Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_04-cv-00651/USCOURTS-cand-3_04-cv-00651-3/pdf.json

Parties Involved:
Sproqit Technologies, Inc.
Counter-claimant
Visto Corporation
Counter-claimant

Document Text:

United States District Court

For the Northern District of California

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

VISTO CORPORATION,

Plaintiff,

v.

SPROQIT TECHNOLOGIES, INC.

Defendant.

___________________________________/

No. C-04-0651 EMC

ORDER DENYING PLAINTIFF’S

MOTION FOR PRELIMINARY

INJUNCTION AND OVERRULING

PLAINTIFF’S OBJECTIONS

(Docket Nos. 97, 124)

Plaintiff Visto Corporation (“Visto”) has filed a motion for a preliminary injunction. Having

considered the parties’ briefs and accompanying submissions, as well as the oral argument of

counsel and good cause appearing therefor, the Court hereby DENIES the motion.

I. FACTUAL AND PROCEDURAL BACKGROUND

Visto owns several patents, including U.S. Patent No. 6,085,192 (the ‘192 patent) which

concerns technology that allows wireless communications between firewall-protected local area

networks (“LAN”s) and remote clients, such as smart phones, outside the firewall. Visto originally

filed suit against Sproqit Technologies (“Sproqit”) on February 15, 2004, alleging infringement of

the ‘192 patent. On March 9, 2004, Sproqit filed a motion to dismiss or, in the alternative, stay or

transfer based on litigation taking place in the District of Minnesota. See Docket No. 5. After the

District of Minnesota transferred the case to this District, this Court denied Sproqit’s motion to

dismiss as moot on November 12, 2004. See Docket No. 38. 

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 Neither party disputes the applicable standard is that set forth in Amazon.com.

2

Subsequently, Sproqit filed its answer to Visto’s complaint and asserted several

counterclaims seeking declaratory relief with respect to Visto’s ‘192 and ‘708 patents. The Court

dismissed Sproqit’s state law claims for torious interference and defamation without prejudice. See

Docket Nos. 41, 72. On February 16, 2005, Sproqit filed a motion to stay this case pending

reexamination of the ‘192 patent, which the Court granted on April 20, 2005. See Docket Nos. 60,

82. Prior to entry of the stay, Visto amended its complaint pursuant to stipulation of the parties and

order of the Court. See Docket No. 81.

On November 7, 2005, Sproqit filed a motion seeking a further stay pending a reexamination

of the ‘708 patent, which the Court denied on November 16, 2005. On November 22, 2005, the PTO

issued the certificate of reexamination on the ‘192 patent, lifting the stay. See Khaliq Decl., Ex. C. 

Visto filed the instant motion for preliminary injunction on November 22, 2005. 

For the purposes of this Motion for Preliminary Injunction, Visto limits its infringement

claims to accuse the Sproqit Personal Edition and Sproqit Workgroup Edition (the “Accused

Products”) of infringing Claim 10 of the ‘192 Patent.

II. DISCUSSION

A. Legal Standard

As the moving party, Visto is entitled to a preliminary injunction if it succeeds in showing

the following four factors: (1) a reasonable likelihood of success on the merits; (2) irreparable harm

if an injunction is not granted; (3) a balance of hardships tipping in its favor; and (4) the injunction’s

favorable impact on the public interest. Amazon.com, Inc. v. Barnesandnoble.com, Inc., 239 F.3d

1343, 1350 (Fed. Cir. 2001) (vacating grant of preliminary injunction).1

 “‘These factors, taken

individually, are not dispositive; rather the district court must weigh and measure each factor against

the other factors and against the form and magnitude of the relief requested.’” Id. (citing Hybritech,

Inc. v. Abbott Labs, 849 F.2d 1446, 1451 (Fed. Cir. 1988). “The burden is always on the movant to

show entitlement to a preliminary injunction.” Reebok International Ltd. v. J. Baker, Inc., 32 F.3d

1552, 1555 (Fed. Cir. 1994).

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2

 Section 282 provides, in pertinent part, as follows: “A patent shall be presumed valid. . . . The

burden of establishing invalidity of a patent or any claim thereof shall rest on the party asserting such

invalidity.” 35 U.S.C. 282 (2002). “The presumption acts as a procedural device which places the

burden of going forward with evidence and the ultimate burden of persuasion of invalidity at trial on

the alleged infringer.” New England Braiding, 970 F.2d at 882. On a motion for preliminary injunction,

however, the trial court does not resolve the validity question but assesses the persuasiveness of the

challenger’s evidence “‘on the basis of procedures that are less formal and evidence that is less complete

than in a trial on the merits.’” Id. at 882-83 (quoting University of Texas v. Camenisch, 451 U.S. 390,

395 (1981)).

3

The Federal Circuit has cautioned that “a preliminary injunction is a drastic and

extraordinary remedy that is not to be routinely granted.” Intel Corp. v. ULSI System Technology,

995 F.2d 1566, 1568 (Fed. Cir. 1993) (vacating the grant of preliminary injunction). Visto cannot be

granted a preliminary injunction unless “it establishes both of the first two factors, i.e., likelihood of

success on the merits and irreparable harm.” Amazon.com, 239 F.3d at 1350. “Irreparable harm is

presumed when a clear showing of patent validity and infringement has been made.” Id. 

B. Likelihood of Success

In order to demonstrate likelihood of success on the merits, Visto must show that in light of

the presumptions and burdens that will inhere at trial on the merits, (1) it will likely prove that

Sproqit infringes the patent, and (2) Visto’s infringement claim will likely withstand Sproqit’s

challenges to the validity and enforceability of the patent. Id. On a motion for preliminary

injunction, the presumption of validity under 35 U.S.C. § 2822 does not shift the burden of proof; the

movant carries the burden of establishing it will likely succeed on all disputed liability issues at trial. 

New England Braiding Co., Inc. v. A.W. Chesterton Co., 970 F.2d 878, 882 (Fed. Cir. 1992)

(affirming denial of preliminary injunction).

The Federal Circuit has held that the moving party must make a fairly robust showing. The

moving party must demonstrate a “substantial likelihood of success” on the merits. Amazon.com,

239 F.3d at 1355-56 (emphasis added). If the opponent “raises a substantial question concerning

either infringement or validity, i.e., asserts an infringement or invalidity defense that the patentee

cannot prove ‘lacks substantial merit,’ the preliminary injunction should not issue.” Amazon.com,

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 In some respects, the formulation of the test would appear to be the converse of one of the

formulations articulated by the Ninth Circuit in non-patent cases wherein the movant need only raise

“serious question” on the merits if the balance of hardship tips in its favor. A&M Records, Inc. v.

Napster, Inc., 239 F.3d 1004, 1013 (9th Cir.2001). 

4

239 F.3d at 1350-51.3 For the reasons set forth below, the Court concludes that on the present

record, Sproqit has raised substantial questions concerning infringement.

1. Infringement Analysis

An infringement analysis involves two steps: “the claim scope is first determined, and then

the properly construed claim is compared with the accused device to determine whether all of the

claim limitations are present either literally or by a substantial equivalent.” Amazon.com, 239 F.3d

at 1351.

a. Claim Construction

The first step is to determine the meaning and scope of each claim. The properly construed

claim is then compared with the accused device to determine whether all of the claim limitations are

present. Id. “Only when a claim is properly understood can a determination be made whether the

claim ‘reads on’ an accused device or method, or whether the prior art anticipates and/or renders

obvious the claimed invention. Because the claims of a patent measure the invention at issue, the

claims must be interpreted and given the same meaning for purposes of both validity and

infringement analyses.” Id.

