Legal Case Summary

Good afternoon, everyone. Very, very happy to open the session in Pittsburgh. We'll call the first case Novice Medicals versus Sikasui. Yes, sir. Thank you, Your Honor. Mr. President, please the court. Mr. Flamme? I would like to reserve five minutes. That's fine. My name is Walter Flamme. The firm is Flamme. Boroff and Bacin. 794, Penelene, Pike, and Bluebell, Pennsylvania. We represent Sikasui Plastics Company Limit. The case we have contended all along is a very simple case. And I'm going to make the essence of our argument as a very simple argument. The case is not a patent case. It's a case of the licensing of technology and trade secrets. At the end of the day, and just by way of background, the product involved here is what we would commonly look at as Styrofoam. But the new and improved product is what's called piosalon on the Japanese side and our cell on the from the Novice side. It's commonly used as a doneage in electronics that you buy. I see that you're side stepping the issue of patent

. You did have a patent for this patent. Well, I don't know. You did have a patent for the technology. There were patents for the technology. I don't believe I'm side stepping it. I don't believe this is a patent case. I'm prepared to address the issue that the court had requested. But this is not a patent case. It is a licensing of know-how and technology. It also involves patents. But the patents themselves are not even referenced by number. Do you have any proprietary rights or legal rights to the technology? Yes. What are those rights? The rights are that they are trade secrets. Well, how can they be trade secrets if you shared them with your folks on the other side? And then time limited the confidentiality. So that I understand that as I think they're arguing this, any confidentiality obligation they had with respect to the technology has expired by the terms of the agreement itself, isn't that right? I think that if we're reading Article 4, we could get in another argument. But I think the facts speak for themselves, Your Honor. Well, answer my question if you can. If you can't, that's fine. But does the agreement not say that any confidentiality that folks from Arquinoba had with respect to the technology that sex who came up with is an obligation that expired by the terms of the agreement? It says that the confidentiality provisions of Article 4 expired at the conclusion of the agreement. Well, you're not contending, are you? That Article 4 somehow different separate from governing something other than the substance of the rights that issue here are, yeah? I'm saying, Your Honor, that the license it involves the license of know-how and other things. It provides for an agreement of second-sewie personnel to train and educate Nova personnel and it includes something more than patents and the facts speak for themselves that there are only two people that can do this, that can manufacture this today. So there's- I think we're talking around them

. I'm trying to get you to address a key point which you raised, which is in response to Judge Fuente saying, do you have underlying rights intellectual property rights? You said, yes, we have trade secrets. What I'm trying to get you to respond to is that assertion that I understand the other side of you making it, that you don't have trade secrets anymore. You shared the technology and know-how with them and you did it in a way that by the terms of the agreement itself releases them from any obligation to keep it secret. Now, I'm just trying to get you to respond to that argument. Is that an accurate assertion or not according to the terms of the agreement itself? The agreement, Your Honor, I'm not trying to sidestep the issue, believe me. The agreement says that those confidentiality arrangements under Article 4 end at the end of the agreement. Then how could there possibly be a trade secret underlying this agreement at this point in time? Because Your Honor, the parties agreed to license to a permanent license. Why would they agree to a permanent license if there was not something to license? So, your argument is it's true we don't have a trade secret anymore because of Article 4, but they're still bound because there's something there, there must be something there or they wouldn't agree to it. Have I got you? I think that's one way of putting it, yes. OK. But what that something is that's underlying the agreement, it's clear it's not a patent at this point and it's clear it's not a trade secret at this point, but it must be something. It is something that the parties felt was important enough that Nova wanted a permanent license. Could you find what that something is if it's not a patent and it's not a trade secret? Your Honor, it could have been the advantage that was given to, I'm sorry if I appear to be elusive here because this wasn't really an issue that was litigated factually below. So there's little record on it. But the basis could have been for the license, the concept of granting a permanent license subject for restriction, the basis could have been that Secki Sui trained the RCO personnel how to make this product and gave them a leg up in the market, the ability to do it when no one else could. And for that reason, my point is that there are independent reasons for supporting the restriction beyond the secrecy. It doesn't stay. All of this hinges on our finding that there was a separate 10-year, a separate agreement that was perpetual. Not a separate agreement that was perpetual, Your Honor. Finding what I think is plainly evident from Article 11, Section 2, is that there was a permanent license. Now, I don't know whether a permanent license means that that's perpetual, perhaps it does. But there was, after the agreement says in Article 11, that after the payment of all of the sums called for under the agreement, and it refers to Article 6, which calls for payments of lump sums running royalties for 10 years, for the period of the agreement

. Article 11 says, after all of these things are paid, Nova has a fully paid up license. And you characterize that and you're briefing as a separate agreement, don't you? And your briefing, you say Article 11 has two parts to it. The first sentence refers to rights and obligations that come from paragraphs, or Article 5.2 and 5.3. And the second sentence of Article 11 is a whole nother animal. It's a fully paid up license. And I think that's what Judge Pointy says is going to be. For us to buy your argument, we would have to agree with you that Article 11 has, in essence, two pieces, one reaching back to 5.2 and 5.3. And the second, coming from the second sentence, a fully paid up license, which stands on its own and is in perpetuity, isn't that right? I think that you can view it as two licenses, yes. I'm not sure the party's viewed it that way when they did it. They viewed it, but after we've over-intellectualized this document, with all respect, the lawyers have made it much more confusing than it is. The agreement simply was that we're going to give you certain things. The party's agreed that a license was necessary for Nova to do what it wanted to do, to make and sell. The parties agreed that a license was necessary for that. They agreed in Article 11 that at the conclusion of the agreement, Nova would have a fully paid up license to sell anywhere in the world subject to restriction. Did you, what wasn't their testimony in this case by Sekisui's own manager or the person who drafted the first agreement that the party never anticipated, a permanent ban on the part of Nova to trade in Asia? I think you may be referring to Mr. Saito's testimony that didn't use the word forever. Yeah, well, let's see. There was testimony

. One of the Sekisui managers or person is instrumental in the drafting of the first agreement, testify that there was no discussion about how long the proposed restriction on our cosability to sell products would last. No discussion at all. Doesn't that argue against your position that there was a permanent ban? I don't think so. You want to put this in common terms. Who in their right mind is going to agree to a permanent ban to sell products in a major sector of the world? I think Nova did. And I think they did because this was the deal. The deal was Sekisui can manufacture this new product that is going to take the place of Styrofoam. Sekisui didn't want to give up Asia. Sekisui gave Nova the rest of the world in exchange for Nova's agreement to give up Asia. Sekisui put the language to give it up forever as your argument. And you can give it up forever argument is pinned on the words fully paid up, right? To give it up for the same time that their license existed. You can have both. You either have a fully paid up license to sell for however long that lasts, subject to a restriction or you don't. That's why the district court disagreed with you, right? I mean, you pose this as a, if you don't have the right to do it then by definition and by the terms of the agreement, you're forbidden to do it. By understanding your argument and as you reiterated here today, where this thing's been over intellectualized when it's just as simple as an on-off switch. If it's on, it's on, it's off, it's off, it's binary. So it's saying that you can't, you're not permitted to sell under the terms of a license in Asia means you can't do it ever. I think I've got your argument, right? But maybe if I got your argument. My argument is if you need a license to sell it, if you agree that you need a license to sell it, the license has the terms that the license has. And the license terms are, you can sell it, excuse me, subject to not being able to sell it in Asia. However long that license lasts, the restriction lasts. You can't have it, one, you can't say I have a license to sell the stuff that didn't expire with the agreement, but there's a restriction that did

