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Lucent Technologies, Inc. v. Gateway

January 17, 2008


The opinion of the court was delivered by: Marilyn L. Huff, District Judge United States District Court

ORDER DENYING MOTIONS FOR SUMMARY JUDGMENT OF INVALIDITY OF UNITED STATES PATENT NUMBERS 4,958,226; ,383,272; 5,347,295; and 4,763,356; 4,439,759 [Doc. Nos. 66, 68, 69, 70, 71, 72, 83, and 85.] AND RELATED CLAIMS

On November 30, 2007, defendants and counterclaimants Gateway, Inc. and related entities ("Gateway"), Microsoft Corp. ("Microsoft"), and Dell Inc. ("Dell" and collectively "Defendants") brought various motions for summary judgment of invalidity with respect to United States Patent Numbers 4,958,226 ("Haskell '226"); 4,383,272 ("Netravali '272"); 5,347,295 ("Agulnick '295"); 4,763,356 ("Day '356"); and 4,439,759 ("Fleming '759"). (Doc. Nos. 66, 68-72, 83, 85.) More specifically, Gateway brought motions regarding the Haskell '226 and Fleming '759 patents. (Doc. Nos. 66, 70.) Dell brought motions regarding the Haskell '226, Netravali '272, Day '356, and Fleming '759 patents. (Doc. Nos. 68-69, 71-72.) Microsoft brought motions regarding the Day '356 and Agulnick '295 patents. (Doc. Nos. 83, 85.) Gateway joined all of Dell's and Microsoft's motions. (Doc. Nos. 75, 86.) Dell joined all of Gateway's and Microsoft's motions. (Doc. Nos. 91-92.) Microsoft joined Dell's and Gateway's motions regarding the Haskell '226 and Day '356 patents. (Doc. No. 94.)

On December 14, 2007, Multimedia Patent Trust ("MPT") submitted responses in opposition to the motions regarding the Haskell '226 and Netravali '272 patents. (Doc. Nos. 139-40.) That same day, Lucent Technologies, Inc. ("Lucent") submitted responses in opposition to the motions regarding the Agulnick '295, Day '356, and Fleming '759 patents. (Doc. Nos. 146-47, 153, 157.) On December 21, 2007, Defendants submitted reply briefs in support of their motions. (Doc. Nos. 173, 176-77, 181, 183, 185-88.)

On January 4, 2008, the Court permitted Plaintiffs to supplement the record with information from recent discovery relevant to the Day '356 patent. (Doc. Nos. 208-09.) On January 7, 2008, with the Court's approval, Defendants filed supplemental briefs addressing this new filing. (Doc. Nos. 213-16.)

The Court held a hearing on these motions on January 8, 2008. Robert A. Appleby, Paul A. Bondor, Gregory F. Corbett, Eric D. Hayes, James E. Marina, and Michael P. Stadnick appeared on behalf of Plaintiffs. Joel Freed and Joseph A. Micallef appeared for Dell. Jonathan D. Baker, Andrew Thomases, and Darren Mareiniss appeared for Gateway. Juanita E. Brooks, Lara S. Garner, John E. Gartman, Christopher S. Marchese, and Cathy Reese appeared for Microsoft. At the hearing, Defendants offered to submit two motions on the papers: Dell's motion on the Day '356 patent and Microsoft's motion on the Agulnick '295 patent. The parties argued the remaining motions at the hearing.

For the reasons set forth below, the Court denies Defendants' motions for partial summary judgment of obviousness.

Legal Standard

I. Summary Judgment Standard

Under Rule 56(c) of the Federal Rules of Civil Procedure, a court may grant summary judgment upon a claim "if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." A party moving for summary judgment bears the initial burden of establishing the absence of a genuine issue of material fact for trial. See Devereaux v. Abbey, 263 F.3d 1070, 1076 (9th Cir. 2001) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). "On a motion for summary judgment the court examines the evidence in the light most favorable to the non-moving party." Porter v. California Dep't of Corrections, 419 F.3d 885, 887 n.1 (9th Cir. 2005). Because an issued patent is presumed valid, the burden of persuasion for invalidity is one of clear and convincing evidence See, e.g., Takeda Chem. Indus., Ltd. v. Alphapharm Pty., Ltd., 492 F.3d 1350, 1355 (Fed. Cir. 2007); Oakley, Inc. v. Sunglass Hut Int'l, 316 F.3d 1331, 1339 (Fed. Cir. 2003).

