The opinion of the court was delivered by: Marilyn L. Huff, District Judge United States District Court
ORDER ON MOTIONS FOR SUMMARY JUDGMENT AND RELATED CLAIMS
[Doc. Nos. 180, 182, 196, 197, 199, 200]
This case involves claims and counterclaims for patent infringement between Lucent Technologies, Inc. ("Lucent"), Multimedia Patent Trust ("MPT"), and AlcatelLucent (collectively with Lucent and MPT, "Plaintffs"*fn1 ) on one side and Microsoft Corporation ("Microsoft") on the other. On January 4, 2008, according to the schedule set by the Court, the parties filed motions for summary judgment. (Doc. Nos. 180, 182, 197, 199-200.)*fn2 The parties filed their oppositions on January 18, 2008. (Doc. Nos. 225-26, 229, 232, 236.) The parties filed their reply briefs on January 25, 2008. (Doc. Nos. 286-88, 291, 293.) The Court also permitted Microsoft to file a late amended version of one of its motions and granted Plaintiffs additional time to respond to this motion. (See Doc. Nos. 196, 209, 222-23, 290.) The Court also authorized supplemental briefing to address any material discovered after the parties' last opportunity to brief an issue. (See Doc. No. 326.)
On February 1, 2008, the Court held a hearing on this motion. The following attorneys appeared on behalf of Lucent and MPT: Robert A. Appleby, Paul A. Bondor, James E. Marina, Michel P. Stadnick, Todd Friedman, Avi Lele, Jonas McDavit, Michael Bregenger, Carl Blickle, Karen Robinson, and Ephraim Starr. Scott Partridge and Lisa Kelly appeared for Alcatel Lucent. The following attorneys appeared for Microsoft: John E. Gartman, Christopher Scott Marchese, Alan Albright, Ross Garsson, Richard Weinblatt, Irene Hudson, Andrew Kopsidas, and John Helms.
On August 9, 2005, in Case No. 02-CV-2060, the Court granted summary judgment of invalidity by indefiniteness of claims 13 and 15 of United States Patent No. 5,227,878 ("Puri '878") because a transcription error by the United States Patent and Trademark Office ("PTO") omitted language from claim 13, on which claim 15 depends. (See Order Granting Part Denying Part Microsoft's Mot. Partial Summ. J. Invalidity Puri '878, Case No. 02-CV-2060, Doc. No. 325.) Lucent obtained a Certificate of Correction from the PTO, issued on October 25, 2005, and then brought this action on March 28, 2006.
While this case was pending, Lucent and Alcatel merged. Lucent is now a subsidiary of Alcatel Lucent. Prior to the merger, Lucent created MPT and assigned certain patents to it, including the Puri '878 patent.
In response to Lucent's action, Microsoft asserted counterclaims for infringement of ten of its patents against Lucent and Alcatel-Lucent: United States Patent Nos. 6,412,004 ("Chen '004"); 6,438,217 ("Huna '217"); 5,438,433 ("Reifman '433"); 5,917,499 ("Jancke '499"); 6,339,794 ("Bolosky '794"); 5,764,913 ("Jancke '913"); 6,565,608 ("Fein '608"); 5,941,947 ("Brown '947"); 5,838,319 ("Guzak '319"); and 5,977,971 ("Guzak '971" and collectively with Guzak '319, "the Guzak patents"). The Court previously ruled on the construction of disputed terms for all eleven patents at issue. (See Doc. No. 156, Claim Construction Order for U.S. Patent Nos: 5,227,878; 6,412,004; 6,438,217; 5,438,433; 5,917,499; 6,339,794; 5,764,913; 6,565,608; 5,941,947; 5,838,319; and 5,977,971 ("Cl. Const. Order").)
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 Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The moving party's burden "may be discharged by 'showing'--that is, pointing out to the district court--that there is an absence of evidence to support the nonmoving party's case." Celotex Corp., 477 U.S. at 325.