“It is well-settled that, in interpreting an asserted claim, the court should look first to the

intrinsic evidence of record, i.e., the patent itself, including the claims, the specification and, if in

evidence, the prosecution history.” Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1582 (Fed.

Cir. 1996). Claim terms are generally given their ordinary and customary meaning to a person of

ordinary skill in the art at the time of the invention. Phillips v. AWH Corp., 415 F.3d 1303, 1312-13

(Fed. Cir. 2005). “The person of ordinary skill in the art is deemed to read the claim term not only

in the context of the particular claim in which the disputed term appears, but in the context of the

entire patent, including the specification.” Id. at 1313. Courts may also rely on extrinsic evidence,

including expert and inventor testimony, dictionaries, and learned treatises, although such evidence

is less valuable than the intrinsic record. Id. at 1317.

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4

 Visto challenges Judge Ward’s construction of the term “firewall” as incomplete for failing

to exclude validation and authentication features, which are separate security features from firewalls.

Mot. at 8-9. This issue was not raised before Judge Ward in the Eastern District of Texas litigation, but

is raised here for the first time. Id. at 9 n.14. Visto suggests an alternate construction of the term

“firewall” based on the Microsoft Computer Dictionary definition to exclude validation and

authentication features. Motion at 10; Khaliq Decl., Ex. E. Sproqit does not oppose Visto’s proposed

construction or suggest an alternative.

Given there was no opposition in connection with the instant motion to Visto’s proposed

construction of the claim term “firewall,” the Court adopts the following construction of the term:

software and/or hardware for protecting an organization’s network

against external threats, such as hackers, coming from another network,

such as the Internet. A firewall prevents computers in the organization’s

network from communicating directly with computers external to the

network and vice versa by routing all communications through a proxy

server outside of the organization’s network for a determination whether

a particular message or file will be permitted to pass through to the

organization’s network.

Kahliq Decl., Ex. A (“Claim Construction Order”) at 14-15; Mot. at 8, 10; Khaliq Decl., Ex. E (The

Microsoft Computer Dictionary (3d ed. 1997), p. 197).

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The claim language of the ‘192 patent was construed in recent litigation in the Eastern

District of Texas. See Mot. at 6; Khaliq Decl., ¶ 2 and Ex. A (April 20, 2005 Claim Construction

Order in Visto Corp. v. Seven Networks, Inc., Civil Action No. 2:03-CV-333 (Ward, J.)). Judge

Ward’s order is persuasive and highly relevant here, though not issue-preclusive against Sproqit or

otherwise binding. See Verizon California Inc. v. Katz Technology Licensing, 326 F. Supp.2d 1060,

1069 (C.D. Cal. 2003). For the purposes of the motion for preliminary injunction (and only for

purposes of the instant motion), the parties stipulate to adopting Judge Ward’s Claim Construction

Order, with the exception of the construction of the claim term “firewall.”4

 Accordingly, for

purposes of this motion, the Court adopts Judge Ward’s Claim Construction Order per the

stipulation. 

As noted above, Visto relies only on Claim 10 in moving for preliminary injunction. As

amended upon reexamination, Claim 10 of the ‘192 patent recites a system comprising the following

elements, with claim terms previously construed by the Eastern District of Texas in bold:

i. a communications channel through a firewall comprising one of an HTTP port and

an SSL port;

ii. a general synchronization module for operating within the first firewall and for

examining first version information to determine whether a first workspace

element at a first store has been modified;

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iii. a synchronization agent for operating outside the first firewall and for forwarding to

the general synchronization module second version information which indicates

whether an independently modifiable copy of the first workspace element at a

second store on a smart phone has been modified;

iv. a synchronization-start module for operating within the first firewall and for

initiating the general synchronization module and the synchronization agent when

predetermined criteria have been satisfied;

v. means for generating a preferred version from the first workspace element and

from the copy by comparing the first version information and the second version

information, wherein if only one of the first workspace element and the copy has

been modified, then the means for generating selects the one as the preferred

version; and

vi. means for storing the preferred version at the first store and at the second store.

Mot. at 7-8.

In brief, Visto’s technology allows remote devices, such as smart phones, to communicate

wirelessly with a LAN through a firewall by using the existing standard ports for passing HTTP

(Hyper-Text Transfer Protocol) encoded messages, namely the HTTP port or SSL (Secure Sockets

Layer) port. Head Decl., ¶¶ 10-11. “By using the HTTP or SSL ports, Visto’s inventions ensure

that no additional ports in the firewall need to be opened.” Id., ¶ 11. Visto’s technology

synchronizes documents by synchronizing modifications made from devices either inside or outside

the firewall, so that material inside and outside the firewall are consistent, thereby making it possible

to use the remote device as if the user were in his/her own office. Id.

b. Comparison of Claim with Accused Products

The Sproqit system allows a user to remotely use applications that reside and run on a server

(such as a desktop computer) from a handheld device such as a PDA (personal digital assistant) or

smart phone, with the two communicating by a wireless link. The Sproqit Personal Edition, for

example, allows individual users to remotely access information stored on a computer and corporate

network using a PDA, whereas the Sproqit WorkGroup Edition allows multiple users to access

applications and networked files. Mansour Decl., ¶ 6. “Sproqit software consists of the Desktop

Agent, which is installed and runs on [the] desktop, and the Sproqit Companion, which is installed

on [the handheld device]. Once installed, the Desktop Agent and the Sproqit Companion exchange

information back and forth via [a] wireless connection. The Desktop Agent asks the Sproqit

Companion for the data [and] sends changes for [the] server to make in desktop applications. . . . 

The Desktop Agent ‘pushes’ requested information down to the device, where the Sproqit

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Companion displays it in various ‘forms.’ Head Decl., Ex. K at 3 (Sproqit Personal Edition User

Guide). 

Visto’s expert witness, Dr. Head, describes how each element of Claim 10 reads on the

accused products, Sproqit Personal Edition and Sproqit WorkGroup Edition. Head Decl., ¶¶ 25-32,

Ex. B (Claim Chart). Sproqit challenges the infringement claim for purposes of this motion on the

grounds that the Accused Products neither: (1) create a “copy” of “workspace element” under the

third element of Claim 10, nor (2) compare first and second version information in generating a

preferred version as required by the fifth element of Claim 10.

i. Communications Channel Through a Firewall

The Sproqit Desktop Agent establishes a communications link using an SSL port through a

firewall. Mot. at 11; Head Decl., Ex. F (Sproqit website). Sproqit currently does not challenge the

comparison of its products with this element of Claim 10.

ii. General Synchronization Module

Visto contends that the Sproqit Desktop Agent incorporates a general synchronization

module, defined as “software routines or code that perform the task of determining whether a

workspace element and/or an independently modifiable copy thereof has (or have) been modified,

based on one or more criteria.” Claim Construction Order at 16; Mot. at 11-13; Head Decl., ¶ 28. 

Sproqit currently does not appear to challenge the comparison of its products with this claim

element.

iii. Synchronization Agent/Independently Modifiable Copy

The third element of Claim 10 requires a “synchronization agent for operating outside the

first firewall and for forwarding to the general synchronization module second version information

which indicates whether an independently modifiable copy of the first workspace element at a

second store on a smart phone has been modified” (emphasis added). 