II. Standard for Obviousness

The obviousness defense challenges a patent's validity and, as noted above, it therefore requires proof by clear and convincing evidence. "The ultimate judgment of obviousness is a legal determination," and summary judgment may be appropriate if "the content of the prior art, the scope of the patent claim, and the level of ordinary skill in the art are not in material dispute, and the obviousness of the claim is apparent in light of these factors." KSR Int'l Co. v. Teleflex Inc., 550 U.S. ___, 127 S.Ct. 1727, 1745-46 (2007) (citing Graham v. John Deere Co. of Kansas City, 383 U.S. 1, 17 (1966)). Courts also consider secondary factors, including "'commercial success, long felt but unsolved needs, failure of others, etc.'" which may dislodge a determination of obviousness. Id. at 1734 (quoting Graham, 353 U.S. at 17-18.) District courts weigh expert testimony to determine if there is an open question of fact, though a merely conclusory affidavit will not preclude summary judgment. See id. at 1745-46.

In KSR, the Supreme Court rejected a rigid application of the Federal Circuit's "teaching, suggestion, or motivation" test. See KSR Int'l Co., 127 S.Ct. at 1734 (citing Al-Site Corp. v. VSI Int'l, Inc., 174 F.3d 1308, 1323-24 (Fed. Cir. 1999), as an example of this test). Under this test, proof of obviousness required some teaching, suggestion, or motivation "found in the prior art, the nature of the problem, or the knowledge of a person having ordinary skill in the art." Id. The Court determined that while "teaching, suggestion, or motivation" had "captured a helpful insight" into obviousness, it was incompatible with Supreme Court precedent when applied in a rigid and mandatory fashion. Id. at 1741. Although the Supreme Court overturned the Federal Circuit decision at issue, it observed that certain more recent decisions reflected a broader approach that may be consistent with its opinions. Id. at 1743 (citing DyStar Textilfarben GmbH & Co. Deutschland KG v. C.H. Patrick Co., 464 F.3d 1356, 1367 (Fed. Cir. 2006); Alza Corp. v. Mylan Labs., Inc., 464 F.3d 1286, 1291 (Fed. Cir. 2006)).

When determining obviousness, "neither the particular motivation nor the avowed purpose of the patentee controls." KSR Int'l Co., 127 S.Ct. at 1741-42. Instead, courts should determine whether the "objective reach of the claim" encompasses obvious subject matter. Id. at 1742. This may include "noting that there existed at the time of invention a known problem for which there was an obvious solution encompassed by the patent's claims." Id. "[T]he results of ordinary innovation are not the subject of exclusive rights under the patent laws." Id. at 1746. However, courts must avoid "falling prey to hindsight bias," "ex post reasoning," and "[r]igid preventative rules that deny factfinders recourse to common sense." Id. at 1742-43. Furthermore, "when the prior art teaches away from combining certain known elements, discovery of a successful means of combining them is more likely to be nonobvious." Id. at 1740.

"A patent composed of several elements is not proved obvious merely by demonstrating that each of its elements was, independently, known in the prior art." KSR Int'l Co., 127 S.Ct. at 1740. A combination is likely nonobvious if the elements work together "in an unexpected and fruitful manner." Id. at 1740. In contrast, a patent is likely to be obvious if it merely yields a predictable result by substituting one element for another known in the field. Id.

Analysis of the Patents

I. Haskell '226

A. The Patent

On September 18, 1990, the United States Patent and Trademark Office ("PTO") issued the Haskell '226 patent, entitled "Conditional Motion Compensated Interpolation of Digital Motion Video," to inventors Barin G. Haskell ("Haskell") and Atul Puri. The application was filed on September 27, 1989. The patent relates generally to the encoding and decoding of digital video signals of moving images in order to reduce the bandwidth required to transmit the images.

