Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_02-cv-02060/USCOURTS-casd-3_02-cv-02060-30/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 28:1338 Patent Infringement

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

LUCENT TECHNOLOGIES, INC.,

MULTIMEDIA PATENT TRUST

TECHNOLOGIES INC., and

MULTIMEDIA PATENT TRUST INC. 

 Plaintiffs and Counterclaim-defendants,

v.

GATEWAY, INC. and GATEWAY

COUNTRY STORES LLC, GATEWAY

COMPANIES, INC., GATEWAY

MANUFACTURING LLC and

COWABUNGA ENTERPRISES, INC.,

Defendants and Counter-claimants,

and

MICROSOFT CORPORATION,

Intervenor and Counter-claimant,

_____________________________________

AND CONSOLIDATED CASES

_____________________________________

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Civil No: 02CV2060-B(CAB)

consolidated with

Civil No: 03CV0699-B (CAB) and

Civil No: 03CV1108-B (CAB)

ORDER GRANTING-IN-PART AND

DENYING-IN PART PLAINTIFFS’

MOTION FOR SUMMARY JUDGMENT

REGARDING U.S. PATENT NO.

4,958,226

I. INTRODUCTION

Multimedia Patent Trust Technologies, Inc. and Multimedia Patent Trust

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1

 MPT is the current asserted owner of U.S. Patent No. 4,958,226. The Court recognizes that

Defendants have reserved their right to challenge this ownership and to pursue any defenses that relate

to MPT in this regard; the instant motions and oppositions in no way waive those rights.

2

 Defendants refer collectively to Microsoft, Dell and Gateway. 

2

(collectively “MPT”)1 moves for summary judgment regarding U.S. Patent No. 4,958,226

(“the ‘226 patent”) on the following issues: (1) the Micke thesis is not prior art; (2) no best

mode violation; (3) no unenforceability due to inequitable conduct; (4) lack of evidentiary

support for Defendants’ affirmative defenses2

; and (5) the date of actual notice to

Microsoft.

II. BACKGROUND

The ‘226 patent was filed on September 27, 1989 and issued on September 18, 1990. 

The patent has two named inventors, Barin G. Haskell and Atul Puri. The ‘226 patent

concerns video compression technology. It describes the encoding of successive video

frames by dividing the frames into blocks. Each of the blocks is encoded based on

predictions rather than coding the actual block; these predictions reduce the number of bits

needed to encode the information and thus achieve the video compression. Starting with

information from frame i-1 (Fi-1), the encoder constructs a prediction of frame i+1 using

motion displacement vectors (mathematical predictions of where an object will be located)

to estimate the motion of objects between Fi-1 and Fi+1 and a prediction error signal

(generated from comparing the prediction of Fi+1 with the actual Fi+1). The intervening

frame Fi

 is constructed by interpolation using motion displacement vectors from frames Fi-1

and Fi+1 and interpolation error (generated from comparing the interpolated frame and the

actual Fi

). The decoder receives the predicted blocks and prediction errors, and the

interpolated blocks and interpolation errors and then uses this information to reconstruct the

succeeding and intervening frames.

III. STANDARD OF LAW

Federal Rule of Civil Procedure 56(c) provides that summary judgment is

appropriate if the “pleadings, depositions, answers to interrogatories, and admissions on

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file, together with the affidavits, if any, show that there is no genuine issue as to any

material fact and that the moving party is entitled to judgment as a matter of law.” In

considering the motion, the court must examine all the evidence in the light most favorable

to the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257 (1986). If

the Court is unable to render summary judgment upon an entire case and finds that a trial is

necessary, it shall if practicable grant summary adjudication for any issues as to which,

standing alone, summary judgment would be appropriate. Fed. R. Civ. P. 56(d).

When the moving party does not bear the burden of proof, summary judgment is

warranted by demonstration of an absence of facts to support the non-moving party’s case. 

Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). Summary judgment must be granted if

the party responding to the motion fails “to make a sufficient showing on an essential

element of her case with respect to which she has the burden of proof.” Id. at 323.

IV. ISSUES FOR SUMMARY ADJUDICATION

A. The Micke Thesis as Prior Art

Under 35 U.S.C. § 102(b), a person is not entitled to a patent if “the invention was

patented or described in a printed publication in this or a foreign country . . . more than one

year prior to the date of the application for patent in the United States.” Whether a

document qualifies as a “printed publication” depends on the accessibility of the document

“to the extent that persons interested and ordinarily skilled in the subject matter or art,

exercising reasonable diligence, can locate it” In re Wyer, 655 F.2d 221, 226 (C.C.P.A.

1981); Constant v. Advanced Micro-Devices, Inc., 848 F.2d 1560, 1569 (Fed. Cir. 1988).