Judge Ward has defined a “synchronization agent” as “software routines or codes that send at

least a portion of second version information to a general synchronization module for purposes of

synchronization.” Claim Construction Order at 25. Visto contends that when the Sproqit

Companion connects to the Sproqit Desktop Agent, a copy of the e-mail from the Microsoft

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 The Sproqit Server is a server hosted on the internet which “facilitates connections between

the Workgroup Agent (installed on a dedicated computer on the network) and the Sproqit Companion

(installed on the handheld device).” Head Decl., Exh. G at 4 (Sproqit Workgroup Edition

Administrator’s Guide). The Sproqit Server “either connects first to each of them and then tells one

connection partner how to securely connect to the other, or, if that is not possible, it connects them

directly via a new encrypted connection tunneled through the Sproqit Server.” Id. at 6.

8

Exchange Server (first store) is stored on the smart phone (second store). Visto also contends that

the Sproqit Companion installed on the smart phone and/or the Sproqit Server5

 incorporates a

synchronization agent which forwards second version information to a general synchronization

module. Mot. at 13. Thus, according to Visto, the smart phone stores an independently modifiable

“copy” of the first “workspace element,” such as an e-mail or file, thereby satisfying the third claim

element.

Sproqit contends, on the other hand, that the Sproqit system does not have “a copy of a

workspace element on a second store at a smart phone.” The focus of its argument centers on the

construction and application of the terms “copy” and “a workspace element.” Sproqit contends its

Companion stores something less than a “copy” of a “workspace element.” It contends, for instance,

that its Companion does not store the entirety of an e-mail and all its associated fields. More

specifically, Sproqit asserts that an e-mail contains many fields, only a subset of which are pushed

from the server to the handheld device in the Sproqit system. Opp. at 6. The Sproqit system does

not, for example, forward to the handheld device the fields for urgency or importance, flag-forfollow-up, Unique ID, categories and reply to lists. Opp. at 6-7; Weinstein Decl. ¶ 24; Roitblat

Decl. ¶¶ 6-11. According to Sproqit, its system does not infringe because the data that is pushed to

the handheld device does not include all e-mail fields and therefore does not constitute a “copy” of

the “workspace element” -- i.e., the entire e-mail as required by Claim 10.

In sum, Sproqit contends that in Claim 10 “a workspace element” equates to an entire e-mail

and all its fields and that a “copy” requires the complete replication of that workspace element. 

The ‘192 specification states that “e-mail data, file data, calendar data and user data are

exemplary and collectively referred to herein as ‘workspace data.’” ‘192 Patent, col. 3, ll. 21-25. It

further states that “e-mail data, file data, calendar data and user data may each be divided into

workspace elements, wherein each workspace element is identified by particular version

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information. . . . Accordingly, ‘each e-mail, file, calendar, etc. may be referred to as a workspace

element in workspace data.’” ‘192 Patent, col. 3, ll. 26-32 (emphasis added). Judge Ward in his

Claim Construction Order defined a “workspace element” as “a subset of workspace data such as an

e-mail, file, bookmark, calendar, or applications program which may include version information.” 

Claim Construction Order at 22. “Workspace data,” in turn, is defined as “data, including

correspondence version information, which may include e-mail data, file data, calendar data, user

data, etc.” Claim Construction Order at 20. 

Neither the ‘192 claim language or specification nor Judge Ward’s Claim Construction Order

addresses the precise question whether a portion of an e-mail can constitute a “workspace element.” 

Sproqit points out that the smallest unit of “workspace element” described in the specification and

Claim Construction Order is e.g., an e-mail, not some subpart of an e-mail. This supports its

construction of the term. Visto, in response, points out that the specification also contemplates a file

as small as a bookmark constitutes a “workspace element.” Visto’s Supplemental Filing at 2-3. 

However, even a bookmark constitutes an entire unit. The question is not the size of the file or unit

but whether something less than the complete unit can comprise a “workspace element.” Visto

further argues that the claim contains no limitation on the term “workspace element,” and thus it

may include any subset of workspace data, not necessarily an entire email file. But the lack of an

express limitation does not necessarily obviate the need for construction of a term not defined by the

claim. 

Although Visto argues with some logical force that a minor omission of e.g., one field out of

many should not preclude a finding of “workspace element” and vitiate an infringement claim, the

Court concludes Sproqit has raised at least a substantial question concerning infringement on this

issue. Sproqit’s construction is plausible. It is consistent with the language of the specification. 

Moreover, even Dr. Head appears to define an e-mail to include “message headers, the message

body, status indicators (such as opened/unopened, deleted/undeleted, and other parameters such as

urgency, and other message or system dependent parameters, etc.).” Head Decl., ¶ 28 at p. 17. 

Thus, even if an e-mail with less than complete fields can constitute a “workspace element,” it may

be argued that at least all significant or important fields of an e-mail such as those described by Dr.

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Head must be included in order to comprise a “workspace element.” Even under this more moderate

construction, it would appear that Sproqit’s handheld device does not store all these fields identified

by Dr. Head, such as urgency. Weinstein Decl. ¶ 24, Roitblat Decl. ¶¶ 6-11.

As an additional response to Sproqit’s argument, Visto contends that the claim requires that

the workspace elements be completely “copied.” It points out the claim language does not include

any limitation on the term “copy.” Visto argues that the specification of the ‘192 Patent does not

teach that a copy of a workspace element has to be an exact copy, and that it should be entitled to the

full scope of its claim language absent a clear disavowal or contrary definition in the specification or

prosecution history. Reply at 3 (citing Home Diagnostics, Inc. v. LifeScan, Inc., 381 F.3d 1352,

1358 (Fed. Cir. 2004)). In contending that “[t]he copy does not have to be an exact copy,” Visto

relies on Judge Ward’s Claim Construction Order which defined the term “independently modifiable

copy” to mean “a copy of a workspace element capable of being modified independent of the

workspace element. The copy of the workspace element does not have to be in the same format as

the workspace element.” Claim Construction Order at 17. Visto then cites Dr. Head’s declaration

which demonstrates that important elements (though not all) of e-mails are stored, modified and

synchronized in Sproqit’s Companion. At oral argument, Visto contended that any copying of a

portion of the workspace element satisfies the claim.

Sproqit, on the other hand, argues that the ‘192 Patent teaches that a “copy” must include all

the elements of the original. It cites the specification describing the preferred embodiment: “An

independently modifiable copy of the workspace data 185, referred to herein as workspace data 123,

is stored on the global server 120 for easy access by a user from the remote terminal 105. Being a

copy, the workspace data 123 includes independently modifiable copies of each workspace element

in workspace data 185 and an independently modifiable copy of version information 255 (Fig. 1),

referred to herein as version information 124.” Opp. at 5-6 (quoting ‘192 Patent, col. 3, ll. 32-40)

(emphasis added in original). Sproqit reasons that just as the patent teaches that a copy of

workspace data must include all the components of that workspace data, a copy of a workspace

element similarly must include all the components of that workspace element. Opp. at 6.

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The Court concludes that Sproqit has raised a substantial question as to whether the

requirement that its Companion store an independently modifiable “copy” is satisfied here. Its

construction of “copy” is plausible. It is supported by the specification it quotes above. Moreover,

the Court further notes that the dictionary definition of “copy” proffered by Visto (Khaliq Decl. in

Support of Reply Brief, Exh. A), states the “copy suggest duplicating an original nearly as possible”

whereas “IMITATE suggests following a model or a pattern but may allow for some variation.” 

