Legal Case Summary

Good morning. We have five cases to on argument today. We've got four cases on oral argument. One case has been submitted on the briefs. So let's start with the first case, high point, SARL versus T-Mobile, 15, 12, 35. Mr. Black. Thank you, Robert. May I please support? The district court erroneously concluded that three of T-Mobile suppliers held licenses to the patents ensued. And then misaflied this court's decision and courage by failing to perform a claim by claim exhaustion analysis. T-Mobile makes a claim of exhaustion in this case, not license. So it's important to understand what the relationship was between the particular suppliers of issue and T-Mobile at the relevant time. I'd like to begin with discussing the district court's analysis of exhaustion in relation to sales made by NSN US to T-Mobile. Prior to 2007, T-Mobile was buying Nokia products from Nokia, from Nokia's telecommunications business. In 2007, Nokia and Siemens entered into a joint venture. They formed a Dutch joint venture. The Nokia business was contributed to the joint venture and the Siemens business was contributed to the joint venture. Siemens had previously entered into an agreement with AT&T that covered the patents ensued and granted limited rights under a divestment rider

. The divestment rider had three crucial elements. The license can be extended to the divested business only. Not a third party business. The license is limited in time applying only while the future divested business is operated as a separately identifiable business. The license is limited in product scope only to the extent applicable to products that serve the sold by the future divested business. We have a number of issues, very distinct issues related to the license that you're now referring to. Maybe it'll help if we give our argument as to some of the specific issues such as the of kinds construction, whether that is too broad or not. Certainly, there are three elements separately identifiable. The purchase has to be from the divested business and the kinds of products. So with respect to the kinds of products, the record is uncontested that prior to the joint venture, T-Mobile was buying Nokia products, Nokia design products from Nokia's US affiliate. It's also uncontested after the joint venture, T-Mobile continued to buy the exact same products from Nokia. That is from the Nokia divested business, not from the Siemens divested business. The license only goes to the Siemens divested business. It also only goes to the Siemens divested business for so long as the Siemens business is separately identifiable. That's a common provision in these sorts of agreements designed to prevent the expansion of the license upon a divestiture. When a business is divested, the licensee may well want for the business that's using the patents to continue to be able to use it. But the licenseeor would not want the divested business to be purchased and then expanded license to a curse that entirely new business does not pay any royalties

. Could gain a license for free. Now, I saw you argue that in the brief, but I didn't see you point to anything to support that argument, that contention. I guess what I'm trying to figure out is what does separately identifiable mean and why was the district court's conclusion of what it meant unreasonable? At the minimum, we know what separately identifiable means. You say it means, but how do I know that? Well, if you look at the structure of the divestment rider, it was entered into it at a time when AT&T was splitting into three separate companies. And the company's got together and they had a special rider to deal with divestments. And what is the problem that would likely have been in the minds of people worrying about the expansion of patent rights to divested businesses? The concern is how do you make sure that things are done fairly? That the divested business say a division which is doing something, continue to continue to operate for some time. But that doesn't expand unfairly to swap, to cover an entire new company which hasn't paid a license right. If our contention on this is at least plausible, then we win because this was at summary judgment. And the district court made a conclusion as a matter of law that our construction was wrong. And at the minimum, our construction is a reasonable one. So what would you want? Would you want it to go back to the district court to do some kind of discoveries to what was, you know, some extrinsic evidence as to the meaning of separately identifiable? I think that there was none submitted and that separately identifiable, if there are two alternatives, the alternatives would be one that it just means separately identifiable from the entity which divested the business, which would mean it's a nullity. There's no reason to write that kind of provision because the divested business by definition has been divested and separated from the original entity. So a contract should not be construed in a way which gives no effect or meaning or which doesn't make commercial sense. They took a lot of care and drafted. You're saying that it's separately identifiable somehow necessarily means it can't be a joint venture. And how do I know that? It could be a joint venture. The problem is not the joint venture

. The problem was when they combined the Nokia business with the Siemens business and also they faded out the Siemens business. The contract clearly says that only the divested business is licensed. The divested business was only the Siemens division originally. According to the evidence, they phased that out. The other problem is there's no evidence that any part of the Siemens divested business was ever acquired by the NSN United States company, which actually made the sales here. Siemens was very big in Europe, not in the United States. So they have to show that they bought from a divested business. They have to show that the products were ones that were being sold at the time. And as soon as the business is no longer separately identifiable, the license lapses. None of those things were shown below. Certainly not at the level required to grant summary judgment. With respect to, I'm going to move on to Ericsson unless you have any further questions on. With respect to Ericsson, we have two different issues. First, so I'm sorry, just back to separately identifiable. You say the correct understanding is what? Separately identifiable from the acquirer's business. And what normally happens, look at the Rembrandt case, for instance. And Rembrandt, what happened is there was a modem business