Once the moving party meets the requirements of Rule 56, the party opposing the motion must set forth specific facts showing that there is a genuine issue of material fact. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-56 (1986). The opposing evidence must be sufficiently probative to permit a reasonable trier of fact to find in favor of the opposing party. See id. at 249-250. Thus, the non-moving party cannot oppose a properly supported summary judgment motion by "rest[ing] upon mere allegation or denials of his pleadings." Id. at 256. If the non-moving party fails to make a sufficient showing of an element of its case, the moving party is entitled to judgment as a matter of law. See Celotex, 477 U.S. at 322-23.
On a motion for summary judgment the court views the evidence in the light most favorable to the non-moving party. United States v. Diebold, Inc., 369 U.S. 654, 655 (1962). However, "[w]hen opposing parties tell two different stories, one of which is blatantly contradicted by the record, so that no reasonable jury could believe it, a court should not adopt that version of the facts" for summary judgment purposes. See Scott v. Harris, 127 S.Ct. 1769, 1776 (2007).
II. Motions Related to the Puri '878 Patent
A. Background for the Puri '878 Patent
The Patent and Trademark Office (PTO) issued the Puri '878 patent, entitled "Adaptive Coding and Decoding of Frames and Fields of Video," on July 13, 1993 to inventors Atul Puri and Rangarajan Aravind. The application was filed on November 15, 1991. Puri '878 relates generally to the compression and decompression of video signals, which allows transmission using less bandwidth.
Two apparatus claims are at issue here: claim 13 and related dependent claim 15. Claim 13 states, in its corrected form:
An apparatus for decoding a compressed digital video signal, comprising: a means for receiving a compressed digital video bit stream; and a means responsive to a motion compensation type signal for selectively and adaptively performing motion compensated decoding of frames of the compressed digital video bit stream and fields of the compressed video bit stream. (Puri '878 90:31-38.) Claim 15 states:
The apparatus of claim 13, in which the decoding means comprises: a means responsive to a motion compensation type signal and selectively responsive to frame motion vectors and field motion vectors for producing an adaptive motion compensated estimate of a decoded video signal; and a means responsive to the compressed digital video bit stream for producing a decoded estimate error signal; and a means responsive to the adaptive motion compensated estimate and the estimate error signal for producing a decoded video signal.
(Puri '878 90:43-55.) The Court previously construed the terms of these claims, including definitions of the structures related to the means-plus-function elements. (See Cl. Constr. Order, Doc. No. 156, App. A.)
Claim 13 did not issue in its current form. The PTO, due to its own error, initially issued claim 13 without the phrase "and fields of the compressed video bit stream" and without the word "digital" in the second means plus function limitation. Lucent previously asserted the Puri '878 patent in a suit against Microsoft without first seeking a correction. There, the Court declined to correct the patent and determined that claims 13 and 15 were invalid for indefiniteness. (Order Granting Part Denying Part Mot. Summ. J. Claims of Puri '878 Invalid Under § 112(2), Case No. 02-CV-2060, Doc. No. 325.) After that ruling, Lucent obtained a certificate of correction from the PTO, pursuant to 35 U.S.C. § 254, which permits the Director to issue a certificate "[w]henever a mistake in a patent incurred through the fault of the Patent and Trademark Office, is clearly disclosed by the records of the Office . . . ." The PTO issued the certificate of correction on October 25, 2005.
MPT now asserts that certain Microsoft products infringe claims 13 and 15, as corrected, in their implementation of MPEG-2 and VC-1 video compression standards. MPEG-2 and VC-1 are both standards for video compression technology used in common consumer video formats including DVD and HD DVD. More specifically, MPT accuses Microsoft of infringing via software related to its Windows operating systems and Xbox 360 game console. The accused software includes the MPEG-2 and VC-1 decoders associated with these products.