Independent claim 12 is the only one at issue with this patent, and it claims: A circuit responsive to coded video signals where the video signals comprise successive frames and each frame includes a plurality of blocks and where the coded video signals comprise codes that describe deviations from approximated blocks and codes that describe deviations from interpolated blocks, comprising: means for developing block approximations from said codes that describe deviations from approximated blocks; and means responsive to said block approximations and to said codes that describe deviations from interpolated blocks to developed said interpolated blocks. (Haskell '226 6:55-66.) The Court previously determined that the structures corresponding to the two means plus function elements of this claim are, respectively:

Decoder 22, DCT-1 24, Adder 27, and Shift Circuit 26, including all inputs and outputs of these elements related to the claimed function (See Fig. 2; Col. 4, lines 3-10, 26-32, Col. 4, lines 63 to Col. 5, line 7). and Decoder 25, DCT-1 34, Adder 35, and Shift Circuits 31 and 39, and Averager 32, including all inputs and outputs of these elements related to the claimed function (See Fig. 2; Col. 4, lines 63-65; Col. 5, lines 7-23 [description of the structure and inputs that correspond to these elements is at Col. 4, lines 38-50]). (Order Construing Claims for Haskell '226, Case No. 02-CV-2060, Doc. No. 311 at 4-5.)

B. Alleged Prior Art and Other Evidence of Obviousness

Defendants assert that claim 12 is obvious in light of a group of patents obtained by inventors at the PictureTel Corporation in the mid- to late-1980s, referred to collectively as the "PictureTel patents." Defendants' expert Edward J. Delp III identifies this extensive group of patents, which cross-reference one another and involve interrelated subject matter, in his report regarding the obviousness of Haskell '226 and Netravali '272 ("the video patents"). (See Decl. James S. Blackburn Supp. Dell's Mots. Summ. J. Invalidity ("Blackburn Decl.")Ex. 18 at 888-891.) The PictureTel patents disclose a variety of video decoding and encoding techniques, including techniques for motion compensation and interpolation. (See generally Blackburn Decl. Exs. 31-37 (various PictureTel patents).)

As early as May 6, 1988, and no later than June 10, 1988, Haskell published a video coding textbook called Digital Pictures, Representation and Compression ("Digital Pictures") (Ex. 21; Ex. 22 at 1100-01; Ex. 26 at 1194-96.) The text describes various interpolation schemes and observes that:

In this as well as other interpolation schemes, since at times the interpolation may be inaccurate, techniques have been devised where the quality of interpolation is checked at the transmitter, and if the interpolation error is larger than a threshold, side information is transmitted to the receiver. It appears that due to unavoidable inaccuracies of the displacement estimator (e.g. complex translational and rotational motion) and the segmentation process, such side information would be necessary to reduce artifacts that may otherwise be introduced due to faulty interpolation. (Id. Ex. 21 at 1093). The book also discusses the application of the Discrete Cosine Transform ("DCT"), which is used in the Haskell '226 patent. Id. at 1092.

Thomas Micke wrote a 1986 Master's Thesis at the University of Hanover Institut für Theoretische Nachrichtentechnick und Informationsverarbeitung ("Institute for Theoretical Communications Engineering and Information Processing" or "TNT") entitled "Vergleich eines prädiktiven und eines interpolativen bewegungskompensierenden Codierverfahrens für Fernsehbildsignale" ("Comparison of a Predictive and an Interpolative Motion Compensating Coding Method for Television Video Signals"). (See Blackburn Decl. Ex. 23 (translated version of thesis).) The Micke Thesis describes a general theoretical framework for combining "the DPCM method with motion compensating prediction" with "motion compensating interpolation of the video signal" into a single method called "motion compensating interpolation error coding." (Id. at 1105.) The thesis examined the viability of these methods using a theoretical computer model, though it did not describe a specific implementation outside the simulation context.

There is conflicting testimony regarding the availability and accessibility of the Micke Thesis. Defendants offer the declaration of Thomas Wehberg, Head of Administration at the University of Hanover's Information Technology Laboratory and former administrator for TNT and its library. (Blackburn Decl. Ex. 38.) He states that the library would have been open to the public in 1986 and that Micke's thesis would have been shelved and indexed by name and title in 1986. (Id.) Plaintiffs' expert Bernd Girod, who worked at TNT as a member of the research staff and was aware of Micke's work, asserts that the TNT library was not open to the public and did not index its theses by subject matter. (Decl. Bernd Girod Supp. MPT's Opp'n Dell's Video Coding Summ. J. Mots. ("Girod Opp'n Decl.") ¶¶ 82-83.) Girod cited the Micke Thesis in a 1987 article and told other colleagues about it. (Blackburn Decl. Ex. 20 at 1045.1-45.9; Ex. 39 at 1444.)