. And the modem business was spun off. It was a business within a larger company. It was spun off into a separate company. And then that company, I believe, went public. So in that situation, you've got a separately identifiable business, the modem business. The problem would come if that business was purchased by somebody gigantic, say somebody like Lucent or General Motors or IBM, they would get a free license. They can't, if they combine the telecommunications businesses together, and that wouldn't be fair. What are the characteristics in corporate form? What are the corporate form characteristics that you would have us look at in order to determine what particular entity is separately identifiable or not? Thank you, Robert. That's a great question. And the reason is there's been a lot of confusion in the briefing about whether or not we're taking the position that a joint venture is somehow excluded. That's not the position. They could have formed a joint venture, contributed to Seaman's telecom business. Oftentimes a joint venture, for example, may have overlapping boarded directors. Or you may have corporate officers that are lent from one entity to the joint venture. And the name itself may reflect the names of the two entities that are joining together for a particular purpose. That's what a problem is. Right, and that's actually what we have here

. It's Nokia Seaman's network, is what NSN stands for. And what happened though, if they had done a joint venture where they contributed to this business, and maybe they contributed, and then maybe Nokia contributed to different business, a cell phone business, not Bay stations and the things that issue in this case, maybe there wouldn't be a problem. If the joint venture was the contribution of the Seaman's business on the one hand, and Nokia money, for instance, and that they therefore went forward in the world together, maybe there wouldn't be a problem. But once you mix two businesses together that have the same business, you have a problem and you have an extension of the patent rights. And that's what was negotiated for here. This is a limited right, but the license only goes, the key point is not really the joint venture. The key point is that the license goes only to the divested business. The divested business, by the way, is a defined term in the 2009. And are you saying that that's a genuine issue that's been cited by a jury in this case? I think actually, it certainly can't grant summary judgment on this record because the evidence is the Seaman's business was shut down, and the evidence is that T-Mobile did not buy any products from the Seaman's business. So the summary judgment motion should have been denied. We didn't file a cross motion on it, so that's not before you, but certainly. So you want separately identifiable to mean that whatever the divested business is or turns into, it can't, the license doesn't encompass practices that are coming from other companies. That's a point separately identified. If there are two businesses that are combined and they're in the same business line, they have to see the business has to be arranged separately identified. You have to be able to point to something in the new company. If the, if the, if general motors, which doesn't have wireless infrastructure business, bought this business, and it remains separately identifiable to the market as something which people could buy products from. But once you put the two together, you mix the product lines, or in this case, they actually drop the Seaman's business, and that resulted in that there was no divested business anymore at all, let alone a license business

. Okay. You better go to the area, because you're running out of time. Yes, Your Honor. The exhaustion defense fails with respect to Ericsson for two critical reasons. First of all, the right granted here was supposedly a sublicense, but a sublicense can only, can rise no further than the license. And in the agreement, the license expired when the patents expired at the end of 2000. So you have your problem having with your argument that you're making. These are sophisticated entities, they're big players. And they wrote an agreement, but yet the agreement permits this retroactive sublicenses to be extended. Well, there's nothing in the agreement that prohibits that. Now, I understand that the patent has expired, and maybe your argument is that the underlying authority has, you know, expired with that. But that's apparently the parties chose to negotiate and to extend this right to retroactively extend a license beyond the life of the patent. Well, it's a little bit like an option, Your Honor. It has to be, it has a time period on it. It's, it had, you have, they had a right to grant a sublicense, but if you want to call the sublicense as they did, they have to extend it during the period when the license is active. The problem here is it doesn't make any sense to apply retroactive exhaustion, which is a new doctor. It may be true in most cases, but here's a specific provision that permits a retroactive application that's open-ended

. At least it appears to me to be the case. I understand what you're saying. I'm saying this agreement should be construed within its words. There really is no such thing as a retroactive sublicense under afficon and other the courts. The reason this lies. Well, I know, but the question is there's two things, two issues. I'm not going to get to the second one because I think that's the dominant one. One is, can they grant a sublicense under these strict words of this agreement when the license is lapsed? The answer is no. Your Honor says there's sophisticated people. I don't think they contemplated this. I don't think that everybody ever thought that one of the parties would let the license expire and then litigation would ensue and 10 years later they tried it. One doubt. If you have a party that's granting another one, this open-ended right to, for example, a blanket extension to all subsidiaries. Then there's this retroactive provision as well. Why didn't the parties put a date on that and say, okay, gee, maybe we better not permit this to happen beyond the life of a pen? Well, it's not in the agreement. They didn't have the authority to grant it. It's like an option that needs to be construed strictly