“If accessibility is proved, there is no requirement to show that particular members of the

public actually received the information.” Constant, 848 F.2d 1569. The determination of

accessibility is not rooted in strict rules. Indexing or cataloging may be helpful to show the

accessibility of a reference, but it is not absolutely required. See In re Klopfenstein, 380

F.3d 1345, 1350 (Fed. Cir. 2004). 

Here, MPT contends that the Micke thesis, a German-language diploma thesis was

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3

 The critical date is one year before the filing of the ‘226 patent on September 27, 1989.

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not publically accessible before the critical date, September 27, 1988,3 and thus cannot be

prior art to the ‘226 patent. In response, Defendants offer a trail of support. The thesis was

completed in April 1986 and placed in the library of the Institute for Theoretical

Communications Engineering and Information Processing (“the TNT library”). According

to the declaration of Thomas Wherberg, an administrator of the TNT library employed

between 1984 and 2000, the Micke thesis was shelved in the library as of 1986. It was

indexed by the author’s name and by its title. According to Wherberg, the TNT library was

well-known throughout the image and video coding industry and accessible to members of

the TNT institute as well as outside visitors without restriction. 

MPT first disputes the evidence offered by Defendants procedurally; it contends that

Defendants never notified MPT under Rule 26(a) or Rule 26(e)(2) as to their use of

Wherberg as a witness and therefore Defendants should be barred from offering

Wherberg’s declaration now. In response, Gateway points to its supplemental disclosures

filed on January 27, 2006, before the close of fact discovery, which identified Wherberg as

relevant to the Haskell ‘226 patent prior art. The Court finds that Gateway provided timely

notice of Wherberg as a witness and the declaration is not barred for use as support to

Defendants’ opposition to the instant motion.

As for MPT’s substantive arguments, these only raise issues of material fact rather

than resolve the motion in its favor. See In re Cronyn, 890 F.2d 1158, 1159 (Fed.

Cir.1989) (whether a reference is a “printed publication” is only a question of law where

there are no disputed factual issues). MPT offers testimony from Dr. Girod, who worked

as researcher at TNT and supervised Micke’s thesis, that to the best of his recollection the

TNT library was not open to the public. This at best only offers a contradiction to

Wherberg’s testimony. 

Regarding the ability of a person of ordinary skill in the art to locate the thesis, the

circumstances bear some similarities to In re Cronyn, 890 F.2d 1158, 1159 (Fed. Cir.

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1989), where indexing by author (on a card with an internal listing of the thesis title) was

insufficient to make the theses reasonably accessible to the public, because “the only

research aid was the student's name, which . . .bears no relationship to the subject of the

student's thesis.” Id. at 1161. Here, although the thesis was also cataloged alphabetically

by title, the thesis in question is titled “Comparison of a Predictive and an Interpolative

Motion Compensating Coding Method For Television Video Signals.” In German, the first

word is of the title is “vergleich” the equivalent of “comparison” and hence, filing under

this word is not indicative of the subject matter.

However, regardless of the cataloging, there are additional facts that might lead a

person of ordinary skill in the art to the Micke thesis. The TNT library is a small,

specialized library, well known in the video coding field. In addition, the thesis was cited

in a journal article published by Prof. Girod in August 1987. The article stated that the

thesis contained preliminary results of the article’s analysis (on the efficiency of motion

compensation prediction for hybrid coding of video sequences) and that the thesis was from

the University of Hannover, Germany (the location of the TNT library). In their totality,

these facts are sufficient to raise an issue of fact as to the public accessibility of the Micke

thesis. See In re Klopfenstein, 380 F.3d 1345, 1348 (Fed. Cir. 2004) (backing away from a

strict reliance on indexing and relying instead on the totality of circumstances with regard

to accessibility by members of the public). Therefore, MPT’s motion is DENIED.

B. Best Mode Violation

A patent must set forth a “the best mode contemplated by the inventor of carrying

out his invention.” 35 U.S.C. § 112. “[I]n order to find that the best mode requirement is

not satisfied, it must be shown that the applicant knew of and concealed a better mode than

he disclosed.” Hybritech Inc. v. Monoclonal Antibodies, Inc., 802 F.2d 1367, 1384 -1385

(Fed. Cir. 1986). “[T]he contours of the best mode requirement are defined by the scope

of the claimed invention.” Northern Telecom Ltd. v. Samsung Electronics Co., Ltd., 215

F.3d 1281, 1286 (Fed. Cir. 2000). There is no requirement to disclose a best mode for

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unclaimed subject matter. Id.

Here, Defendants have premised their best mode violation defense on the contention

that the inventors failed to include a method of quantizing interpolation error more coarsely

than prediction error. This other method was published in an abstract by one of the

inventors, Puri, approximately three weeks before the filing of the ‘226 patent (“the Puri

abstract”). In the abstract, Puri states that the two types of error signals used in video

coding can be quantized separately, as well as stating that interpolation error could be

coded with one-fourth or less of the bits used to encode prediction error (referred to therein

as MCIE and MCPE, respectively). This differential quantization was not included in the

‘226 patent. 

