0107611828. Michael Hallby, Cargill, Incorporated. Good morning. May I please the court, Doria Bred on behalf of the court. Mr. Bred, just one question. With respect to the audit report, there was issued by the state of Oklahoma what needs to be done with that. Can we take traditional notice of that? We are getting asked a judge, but I, you know, we'll wave that
. Is it a public document? It might be understanding as it is, Judge. Mr. Besson probably talked more about that. Thank you. Mr. Besson? Thank you, Your Honor. May I please the court? The court identified exactly the problem with plaintiff's argument, which is that the initial $300,000 was provided
. The amended operating agreement, the plaintiff signed, states that it was provided, and they've waved and are contingent, but they waved any argument that it wasn't, I'm virtue of the fact that they signed the amended agreement. With regard to the failure to fund provisions, section 7.8 of the amended agreement, first of all the auditors report, which came out after the district court's decision end of which we asked this court to take traditional notice. Clearly establishes on page 20 that within a month of signing the amended agreement, they got $8.9 million, and over the length of the company they got $9.8 million. What are you asking us to take traditional notice of the fact that there was a report of what was in it or the correctness of the report? I have serious problems without taking traditional notice of an auditors report as establishing the fact set out in the report
. I mean, when you're talking with dollars, that's a matter that's constantly being distributed. The auditors says one thing, someone else comes in and says the auditors are wrong. I mean, I would have no problem taking traditional notice of the auditors' role to report. But I gather you want us to take traditional notice of the auditors' report as establishing the fact set out in the report. Your Honor, I believe that at the very least the court needs to take traditional notice of the existence of the report and that it says what it says. We think that the case law establishes that in fact the court can take traditional notice of the correctness of the number of the dollar figures set forth in the report. For example, in Blair versus City of Pomona, which is 223 F3rd, 1074, the 9th Circuit took traditional notice of an independent commission report that did investigation of the conduct of the various city police departments in Los Angeles
. But isn't it correct that normally traditional notice relates to matters that are not subject to dispute? And certainly the amount the dollar amount set out in the auditors' report may be subject to dispute. I don't know, but I have the suspicion that your opponent would dispute the amount set forth in the auditors' report. And if it's subject to dispute, I don't see how it can take traditional notice of it. I mean, traditionally, traditional notice has taken up the fact that the 7th of April in 1922 was on a Tuesday. I mean, that's something you can take traditional notice of because there's no dispute about it. But if the question was how much someone earned from the practice of the profession in a particular year, and somebody says, well, here's a report showing this, and the fellow says, no idea, I earned a lot more than that. I don't see that we can take traditional notice of that as being established beyond dispute
. I respectfully disagree based on the procedures in the process that the auditor stated he followed in the report in terms of following the money and auditing. And the report's very careful to note where there were in addictive records. But do you need, do you, in order to prevail on this aspect of the case, you don't have to rely on that order to report. Do you listen to this enough to show that there was substantial compliance with the dollar amount? Clearly, if the court declines to take traditional notice of the dollar figures set forth in the report, or cargo is still entitled to prevail, and the district court's decision was correct, the district court didn't have the report available to it at the time it decided that the amount of funding that was provided, and that they admit that plaintiffs admit was provided, was raised in the language of the failure of fund provision, reasonably sufficient to fund the company's operations. We know that that is the case because during the time, during the Philadelphia litigation, earlier litigation, plaintiffs were saying and testified under oath that the plan was operation. At page 17, 18, the appendix, they sent marketing literature out providing operating costs, figures based on operations of the plan. So when it suited them to claim that the plan was operational and had been funded to the point where they could start it up and get reliable figures from it, they did so