. But I want to move to the other question, which is assuming, even assuming they had a right to do this, what is the effect? There's no license to T-Mobile. Their claim is exhaustion and they want to make a claim that this court extend the exhaustion doctrine to retroactive exhaustion. Exhaustion was designed to deal with specific problem. You had patent holders who were selling a product and then trying to control the downstream, the downstream issues relating to the product and trying to get a royalty twice and extend the patent monopoly. Did that happen here? No. What happened? Products were sold to T-Mobile. They installed them in their network. In Fringement occurred. I'm sure claim occurred at that point, which has a separate character's character from permission to an license. And then the patent expired. There was no abuse of the patent monopoly by the patent holder. There was no extension of the patent monopoly unfairly. And what they're asking you to do is to create for them a doctrine which would help them out of the problem they had because they didn't grant the license early, which would have wide-ranging effects. What's the purpose of a retroactive license? Isn't it to protect the licensee sub licensee from liability for past activities? I think that's probably the intent in ethical and standing cases the Court has said we're not necessarily going to give that effect. I would point out one important thing though with respect to this particular sub license and it's dispositive if your honor thinks it's some sort of release, which is that this sub license was a license between LMA and Ericsson Inc. So even if it has some effect for Ericsson Inc, it doesn't have any effect for T-Mobile unless you go further and adopt a concept of retroactive exhaustion, which I suggest is not consistent with the exhaustion doctrine, which is very much focused on the character of the infringing sale and what are the patent holders abused in the monopoly? All right, we used up your time. I'm going to restore your three minutes, okay? Thank you, Robert

. Now, due to the questions that we had, Mr. Bonsali. Thank you, Your Honor. Did I pronounce that correctly, sir? Very well, thank you, Your Honor. And you have 15 more. I'll give you a little extra time if you want, but if you need it only, okay? May it please the Court, Mr. Bonsali of Kekeren Van Nest, LLP for T-Mobile USA. I'd like to start where you left off Judge Reina, which is that these are big players, as you call them. And that observation actually applies to all of the licenses we're dealing with. AT&T in Lucent, when they licensed these patents in the 80s and 90s, received fair compensation in the form of the freedom to operate, free of patent risk from their major competitors, Siemens, Ericsson, and Alcatel, and also received substantial monetary compensation. Once the district court interpreted the licenses to enforce those promises that Lucent and AT&T made against the current holder of their patents, the district court engaged in a straightforward application of the exhaustion doctrine in order to find high points claims exhausted. Why don't you address the separately identifiable limitation? Yes, Your Honor. That limitation was written into the divestment ryer, which was drafted by AT&T, if you look at the rider, it's on AT&T letterhead. And it says exactly what it says. It says that the business has to be separately identifiable. I think it's separately identifiable from who? From the identifiable from what? From any other business. And AT&T in the parent license, in the 1988 parent license