. They can also manufacture a canter. They can manufacture it, yes. But you say they can manufacture and sell it anywhere, but they can't, except they can't sell it in Asia. They can manufacture it in the US and Canada and they can sell it anywhere in the world, but Asia. Now the district court looked at your argument and said, if I understood it correctly, that it did not take account of, a paraphrasing loosely, it did not take account of an understanding of the license as pinned on intellectual property rights, that is, it was designed and set up in a way that meant any restrictions or limitations in the license lasted only as long as the rights claimed to be given lasted. And since you don't have rights to give anymore, the restrictions can't extend either. That's, if I understand correctly, what the district court said. What's your response to the district court's assertion that it's not your license agreement that can forbid these people forever, the license can only grant and then withhold certain things. And once the underlying stuff on which the license is based is gone, by definition, they can do whatever they want wherever they want. What's the response to that? That you're writing off the permanent license, that the fully paid up license in article, what's the point of having a fully paid up license at the end of the agreement if there's nothing to license? There's no point. So to do that, you're saying that this entire provision of the contract is meaningless. Well, doesn't that ignore the possibility and indeed isn't it relatively common for licenses to include sell-off provisions for something that was made before the expiration or certain rights and then allows them to sell off after the license period ends? I don't know whether that's correct as a factual matter, but it's certainly not in this record. There was a license, the party's negotiated for a fully paid up license that you can't rationalize it any way other than that fully paid up license started when the agreement was done. And the fully paid up license was to sell anywhere in the world except these countries, whether that's a prescription or a description doesn't make any difference because as your honor points I had to buy an airy notion. I was reflecting what I understood your argument to be. And I think I understood correctly that it's buy air, right? Yeah, that's my argument. You did have patents properly registered patents for the Piosalin product. Yes. Those patents have expired. Yes. In anyone then manufactured Piosalin? Anyone that takes the trouble of going through the patents and figuring out the technology? No. Why not? Because they don't have the trade secrets

. They don't know the processes. Well, but if they don't have the equipment, there was other. Well, Nova knows the secrets. Can't Nova then share that with another manufacturer? Supposed they could. Well, it often is challenging. Yes. And if they did, could that other party sell in Asia? We would be arguing that they could not. They would be doing it indirectly. Mr. Flan, thank you very much. Thank you very much. Mr. McIntyre. Thank you, Your Honor. May I please the court? I'm John McIntyre, counsel for the Appalee of the Chemicals Incorporated. Let me start by following up on some of the court's questions, because I think I can shed some light on the questions that you've asked about. Certainly, the consideration that was provided by Sekisui in the license agreement was to grant restrictive patent rights and trade secrets from Sekisui to Arco. As this court is recognized and as the record is absolutely clear, all of those patents have expired. With respect to the trade secrets, Article 4 is very clear. Article 4 said that in paragraph 4.3, that the use of the trade secrets by the party who received them was restricted only to implement the purposes of the license agreement. I don't think you're getting a disagreement from the other side on that

. What I do think you're getting a disagreement from them on is the assertion that there's nothing that continues to bind your client. So I'd like you to respond if you would, Mr. Flams, argument, that certainly, Arco and Noble knew that there was something binding and obligating, Nova going forward, or they would not have transferred the license after the expiration date. Certainly. What would be the purpose of doing that if there was nothing there? And indeed, what would be the meaning more importantly, does the position that your client is taking here render the fully paid license language of Article 11 meaningless? Just a certain message. Certainly, Aron, let me address both of those. First of all, as we point out in our brief, the question about the assignment and its legal meaning wasn't raised below. If it had been, we would point it out that Article 4, as we have discussed right here, granted Arco and subsequently Nova free use of the trade secrets. Once the patents had expired, anybody in the world was free to use the technology, but we were granted a right under the license agreement to these trade secrets. And we are free to use them now as we please. Therefore, there was a property right that vested in Arco and now Nova, and that was the purpose for the assignment. The other point that I would make is as the record. Are you then conceiving that these are trade secrets that the thing you took, even though they gave it to you and you don't have any confidentiality obligation that those could still be trade secrets under the law? Whether they are or not, Your Honor, I think that they are, frankly. If we were to suppose, how is that in your client's interest to take that position and how could it be that as a matter of law since you're under no restriction and could deliver that information to anybody you want? It's in my client's interest because we are maintaining them as trade secrets ourselves. We don't want to disclose them necessarily to the world. Therefore, that both Sekisui has a proprietary interest in those trade secrets as to we. But if you did disclose them to a third party, would you not be in violation then to be agreement? No, Your Honor, we wouldn't be in violation. In fact, Article four specifies that 10 years after the exercise of the option, all obligations with respect to the secrecy under the trade secrets shall expire and they did expire with the rest of the license agreement. So though it may be against your economic interest, you're free to share the technology and whenever you learn about Sekisui with any other third party in the world. Exactly, Your Honor. So you can keep it secret if you choose, but you don't have to. In other words, I guess what I hear you saying is, now it's your trade secret, it's not theirs

. Well, as long as you can share with anybody and they have no control over the secrecy, I could be theirs. Actually, Your Honor, they have the same interest. They are free, there's nothing binding them to maintain the secrecy of these trade secrets. If they wanted to disclose them to DuPont, they would be free to. I'm not trying to see how many angels dance in the head and I'm trying to understand something here. So your assertion though is that as far as your client is concerned, you can keep it close and secret if you want or you can share it with whoever you want and that's your position, right? Absolutely. So as a matter of fact and law, doesn't that take the control of the secrecy away from Sekisui? I think as a matter of law, it does. Okay. And likewise, since they could share with anybody, they want you don't have control of the secrecy. Absolutely. Okay. Did the district court address the issue of whether there were trade secrets that were part of an agreement? It did, Your Honor. The district court's opinion specifically states that we were free to use the trade secrets as we wished after the expiration of license agreement. And that was the expiration of the Article 5 10 year period. Correct. Correct. Is there any difference between that 10 year period and the 10 year period described in the Article 11? It turns out your honor that it's the same. The way that Article 4 was written, it contained provisions that would have maintained the secrecy obligations beyond determination only if the termination had occurred prematurely. So if for some reason, ARCO were to terminate the agreement, there was a secrecy obligation that would have extended beyond that termination. But because the agreement ran its full course, those secrecy obligations terminate with the rest of the license agreement. The agreement that's full course way. February 20th, 1995

. 1995. So what, I'm not sure I understand yet, Mr. McTar, what's the position you have with respect to Article 11? Are you saying that they did license you valuable technology, which continues, and there continues to be an intellectual property right underlying that license, and it's fully paid up, and you're operating under that license. No. We're not saying that, you remember? Right. Because that would be the other side. It would. It would. Gotcha. So then what are you saying with respect to Article 11? How do you read fully paid up? Certainly. Let me address that. First of all, I think in order to define Article 11, what it means, you have to look at 5.4 and what it accomplished. Article 5.4 dealt with the right to sell in the Asian countries. But it wasn't a contractual prohibition, because no contractual prohibition was necessary. Sekisui had existing U.S. patent rights, and if we or Arco had sold in the Asian countries, they could have sued for infringement here in the United States. So clearly, Article 5.4 granted us an affirmative right to use, to manufacture in the United States and Canada, and to sell in every country of the world except 12. And the reason that they did that was you couldn't define that with solely because of patent rights

