(citing Sartor v. Arkansas Natural Gas Corp., 321 U.S. 620, 628-29 (1944)). Providing a basis
to believe the witness has an interest in the outcome of the litigation may be sufficient to create a
genuine issue of fact as to the witness’s credibility.

With these standards in mind, the Court will evaluate each claim the defendants argue is
invalid to determine whether they are entitled to summary judgment.

1. Claim 5 of U.S. Patent No. 5,740,245

Claim 5 of the ‘245 patent covers a transcription network for use by attorneys examining
witnesses, in which a CAT system translates the court reporter’s strokes in real time to words and
numbers and sends the alphabetic and numeric transcript to computers loaded with software that
determines whether the transcript contains words previously selected by the user and performs a
pre-defined function once the words are located.° The application for this patent was filed on
November 15, 1994, but the critical date for this patent ~ and all the other patents at issue — is

March 24, 1992, because Engate’s patents are accorded the filing date of its first patent

> The Court’s description in the body of the opinion of patented claims paraphrases the
claim language as understood and agreed to by the parties in light of the Court’s previous
construction of the claims. See Defs.’ Am, Facts; Engate’s Resp. Facts. Claim 5 of the ‘245
patent states exactly:

5. A transcription network for use by attorneys in the examination of a
witness comprising:

transcription means for generating transcript signals representative of spoken
words in real time;

a terminal capable of performing a predefined function;

the terminal receiving the transcript signals from the transcription means and
comprising evaluation means for evaluating the transcript signals as they
are received to determine whether the transcript signals contain a
predefined word selection;

the terminal responding to the evaluation means to perform the predefined
function.

Claim 5 of U.S. Patent No. 5,740,245 (issued April 14, 1998).
19


transcript responsive to the search can be played.'* Claim 13 covers resynchronizing the
transcript and corresponding audio signals captured using the system described in Claim 12.”
Claim 19 of the patent covers the use of a CAT system to create a transcript in real time that is
delivered to and displayed on a terminal and is linked in real time to audio recordings of the

spoken words corresponding to the transcript? Claim 25 of the patent covers a function that

'S Specifically, Claim 12 of the ‘510 patent covers:

12. A method for facilitating the use of information from a testimonial
proceeding, the method utilized at least in part during the testimonial proceeding,
the method using a transcription system, a capture system and a terminal having a
screen, the method comprising:

converting, using the transcription system, spoken words to text in real time;

capturing, using the capture system, audio signals representative of the spoken

words in real time;

associating the audio signals with the text;

storing the text and the associated audio signals;

displaying the text on the screen for real time review;

accepting an input and performing a search of the stored text using the

accepted input; and

reproducing portions of the spoken words from portions of the stored audio

signals corresponding to portions of the stored text located in response to
the search.

Claim 12 of U.S. Patent No. 6,282,510 (issued Aug. 28, 2001).

'° Claim 13 of the ‘510 patent specifically states that “[t]he method of claim 12 further
comprising reassociating the audio signals with the text to attempt to provide accurate
synchronization therebetween.” Claim 13 of U.S. Patent No. 6,282,510 (issued Aug. 28, 2001).

°° Claim 19 of the ‘510 patent specifically states:

19. A method for facilitating the use of information from a testimonial
proceeding, the method utilized at least in part during the testimonial proceeding,
the method using a transcription system, a capture system and a terminal having a
screen, the method comprising:

converting, using the transcription system, spoken words to text in real time;

capturing, using the capture system, audio signals representative of the spoken

words in real time;
(continued...

40


Claim 32 covers the association of a real-time transcript with video images of the speaker with
the added features that the transcript can be displayed in real time on a terminal, the CAT system
can store the transcript with the associated video images, and a user can use the CAT system to
search for stored text and display it on the screen with the associated video images.'? The
application for this patent was filed March 12, 1997.

The defendants argue that Claims 26 through 28 were anticipated by closed captioning of
television programming. By the early 1990s, the National Captioning Institute used a CAT
system to translate stenographic strokes to readable text that was associated with a broadcast
signal and transmitted so that the text could be viewed on a screen receiving the signal along with
the video image of the speaker. Wolffe, supra; see also Foerstel, supra (“The captions are then
transmitted with the televised picture and appear at the bottom of the screen.”). Engate’s sole
response is that closed captioning performed by the NCI was displayed on television screens not
computer screens. We find the distinction between a television screen and a computer screen
immaterial to the substance of the patent. Thus Engate has failed to raise a genuine issue of fact

as to the validity of claims 26 through 28. The advent of closed captioning in the 1980s

's( continued)
the text.” Claim 28 of U.S. Patent No. 5,949,952 (issued Sept. 7, 1999).

'7 Claim 32 specifically states:

32. The method of claim 26 further comprising:

storing the text and the associated video images;

accepting an input and performing a search of the stored text using the
accepted input; and

displaying portions of the stored video images corresponding to portions of the
stored text located in response to the search.

Claim 32 of U.S. Patent 5,949,952 (issued Sept. 7, 1999).
36


stenographic characters stored in the phonetic library and create a phonetic

representation of the untranslated word which would then go into the real-time

transcript.

Middlebrooks Decl. 4. Similarly, Sanchez explained in her declaration that

The CAT system I used in the Phoenix CIC, prior to March 24, 1992, contained a

main dictionary and several user programmable job dictionaries. In addition to

these dictionaries, it also contained an additional dictionary which contained

phonetic representations of letters and syllables. The CAT system compared the

stenographic strokes to the words stored in the dictionaries. If it located an exact

match, the located word was entered into the transcript. If the CAT system could

not locate an exact word in the user dictionaries, it would then compare the

stenographic characters to the stenographic characters stored in the phonetic

library and create a phonetic representation of the untranslated word; that phonetic

representation would then go into the real-time transcript.

