:12] Speaker 01:
You have Fraunhofer securing a third party license for SiriusXM for the very high band system we're talking about.

[00:22:19] Speaker 01:
You have an amendment to the FFPC between the parties where in-house counsel and principals are talking to each other.

[00:22:27] Speaker 01:
You have ongoing meetings four times a year between 2010 and 2012, and then subsequent meetings after that.

[00:22:34] Speaker 01:
You have audio technology work happening between the parties, and that audio technology, that coding, is something that's transmitted over the high band system.

[00:22:42] Speaker 01:
In addition to that, starting in August 2012, you have von Hoffer and serious engineers having the wonky engineering discussions about, well, maybe we can enhance the system.

[00:22:53] Speaker 01:
And even in August 2012, it's part of that email exchange cited by the district court.

[00:22:59] Speaker 01:
And this is APPX 6022 to 6028.

[00:23:04] Speaker 01:
One of Sirius XM's engineers tells one of Fraunhofer's engineers under the surface, in the context of trying to figure out how to enhance the high band, as you're aware, Liberty Media may want to gain control of Sirius XM.

[00:23:19] Speaker 01:
Our group has met with the CEO of Liberty Media, and our impression is that he's willing to invest in new ideas to keep satellite radio relevant and to potentially expand into Europe.

[00:23:28] Speaker 01:
if liberty gains control, you know, we'll make a proposal.

[00:23:32] Speaker 01:
These are the type of ordinary discussions in that context that, from Sirius XM's perspective, you would think, these guys aren't about to enforce their patent rights against us.

[00:23:43] Speaker 01:
And that's what satisfies the standard here.

[00:23:45] Speaker 01:
To boot by October of 2012, they have meetings talking about expanding the high-advance system, about business synergies.

[00:23:53] Speaker 01:
All this stuff is happening.

[00:23:54] Speaker 01:
And then by May of 2013, they're talking about, and this is one of von Hoffer's principles, talking to one of Sirius XM's engineers.

[00:24:03] Speaker 01:
As you know, we still count on people forming a well-known circle around the old XM von Hoffer team, but also new people around further satellite and terrestrial activities.

[00:24:14] Speaker 01:
These sort of communications, this is the plus conduct that Your Honor is referring to.

[00:24:18] Speaker 01:
It is part of the ordinary relationship that was happening between 2012, 2015,

[00:24:23] Speaker 01:
in the context of a known sublicense.

[00:24:26] Speaker 01:
All that, you put all that together, that's the plus conduct that gets you to the misleading nature of what occurred here.

[00:24:37] Speaker 01:
Let me address this issue about, is this an implied license case or is this an equitable estoppel case?

[00:24:46] Speaker 01:
This is an equitable estoppel case.

[00:24:48] Speaker 01:
And if you look at what the district court did, if you look at what we argued, we argued the three elements of equitable estoppel.

[00:24:55] Speaker 01:
And in fact, this court in the Lang case made very clear the distinction between what an implied license case covers and what an equitable estoppel case covers.

[00:25:04] Speaker 01:
And the primary difference in implied license cases is looking for an affirmative grant of consent.

[00:25:10] Speaker 01:
Receptible estoppel is looking for misleading conduct that suggests that the patentee will not enforce their rights.

[00:25:20] Speaker 01:
Let me address the prejudice point.

[00:25:24] Speaker 01:
I think prejudice was undisputed below.

[00:25:27] Speaker 01:
That's what the district court said.

[00:25:29] Speaker 01:
von Hoffler has tried to raise some prejudice arguments here.

[00:25:34] Speaker 01:
We think prejudice is easily satisfied under the circumstances simply because there was a change in economic position.

[00:25:40] Speaker 01:
By migrating to the high band system, the increase in high band receivers that were implemented at that point in time

[00:25:46] Speaker 01:
clearly shows prejudice because we were in fact expanding the high band system.

[00:26:01] Speaker 01:
One last point for the court.

[00:26:05] Speaker 01:
Council mentioned about instantaneously changing from the high band to the low band.

[00:26:11] Speaker 01:
Again, that's not required here under the circumstances.

[00:26:20] Speaker 01:
If the court has, I'm happy to answer any other questions the court may have.

[00:26:25] Speaker 00:
Thank you, Your Honor.

[00:26:27] Speaker 00:
Thank you, Counsel.