Merriam-Webster’s Collegiate Dictionary, 10th Edition, p. 256 (1999) (emphasis added).

Judge Ward’s Claim Construction Order relied on by Visto does not address the precise issue

here. The issue before Judge Ward focused on the effect of different formats stored in different

locations. Judge Ward concluded that an “independently modifiable copy” does not have to be an

exact copy insofar as it does not have to be in the same format. Judge Ward did not address whether

the copy must replicate (in one format or another) all elements or fields of the unit, file or data base

in question. In fact, his order seems to caution against a broad or loose definition of “copy;” he held

that “[a]lthough the data may be stored in a different format in different locations, Visto’s proposed

definition appears to suggest a broader meaning of copy than the claim language supports.” Claim

Construction Order at 17.

In sum, although it has not necessarily demonstrated non-infringement, Sproqit has raised a

substantial question as to whether its Accused Products infringe on the third claim element which

requires that a “copy” of a “workspace element” be stored on the smart phone.

iv. Synchronization-Start Module

A synchronization-start module is defined as “software routines or code which initiate the

synchronization process.” Claim Construction Order at 26-27. In Sproqit’s system, the

synchronization-start module initiates the general synchronization module when an e-mail arrives or

changes are made to the user’s inbox folder. Head Decl., ¶ 20, Test 3 & 6. Sproqit does not appear

to challenge the comparison of its products with this claim element at this juncture.

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 The means-plus-function claim format is authorized by 35 U.S.C. § 112:

An element in a claim for a combination may be expressed as a means or

step for performing a specified function without the recital of structure,

material, or acts in support thereof, and such claim shall be construed to

cover the corresponding structure, material, or acts described in the

specification and equivalents thereof.

35 U.S.C. § 112, ¶ 6. 

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v. Means for Generating a Preferred Version by Comparing First and

Second Version Information

The fifth element requires a “means for generating a preferred version from the first

workspace element and from the copy by comparing the first version information and the second

 version information.” As Judge Ward found, this specification was written in means-plus-function

form.6

 The specification describes the structure that performs the function of generating a preferred

version by comparing the first and second version information:

The general synchronization module 425 further includes routines for

comparing the version information 124 and the version information

255 to determine if only one or both versions of a particular workspace

element have been modified and routines for performing an

appropriate synchronizing responsive action.

‘192 Patent, col. 5, ll. 55-61. Judge Ward concluded that “[t]he corresponding structure for this

limitation is the general synchronization module 425.” Claim Construction Order at 30.

This claim element specifically requires “comparing the first version information and the

second version information.” Sproqit contends that the ‘192 Patent teaches that the first and second

version information are compared by the general synchronization module bringing the two versions

together and evaluating similarities or differences. Weinstein Decl., ¶¶ 29-31, citing ‘192 Patent,

col. 5, ll. 35-61. It argues that its system does not “compare” the first and second version

information to generate a preferred version. Id., ¶ 32; Opp. at 8-9. Rather, changes or events are

automatically “pushed” as they happen from the remote device to the desktop (and vice versa),

wherein events are simply queued. Opp. at 8-9; Roitblat Decl. ¶¶ 6, 14, 18-20. It cites the testing

done by Dr. Head as simply evidencing the desktop “pushing” events (i.e., modification to version)

onto the handheld without any comparing. According to Sproqit, “There was no comparison of

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version information and no generation of a preferred version involved.” Opp. at 9. It cites its own

experiments in which sequential modifications made on the desktop are “pushed” in the same

sequence onto the handheld. It concludes, “There is no comparison/synchronization taking place.” 

Opp. at 11. In short, “The Sproqit system does not generate a preferred version by comparing

version information.” Id.

Visto responds that the queuing function in Sproqit’s system does, in fact, generate a

preferred version, selecting the latest version as the preferred version on both memory stores. Reply

at 5; Head Reply Decl. ¶¶ 8-11. What Sproqit refers to as an “event” constitutes a modification

wherein the most recent version is selected as the preferred version. Reply at 5. The queuing

actions “do, in fact, involve the processing of version information.” Id. Moreover, Visto points out

that when there are conflicting modified versions between the handheld and the desktop, the Sproqit

system selects as the preferred version the latest version stored in the handheld even if it preceded in

time the version in the desktop. By picking the last version from the handheld when confronted with

competing versions, “[t]he system therefore undoubtedly compares versions in the queues.” Reply

at 5.

The question turns on the construction of the term “comparing.” At bottom, the issue is

whether the relatively simply queuing function performed in the Sproqit system constitutes

“comparing” as that term is used in the fifth element of Claim 10.

Based on the record currently before this Court, Judge Ward’s Claim Construction Order

which is binding on this motion, and the particular arguments advanced by the parties thus far, the

Court concludes Sproqit has not raised a “substantial question” on infringement as to this element. 

While the Sproqit system is arguably “event” driven wherein the preferred version appears to be

generated by date and source (desktop v. handheld) of modified versions of a workspace element,

and not by a more sophisticated examination and analysis of the content of that element, the Sproqit

system does appear to “compare” one version with another in order to determine whether one

version has been modified; if such a modification is detected, a selection process based on simple

rules informed by time and source is triggered. For instance, in its own experiment, Sproqit

demonstrates that changes (such as flipping between “read” and “unread” status) in the unconnected

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 To be sure, the ‘192 Patent specification also describes the function of module 430:

The content-based synchronization module 430 includes routines for

reconciling two or more modified versions in workspace data 123, 185

of the same workspace element. For example, if the original and the

copy of a user workspace element have both been modified

independently since the last synchronization, the contentbased [sic]

synchronization module 430 determines the appropriate responsive

action. The content-based synchronization module 430 may request a

user to select the preferred one of the modified versions or may respond

based on preset preferences, i.e., by storing both versions in both stores

or by integrating the changes into a single preferred version which

replaces each modified version at both stores.

‘192 Patent, col.6, ll. 15-27. Given the linkage between modules 425 and 430 (see ‘192 Patent, col. 5,

l. 55 - col. 6, l. 2), it perhaps could be argued that the specification contemplates that the comparison

function described in the fifth element of the ‘192 Patent entails a more substantive examination of

content rather than simple queuing by date or source as the Sproqit system appears to employ. On the

other hand, it may be countered that module 430 describes the process of “generating” a preferred

version, not the predicate process of “comparing.” In any event, Sproqit has not advanced such an

argument here.

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desktop generates a synchronization process with the handheld when the two are connected. Each

modification had to have been detected in order to trigger the synchronization and generation of the

preferred (subsequent) version. The detection presumably is made by a comparison process, even if

that process was as simple as comparing the date of the first and second version information. In

short, the queuing described by Sproqit is presumably triggered by a comparison of version

information to see if there has been a modification. If so, an “event” is discerned and queuing

occurs; if not, there is no “event” and no queuing ensues. Sproqit has not explained why there is no

“comparing” at best in its most literal sense.

Sproqit has not submitted any evidence that the term “comparing” as used in Claim 10

requires anything more than what occurs in detecting a modification in one version. To the contrary,

the specification describing synchronization module 425 identified by Judge Ward as the

corresponding structure for this limitation speaks of “comparing” as the means “to determine if only

one or both versions of a particular workspace element have been modified.” ‘192 Patent, col. 5, ll.

55-60. Thus, even under the relatively simple function of “queuing,” “comparing” occurs.7

 Sproqit

has failed to raise a substantial question as to the proper construction of “comparing” as the term is

used in the fifth element of Claim 10.