. So let's say you have a joint venture and you're going to apply this separately identifiable. You say from any business. So you seem to argue that the fact that it's divested is sufficient. The fact that it's divested and you can look at the divested business and say this is a free standing separately identifiable. Okay. Assume that divested business now assumes a, a macro name or a name that's built out of the both entities in a joint venture. Is that separately identifiable? That's certainly one characteristic of it being separately identifiable. And in this case is your honor. Actually, your hypothetical existed here because it was Nokia Siemens networks. And so one could look at Nokia Siemens networks and say that it was the identifiable business, separately identifiable business that came from the divested Siemens business. Doesn't that name give rise to question that maybe they're not separate? The fact that the entities retain the name that make perhaps a controlling interest by one entity, overlapping board of directors? That, well certainly the name is, suggests that it's a joint venture. I think is Mr. Black conceded here and the high point concedes in their reply. There's no prohibition on a joint venture. What you have to look at is, is this joint venture separately identifiable. And we at page 21 in our, in our opposition briefs. I still don't understand what separately identifiable means. What if Nokia had bought this divested business? Would that be separately identifiable? I think you would have to look at the characteristics of the business in that, in the, in the range that that's existed. Of course, as I understood the district court's opinion, the answer would be yes, because whatever that is, Nokia's purchase of that divested business, it would be separately identifiable from Siemens. And that's how I understand how the district court understood separately identifiable. And to me that arguably makes the term separately identifiable redundant in light of the fact the contract already says divested business. So let me respond to that with two points. I think first with respect to the district court's opinion, I think one has to read that in the overall context, which is that we explained in our papers in the district court that NSN was operated separately and independently from both Nokia and Siemens. And you could identify it separately and independently in the evidence. Where does that take us, though? The fact that NSN operates independently of Nokia, I mean, what does that matter? Well, what it relates to is that ultimately AT&T, if they wanted to put additional restrictions into separately identifiable, they were a sophisticated party who had the ability to write that in. And in fact, in the parent license, the 1988 Siemens license, they have specific terms, for example, on the ownership that's required of a subsidiary in order for it to be licensed. And the divestment writer actually incorporates, for example, the time period term of the parent license. So if, for example, AT&T wanted the divestment writer not to apply if the divested business became a subsidiary of another company, they could have written that into the license. They chose not to do that. And the district court simply applied the plain language to interpret it as requiring only separation from any other business. Now, I recognize that in the district court's opinion, the late Judge Irina's focused only on separation from Siemens. But the record is undisputed that NSN was also separate from Nokia. And page 21 of our brief, we cite all the evidence that was undisputed about that separation. But you're arguing with us separate because there was a divested

. What if Nokia had bought this divested business? Would that be separately identifiable? I think you would have to look at the characteristics of the business in that, in the, in the range that that's existed. Of course, as I understood the district court's opinion, the answer would be yes, because whatever that is, Nokia's purchase of that divested business, it would be separately identifiable from Siemens. And that's how I understand how the district court understood separately identifiable. And to me that arguably makes the term separately identifiable redundant in light of the fact the contract already says divested business. So let me respond to that with two points. I think first with respect to the district court's opinion, I think one has to read that in the overall context, which is that we explained in our papers in the district court that NSN was operated separately and independently from both Nokia and Siemens. And you could identify it separately and independently in the evidence. Where does that take us, though? The fact that NSN operates independently of Nokia, I mean, what does that matter? Well, what it relates to is that ultimately AT&T, if they wanted to put additional restrictions into separately identifiable, they were a sophisticated party who had the ability to write that in. And in fact, in the parent license, the 1988 Siemens license, they have specific terms, for example, on the ownership that's required of a subsidiary in order for it to be licensed. And the divestment writer actually incorporates, for example, the time period term of the parent license. So if, for example, AT&T wanted the divestment writer not to apply if the divested business became a subsidiary of another company, they could have written that into the license. They chose not to do that. And the district court simply applied the plain language to interpret it as requiring only separation from any other business. Now, I recognize that in the district court's opinion, the late Judge Irina's focused only on separation from Siemens. But the record is undisputed that NSN was also separate from Nokia. And page 21 of our brief, we cite all the evidence that was undisputed about that separation. But you're arguing with us separate because there was a divested. That it was separate, yes, that it was divested, actually both from Siemens and that to the extent that Nokia business was part of NSN. And that was also separate from Nokia. Can you envision a divestiture, a joint venture where you really don't have a separate distinct corporate entity? Sure, I mean, hypothetically, two companies could have a joint venture where they combine their business efforts and the company doesn't operate independently. It's just two divisions of businesses operate together. So if the court looks at this and simply says we have a divestiture that's enough, isn't there more to that? I mean, don't we have a genuine issue of fact, as to whether there's an identity of a distinct entity? Your Honor, hypothetically, there could be a genuine issue of material fact. On the record in this case, all of the facts regarding the operation of NSN were undisputed and that it operated independently of both of its pair, both of the companies that contributed their businesses to it. I'm still lost. Are you saying if Nokia, I don't understand what your answer is, is if the fact pattern was if Nokia had bought this divested business from Siemens. Or if whoever AT&T's largest arch enemy competitors ended up buying this divested business from Siemens. On one end, you know, one could argue, yeah, that's separately identifiable. That concern that is now selling all kinds of licensed equipment. It would that fit within your definition of separately identifiable? Not if it is rolled up into the parent business such that the purchase, the divestiture from Siemens, is merely an artist to obtain licensed rights. That's not the situation we have here because we have a bona fide business transaction that created a separate independent entity. How do we know we have a bona fide transaction that created some breakaway from Nokia? We, the record establishes that NSN was operated independently, that it was created as a joint venture of these two businesses. It had its own board of directors. But most of them are from Nokia, right? Well, actually it had board, it had directors from both Nokia and from Siemens. But the majority were from where? There was, I believe there was, the majority was from Nokia