B. Anticipation, Obviousness, and Structural Equivalence of Decoders
MPT moves for partial summary judgment that the asserted claims of the Puri '878 patent are neither anticipated nor obvious. Microsoft moves for summary judgment that not all MPEG-2 and VC-1 decoders are structurally equivalent. Micrsoft also raises its argument regarding the equivalence of decoders in response to MPT's motions on anticipation and obviousness.
1. Microsoft's Motion Regarding Equivalence of Decoders
Microsoft seeks summary adjudication that not all MPEG-2 and VC-1 decoders are structurally equivalent. Specifically, it challenges the assertion of MPT's expert, Bernd Girod, that any decoder that complies with the MPEG-2 or VC-1 standard will have structures that are at least equivalent to the corresponding structures of claims 13 and 15. (See Decl. John E. Gartman Supp. Microsoft's Mot. Summ. Adjudication Not Any and Every MPEG-2 VC-1 Decoder Structurally Equivalent Ex. A ("Girod Decl.").) Microsoft also seeks exclusion of Girod's testimony on this question of equivalence.
To determine infringement, the Court first construes the claim and then compares the claim to the accused product or device. See, e.g., Freedman Seating Co. v. Am. Seating Co., 420 F.3d 1350, 1356-57 (Fed. Cir. 2005); Terlep v. Brinkmann Corp., 418 F.3d 1379, 1381 (Fed. Cir. 2005). For infringement, "the plaintiff must show the presence of every element or its substantial equivalent in the accused device or process." Terlep, 418 F.3d at 1385 (quoting Wolverine World Wide, Inc. v. Nike, Inc., 38 F.3d 1192, 1199 (Fed. Cir. 1994)). For means plus function elements under 35 U.S.C. § 112 ¶ 6, the patentee must prove that the accused product performs the claimed function using a structure identical or equivalent to the structure identified by the Court's construction. See, e.g., Cytologix Corp. v. Ventana Med. Sys., Inc., 424 F.3d 1168, 1178 (Fed. Cir. 2005).
Microsoft argues that Girod's declaration is legally insufficient because, to conclude that the accused products have the same or equivalent functions and structures as the patents, he relies on the products' compliance with either the MPEG-2 or VC-1 standards. The Court disagrees. MPT has responded adequately with evidence from Girod's testimony that presents a material question of fact regarding whether the accused products infringe the asserted claims. His declaration offers an analysis of the structure and function of the accused products sufficient to survive summary judgment. Girod bases his infringement analysis both on the implications of compliance with the standard and on review of the product source code as applied to the Court's construction. (See, e.g., Girod Decl. at 50 (asserting, after review of both the standard and the product's source code, that "a computer with the MPEG-2 Decoder installed contains structure that performs the claimed function of "producing an adaptive motion compensated estimate . . . .").)
The Court recognizes that standards compliance is not necessarily equivalent to an infringement analysis for claims under section 112 ¶ 6. Nevertheless, analysis of standards implemented by a product may be relevant to infringement and provide support for the patentee's position, provided that standards compliance does not replace the ultimate legal standard for infringement. The parties do not dispute that the accused software complies with these standards. Microsoft only concedes, however, that the standards specify the syntax of a bit stream that a decoder must be able to decode. Microsoft disputes whether compliance with the standards requires implementation by a particular type of hardware or software. Nevertheless, MPT presents a material question of fact regarding infringement of claims 13 and 15, based on more than just compliance with the standards, and summary judgment of noninfringement is therefore inappropriate.
Finally, the Court also notes that to the extent that Microsoft's motion may be construed as an objection to the admissibility of Girod's expert testimony under Federal Rule of Evidence 702, it has reviewed the motion and found no reason to exclude Girod's testimony at this time. As a result, the Court DENIES Microsoft's motion for summary adjudication that not any and every MPEG-2 or VC-1 decoder is structurally equivalent.