Sanchez Decl. ] 14. The technology as described by Sanchez and Middlebrooks contained all the
elements that comprise Claim 1 and Claim 4 of Engate’s patents. But as we have indicated
before, we cannot rely on the testimony of an interested witness such as Middlebrooks to
corroborate Sanchez’s declaration because the Court would be making a credibility determination
that is inappropriate on summary judgment.

The question, then, is whether the defendants have provided other evidence that satisfies
the clear and convincing standard of proof. One piece of evidence is an article published in the
Los Angeles Times in 1982 describing the use of a CAT system during the criminal trial of a deaf
defendant. Bill Hazlett, Computer Also on Trial in L.A. Courtroom, L.A. Times, Feb. 19, 1982,
at 3 (Defs.’ Ex. 22), The computer system used in the L.A. courtroom was a CAT system
developed by Xscribe Corp. Jd. at 24. During the trial,

[c]ourt reporter Jere L. With takes down the testimony on his electronic

stenographic machine, which translates the words into a series of alphabetical

outlines.

“Those outlines are then transmitted to a computer terminal which sorts

45


critical date description of an invention in a printed publication invalidates a patent only if “the
four corners of a single, prior art document describe every element of the claimed invention,
either expressly or inherently, such that a person of ordinary skill in the art could practice the
invention without undue experimentation.” Advanced Display Systems, Inc. v. Kent State
University, 212 F.3d 1272, 1282 (Fed. Cir. 2000) (citations omitted). Similarly, “‘[flor a prior art
reference to anticipate in terms of 35 U.S.C. § 102, every element of the claimed invention must
be identically shown in a single reference.” In re Bond, 910 F.2d 831, 832 (Fed. Cir. 1990)
(quoting Diversitech Corp. v. Century Steps, Inc., 850 F.2d 675, 677 (Fed. Cir. 1988)); see also
Apple Computer, Inc. v. Articulate Systems, Inc., 234 F.3d 14, 20 (Fed. Cir. 2000) (citation
omitted) (“Anticipation under 35 U.S.C. § 102 requires the disclosure of a single piece of prior
art of each and every limitation of a claimed invention.”).

However, this rule is not without some pliancy. The single prior art disclosure “need not
be express, but may anticipate by inherency where it would be appreciated by one of ordinary
skill in the art.” Glaxo Inc. v. Novopharm Ltd. , 52 F.3d 1043, 1047 (Fed. Cir. 1995) (citing
Continental Can Co. USA, 948 F.2d at 1268). The Federal Circuit has explained that “‘[u]nder
the principles of inherency, if the prior art necessarily functions in accordance with, or includes,
the claimed limitations, it anticipates.” In re Cruciferous Sprout Litigation, 301 F.3d 1343,
1349 (Fed. Cir. 2002) (quoting MEHL/Biophile International Corp, v. Milgraum, 192 F.3d 1362,
1365 (Fed. Cir. 1999)). “This modest flexibility in the rule that ‘anticipation’ requires that every
element of the claims appear in a single reference accommodates situations where the common
knowledge of technologists is not recorded in the reference; that is, where technological facts are

known to those in the field of the invention, albeit not known to judges.” Continental Can Co.

13


who filed the unfair competition claim had not been a party in the allegedly “meritless lawsuits”
that were the basis of the unfair competition claim. Jd. at 924, 120 Cal. Rptr. 2d at 602.
However, Rubin and Kashian make clear that the § 47(b) privilege bars causes of action seeking
redress for the filing of baseless lawsuits ~ unless the plaintiff (or counterclaimant) pleads the
elements of malicious prosecution. Accordingly, the Court grants Engate’s motion to dismiss
Esquire’s unfair competition claim under Fed. R. Civ. P. 12(b)(6).
Conclusion

For the reasons stated above, the Court grants in part and denies in part Esquire and
Atkinson-Baker’s motion for partial summary judgment on invalidity [docket # 183]. The Court
grants Engate’s motion to dismiss Esquire’s unfair competition claim [docket # 235] and denies
Esquire’s motion for summary judgment on its unfair competition claim [docket #247]. The
Court grants Engate’s motion for reconsideration [docket # 267], but denies the defendants’
motion for reconsideration (docket # 266]. The Court’s July 30, 2004 Memorandum Opinion

and Order, reported at 2004 WL 1699024, is vacated.

MATTHEW F, KENNHLLY
United States District Judge

Date: August 20, 2004

35


“the privilege applies to any communication (1) made in judicial or quasi-judicial proceedings;
(2) by litigants or other participants authorized by law; (3) to achieve the objects of the litigation;
and (4) that have some connection or logical relation to the action.” Jd. at 212, 786 P.2d 365
(citations omitted). The California Supreme Court has clarified that “(t]he ‘furtherance’
requirement was never intended as a test of a participant’s motives, morals, ethics or intent.” Id.
at 220, 786 P.2d 365 (citations omitted). And “[{a]ny doubt as to whether the privilege applies is
resolved in favor of applying it.” Home Insurance Co. v. Zurich Insurance Co., 96 Cal. App. 4th
17, 23, 116 Cal. Rptr. 2d 583, 587 (2002) (citation omitted).