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vi. Means for Storing the Preferred Version

This claim element is also stated as a means-plus-function limitation. This element recites

the “means for storing the preferred version at the first store and at the second store.” The

corresponding structure, the general synchronization module 425, is described in the specification:

The general synchronization module 425 further includes . . . routines

for performing an appropriate synchronizing responsive action. . . .

Appropriate synchronizing responsive actions may include forwarding

the modified version (as the preferred version) of a workspace element

in workspace data 185 or forwarding just a compilation of the changes

to the other store(s).

Claim Construction Order at 30 (quoting ‘192 patent, col. 5, ll. 55-65). Sproqit does not challenge

the comparison of the Accused Products with this claim element.

c. Summary of Infringement Analysis: Sproqit Raises a Substantial Question as

to Whether All the Claim Elements Read on the Accused Products

Sproqit has raised substantial questions as to whether the Accused Products make a “copy”

of a “workspace element” in the handheld as required by the third element of Claim 10. Visto

therefore has not established that Sproqit’s infringement defense “lacks substantial merit.” 

Amazon.com, 239 F.3d at 1350-51.

2. Challenges to Validity

In determining the likelihood of success, the Court must also consider the likelihood of

withstanding the opponent’s challenges to the validity and enforceability of the patent. “[I]n an

invalidity analysis, the district court must assess the meaning of the prior art references cited to

support the validity challenge.” Amazon.com, 239 F.3d at 1358. “Validity challenges during

preliminary injunction proceedings can be successful, that is, they may raise substantial questions of

invalidity, on evidence that would not suffice to support a judgment of invalidity at trial. The test

for invalidity at trial is by evidence that is clear and convincing. . . . In resisting a preliminary

injunction, however, one need not make out a case of actual invalidity. Vulnerability is the issue at

the preliminary injunction stage, while validity is the issue at trial. The showing of a substantial

question as to invalidity thus requires less proof than the clear and convincing showing necessary to

establish invalidity itself.” Id. at 1358-59 (citations omitted). 

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“When moving for the extraordinary relief of a preliminary injunction, a patentee need not

establish the validity of a patent beyond question. The patentee must, however, present a clear case

supporting the validity of the patent in suit. Such a case might be supported, for example, by

showing that the patent in suit had successfully withstood previous validity challenges in other

proceedings. Further support for such a clear case might come from a long period of industry

acquiescence in the patent’s validity.” Id. at 1359 (citations omitted). In Amazon.com, the Federal

Circuit found that Barnesandnoble.com had raised prior art references which taught key limitations

of the claims of the patent in suit and sufficiently cast enough doubt on the validity of the patent to

avoid a preliminary injunction, saving the final resolution of the validity issue for trial. Id. at 1359-

60.

a. Obviousness Challenge

Sproqit contends that Claim 10 is made obvious by two separate prior art systems: the Coda

System and Lotus Notes. Opp. at 11. Visto conceded at oral argument that neither Coda nor Lotus

Notes had been considered by the PTO in issuing the original patent; they were considered only on

reexamination of the ‘192 Patent. See Khaliq Reply Decl., Exh. E (‘192 Patent Reexamination

Information Disclosure Statement). 

i. Legal Standard for Obviousness

The statutory standard for determining obviousness provides that an invention is not

patentable “if the differences between the subject matter sought to be patented and the prior art are

such that the subject matter as a whole would have been obvious at the time the invention was made

to a person having ordinary skill in the art.” 35 U.S.C. § 103(a) (2002). “The ultimate

determination of whether an invention would have been obvious is a legal conclusion based on the

totality of the evidence, including underlying factual inquiries such as: (1) the scope and content of

the prior art; (2) the level of ordinary skill in the prior art; (3) the differences between the claimed

invention and the prior art; and (4) objective evidence of nonobviousness.” Brown & Williamson

Tobacco Corp. v. Philip Morris Inc., 229 F.3d 1120, 1124 (Fed. Cir. 2000) (citing Graham v. John

Deere Co., 383 U.S. 1, 17-18 (1966)). Relevant secondary indicators of nonobviousness include (1)

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commercial success; (2) long-felt but unresolved needs; (3) failure of others; and (4) skepticism

before the invention, copying, praise, unexpected results, and industry acceptance. Id. at 1129. 

“The consistent criterion for determination of obviousness is whether the prior art would

have suggested to one of ordinary skill in the art that this process should be carried out and would

have a reasonable likelihood of success, viewed in the light of the prior art.” In re Dow Chem., 837

F.2d 469, 473 (Fed. Cir. 1988). This standard consists of two requirements: (1) “a showing of a

suggestion, teaching, or motivation to combine the prior art references is an ‘essential evidentiary

component of an obviousness holding.’ This evidence may flow from the prior art references

themselves, the knowledge of one of ordinary skill in the art, or, in some cases, from the nature of

the problem to be solved.” Brown & Williamson, 229 F.3d at 1124-25; (2) “The second requirement

is that the ultimate determination of obviousness ‘does not require absolute predictability of success.

. . . All that is required is a reasonable expectation of success.’” Id. at 1125 (quoting In re

O’Farrell, 853 F.2d 894, 903-904 (Fed. Cir. 1988).

Where, as here, the patent in suit has been reissued after consideration by the PTO of art not

considered during the original prosecution, “the presumption of validity [under 35 U.S.C. § 282]

remains intact, and the challenger’s burden of proof imposed by that presumption, as an evidentiary

matter, is usually more difficult to sustain.” Kaufman Co., Inc. v. Lantech, Inc., 807 F.2d 970, 973-

74 (Fed. Cir. 1986). “[P]laintiff has the benefit of the deference due the patent office in defending

against the charge of invalidity.” Mezzalingua Assoc. v. Arris International, Inc., 298 F. Supp.2d

813, 820 (W.D. Wisc. 2003).

ii. Whether Claim 10 is Made Obvious by Coda

According to Sproqit’s expert, “Coda discloses communicating via a firewall,” namely, an

authentication server to ensure access to authorized personnel. Weinstein Decl., ¶ 50 and Ex. B

(claim chart); Opp. at 12. Visto responds that Coda does not teach a communications channel

through a firewall, distinguishing a “firewall” from Coda’s use of authentication procedures for

validating the identity and access rights of an individual. Reply at 8. 

In addition to the firewall distinction, Visto finds other differences between Claim 10 and

Coda: (a) Claim 10 requires the use of an HTTP or SSL port for establishing a communications

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channel through a firewall; Head Reply Decl., ¶ 16; (b) Claim 10 requires the use of a smart phone,

which were not in existence at the time Coda was developed; Head Reply Decl., ¶ 17; and (c) under

Claim 10, synchronization is initiated from within a firewall, whereas in Coda, synchronization is

always initiated by the client (“Venus” component); Head Reply Decl., ¶ 18. With perhaps the

exception the use of a smart phone which is arguably disclosed by Coda’s system of handling

disconnected operation with “powerful, lightweight and compact laptop computers,” Weinstein

Decl., ¶ 48 and Ex. D at 7, id. ¶¶ 48-49 (opining that person of ordinary skill in the art would

understand Coda as disclosing use of a smart phone, similar to “powerful, lightweight and compact

laptop computers” described in the Coda system), Sproqit has not shown that the Coda prior art