. Yes. Okay. Then point me to where in the document that exists. What in this agreement says, hey, this license with respect to limitations on territory, this is all about the patents, not trade secrets. First of all, Your Honor, I think that you have to look at, let's just be blunt. Sure. It's not in there, is it? There's nothing in this agreement that says anything like that is there. No, but I think you can tell from the context in which paragraph 5.4 is placed, that that's the case. For example, let me direct the court's attention to paragraph 5.1. Paragraph 5.1 also granted Arco a right to sell products, prior to the time that the option was exercised. Paragraph 5.1 says, you shall have the right to sell in the United States and Canada. Doesn't say you can't sell in the Asian countries, doesn't say you can't sell in South America, because it didn't have to. They were already prohibited. The only rights that Arco had sprang from this license agreement. Prior to that time, they were barred by the patent laws. But 5.4 clearly bars you from selling in the 12 Asian countries, doesn't it? It does not, Your Honor. What it does is it grants an affirmative right to sell everywhere else. It would have been almost impossible for the parties to say, you're granted an affirmative right in the following 180 countries. So what they had to do was to say, we're going to say you have an affirmative right to sell everywhere except here. And that's the language they used, except it doesn't create a bar. What does that? When you say that doesn't create a bar, in order for that not to create a bar, one has to assume the underlying rights theory that the district court did. If I understood the district court's position in ruling, it was, the rights don't spring from this license alone. This is a license that has to lay out a foundation of independent rights, intellectual property rights. And prohibitions. And the statements in the license about where you can sell and where you can't sell. Because I guess I'd have to agree with your opponent here that if it says you can sell everywhere but here, that's another way of saying, as long as we're under this license, you don't have a right to sell. I disagree, Your Honor. I disagree. Now, what's the, what is it other than the intellectual property rights itself that could possibly exist as a third way between you can sell here, except there and you can't sell in Asia. What's the third way? They say it's binary. You're saying it's not. What's the, what's the non binary answer? The third way would have been, Arco agrees not to sell in the following Asian countries, but shall have a right to sell in all other countries of the world. That's the third way. That shows an affirmative agreement on the part of Arco not to sell in those countries, whereas the language here simply talks about the right to sell everywhere except. And again, 5.4 even mentions the countries that you cannot sell in a product. Exactly, Your Honor. That's where, it doesn't mention where you can't sell it, Your Honor. Oh, wait a minute

. It would have been almost impossible for the parties to say, you're granted an affirmative right in the following 180 countries. So what they had to do was to say, we're going to say you have an affirmative right to sell everywhere except here. And that's the language they used, except it doesn't create a bar. What does that? When you say that doesn't create a bar, in order for that not to create a bar, one has to assume the underlying rights theory that the district court did. If I understood the district court's position in ruling, it was, the rights don't spring from this license alone. This is a license that has to lay out a foundation of independent rights, intellectual property rights. And prohibitions. And the statements in the license about where you can sell and where you can't sell. Because I guess I'd have to agree with your opponent here that if it says you can sell everywhere but here, that's another way of saying, as long as we're under this license, you don't have a right to sell. I disagree, Your Honor. I disagree. Now, what's the, what is it other than the intellectual property rights itself that could possibly exist as a third way between you can sell here, except there and you can't sell in Asia. What's the third way? They say it's binary. You're saying it's not. What's the, what's the non binary answer? The third way would have been, Arco agrees not to sell in the following Asian countries, but shall have a right to sell in all other countries of the world. That's the third way. That shows an affirmative agreement on the part of Arco not to sell in those countries, whereas the language here simply talks about the right to sell everywhere except. And again, 5.4 even mentions the countries that you cannot sell in a product. Exactly, Your Honor. That's where, it doesn't mention where you can't sell it, Your Honor. Oh, wait a minute. Tell me, tell me where, tell me where this is rolling. This is 5.4. ACC, your predecessor, Right. Shall have the right to sell products and other resinous materials in all countries of the world, except in the following countries. Right. Both countries are in a name that, now does that not mean you cannot sell? It does not. Basically, Sekisui's backyard. No, Your Honor. It does not. And the reason is, So I've, I've misread that. No, Your Honor. The point is that you can't read it in a vacuum. You have to understand that this is a license agreement that Sekisui has the right to prohibit sales anywhere. So I have to go somewhere else and some other provision of this contract in order to fully understand 5.4. No, Your Honor. You have to look at the context in which it was entered into. This is a license agreement. What happened to plain reading? I have them. Reading the words of 5.4

. Tell me, tell me where, tell me where this is rolling. This is 5.4. ACC, your predecessor, Right. Shall have the right to sell products and other resinous materials in all countries of the world, except in the following countries. Right. Both countries are in a name that, now does that not mean you cannot sell? It does not. Basically, Sekisui's backyard. No, Your Honor. It does not. And the reason is, So I've, I've misread that. No, Your Honor. The point is that you can't read it in a vacuum. You have to understand that this is a license agreement that Sekisui has the right to prohibit sales anywhere. So I have to go somewhere else and some other provision of this contract in order to fully understand 5.4. No, Your Honor. You have to look at the context in which it was entered into. This is a license agreement. What happened to plain reading? I have them. Reading the words of 5.4. And it says, You cannot sell there. It doesn't say that, Your Honor. It says, You can sell everywhere except. Right. And your work, And your reading of the word, except means, it doesn't really mean except. No, Your Honor. It doesn't mean except. You can sell everywhere except there and except. In this instance, means, You could sell there, But not really. I mean, Your Honor. You have taken us down a rabbit hole. It feels like. I don't, you know, You keep saying, Look at the context. Look at the context. But I, I got to say, I don't know what context you can point me to that doesn't end up with the words, Except meaning, We really are letting you sell here and not there. Your Honor, Let me direct you back to 5.1. 5.1 says, You can sell the United States and Canada. Sure. Would the court agree that under the patents we were prohibited from selling anywhere else? Well, Since this doesn't appear to me to be a license limited to patents, I'm not sure what that question goes to, sir. Your Honor, At a minimum, At a minimum, To wear in the agreement, It says, The technology we're talking about here, And the limits we're talking about here, Or the limits associated with the patent rights, And not the trade secret rights, Then we would be having a different discussion

. And it says, You cannot sell there. It doesn't say that, Your Honor. It says, You can sell everywhere except. Right. And your work, And your reading of the word, except means, it doesn't really mean except. No, Your Honor. It doesn't mean except. You can sell everywhere except there and except. In this instance, means, You could sell there, But not really. I mean, Your Honor. You have taken us down a rabbit hole. It feels like. I don't, you know, You keep saying, Look at the context. Look at the context. But I, I got to say, I don't know what context you can point me to that doesn't end up with the words, Except meaning, We really are letting you sell here and not there. Your Honor, Let me direct you back to 5.1. 5.1 says, You can sell the United States and Canada. Sure. Would the court agree that under the patents we were prohibited from selling anywhere else? Well, Since this doesn't appear to me to be a license limited to patents, I'm not sure what that question goes to, sir. Your Honor, At a minimum, At a minimum, To wear in the agreement, It says, The technology we're talking about here, And the limits we're talking about here, Or the limits associated with the patent rights, And not the trade secret rights, Then we would be having a different discussion. But I've looked at this license. I can't find it. You haven't pointed me to it. So I'm not sure where you get from this document, Or frankly, from any of the evidence you've profit in the district court, And it's in the record before us, That these limitations were tied to the patent rights, And were not also tied to the rights, Which you yourself have described straight secrets. Yes. Your Honor, I agree with you, That you could look at under either scenario. If you look at paragraph 5.1, You would agree with me, Would you not, That Arco had a right to sell in the United States and Canada, But did not have a right anywhere else. That there were no other countries that were mentioned. Are you asking me a question? I'm saying that the point is that you have to understand this in the context of intellectual property rights. It can't be divorced from that. Even if the court, But even if the court were to conclude that, Arco agreed to a contractual prohibition on sales in the Asian countries. You then have to get to that it's a perpetual prohibition that extends for it. But what was it, But going back to this point of the prohibition of selling in Asia, Was there any point in naming the country specifically that there was? 40 to 5.4, You cannot sell the, Crystalline. Absolutely, Your Honor, Because what they were saying is, We're granting you an affirmative right to sell in all countries of the world, Except here. So the reason that you have to name those countries is to make clear to the parties where you were not granted, And that's why they were not granted the affirmative right. Doesn't make sense that this is simply like you see his backyard. They were also selling the product and didn't want you competing with them. That's fine, Your Honor. But the Supreme Court and Rulot has held that you can't bar the use of patent technology beyond the term of the legal monopoly granted by the patents. You're back to patent technology

