Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_02-cv-00710/USCOURTS-cand-4_02-cv-00710-6/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:271 Patent Infringement

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United States District Court

For the Northern District of California

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 IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

IMMERSION CORPORATION,

Plaintiff,

v.

SONY COMPUTER ENTERTAINMENT AMERICA,

INC., and SONY COMPUTER

ENTERTAINMENT, INC.,

Defendants.

 /

No. C 02-0710 CW

ORDER DENYING

DEFENDANTS'

MOTION FOR RELIEF

FROM FINAL

JUDGMENT

Defendants Sony Computer Entertainment America, Inc., and Sony

Computer Entertainment, Inc., (collectively, Sony) move, pursuant

to Federal Rule of Civil Procedure 60(b), for relief from final

judgment. Plaintiff Immersion Corporation (Immersion) opposes the

motion. 

The matter was heard on January 20, 2006. Having considered

all of the papers filed by the parties and oral argument on the

motion, the Court denies Sony's request for relief from final

judgment.

BACKGROUND

I. Procedural History

The general background of this patent case has been set forth

at length in the Court's prior orders. See March 2, 2004 Order

Resolving Parties' Motions for Summary Judgment (Summary Judgment

Order); January 10, 2005 Order Denying Parties' Motions for

Judgment as a Matter of Law and Addressing Other Matters (JMOL

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Order). In brief, Immersion prevailed at trial on certain of its

claims that Sony's Playstation consoles and Dualshock controllers,

in conjunction with forty-four accused games, infringed U.S. Patent

Nos. 6,275,213 ('213 patent) and 6,424,333 ('333 patent), owned by

Immersion. The jury found that the asserted claims of Immersion's

patents were not invalid due to anticipation, obviousness or

inadequate written description. The jury awarded Immersion eightytwo million dollars as a reasonable royalty for Sony's

infringement. The Court later found in favor of Immersion on

Sony's inequitable conduct defense and denied Sony's motions for

judgment as a matter of law. Sony has appealed the judgment

against it. 

In prosecuting its counterclaims and defenses, Sony asserted

that the patents-in-suit were invalid as anticipated or rendered

obvious by various prior art, including U.S. Patent Nos. 5,669,818

('818 patent), 5,565,840 ('840 patent) and 5,684,722 ('722 patent),

issued to Craig Thorner and others (collectively, the Thorner

patents). The '818 patent discloses a “seat-based tactile

sensation generator capable of producing tactile sensation to a

video game player corresponding to activity portrayed in a video

game.” '818 patent, abstract. The '818 patent incorporates by

reference two previously filed applications that were issued as the

'840 and '722 patents. The '840 patent discloses a vest or harness

for maintaining a flexible pad next to a video game player's body. 

'840 patent, abstract. The '722 patent discloses a device in which

a control system converts the audio signal output by a video game

program into a signal indicative of the amplitude, frequency, and

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rate of change of the audio signal that is used to activate a

tactile sensation generator. ‘722 patent, abstract. In the seatbased tactile sensation generator disclosed by the ‘818 patent,

actuators arranged within a foam seat cushion can be activated by

the host-dependent control system disclosed in the ‘840 patent

and/or by the host-independent control system disclosed in the ‘722

patent. For a more detailed description of the Thorner patents,

see Summary Judgment Order at 6-8. 

The Court found that, although the Thorner patents teach both

the individual activation of mass-moving actuators and varying the

frequency and amplitude of the vibrations, the Thorner patents did

not teach combining those two techniques to use the individual

activation of multiple actuators to create a complex tactile

sensation. Summary Judgment Order at 8-9. At trial, Sony

presented evidence and argument that the Thorner patents' hostdependent and independent circuits could in fact be used in

combination to produce a complex tactile sensation. Immersion's

expert Dr. Robert Howe testified, however, that the seat pad and

chest pad Thorner created to implement his patents involved

actuators separated by a distance and set in foam rubber, thus

ensuring that each actuator would generate only a "separate

localized sensation." Trial Tr. 2964:23-24. He opined, 

Thorner is talking about how do I convey sensations all over

the body, the chest, the sides, the back, and so on. 

Immersion, on the other hand, says, let's create some

interesting tactile sensation, some more complex, more varied,

a broader range of sensations . . . . Immersion patents are

interested in . . . a sensation on a single point that covers

a much broader range of possible sensations.

Trial Tr. 2965:8-19. He stated that, with Thorner's seat pad, it

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was "automatic" that a user would "feel [the actuators] throughout

the seat pad in the same way." Id. 2967:23-24. Based on Dr.

Howe's testimony, the Court found that a reasonable jury could have

found that Thorner did not teach the element, disclosed in the '213

patent, of individual activation of mass-moving actuators to

produce a complex tactile sensation resulting from varying the

frequency and amplitude of the vibrations. May 17, 2005 Order

Denying Defendants' Renewed Motion for Judgment as a Matter of Law

or in the Alternative for a New Trial and Granting Defendants'

Motion for Stay (JMOL II Order) 8-9. 

The Court also concluded that a reasonable jury could have

found that the Thorner patents failed to teach the "decoupling" of

amplitude and frequency limitation of the '213 patent claims;

failed to teach enabling a "plurality of rotating-mass actuators to

create in combination a vibration upon said user," an element of

claim 14 of the '333 patent; and, also based on Dr. Howe's

testimony regarding the spatial distribution of Thorner's

actuators, failed to teach a limitation of claims 15 and 17 of the

'333 patent, the activation of actuators with different frequencies

"to create a tactile sensation upon the user that has a non-uniform

amplitude over a duration of said tactile sensation." JMOL II

Order at 8-12. 

The Court further concluded that a reasonable jury could have

found that the patents-in-suit were not rendered obvious by the

Thorner patents in combination with personal massager inventions. 

Id. at 14-16. The Court found that Immersion had presented

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obviousness," including the failure of Thorner and other video game

prior art to achieve commercial success. Id. at 15-16. 

II. Allegations of Misconduct

Sony now accuses Immersion of conspiring with Mr. Thorner to

hide additional prior art, withholding prior art and other relevant

information in discovery, and then asserting at trial arguments

that would have been rebutted by the undisclosed information. 

Immersion, in turn, accuses Sony of paying for Mr. Thorner's

perjurious testimony. 

A. Allegedly Withheld Public Use Prior Art 

Any invention in public use in the United States more than one

year prior to November 30, 1995, the filing date of the parent

patent from which Immersion's patents-in-suit derive, is

potentially invalidating prior art. See 35 U.S.C. § 102(b)

(setting forth prior use rule regarding patentability). Mr.

Thorner now testifies that, more than one year prior to the filing

of the applications for Immersion's patents, he publicly used and

demonstrated prototypes of his patents, and that this public use

prior art fills the gaps identified by Dr. Howe between the Thorner

patents and the Immersion inventions. Thorner Decl. ¶ 6. 

As corroboration of Mr. Thorner's prior art demonstrations,

Sony proffers a prototype seat pad, vibrating actuators, controller

boxes and circuit boards. See Kennedy Decl., Ex. 43 (photographs). 

Immersion has inspected these prototypes and accessories, and does

not contest their authenticity. 

Mr. Thorner's characterizations of his public use prior art

have been somewhat inconsistent. In his initial declaration, Mr.

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Thorner claimed that his hardware prototypes included a hand-held

controller and an "eight-zone" vibrotactile system. Id. ¶ 9. In

his rebuttal declaration, Mr. Thorner admitted that this statement

was a "mistake," and that the 1994, first-generation prototype

control box (created by co-inventor Thomas Glass) could control

only four zones independently. Thorner Rebuttal Decl. ¶ 30. Also

among the first generation prototypes, according to Mr. Thorner,

was a seat pad with three vibrotactile "zones" that worked with his

intelliVIBE system, a circuit board, and a "Sega Genesis game

controller modified to vibrate using two independently controllable

vibrating motors." Thorner Rebuttal Decl. ¶ 27. Mr. Thorner does

not explain, however, if the motors within the modified controller

vibrate independently of each other (in which case, according to

the definition of "zone" Sony used at the hearing, there would be

two zones in the controller), or independently of zones in the seat

pad or other accessories. To the extent that the hand-held

controller was used with the seat-pad and the first-generation

intelliVIBE system, Mr. Thorner's rebuttal declaration suggests

that the handheld controller contained only one zone. See Thorner

Rebuttal Decl. ¶ 30 ("my original 1994 prototype control box . . .

could only control four zones independently (such as three zones in

the vibrotactile seat pad and one accessory zone)"). In his

initial declaration, Mr. Thorner asserted that he "openly

demonstrated working prototypes of my handheld video game

controller." Thorner Decl. ¶ 6. Mr. Thorner subsequently revised

his testimony; he now states only that the modified Sega Genesis

controller "was shown and its functionality described and made

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clear." Thorner Rebuttal Decl. ¶ 27. 