Esquire argues that the § 47(b) privilege only bars causes of action seeking redress for
slanderous or libelous communications made in a court proceeding and, thus, does not apply to
its counterclaim. The California Supreme Court has not construed § 47(b) so narrowly. To the
contrary, in Rubin v. Green the California Supreme Court concluded that § 47(b) barred a lawsuit
filed by the owner of a mobile home park alleging that the attorneys who sued him had engaged
in solicitation by talking to potential plaintiffs and filing the suit. Much like Esquire, Rubin
alleged that the defendants had tried to stir up “‘frivolous litigation as a means to profit unjustly
at [Rubin’s] expense.” Rubin, 4 Cal. 4th at 1191, 847 P.2d 1044. Rubin’s suit was not based on
any particular slanderous or libelous statements. Yet the court applied § 47(b), reasoning that it
“c[ould] imagine few communicative acts more clearly within the scope of the privilege than
those alleged in the amended complaint, that is, meeting and discussing with Cedar Village
residents park conditions and the merits of the proposed failure-to-maintain lawsuit, and filing
the complaint and subsequent pleadings in the litigation.” Rubin, 4 Cal. 4th at 1195, 847 P.2d

1044, The court concluded that under § 47(b), malicious prosecution — “provided the requisite

53


Engate alleged that Esquire had infringed 131 patented claims “without a scintilla of evidence”
or a “good faith belief that Engate could prevail in litigation” in hopes “that Esquire would
capitulate (as did several of the defendants) to avoid having to spend millions of dollars
defending itself against this baseless suit.” Esquire’s Mot. for Summ. J. on Unfair Competition
at 1. When Esquire first filed its counterclaim, it simply alleged that “Engate has sued Esquire
on patents that it knows Esquire does not and cannot infringe” and provided an example of one
patent — U.S. Patent No. 5,926,787 — it was alleged to have infringed that it could not have.
Esquire’s Answer to Am. Compl. § 13. Engate argues that Esquire’s unfair competition
counterclaim should be dismissed for failure to state a claim upon which relief can be granted,
Esquire argues that it is entitled to summary judgment on its counterclaim.

Engate argues that the Court should read Esquire’s counterclaim as alleging that Engate
improperly sued Esquire for infringing only the ‘787 patent mentioned in Esquire’s Answer. In
other words, Engate argues that it should not have to defend its initial complaint alleging that
Esquire infringed 131 patented claims. The Court believes Engate’s suggested reading of
Esquire’s counterclaim is too narrow. The counterclaim cannot be read as alleging that Engate
engaged in unfair competition solely by charging Esquire with violating U.S. Patent No.
5,926,787. Rather, Esquire alleged that Engate had sued Esquire on “patents” — plural — that it
knew Engate could not have infringed and prefaced its allegation regarding the ‘787 patent with
the phrase “[f]or example.” The Court therefore rejects Engate’s claim that Esquire is
improperly attempting to expand its counterclaim two years after filing it. Engate makes the
related argument that Esquire has failed to plead its unfair competition claim with sufficient

particularity. However, the Court will not consider this argument because the Court agrees with

51


Prior to March 24, 1992, a search routine within the software could be initiated

during a court proceeding, such that during the generation of the transcript, the

user could search the transcript for a particular word or phrase. In real-time

application, I generated a transcript which was immediately sent to the judge’s

terminal and/or attorney’s terminal, typically a PC, where it was displayed and

stored. (It also was stored by me on my CAT.) The judge or an attorney could

input a search request including search terms and optionally including Boolean

logic. Each user could independently search and identify one or more portions of

the real-time transcript corresponding to the search request. The software would

display (as I continued to generate the real-time transcript) at least a portion of the

real-time transcript that was responsive to the search request.
Sanchez Decl. 4 9.

Engate argues the Court must deny the defendants’ motion because two declarations are
never sufficient to invalidate a patent. As we previously explained, this misstates the law.
Applying the Woodland Trust factors, the Court must consider whether Sanchez’s declaration
corroborates Sandstrom’s declaration. Sanchez, who served as Judge Strand’s court reporter
from 1986 to 1992 and remains a court reporter for the U.S. District Court in Phoenix, has no
interest in the outcome of this litigation other than the fact that the defendants sought her
testimony. She also has no relationship with Sandstrom other than a few conversations they had
in 1989 when the Phoenix CIC used DiscoveryZX. Sandstrom Decl. 3. Yet their descriptions
of the technological capabilities of litigation-support software are reinforcing. Although
Sanchez’s declaration recounts her activities more than ten years ago, she has an extensive
familiarity with real-time court reporting and her declaration describes the capabilities of the
Phoenix CIC with precision and detail. Furthermore, given the numerous technological
capabilities of the Phoenix CIC, her testimony is consistent with the state of the art at the time.

Therefore, the Woodland Trust test indicates Sanchez’s declaration can be used as corroborative

evidence,

23


allows the user to search the transcript and associated audio files created according to Claim 19
and play the audio files associated with the portion of the transcript responsive to the search!
The application for Patent 6,282,510 was filed on February 3, 2000.

The defendants argue that these four claims were anticipated by Discovery VideoZX.
They rely on the press release describing Discovery VideoZX’s capabilities. However, neither the
Discovery VideoZX software nor the press release can be the basis for invalidating Claims 12,13,
19 and 25 of Patent 6,282,510 for the same reasons that it could not be used to invalidate Claim
32 of Patent 5,949,952 — that is, Engate has created a genuine issue of fact as to whether the
Discovery VideoZX software could link a transcript to an audio or video file in real time and the
press release is too ambiguous to constitute a prior printed publication describing all the claim
limitations. Even though Middlebrooks’ deposition testimony only mentioned that

Discovery VideoZX could not synchronize video files with the text until after the transcript was

(continued)
associating the audio signals with the text;
delivering the text to the terminal; and
displaying the text on the screen for real time review.