An anticipation defense under 35 U.S.C. § 102 requires clear and convincing evidence that a single prior-art reference discloses all limitations of a claim. See, e.g., Glaxo Group Ltd. v. Apotex, Inc., 376 F.3d 1339, 1348 (Fed. Cir. 2004); Union Carbide Chems. & Plastics Tech. Corp. v. Shell Oil Co., 308 F.3d 1167, 1188-89 (Fed. Cir. 2002).Anticipation is typically established by one skilled in the art who must "identify each claim element, state the witnesses' interpretation of the claim element, and explain in detail how each claim element is disclosed in the prior art reference." Schumer v. Lab. Computer Sys., Inc., 308 F.3d 1304, 1315 (Fed. Cir. 2002). Such testimony cannot be merely conclusory. Id. at 1315-16. It is not the task of the district court "to attempt to interpret confusing or general testimony to determine whether a case of invalidity has been made out, particularly at the summary judgment stage." Id. at 1316.
MPT meets its initial burden under Celetox to point out a lack of supporting evidence from Microsoft, which bears the burden of persuasion on this affirmative defense. Celotex Corp., 477 U.S. at 325. In particular, MPT points out that Microsoft's expert report does not delineate how any single prior art reference discloses all limitations of the claim. Under Celotex, Microsoft must come forward with evidence sufficient to support a defense of anticipation, but it fails to do so.
Microsoft first attempts to apply its structural equivalence argument regarding MPEG-2 and VC-1 decoders in this context, arguing that if any MPEG-2 or VC-1 decoder infringes the claims, as MPT argues, then certain prior art references render the patents invalid. Jerry Gibson, Microsoft's expert, opines that "if MPT is permitted to disregard the specific structures identified by the Court in order to read claims 13 and 15 on the accused decoders, it is my opinion . . . that claims 13 and 15 are invalid." (Decl. John E. Gartman Supp. Microsoft's Opp'n Plfs.' Mots. Summ. J. ("Gartman Opp'n Decl.") Ex. I-1 ("Gibson Report") at 48-49.) The premise of this argument is inconsistent with the Court's claim construction.
Gibson does not identify how a single prior art reference discloses all elements of either claim. Gibson only cites to prior art setting forth some but not all elements, or makes conclusory statements regarding anticipation. For example, he contends that:
(1) U.S. Patent No. 5,093,070 discloses the structure for adaptive motion compensated decoding; (2) U.S. Patent No. 4,710,810 discloses the structure for differential encoding and decoding of motion vectors; (3) two articles by inventor Puri disclose the structure for variable block size decision making; (4) U.S. Patent No. 5,428,693 discloses the structure for motion compensated predictive coding; (5) U.S. Patent No. 5,539,466 describes adaptive motion compensation and a prediction mode signal. (See Gibson Report 21, 33-34, 36, 38-39, 40-41 (analyzing prior art); Gartman Opp'n Decl Exs. I-2 to I-6 (copies of alleged prior art).) Gibson also analyzes specific claim limitations and argues that they are disclosed by certain prior art references. (See, e.g., Gibson Report 49-50 (arguing that the limitation of "selectively and adaptively performing motion compensated decoding . . ." is shown in prior art including "DigiCipher Description," "Columbia 91/131 Submission," "Ericsson 1985 Article," U.S. Patent Nos. 5,428,693 and 5,539,466, and "numerous MPEG submissions"). Nevertheless, Microsoft fails to indicate any analysis in which its expert lays out precisely how any one of these references discloses all the limitations of either claim.
Microsoft argues that Gibson's invocation of U.S. Patent No. 5,091,782 ("the Krause patent") is sufficient because that patent incorporates a 1985 Ericsson article by reference which, Gibson argues, anticipate the claims in combination if viewed as a single reference. Even assuming that the Krause patent and Ericsson article may be considered a single reference, the cited portion of Gibson's analysis makes only generalized statements. He fails to set forth how the combined references would disclose every claim element. (See Gibson Report 14-20.)