. But I've looked at this license. I can't find it. You haven't pointed me to it. So I'm not sure where you get from this document, Or frankly, from any of the evidence you've profit in the district court, And it's in the record before us, That these limitations were tied to the patent rights, And were not also tied to the rights, Which you yourself have described straight secrets. Yes. Your Honor, I agree with you, That you could look at under either scenario. If you look at paragraph 5.1, You would agree with me, Would you not, That Arco had a right to sell in the United States and Canada, But did not have a right anywhere else. That there were no other countries that were mentioned. Are you asking me a question? I'm saying that the point is that you have to understand this in the context of intellectual property rights. It can't be divorced from that. Even if the court, But even if the court were to conclude that, Arco agreed to a contractual prohibition on sales in the Asian countries. You then have to get to that it's a perpetual prohibition that extends for it. But what was it, But going back to this point of the prohibition of selling in Asia, Was there any point in naming the country specifically that there was? 40 to 5.4, You cannot sell the, Crystalline. Absolutely, Your Honor, Because what they were saying is, We're granting you an affirmative right to sell in all countries of the world, Except here. So the reason that you have to name those countries is to make clear to the parties where you were not granted, And that's why they were not granted the affirmative right. Doesn't make sense that this is simply like you see his backyard. They were also selling the product and didn't want you competing with them. That's fine, Your Honor. But the Supreme Court and Rulot has held that you can't bar the use of patent technology beyond the term of the legal monopoly granted by the patents. You're back to patent technology. Certainly, Your Honor, I mean, the Supreme Court has made clear in Rulot that it's simply void. You can't agree to impose any geographic restrictions beyond the term of the patent. You're raising the Sherman Act issue. The Sherman Act, but I think more directly, Rulot, Your Honor. Well, not a Rulot. Rulot doesn't have anything to do with trade secrets. I mean, if they've got trade secret technology and they want to limit a lot of you geographically, they can do that till the cows come home. But Your Honor, this goes back to your very first point, which is that all the trade secret restrictions have expired. So if the patents have expired and the trade secrets have expired, we don't need a license. Then explain to me what you have and are operating under. Now, it really does go to the first point. They say there must be something that the other side believes they're a licensed under. They claim a fully paid up license. Article 11 talks about a fully paid up license. They assert that there's know how that they're keeping in confidence. They're operating under a license. And as long as they're operating under that license, we're entitled to enforce the restrictions associated with that license. So if you're taking the position that, wait, there really is no trade secret, tell me what it is that Article 11 fully paid up license is talking about. What Article 11 fully paid up license is talking about is, as we point out in our briefs, is that Arca wanted to make very clear that as long as they had paid all of their running royalties during the term of the agreement, that they had a fully paid up license, they couldn't be sued for infringement if there were some technical violation of the agreement. In other words, it's existing. No, but it was done. You paid, you made your lump sum payment, you paid all the royalties, you were finished

. Certainly, Your Honor, I mean, the Supreme Court has made clear in Rulot that it's simply void. You can't agree to impose any geographic restrictions beyond the term of the patent. You're raising the Sherman Act issue. The Sherman Act, but I think more directly, Rulot, Your Honor. Well, not a Rulot. Rulot doesn't have anything to do with trade secrets. I mean, if they've got trade secret technology and they want to limit a lot of you geographically, they can do that till the cows come home. But Your Honor, this goes back to your very first point, which is that all the trade secret restrictions have expired. So if the patents have expired and the trade secrets have expired, we don't need a license. Then explain to me what you have and are operating under. Now, it really does go to the first point. They say there must be something that the other side believes they're a licensed under. They claim a fully paid up license. Article 11 talks about a fully paid up license. They assert that there's know how that they're keeping in confidence. They're operating under a license. And as long as they're operating under that license, we're entitled to enforce the restrictions associated with that license. So if you're taking the position that, wait, there really is no trade secret, tell me what it is that Article 11 fully paid up license is talking about. What Article 11 fully paid up license is talking about is, as we point out in our briefs, is that Arca wanted to make very clear that as long as they had paid all of their running royalties during the term of the agreement, that they had a fully paid up license, they couldn't be sued for infringement if there were some technical violation of the agreement. In other words, it's existing. No, but it was done. You paid, you made your lump sum payment, you paid all the royalties, you were finished. Exactly. What did you think you were buying with that additional time period? It makes sense. Here's what makes sense to me, and here's what it doesn't. We sort of had time to class. I can get my head around the notion that whether you call it a trade secret or a patent, there has to be some intellectual property right underlying the license for the thing to make sense. I can also appreciate and understand the position that's been taken that, hey, we don't have an obligation to keep things secret. In that respect, they don't have any enforceable trade secret right against us. Therefore, there's nothing underlying this license anymore, and we can do whatever we want, wherever we want, because they're done. I can understand that assertion. What I'm having a little trouble with is, and what seems to be contradictory in your presentation here today, is how you deal with their argument that that would render the second sentence of article 11, newgatory, it would make it just meaningless. There was something out there that they were willing to pay money for and take a license for. And maybe it's not a patent, maybe it's not a trade secret, but it's some kind of intellectual property, right? And they paid for it, and therefore there's a restriction that still exists on it. And I'm still not understanding your position on that assertion. You paid for it, you seem to be even saying here, yeah, we've got a license of some sort, whereas I would have thought your position would be, there is no license, because there's no underlying in a intellectual property right. Here on our must not have been clear. I guess my point was that our position is that the second sentence of article 11 relates to a fully paid up license during the term of the agreement. Our position is not that we bought some license, or that we needed a license beyond the term. And I think that our point would be, even if the court were to conclude that article 11 read differently, I think you could say, you know, it's unclear from the record if the patents were still in effect at the time that the license agreement expired. But even if you gave Secretary of State the most generous interpretation possible, and that the patents were in effect the day before the license agreement started in January of 1983, those patents would have expired in January of 2000. Therefore, there was no intellectual property right that existed after January of 2000 that we would have needed a license for. Does that mean that the license that you obtained under the option and paid for under I think it's article six, along some payment and royalties has now been satisfied? So you now have fully paid up license. Is that your position? It's not our position

. Exactly. What did you think you were buying with that additional time period? It makes sense. Here's what makes sense to me, and here's what it doesn't. We sort of had time to class. I can get my head around the notion that whether you call it a trade secret or a patent, there has to be some intellectual property right underlying the license for the thing to make sense. I can also appreciate and understand the position that's been taken that, hey, we don't have an obligation to keep things secret. In that respect, they don't have any enforceable trade secret right against us. Therefore, there's nothing underlying this license anymore, and we can do whatever we want, wherever we want, because they're done. I can understand that assertion. What I'm having a little trouble with is, and what seems to be contradictory in your presentation here today, is how you deal with their argument that that would render the second sentence of article 11, newgatory, it would make it just meaningless. There was something out there that they were willing to pay money for and take a license for. And maybe it's not a patent, maybe it's not a trade secret, but it's some kind of intellectual property, right? And they paid for it, and therefore there's a restriction that still exists on it. And I'm still not understanding your position on that assertion. You paid for it, you seem to be even saying here, yeah, we've got a license of some sort, whereas I would have thought your position would be, there is no license, because there's no underlying in a intellectual property right. Here on our must not have been clear. I guess my point was that our position is that the second sentence of article 11 relates to a fully paid up license during the term of the agreement. Our position is not that we bought some license, or that we needed a license beyond the term. And I think that our point would be, even if the court were to conclude that article 11 read differently, I think you could say, you know, it's unclear from the record if the patents were still in effect at the time that the license agreement expired. But even if you gave Secretary of State the most generous interpretation possible, and that the patents were in effect the day before the license agreement started in January of 1983, those patents would have expired in January of 2000. Therefore, there was no intellectual property right that existed after January of 2000 that we would have needed a license for. Does that mean that the license that you obtained under the option and paid for under I think it's article six, along some payment and royalties has now been satisfied? So you now have fully paid up license. Is that your position? It's not our position. Our position is that five point or article 11 related to rights during the term of the agreement that the fully paid up license referred to the fact that if we were making our running royalties as they were coming due, that we had a fully paid up license during the term and not post expiration. Mr. McIntyre, thank you very much. Mr. Flem. Thank you, Robert. I would just like to make two brief points. And the first one is that we must remember to stay to the record here. The issue about patents, if you read the agreement, there's no patent numbers. There's no description of patents. And I don't think we can be making arguments about as Mr. McIntyre does about looking this as an overlay over who had patent rights where because there's nothing in the record for that effect. And some of the facts that I've heard banded about you're not correct. So are you saying that the technology here was not at some point or a part of it at least patented technology? No, it was, but it is not this agreement is not based on a framework of patent technology. If you look at the agreement, what was the license under Article 1, the most of them are the equipment and technology and not patent rights. Patent rights is number nine of the listed items. The rest of them are technical. But both things were in play, right? Patent rights were in play trade secrets and know how we're in play. Certainly one more being dealt with by this license. That's correct. That's correct. Do you agree with your opponent that there were certain aspects of the patent rights that didn't expire until post 2000? Nobody knows when the patent rights expired