“would have suggested to one of ordinary skill in the art that this process should be carried out and

would have a reasonable likelihood of success.” In re Dow Chem., 837 F.2d at 473. The differences

appear substantial, and Sproqit has not rebutted the presumption that flows from the PTO’s

consideration of this prior art upon reexamination.

iii. Whether Lotus Notes Renders Claim 10 Obvious

According to Sproqit and as summarized in Weinstein’s second claim chart, Lotus Notes 

discloses a communications channel through a firewall using HTTP or SSL protocol and compares

version information, as does Claim 10. Weinstein Decl., ¶ ¶ 51-56 and Ex. C (claim chart); Opp. at

14. In opposition, Visto contends that Lotus Notes is not designed to communicate over an HTTP

(port 80) or SSL (port 443) port, using instead port 1352 which is a completely separate port, usually

requiring changes to most corporate firewalls. Reply at 9; Head Reply Decl., ¶ 20. Visto also

argues that Notes does not teach or suggest a “general synchronization module for operating within a

first firewall,” distinguishing Notes’ uni-directional replication of documents from the bi-directional

synchronization of workspace elements required by Claim 10. Head Reply Decl., ¶ 21. Visto

further argues that Notes was never designed for smart phones, although Sproqit contends that a

smart phone is essentially a portable computer, which Lotus Notes does use. Compare Head Reply

Decl., ¶ 22 with Weinstein Decl., ¶ 56. Finally, Visto argues that Notes does not have a

“synchronization start module for operating within the first firewall,” as required by Claim 10;

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 At oral argument, Sproqit further asked the Court to consider whether Visto followed the

PTO’s regulations for citing prior art, contending that Visto did not properly cite the prior art. Because

this argument had not been raised in the papers, the Court precluded argument on this challenge at the

hearing on preliminary injunction since it had not been raised in Sproqit’s opposition papers. It was

raised for the first time at the hearing.

9

 Section 252 provides as follows:

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rather, in Notes, replication between a client and server is always initiated by the client. Head Reply

Decl., ¶ 23.

Except possibly as to use of smart phones, Visto has shown substantial differences between

the claimed invention and the prior art that defeat, on this record, Sproqit’s claim of obviousness. 

Given the PTO’s consideration of Lotus Notes, the presumption of validity over that prior art

obtains. Sproqit has not overcome that presumption on this record.

iv. Summary: Sproqit Has Not Raised a Substantial Question as to

Obviousness

Given the presumption of validity where the prior art was considered by the PTO, Sproqit

has not raised a substantial question as to obviousness to rebut that presumption.8

 See ATD Corp. v.

Lydall, Inc. 159 F.3d 534, 546 (Fed. Cir. 1998) (“Determination of obviousness can not be based on

the hindsight combination of components selectively culled from the prior art to fit the parameters of

the patented invention. There must be a teaching or suggestion within the prior art, or within the

general knowledge of a person of ordinary skill in the field of the invention, to look to particular

sources of information, to select particular elements, and to combine them in the way they were

combined by the inventor.”) 

3. Intervening Rights Challenge

The Court must also consider whether Visto’s infringement claim will likely withstand

Sproqit’s intervening rights defense. Sproqit argues that the doctrine of equitable intervening rights

permits the continued sale of its products which were developed after expending $8,000,000 in

investment and 60,000 to 80,000 man hours before Claim 10 was substantively changed during

reexamination. Opp. at 16. The doctrine of intervening rights is derived from 35 U.S.C. § 2529

 and

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The surrender of the original patent shall take effect upon the

issue of the reissued patent, and every reissued patent shall have the same

effect and operation in law, on the trial of actions for causes thereafter

arising, as if the same had been originally granted in such amended form,

but in so far as the claims of the original and reissued patents are

substantially identical, such surrender shall not affect any action then

pending nor abate any cause of action then existing, and the reissued

patent, to the extent that its claims are substantially identical with the

original patent, shall constitute a continuation thereof and have effect

continuously from the date of the original patent.

A reissued patent shall not abridge or affect the right of any

person or that person’s successors in business who, prior to the grant of

a reissue, made, purchased, offered to sell, or used within the United

States, or imported into the United States, anything patented by the

reissued patent, to continue the use of, to offer to sell, or to sell to others

to be used, offered for sale, or sold, the specific thing so made,

purchased, offered for sale, used, or imported unless the making, using,

offering for sale, or selling of such thing infringes a valid claim of the

reissued patent which was in the original patent. The court before which

such matter is in question may provide for the continued manufacture,

use, offer for sale, or sale of the thing made, purchased, offered for sale,

used, or imported as specified, or for the manufacture, use, offer for sale,

or sale in the United States of which substantial preparation was made

before the grant of the reissue, and the court may also provide for the

continued practice of any process patented by the reissue that is

practiced, or for the practice of which substantial preparation was made,

before the grant of the reissue, to the extent and under such terms as the

court deems equitable for the protection of investments made or business

commenced before the grant of the reissue.

35 U.S.C. § 252 (1999).

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protects an accused infringer from liability for infringement occurring before the reexamined patent

is issued. It applies where the claim in question in the reissue patent is not substantially identical to

the claim in the original patent, i.e., the amendments make a substantive change to the claims. 

Seattle Box Co. v. Industrial Crating & Packaging, Inc., 731 F.2d 818, 827-28 (Fed. Cir. 1984)

(“Seattle Box I”) (reversing judgment for damages occurring before patent reissuance where claims

in reissued patent were substantively different that those in the original patent). “The accused

infringer may raise the defense of intervening rights only when none of the infringed claims of the

reissue patent were present in the original patent.” BIC Leisure Products, Inc. v. Windsurfing Inter.,

Inc., 1 F.3d 1214, 1220 (Fed. Cir. 1993). 

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Section 252 provides for two separate and distinct defenses under the doctrine of intervening

rights: “absolute” intervening rights and “equitable” intervening rights. Absolute intervening rights

provide “an accused infringer with the absolute right to use or sell a product that was made, used, or

purchased before the grant of the reissue patent as long as this activity does not infringe a claim of

the reissue patent that was in the original patent.” Id. at 1220-21. “This absolute right extends only

to anything made, purchased, or used before the grant of the reissue patent. In other words, it covers

products already made at the time of reissue.” Id. at 1221.

The broader doctrine of equitable intervening rights “permits the continued manufacture, use,

or sale of additional products covered by the reissue patent when the defendant made, purchased, or

used identical products, or made substantial preparations to make, use, or sell identical products,

before the reissue date.” Id. at 1221. The relevant statutory provision states that “[t]he court ... may

provide for the continued manufacture, use or sale ... to the extent and under such terms as the court

deems equitable for the protection of investments made or business commenced....” 35 U.S.C. §

252, ¶ 2, 2nd sentence (emphasis added). This language permits the Court to protect investments

made before reissue, “as dictated by the equities.” BIC Leisure Products, 1 F.3d at 1221.