Claim 19 of U.S. Patent No. 6,282,510 (issued Aug. 28, 2001).

2! More precisely, Claim 25 of the ‘510 patent states:

25. The method of claim 19 further comprising:

storing the text and the associated audio signals;

accepting an input and performing a search of the stored text using the
accepted input; and

reproducing portions of the spoken words from portions of the stored audio
signals corresponding to portions of the stored text located in response to
the search.

Claim 25 of U.S. Patent No. 6,282,510 (issued Aug. 28, 2001).

41



is a genuine issue for trial.” Continental Can Co. USA v. Monsanto Co., 948 F.2d 1264, 1265
(Fed. Cir, 1991) (citations omitted).
Invalidity

The Court must presume Engate’s patents are valid. 35 U.S.C. § 282. “The statutory
presumption of validity under 35 U.S.C. § 282 puts the burden of proving invalidity on the party
asserting it and the burden never shifts to the patentee.” Sinskey v. Pharmacia Ophthalmics, Inc.,
982 F.2d 494, 498 (Fed. Cir. 1992) (citing Stratoflex, Inc. y. Aeroquip Corp., 713 F.2d 1530,
1534 (Fed. Cir. 1983)). The presumption of validity “can be overcome only through clear and
convincing evidence.” Eli Lilly & Co. v. Barr Laboratories, Inc., 251 F.3d 955, 962 (Fed. Cir.
2001) (citing U.S. Surgical Corp. v. Ethicon, Inc., 103 F.3d 1554, 1563 (Fed. Cir. 1997)). “Thus,
a moving party seeking to invalidate a patent at summary judgment must submit such clear and
convincing evidence of invalidity so that no reasonable jury could find otherwise.” id.

The defendants argue that twenty-two claims in Engate’s patents are invalid because they
were in public use, on sale or described in a printed publication at least one year before Engate
filed its patent applications. The defendants’ argument is based on 35 U.S.C. § 102(b), which
states that “[a] person shall be entitled to a patent unless ~. . . (b) the invention was patented or
described in a printed publication in this or a foreign country or in public use or on sale in this
country, more than one year prior to the date of the application for patent in the United States.”
To demonstrate that Engate’s patent claims were anticipated, defendants cite several published
articles describing the use of real-time transcription services in several U.S. courtrooms and the
advent of closed captioning of television programming.

Engate has two general responses to the defendants’ arguments. First, Engate argues that


Frank Andrews, Computer-Integrated Courtrooms: Enhancing Advocacy, Trial, September
1992, at 37-38. Engate correctly points out that the article was published after the critical date
and gives no indication that the Dallas CIC was in use prior to the critical date. Therefore, we
cannot say that the technology available in the Dallas CIC, as described by Judge Andrews,
anticipated Claim 16 of Engate’s patent.

The defendants’ only other support for their claim that multiple computers could be
attached to the network for each party is the Sanchez declaration, which states:

Prior to March 24, 1992, users could send messages to other users, which could

include part of the real-time transcript. The Phoenix CIC utilized a Novell local

area network linking ten DOS 286 workstations. The work stations were located

on the judge’s bench, at each counsel’s table, at the courtroom deputy clerk’s

station, at my position, in the judge’s chambers, in my office, at the secretary’s

desk, and at each law clerk’s desk, Those work stations also each had the

capability to send and receive messages to and from any other work station.

Those messages could include part of the transcript. The Judge and clerk could

communicate via e-mail. This communication from the clerk to the judge was

isolated from counsel. A single plaintiff attorney terminal was connected to the

Novel|l] network. Because the CIC was configured with double cabling at each

work station, a second terminal could have been provided to the plaintiff, if

requested. Similarly, a second terminal could have been provided to the

defendant, if requested. These second terminals would have allowed the two

plaintiff terminals and the two defendant terminals to communicate in the same

manner as the clerk and Judge.
Sanchez Decl. { 13. As we have previously stated, Sanchez’s credibility is not in issue because
she is uninterested in these proceedings and Engate has not challenged her credibility, but we
cannot invalidate a claim based solely on uncorroborated testimonial evidence. The Court
suspects that multiple computers for each party could have been attached to the network prior to
the critical date, but we cannot say the technology we know was available in the Phoenix CIC

inherently had this capability. Similarly, even though the computers in the Phoenix CICs were

password protected to maintain confidentiality and had access to e-mail, it is not inherent in this

34



application, which was filed on March 24, 1993. See 35 U.S.C. § 120. An element essential to
this claim — and all other claims the defendants seek to invalidate — is a CAT system that
converts a stenographer’s strokes into readable language in real time and transmits the transcript
to computers used by attorneys. Articles describing these features in the early 1990s leave no
doubt that this technology was available in courtrooms prior to March 24, 1992, the earliest
critical date of any of Engate’s patents. As quoted above, Diane Knox described how a CAT
system works in a 1991 issue of The American Lawyer. Knox, supra, at 6. The year before,
Martin Block wrote in the periodical Trial that:

The court reporter’s computer-aided transcription (CAT) system underlies and

supports the CIC, integrating recent advances in computer technology. Ideally,

computer terminals placed at the counsels’ tables and the judge’s bench can be

tied into the court reporter’s CAT system. This allows judges, lawyers, and

litigants to see English-language text of testimony on their computer monitors

moments after it is given.
Block, supra, at 51. Rather than repetitively recount that the CAT system that is the building
block of all Engate’s claims was in public use prior to the earliest critical date of Engate’s
patents, the Court adopts the above analysis as to these elements of Claim 5 of the ‘245 patent
and applies it to our analysis of the validity of Engate’s other patented claims.