. Our position is that five point or article 11 related to rights during the term of the agreement that the fully paid up license referred to the fact that if we were making our running royalties as they were coming due, that we had a fully paid up license during the term and not post expiration. Mr. McIntyre, thank you very much. Mr. Flem. Thank you, Robert. I would just like to make two brief points. And the first one is that we must remember to stay to the record here. The issue about patents, if you read the agreement, there's no patent numbers. There's no description of patents. And I don't think we can be making arguments about as Mr. McIntyre does about looking this as an overlay over who had patent rights where because there's nothing in the record for that effect. And some of the facts that I've heard banded about you're not correct. So are you saying that the technology here was not at some point or a part of it at least patented technology? No, it was, but it is not this agreement is not based on a framework of patent technology. If you look at the agreement, what was the license under Article 1, the most of them are the equipment and technology and not patent rights. Patent rights is number nine of the listed items. The rest of them are technical. But both things were in play, right? Patent rights were in play trade secrets and know how we're in play. Certainly one more being dealt with by this license. That's correct. That's correct. Do you agree with your opponent that there were certain aspects of the patent rights that didn't expire until post 2000? Nobody knows when the patent rights expired. It's not in the record, you're on it. There's nothing in the record about when the patent rights. The last point, this argument that the fully paid up license is during the term of the agreement is with all due respect to my opponent preposterous. If fully paid up license, it's plain English for goodness sake. A fully paid up license is something that's fully paid up and the agreement says that upon payment of a fully paid up license under 6.1, which refers to the running royalties lump sum over 10 years. That's how you get a fully paid up license. Can you touch at some point, Mr. McIntyre's point that your interpretation of the agreement imposes a permanent perpetual bar on Nova trading in Asia? It grants them a permanent perpetual license to sell everywhere in the world that they felt was a value. They don't have to pay anything for that license. They paid for it. They paid for it over 10 years. They have a permanent paid up license to sell everywhere in the world. If I were Nova, I wouldn't have wanted to pay you. So I wouldn't have your license and then I could use that technology to go ahead and sell the product in Asia. You're on it. They would have never gotten the technology for the actually 16 years that they had it before the agreement expired. This is a brief. This license never ends according to you, right? When Gabriel sounds as Trump, there will still be a restriction on Nova in selling in Asia, correct? Nova would still have a right to sell everywhere in the world. You can't have in Asia, right? But you can't look at only one side of this agreement. I'm going to buy your car for $1,000, but I'll give you $1,000 and I don't get the car. We're not trying to look at it from one side

. It's not in the record, you're on it. There's nothing in the record about when the patent rights. The last point, this argument that the fully paid up license is during the term of the agreement is with all due respect to my opponent preposterous. If fully paid up license, it's plain English for goodness sake. A fully paid up license is something that's fully paid up and the agreement says that upon payment of a fully paid up license under 6.1, which refers to the running royalties lump sum over 10 years. That's how you get a fully paid up license. Can you touch at some point, Mr. McIntyre's point that your interpretation of the agreement imposes a permanent perpetual bar on Nova trading in Asia? It grants them a permanent perpetual license to sell everywhere in the world that they felt was a value. They don't have to pay anything for that license. They paid for it. They paid for it over 10 years. They have a permanent paid up license to sell everywhere in the world. If I were Nova, I wouldn't have wanted to pay you. So I wouldn't have your license and then I could use that technology to go ahead and sell the product in Asia. You're on it. They would have never gotten the technology for the actually 16 years that they had it before the agreement expired. This is a brief. This license never ends according to you, right? When Gabriel sounds as Trump, there will still be a restriction on Nova in selling in Asia, correct? Nova would still have a right to sell everywhere in the world. You can't have in Asia, right? But you can't look at only one side of this agreement. I'm going to buy your car for $1,000, but I'll give you $1,000 and I don't get the car. We're not trying to look at it from one side. In fact, my question is specifically premised on your reading of this license, which is to say, except is to say, you cannot. That's correct. And so under your reading of this license, they cannot ever, forever sell anything into Asia that's covered by this license. Is that correct? That's correct because their license lasts for that moment. That's all I have to say, Your Honor, if you don't construe the Article 11 to impose exactly what Your Honor said, then the fully paid up license is meaningless. There can be no meaning to it because there's no point to it. And if you have a fully paid up license, then the terms are set forth right in the contract. Sell anywhere but Asia. Mr. Klam, thank you very much. Thank you, Your Honor. We'll take this case and your advice and thanks, Council, for excellent presentations.