Of the two types of intervening rights - absolute and equitable - only equitable intervening

rights are at issue here. Sproqit is not seeking to continue selling accused products made before the

change. Rather, it seeks to defeat an injunction against future sales based on equitable

considerations. “When the doctrine of intervening rights is properly raised, the court must consider

whether to use its broad equity powers to fashion an appropriate remedy.” Seattle Box I, 731 F.2d at

830 (citing 35 U.S.C. § 252, ¶ 2). Upon weighing the equities of intervening rights, the Court may

consider various factors: (1) whether “substantial preparation” was made by the infringer before the

reissue; (2) whether the infringer continued manufacturing before reissue on advice of its patent

counsel; (3) whether there were existing orders or contracts; (4) whether non-infringing goods can

be manufactured from the inventory used to manufacture the infringing product and the cost of

conversion; (5) whether there is a long period of sales and operations before the patent reissued from

which no damages can be assessed; and (6) whether the infringer has made profits sufficient to

recoup its investment. See Seattle Box Co. v. Industrial Crating & Packing, Inc., 756 F.2d 1574,

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1579 (Fed. Cir. 1985) (“Seattle Box II”); Plastic Container Corp. v. Continental Plastics, 607 F.2d

885, 903 (10th Cir. 1979) ; Mine Safety Appliances Co. v. Becton Dickinson and Co., 744 F. Supp.

578, 580-81 (S.D.N.Y. 1990) (on cross-motions for summary judgment, requiring alleged infringer

to pay royalties for units sold after reissue date and protecting intervening rights by allowing it to

continue it product line); Wayne-Gossard Corp. v. Sondra, Inc., 434 F. Supp. 1340, 1363 (E.D. Pa.

1977), aff’d, 579 F.2d 41 (3d Cir. 1978).

In support of its intervening rights defense, Sproqit contends that in about June 2003, it

evaluated the ‘192 Patent as originally issued and determined that it was invalid and would not be

infringed by Sproqit’s developing technology because its technology was different from Visto’s. 

Mansour Decl., ¶ 7-11; Roitblat Decl. ¶ 3. Sproqit states that it relied on the scope of the ‘192

Patent claims and invested about $8,000,000 and 60,000 to 80,000 man hours developing its

technology for Sproqit Personal Edition and Sproqit Work Group Edition. Mansour Decl., ¶ 16. 

Sproqit further argues that during reexamination, the PTO concluded that Claim 10 of the

‘192 Patent as originally issued was invalid. Opp. at 16; Head Decl., Ex. D (Office Action of Feb. 7,

2005). Visto does not dispute that it amended Claim 10 upon reexamination. See Reply at 10 n.10

(referring to amendment to Claim 10). Sproqit contends, and Visto does not dispute, that the

amendments to Claim 10 are substantive and significantly alter the scope of the claim as originally

issued. Opp. at 17. For example, Visto amended Claim 10 to include the limitations of “a

communications channel through a firewall comprising one of an HTTP port and an SSL port” and a

“smart phone,” neither of which were contained in the original patent claims. Reply at 10 n.10. 

Visto argues that notwithstanding the amendment of Claim 10, Sproqit fails to meet the

factors necessary to establish equitable intervening rights. The Court agrees and finds Sproqit has

not raised a substantial question on the merits of the equitable intervening rights defense for several

reasons. 

First, there is scant evidence that Sproqit engaged in any substantial preparation in deciding

to go forward in the face of the ‘192 Patent. Other than its CEO, Mansour’s and CTO Roitblat’s

declarations, Sproqit does not cite to evidence of its invalidity analysis, such as advice of patent

counsel or prior art. They merely state they had concluded all claims of the ‘192 patent were invalid

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as claiming techniques that used old art or obvious combinations of old techniques. Mansour Decl.,

¶ 11; Roitblat Decl., ¶ 3. Their self-serving declarations contain no substantive analysis. In fact,

Mansour’s assumption that “all” the claims were invalid was not necessarily born out. Visto

contends other ‘192 claims (such as claims 6-8) were not substantially amended in the

reexamination. See Reply Brief, ¶¶ 10-11. Nor are the declarations corroborated by any document

or other recorded evidence.

The only written evidence submitted to the Court is an e-mail in which Mansour states he

considered the Sproqit architecture different than the ‘192 Patent. That contention does not address

validity of the ‘192 Patent. Although Claim 10 was amended during the PTO reexamination, Sproqit

has not argued that those amendments materially affect the infringement analysis as applied to

Sproqit’s accused product. Hence, it is difficult to discern any reliance interest with respect to

Mansour’s infringement analysis.

Sproqit has not produced any evidence on the other Seattle Box factors except one: that it

spent $8,000,000 and significant man hours in developing the technology for the Sproqit products. 

But given the lack of any proof that Sproqit exercised greater diligence in obtaining assurance of the

legality of its technology, the factor should be accorded limited weight.

The totality of the Seattle Box factors as applied to the present record weighs significantly

against Sproqit. The Court concludes Sproqit has not raised a substantial question on the

intervening rights defense.

C. Irreparable Harm

The second factor Visto must establish on its motion for preliminary injunction is that it will

suffer irreparable harm if the preliminary injunction is not granted. Visto would be entitled to a

rebuttable presumption of irreparable harm upon establishing a “strong showing of likelihood of

success on the merits coupled with continuing infringement.” Reebok, 32 F.3d at 1556. “This

presumption derives in part from the finite term of the patent grant, for patent expiration is not

suspended during litigation, and the passage of time can work irremediable harm. The opportunity

to practice an invention during the notoriously lengthy course of patent litigation may itself tempt

infringers.” H.H. Robertson, Co. v. United Steel Deck, Inc., 820 F.2d 384, 389 (Fed. Cir. 1987)

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(affirming grant of preliminary injunction). “The nature of the patent grant thus weighs against

holding that monetary damages will always suffice to make the patentee whole, for the principal

value of a patent is its statutory right to exclude.” Id. at 390. Factors to consider on the issue of

irreparable harm include any delay by the patent holder in seeking injunctive relief, and the

effectiveness of money damages to compensate a party for market loss. Nutrition 21 v. U.S., 930

F.2d 867, 871 (Fed. Cir. 1991).

To rebut the presumption of injury, the infringer must show clear evidence that the injury is

not irreparable. H.H. Robertson, 820 F.2d at 390. In Reebok, for example, the alleged infringer

established that Reebok no longer produced the SHAQ I model shoe protected by the patent at issue,

and that the shoe was no longer carried in stores. 

In the case at bar, for the reasons stated above, Visto has not established a “strong showing

of likelihood of success on the merits.” Reebok, 32 F.3d at 1556. Sproqit has raised a substantial

question on the issue of infringement. Thus, no presumption of irreparable injury obtains.

Loss of sales alone does not in and of itself constitute irreparable harm. Reebok, 32 F.3d at

1552. Nonetheless, given the ever-changing nature of the market for wireless technology, Visto

argues with some force that it will suffer irreparable harm should a preliminary injunction be denied. 

See John Mezzalingua Assoc. v. Arris Intern., Inc., 298 F. Supp. 2d 813, 821 (W.D. Wisc. 2003)

(granting motion for preliminary injunction). “Money damages are not sufficient because of the

difficulty of determining not just the lost sales over the next few months before this case is resolved

but determining the economic effect of breaking into new markets.” Id. Here, Visto claims that

Sproqit currently markets two infringing products (Sproqit Personal Edition and Sproqit WorkGroup

Edition) that compete with Visto’s products, and that each Sproqit sale diverts sales from Visto in a

market with rapid changes in technology. Mot. at 20. It contends the nature of this business is such

that it if loses a customer to Sproqit, it will be difficult to convert that customer given the linkage of

products and services potentially involved. Visto also argues that its patent rights are not

sufficiently protected by monetary damages if Sproqit is allowed to continue selling infringing

products until the case is tried. Mot. at 22. Trial is not set until May 7, 2007.