According to Mr. Thorner's revised testimony, he and coinventor Paul Heilman created a "second-generation prototype" in

January, 1995 that used a microcontroller to control independently

eight vibrotactile zones. Thorner Rebuttal Decl. ¶ 31. For this

second-generation system, Mr. Thorner states that Mr. Heilman

"created assembly control code, including microcontroller code for

pulse width modulation that independently controlled vibration

frequency and amplitude, to run the second generation prototype." 

Thorner Rebuttal Decl. ¶ 31. Mr. Heilman describes the expanded

intelliVIBE system as a "computer-controlled system with multiple

independent motors that can be individually controlled in terms of

their intensity," and "human perceived frequency." Kennedy Decl.,

Ex. 11, Heilman Dep. 27:8-28:5. However, Mr. Heilman also

testified that pairs of motors within zones could not be controlled

independently. Heilman Dep. 152:2-4. 

In his initial declaration, Mr. Thorner claimed that in

September, 1994 he provided to other companies eight programs,

including "Car.bas," that could create "a nearly infinite variety

of tactile sensations." Thorner Decl. ¶ 8. The demonstration

programs included instructions "that independently control . . .

the on and off times of the voltage supplied to the motors and the

rotational speeds so that the frequency and amplitude of the

vibrations produced by the individual motors could be controlled

separately to create the frequency and amplitude of the

vibrations." Id. ¶ 8. In his rebuttal declaration, Mr. Thorner

explained that he had been "confused," and that Car.bas and other

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1

Immersion accuses Mr. Thorner of deliberately falsifying a

1996 program in order to pass it off as prior art from 1994. Mr.

Thorner claims that because the code in the earlier and later

programs was "almost identical" and had "the same visual

presentation and functionality," he became confused as he attempted

to make the programs readable. Id. ¶ 32. Mr. Thorner asserts that

he discovered this error on September 11, 2005, and voluntarily

produced the genuine second-generation programs the next day. Id.

¶ 32. 

8

programs were later, "substantially identical" versions written to

adapt the original 1994 "Papyrus.bas" program, which worked with

the first-generation Glass prototype, to use with the secondgeneration prototype based on the Heilman microcontroller.1

Thorner Rebuttal Decl. ¶ 32. Nevertheless, Mr. Thorner reiterates

that even the first generation Papyrus.bas program allows commands

to be sent with varying intensity and to one of the four

vibrotactile "zones"

in a vibrating seat pad (or another accessory such as my

modified Sega Genesis controller with two independently

controllable vibrotactile zones), where each zone has one or

more vibrating eccentric mass motors, in order to create car

effects (such as a car spinning out of control or turning) or

helicopter effects (such as a helicopter flying, moving,

crashing or shooting a machine gun), when they send

instructions separately to each of multiple vibrotactile

zones.

Thorner Rebuttal Decl. ¶ 35. Mr. Thorner also claims that, using

many rapid instructions to turn on or off a zone at a particular

intensity level, a programmer could "easily decouple vibration

frequency and intensity to create any desired complex, combined

vibrotactile effect for a user." Thorner Rebuttal Decl. ¶ 37. 

Several witnesses generally corroborate Mr. Thorner's public

use prior art, although none has any first-hand memory of his

demonstration of a vibrating controller, the accessory potentially

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most significant to Sony's invalidity case. In September, 1994,

Mr. Thorner traveled to Mesquite, Texas in order to demonstrate his

inventions, including the first-generation version of intelliVIBE,

for id Software, a computer company. John Romero, an id Software

co-founder, recalls that Mr. Thorner demonstrated a vest with

"multiple vibrating sensor points at different areas within the

vest," and that he brought along other prototypes including a handheld controller and steering wheel, with similar vibrating sensors. 

Romero Decl. ¶ 5. At his deposition, however, Mr. Romero clarified

that he had no recollection of Mr. Thorner demonstrating any

prototype other than the seat pad. Romero Dep. 22:18-21. Mr.

Romero personally tested the seat pad prototype for five or ten

minutes, and described the motors as "all on independently. One

would turn on, it would turn off. The next one would turn on. It

did it in a circular pattern." Kennedy Decl., Romero Dep. 25:12-

13, 49:15-17. Mr. Romero testified that intelliVIBE operated as a

system where the frequency of vibration of the motors was decoupled

from the intensity of the vibrations, and that the system provided

complex combined sensations. Romero Dep. 50:3-9, 14, 50:25-51:5. 

Mr. Thorner left printouts and a disk of sample programs with id

Software. Romero Decl. ¶ 8. No one at id Software executed a

confidentiality agreement with Mr. Thorner. Id. at ¶ 9. 

A similar demonstration was also given in September to Kyle

Freeman and other representatives of NovaLogic in Tarzana,

California. Thorner Decl. ¶ 12. In his declaration, Mr. Freeman

recalls that the prototypes demonstrated included a seat cushion

and vest, which were used with "test programs that independently

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Sony's attorney's provided Mr. Freeman with a draft

declaration that included a statement that Mr. Thorner showed him a

prototype "vibrating hand-held controller." Heinrich Decl., Ex. Y. 

According to email correspondence between Sony and Mr. Freeman, he

then edited the declaration to eliminate items that he didn't

clearly recall, noting, "I don't specifically recall any devices

other than the seat and the vest, but it was 11 years ago." Id., Ex. Z. During his deposition, however, Mr. Freeman denied that the

draft declaration had any references to prototypes that he was

unable to recall. Id., Ex. AA, Freeman Dep. 89:16-18. 

10

created vibrations of varying intensity and time intervals to

create particular effects." Freeman Decl. ¶ 5.2 At his

deposition, however, Mr. Freeman testified that Mr. Thorner showed

them the vest but "didn't actually operate that for us." Freeman

Dep. 30:19. Like Mr. Romero, Mr. Freeman recalls sitting on the

seat pad while it was operating for "around five minutes or less." 

Freeman Dep. 32:6-9. He specifically recalls a program entitled

Heli.Bas, and attaches to his declaration a program that he says

appears to be substantially the same as the program disclosed in

1994 by Mr. Thorner. Freeman Decl., Ex. A, File: "Heli.Bas"

Printout of Quickbasic v4.5 Program Code. NovaLogic likewise did

not sign any confidentiality agreement with Mr. Thorner. 

In March, 1995, Mr. Thorner again demonstrated his inventions,

this time to employees of Papyrus Software in Somerville,

Massachusetts. Thorner Decl. ¶ 13. Matteo Marsala of Papyrus

Software testified that a vibrating seat pad was demonstrated

before about a dozen people. Kennedy Decl., Ex. 10, Marsala Dep.

40:3-12. Mr. Marsala himself sat on the seat pad and felt its

vibrations. Marsala Dep. 35:23-36:5. He describes the sensation

as a cycling of the motors inside the pads, in which "the intensity

of the motors would change based on how fast the spin or how

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intense the spin was," giving him the feeling "like this thing is

kind of cycling and rotating around you." Marsala Dep. 30:10-23. 

Mr. Marsala stated that Mr. Thorner "had the black box with the

seat pad," and recalls Mr. Thorner "talking" about other

peripherals, including a chest pad and gloves, all of which "would

be able to be plugged into his intelliVIBE system and each one of

them would have independent control over their motors and be able

to pass along a simulated effect from the game to all translate

into one feeling." Marsala Dep. 34:17-24. 

Sony's attorneys now also represent Mr. Romero, Mr. Marsala

and Mr. Freeman. Thus, Immersion was prevented from asking them

about the content of their preparation to give testimony. E.g.,

Romero Dep. 8:2-7. According to Mr. Romero, he is not in need of

legal advice, yet he has been represented by Sony's attorneys ever

since being contacted by Mr. Gewirtz. Romero Dep. 6-7. On June

22, 2005, Mr. Thorner emailed Mr. Freeman with a printout of a

computer program and asked, "Perhaps you will remember this and be

able to authenticate it as the original program you saw?" Heinrich

Decl., Ex. 6, June 22, 2005 Email from Craig Thorner to Kyle

Freeman. However, as Mr. Thorner now admits, the program he showed

Mr. Freeman was not the original 1994 program, but a later version. 

At his deposition, Mr. Freeman testified that he had had no

communication with Mr. Thorner about the program. Freeman Dep.

88:22-24. 

 Sony expert Dr. Allan Gottlieb has reviewed documents of Mr.

Thorner's entitled "Using intelliVIBE" as well as six QuickBasic

4.5 demonstration programs, Findval.Bas, Vibestep.Bas, Accel.Bas,

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3

Sony clarified at the hearing that each "zone" does not in

fact have its own actuator, but that there are two motors in each

zone. 

4

Here, Dr. Gottlieb's use of the terms "zone" and "device"

differs from Sony's description of those terms at the hearing;

Sony, unlike Dr. Gottlieb, defines each motor as its own "device." 