Good afternoon, everyone. Very, very happy to open the session in Pittsburgh. We'll call the first case Novice Medicals versus Sikasui. Yes, sir. Thank you, Your Honor. Mr. President, please the court. Mr. Flamme? I would like to reserve five minutes. That's fine. My name is Walter Flamme. The firm is Flamme. Boroff and Bacin. 794, Penelene, Pike, and Bluebell, Pennsylvania. We represent Sikasui Plastics Company Limit. The case we have contended all along is a very simple case. And I'm going to make the essence of our argument as a very simple argument. The case is not a patent case. It's a case of the licensing of technology and trade secrets. At the end of the day, and just by way of background, the product involved here is what we would commonly look at as Styrofoam. But the new and improved product is what's called piosalon on the Japanese side and our cell on the from the Novice side. It's commonly used as a doneage in electronics that you buy. I see that you're side stepping the issue of patent. You did have a patent for this patent. Well, I don't know. You did have a patent for the technology. There were patents for the technology. I don't believe I'm side stepping it. I don't believe this is a patent case. I'm prepared to address the issue that the court had requested. But this is not a patent case. It is a licensing of know-how and technology. It also involves patents. But the patents themselves are not even referenced by number. Do you have any proprietary rights or legal rights to the technology? Yes. What are those rights? The rights are that they are trade secrets. Well, how can they be trade secrets if you shared them with your folks on the other side? And then time limited the confidentiality. So that I understand that as I think they're arguing this, any confidentiality obligation they had with respect to the technology has expired by the terms of the agreement itself, isn't that right? I think that if we're reading Article 4, we could get in another argument. But I think the facts speak for themselves, Your Honor. Well, answer my question if you can. If you can't, that's fine. But does the agreement not say that any confidentiality that folks from Arquinoba had with respect to the technology that sex who came up with is an obligation that expired by the terms of the agreement? It says that the confidentiality provisions of Article 4 expired at the conclusion of the agreement. Well, you're not contending, are you? That Article 4 somehow different separate from governing something other than the substance of the rights that issue here are, yeah? I'm saying, Your Honor, that the license it involves the license of know-how and other things. It provides for an agreement of second-sewie personnel to train and educate Nova personnel and it includes something more than patents and the facts speak for themselves that there are only two people that can do this, that can manufacture this today. So there's- I think we're talking around them. I'm trying to get you to address a key point which you raised, which is in response to Judge Fuente saying, do you have underlying rights intellectual property rights? You said, yes, we have trade secrets. What I'm trying to get you to respond to is that assertion that I understand the other side of you making it, that you don't have trade secrets anymore. You shared the technology and know-how with them and you did it in a way that by the terms of the agreement itself releases them from any obligation to keep it secret. Now, I'm just trying to get you to respond to that argument. Is that an accurate assertion or not according to the terms of the agreement itself? The agreement, Your Honor, I'm not trying to sidestep the issue, believe me. The agreement says that those confidentiality arrangements under Article 4 end at the end of the agreement. Then how could there possibly be a trade secret underlying this agreement at this point in time? Because Your Honor, the parties agreed to license to a permanent license. Why would they agree to a permanent license if there was not something to license? So, your argument is it's true we don't have a trade secret anymore because of Article 4, but they're still bound because there's something there, there must be something there or they wouldn't agree to it. Have I got you? I think that's one way of putting it, yes. OK. But what that something is that's underlying the agreement, it's clear it's not a patent at this point and it's clear it's not a trade secret at this point, but it must be something. It is something that the parties felt was important enough that Nova wanted a permanent license. Could you find what that something is if it's not a patent and it's not a trade secret? Your Honor, it could have been the advantage that was given to, I'm sorry if I appear to be elusive here because this wasn't really an issue that was litigated factually below. So there's little record on it. But the basis could have been for the license, the concept of granting a permanent license subject for restriction, the basis could have been that Secki Sui trained the RCO personnel how to make this product and gave them a leg up in the market, the ability to do it when no one else could. And for that reason, my point is that there are independent reasons for supporting the restriction beyond the secrecy. It doesn't stay. All of this hinges on our finding that there was a separate 10-year, a separate agreement that was perpetual. Not a separate agreement that was perpetual, Your Honor. Finding what I think is plainly evident from Article 11, Section 2, is that there was a permanent license. Now, I don't know whether a permanent license means that that's perpetual, perhaps it does. But there was, after the agreement says in Article 11, that after the payment of all of the sums called for under the agreement, and it refers to Article 6, which calls for payments of lump sums running royalties for 10 years, for the period of the agreement. Article 11 says, after all of these things are paid, Nova has a fully paid up license. And you characterize that and you're briefing as a separate agreement, don't you? And your briefing, you say Article 11 has two parts to it. The first sentence refers to rights and obligations that come from paragraphs, or Article 5.2 and 5.3. And the second sentence of Article 11 is a whole nother animal. It's a fully paid up license. And I think that's what Judge Pointy says is going to be. For us to buy your argument, we would have to agree with you that Article 11 has, in essence, two pieces, one reaching back to 5.2 and 5.3. And the second, coming from the second sentence, a fully paid up license, which stands on its own and is in perpetuity, isn't that right? I think that you can view it as two licenses, yes. I'm not sure the party's viewed it that way when they did it. They viewed it, but after we've over-intellectualized this document, with all respect, the lawyers have made it much more confusing than it is. The agreement simply was that we're going to give you certain things. The party's agreed that a license was necessary for Nova to do what it wanted to do, to make and sell. The parties agreed that a license was necessary for that. They agreed in Article 11 that at the conclusion of the agreement, Nova would have a fully paid up license to sell anywhere in the world subject to restriction. Did you, what wasn't their testimony in this case by Sekisui's own manager or the person who drafted the first agreement that the party never anticipated, a permanent ban on the part of Nova to trade in Asia? I think you may be referring to Mr. Saito's testimony that didn't use the word forever. Yeah, well, let's see. There was testimony. One of the Sekisui managers or person is instrumental in the drafting of the first agreement, testify that there was no discussion about how long the proposed restriction on our cosability to sell products would last. No discussion at all. Doesn't that argue against your position that there was a permanent ban? I don't think so. You want to put this in common terms. Who in their right mind is going to agree to a permanent ban to sell products in a major sector of the world? I think Nova did. And I think they did because this was the deal. The deal was Sekisui can manufacture this new product that is going to take the place of Styrofoam. Sekisui didn't want to give up Asia. Sekisui gave Nova the rest of the world in exchange for Nova's agreement to give up Asia. Sekisui put the language to give it up forever as your argument. And you can give it up forever argument is pinned on the words fully paid up, right? To give it up for the same time that their license existed. You can have both. You either have a fully paid up license to sell for however long that lasts, subject to a restriction or you don't. That's why the district court disagreed with you, right? I mean, you pose this as a, if you don't have the right to do it then by definition and by the terms of the agreement, you're forbidden to do it. By understanding your argument and as you reiterated here today, where this thing's been over intellectualized when it's just as simple as an on-off switch. If it's on, it's on, it's off, it's off, it's binary. So it's saying that you can't, you're not permitted to sell under the terms of a license in Asia means you can't do it ever. I think I've got your argument, right? But maybe if I got your argument. My argument is if you need a license to sell it, if you agree that you need a license to sell it, the license has the terms that the license has. And the license terms are, you can sell it, excuse me, subject to not being able to sell it in Asia. However long that license lasts, the restriction lasts. You can't have it, one, you can't say I have a license to sell the stuff that didn't expire with the agreement, but there's a restriction that did. They can also manufacture a canter. They can manufacture it, yes. But you say they can manufacture and sell it anywhere, but they can't, except they can't sell it in Asia. They can manufacture it in the US and Canada and they can sell it anywhere in the world, but Asia. Now the district court looked at your argument and said, if I understood it correctly, that it did not take account of, a paraphrasing loosely, it did not take account of an understanding of the license as pinned on intellectual property rights, that is, it was designed and set up in a way that meant any restrictions or limitations in the license lasted only as long as the rights claimed to be given lasted. And since you don't have rights to give anymore, the restrictions can't extend either. That's, if I understand correctly, what the district court said. What's your response to the district court's assertion that it's not your license agreement that can forbid these people forever, the license can only grant and then withhold certain things. And once the underlying stuff on which the license is based is gone, by definition, they can do whatever they want wherever they want. What's the response to that? That you're writing off the permanent license, that the fully paid up license in article, what's the point of having a fully paid up license at the end of the agreement if there's nothing to license? There's no point. So to do that, you're saying that this entire provision of the contract is meaningless. Well, doesn't that ignore the possibility and indeed isn't it relatively common for licenses to include sell-off provisions for something that was made before the expiration or certain rights and then allows them to sell off after the license period ends? I don't know whether that's correct as a factual matter, but it's certainly not in this record. There was a license, the party's negotiated for a fully paid up license that you can't rationalize it any way other than that fully paid up license started when