Great summary from jaykayjones at the Raging Bull:
Preamble
As I posted earlier in October, I don’t think that there’s really very much direct connection between this case and IDCC-ERICD. However, ERICD did have to disclose some internal documents to Harris’s attorneys (one of which is F&J) and some of these appeared in the trial. So, IDCC may benefit from these.
Recap
This case involves patent #4,365,338 issued on Dec. 21, 1982. At issue, HRS alleges ERICD infringed independent claims 1 (plus dependent claims 2 and 33) and 45.
ERICD Defense
1. The patent is invalid and unenforceable for the following reasons (in descending order of desperateness):
a) Prior art existed (several ‘Proakis’ papers issued from 1969-78),
b) HRS didn’t disclose all relevant prior art to the USPTO (but did do so to the German PTO 9 years later),
c) the invention was not new because it was obvious and could have been anticipated by one skilled in the art,
d) the USPTO shouldn’t have granted the patent because they are busy government bureaucrats that didn’t have the time to realize that the patent application didn’t have an adequate written description and didn’t disclose the ‘best mode’ of applying the invention, and
e) HRS had sold a 16 kbps modem (with the invention claims) more than one year before the patent application thereby invalidating the filing under the ‘on-sale’ bar.
2. ERICD’s cellphones and base stations do not use the HRS inventions but instead use the Viterbi Algorithm (VA). ERICD claims VA is not covered by the ‘338 patent (HRS says it is - because it’s a subset of a class of MLSE equalizers). ERICD holds several US patents on VA that were granted later than the ‘338 and, ERICD say, with the full knowledge by the USPTO of the ‘338 patent.
3. ERICD is an honorable company that has licensed a lot of wireless technology (showed a list including Motorola 22 patents, $370 million, Alcatel, Unisys, British Telecom, Siemens, Rice University, Bull, and others). It has thoroughly investigated HRS’s claims and disagrees with HRS.
4. If the jury finds infringement, then it wasn’t willful. Further, ERICD’s expert witnesses calculate that any royalties owed to HRS should be in the range of $1.3-1.7 million.
Day’s Events
If anyone has any specific questions, please post and I will reply. Summarizing:
---------------------
8.00-8.30 No Jury: Judge listened to the parties objections to the Instructions to the Jury (IJ) and overruled all except some minor typographical errors.
Among HRS’s 9 issues were the definitions in the IJ of…coupling and coupled, anticipation, obviousness, written documentation, inequitable conduct, and some descriptions in the Verdict Questionnaire.
Among ERICD’s 5 issues were…instructions relating to willful infringement, refusal to reference ERICD’s own patents, refusal to include a reference to the timeframe of events, and intent to deceive/inequitable conduct.
8.30-11.00 With Jury: The Judge read out the ‘Instructions to the Jury’ which were an amalgam of the proposed instructions submitted by each side (which I had copies from early October). The instructions included the claims constructions; these were almost verbatim from the Markman report (these were largely HRS constructions). However, in the context of all that has gone on in the trial, they seemed less significant. The Jury was given a fill-in-the-blanks, Yes or No, ‘Verdict Questionnaire’. See below.
11.17-12.20 Final arguments to the Jury by HRS (Bunsow). He presented a brief summary of each HRS witness’s testimony. He continually referred to ERICD’s defense as …’the next bus coming round the corner’, i.e. if one argument doesn’t convince you, then here’s the next. Said…’ERICD thumbed its nose at other people’s patents’.
Claimed that Proakis didn’t disclose ‘structure for the means’, didn’t refer to ‘voice communications’, and referred to a different equalizer. Said ‘best mode’ (phase jitter) wasn’t known or proven at the time of patent app. Said that the modem sales were for wireline, not for wireless apps - therefore no violation of on-sale bar. Portrayed HRS inventors and patent agent as honest men who wouldn’t lie. Claimed USPTO should be the judge of whether the patent app included an adequate written description. Claimed the invention was not ‘obvious’ and that ERICD is using 2002 20/20 hindsight to try to prove 1980’s obviousness. Brushed off the German PTO issue and Proakis prior art as…another time, another place, different context, not relevant, etc.
Claimed HRS royalty in 1980-92 was 1.75%. and that HRS has a range of royalties (1.0-2.5%) depending on many factors.
Claimed ERICD’s external patent opinion (by Lastova) of the ‘338 patent was tainted by self-interest and ERICD’s withholding of documents.
Claimed that ERICD had a culture of deliberately ignoring third party’ patents. Showed one ERICD internal document (1994 timeframe) that included a reference to the increasing importance of patents and ERICD’s (potential) astronomical liabilities (my emphasis).
Referred to a 1996 fax from NOK to ERICD concerning alleged infringement of 5 US patents (the context of this wasn’t clear, and it wasn’t clear if NOK was claiming that ERICD was infringing NOK’s patents).