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IVibe255.Bas, Car.Bas and Heli.Bas. Based on this review, Dr.

Gottlieb opines that the intelliVIBE system contained "a number of

'tactile feedback zones,'" each driven by its own vibrating

actuator;3

 each of which could be programmed independently or

simultaneously; the intensity, frequency and duration of which

could be set to any value for any length of time. Gottlieb Decl.

¶ 6. For instance, according to Dr. Gottlieb, the Heli.Bas program

produces "sensations in the selected zones [e.g. back, right leg,

left leg, chest pad, left hand and right hand] that can vary

independently in intensity, frequency, and duration." Id. ¶ 10. 

Dr. Gottlieb explained at his deposition, however, that individual

motors within a particular "device" operate uniformly:4

 "When you

issue a command, it is a device-specific and also device-wide

command, it pertains only to the device mentioned but pertains to

all of the device mentioned." Heinrich Decl., Ex. DD, Gottleib

Dep. 143:5-14. 

B. Thorner's Pre-Trial Contacts with Immersion and Sony

On December 7, 1999, Immersion contacted Mr. Thorner to

propose that Immersion acquire the '840 patent, in exchange for

fifteen percent of any royalties derived from license agreements,

up to a cap of $1.5 million. Thorner Decl., Ex. A, December 7,

1999 Letter to Craig Thorner from Richard H. Abramson, Director of

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Litigation and Intellectual Property. No agreement was ever

finalized; Mr. Thorner later told Immersion that he considered the

offer insufficient. Chang Decl., Ex. A, March 18, 2003 Email from

Craig Thorner to Dean Chang. 

In late 2002, according to outside counsel Douglas E. Lumish

of Weil, Gotshal & Manges, Sony also contacted Mr. Thorner. Sony

was interested in talking to Mr. Thorner "because he was the

inventor on three patents of significant interest as prior art";

"[t]he purpose in contacting him was to see if he had any

additional prior art, anything else that might be of interest to

the case and any explanation in the description of the patents that

was interesting to me." Lumish Decl. ¶ 2; Kennedy Decl., Ex. 40,

Lumish Dep. 26:9-13. 

Mr. Thorner was initially receptive because he saw working

with Sony as an opportunity to meet "important people at Sony who

make the business decisions," in order to demonstrate his

technology and "perhaps get it adopted in some manner." Heinrich

Decl., Ex. B, Thorner Dep. 83:10-11, 22-25. Mr. Lumish spoke with

Mr. Thorner two or three times, and set up a meeting in early

April, 2003 in New Jersey. Lumish Decl. ¶ 3. In those

conversations, Mr. Thorner "described what he had," and Mr. Lumish

asked him "extensively about whether there was other types of prior

art that might be of interest." Lumish Dep. 65:1-4. Mr. Lumish

asked if there were any prototypes, and Mr. Thorner told him that

he might have a seat pad in his garage or basement, "the same seat

pad that was described in the patents." Id. 26:18-24. Mr. Thorner

told Mr. Lumish about the mechanism for controlling the motors, and

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Mr. Lumish concluded that it was "essentially what was described in

the patent." Id. 28:10-17. Mr. Lumish intended to engage Mr.

Thorner as a consultant and to view the seat pad prototype. Id.

60:24-61:1. However, Mr. Thorner was not interested in the

proposed April meeting with Sony attorney and executive Riley

Russell, who did not fit Mr. Thorner's criteria for the desired

important, business decision-makers. Thorner Dep. 88:8-17. Mr.

Thorner says he told Mr. Lumish that he would have "the meeting

first, then I can give you some, you know -- give you my relevant

material." Id. 90:8-10. 

Mr. Thorner cancelled the meeting shortly before it was

scheduled, and Mr. Lumish's later attempts to reach him were

unsuccessful. Lumish Decl. ¶ 4; Lumish Dep. 53:15. Mr. Lumish was

left "with a very firm conclusion that what [Mr. Thorner] had was

no different than or more detailed than or better than" the Thorner

patents, and Mr. Thorner also "led [him] to believe that there had

been no prior public use of the invention." Lumish Dep. 65:8-11,

60:7-9. 

In March, 2003, as he was negotiating with Mr. Lumish, Mr.

Thorner says, he contacted Immersion and advised it that he owned

technology that was relevant to its lawsuit against Sony and

Microsoft, and that he believed Sony and Microsoft would prevail if

they learned about his prior art technology. Thorner Decl. ¶ 3. 

He claims to have had "numerous" telephone calls with Immersion

attorney Patrick Reutens, and others associated with Immersion,

between March and April 18, 2003. Thorner Decl. ¶ 3. He told Mr.

Reutens, Victor Viegas, Immersion's CEO, and outside counsel

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Richard Birnholz of Irell & Manella about the "prior art controller

and entire vibrotactile system with great specificity and advised

Immersion that my handheld game controller was, in effect, the

world's first 'DualShock' controller." Id. ¶ 4. He further told

Mr. Reutens of his "eight-zone" vibrotactile system, explaining

that frequencies and amplitudes of the eight motors could be

independently controlled. Id. ¶ 5. He advised Immersion of his

open demonstrations in September, 1994. 

Mr. Thorner declares that, as a result of these conversations,

Immersion "understood that I was a very dangerous witness against

them with regard to my public use prior art, patents and what I had

invented . . . ." Heinrich Decl., Thorner Dep. 270:23-25. Mr.

Thorner describes Immersion's response as follows,

On several occasions, Immersion's attorneys including Patrick

Reutens and Richard Birnholz stated that they heard enough

about my prior art, and did not need or want to hear any more

details about it. I was advised by Immersion that they were

looking for a valued partner, and Mr. Reutens told me that I

'would be well treated financially' if I entered into an

agreement with Immersion. Mr. Reutens and Mr. Birnholz made

clear during our telephone discussions in the weeks that

preceded entering agreements with Immersion, that I should not

provide any of my prior art information to Sony and Microsoft. 

They also explained that I should never send Immersion

anything in writing so that there would be no record of my

prior art.

Thorner Decl. ¶ 18. At his deposition, Mr. Thorner amplified,

They [Immersion representatives] said, 'Okay, we're done

talking about your prior art, your public use prior art, your

patents, your technology, we never want to hear about it

again, you are never to disclose this to Microsoft and Sony,

there's no doubt we're going to be strategic partners,

theoretically speaking this will damage our case, your

assessment that we will lose our case if this goes to the

opposing counsel is correct, without admitting anything, of

course. So we're going to work a deal, what is it that you

want?'

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Thorner Dep. 270:9-19. 

Immersion's account of these conversations differs

dramatically. According to Patrick Reutens, Immersion's General

Counsel, Mr. Thorner alleged that Immersion's TouchWare Gaming

software infringed his '722 patent, and threatened to file suit

immediately and seek an injunction. Reutens Decl. ¶ 2. This is

supported by a March 18, 2003 email from Mr. Thorner to Dean Chang,

Immersion's Chief Technology Officer and Vice President of Gaming,

copied to Mr. Reutens and others, in which Mr. Thorner warned,

It's urgent we communicate with regard to your impending

release of your "TouchWare" software, which according to your

press release of March 6th 2003, is currently in beta testing. 

It is my belief that this software infringes on several of the

patents of mine and my company VRF Corp. We call this

technology "AudioSense®" and have patents issued and pending

in both the US and abroad. For your reference, the parent

case is US Pat. No. 5,684,722, having priority back to

September of 1994. 

It is my intention, in the immediate near future, in the

absense [sic] of good faith negotiations with your company, to

seek an injunction on the basis of patent infringement and

irreparable harm to my company should you release your

software. 

Chang Decl., Ex. A, March 18, 2003 Email from Craig Thorner to Dean

Chang. Mr. Thorner also reportedly told Immersion that he believed

his patents would invalidate Immersion's U.S. Patent No. 5,857,956

(the Moriyasu patent). According to Mr. Birnholz, Mr. Thorner said

that he had been offered a $300 hourly fee by Sony, but that this

type of compensation was not what he was looking for, that he

wanted "substantial consideration in terms of a business

relationship." Birnholz Dep. 23:22-24:1. Mr. Birnholz says that

Mr. Thorner told him that Mr. Thorner's "work was important to the

case and that he thought Sony would likely win the case with his

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help." Birnholz Dep. 26:8-10. Mr. Reutens and Mr. Birnholz deny

that they were ever on a call together with Mr. Thorner and deny

that Mr. Thorner told them about any alleged "public use" prior art

or other non-patent prior art. Reutens Decl. ¶ 4; Heinrich Decl.,

Birnholz Dep. 80:7-81:12. Victor Viegas denies ever speaking on

the phone with Mr. Thorner. Heinrich Decl., Ex. L, Viegas Dep.