the agreement was done. And the fully paid up license was to sell anywhere in the world except these countries, whether that's a prescription or a description doesn't make any difference because as your honor points I had to buy an airy notion. I was reflecting what I understood your argument to be. And I think I understood correctly that it's buy air, right? Yeah, that's my argument. You did have patents properly registered patents for the Piosalin product. Yes. Those patents have expired. Yes. In anyone then manufactured Piosalin? Anyone that takes the trouble of going through the patents and figuring out the technology? No. Why not? Because they don't have the trade secrets. They don't know the processes. Well, but if they don't have the equipment, there was other. Well, Nova knows the secrets. Can't Nova then share that with another manufacturer? Supposed they could. Well, it often is challenging. Yes. And if they did, could that other party sell in Asia? We would be arguing that they could not. They would be doing it indirectly. Mr. Flan, thank you very much. Thank you very much. Mr. McIntyre. Thank you, Your Honor. May I please the court? I'm John McIntyre, counsel for the Appalee of the Chemicals Incorporated. Let me start by following up on some of the court's questions, because I think I can shed some light on the questions that you've asked about. Certainly, the consideration that was provided by Sekisui in the license agreement was to grant restrictive patent rights and trade secrets from Sekisui to Arco. As this court is recognized and as the record is absolutely clear, all of those patents have expired. With respect to the trade secrets, Article 4 is very clear. Article 4 said that in paragraph 4.3, that the use of the trade secrets by the party who received them was restricted only to implement the purposes of the license agreement. I don't think you're getting a disagreement from the other side on that. What I do think you're getting a disagreement from them on is the assertion that there's nothing that continues to bind your client. So I'd like you to respond if you would, Mr. Flams, argument, that certainly, Arco and Noble knew that there was something binding and obligating, Nova going forward, or they would not have transferred the license after the expiration date. Certainly. What would be the purpose of doing that if there was nothing there? And indeed, what would be the meaning more importantly, does the position that your client is taking here render the fully paid license language of Article 11 meaningless? Just a certain message. Certainly, Aron, let me address both of those. First of all, as we point out in our brief, the question about the assignment and its legal meaning wasn't raised below. If it had been, we would point it out that Article 4, as we have discussed right here, granted Arco and subsequently Nova free use of the trade secrets. Once the patents had expired, anybody in the world was free to use the technology, but we were granted a right under the license agreement to these trade secrets. And we are free to use them now as we please. Therefore, there was a property right that vested in Arco and now Nova, and that was the purpose for the assignment. The other point that I would make is as the record. Are you then conceiving that these are trade secrets that the thing you took, even though they gave it to you and you don't have any confidentiality obligation that those could still be trade secrets under the law? Whether they are or not, Your Honor, I think that they are, frankly. If we were to suppose, how is that in your client's interest to take that position and how could it be that as a matter of law since you're under no restriction and could deliver that information to anybody you want? It's in my client's interest because we are maintaining them as trade secrets ourselves. We don't want to disclose them necessarily to the world. Therefore, that both Sekisui has a proprietary interest in those trade secrets as to we. But if you did disclose them to a third party, would you not be in violation then to be agreement? No, Your Honor, we wouldn't be in violation. In fact, Article four specifies that 10 years after the exercise of the option, all obligations with respect to the secrecy under the trade secrets shall expire and they did expire with the rest of the license agreement. So though it may be against your economic interest, you're free to share the technology and whenever you learn about Sekisui with any other third party in the world. Exactly, Your Honor. So you can keep it secret if you choose, but you don't have to. In other words, I guess what I hear you saying is, now it's your trade secret, it's not theirs. Well, as long as you can share with anybody and they have no control over the secrecy, I could be theirs. Actually, Your Honor, they have the same interest. They are free, there's nothing binding them to maintain the secrecy of these trade secrets. If they wanted to disclose them to DuPont, they would be free to. I'm not trying to see how many angels dance in the head and I'm trying to understand something here. So your assertion though is that as far as your client is concerned, you can keep it close and secret if you want or you can share it with whoever you want and that's your position, right? Absolutely. So as a matter of fact and law, doesn't that take the control of the secrecy away from Sekisui? I think as a matter of law, it does. Okay. And likewise, since they could share with anybody, they want you don't have control of the secrecy. Absolutely. Okay. Did the district court address the issue of whether there were trade secrets that were part of an agreement? It did, Your Honor. The district court's opinion specifically states that we were free to use the trade secrets as we wished after the expiration of license agreement. And that was the expiration of the Article 5 10 year period. Correct. Correct. Is there any difference between that 10 year period and the 10 year period described in the Article 11? It turns out your honor that it's the same. The way that Article 4 was written, it contained provisions that would have maintained the secrecy obligations beyond determination only if the termination had occurred prematurely. So if for some reason, ARCO were to terminate the agreement, there was a secrecy obligation that would have extended beyond that termination. But because the agreement ran its full course, those secrecy obligations terminate with the rest of the license agreement. The agreement that's full course way. February 20th, 1995. 1995. So what, I'm not sure I understand yet, Mr. McTar, what's the position you have with respect to Article 11? Are you saying that they did license you valuable technology, which continues, and there continues to be an intellectual property right underlying that license, and it's fully paid up, and you're operating under that license. No. We're not saying that, you remember? Right. Because that would be the other side. It would. It would. Gotcha. So then what are you saying with respect to Article 11? How do you read fully paid up? Certainly. Let me address that. First of all, I think in order to define Article 11, what it means, you have to look at 5.4 and what it accomplished. Article 5.4 dealt with the right to sell in the Asian countries. But it wasn't a contractual prohibition, because no contractual prohibition was necessary. Sekisui had existing U.S. patent rights, and if we or Arco had sold in the Asian countries, they could have sued for infringement here in the United States. So clearly, Article 5.4 granted us an affirmative right to use, to manufacture in the United States and Canada, and to sell in every country of the world except 12. And the reason that they did that was you couldn't define that with solely because of patent rights. Yes. Okay. Then point me to where in the document that exists. What in this agreement says, hey, this license with respect to limitations on territory, this is all about the patents, not trade secrets. First of all, Your Honor, I think that you have to look at, let's just be blunt. Sure. It's not in there, is it? There's nothing in this agreement that says anything like that is there. No, but I think you can tell from the context in which paragraph 5.4 is placed, that that's the case. For example, let me direct the court's attention to paragraph 5.1. Paragraph 5.1 also granted Arco a right to sell products, prior to the time that the option was exercised. Paragraph 5.1 says, you shall have the right to sell in the United States and Canada. Doesn't say you can't sell in the Asian countries, doesn't say you can't sell in South America, because it didn't have to. They were already prohibited. The only rights that Arco had sprang from this license agreement. Prior to that time, they were barred by the patent laws. But 5.4 clearly bars you from selling in the 12 Asian countries, doesn't it? It does not, Your Honor. What it does is it grants an affirmative right to sell everywhere else. It would have been almost impossible for the parties to say, you're granted an affirmative right in the following 180 countries. So what they had to do was to say, we're going to say you have an affirmative right to sell everywhere except here. And that's the language they used, except it doesn't create a bar. What does that? When you say that doesn't create a bar, in order for that not to create a bar, one has to assume the underlying rights theory that the district court did. If I understood the district court's position in ruling, it was, the rights don't spring from this license alone. This is a license that has to lay out a foundation of independent rights, intellectual property rights. And prohibitions. And the statements in the license about where you can sell and where you can't sell. Because I guess I'd have to agree with your opponent here that if it says you can sell everywhere but here, that's another way of saying, as long as we're under this license, you don't have a right to sell. I disagree, Your Honor. I disagree. Now, what's the, what is it other than the intellectual property rights itself that could possibly exist as a third way between you can sell here, except there and you can't sell in Asia. What's the third way? They say it's binary. You're saying it's not. What's the, what's the non binary answer? The third way would have been, Arco agrees not to sell in the following Asian countries, but shall have a right to sell in all other countries of the world. That's the third way. That shows an affirmative agreement on the part of Arco not to sell in those countries, whereas the language here simply talks about the right to sell everywhere except. And again, 5.4 even mentions the countries that you cannot sell in a product. Exactly, Your Honor. That's where, it doesn't mention where you can't sell it, Your Honor. Oh, wait a minute. Tell me, tell me where, tell me where this is rolling. This is 5.4. ACC, your predecessor, Right. Shall have the right to sell products and other resinous materials in all countries of the world, except in the following countries. Right. Both countries are in a name that, now does that not mean you cannot sell? It does not. Basically, Sekisui's backyard. No, Your Honor. It does not. And the reason is, So I've, I've misread that. No, Your Honor. The point is that you can't read it in a vacuum. You have to understand that this is a license agreement that Sekisui has the right to prohibit sales anywhere. So I have to go somewhere else and some other provision of this contract in order to fully understand 5.4. No, Your Honor. You have to look at the context in which it was entered into. This is a license agreement. What happened to plain reading? I have them. Reading the words of 5.4. And it says, You cannot sell there. It doesn't say that, Your Honor. It says, You can sell everywhere except. Right. And your work, And your reading of the word, except means, it doesn't really mean except. No, Your Honor. It doesn't mean except. You can sell everywhere except there and except. In this instance, means, You could sell there, But not really. I mean, Your Honor. You have taken us down a rabbit hole. It feels like. I don't, you know, You keep saying, Look at the context. Look at the context. But I, I got to say, I don't know what context you can point me to that doesn't end up with the words, Except meaning, We really are letting you sell here and not there. Your Honor, Let me direct you back to 5.1. 