. That it was separate, yes, that it was divested, actually both from Siemens and that to the extent that Nokia business was part of NSN. And that was also separate from Nokia. Can you envision a divestiture, a joint venture where you really don't have a separate distinct corporate entity? Sure, I mean, hypothetically, two companies could have a joint venture where they combine their business efforts and the company doesn't operate independently. It's just two divisions of businesses operate together. So if the court looks at this and simply says we have a divestiture that's enough, isn't there more to that? I mean, don't we have a genuine issue of fact, as to whether there's an identity of a distinct entity? Your Honor, hypothetically, there could be a genuine issue of material fact. On the record in this case, all of the facts regarding the operation of NSN were undisputed and that it operated independently of both of its pair, both of the companies that contributed their businesses to it. I'm still lost. Are you saying if Nokia, I don't understand what your answer is, is if the fact pattern was if Nokia had bought this divested business from Siemens. Or if whoever AT&T's largest arch enemy competitors ended up buying this divested business from Siemens. On one end, you know, one could argue, yeah, that's separately identifiable. That concern that is now selling all kinds of licensed equipment. It would that fit within your definition of separately identifiable? Not if it is rolled up into the parent business such that the purchase, the divestiture from Siemens, is merely an artist to obtain licensed rights. That's not the situation we have here because we have a bona fide business transaction that created a separate independent entity. How do we know we have a bona fide transaction that created some breakaway from Nokia? We, the record establishes that NSN was operated independently, that it was created as a joint venture of these two businesses. It had its own board of directors. But most of them are from Nokia, right? Well, actually it had board, it had directors from both Nokia and from Siemens. But the majority were from where? There was, I believe there was, the majority was from Nokia. But there's no evidence that, and again, the record evidence here that the judge ruled on was undisputed that NSN did not somehow have fielded to Nokia and it wasn't carrying out a Nokia business agenda. It was operating as an independent entity. High point never developed or offered any evidence and the summary judgment record to dispute the independent operation of Nokia. Was there argument below as to the independent operation of the joint venture? Yes, Your Honor. Absolutely. There was. It was set out in our summary judgment papers. And again, at page 21 of our brief in this court, we cite that evidence. And it's notable that neither in their opening brief nor in their reply brief does high point offer any evidence that Nokia engaged in any kind of control that would have affected the operation of NSN? Did high point make those arguments before the record? The high point argued before the district court only that separately identifiable could not cover the Nokia products. And there's an important issue there because under the Rembrandt case in interpreting the exact kind of divestment that are from AT&T, this court previously held that the category of products covered by this divestment writer is broad and is not limited to a particular product line that existed at a particular time. I correct me from wrong, but it seemed to me that high point was arguing below that we did not have a separately identifiable business only on the basis of products, not corporate form. Your honor, I would agree with that. And then after seeing the Rembrandt case high point has sort of shifted its argument and tried to sort of wedge that product limitation that they want into the separate identifiability issue. But this court in Rembrandt, interpreting the exact same kind of divestment writer, treated those as different issues. And on the product issue, Rembrandt is very clear that it's a broad license that's not limited to a particular kind of product. So that if Siemens had divested the business, not into a joint venture, but into just Siemens divested business, and then they had acquired the Nokia product line, we wouldn't be here. And so what high point is really doing is essentially sort of a form over substance argument that says, well, because this is a joint venture, now we can get around Rembrandt and limit the products that the joint venture is licensed to sell