[00:26:29] Speaker 00:
Mr. McPhee has some rebuttal time.

[00:26:37] Speaker 02:
The district that made clear what it was ruling on.

[00:26:39] Speaker 02:
It was ruling on the actual motion that Sirius XM filed, which was on implied license.

[00:26:47] Speaker 02:
It referred to DI 638, and that's what we're talking about here.

[00:26:51] Speaker 02:
There was no separate standalone equitable stopple issue raised.

[00:26:56] Speaker 04:
District Judge clearly understood that he was ruling on equitable stopple.

[00:27:00] Speaker 02:
I'm sorry, what are you talking about?

[00:27:04] Speaker 02:
So what Sirius XM argued was that they had an implied license based on an equitable stopple theory.

[00:27:09] Speaker 02:
That is the motion that the court made.

[00:27:11] Speaker 02:
Yes, exactly.

[00:27:13] Speaker 02:
So good.

[00:27:14] Speaker 02:
On the Wadding Declaration, there was a reference to that.

[00:27:16] Speaker 02:
I'll just point out that serious activity did not rely upon the Wadding Declaration on appeal in support of the district court's grant of summary judgment.

[00:27:24] Speaker 02:
They only relied upon it in connection with Fraunhofer's request for summary judgment on that issue.

[00:27:30] Speaker 02:
And in any event, that declaration is exactly the kind of conclusory post-hoc statement that we talked about in Hall, Myers, Gasser chair, that is insufficient to show or support a finding of summary judgment.

[00:27:43] Speaker 02:
On the question of the assumptions that the district court made,

[00:27:48] Speaker 02:
It is a problem.

[00:27:50] Speaker 02:
And in fact, what the district court did, if you look at pages two and three of its decision, it essentially said assume that there was a termination in 2010 and that there was a termination in 2015 and that somehow it terminated with respect to the merger, the failure to assign.

[00:28:08] Speaker 02:
Well, that was never Fraunhofer's argument.

[00:28:10] Speaker 02:
And it makes no sense.

[00:28:11] Speaker 02:
You can only have one termination.

[00:28:13] Speaker 03:
If we were to reverse and send this back on the implied license issue,

[00:28:18] Speaker 03:
Are there any other issues that would be impacted by our decision?

[00:28:22] Speaker 03:
The whole case would move forward towards trial?

[00:28:25] Speaker 03:
Is that what would happen?

[00:28:26] Speaker 02:
Yes.

[00:28:27] Speaker 02:
So we believe that the case should go back.

[00:28:30] Speaker 02:
There are a pile of summary judgment motions that were filed by both sides, including affirmative motions by Fraunhofer, Daubert motions.

[00:28:37] Speaker 02:
Those things would need to be resolved.

[00:28:39] Speaker 02:
And we should get to trial.

[00:28:40] Speaker 02:
This case has been pending for over eight years now.

[00:28:43] Speaker 02:
So we think it's more than ready for that.

[00:28:47] Speaker 02:
Finally, I'll just mention on the misleading prong, which my friend here spent quite a bit of time on, I will just say the bottom line is this.

[00:28:58] Speaker 02:
There are meaningful, disputed facts at a minimum as to the nature of the party's relationship between 2010 and 2015.

[00:29:10] Speaker 02:
Sirius XM has claimed that and went through the litany of what they believe represents extensive ongoing engagements between 2010 and 2015.

[00:29:20] Speaker 02:
They say it was business as usual.

[00:29:23] Speaker 02:
They say it was an ordinary business relationship.

[00:29:25] Speaker 02:
We strongly dispute that.

[00:29:27] Speaker 02:
We don't believe that's supported by the facts.

[00:29:29] Speaker 02:
We've pointed to contrary evidence in the record.

[00:29:33] Speaker 02:
And so there's, at a minimum, a dispute of fact on that misleading element, as well as disputes about what inferences can be drawn from those disputed facts.

[00:29:43] Speaker 02:
In any event, no matter how you look at it, this is not a case for a summary judgment for Sirius XM.

[00:29:49] Speaker 02:
It needs to go back to the district court.

[00:29:52] Speaker 02:
If there are no other questions.

[00:29:54] Speaker 00:
Thank you, counsel.

[00:29:55] Speaker 00:
Thank you to both.

[00:29:57] Speaker 00:
Case is submitted.

[00:29:58] Speaker 00:
And that concludes today's argument.