MPT argues there is no best mode violation because differential quantization is not

part of the claimed invention, and the inventors did not subjectively consider it to be the

best mode of their claimed invention. On the first point, the relationship of the quantization

of the Puri abstract to the claimed invention is not direct. The only claim at issue, claim 12,

relates to circuitry for a decoder. The Puri abstract describes quantizing error; this function

is performed by an encoder, not a decoder. In the ‘226 patent, the encoder generates two

error signals, a predicted error and interpolation error. The decoder then receives these two

error signals and uses them in decoding the images. Thus, the method of encoding

quantization is not part of the claimed decoding circuitry.

Although a patent may be found to violate the best mode requirement “for failure to

disclose subject matter not strictly within the bounds of the claims,” Teleflex, Inc. v.

Ficosa North America Corp., 299 F.3d 1313, 1331 (Fed. Cir. 2002), the circumstances must

show that the undisclosed material bears a “strong relationship to the claimed invention,”

for example, the disclosure was necessary or critical to practicing the invention or that the

undisclosed subject matter was a preferred embodiment of the claimed invention. Id.;

Bayer AG v. Schein Pharmaceuticals, Inc., 301 F.3d 1306, 1319 (Fed. Cir. 2002). In

essence, “the failure to disclose a preference for carrying out the claimed invention directly

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impacted the invention itself.” Bayer, 301 F.3d at 1319. 

Here, although one of the goals of the ‘226 patent is the reduction of bandwidth, that

function is not performed by a decoder, but by the encoder; other claims of the ‘226 patent,

not at issue here, are directed to encoders. While Defendants argue that encoders and

decoders are intimately related since one is the mirror image of the other, such arguments

skirt around the actual issue - how the differential quantization and the reduced bits used to

encode interpolation error would be necessary or critical to the claimed decoding circuitry,

or how they would directly impact the claimed decoder. 

Furthermore, Defendants have failed to show that at least one of the inventors of the

‘226 patent considered the differential quantization to be the best mode of practicing the

claimed invention. Puri testified that the ‘226 patent did not claim quantization and that the

patent focused on interpolation. Haskell testified only that the inventors ran lots of

experiments relating to the quantization parameters sometime in the 1980's. Defendants

point to no testimony of Haskell or Puri that the quantization or the experiments were

related to the claimed decoder and therefore fail to establish a connection between these

facts and the claimed invention. The Court therefore finds that Defendants have failed to

raise any issues of material fact as to a best mode violation; summary adjudication of no

invalidity based on a best mode violation is GRANTED. 

C. Unenforceability due to inequitable conduct

 “To prove inequitable conduct in the prosecution of a patent, the defendant must

have provided evidence of affirmative misrepresentations of a material fact, failure to

disclose material information, or submission of false material information, coupled with an

intent to deceive.” Dayco Products, Inc. v. Total Containment, Inc., 329 F.3d 1358, 1362

(Fed. Cir. 2003). MPT contends that Defendants lack evidence on the element of intent to

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4

 Although MPT makes the conclusory statement that it disputes the factual contentions on the

other elements, it does not offer any further explanation. Thus, for purposes here, it is assumed that

there are no material issues of fact as to the first two elements and that only the element of intent to

deceive is in dispute between the parties.

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deceive.4 MPT argues that Defendants’ evidence goes only to knowledge and materiality

of the references but fails to show any purposeful decision to withhold information from

the USPTO.

“[M]ere gross negligence is insufficient to justify an inference of an intent to

deceive the PTO . . . there must be clear and convincing evidence that the applicant made a

deliberate decision to withhold a known material reference.” Baxter Intern., Inc. v.

McGaw, Inc., 149 F.3d 1321, 1329 (Fed. Cir. 1998). Evidence of a deliberate decision may

be proven circumstantially. LaBounty Mfg., Inc. v. U.S. Intern. Trade Com'n, 958 F.2d

1066, 1076 (Fed. Cir.1992) (“Direct proof of wrongful intent is rarely available but may be

inferred from clear and convincing evidence of the surrounding circumstances.”).

Defendants point to two references that were not disclosed to the patent office

during the prosecution of the ‘226 patent. The first, referred to as “Document #81,” is a

paper presented at a meeting of the organization that developed the video coding standard

H.261. Document #81, entitled “Comments on Conditional Motion Compensated Frame

Interpolation” was published more than one year before the filing of the ‘226 patent. 

According to Defendants’ expert, the paper discloses every element of claim 12. 