Microsoft also attempts to rely on statements by Plaintiffs' expert Girod, but the Court concludes that Microsoft fails to present a question of fact based on Girod's testimony. Even if Girod's testimony concedes that certain limitations are present in the prior art, as Microsoft argues, it has not explained how Girod's testimony establishes that every limitation was present in a single reference.
Finally, Microsoft argues that it can make an anticipation defense through fact witnesses in lieu of expert testimony, citing Lacks Indus. Inc. v. McKechnie Vehicle Components USA, Inc., 322 F.3d 1335, 1348-51 (Fed. Cir. 2003). This does not change the fact, however, that it must put forward some specific evidence at this point sufficient to establish its defense, not merely conclusory or generalized assertions about the availability of evidence. See Celotex Corp., 477 U.S. at 325. Accordingly, the Court GRANTS Plaintiffs' motion for summary judgment that the Puri '878 patent is not invalid due to anticipation.
"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. The Supreme Court observed that other more recent Federal Circuit 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.
An issued patent is presumed valid, so the burden of persuasion for invalidity defenses, including obviousness, 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).
Unlike anticipation, where a single reference must disclose all claim elements, a party asserting obviousness may rely on the prior art as a whole. As with anticipation, Microsoft's expert offers numerous arguments that various elements of the Puri '878 patent were present in the prior art. For example, he contends that:
(1) U.S. Patent No. 5,093,070 discloses the structure for adaptive motion compensated decoding; (2) U.S. Patent No. 4,710,810 discloses the structure for differential encoding and decoding of motion vectors; (3) two articles by inventor Puri disclose the structure for variable block size decision making; (4) U.S. Patent No. 5,428,693 discloses the structure for motion compensated predictive coding; (5) U.S. Patent No. 5,539,466 describes adaptive motion compensation and a prediction mode signal. (See Gibson Report 21, 33-34, 36, 38-39, 40-41 (analyzing prior art); Gartman Opp'n Decl Exs. I-2 to I-6 (copies of alleged prior art).) Gibson also analyzes specific claim limitations and argues that they are disclosed by certain prior art references. (See, e.g., Gibson Report 49-50 (arguing that the limitation of "selectively and adaptively performing motion compensated decoding . . ." is shown in prior art including "DigiCipher Description," "Columbia 91/131 Submission," "Ericsson 1985 Article," U.S. Patent Nos. 5,428,693 and 5,539,466, and "numerous MPEG submissions").
Gibson also asserts the Krause patent and Ericsson article. Unlike the anticipation context, the Court concludes that these references present a material question of fact on obviousness. The examiner initially rejected claims 13 and 15 as anticipated in light of the Krause patent. (See Gibson Report 14--17.) The applicants amended the second means plus function element of claim 13 as follows: a means response to a motion compensation [coding] type signal for selectively and adaptively performing motion compensated decoding of frames of the compressed digital video bit stream and fields of the compressed video bit stream.*fn3 (Gartman Opp'n Decl. Ex. III-2 at CCMS_311949.)Microsoft argues that these additions of "motion [compensation/compensated]" and "adaptively" would have been obvious in light of other references. Gibson argues the Ericsson article describes a method for using motion compensation in an adaptive prediction scheme, thus rendering these modifications obvious. (See Gibson Report at 18.) The Court concludes that this evidence presents triable issues of fact on obviousness and DENIES Plaintiffs' motion that the Puri '878 patent is not invalid for reasons of obviousness. By providing these examples the Court does not limit Microsoft's ability to raise other prior art or other theories of obviousness.