224:8-9. Mr. Chang says that he spoke with Mr. Thorner once, but

that his business plans for his product seemed "unrealistic and

exaggerated," and thus Mr. Chang was not eager to talk further

about the product. Chang Decl. ¶ 4. 

On April 18, 2003, after these disputed conversations,

Immersion and Mr. Thorner entered into two separate agreements. In

the first, Immersion assigned Mr. Thorner ownership of the Moriyasu

patent and Mr. Thorner granted Immersion a "perpetual, irrevocable,

worldwide license" to his '722 patent and any divisionals. Thorner

Decl., Ex. K, Agreement ¶¶ 2, 3. Immersion promised to fund fifty

percent of the costs of obtaining foreign counterparts of the '722

patent, and to pay Mr. Thorner fifty percent of gross revenues

derived from any Immersion licenses of the '722 patent and twenty

percent of net revenues from sale or licensing of Immersion's Audio

Analysis Software. Id. ¶ 6-8. As part of this agreement, Mr.

Thorner agreed not to "provide consulting to, or otherwise assist

in any way, any third party in connection with any lawsuit, dispute

or legal action between such third party and Immersion." Id. ¶ 11. 

In the second, Immersion engaged Mr. Thorner as an independent

contractor at a rate of $100.00 per hour. Thorner Decl., Ex. K,

Independent Contractor Services Agreement. This agreement included

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Immersion notes that Sony included similar provisions in its

agreements with litigation consultants. See, e.g., Heinrich Decl.,

Ex. J, ("To the extent anyone from Immersion, its attorneys or its

agents, contact Dr. Ganapathy, he agrees not to have any

discussions with them").

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a conflict-of-interest provision in which Mr. Thorner agreed not to

accept any work or obligation "inconsistent or incompatible" with

his obligations under the Agreement.5 Id. ¶ 5. 

On July 29, 2003, Mr. Thorner sent an email congratulating

Immersion on the settlement of its claims against Microsoft and

noting that he wouldn't be needed to testify on Immersion's behalf. 

Reutens Decl., Ex. A. Mr. Thorner did not suggest that he was

entitled to a share of Immersion's settlement; however, he did say

that he had "a few questions about this development, specifically

regarding the '722 case and the need (or lack thereof) to pursue

internationally at this time." Heinrich Decl., Ex. JJ. Mr.

Reutens responded on July 31, stating that Immersion might "need

[Mr. Thorner's] assistance" in the ongoing lawsuit against Sony. 

Reutens Decl., Ex. A at 1. 

Several months later, Immersion outside counsel Andrei Iancu

and Alan Heinrich called Mr. Thorner seeking consulting services in

connection with the lawsuit against Sony. Heinrich Decl., Heinrich

Dep. 20:7-21:11. They suggested using ten hours of his time, for a

total payment of $1,000.00. Id. On October 1, 2003, Mr. Thorner

emailed Mr. Reutens to report that he had received a phone call

from Irell & Manella regarding the case against Sony, and that he

told them "it wouldn't be objectionable to send me a $1,000

retainer to own some of my time at the $100 per hour rate." 

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Mr. Thorner denies talking about the AT&T joystick with Mr.

Heinrich. Thorner Rebuttal Decl. ¶ 19. 

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Reutens Decl., Ex. A, at 1. Mr. Reutens approved the $1,000

retainer and informed Mr. Thorner that the TouchWare Gaming product

had been launched, noting that the launch "will be a good test of

market acceptance for sound-to-vibe, and hopefully a revenue stream

for you." Id. at 1. 

Mr. Thorner alleges that in October, 2003, he met Mr. Heinrich

at a restaurant in Wall, New Jersey, where Mr. Heinrich subjected

him to "extensive and specific questioning," and Mr. Thorner again

explained his public use prior art "in great detail." Thorner

Decl. ¶ 20. Mr. Thorner states that he brought prototypes of a

TFCS main controller and a modified Sega Genesis dual motor

handheld controller and offered to show them to Mr. Heinrich, who

refused on the grounds that it would "make it easier for [Mr.

Heinrich] to deny their existence." Id. ¶ 20. Instead, Mr.

Heinrich made drawings in his notebook based on Mr. Thorner's

descriptions. Id. Mr. Thorner was paid $1,000 for this meeting,

the only compensation he received pursuant to the independent

contractor agreement. 

Acknowledging the meeting and the $1,000 payment, Mr. Heinrich

disputes Mr. Thorner's account of their interaction. Mr. Heinrich

says that he discussed with Mr. Thorner the prior art on which Sony

was relying for its invalidity case, including the seat embodiment

described in Mr. Thorner's patents and the AT&T force feedback

joystick.6 Heinrich Decl. ¶ 3. Mr. Heinrich recalls Mr. Thorner

explaining that an important difference between his technology and

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Immersion objects on grounds of hearsay and irrelevance to

the testimony of these witnesses. The declarations are relevant

and admissible to show Mr. Thorner's prior consistent statements

and state of mind; the Court does not consider them as proof of the

matters asserted therein. 

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the Sony DualShock controller was that his seat was "only an output

device." Id. Mr. Heinrich states,

At no point at this time or any other time did Mr. Thorner

tell me that he had additional prior art other than his

patents, and we did not discuss any alleged additional prior

art of his other than his patents. He did not tell me about

any public use, demonstration, or disclosure of any alleged

non-patent prior art. He also did not tell me he had a prior

art hand-held controller. In fact, he distinguished his

technology from a hand-held controller. 

Id. He declares that substantial portions of Mr. Thorner's sworn

account of the meeting are untrue, including the statement that Mr.

Heinrich refused to look at prototypes but made drawings from

descriptions of Mr. Thorner's prior art. Id. ¶ 4. Mr. Heinrich

says that he drafted a handwritten memo of the meeting during his

flight back to California that day. Id. ¶ 7. 

Eight of Mr. Thorner's friends, family and business associates

declare under oath that he told them of discussions and agreements

with Immersion in 2003.7 According to these declarants, Mr.

Thorner looked forward to receiving "a lot of money" from Immersion

on the condition that he "hide" his prototypes and software, as

well as his past prior uses of the technology, from Sony and

Microsoft. E.g., Gutleber Decl. ¶ 5. Several report that Mr.

Thorner had initially been contacted by Sony and Microsoft, but

that those companies "had shown no great interest in an

arrangement." E.g., Torres Decl. ¶ 4. One friend reported that

Mr. Thorner claimed his agreements with Immersion were a "mechanism

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for sharing in proceeds from the litigation revenue, because,

although he had invented the technology, Immersion was better

suited to serve as the plaintiff, and Immersion had agreed that

they would pay him substantially in the future if they prevailed in

their lawsuits." Purrelli Decl. ¶ 6. An employee of Mr. Thorner's

recalls being told of the New Jersey meeting between Mr. Thorner

and an Immersion attorney, who refused to look at Mr. Thorner's

prototypes and documentation. Brown Decl. ¶ 6. Another remembers

Mr. Thorner commenting on the irony of being paid to keep his

technology secret. Delay Decl. ¶ 4. According to Lauren Clark, an

ex-girlfriend with whom he remains in frequent contact, Mr. Thorner

usually brings up the Sony-Immersion litigation "daily," because it

"pretty much consumes him." Clark Dep. 21:15-16. 

C. Discovery Conduct

During initial discovery, Sony produced to Immersion U.S.

Patent No. 6,422,941 ('941 patent). Heinrich Decl., Ex. 9,

November 8, 2002 Letter from Matthew Bonini to Andrew Iancu. The

'941 names Mr. Thorner and Mr. Heilman as co-inventors and was

dated July 23, 2002, so it was not prior art. 

On June 16, 2003 Immersion's attorneys advised Sony that Mr.

Thorner had "been retained" by Immersion, and asked Sony not to

contact him further. Lumish Decl., Ex. A, June 16, 2003 Letter

from Richard Birnholz to Douglas E. Lumish and John P. Schnurer. 

The letter did not specify the capacity in which Immersion had

retained Mr. Thorner. 

Based on this letter, Mr. Lumish concluded that Sony was not

permitted to interview or depose Mr. Thorner unless Sony made a

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showing that such discovery would fall within an exception under

the Federal Rules of Civil Procedure, e.g. "extraordinary

circumstances" under Rule 26(b)(4)(B). Lumish Decl. ¶ 5. At his

deposition, Mr. Lumish clarified that he understood that Sony could

have subpoenaed Mr. Thorner. Lumish Dep. 65:21-23. 

In a subsequent letter, Mr. Birnholz explained that Immersion

was not seeking to allow Mr. Thorner to have access to confidential

Sony materials under the protective order, but that Immersion did

intend to retain Mr. Thorner as a "consultant." Lumish Decl., Ex.

B, June 23, 2003 Letter from Mr. Birnholz to Sonal Mehta. 

