"...the purpose of the safe harbor is to facilitate market entry ..." Judge
That statement and the others noted by posters suggests* the appeal will not get anywhere.
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* It is worth noting for the non-lawyers that appellate judges often will ask questions that may suggest they are leaning one direction when they are not. At times the questions are just to help them think about the issues. That is not what I believe happened but you rarely can be certain until you see the opinion.
It is astonishing what foolish things one can temporarily believe if one thinks too long alone ... where it is often impossible to bring one's ideas to a conclusive test either formal or experimental. J.M. Keynes