Defendants argue that Document #81 is highly material to the claims of the ‘226

patent and that one of the inventors, Haskell, was familiar with its contents. According to

the evidence, Haskell was at the meeting at which Document #81 was presented. Although

Haskell has no memory of the particular meeting, he testified that it was the general

procedure for the presented papers to be distributed to the participants before the meeting

and for the technology in the papers to be discussed and demonstrated at the meeting

The second document not disclosed to the USPTO is a textbook “Digital Pictures,

Representation and Compression” (hereinafter “Digital Pictures”) authored by Haskell

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copyrighted in May 1988 and published before June 10, 1988 (both more than one year

before the ‘226 patent was filed). Defendants contend that this textbook relates directly to

the claimed invention because it discloses the problem of inaccuracies in interpolating

picture elements in successive frames and also proposes a solution of checking for

inaccuracies and if found, transmitting “side information” to the receiver. This problem

and solution, Defendants contend, are the same as set out by the ‘226 patent. Defendants

further argue that Haskell was aware of this overlap. During prosecution of the ‘226

patent, the examiner issued an obviousness rejection. In response, the applicants argued

that the two-stage coded video signals using approximated blocks and interpolated blocks

was not taught or suggested by the cited prior art. Defendants argue that Digital Pictures,

which was never disclosed to the USPTO, contains this two stage arrangement which the

patentees believed was key to their invention, and, of course, Haskell was aware of the

contents of Digital Pictures since he was the author of the book.

The totality of this evidence raises at least a triable issue of fact as to intent. The

Federal Circuit has noted that where the nondisclosure of a highly material reference is at

issue and the patentee has offered no credible explanation for the omission, “an inference

of deceptive intent may fairly be drawn in the absence of such an explanation.” Bruno

Independent Living Aids, Inc. v. Acorn Mobility Services, Ltd., 394 F.3d 1348, 1354 (Fed.

Cir. 2005). MPT has offered no explanation at all for why the references were not

disclosed, why the inventors might not have realized their materiality or any other

explanation that would indicate good faith on the part of the patentees. Defendants have

sufficiently raised issues of fact to preclude summary adjudication on the issue of

inequitable conduct; MPT’s motion is DENIED.

D. Defendants’ affirmative Defenses

MPT moves for summary judgment regarding Defendants’ affirmative defenses

which it contends lack evidentiary support. These issues are the same as those with regards

to U.S. Patent No. 4,383,272 (“the ‘272 patent”) and are addressed in detail in the Court’s

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Order on Plaintiffs’ summary judgment motion regarding the ‘272 patent. For

convenience, the rulings as they apply to the ‘226 patent are summarized in the conclusion

section below.

E. Date of Actual Notice

MPT moves the Court to find that the date for actual notice to Microsoft is January

13, 2003, the date on which Lucent’s licensing agent Thinkfire sent a letter to Microsoft

regarding the ‘226 patent. Microsoft argues that this letter is insufficient because (1) it was

not sent by Lucent directly; (2) it does not identify a single Microsoft product; (3) it does

not use the word “infringement”; and (4) the patents identified are only listed as

“exemplary.” 

The Court examined the same letter from Thinkfire to Microsoft in the context of the

Group 4 patents. (See Court’s Order regarding U.S. Patent No. 5,347,295, March 8, 2007.) 

The Court applies the same reasoning here. Notice requires “a specific charge of

infringement by a specific accused product or device.” Amsted Industries Inc. v. Buckeye

Steel Castings Co., 24 F.3d 178, 187 (Fed. Cir.1994). Here, the letter and its attached list,

although providing patent numbers, are not particularly specific as to products, listing

broad categories potentially covering many devices (“client platforms, server platforms,

home entertainment, application software, web products and other product offerings”). 

Whether this list and the associated letter are sufficiently specific to confer a specific

charge of infringement against a specific product is a question of fact for the jury and is

thus sufficient to preclude summary adjudication here on this issue. Therefore, Lucent’s

motion regarding the date of actual notice is DENIED.

IV. CONCLUSION

For the reasons herein, the Court rules as follows on MPT’s motion:

Micke thesis is not prior art DENIED

No Best mode violation GRANTED

No unenforceability due to inequitable conduct DENIED

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No laches as to:

Dell and Microsoft DENIED

Gateway GRANTED

No Unclean hands as to:

Dell GRANTED

Gateway/Microsoft DENIED

No equitable estoppel/implied license/waiver/

exhaustion/have-made rights GRANTED

No Prior Settlements as to Gateway GRANTED

No patent misuse GRANTED

No license as to Microsoft GRANTED

Date of Actual Notice DENIED

IT IS SO ORDERED.

DATED: June 27, 2007

Hon. Rudi M. Brewster

United States Senior District Court Judge

 cc: Hon. Cathy Ann Bencivengo

 United States Magistrate Judge

 All Counsel of Record

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