C. Conception Date of Puri '878
Microsoft moves the Court for summary adjudication that the inventors of the Puri '878 patent conceived claims 13 and 15 no earlier than September 30, 1991. Microsoft clearly seeks this adjudication in relation to invalidity arguments, such as alleged anticipation under section 102(a). Microsoft retains the burden of persuasion for invalidity. In Mahurkur v. C.R. Bard, Inc., 79 F.3d 1572 (Fed. Cir. 1996), the Federal Circuit clarified the allocation of burdens where the alleged infringer challenges the validity of a patent and the patentee seeks to avoid prior art by establishing an invention date earlier than the patent filing date. The patentee has the burden of producing evidence showing an earlier invention date. Id. at 1576-77. If the patentee fails to meet this burden, the patent's filing date is treated as the invention date. Id. at 1577. If the patentee satisfies the burden of production, however, the alleged infringer still has the usual burden of persuasion for invalidity, namely clear and convincing evidence. Id. 1577-78.*fn4
Conception is "the formation in the mind of the inventor, of a definite and permanent idea of the complete and operative invention, as it is hereafter to be applied in practice." Hybridtech Inc. v. Monoclonal Antibodies, Inc., 802 F.2d 1367, 1376 (Fed. Cir. 1986). Conception is complete once "only ordinary skill could reduce it to practice, without extensive research or experimentation." Burroughs Wellcome Co. v. Barr Labs., Inc., 40 F.3d 1223, 1228 (Fed. Cir. 1994). Proof of conception requires corroborating evidence, to which Courts apply a "rule of reason" that examines "all pertinent evidenceso that a sound determination of the credibility of the inventor's story may be reached." Coleman v. Dines, 754 F.2d 353, 360 (Fed. Cir. 1985)."There is no particular formula that an inventor must follow in providing corroboration of his testimony of conception." Singh v. Brake, 222 F.3d 1362, 1367 (Fed. Cir. 2000). This may include consideration of circumstantial evidence. Sandt Tech., Ltd. v. Resco Metal and Plastics Corp., 264 F.3d 1344, 1351 (Fed. Cir. 2001).
Applying these principles, the Court examines whether Plaintiffs have met their burden of production for evidence of conception prior to the filing date of November 15, 1991, including adequate corroboration. Viewing the evidence in the light most favorable to Plaintiffs, the Court concludes that they have produced evidence sufficient to raise a triable issue of fact regarding whether conception occurred prior to Microsoft's proposed cut-off date of September 30, 1991.
Plaintiffs submit Appendix A to Puri '878 as a sample segment of source code implementing the invention, with "Sept 1991" entered in its initial comment field. (Puri '878 cols. 31-88). Inventor Puri testified that this code represented a "snapshot" of code, meaning that it was complete and functional. (Decl. Ephraim Starr Opp'n Microsoft's Mot. Partial Summ. J. Claims of Puri '878 Conceived No Earlier Than Sept. 30, 1991 Ex. A ("Puri Depo. Tr.") 309:4-310:14.) Puri further testified that writing such code was the second phase in a two-step process consisting of a research and development phase and an implementation phase. (Puri Depo. Tr. 310:16-311:11.) Puri estimated the length of the implementation phase at six months. (Puri Depo. Tr. 311:13-23.) The complexity of the code used to implementing the patent corroborates Puri's testimony of the need for an implementation phase following research and development.
Other documents and testimony, viewed in the light most favorable to Plaintiffs, also corroborate Puri's version of events. Plaintiffs' expert, Girod, also asserts that a six month implementation period is reasonable in light of the complexity of the code. (Decl. Bernd Girod Opp'n Microsoft's Mot. Summ. J. Claims 13 and 15 Conceived No Earlier Than Sept. 30, 1991 ¶ 7.) In November, 1991, Puri submitted, to an ISO standardization working group, an MPEG-2 video coding proposal containing elements, such as frame and field motion compensation, related to the invention. (Decl. Atul Puri Opp'n Microsoft's Mot. Summ. J. Claims 13 and 15 Conceived No Earlier Than Sept. 30, 1991 ("Puri Decl.") Ex. A.) Puri submitted another related proposal to ISO in May, 1991. (Puri Decl. Ex. E.) On February 11, 1991, Puri and co-inventor Aravind produced research reports for the period of October, 1990, to January, 1991, which describe working on coding research related to MPEG-2. (Puri Decl. Exs. B-C.) Plaintiffs also submitted an internal AT&T document dated May 10, 1991, describing "[a] subset of ideas that could be tested for MPEG-2." This evidence, combined with the complexity of the code itself, presents a sufficient question of fact for the jury to consider whether the inventors conceived the patented invention prior to September 30, 1991. For these reasons, the Court DENIES Microsoft's motion for summary adjudication that the inventors conceived claims 13 and 15 of the Puri '878 patent no earlier than September 30, 1991, as there are triable issues of material fact.