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However, Visto’s showing of irreparable harm, which is not presumed given its showing on

the merits, is not particularly compelling. Sproqit contends that its small operations do not pose a

threat to Visto. Sproqit’s primary customer for Personal Edition is Bell Mobility in Canada, which

generates about $3,000 in revenue. Sproqit’s marketing efforts for Work Group Edition in the

United States are limited and only a few customers have purchased that product. Opp. at 20-21. 

Moreover, in at least one other infringement lawsuit brought to vindicate the patent in suit, Visto has

settled with the defendant for terms which include a royalty-bearing license. Sankaran Decl., Exh.

A. But given the direct competition posed by Sproqit and others, the rapidly changing nature of the

technology and market, and the structure of the industry where sales could establish long-term

relationships, the Court concludes Visto has established irreparable harm for purposes of preliminary

injunction.

D. Balance of Hardships

The third factor the Court must consider is the balance of (1) the harm that will occur to the

moving party from the denial of the preliminary injunction with (2) the harm that the non-moving

party will incur if the injunction is granted. Hybritech v Abbott Laboratories, 849 F.2d 1446, 1457

(Fed. Cir. 1988). The balance must be examined even where irreparable injury is established. H.H.

Robertson, 820 F.2d at 391. In particular, the Court must balance, on the one hand, the harm to the

patent holder from the denial of an injunction wherein the defendant will be able to continue to

exploit its infringing products and obtain business that might have gone to the patent holder, and, on

the other, defendant’s inability to market a product which it contends is non-infringing and desirable

to customers. See Mezzalingua, 298 F. Supp. 2d at 821 (finding that neither party had a clear

advantage in the balance of hardships, but enjoining defendant based on findings on other three

factors). See also PPG Industries, Inc. v. Guardian Industries Corp., 75 F.3d 1558, 1567 (Fed. Cir.

1996) (affirming preliminary injunction where district court concluded that plaintiff “would suffer

significant harm from the denial of an injunction, while an injunction would be less burdensome for

Guardian, as it would require only a temporary interruption in Guardian’s production and sale” of its

product).

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Visto contends that denial of an injunction would result in loss of good will and potential

revenue to Visto, and would permit Sproqit to continue conducting business around the infringement

of Visto’s technology. Mot. at 22-23. It cites the irreparable injury discussed above.

Sproqit argues, on the other hand, that an injunction would have a devastating impact on its

business and would essentially shut down operations in the United States. In contrast, its relatively

small sales do not threaten Visto.

The Court finds that the balance of hardships tips in favor of Sproqit, and disfavors a

preliminary injunction. While Visto might suffer irreparable injury should the injunction be denied,

as noted above, its showing was not compelling. While Sproqit competes directly, it does not at this

point have a significant market share. Cf. Hybritech, 849 F.2d at 1456 (Defendant “has a very large

presence in this field.”). Indeed, according to Sproqit’s evidence, its market share appears rather

meager. Its primary customer is in Canada and generates only $3,000 in revenue. Conversely, Visto

has not produced any evidence that currently it is suffering any significant financial impact resulting

from the sales of Sproqit’s accused products. As noted above, there is evidence that Visto has

granted a royalty-bearing license to another company. The harms Visto points to in order to

establish irreparable harm appear more theoretical or potential than actual or proven at this point. In

contrast, neither parties appear to dispute that issuance of the preliminary injunction would devastate

Sproqit’s business.

Although “small parties have no special right to infringe patents simply because they are

small,” Bell & Howell Document Management Products, Co. v. Altek Systems, 132 F.3d 701, 708

(Fed. Cir. 1997), the fact that Visto “would sustain only minimal damage if a preliminary injunction

did not issue, and that [Sproqit] would be put out of business if a preliminary injunction did issue” is

a “proper factor to be considered.” Id.

The balance of hardships tips in Sproqit’s favor.

E. Public Interest

The fourth factor to consider is the impact of the injunction on the public interest; that is,

whether there exists some critical public interest that would be injured by the grant of preliminary

relief. Hybritech, 849 F.2d at 1458. This factor balances the deprivation to the public by the

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10 The Court notes that the inability of Visto to establish a likelihood of success on the merits

alone could constitute grounds for denying a preliminary injunction without regard to the other three

factors. See Helifix Ltd. v. Blok-Lok Ltd., 208 F.3d 1339, 1351-1352 (Fed. Cir. 2000). Helifix, however,

appears inconsistent with Amazon.com’s directive that the four factors “taken individually, are not

dispositive” and must be weighed against each other. Amazon.com, 239 F.3d at 1350. Given the

apparent ambiguity left by Helifix and Amazon.com on this point, the Court has analyzed all the factors.

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unavailability of the accused products against “the strong public policy favoring the enforcement of

patent rights.” See PPG, 75 F.3d at 1568. Sproqit argues that any injunction would prevent Sproqit

from serving its customers, which notably include the Seattle firefighters, and would interfere with

their public service if Sproqit could not continue operating its business. Opp. at 21. See Hybritech,

849 F.2d at 1458 (affirming preliminary injunctive order which excluded cancer and hepatitis test

kits from injunction). However, Sproqit has not shown with any particularity what impact of a

preliminary injunction would have on that department and its ability to protect public health and

safety.

The Court concludes this factor does not weigh strongly in favor of either party.

F. Summary

Based on Visto’s inability to demonstrate a substantial likelihood of success on the merits,

the fact that Visto’s showing of irreparable injury is not particularly compelling, the fact that the

balance of hardships tips in Sproqit’s favor, and the relative neutrality of the public interest factor,

the Court denies Visto’s request for preliminary injunction.10

III. VISTO’S OBJECTIONS

The parties did not conduct discovery prior to Visto’s filing of the motion for preliminary

injunction on November 22, 2005. On January 5, 2006, Visto counsel contacted Sproqit counsel to

set dates for depositions of Sproqit’s employees Mansour and Roitblat and third party expert

Weinstein, asking for dates before the motion hearing on January 18. Sproqit declined Visto’s

proposal, and Visto noticed the depositions for Jan. 13 (giving 7 days notice), with accompanying

subpoena for Weinstein. On January 12, 2006, Sproqit notified Visto that its employees would not

appear for the depositions and filed a motion for protective order.

Visto argues that because Mansour and Roitblat were not made available for deposition,

Sproqit should not be permitted to rely on Mansour and Roitblat’s declarations in opposition to the

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motion for preliminary injunction. Visto Corp.’s Objection to Decl. of Peter Mansour and Barry

Roitblat at 4 (filed 1/13/06). Sproqit argues that Visto refused to continue the hearing date on its

motion for preliminary injunction to give both parties time to conduct some discovery, and should

not be permitted to conduct unilateral expedited discovery in advance of that hearing. Sproqit’s

Mot. for Prot. Order at 4.

At the hearing on the motion for preliminary injunction, Visto conceded that it would not

pursue expedited discovery in advance of the Court’s ruling on the motion, and that it would rely on

its papers in support of the motion. Both parties were prepared to submit on the papers. Sproqit has

withdrawn its motion for a protective order (Docket No. 121). The Court OVERRULES the

objections to the Mansour and Roitblat declarations (Docket No. 124). This does not necessarily

preclude discovery from now moving forward as a matter of course. 

The hearing on Sproqit’s motion for a protective order set for February 22, 2006 is hereby

VACATED.

IV. CONCLUSION

Visto’s motion for preliminary injunction is DENIED.

This order disposes of Docket Nos. 97 and 124.

IT IS SO ORDERED.

Dated: February 7, 2006

 EDWARD M. CHEN

United States Magistrate Judge

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