. But there's no evidence that, and again, the record evidence here that the judge ruled on was undisputed that NSN did not somehow have fielded to Nokia and it wasn't carrying out a Nokia business agenda. It was operating as an independent entity. High point never developed or offered any evidence and the summary judgment record to dispute the independent operation of Nokia. Was there argument below as to the independent operation of the joint venture? Yes, Your Honor. Absolutely. There was. It was set out in our summary judgment papers. And again, at page 21 of our brief in this court, we cite that evidence. And it's notable that neither in their opening brief nor in their reply brief does high point offer any evidence that Nokia engaged in any kind of control that would have affected the operation of NSN? Did high point make those arguments before the record? The high point argued before the district court only that separately identifiable could not cover the Nokia products. And there's an important issue there because under the Rembrandt case in interpreting the exact kind of divestment that are from AT&T, this court previously held that the category of products covered by this divestment writer is broad and is not limited to a particular product line that existed at a particular time. I correct me from wrong, but it seemed to me that high point was arguing below that we did not have a separately identifiable business only on the basis of products, not corporate form. Your honor, I would agree with that. And then after seeing the Rembrandt case high point has sort of shifted its argument and tried to sort of wedge that product limitation that they want into the separate identifiability issue. But this court in Rembrandt, interpreting the exact same kind of divestment writer, treated those as different issues. And on the product issue, Rembrandt is very clear that it's a broad license that's not limited to a particular kind of product. So that if Siemens had divested the business, not into a joint venture, but into just Siemens divested business, and then they had acquired the Nokia product line, we wouldn't be here. And so what high point is really doing is essentially sort of a form over substance argument that says, well, because this is a joint venture, now we can get around Rembrandt and limit the products that the joint venture is licensed to sell. And that's just not appropriate because this court really treated those as two separate limitations in Rembrandt. What do you think the purpose was of this writer? I mean, the other side is saying the purpose of this writer was to make sure that the licensing rights were maintained within the scope of whatever Siemens had previously been doing, but now it's going to be occurring in the divested business, and to ensure that other competitors that are unlicensed weren't going to be able to somehow enjoy the benefits of a license. So I would say they're understanding of the writer. Your Honor, I would say that that's sort of, I think, a gloss. I would say that what it means besides that. I think the primary purpose of the writer, as reflected in the writer itself, is in order for Lucent, what ultimately became Lucent, and the other AT&T spin-offs to get the benefit of the cross licenses that AT&T had with its competitors in the industry, so that they could be spun off and operate free from patent risk just as AT&T did. So I think it has to be viewed in that context, which is actually in order to obtain operating freedom for AT&T's businesses rather than to limit their operating freedom. So with that context, I think the purpose of the separate identifiability writer is in order to prevent somebody from using a divestiture and actuization as an artist to obtain license rights. It's not in order to govern what future form AT&T spin-off businesses and their licensing counterparts spin-off businesses would take. There's no suggestion of that in the license. Is it true what the other side says that the joint venture ended up selling predominantly the Nokia-based line? So they sold in China, they sold the Siemens line. In other markets, including the U.S., they consolidated the product lines, and actually after the joint venture was formed, the products became backwards compatible, quote unquote, to the Siemens product line. In other words, it was joint NSN product line, and admittedly it used the model names in many instances, the Nokia products, but those were compatible with the Siemens products, and they had a joint R&D. I mean, the R&D came from both companies, and again, all those record facts are cited at page 21 of our brief. Can you address the Erikson license please? Yes, Your Honor

. And that's just not appropriate because this court really treated those as two separate limitations in Rembrandt. What do you think the purpose was of this writer? I mean, the other side is saying the purpose of this writer was to make sure that the licensing rights were maintained within the scope of whatever Siemens had previously been doing, but now it's going to be occurring in the divested business, and to ensure that other competitors that are unlicensed weren't going to be able to somehow enjoy the benefits of a license. So I would say they're understanding of the writer. Your Honor, I would say that that's sort of, I think, a gloss. I would say that what it means besides that. I think the primary purpose of the writer, as reflected in the writer itself, is in order for Lucent, what ultimately became Lucent, and the other AT&T spin-offs to get the benefit of the cross licenses that AT&T had with its competitors in the industry, so that they could be spun off and operate free from patent risk just as AT&T did. So I think it has to be viewed in that context, which is actually in order to obtain operating freedom for AT&T's businesses rather than to limit their operating freedom. So with that context, I think the purpose of the separate identifiability writer is in order to prevent somebody from using a divestiture and actuization as an artist to obtain license rights. It's not in order to govern what future form AT&T spin-off businesses and their licensing counterparts spin-off businesses would take. There's no suggestion of that in the license. Is it true what the other side says that the joint venture ended up selling predominantly the Nokia-based line? So they sold in China, they sold the Siemens line. In other markets, including the U.S., they consolidated the product lines, and actually after the joint venture was formed, the products became backwards compatible, quote unquote, to the Siemens product line. In other words, it was joint NSN product line, and admittedly it used the model names in many instances, the Nokia products, but those were compatible with the Siemens products, and they had a joint R&D. I mean, the R&D came from both companies, and again, all those record facts are cited at page 21 of our brief. Can you address the Erikson license please? Yes, Your Honor. With respect to the Erikson license, again, I think your Honor hit the issue, which is that these were sophisticated parties, and they intentionally included this right to retroactively sublicense, so that you didn't have to necessarily execute the license prior to a subsidiary practicing the patent. You could come back and execute it later. Now, Mr. Black has suggested that, well, even if they had intended that, the license should not run past the expiration of the patents. But, of course, the right to the right to the super damages, as the Court, as well aware, runs for six years after the expiration of a patent. And so, the need for a retroactive sublicense would continue during that six years. I think Judge Chen very recently recognized in the Carinno's case that a license's validity should not turn on the fortuity of whether it's executed immediately prior to a patent's expiration or immediately after a patent's expiration. Now, in Carinno's, the Court was dealing with an exclusive license, but a non-exclusive sublicense actually the same reasoning applies to that kind of sublicense. And, in fact, arguably, is stronger there. That, you know, here we have a contract. The party's clearly anticipated that in the future, one of, again, loosened or L.M. Ericsson, this is a retroactive provision. I mean, a reciprocal provision that applies both ways. One of their subsidiaries may need a retroactive license. That's what we have here. It seems to me that it's pushing a little bit too far to say that the parties for a situation where subsidiaries are suited for infringement