. Now in this litigation, they're backing away from that, trying to create a factual issue. The district court properly considered Mr. Moser's testimony. But basically, didn't the district court find that the problem here was that a little plant was operational, that it couldn't get the business needed? Well, I believe that's one of the basis for the district court's decision. The other basis is that plaintiffs' description and determination of what the plant needed to do to be operational is a hope or an aspiration, and the fact that they started it up and it wasn't as good as they thought it would be doesn't mean that it was an operation. The fact that the bigger problem with the business field was not lack of money, but the location and the fact that they couldn't get customers. And finally, even if the amount of funding inadequate and failure of fund provision did occur, the fact is that the language of some point doesn't give ownership rights, which are necessary for them to have standing, doesn't give it back to them
. The language in Section 3.4, they agreement clearly states that they transferred all their rights, which means ownership to LGX, and even if the failure of fund provision applies, all they get back is the right to use, they get an on-exclusive license. That's not enough to give them standing. So we think that clearly the district court's decision with regard to the funding and their lack of standing to bring their state law claims and their patent claims was correct. As we discussed in a brief, there are additional reasons the district court chose not to address why the judgment regarding the patent claim should be a firm. If the court needs to consider those, we would ask that you do that. But the district court did not hold an evidentiary hearing
. This was all done on summary judgment. Correct. So the factual findings were often documents. Correct. And is that on the basis of the judgment that the factual findings certainly were not in favor of the whole plaintiffs? That's correct, Your Honor. The district court considered all the evidence carefully stated that the correct standard for summary judgment drew all the inferences that it could in favor of plaintiffs who were the non-movement party, and determined that they lack standing. Believe the district court's decision in that regard was correct
. And all the inferences were to be drawn in favor of the not-movement party. Correct. And spite of the fact of the findings of fact that were made by the court. The court considered all of the evidence drew inferences from that evidence that favored the non-movement party and still determined that no reasonable jury could find in plain of favor. That's the proper summary to understand. With respect to the judicial notice of the audit report, wouldn't the audit report really be subject to the audit or would be subject to cross-examination as to the procedures used? And the source of the information that was determined to be in the report? Conceivately the audit could be subject to cross-examination with regard to the methods used. I don't know that there's any particular immunity that would preclude that procedure, all right? Honestly, haven't looked into that
. But with respect to that, do you really need the audit report to prevail? As I stated in response to Judge Friedman's question, I believe no. The audit report wasn't available to the district court at the time of the judge, district court's ruling, and the district court's ruling is correct for the reasons we've articulated now and in our brief. Turning to the, our cross appeal, we believe the district court erred when it determined the carry lack standing to bring its claims for patent infringement against the court. It's counterclaims for patent infringement against the plaintiffs. The district court's ruling was premised on the alleged lack of standing based on a termination letter that Cargo received. Cargo all disputed whether or not the license or had power to terminate the agreement and whether the termination was proper. The license or later acknowledged that that notice of termination was improper by signing an agreement that annulled the notice of termination. There was also a study that was non-exclusive in the sense that the license or retain the right to sue. You didn't. If you didn't. The license or retain a limited right to sue. With respect to our belief of reading of this court's case law about what is an adequate exclusive license to confer standing to sue doesn't require that the exclusive license is the only party that can sue. It only requires that there be no risk of multiple suites. By the its terms, the license agreement between the two parties clearly removes the risk of multiple suites by saying if Cargo sues Mr
. There was also a study that was non-exclusive in the sense that the license or retain the right to sue. You didn't. If you didn't. The license or retain a limited right to sue. With respect to our belief of reading of this court's case law about what is an adequate exclusive license to confer standing to sue doesn't require that the exclusive license is the only party that can sue. It only requires that there be no risk of multiple suites. By the its terms, the license agreement between the two parties clearly removes the risk of multiple suites by saying if Cargo sues Mr. Franky cannot. Furthermore, the prior non-exclusive license to Hershey is a red herring because the difference between taking exclusive license to a party is not the same. The prior license and taking a assignment to an exclusive license is immaterial. So that the existence of the Hershey agreement is in our view irrelevant to whether or not Cargo had standing to sue. If there are no further questions, I'll save my rebuttal time. Okay, we'll start wrapping up. With respect to Cargo's counter claim is the court picked up on