Defendants offer several papers which they claim disclose the idea of transmitting both interpolation error and prediction error in the same system. N.K. Lodge authored "A Hybrid Interpolative and Predictive Code for the Embedded Transmission of Broadcast Quality Television Pictures" in a paper from the June 1986 Second International Conference on Image Processing and its Applications. (Blackburn Decl. Ex. 28.) Masayuki Tanimoto and Taskashi Mori wrote "A Hybrid Scheme of Subsampled DPCM and Interpolative DPCM for the HDTV Coding" for the July 1987 Transactions of the Institute of Electronics, Information and Communications Engineers. (Id. Ex. 29.) Defendants also offer Document #81 from a CCITT Specialist Group on Coding for Visual Telephony, entitled "Comments on Conditional Motion Compensated Frame Interpolation" and dated March, 1986. (Id. Ex. 30.) Plaintiffs counter that there is no evidence that Document #81 was available, outside confidential group meetings, early enough for it to be prior art. (See Girod Opp'n Decl. ¶ 76.)

C. Person of Ordinary Skill

The parties have not disputed the level of ordinary skill in the art, at least as it relates to this motion. For the present purposes, the Court applies the statement by Plaintiffs' expert that "a person of ordinary skill in the art of video compression throughout the 1980s would have had at least a Bachelor of Science degree in electrical engineering or a related field and 2 years experience working in the area of video compression systems." (Girod Opp'n Decl. ¶ 21.)

D. Discussion

Plaintiffs first argue that Girod conceded that claim 12 does not require "coding of interpolation errors," suggesting that Girod used "coding" in this context to mean "decoding." The Court disagrees. The relevant portion of Girod's deposition, viewed in the light most favorable to Plaintiffs, reveals that Defendants were ambiguous in their use of the term "coding" during the contested questioning. Although Girod stated that "coding" was not required, Defendants' questions failed to distinguish "encoding" from "decoding," and Plaintiffs raised objections to this effect. (See Blackburn Decl. Ex. 20 at 1083-85.) For summary judgment purposes, the point was not conceded.

Defendants next argue that, even if the patent requires blockwise decoding of interpolation error, it would have been obvious, in light of the prior art, to modify the PictureTel patents to include this. Again, Plaintiffs fail to meet their burden on summary judgment. In particular, the Court agrees that Defendants' expert Delp has failed to establish that the structure corresponding to the "means responsive to . . . codes that describe deviations from interpolated blocks . . . ." would have been obvious in light of the PictureTel patents, alone or in combination with the other prior art. (See Blackburn Decl. Ex. 18 (Delp report regarding obviousness).) The claim limitation is the overall structure, not each element taken individually. See Odetics Inc. v. Storage Tech. Corp., 185 F.3d 1259, 1268 (Fed. Cir. 1999). Although Defendants may have established that certain individual structures were known in the prior art, Plaintiffs have not met their burden to show why the particular structure would have been obvious, taken as a whole. As stated by Plaintiffs' expert, many video coding techniques were known at the time, and viewing this argument in a favorable light, it would have taken "more than common sense and knowledge of the prior art" to settle on the particular approach of claim 12, out of the many possibilities. (Girod Opp'n Decl. ¶ 53.) This assertion by Girod is not merely conclusory, as he offers various examples and explanations of his position. The dueling experts' contentions present material questions of fact.

These reasons are enough to determine that summary judgment of obviousness is not appropriate for claim 12 of the Haskell '226 patent. The Court also notes that there are factual disputes over whether the Micke Thesis or Document #81 are prior art. Even if a document is not prior art, a Court may consider it for motivation to combine, at least to the extent that motivation to combine is treated flexibly under KSR. See Nat'l Steel Car, Ltd. v. Canadian Pac. Ry., Ltd., 357 F.3d 1319, 1337-38 (Fed. Cir. 2004) (holding that evidence need not reach the level of prior art to be considered for motivation to combine).

The Court denies Defendants' motion for summary judgment regarding the Haskell '226 patent.*fn1

II. Netravali '272

A. The Patent

On May 10, 1983, the PTO issued the Netravali '272 patent, entitled "Video Signal Interpolation Using Motion Estimation," to inventors Arun N. Netravali and D. Robbins. The application was filed on April 13, 1981. The Netravali patent relates generally to the interpolation of video signals using motion estimation. Interpolation allows ...

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