In October, 2003, Immersion also retained Mr. Heilman as a

litigation consultant at a rate of $100 per hour in connection with

its lawsuit against Sony. See Heinrich Decl., Ex. 11, Oct. 1, 2003

Letter from Alan Heinrich to Paul Heilman (formalizing Mr.

Heilman's retention as a consultant). The agreement provided that

Mr. Heilman would not provide services related to the patents to

any party other than Immersion. Mr. Heilman recalls only one

resulting conversation with Alan Heinrich, counsel for Immersion,

and says he received no money as a result of that agreement. 

Heilman Dep. 77-78; 73:4-7. 

In discovery, Sony asked Immersion for all prior art

concerning the patents-in-suit as well as all documents concerning

the "functions and operations of any devices or technology

developed" by Thorner. Gewirtz Decl., Ex. C, Sony's Requests for

Production Nos. 54, 189. Immersion objected to the requests on

various grounds, and did not provide Sony with any documents

relating to Mr. Thorner's public use prior art, or list any such

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documents in its privilege log. Immersion did not provide Sony

with its December 7, 1999 offer to acquire Mr. Thorner's '840

patent or its later license of his '722 patent. 

Sony also asked Immersion for any "agreements or contracts

between Immersion or counsel for Immersion and any expert witness

or consultant hired by Immersion in connection with this action,"

and for all documents concerning efforts by Immersion to obtain

rights to Thorner's patents. Id., Request Nos. 118, 185. Again,

Immersion objected to the requests on various grounds, and did not

provide Sony with the offer or agreements it had made with Mr.

Thorner or list them in its privilege log. At the hearing on this

motion, Morgan Chu, Immersion's trial counsel, explained that, when

faced with very broad requests for admissions, both parties would

at times respond with blanket objections without listing all

documents. He later stated that Immersion's license agreement for

the '722 patent was irrelevant because it was directed toward

software not at issue at trial. 

During the August 22, 2003 deposition of Immersion co-founder

Louis Rosenberg, Mr. Lumish asked whether Mr. Rosenberg was

"involved in any attempts by Immersion to purchase Mr. Thorner's

patents." Lumish Decl. in Supp. of Sony's Opp'n to Immersion's

Mot. Summ. J, Ex. R, Rosenberg Dep. 119:25-120:1. Mr. Rosenberg

answered that he was, but denied any recollection of when that

occurred or the dollar amount offered. Id. 120:14-121:3. In

September, 2003, Immersion supplemented its responses to Sony's

requests for admissions and, while reiterating its initial

objections, admitted that it "has had contacts with Craig Thorner

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concerning the possibility of obtaining rights to U.S. Patent Nos.

5,565,840 and 5,684,722 issued in part to Craig Thorner." Sony's

Supp. Ex., Immersion's Supp. Resp. to Sony's Second Set of Req. for

Admis. at 4. At the February, 2004 summary judgment hearing,

Sony's trial counsel asked the Court to infer Immersion's wrongful

intent in relation to Sony's inequitable conduct defense based on

"additional evidence here you don't normally have, which is

[Immersion's] attempt to go buy Thorner's patents, which shows, not

only . . . knowledge but appreciation of importance." February 27,

2004 Hearing Tr. 17:22-18:1. 

Counsel for Sony decided not to seek further discovery from

Mr. Thorner because he was then "a paid and potentially hostile

consultant working for [Immersion], the likelihood of information

being presented in a way that was unhelpful was amplified." Lumish

Dep. 65, 66:5-8. According to Mr. Lumish, Sony anticipated that

Immersion would oppose any effort to subpoena Mr. Thorner, and even

if the effort were eventually successful, it "would have made the

process more expensive and more difficult." Lumish Dep. 146:22-

147:10. Mr. Lumish also concluded, "I didn't think there would be

anything additional to get from him [through Rule 26], in light of

the extensive discussions I had already had with him about the

prior art." Lumish Dep. 67:10-13. 

Jennifer Liu, Sony's in-house counsel, explained to Sony

executive Riley Russell, "Weil's plan at this point is to still use

the Thorner patent in a summary judgment motion, wait until Thorner

sticks his neck out in a declaration, and then chop it off. We

will see how well this strategy works." Heinrich Decl., Ex. N,

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August 23, 2003 Email from Jennifer Liu to Riley Russell. 

D. Trial Assertions 

At trial, Mr. Chu, counsel for Immersion, presented closing

arguments which Sony believes could have been rebutted by Mr.

Thorner's public use prior art. Mr. Chu asserted, 

Thorner didn't have complex combined sensations. . . . All

the motors in a set are either on or off identically. Well,

if they're all off, they're identically off. But if they're

all on, they're turned on to the same frequency and amplitude. 

Every one in this case, the five motors. That's not what the

patents involve here. 

Gewirtz Decl., Ex. D, Trial Tr. 3725. He later argued, "Did anyone

[before the inventors of Immersion's patents] have a way to combine

and control the use of two motors or a single motor on a special

control of pulsing to decouple? And the answer's no." Id. at

3733-34. He also commented that, despite Mr. Thorner's patents,

there was "no evidence . . . of any sales or success or licensing

whatsoever in contrast to the Immersion patents." Id. at 3736. 

E. Thorner's Post-Trial Communications with Sony and

Immersion

In October, 2004, Immersion Vice President Mark Belinsky

contacted Mr. Thorner to discuss purchasing his patents rather than

continuing to pay small amounts of royalties. Belinsky Decl. ¶ 3. 

Mr. Belinsky suggested $50,000, and claims that Mr. Thorner

"indicated that number was in the right ballpark." Belinsky Decl.

¶ 4. Mr. Belinsky proposed a draft agreement by which Thorner

would sell his entire patent family to Immersion, but Immersion

would grant back an exclusive license to use them, for a total of

$50,000. Belinsky Decl., Ex. C, December 6, 2004 Email from Mark

Belinsky to Craig Thorner, Purchase Agreement Proposal for your

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Review. The offer was not accepted. 

On January 13, 2005, Mr. Thorner sent an email to Mr. Belinsky

offering to stay on as an exclusive consultant with Immersion in

exchange for "a 'small' piece of the Sony revenue." Belinsky

Decl., Ex. D, January 13, 2005 Email from Craig Thorner to Mark

Belinsky. Mr. Thorner then demanded a $100,000 "signing bonus" for

a ten-year consultancy agreement as well as $30,000 per quarter

during the term of the agreement. Id. He stated his intention to

pursue future litigation against Sony and Microsoft, and promised,

"By reaching a deal with Immersion I'll agree to keep you off the

defendants list with regard to my 2 applications cited by you

regarding the IP in the case during my patent infringement

litigation against Sony and Microsoft." Id. He noted that he had

received nothing from Immersion "excluding the promise of future

revenue," and said that the consideration he received up to then

had been "irrelevant and hasn't helped me one whit but for the fact

that 2006 might see substantial VibeTonz revenue." Mr. Belinsky

rejected the offer, stating that Immersion was "happy to continue

working under the existing arrangements." Belinsky Decl., Ex. D,

January 20, 2005 Email from Mark Belinsky to Craig Thorner. 

According to Mr. Belinsky, Mr. Thorner called that day and

told him that he had prior art that had been "held secret in his

basement up to now." Belinsky Decl. ¶ 8. In response, Mr.

Belinsky asked to see the purported prior art so that Immersion

could decide whether to make additional disclosures to the Patent

Office, and stated, "Immersion would not under any circumstances

pay you or anyone else to keep potential prior art hidden." 

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Mr. Thorner personally and his company had suffered

substantial monetary losses over the past eleven years. Thorner

Dep. 401:12-15. In addition, on August 15, 2005, the New Jersey

Superior Court issued a warrant for Mr. Thorner's arrest in

connection with failure to pay a August 26, 2004 civil judgment

against him. Heinrich Decl., Ex. P. 

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Belinsky Decl., Ex. E, January 27, 2005 Email from Mark Belinsky to

Craig Thorner. Later, Mr. Thorner again threatened to pursue

litigation against Immersion, saying, "I made a mistake in not

insisting on some small percentage of your revenues from said

litigation [against Sony and Microsoft] and this is a mistake that

I intend to correct by enforcing my own IP." Belinsky Decl., Ex.

E, January 27, 2005 Email from Craig Thorner to Mark Belinsky. In

an April 15, 2005 email to Mr. Belinsky and Mr. Viegas, Mr. Thorner

again threatened to enforce patent rights against Immersion, to

cooperate "with any and all 3rd parties to produce results that are

beneficial to my interests, including but not limited to

cooperation with Sony for the issues currently under appeal," and

to publicize Immersion's alleged victimization of him. Belinsky

Decl., Ex. F. 