The remaining elements of Claim 5 were also in public use prior to the critical date.
Knox explained that “[a]ttorneys c[ould] also program the computer to automatically highlight
certain words whenever they occur — court reporter Sanchez, for example, highlights the word

objection in Judge Strand’s file so he can easily find the questions or statements that prompt

objections.”* Knox, supra, at 9. Engate has failed to come forth with evidence raising a genuine

° The Court could have provided several citations in support of many of its statements
describing the technology available in the computer-integrated courtrooms, but for brevity, we
(continued...)

20



limitations of Claim 7. The defendants make the alternative argument that the version 3.1
manual invalidates because it states that the transcript can be searched. Jd. at 18. But the version
3.1 manual does not state that the user can conduct a natural language or Boolean search, so it
does not describe all the limitations of Claim 7. Furthermore, Engate has raised a genuine issue
as to whether the version 3.1 manual was actually published.

The defendants argue that DiscoveryZX version 3.1 is invalidating prior art, because
Sandstrom states that version 3.1 had all the capabilities of version 3.0, which we know from the
manual allowed natural language searches. Sandstrom Decl. 8. But as we have already
discussed, Sandstrom’s declaration is insufficient for purposes of summary judgment.

The defendants’ argument regarding CaseView suffers from a similar infirmity. The
defendants have provided the Court with a DVD containing a promotional video circulated by
Stenograph, the makers of CaseView. In describing Case View’s capabilities, the narrator states
that an attorney can “search for a pertinent word or phrase or previously marked text” in a real-
time transcript. Defs.’ Ex. 3.2. One could infer that a search for a pertinent word uses natural
language. But for CaseView to anticipate Claim 7, it must have been in use or on sale prior to
March 24, 1992. The last frame of the video says only that the video was copyrighted in 1992
but does not provide a more precise date. John Wenclawski, the president of Stenograph who
provided the defendants with the video, states in a declaration that the video was in use prior to
March 24, 1992. But we cannot rely on Wenclawski’s declaration to give the defendants
summary judgment, because as the president of a company that markets a product that might be
covered by Engate’s patents, he is an interested witness. For these reasons, the Court denies the

defendants’ request for summary judgment on the invalidity of Claim 7 of the ‘395 patent.

26



patent was filed on July 1, 1999. The defendants rely on two declarations to prove that searches
could be conducted while the transcript was being generated and that they could use Boolean
terms.* Brent Sandstrom, who developed the Discovery and DiscoveryZX software, explained:

Searching a real-time transcript was available in DiscoveryZX prior to March 24,
1992. This real-time feature was inherited from the non-real-time version of the
software. In real-time application, the court reporter generated a transcript, which
was immediately sent to the judge’s terminal and/or attorney’s terminal, typically
a PC or laptop, where it was displayed. The transcript was indexed in real-time.
In different configurations, the real time transcript might be indexed stored either
on a dedicated real-time convert workstation or on an attorney station that was
running the convert software... . This index was used for various purposes,
including responding to search requests. In use, a judge or an attorney would
input a search request including search terms and optionally including Boolean
logic. The system would identify one or more portions of either the real-time
transcript or an earlier transcript corresponding to the search request. The
sofiware would display, as a court reporter continued to generate the real-time
transcript, at least a portion of the real-time transcript that was responsive to the
search request,

Sandstrom Decl. § 12. Judge Strand’s court reporter, Merilyn Sanchez, also explained in her
declaration that the technology in use prior to the critical date enabled Boolean logic searches of

the real-time transcript.

7(...continued)
search request; and
displaying, during generation of the transcript, the at least a portion of the
transcript identified.

Claim 7 of U.S. Patent No. 6,026,395 (issued Feb. 15, 2000).

5 Searches sensitive to the relationship between search terms use Boolean logic. 4
Primer in Boolean Logic, University Libraries, University at Albany, at
http://library.albany.edw/internet/boolean-html. “Boolean logic consists of three logical
operators: or, and, not.” Jd. It enables the user to search for records that have either one term or
another, both terms, or one term and not the other. /d. A more sophisticated variation enables
searches using proximity connectors and the roots of words. Boolean Searching, Thurgood
Marshal! Law Library Research Guide, at
http://www. law.umaryland.edu/marshall/UMLaw/researchguide/boolean.asp.

22


set-up that courtroom technology provided isolated communication links between the multiple
computers for each party such that a secure communication could be sent between two computers
used by one party in the courtroom. Therefore, the defendants have failed to show that the
technology available in the Phoenix CIC prior to the critical date of Patent 5,369,704 anticipated
Claim 16. The Court denies the defendants’ motion for summary judgment as to this claim.

8 Claims 26 -28 and 32 of U.S. Patent No. 5,949,952

Claim 26 of the ‘952 patent covers a real-time system that converts spoken words to text
that is transmitted to user computers and captures a video image as the words are being spoken
that is associated with the text in real time.'* Claim 27 covers the additional feature that a
portion of the video images captured under Claim 26 can be delivered to the terminal.'> Claim

28 covers the ability to view the video images and transcript simultaneously on the screen.'®

Specifically, Claim 26 of the ‘952 patent covers:

26. A method for facilitating the use of information from a testimonial
proceeding, the method utilized at least in part during the testimonial proceeding,
the method using a transcription system, a capture system and a terminal having a
screen, the method comprising:

converting, using the transcription system, spoken words to text in real time;

capturing, using the capture system, video images showing speaking of the

spoken words in real time;

associating the video images with the text;

delivering the text to the terminal; and

displaying the text on the screen for real time review.