. Franky cannot. Furthermore, the prior non-exclusive license to Hershey is a red herring because the difference between taking exclusive license to a party is not the same. The prior license and taking a assignment to an exclusive license is immaterial. So that the existence of the Hershey agreement is in our view irrelevant to whether or not Cargo had standing to sue. If there are no further questions, I'll save my rebuttal time. Okay, we'll start wrapping up. With respect to Cargo's counter claim is the court picked up on. Under a patent law, the only individuals or companies that can bring an infringement claim are of course the patty, the Ascini or a licensee who holds all substantial rights to the technology. One of the substantial rights is exclusivity. Cargo, I think, is admitted in this correspondence he's had with Mr. Franky, who are various companies or their attorneys. They are very worried about the fact that he had issued this license prior to Hershey, governing the same technology. So it's our contention that as the court noted that this license to Cargo was not exclusive and therefore did not grant upon Cargo's standing to sue for infringement in this case. And secondly, we think this report was correct in finding that at the time that Mr
. Under a patent law, the only individuals or companies that can bring an infringement claim are of course the patty, the Ascini or a licensee who holds all substantial rights to the technology. One of the substantial rights is exclusivity. Cargo, I think, is admitted in this correspondence he's had with Mr. Franky, who are various companies or their attorneys. They are very worried about the fact that he had issued this license prior to Hershey, governing the same technology. So it's our contention that as the court noted that this license to Cargo was not exclusive and therefore did not grant upon Cargo's standing to sue for infringement in this case. And secondly, we think this report was correct in finding that at the time that Mr. Michael did these various liquefied gas extraction tests on what we would intend would be a product that would not be carried by the Franky patents anyway. That Cargo's license wasn't even in effect, even if it was exclusive. But they had terminated months before Mr. Hall performed his test and it remained terminated throughout the time and did this test. So the district court noted an equitable argument which I think makes sense, which is that how can you hold somebody to a license that wasn't in place but is somehow then retroactively applied. It's just simply not fair to Mr. Hall in this case to say, well, we're going to reinstate this license
. Michael did these various liquefied gas extraction tests on what we would intend would be a product that would not be carried by the Franky patents anyway. That Cargo's license wasn't even in effect, even if it was exclusive. But they had terminated months before Mr. Hall performed his test and it remained terminated throughout the time and did this test. So the district court noted an equitable argument which I think makes sense, which is that how can you hold somebody to a license that wasn't in place but is somehow then retroactively applied. It's just simply not fair to Mr. Hall in this case to say, well, we're going to reinstate this license. And by the way, you're now infringement of it even though the time we didn't have it. So we think in those, for those reasons, your honor is that the district court was correct in denying Cargo's motion for a counter-click. I'm sorry. Motion for some of you to counter-click. Thank you. Your honor. In response to Mr
. And by the way, you're now infringement of it even though the time we didn't have it. So we think in those, for those reasons, your honor is that the district court was correct in denying Cargo's motion for a counter-click. I'm sorry. Motion for some of you to counter-click. Thank you. Your honor. In response to Mr. Britz arguments regarding the counter-climbing. First of all, this court's case clearly establishes that the hallmark of an exclusive license he was standing this suit is the power to indulge in infringement. And that's what Cargo has by the virtue of the fact it's the sole party that can indulge in infringement by granting sublicenses. Even if Mr. Frankie were to choose to suit, Cargo could be immunized the party by granting a sublicense. Furthermore, his public notice argument assumes something that is in fact almost never the case, which is that the licenses of this nature are available to public and the publics entitled to rely on them. Licenses are almost always confidential, the terms are not known