Mr. Thorner's consulting contract with Immersion expired on

April 18, 2005, and he contacted Sony soon thereafter. He informed

it that he was "open to any and all suggestions as to how we might

accomplish some sort of compensation for utilizing my technology,

my patents, my disclosures, my testimony, my cooperation, my

demonstrations, et cetera." Thorner Dep. 137:23-138:4. In

exchange, he asked for "Money, some form of money . . . A thank you

note wasn't going to do it."8 Id. 138:8-11. According to Mr.

Thorner, Immersion had by that point offered him $250,000 to extend

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his consulting agreement. Id. 138:13-15. Immersion denies making

such an offer. 

On May 26, 2005, Mr. Thorner entered into a "license

agreement" with Electro Source, a co-defendant with Sony in a

related action brought by Immersion. Sony has a joint defense

agreement with Electro Source. Mr. Thorner provided Electro Source

with a license to sell products that infringed the Thorner patents,

but excluded from the license products "in the field of vibrotactile seats and vests." Heinrich Decl., Ex. S, Electro Source

License Agreement. The '818 and '840 Thorner patents are directed

primarily to vibrating seats and vests. Electro Source agreed to

pay Mr. Thorner $150,000 as an advance royalty under the license. 

Mr. Thorner also agreed with Electro Source that, "at Sony's

election," he would

enter into a license agreement to grant a license to Sony with

respect of the Patents, upon the same terms and conditions as

set forth herein and in the form of the [Electro Source

License Agreement] attached hereto, including without

limitation, royalty amounts and set-off rights, provided that

Sony shall not be required to pay the Advance Royalty.

Kennedy Decl., Ex. 1, May 26, 2005 Deal Point Memorandum Re: Vibrotactile Technology Patents. 

Sony maintains that it and Electro Source entered into the

arrangement described in the Deal Point Memorandum because Mr.

Thorner had accused them of infringing his patents. Larry Russ,

counsel for Electro Source, says that he received $150,000 from

Sony which he used to pay the advance royalty to Mr. Thorner,

pursuant to the Electro Source license agreement. Heinrich Decl.,

Ex. O, Russ Dep. 30:16-24. According to Sony's internal wire

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transfer request, however, the purpose of the $150,000 given to Mr.

Russ was to secure an "option to purchase Thorner patents for

Immersion case." Heinrich Decl., Ex. T, May 24, 2005 SCEA Wire

Transfer Request (emphasis added). 

Mr. Russ explained to Mr. Thorner that $150,000 was the most

he could get as an advance, and that the deal "still depends upon a

couple of matters," specifically,

1) Sony is preparing a Declaration for you to sign. If the

declaration is not acceptable to you and cannot be worked out,

we have a problem. 

2) We need to know whether you still have the Sega Controller.

3) We need to know who you showed your proto-type to. Not

helpful if just to your girlfriend.

Heinrich Decl., Ex. A, May 9, 2005 Email from Larry C. Russ to

Craig Thorner. Mr. Thorner responded that he would accept the

$150,000, as long as he got help "putting pressure" on Immersion to

pay revenues owed him, and with other legal matters. Id., May 9,

2005 Email from Craig Thorner to Larry C. Russ. Mr. Thorner

assured the Electro Source attorney, "I am sure the Sony

declaration will suffice, and it should be as strongly worded as

possible." Id. He also assured Mr. Russ that he had the modified

Sega controller and that he expected Mr. Russ would be "pleased

with the witness list." Id. Mr. Thorner testified that all of the

discussions leading up to the first agreement he signed with

Electro Source "were designed and carried out specifically as a

process of negotiation to result in some form of compensation." 

Thorner Dep. 142:22-25. Mr. Thorner understood that he had to

produce what he believed was corroborating evidence before he would

be paid $150,000. Id. 204:23-205:3. Nevertheless, Mr. Thorner

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testified that he did not believe that the $150,000 came from Sony,

and that he had been told "numerous times" that Sony would pay

nothing for his cooperation. Id. 186:4-187:16. 

According to Mr. Russ, he, Mr. Russell and Mr. Thorner all

participated in a conference call on May 11, 2005, for the purpose

of discussing the underlying content of Mr. Thorner's declaration

as well as his due diligence in searching for evidence of his

public use prior art. Russ Dep. 162:7-163:12. Mr. Russell

prepared a rough draft of the declaration for Mr. Thorner. 

Heinrich Decl., Ex. Q, Russell Dep. 206:3-4. Nevertheless, Mr.

Thorner insists, "The specific sentence syntax and presentation of

this entire document is my sole testimony." Thorner Dep.

160:21:23. Several drafts were completed before Mr. Thorner was

paid, although he continued to work on the declaration after

receiving payment. Thorner Dep. 205:15-24. Mr. Gewirtz, Sony's

new outside counsel, testified that he personally handed Mr.

Thorner the $150,000 check from Electro Source, while Mr. Thorner

was in his office in connection with Sony's Rule 60(b) motion. 

Gewirtz Dep. 71:2-16. 

Mr. Russ and Mr. Thorner testified that they did not discuss

the "content" of the declaration, Thorner Dep. 167:16-18, Russ Dep.

51:19-22, but Mr. Russ says that he did discuss the declaration's

"subject matter" with Mr. Thorner. Russ. Dep. 134:13-25. Mr. Russ

was also responsible for asking Mr. Thorner to search his records,

hard drives and emails for corroborating evidence; Mr. Russ refused

to say, on grounds of attorney-client privilege, whether this

effort was related to Sony's Rule 60(b) motion. Russ Dep. 134:24-

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136:3. 

Mr. Russell denies that the $150,000 payment from Sony to

Electro Source was a reimbursement for Electro Source's $150,000

payment to Mr. Thorner. Kennedy Decl., Ex. 5, Russell Dep. 50:1-

16. Mr. Russell denies that Mr. Thorner knew that Sony had

purchased an option for licensing the Thorner patents from Electro

Source. Id. 10-12. 

On May 16, 2005, Mr. Thorner emailed Mr. Russ to say that he

needed to take a break in order to file an unrelated patent

application with the PTO, for which he would otherwise have to pay

a $510 late fee. Ex. 17, May 16, 2005 Emails. At first Mr. Russ,

copying Mr. Russell, emailed to say that delay would be acceptable. 

When Mr. Thorner informed him of the potential length of the delay,

Mr. Russ warned, "It is your call, but the longer you wait, the

greater the risk of this thing falling apart. Your declaration

only has value to us if Sony can use it to request a new trial." 

Id. Ultimately, Mr. Russ paid Mr. Thorner's late fee. Sony then

paid the Russ law firm approximately $500 in order to reimburse

Electro Source for money it had advanced to Mr. Thorner for the

late filing fee. Russell Dep. 64:6-13. This payment was not

pursuant to Thorner's license agreement with Electro Source; when

asked if it was a gift, Mr. Russ replied, "You can call it anything

you want." Russ Dep. 109:18-22. 

On June 1, 2005, Mr. Thorner sent Immersion an email asking

whether "the $250K offer to maintain my unilateral cooperation with

Immersion" was "still on the table." Belinsky Decl., Ex. H, June

1, 2005 Email from Craig Thorner to Mark Belinsky. Mr. Belinsky

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responded, "I don't have my notes handy, but I don't recall an

offer as you describe below." Id., June 3, 2005 Email from Mark

Belinsky to Craig Thorner. 

LEGAL STANDARD

Rule 60(b) enumerates the grounds upon which a motion for

relief from an order or judgment may be made. It specifies the

following:

1) mistake, inadvertence, surprise or excusable neglect;

2) newly discovered evidence which by due diligence could not

have been discovered before the court's decision;

3) fraud by the adverse party;

4) the judgment is void;

5) the judgment has been satisfied; or

6) any other reason justifying relief.

Here, Sony moves for relief from final judgment on the grounds

of newly discovered evidence and fraud. 

Relief from final judgment on the basis of newly discovered

evidence under Rule 60(b)(2) "is warranted if (1) the moving party

can show the evidence relied on in fact constitutes 'newly

discovered evidence' within the meaning of Rule 60(b); (2) the

moving party exercised due diligence to discover this evidence; and

(3) the newly discovered evidence must be of 'such magnitude that

production of it earlier would have been likely to change the

disposition of the case.'" Feature Realty, Inc., v. City of

Spokane, 331 F.3d 1082, 1093 (9th Cir. 2003) (quoting Coastal

Transfer Co. v. Toyota Motor Sales, U.S.A., 833 F.2d 208, 211 (9th

Cir. 1987)). 

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In order to prevail on a motion for relief from final judgment

under Rule 60(b)(3), a movant must

(1) prove through clear and convincing evidence that the

verdict was obtained through fraud, misrepresentation, or

other misconduct. 

(2) establish that the conduct complained of prevented the

losing party from fully and fairly presenting his case or

defense. 

Jones v. Aero/Chemical Corp., 921 F.2d 875, 878-879 (9th Cir. 1990)

(quoting Bunch v. United States, 680 F.2d 1271, 1283 (9th Cir.