Claim 26 of U.S. Patent No. 5,949,952 (issued Sept. 7, 1999),

'S Specifically, Claim 27 covers “[t]he method of claim 26 further comprising: delivering
at least portions of the video images to the terminal; and displaying at least portions of the video
images delivered.” Claim 27 of U.S. Patent No. 5,949,952 (issued Sept. 7, 1999).

'® Specifically, Claim 28 covers “[t]he method of claim 27 wherein the displaying of the
at least portions of the video images delivered occurs on the screen along with the displaying of
(continued...)

35



do not agree with Engate’s overly narrow definition of what constitutes corroborating evidence.
Engate contends that testimonial evidence from multiple witnesses alone is never sufficient to
invalidate a patent — that is, that testimonial evidence can never be corroborated by testimonial
evidence. This view is not wholly unsupported by case law. The Federal Circuit has explained
that “the Supreme Court has defined the necessity of corroboration not with reference to the level
of interest of the testifying witness, but rather because of doubt that testimonial evidence alone in
the special context of proving patent invalidity can meet the clear and convincing evidentiary
standard to invalidate a patent.” Finnigan Corp., 180 F.3d at 1368, But Engate’s reading of
Federal Circuit precedent overstates the level of skepticism with which courts must regard
testimonial evidence when considering the validity of a patent. The year before the Federal
Circuit decided Finnigan, it implicitly accepted that testimonial evidence can satisfy the
corroboration requirement under certain circumstances, Woodland Trust v. Flowertree Nursery,
Inc., 148 F.3d 1368, 1371 (Fed. Cir. 1998), and it has stated as recently as last month that the ,
“oral testimony of a disinterested party can serve to satisfy the corroboration requirement.”
TypeRight Keyboard Corp., 374 F.3d at 1159. See also Sandt v. Technology, Ltd. v. Resco Metal
& Plastics Corp., 264 F.3d 1344, 1351 (Fed. Cir. 2001) (citing Woodland Trust, 148 F.3d at
1371).4

When assessing whether testimonial evidence corroborates other testimonial evidence,

4 This construction of the corroboration requirement exemplifies, in this Court’s view, the
irrationality of the corroboration rule, which evidently applies at trials just as it applies on
summary judgment. See, e.g., Woodland Trust, 148 F.3d at 1371-73. A single interested
witness’s testimony alone is insufficient, and the same is true of a single disinterested witness,
but under TypeRight Keyboard evidently the whole is greater than the sum of its parts. We make
this observation not to indicate any disagreement with TypeRight Keyboard but rather to suggest
that the underlying rule has seen better days and ought to be put out of its misery humanely rather
than being forced to suffer the death of a thousand cuts.

17


since the late seventies. But the computer-integrated courtroom takes the

technology one step further by using CAT to provide an on-screen display of the

transcript of courtroom proceedings just three seconds after the words are taken

down by the court reporter.

Id. Computers for the judge and lawyers could be hooked up to the court reporter’s CAT system
so that they received real-time transcripts of the proceedings. Block, supra, at 51. The Phoenix
CIC used a local area network (“LAN”) to link the courtroom computers to a common file server.
Roger G. Strand, The Courtroom of the Future, The Judges’ Journal, Spring 1989, at 10 (Defs.’
Ex. 12). The computers on the local network were “located on the judge’s bench, at each
counsel’s table, and at the courtroom deputy clerk’s station, the court reporter’s position, the
secretary’s desk, and each law clerk’s desk.” Jd. at 10. Although the computers were all linked,
“{t]he LAN file server provide[d] each party and the court with separate space in the data base
and with separate security codes, in order to ensure that proper handling is accorded to these
confidential and privileged litigation materials.” Jd. at 11.

CICs utilized litigation support software to enhance the utility of having real-time,
electronic transcripts. For example, the litigation support software used in Judge Strand’s
courtroom enabled the parties to search transcripts electronically, annotate the text and “‘issue-
code’ their copies of the testimony as it happens, by assigning numbers to subjects of particular
interest and marking the transcript electronically whenever the subject is mentioned.” Knox,
supra, at 9. The software could search for particular words, such as “objection,” their synonyms
or “pairs of words that appear near to one another (every time, for example, a client’s name is
mentioned within ten words of the word cocaine).” Id.; see also, e.g., Ronald F. Madden, The

Coming of the Electronic Courtroom, 5 Yearbook of Law Computers & Technology 9, 13 (1991)



associated to a selected portion of the transcript to a second user on the network and that the
second user could see the portions of the transcript associated to the message. The defendants’
only evidence that portions of the real-time transcript could be linked to messages prior to the
critical date is Sanchez’s declaration. Although the Court has absolutely no reason to doubt
Sanchez’s veracity and credibility, as previously discussed, we cannot invalidate a patent based
on uncorroborated testimonial evidence, even if the witness is not interested in the outcome of
the case. Finnigan Corp., 180 F.3d at 1367. Accordingly, the Court must deny the defendants’
motion for summary judgment as to Claim 1 of Patent 5,269,704.

7. Claim 16 of U.S. Patent No. 5,369,704

Claim 16 of the ‘704 patent covers a network configuration in which the CAT system
transmits real-time transcripts to several computers used by plaintiff’s attorneys and several
computers used by defense attorneys, but the communication link between the defense attorneys’
computers are isolated from the communication link between the plaintiff attorneys’ computer

such that each side can send private messages to other members of her side."? As we have

? Specifically, Claim 16 of the ‘704 patent covers:

16. A transcription network comprising:

transcription means for producing transcript signals representative of spoken
words in real time;

a plurality of examining terminals receiving and displaying transcript signals
produced by said transcription means;

a first communication link connected to provide for the exchange of messages
between said examining terminals;

a plurality of defending terminals receiving and displaying transcript signals
produced by said transcription means; and

a second communication link isolated from said first communication link and
connected to provide for the exchange of messages between said
defending terminals.