. Britz arguments regarding the counter-climbing. First of all, this court's case clearly establishes that the hallmark of an exclusive license he was standing this suit is the power to indulge in infringement. And that's what Cargo has by the virtue of the fact it's the sole party that can indulge in infringement by granting sublicenses. Even if Mr. Frankie were to choose to suit, Cargo could be immunized the party by granting a sublicense. Furthermore, his public notice argument assumes something that is in fact almost never the case, which is that the licenses of this nature are available to public and the publics entitled to rely on them. Licenses are almost always confidential, the terms are not known. So whether or not there was a dispute and the license was in Mr. Britzview reinstated is irrelevant. And finally, and most importantly, the license was not canceled and then reinstated. What happened here is no different than if Cargo had pursued arbitration and gotten an arbitrator's ruling that said the notice of termination was not properly made and therefore ineffective. Certainly if Cargo had gone arbitration and gotten a ruling that said that, there would be no quote-unquote gap in Cargo's right to suit. Well, here Mr. Cargo didn't have to go through arbitration because Mr
. So whether or not there was a dispute and the license was in Mr. Britzview reinstated is irrelevant. And finally, and most importantly, the license was not canceled and then reinstated. What happened here is no different than if Cargo had pursued arbitration and gotten an arbitrator's ruling that said the notice of termination was not properly made and therefore ineffective. Certainly if Cargo had gone arbitration and gotten a ruling that said that, there would be no quote-unquote gap in Cargo's right to suit. Well, here Mr. Cargo didn't have to go through arbitration because Mr. Frankie recognized that his notice was invalid and annulled it. That's the meaning of the term annull that's used in the area that didn't restate agreement. The district court just improperly construed the amended and restated agreement and improperly denied Cargo's standing to suit. It's counter-claiming for bad and for injury in this case. All right. There are no further questions. Thank you
. Frankie recognized that his notice was invalid and annulled it. That's the meaning of the term annull that's used in the area that didn't restate agreement. The district court just improperly construed the amended and restated agreement and improperly denied Cargo's standing to suit. It's counter-claiming for bad and for injury in this case. All right. There are no further questions. Thank you. Thank you. The case is submitted.
0107611828. Michael Hallby, Cargill, Incorporated. Good morning. May I please the court, Doria Bred on behalf of the court. Mr. Bred, just one question. With respect to the audit report, there was issued by the state of Oklahoma what needs to be done with that. Can we take traditional notice of that? We are getting asked a judge, but I, you know, we'll wave that. Is it a public document? It might be understanding as it is, Judge. Mr. Besson probably talked more about that. Thank you. Mr. Besson? Thank you, Your Honor. May I please the court? The court identified exactly the problem with plaintiff's argument, which is that the initial $300,000 was provided. The amended operating agreement, the plaintiff signed, states that it was provided, and they've waved and are contingent, but they waved any argument that it wasn't, I'm virtue of the fact that they signed the amended agreement. With regard to the failure to fund provisions, section 7.8 of the amended agreement, first of all the auditors report, which came out after the district court's decision end of which we asked this court to take traditional notice. Clearly establishes on page 20 that within a month of signing the amended agreement, they got $8.9 million, and over the length of the company they got $9.8 million. What are you asking us to take traditional notice of the fact that there was a report of what was in it or the correctness of the report? I have serious problems without taking traditional notice of an auditors report as establishing the fact set out in the report. I mean, when you're talking with dollars, that's a matter that's constantly being distributed. The auditors says one thing, someone else comes in and says the auditors are wrong. I mean, I would have no problem taking traditional notice of the auditors' role to report. But I gather you want us to take traditional notice of the auditors' report as establishing the fact set out in the report. Your Honor, I believe that at the very least the court needs to take traditional notice of the existence of the report and that it says what it says. We think that the case law establishes that in fact the court can take traditional notice of the correctness of the number of the dollar figures set forth in the report. For example, in Blair versus City of Pomona, which is 223 F3rd, 1074, the 9th Circuit took traditional notice of an independent commission report that did investigation of the conduct of the various city police departments in Los Angeles. But isn't it correct that normally traditional notice relates to matters that are not subject to dispute? And certainly the amount the dollar amount set out in the auditors' report may be subject to dispute. I don't know, but I have the suspicion that your opponent would dispute the amount set forth in the auditors' report. And if it's subject to dispute, I don't see how it can take traditional notice of it. I mean, traditionally, traditional notice has taken up the fact that the 7th of April in 1922 was on a Tuesday. I