Bunsow reserved 30 minutes for final rebuttals after ERICD’s final summation.
[My take was that Bunsow tried to cover too much ground and was rushing. Having not heard all the evidence on the Proakis’ papers, I couldn’t make a judgment on its relevance to prior art]
12.20-2.50 pm (with lunch break 1-2 pm) Final arguments to the Jury by ERICD (McKool). He wasn’t as aggressive as in his opening sessions; much more trying to simplify the issues for the jury. Focused on what his expert witnesses had said about the importance of Proakis and prior art; referred to lapses in memory of the ‘now senior’ inventors about their actions in 1980 (they had referenced Proakis in internal HRS documents but not the USPTO app but had to the German PTO). Tried to cast the aspersion that two HRS people (one co-inventor and HRS’s patent agent; who hadn’t been witnesses) were really the culprits!
Claimed that Proakis did refer to ‘voice’. Referenced HRS’s actions in front of the German PTO (in disclosing Proakis) and inequitable conduct with the USPTO. Claimed that HRS did know of ‘phase jitter best mode’ before the patent app.
Claimed the modem has ‘interleaving’, which ERICD claim is the central principle of the’338 invention.
Claimed ERICD didn’t use the HRS invention and that HRS is trying to blur the definition of ‘coupling’. Claimed ERICD uses its own patented stuff, e.g. VA. Claimed that HRS is trying to extend the scope/definition of their ‘output conversion means’ in the ‘338 patent to include the three additional steps (deciphering, de-interleaving, error decoding) that are included in ERICD’s cellphones.
When McKool made one reference to testimony by an HRS employee, two HRS employees sitting in front of me said ‘he’s (McKool) lying, the witness didn’t say that’!
ERICD’s damages should be in the range 0.0004-0.0005 (wasn’t clear if this was percentages or fractions!). HRS had asked NEC for $15 million for 21 patents and settled for $4.95 million.
McKool left 15 minutes for his fellow attorney (Eric). [Eric is excellent, a logical brain, with a calm and influential speaking style]. He focused on three issues: a) Proakis was not disclosed to the USPTO, b) ERICD did not willfully infringe (and, by the way, did the jury know that HRS’s negotiator with ERICD was a hired-gun bounty hunter that got 20% of their license fees!), and c) any royalty should be $1.3-1.7 million.
[My take. I think McKool did a good job of directing attention away from the patent and its claims and onto the internal HRS ‘Patent Disclosure Form’. Plus he highlighted the differences between what the inventors were focused on (i.e. the equalizer and the disclosure of Proakis) and what appeared in the patent (a wireless comms system with no reference to Proakis)].
2.50-3.20 Final Rebuttals to the Jury by HRS (Bunsow). McKool had obviously rattled Bunsow by the former’s style and characterization of the evidence. Bunsow had used the lunch break to prepare some hasty slides to rebut McKool. Bunsow was visibly agitated as he tried to negate McKool’s points.
He more-or-less accused McKool of misrepresenting: a) Dr. Acampora’ s testimony, b) Dan McRae’s (the main inventor) intentions on MLSE, c) HRS’s patent agent’s actions, d) Dr. Proakis’s statements about developing products, e) ERICD’s actions with its outside patent advisor (Lastova).
Bunsow also mentioned that ERICD withheld information from Lastova about how its own phones worked and that no senior ERICD executive monitored Lastova’s report or consequences.
He mentioned that ERICD allowed one of its expert witnesses (Dr. Monsen) to base his work and report on an inaccurate and already-corrected deposition of McRae (who had a senior moment).
Bunsow made one memorable remark…'if patents have such little value (as ERICD wants the jury to believe), then why are all these expensive attorneys and observers (at this time maybe 60) in court?
Further, a) if ERICD didn’t infringe literally, then they did under Doctrine of Equivalents, b) this conflicts started in 1992 (when HRS’s royalty was 1.75%) and a back-dated royalty would be $175 million; so $61.25 million is reasonable. !
In conclusion, Bunsow made an emotional appeal. ‘This is one more example of unacceptable corporate behavior. You, the jury, can send a strong message. If you don’t, who will?’
[My take. McKool got Bunsow focused on rebutting McKool’s summary. It was a good tactic because, IMO, Bunsow needed to convince me that Proakis wasn’t prior art. He didn’t do that. But, don’t forget, I didn’t catch all the testimony in the trial about Proakis.]
The Verdict
I can’t tell you how the jury will decide. I missed too much intervening testimony to form a proper opinion. However, I can say this:
If McKool is right about Proakis as prior art, then HRS is toast. There shouldn’t have been a patent.
On the other hand, if the jury believes that Proakis isn’t prior art, then HRS could win on either literal infringement or, more probably, under DoE.
Observation
During McKool’s summation, only three of the jury concentrated on him (two women and one man). The eyes of the other five were elsewhere most of the time.
ragingbull.lycos.com |