D. Microsoft's Affirmative Defenses and Counterclaims
Microsoft asserts two distinct theories of laches: (1) "prosecution laches," resulting from unreasonable delay in prosecuting a patent, and (2) "traditional laches," resulting from unreasonable delay in bringing suit.
Prosecution laches is an equitable doctrine with origins in two Supreme Court cases from the 1920s. See Webster Electric Co. v. Splitdorf Elec. Co., 264 U.S. 463 (1924); Woodbridge v. United States, 263 U.S. 50 (1923); see also Symbol Techs., Inc. v. Lemelson Medical, Educ. & Research Found., 277 F.3d 1361, 1364 (Fed. Cir. 2002) ("Symbol Techs., Inc. I") (summarizing these cases). In both cases, the Supreme Court concluded that patentees were barred from enforcing claims secured after an unreasonable delay in prosecuting applications. Symbol Techs., Inc. I, 277 F.3d at 1364. Later, the Court expanded the prosecution laches defense to actions "involving new claims issuing from divisional or continuing applications that prejudice intervening adverse public rights." Id. at 1364-65 (discussing Crown Cork & Seal Co. v. Ferdinand Gutmann Co., 304 U.S. 159 (1938); Gen. Talking Pictures Corp. v. W. Elec. Co., 304 U.S. 175 (1938)). A Court may apply prosecution laches even though the applicant complied with pertinent statutes and rules, provided that the delay was unreasonable. See id. at 1363-66
Microsoft cites no case, however, in which the courts have applied prosecution laches to an alleged delay in seeking a certificate of correction. It points to Southwest Software, Inc. v. Harlequin, Inc., 226 F.3d 1280, 1296 (Fed. Cir. 2000) where the Federal Circuit observed that "it does not seem to us to be asking too much to expect a patentee to check a patent when it is issued in order to determine whether it contains any errors that require the issuance of a certificate of correction." The Federal Circuit made that observation, however, in holding that a certificate of correction does not have retroactive effect to causes of action arising before its issuance. Id. at 1294-96. The cases from which the prosecution laches defense originates all involved delays in the application process, not delays in seeking corrections. See Symbol Techs., Inc. I, 277 F.3d at 1363-66. Prosecution laches is only for "egregious cases of misuse of the statutory patent system." See Symbol Techs., Inc. v. Lemelson Medical, Educ. & Research Found., 422 F.3d 1378, 1385 (Fed. Cir. 2005). Delaying a certificate of correction does not change the term of a patent, thus avoiding the concern identified in Woodbridge that an inventor would "unduly . . . postpone the time when the public could enjoy the free use of the invention." Woodbridge, 263 U.S. at 60.
The Court declines to extend prosecution laches beyond the existing precedent. In doing so, the Court does not completely foreclose Microsoft's ability to assert the delay in correcting the patent when defending MPT's claims. As the Federal Circuit explained Southwest Software, Inc., recipients of certificates of correction are limited by their inability to apply the corrected patent to causes of action arising before the certificate of correction. See Southwest Software, Inc., 226 F.3d at 1294-96.