mean, that's something you can take traditional notice of because there's no dispute about it. But if the question was how much someone earned from the practice of the profession in a particular year, and somebody says, well, here's a report showing this, and the fellow says, no idea, I earned a lot more than that. I don't see that we can take traditional notice of that as being established beyond dispute. I respectfully disagree based on the procedures in the process that the auditor stated he followed in the report in terms of following the money and auditing. And the report's very careful to note where there were in addictive records. But do you need, do you, in order to prevail on this aspect of the case, you don't have to rely on that order to report. Do you listen to this enough to show that there was substantial compliance with the dollar amount? Clearly, if the court declines to take traditional notice of the dollar figures set forth in the report, or cargo is still entitled to prevail, and the district court's decision was correct, the district court didn't have the report available to it at the time it decided that the amount of funding that was provided, and that they admit that plaintiffs admit was provided, was raised in the language of the failure of fund provision, reasonably sufficient to fund the company's operations. We know that that is the case because during the time, during the Philadelphia litigation, earlier litigation, plaintiffs were saying and testified under oath that the plan was operation. At page 17, 18, the appendix, they sent marketing literature out providing operating costs, figures based on operations of the plan. So when it suited them to claim that the plan was operational and had been funded to the point where they could start it up and get reliable figures from it, they did so. Now in this litigation, they're backing away from that, trying to create a factual issue. The district court properly considered Mr. Moser's testimony. But basically, didn't the district court find that the problem here was that a little plant was operational, that it couldn't get the business needed? Well, I believe that's one of the basis for the district court's decision. The other basis is that plaintiffs' description and determination of what the plant needed to do to be operational is a hope or an aspiration, and the fact that they started it up and it wasn't as good as they thought it would be doesn't mean that it was an operation. The fact that the bigger problem with the business field was not lack of money, but the location and the fact that they couldn't get customers. And finally, even if the amount of funding inadequate and failure of fund provision did occur, the fact is that the language of some point doesn't give ownership rights, which are necessary for them to have standing, doesn't give it back to them. The language in Section 3.4, they agreement clearly states that they transferred all their rights, which means ownership to LGX, and even if the failure of fund provision applies, all they get back is the right to use, they get an on-exclusive license. That's not enough to give them standing. So we think that clearly the district court's decision with regard to the funding and their lack of standing to bring their state law claims and their patent claims was correct. As we discussed in a brief, there are additional reasons the district court chose not to address why the judgment regarding the patent claim should be a firm. If the court needs to consider those, we would ask that you do that. But the district court did not hold an evidentiary hearing. This was all done on summary judgment. Correct. So the factual findings were often documents. Correct. And is that on the basis of the judgment that the factual findings certainly were not in favor of the whole plaintiffs? That's correct, Your Honor. The district court considered all the evidence carefully stated that the correct standard for summary judgment drew all the inferences that it could in favor of plaintiffs who were the non-movement party, and determined that they lack standing. Believe the district court's decision in that regard was correct. And all the inferences were to be drawn in favor of the not-movement party. Correct. And spite of the fact of the findings of fact that were made by the court. The court considered all of the evidence drew inferences from that evidence that favored the non-movement party and still determined that no reasonable jury could find in plain of favor. That's the proper summary to understand. With respect to the judicial notice of the audit report, wouldn't the audit report really be subject to the audit or would be subject to cross-examination as to the procedures used? And the source of the information that was determined to be in the report? Conceivately the audit could be subject to cross-examination with regard to the methods used. I don't know that there's any particular immunity that would preclude that procedure, all right? Honestly, haven't looked into that. But with respect to that, do you really need the audit report to prevail? As I stated in response to Judge Friedman's question, I believe no. The audit report wasn't available to the district court at the time of the judge, district