(continued...)

32


invalidate a patent." A “Quick Reference Card” for DiscoveryZX prepared by the Texas Court
Reporters Association for a presentation about CICs on April 27, 1991 at the NCRA Midyear
Seminar explains that the F1 and F2 keys on the keyboard enable the user to “Go to Next
Keyword” and “Go to Next Master Keyword.” Defs.’ Ex. 4.5. The Quick Reference Card was
prepared for a session called “Realtime Spectacular, Part 3,” thus one can infer that the F1 and F2
functions could be utilized on a realtime transcript. Jd. Engate argues that there is no evidence
that the version of DiscoveryZX that had this capability had been installed in any CICs before the
critical date. Although Engate is correct that no descriptions of the pre-critical date CICs
specifically mentioned DiscoveryZX software with this feature, the reference card shows that the
version of DiscoveryZX that had the function at issue was on sale prior to the critical date, which
is a basis for invalidity under 35 U.S.C. § 102(b). The Court finds the Quick Reference Card
provide clear and convincing evidence of invalidity that Engate has failed to call into question.
Accordingly, the Court grants the defendants’ motion for summary judgment as to Claim 10 of
the ‘256 patent.

J. Claim 15 of U.S. Patent No. 5,940,800

Claim 15 of the ‘800 patent describes a system that enables the user to create a list of

'° The documentary evidence pertains to the capabilities of DiscoveryZX software.
Because Sanchez did not state that she used the search-and-skip function of DiscoveryZX
software, the documentary evidence does not provide the corroboration that the Federal Circuit
requires for us to be able to rely on the testimonial evidence of a disinterested witness such as
Sanchez. A fact finder might, after a trial, find the totality of the evidence (testimony and
documents) on this and other points sufficient to satisfy the Federal Circuit’s corroboration
requirement as we understand it. But on a summary judgment motion, a judge cannot make the
credibility determinations that we believe are necessary to get the defendants over the hurdle in
this case.

29



‘experimentation’ may constitute a barring public use.” Jd. (citing RCA Corp. v. Data Gen.
Corp., 887 F.2d 1056, 1061 (Fed. Cir. 1989)). And the invention need not “function perfectly in
order to be reduced to practice or considered as on sale or in public use. All that is necessary is
that the invention be commercially operable; it may have problems which are not due to
fundamental defects.” Harrington Manufacturing Co., 815 F.2d at 1481 (internal quotation
marks omitted; quoting Jn re Theis, 610 F.2d 786, 794 n.11 (C.C.P.A. 1979)). The experimental
use doctrine does not apply to “market testing where the inventor is attempting to gauge
consumer demand for his claimed invention. The purpose of such activities is commercial
exploitation and not experimentation.” In re Smith, 714 F.2d 1127, 1135 (Fed. Cir. 1983)
(citations omitted).

The experimental use doctrine “does not shift the burden of proof from the accused
infringer to the patentee. Rather, it operates to negate application of the public use bar.”
SmithKline Beecham Corp., 365 F.3d at 1317 (citing EZ Dock, Inc. v. Schafer Systems, Inc., 276
F.3d 1347, 1351-52 (Fed. Cir. 2002)). That means that “once the challenger of the patent has
proven by clear and convincing evidence that the invention was in public use before the critical
date, the burden of production shifts to the patentee to provide sufficient evidence to create a
genuine issue of material fact that the use qualifies as experimental.” /d.

The court must “look to the totality of the circumstances when evaluating whether there
has been a public use within the meaning of section 102(b).” Netscape Communications Corp.,
295 F.3d at 1320 (citing Sinskey, 982 F.2d at 498). And the court must do so while keeping in
mind “the policies underlying the public use bar.” Id. (citing Tone Bros., Inc. v. Sysco Corp., 28

F.3d 1192, 1198 (Fed. Cir. 1994)). “The circumstances may include: the nature of the activity


any uses of the patented technology prior to the relevant critical date were experimental and,
therefore, do not invalidate the patents. Second, Engate argues that even if real-time
transcription services available in courtrooms prior to the critical date were not experimental, the
defendants have failed to prove that the technology in public use, on sale or described in printed
publications had all of the features covered by Engate’s patents. We will evaluate each argument
in turn and then examine the validity of each claim at issue.
A, Experimental usage

The Federal Circuit has explained that “[w]hether a patent is invalid due to public use
under § 102(b) is a question of law based on underlying questions of fact.” Smithkline Beecham
Corp. v. Apotex Corp., 365 F.3d 1306, 1316 (Fed. Cir. 2004) (citing 344 Co. v. Chemque, Inc.,
303 F.3d 1294, 1301 (Fed. Cir. 2002)). “Public use includes ‘any use of [the claimed] invention
by a person other than the inventor who is under no limitation, restriction or obligation of secrecy
to the inventor.”” Netscape Communications Corp. v. Konrad, 295 F.3d 1315, 1320 (Fed. Cir.
2002) (citing Petrolite Corp. v. Baker Hughes Inc,, 96 F.3d 1423, 1425 (Fed. Cir. 1996)), Public
use does not include “[t]he use of an invention by the inventor himself, or of any other person
under his direction, by way of experiment, and in order to bring the invention to perfection.”
Elizabeth v. Pavement Company, 97 U.S. 126, 134 (1877) (citations omitted). This experimental
use doctrine applies “‘[w]hen an evaluation period is reasonably needed to determine if the
invention will serve its intended purpose.’” New Railhead Manufacturing, L.L.C. v. Vermeer
Manufacturing Co., 298 F.3d 1290, 1297 (Fed. Cir. 2002) (quoting Seal-Flex, Inc. v. Athletic
Track & Court Construction, 98 F.3d 1318, 1324 (Fed. Cir. 1996)). “Once an inventor realizes