Furthermore, the Court concludes that other defenses premised at least in part on the delay, including traditional laches, survive summary judgment. The Federal Circuit has described the traditional laches defense as follows:
Laches may be defined generally as "slackness or carelessness toward duty or opportunity." In a legal context, laches may be defined as the neglect or delay in bringing suit to remedy an alleged wrong, which taken together with lapse of time and other circumstances, causes prejudice to the adverse party and operates as an equitable bar. "[Laches] exacts of the plaintiff no more than fair dealing with his adversary." In refusing to enforce a patentee's claim of infringement, the Supreme Court invoked the maxim: "Courts of equity, it has often been said, will not assist one who has slept upon his rights, and shows no excuse for his laches in asserting them."
A.C. Aukerman Co. v. R.L. Chaides Constr. Co., 960 F.2d 1020, 1028-29 (Fed. Cir. 1992) (citations omitted). The application of laches is within the discretion of the district court, and it should be determined in a flexible manner without mechanical rules. Id. at 1032. This discretion notwithstanding, the defendant must prove two factors: (1) "the plaintiff delayed filing suit for an unreasonable and inexcusable length of time from the time the plaintiff knew or reasonably should have known of its claim against the defendant," and (2) "the delay operated to the prejudice or injury of the defendant." Id.
In support of traditional laches Microsoft points to: (1) Plaintiffs' 12-year delay in seeking a certificate of correction, (2) Plaintiffs' delay in bringing suit against Microsoft, and (3) prejudice due to investment made during the period of time when the asserted claims were invalid and due to the cost associated in converting its products to avoid the corrected patent. Plaintiffs counter that the delay should be measured from the date they knew or should have known of the infringement, not the date the patent issued, and that the delay in seeking the certificate is irrelevant to this determination. At least in this context, the parties did not dispute that Microsoft offers sufficient evidence of prejudice.
Under A.C. Aukerman Co., Microsoft must establish a delay in filing suit, not merely a delay in seeking the correction, that was unreasonable and inexcusable as measured from when Plaintiffs knew or should have known of their claims. See id. at 1032. Nevertheless, given the equitable nature of laches, the Court may consider Plaintiffs' delay in seeking a certificate of correction as a factor relevant to applying the laches defense.
The facts are sufficient for Microsoft's traditional laches defense to survive summary judgment. There is no dispute that Plaintiffs did not seek a certificate of correction from the PTO until approximately 12 years after the patent issued. There is evidence that Lucent should have been aware of the error as early as 1996, and perhaps as early as the issuance of the patent. Specifically, Microsoft offers evidence that Lucent obtained an analysis of claim 13 as it relates to the MPEG-2 standard as early as October 31, 1996. (See Gartman Opp'n Decl. Ex. III-6 (letter from attorney Kenneth Rubenstein to Lucent's Intellectual Property Division Manager).) Former Commissioner of Patents and Trademarks Gerald Mossinghoff opines that any such analysis should have uncovered the missing words of claim 13. (Id. Ex. III-5 ¶ 33.) He also observes that, in general, "sophisticated patent-acquiring entities proofread granted U.S. patents against the prosecution history . . . ." (Id. ¶ 32.) Lucent attempted to assert the patent in its uncorrected form, and those infringement claims were pending for approximately two years before this Court.
Microsoft also offers evidence that Lucent actively asserted claim 13 in licensing negotiations as early as 2002 and was informed of the error in the claim language during the prior litigation. The evidence of licensing negotiations includes presentations made for Apple Computer, eMachines, and Terayon Networks. (See Gartman Opp'n Decl. Exs. III-7 to III-9.) Defense counsel informed Lucent of the error both in correspondence from February, 2003, and statements in the Court's record from July, 2005. (See Gartman Opp'n Decl. Exs. III-10 to III-11.)
Lucent obtained its certificate of correction on October 25, 2005, and it cannot seek damages for infringement before this date. It brought the present suit on March 28, 2006. The delay from the earliest possible cause of action is therefore approximately five months. In light of the circumstances of this case, even this delay might be considered unreasonable. Furthermore, any ultimate determination about availability of traditional laches would be better founded on a more extensive record as developed at trial. The Court therefore GRANTS IN PART AND DENIES IN PART Plaintiffs' ...