1982)). "Failure to disclose or produce materials requested in

discovery can constitute 'misconduct'" under Rule 60(b)(3), and

misconduct "does not demand proof of nefarious intent or purpose as

a prerequisite to redress." Id. at 879 (quoting Anderson v.

Cryovac, Inc., 862 F.2d 910, 923 (1st Cir. 1988)). When "the case

involves the withholding of information called for by discovery,

the party need not establish that the result in the case would be

altered." Id. (quoting Bunch, 680 F.2d at 1283). Rule 60(b)(3)

also requires that the fraud "not be discoverable by due diligence

before or during the proceeding." Pac. & Arctic Ry. and Navigation

Co. v. United Transp. Union, 952 F.2d 1144, 1148 (9th Cir. 1991). 

DISCUSSION

I. Newly Discovered Evidence

Even if Sony cannot show that Immersion committed fraud or

other misconduct, Sony may be entitled to relief from final

judgment if it can show that it exercised due diligence to discover

the new evidence, and that the new evidence is of such magnitude

that production of it earlier would likely have changed the outcome

of the case. 

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Two categories of information provided by Mr. Thorner to Sony

in April, 2005 could constitute newly discovered evidence under

Rule 60(b)(2): (1) evidence of Mr. Thorner's public use prior art,

including the seat pad and controller prototypes, the IntelliVIBE

programs and Mr. Thorner and others' oral testimony; and

(2) Immersion's 1999 offer to purchase the '840 patent, its April,

2003 consultancy agreement with Mr. Thorner and its April, 2003

acquisition of a license for Mr. Thorner's '722 patent in exchange

for the Moriyasu patent. Immersion argues that Sony could have

discovered this information had it sought discovery of Mr. Thorner

or filed a motion to compel, and thus Sony failed to exercise due

diligence. 

A. Public Use Prior Art

Based on Mr. Thorner's initial discussion with Mr. Lumish,

Sony knew that Mr. Thorner thought he had valuable information

relating to the lawsuit and that he had an extant prototype of his

vibrating seat in his garage. Mr. Lumish says that, based on Mr.

Thorner's statements to him, he reasonably concluded that the

prototype was coextensive with the patents. 

This belief, even if reasonable due to Mr. Thorner's

misleading, incomplete or false statements, is not sufficient to

support Sony's claim that it exercised due diligence with respect

to Mr. Thorner. Sony asserted that the Thorner patents themselves

invalidated Immersion's patents-in-suit. The scope and capability

the inventions disclosed in the Thorner patents were hotly

contested at trial. As Sony internal emails demonstrate, Sony made

a deliberate, strategic decision not to seek additional discovery

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from Mr. Thorner concerning his inventions. Sony was concerned

that, because Mr. Thorner had been retained as an expert by

Immersion, his testimony would be presented in an unfavorable way. 

Even this rationale fails to explain why Sony did not seek to

obtain the prototype, which it admittedly knew existed. Had Sony

conducted fact discovery into the prototype and its past use, it

would certainly have learned of its demonstration, which would have

led to witnesses such as Mr. Romero, Mr. Freeman and Mr. Marsala,

and thus the existence of additional prior art accessories. If the

seat pad does produce the claimed complex vibrations, as witnesses

to its demonstration now testify, then Sony forwent its opportunity

to discover that information and present it to the jury. 

Sony blames Immersion for its lack of due diligence, claiming

that Immersion "misled" Sony into believing that Mr. Thorner had

been retained as an expert witness. Yet Immersion never told Sony

that Mr. Thorner was being retained as an expert, and just over a

week after telling Sony not to contact him, Immersion described Mr.

Thorner to Sony as merely a "consultant." Sony claims that it

could not have known that Mr. Thorner was "an actor or viewer with

respect to transactions or occurrences that are part of the subject

matter of the lawsuit," and thus capable of being deposed as a fact

witness. Fed. R. Civ. P. 26, Advisory Committee Notes. Yet Sony

knew well that Mr. Thorner was not simply an expert for hire, but

also an "actor or viewer" by virtue of his invention of the

technology which Sony would argue at trial invalidated Immersion's

patents, and because Sony knew that Mr. Thorner had created a

prototype of that allegedly invalidating technology. Sony's level

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of knowledge about Mr. Thorner's past activities and experience is

comparable to that in cases where courts have permitted deposition

of non-testifying experts as fact witnesses, without a showing of

extraordinary circumstances under Rule 26(b)(4). See Norfin, Inc.,

v. Int'l Bus. Mach. Corp., 74 F.R.D. 531, 533-34 (D. Colo. 1977)

(allowing deposition of expert without showing of extraordinary

circumstances regarding his prior experience as actor or viewer of

prior art technology); Atari Corp. v. Sega, 161 F.R.D. 417, 421-22

(N.D. Cal. 1994) (allowing deposition of expert without showing of

extraordinary circumstances regarding his invention prior to his

employment as expert). The Court concludes that Sony could have

discovered the additional public use prior art if it had exercised

due diligence by deposing Mr. Thorner and seeking discovery of his

prototype, but reasonably chose not to do so for strategic reasons. 

B. Offer and Agreements Between Immersion and Thorner

With respect to the Immersion's 1999 offer to Mr. Thorner as

well as the subsequent agreements between them, Sony did propound

requests to which those documents would have been responsive. 

Immersion says it withheld them based on its asserted blanket

grounds of privilege, including relevance and work product. 

With respect to the consulting agreement between Immersion and

Mr. Thorner, Sony has not shown that it exercised due diligence. 

Sony was directly informed of Mr. Thorner's retention by Immersion

and should have known that a written document memorializing this

agreement likely existed, yet Sony failed to challenge Immersion's

claims of privilege on this ground. Moreover, Sony did not produce

its own agreements with expert witnesses in response to

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corresponding Immersion requests. In any event, this agreement

would have provided little probative information. 

Immersion's failure to produce either the 1999 offer to

purchase the '840 patent or the 2003 license agreement for the '722

patent is more troubling. Immersion does not explain how these

documents could have been withheld properly pursuant to the

privileges it asserted, such as attorney work product. In Canady

v. Erbe Elektromedizin GmbH, 99 F. Supp. 2d 37 (D. D.C. 2000), the

defendants were served a request for production of certain patent

prosecution histories. They responded by objecting on grounds of

relevance and attorney-client privilege, and then stated that all

responsive documents had been produced "subject to the objections." 

99 F. Supp. 2d at 44. The defendants produced a copy of a patent

application, but not the PTO's response or their later amendment,

which the court subsequently found constituted material, noncumulative evidence. The defendant attempted to avoid a Rule

60(b)(2) motion by arguing that the plaintiff failed to exercise

due diligence by failing to request a privilege log. The court

rejected this defense, finding that the stated objections were

unsupported by the record and that the defendant's excuse that it

had notified the opposing party of its objections was disingenuous,

reasoning that this notice indicated "only that [the defendant]

might be withholding documents which fell under its relevance or

privilege objections to request 32, not that it might be

withholding responsive documents which did not qualify under these

objections." 99 F. Supp. 2d at 48. 

In this case, there was a privilege log, but the 1999 offer

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and 2003 license were not listed. The license agreement in

particular is relevant to Immersion's assertions at trial that Mr.

Thorner and other prior art inventors were commercially

unsuccessful. Immersion claims that the 2003 agreement had

"nothing to do with prior art" because Sony did not rely on the

'722 patent for its invalidity case at trial. Pl.'s Opp. at 24. 

This statement, like the defendant's in Canady, is disingenuous. 

During the summary judgment briefing, Sony did rely on the '722

patent, which Sony argued disclosed the "pulsing to decouple"

element of Immersion's patents. Furthermore, the '722 patent was

incorporated by reference into the '840 patent, which Sony did rely

upon at trial. 

Nevertheless, Sony clearly knew that Immersion had made some

sort of offer to Mr. Thorner, as shown by both Mr. Lumish's

questioning of Mr. Rosenberg and Immersion's subsequent admissions. 

Although those admissions were less than fully candid, had Sony

wished to use at trial Immersion's commercial interest in Mr.

Thorner's patents, it could have pursued the issue further with a

motion to compel, or used the information it did have to show that

Immersion had considered purchasing Mr. Thorner's patents. This

information, if presented to the jury, may have had some marginal

purpose in rebutting Mr. Chu's blanket statement that Mr. Thorner

had had no success in licensing his patents. Accordingly, the

Court finds that Sony did not exercise due diligence in seeking

information about Immersion's licensing or attempts to license the

Thorner patents. 

Furthermore, Sony has not explained how this information would

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have made the difference in enabling it to meet its burden of

proving by "clear and convincing evidence" that the patents-in-suit

are invalid. There is no evidence that Immersion itself enjoyed

any commercial success due to its license of the '722 patent. In

fact, the evidence indicates that Mr. Thorner realized little

profit from his portion of the licensing agreement. Thus, the

offer and agreement's probative value with respect to the issue of

commercial success is slight. Therefore, the Court denies Sony's

motion under Rule 60(b)(2) with respect to newly discovered

evidence. 