5.1 says, You can sell the United States and Canada. Sure. Would the court agree that under the patents we were prohibited from selling anywhere else? Well, Since this doesn't appear to me to be a license limited to patents, I'm not sure what that question goes to, sir. Your Honor, At a minimum, At a minimum, To wear in the agreement, It says, The technology we're talking about here, And the limits we're talking about here, Or the limits associated with the patent rights, And not the trade secret rights, Then we would be having a different discussion. But I've looked at this license. I can't find it. You haven't pointed me to it. So I'm not sure where you get from this document, Or frankly, from any of the evidence you've profit in the district court, And it's in the record before us, That these limitations were tied to the patent rights, And were not also tied to the rights, Which you yourself have described straight secrets. Yes. Your Honor, I agree with you, That you could look at under either scenario. If you look at paragraph 5.1, You would agree with me, Would you not, That Arco had a right to sell in the United States and Canada, But did not have a right anywhere else. That there were no other countries that were mentioned. Are you asking me a question? I'm saying that the point is that you have to understand this in the context of intellectual property rights. It can't be divorced from that. Even if the court, But even if the court were to conclude that, Arco agreed to a contractual prohibition on sales in the Asian countries. You then have to get to that it's a perpetual prohibition that extends for it. But what was it, But going back to this point of the prohibition of selling in Asia, Was there any point in naming the country specifically that there was? 40 to 5.4, You cannot sell the, Crystalline. Absolutely, Your Honor, Because what they were saying is, We're granting you an affirmative right to sell in all countries of the world, Except here. So the reason that you have to name those countries is to make clear to the parties where you were not granted, And that's why they were not granted the affirmative right. Doesn't make sense that this is simply like you see his backyard. They were also selling the product and didn't want you competing with them. That's fine, Your Honor. But the Supreme Court and Rulot has held that you can't bar the use of patent technology beyond the term of the legal monopoly granted by the patents. You're back to patent technology. Certainly, Your Honor, I mean, the Supreme Court has made clear in Rulot that it's simply void. You can't agree to impose any geographic restrictions beyond the term of the patent. You're raising the Sherman Act issue. The Sherman Act, but I think more directly, Rulot, Your Honor. Well, not a Rulot. Rulot doesn't have anything to do with trade secrets. I mean, if they've got trade secret technology and they want to limit a lot of you geographically, they can do that till the cows come home. But Your Honor, this goes back to your very first point, which is that all the trade secret restrictions have expired. So if the patents have expired and the trade secrets have expired, we don't need a license. Then explain to me what you have and are operating under. Now, it really does go to the first point. They say there must be something that the other side believes they're a licensed under. They claim a fully paid up license. Article 11 talks about a fully paid up license. They assert that there's know how that they're keeping in confidence. They're operating under a license. And as long as they're operating under that license, we're entitled to enforce the restrictions associated with that license. So if you're taking the position that, wait, there really is no trade secret, tell me what it is that Article 11 fully paid up license is talking about. What Article 11 fully paid up license is talking about is, as we point out in our briefs, is that Arca wanted to make very clear that as long as they had paid all of their running royalties during the term of the agreement, that they had a fully paid up license, they couldn't be sued for infringement if there were some technical violation of the agreement. In other words, it's existing. No, but it was done. You paid, you made your lump sum payment, you paid all the royalties, you were finished. Exactly. What did you think you were buying with that additional time period? It makes sense. Here's what makes sense to me, and here's what it doesn't. We sort of had time to class. I can get my head around the notion that whether you call it a trade secret or a patent, there has to be some intellectual property right underlying the license for the thing to make sense. I can also appreciate and understand the position that's been taken that, hey, we don't have an obligation to keep things secret. In that respect, they don't have any enforceable trade secret right against us. Therefore, there's nothing underlying this license anymore, and we can do whatever we want, wherever we want, because they're done. I can understand that assertion. What I'm having a little trouble with is, and what seems to be contradictory in your presentation here today, is how you deal with their argument that that would render the second sentence of article 11, newgatory, it would make it just meaningless. There was something out there that they were willing to pay money for and take a license for. And maybe it's not a patent, maybe it's not a trade secret, but it's some kind of intellectual property, right? And they paid for it, and therefore there's a restriction that still exists on it. And I'm still not understanding your position on that assertion. You paid for it, you seem to be even saying here, yeah, we've got a license of some sort, whereas I would have thought your position would be, there is no license, because there's no underlying in a intellectual property right. Here on our must not have been clear. I guess my point was that our position is that the second sentence of article 11 relates to a fully paid up license during the term of the agreement. Our position is not that we bought some license, or that we needed a license beyond the term. And I think that our point would be, even if the court were to conclude that article 11 read differently, I think you could say, you know, it's unclear from the record if the patents were still in effect at the time that the license agreement expired. But even if you gave Secretary of State the most generous interpretation possible, and that the patents were in effect the day before the license agreement started in January of 1983, those patents would have expired in January of 2000. Therefore, there was no intellectual property right that existed after January of 2000 that we would have needed a license for. Does that mean that the license that you obtained under the option and paid for under I think it's article six, along some payment and royalties has now been satisfied? So you now have fully paid up license. Is that your position? It's not our position. Our position is that five point or article 11 related to rights during the term of the agreement that the fully paid up license referred to the fact that if we were making our running royalties as they were coming due, that we had a fully paid up license during the term and not post expiration. Mr. McIntyre, thank you very much. Mr. Flem. Thank you, Robert. I would just like to make two brief points. And the first one is that we must remember to stay to the record here. The issue about patents, if you read the agreement, there's no patent numbers. There's no description of patents. And I don't think we can be making arguments about as Mr. McIntyre does about looking this as an overlay over who had patent rights where because there's nothing in the record for that effect. And some of the facts that I've heard banded about you're not correct. So are you saying that the technology here was not at some point or a part of it at least patented technology? No, it was, but it is not this agreement is not based on a framework of patent technology. If you look at the agreement, what was the license under Article 1, the most of them are the equipment and technology and not patent rights. Patent rights is number nine of the listed items. The rest of them are technical. But both things were in play, right? Patent rights were in play trade secrets and know how we're in play. Certainly one more being dealt with by this license. That's correct. That's correct. Do you agree with your opponent that there were certain aspects of the patent rights that didn't expire until post 2000? Nobody knows when the patent rights expired. It's not in the record, you're on it. There's nothing in the record about when the patent rights. The last point, this argument that the fully paid up license is during the term of the agreement is with all due respect to my opponent preposterous. If fully paid up license, it's plain English for goodness sake. A fully paid up license is something that's fully paid up and the agreement says that upon payment of a fully paid up license under 6.1, which refers to the running royalties lump sum over 10 years. That's how you get a fully paid up license. Can you touch at some point, Mr. McIntyre's point that your interpretation of the agreement imposes a permanent perpetual bar on Nova trading in Asia? It grants them a permanent perpetual license to sell everywhere in the world that they felt was a value. They don't have to pay anything for that license. They paid for it. They paid for it over 10 years. They have a permanent paid up license to sell everywhere in the world. If I were Nova, I wouldn't have wanted to pay you. So I wouldn't have your license and then I could use that technology to go ahead and sell the product in Asia. You're on it. They would have never gotten the technology for the actually 16 years that they had it before the agreement expired. This is a brief. This license never ends according to you, right? When Gabriel sounds as Trump, there will still be a restriction on Nova in selling in Asia, correct? Nova would still have a right to sell everywhere in the world. You can't have in Asia, right? But you can't look at only one side of this agreement. I'm going to buy your car for $1,000, but I'll give you $1,000 and I don't get the car. We're not trying to look at it from one side. In fact, my question is specifically premised on your reading of this license, which is to say, except is to say, you cannot. That's correct. And so under your reading of this license, they cannot ever, forever sell anything into Asia that's covered by this license. Is that correct? That's correct because their license lasts for that moment. That's all I have to say, Your Honor, if you don't construe the Article 11 to impose exactly what Your Honor said, then the fully paid up license is meaningless. There can be no meaning to it because there's no point to it. And if you have a fully paid up license, then the terms are set forth right in the contract. Sell anywhere but Asia. Mr. Klam, thank you very much. Thank you, Your Honor. We'll take this case and your advice and thanks, Council, for excellent presentations