court's ruling, and the district court's ruling is correct for the reasons we've articulated now and in our brief. Turning to the, our cross appeal, we believe the district court erred when it determined the carry lack standing to bring its claims for patent infringement against the court. It's counterclaims for patent infringement against the plaintiffs. The district court's ruling was premised on the alleged lack of standing based on a termination letter that Cargo received. Cargo all disputed whether or not the license or had power to terminate the agreement and whether the termination was proper. The license or later acknowledged that that notice of termination was improper by signing an agreement that annulled the notice of termination. There was also a study that was non-exclusive in the sense that the license or retain the right to sue. You didn't. If you didn't. The license or retain a limited right to sue. With respect to our belief of reading of this court's case law about what is an adequate exclusive license to confer standing to sue doesn't require that the exclusive license is the only party that can sue. It only requires that there be no risk of multiple suites. By the its terms, the license agreement between the two parties clearly removes the risk of multiple suites by saying if Cargo sues Mr. Franky cannot. Furthermore, the prior non-exclusive license to Hershey is a red herring because the difference between taking exclusive license to a party is not the same. The prior license and taking a assignment to an exclusive license is immaterial. So that the existence of the Hershey agreement is in our view irrelevant to whether or not Cargo had standing to sue. If there are no further questions, I'll save my rebuttal time. Okay, we'll start wrapping up. With respect to Cargo's counter claim is the court picked up on. Under a patent law, the only individuals or companies that can bring an infringement claim are of course the patty, the Ascini or a licensee who holds all substantial rights to the technology. One of the substantial rights is exclusivity. Cargo, I think, is admitted in this correspondence he's had with Mr. Franky, who are various companies or their attorneys. They are very worried about the fact that he had issued this license prior to Hershey, governing the same technology. So it's our contention that as the court noted that this license to Cargo was not exclusive and therefore did not grant upon Cargo's standing to sue for infringement in this case. And secondly, we think this report was correct in finding that at the time that Mr. Michael did these various liquefied gas extraction tests on what we would intend would be a product that would not be carried by the Franky patents anyway. That Cargo's license wasn't even in effect, even if it was exclusive. But they had terminated months before Mr. Hall performed his test and it remained terminated throughout the time and did this test. So the district court noted an equitable argument which I think makes sense, which is that how can you hold somebody to a license that wasn't in place but is somehow then retroactively applied. It's just simply not fair to Mr. Hall in this case to say, well, we're going to reinstate this license. And by the way, you're now infringement of it even though the time we didn't have it. So we think in those, for those reasons, your honor is that the district court was correct in denying Cargo's motion for a counter-click. I'm sorry. Motion for some of you to counter-click. Thank you. Your honor. In response to Mr. Britz arguments regarding the counter-climbing. First of all, this court's case clearly establishes that the hallmark of an exclusive license he was standing this suit is the power to indulge in infringement. And that's what Cargo has by the virtue of the fact it's the sole party that can indulge in infringement by granting sublicenses. Even if Mr. Frankie were to choose to suit, Cargo could be immunized the party by granting a sublicense. Furthermore, his public notice argument assumes something that is in fact almost never the case, which is that the licenses of this nature are available to public and the publics entitled to rely on them. Licenses are almost always confidential, the terms are not known. So whether or not there was a dispute and the license was in Mr. Britzview reinstated is irrelevant. And finally, and most importantly, the license was not canceled and then reinstated. What happened here is no different than if Cargo had pursued arbitration and gotten an arbitrator's ruling that said the notice of termination was not properly made and therefore ineffective. Certainly if Cargo had gone arbitration and gotten a ruling that said that, there would be no quote-unquote gap in Cargo's right to suit. Well, here Mr. Cargo didn't have to go through arbitration because Mr. Frankie recognized that his notice was invalid and annulled it. That's the meaning of the term annull that's used in the area that didn't restate agreement. The district court just improperly construed the amended and restated agreement and improperly denied Cargo's standing to suit. It's counter-claiming for bad and for injury in this case. All right. There are no further questions. Thank you. Thank you. The case is submitted