II. Fraud, Misrepresentation or Other Misconduct

A. Thorner's Public Use Prior Art

In order to show that it is entitled to relief from final

judgment under Rule 60(b)(3), Sony must first show by clear and

convincing evidence that Immersion engaged in fraud or other

misconduct. 

Sony's allegations that Immersion engaged in fraud by

conspiring to hide evidence of Mr. Thorner's public use prior art

rest entirely on Mr. Thorner's testimony. Immersion does not deny

that his allegations, if true, would amount to clear and convincing

evidence of misconduct by Immersion. Instead, Immersion contends

that Mr. Thorner has lied about their interactions with each other,

and all of the Immersion employees and attorneys involved deny

knowledge of, much less a conspiracy to suppress, public use prior

art. 

Having considered all of the evidence, the Court concludes

that Mr. Thorner is too unreliable a witness to enable Sony to meet

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its burden to prove by clear and convincing evidence that Immersion

engaged in misconduct. To the contrary, strong evidence, including

internal Sony documents and Mr. Russ and Mr. Thorner’s own

testimony, shows that Mr. Thorner reasonably understood his

satisfactory testimony against Immersion to be quid pro quo for his

receipt of $150,000 payment pursuant to the purported Electro

Source licensing contract. Internal Sony documents describing the

$150,000 option payment to Electro Source as "for Immersion case"

bely Sony's claim that it purchased the option because Mr. Thorner

threatened to sue Sony for infringement. Mr. Thorner came to Sony

with the intent of offering testimony and cooperation on the

condition that he receive "some form of money." His lucrative

Electro Source licensing contract fits that criterion. The fact

that the license agreement excluded from its purview products in

the field of vibro-tactile seats and vests, despite the fact that

Mr. Thorner's patents are directed toward such technology, further

suggests that the license agreement itself lacks a legitimate

business purpose. Mr. Thorner's email exchange with the Electro

Source attorney shows the close connection between his testimony

and contract: "If the declaration [drafted by Sony attorney Riley

Russell] is not acceptable to you and cannot be worked out, we have

a problem." Mr. Thorner was in need of money. He understood that

Electro Source and Sony were cooperating in their disputes with

Immersion. He understood the importance of "strong" statements and

the right witnesses (e.g., "not just your girlfriend"). Despite

Sony and Electrosource's efforts not to effect a direct exchange,

when Mr. Thorner found himself needing to pay a late filing fee due

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to his work for Sony, Electrosource paid the bill and Sony promptly

reimbursed it. In this context, the fact that Sony also told him

"numerous times" that it would not pay for testimony appears to be

mere window dressing. 

Even if he had not been paid, Mr. Thorner's credibility would

be weak. According to his own account, he conspired with Immersion

to hide evidence in exchange for a favorable business deal that he

hoped would bring him significant future revenue, after trying but

failing to obtain a similar deal with Sony. Mr. Lumish says he

questioned Mr. Thorner "extensively" about his prior art, yet came

away from their interaction unaware of any public demonstrations of

that prior art and convinced that the prototypes in Mr. Thorner's

garage were no more extensive than the patents. This suggests that

Mr. Thorner lied to or misled Mr. Lumish even before he had entered

into an agreement with Immersion. 

Mr. Thorner can produce no contemporaneous documents

supporting his testimony that he and Immersion conspired to keep

public use prior art secret from Sony. To the contrary, his July,

2003 email to Immersion contains no hint of the alleged conspiracy,

and is inconsistent with his reports to friends and family that he

would be entitled to share in the fruits of Immersion's recovery. 

In fact, Mr. Thorner's own communications to Immersion show that he

became frustrated precisely because he gained nothing from

Immersion's success at trial. Although the testimony of his

family, friends and colleagues does show some prior consistent

statements of Mr. Thorner, their testimony is not in itself

evidence of Immersion's knowledge of Mr. Thorner's public use prior

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art. Instead, the declarants' testimony could support alternative

scenarios that are not evidence of misconduct of Immersion; for

instance, that Mr. Thorner wished his friends and family to believe

he had a lucrative deal. The declarants' testimony does not

bolster Mr. Thorner's credibility sufficiently to meet the clear

and convincing evidence standard. 

Mr. Thorner's repeated revision of his own testimony is also

troubling. Mr. Thorner may have made honest mistakes when he

claimed the invention demonstrated in September, 1994 had eight

zones; when he removed the header and declared a computer program

written in 1996 to be a 1994 prior art product; and when he

subtlely revised his testimony regarding public use of the modified

Sega controller after none of the other witnesses could recall him

actually demonstrating it. Still, this need for revision of Mr.

Thorner's testimony suggests that his initial testimony was neither

careful nor conscientious, further undermining his reliability. 

It is true that some circumstantial evidence supports some

portions of Mr. Thorner's story. For instance, Mr. Heinrich’s

account of his New Jersey meeting with Mr. Thorner, in which he

discussed significant prior art technology, yet took no

contemporaneous notes, is not entirely believable. Nevertheless,

Sony has identified no circumstantial evidence strong enough to

surmount the clear and convincing standard hurdle. Instead, the

record before the Court involves significant factual disputes

between Mr. Thorner and Immersion’s representatives, which turn

primarily on the credibility of the parties involved. For the

reasons described above, the Court finds that Mr. Thorner's account

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of Immersion's misconduct does not and cannot rise to the level of

clear and convincing evidence. Accordingly, the Court denies

Sony's motion for relief from final judgment pursuant to Rule

60(b)(3) on the basis of Immersion's alleged suppression of Mr.

Thorner's public use prior art. 

B. Offer and Agreements Between Immersion and Thorner

Finally, the parties dispute whether Immersion’s failure to

produce its offer to and agreements with Mr. Thorner constitutes

misconduct for purposes of Rule 60(b)(3). 

In Casey v. Albertson's Inc., 362 F.3d 1254 (9th Cir. 2004),

the Ninth Circuit found that a simple failure to respond to a

request for production does not constitute fraud. In that case,

the court reasoned,

It is significant to note that this is not a case in which it

is alleged that Albertson's possessed Smith's employment

records but falsely denied having them, or the like. Casey

simply argues that Albertson's failed to respond to a

discovery request made two and a half weeks before the close

of discovery. This is a run-of-the-mill discovery problem for

which the rules provide remedies, had they been sought (as

Casey herself learned the hard way when she failed to respond

to Albertson's requests for admissions). Albertson's

discovery recalcitrance does not constitute fraud. Moreover,

Casey failed to file a motion to compel production of Smith's

employment records.

362 F.3d at 1260-61. In contrast, the court in Canady found (in

the alternative, after granting a motion for relief from final

judgment based on new evidence) that the defendant's failure to

produce a full patent history constituted misconduct. It noted

that the withheld documents were also responsive to another request

for all documents relating to the inventor, to which the defendant

replied, "All documents responsive to this request have been

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produced by Plaintiffs." 99 F. Supp. 2d at 49. The court found

that this inaccurate statement formed a basis for relief from final

judgment on grounds of misconduct. 

Here, in contrast to Canady, Sony has not identified a

particular false statement by Immersion, but instead relies on

Immersion's omission of the offer and agreements as evidence of

misconduct. The Court is troubled by these omissions, which appear

to violate Immersion's duties of disclosure under Federal Rule of

Civil Procedure 26. In the context of this case, however, such

discovery violations do not rise to the level of misconduct

justifying relief from final judgment. The Court has already noted

with disapproval the aggressive discovery conduct of both parties. 

See JMOL Order at 24. As explained above, Sony cannot claim that

it was misled by Immersion's failure to produce its consultancy

agreement with Mr. Thorner because it knew of the arrangement, and

Sony did not produce copies of similar agreements it had made. In

light of Sony's awareness of Immersion's offer to purchase Mr.

Thorner's patents, Sony could have moved to compel production of

relevant documentation if it felt that such information was

important to its defense. Sony apparently decided that Immersion's

purported commercial interest in the Thorner patents was not

sufficiently relevant or important to present to the jury, even

though it could have been used to rebut a very small portion of Mr.

Chu's closing argument. Sony has not explained why Immersion's

license of the '722 patent would, in contrast, be part of a full

and fair presentation of its defense. 

This motion has raised concerns about both parties' litigation

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conduct. However, the Court finds that Sony has not presented

clear and convincing evidence of misconduct by Immersion that would

warrant a new trial. 

CONCLUSION

For the foregoing reasons, the Court DENIES Sony's motion for

relief from final judgment (Docket No. 1761). 

 

IT IS SO ORDERED.

Dated: 3/8/06

 

CLAUDIA WILKEN

United States District Judge

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