. With respect to the Erikson license, again, I think your Honor hit the issue, which is that these were sophisticated parties, and they intentionally included this right to retroactively sublicense, so that you didn't have to necessarily execute the license prior to a subsidiary practicing the patent. You could come back and execute it later. Now, Mr. Black has suggested that, well, even if they had intended that, the license should not run past the expiration of the patents. But, of course, the right to the right to the super damages, as the Court, as well aware, runs for six years after the expiration of a patent. And so, the need for a retroactive sublicense would continue during that six years. I think Judge Chen very recently recognized in the Carinno's case that a license's validity should not turn on the fortuity of whether it's executed immediately prior to a patent's expiration or immediately after a patent's expiration. Now, in Carinno's, the Court was dealing with an exclusive license, but a non-exclusive sublicense actually the same reasoning applies to that kind of sublicense. And, in fact, arguably, is stronger there. That, you know, here we have a contract. The party's clearly anticipated that in the future, one of, again, loosened or L.M. Ericsson, this is a retroactive provision. I mean, a reciprocal provision that applies both ways. One of their subsidiaries may need a retroactive license. That's what we have here. It seems to me that it's pushing a little bit too far to say that the parties for a situation where subsidiaries are suited for infringement. And then there's a retroactive application of a license to those subsidiaries in order to come in. Your Honor, I think we, I would say two things. First, one thing to be clear, from the beginning, loosened gave up its rights to these patents, vis-a-vis any Ericsson subsidiaries. This isn't a situation where loosened had to provide consent or they had to be given notice. Loosen authorized L.M. Ericsson and its subsidiaries to practice these patents without any restriction and gave L.M. Ericsson the sole right to sublicense. And so this is akin to the Tessera case where a license was granted. And there there was actually an expressed condition that the license was conditioned on the payment of royalties. But the court said it didn't matter. You granted an authorization to practice the patents and therefore this other condition that had to be satisfied as a contract issue, it doesn't limit the authorization that was granted to practice the patents. We have the same thing here. Loosen gave up its rights. There's no dispute about that. The only question is whether L

. And then there's a retroactive application of a license to those subsidiaries in order to come in. Your Honor, I think we, I would say two things. First, one thing to be clear, from the beginning, loosened gave up its rights to these patents, vis-a-vis any Ericsson subsidiaries. This isn't a situation where loosened had to provide consent or they had to be given notice. Loosen authorized L.M. Ericsson and its subsidiaries to practice these patents without any restriction and gave L.M. Ericsson the sole right to sublicense. And so this is akin to the Tessera case where a license was granted. And there there was actually an expressed condition that the license was conditioned on the payment of royalties. But the court said it didn't matter. You granted an authorization to practice the patents and therefore this other condition that had to be satisfied as a contract issue, it doesn't limit the authorization that was granted to practice the patents. We have the same thing here. Loosen gave up its rights. There's no dispute about that. The only question is whether L.M. Ericsson perfected the requirements to exercise those rights. We think under the contract they did that. They had the right to do that retroactively. But even if they didn't loosened had given up its rights. And therefore there's- Do you have anything additional to say about the retroactive exhaustion in argument by the other sign? Or is it the same the central principle? It's the same. It's the Tessera principle that once you've authorized your honor that that triggers exhaustion. Okay. You've got about 13 seconds left. You want to sum up? Yes, Your Honor. I would like something. The last thing I would say is that this was a very well considered situation. It wasn't as high point as suggested a casual decision by the district court. There's 7,700 pages of record. There was a two hour summary judgment argument that ran about 100 pages. It's at the end of the appendix, the joint appendix. So this was not something that the district court just did on an unconsidered record

.M. Ericsson perfected the requirements to exercise those rights. We think under the contract they did that. They had the right to do that retroactively. But even if they didn't loosened had given up its rights. And therefore there's- Do you have anything additional to say about the retroactive exhaustion in argument by the other sign? Or is it the same the central principle? It's the same. It's the Tessera principle that once you've authorized your honor that that triggers exhaustion. Okay. You've got about 13 seconds left. You want to sum up? Yes, Your Honor. I would like something. The last thing I would say is that this was a very well considered situation. It wasn't as high point as suggested a casual decision by the district court. There's 7,700 pages of record. There was a two hour summary judgment argument that ran about 100 pages. It's at the end of the appendix, the joint appendix. So this was not something that the district court just did on an unconsidered record. This was after two years of litigation and extensive briefing and argument. Okay. Thank you very much. Mr. Black. You have three minutes. Thank you, Your Honor. First of all, there's been an assertion made which I find rather surprising that we didn't argue with the separately identifiable point below. I would point to the district court's opinion at page 24 where he notes that he takes the divestment clause and says point A. Only while the future divested business operates to separately identifiable business and B. Only to the extent applicable to products and services. He writes high point argues that the sub license was not authorized because neither conditions A and B were satisfied. Did you make specific arguments as to corporate forum and whether the corporate forum could be a characteristic of a separate identifiable business? Not sure, I understand what we argued what we argued was that you seem to have argued that separately identifiable was determined by the products that are being sold. I think what we argued and I maintain the position is that you need to look at what actually happened with respect to the businesses. There's a business and another business and you combine them and a joint venture you're likely going to end up with a situation where they are combined. They caricature our argument as being that well, there's a joint venture exception. That's not what we're saying

. This was after two years of litigation and extensive briefing and argument. Okay. Thank you very much. Mr. Black. You have three minutes. Thank you, Your Honor. First of all, there's been an assertion made which I find rather surprising that we didn't argue with the separately identifiable point below. I would point to the district court's opinion at page 24 where he notes that he takes the divestment clause and says point A. Only while the future divested business operates to separately identifiable business and B. Only to the extent applicable to products and services. He writes high point argues that the sub license was not authorized because neither conditions A and B were satisfied. Did you make specific arguments as to corporate forum and whether the corporate forum could be a characteristic of a separate identifiable business? Not sure, I understand what we argued what we argued was that you seem to have argued that separately identifiable was determined by the products that are being sold. I think what we argued and I maintain the position is that you need to look at what actually happened with respect to the businesses. There's a business and another business and you combine them and a joint venture you're likely going to end up with a situation where they are combined. They caricature our argument as being that well, there's a joint venture exception. That's not what we're saying. What we're saying though is when they combine the businesses, they combine the boards and a lot of this evidence is in the record including in the appendix on appeal, A62, 32, 33, etc., the statement of facts. We established what happened with the business, how they were combined, how there was a new board of directors that board of directors was controlled by Nokia, how the Siemens business was then discontinued, how everything was controlled by this new and combined business. So we did make all those arguments. Wait, you're saying the joint venture was controlled by Nokia? It was, yes. The board was split but Nokia had majority control and their financials were consolidated up to Nokia. Nokia, Nokia, OY or whatever. And you're saying you argued that on that basis, you did not have a separate identifiable? Yes, we did because they had been contributed to a joint, to a business and combined with the Nokia business in this, and specifically their carrier business. Yes, right? If it was any other business, you wouldn't care. I think we might not have the problem because then to the market, the business would be separately identifiable to the people who were selling it. That's who it matters to. I think that fair construction would be that say all Nokia contributed was $100 million of capital and the Siemens business, then maybe we certainly wouldn't be here today. If we were to say that this contract division was ambiguous and it needs to go back for further development of the record. What could really be uncovered, discovered, lean from extrinsic evidence? It's possible to help understand separately identifiable. As far as the understanding of separately identifiable, I'm not sure that there's much more that could be found. I don't know. With respect to the facts, we have a pretty extensive record

. This was the main issue for us on NSN. We have a long record and they require statements of facts and response to statement of facts and all the evidence. A lot of it's here even in the appendix. We have your argument. You're out of time. Thank you for the argument