that the invention as later claimed indeed works for its intended purpose, further


the court should consider
(1) the relationship between the corroborating witness and the alleged prior user,
(2) the time period between the event and trial,
(3) the interest of the corroborating witness in the subject matter in suit,
(4) contradiction or impeachment of the witness’ testimony,
(5) the extent and details of the corroborating testimony,
(6) the witness’ familiarity with the subject matter of the patented invention and

the prior use,

(7) probability that a prior use could occur considering the state of the art at the
time,

(8) impact of the invention on the industry, and the commercial value of its
practice.

Woodland Trust, 148 F.3d at 1371 (quoting Price v. Symsek, 988 F.2d 1187, 1195 n.3 (Fed. Cir.
1993)). When the patentee comes forth with evidence challenging the credibility of the witnesses
claiming prior use or invention, the trier of fact must implicitly make a credibility determination
in finding that the testimony of one witnesses (or documents, for that matter) corroborates the
testimony of the witness whose credibility has been challenged.

This has serious implications for the party seeking to invalidate a patent on summary
judgment. A judge cannot make credibility determinations when reviewing a motion for
summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). Thus if the
patentee comes forward with evidence sufficient to call into question the credibility of an affiant
or deponent whose testimony is relied upon by the movant, the court cannot grant summary
judgment as to invalidity, even if the party seeking the declaration of invalidity has come forth
with corroborating testimonial or documentary evidence. The patentee must do more than simply
“assert[] that the movants [sic] witnesses are not to be believed.” TypeRight Keyboard Corp.,
374 F.3d at 1158. “However, summary judgment is not appropriate where the opposing party

offers specific facts that call into question the credibility of the movants [sic] witnesses.” Jd.

18



“Time”) (Defs.’ Ex. 3.6); Diane Knox, Phoenix's Courtroom of the Future, The American
Lawyer, May 1991, at 4 (Defs.’ Ex. 4.6). In these courtrooms, referred to as computer-integrated
courtrooms or CICs, the stenographer’s keystrokes were translated real time into readable
English transcripts that appeared on computers for the judge and parties. Time, supra. The
National Court Reporters Association equipped the three courtrooms for computer-aided
transcription (“CAT”) “to showcase court reporter technology.” Knox, supra, at 6. By 1990,
court systems in Cook County, Illinois, El Paso, Texas, and St. Paul, Minnesota, had provided
funding for CICs, as had the Columbus Bar Association and Ohio Shorthand Reporters
Association. Martin H. Block, Computer-Integrated Courtrooms: Moving the judicial system
into the twenty-first century, Trial, September 1990, at 52 (Defs.’ Ex. 8). And by 1991, local
court reporter associations, bar associations and courts had funded ten state and federal
computer-integrated courtrooms, with six others on the way. Knox, supra, at 6.

The hardware and software in the three original CICs were repeatedly updated. Merilyn
A, Sanchez, The Computer-Integrated Courtroom, Hearsay, October 1990, at 6 (Defs.’ Ex 23).
As of 1991, some CICs relied on Stenograph software; others relied on Xscribe software, Jill
Berman Levy, Written remarks for the Conference on Technologies in Court Reporting
sponsored by the Institute for Court Management of the National Center for State Courts and the
National Court Reporters Association 12-13 (Feb. 15, 1991) (Defs.’ Ex. 9).

At the heart of a computer-integrated courtroom is a system known as CAT, or

computer-aided transcription, which translates a court reporter’s phonetically

based keystrokes into English. Since every court reporter has individual ways of

stroking various words, the translation is based on a personal “dictionary”

developed by each reporter based on his or her particular stroking patterns. Court
reporters have used CAT technology to make preparation of transcripts easier

courtroom.



However, as the developer of software with capabilities patented by Engate, Sandstrom
has the type of interest in these proceedings that has given rise to the Federal Circuit’s skepticism
about testimonial evidence. See Finnigan Corp., 180 F.3d at 1367. Under the Federal Circuit’s
corroboration requirement, neither Sanchez nor Sandstrom’s declarations standing alone are
sufficient to invalidate Engate’s claim. But to rely on Sandstrom’s declaration — even if in
concert with the declaration of Sanchez, who is a very compelling source — would require the
Court implicitly to make a credibility determination about Sandstrom. This the Court cannot do
ona motion for summary judgment. For now, the Court is restricted by the confines of Fed. R.
Civ. P. 56(c).

The defendants argue that Sandstrom’s declaration is not the only evidence that
corroborates Sanchez’s declaration. It is true that several articles explained that users could
search transcripts for terms. See, e.g., Strand, supra, at 10-11; Knox, supra, at 9. But the articles
do not explicitly state that users could search the real-time transcript. The defendants argue that
is what the articles imply. Sanchez wrote in her 1990 article that litigation support software
“enables the participants in the courtroom to electronically search the record for something that
occurred five minutes or five days previously.” Sanchez, supra, at 7. And B.J. Shorak wrote in
1989 that litigation support software “allows attorneys to review prior testimony on their
monitors during cross-examination without having to interrupt the proceedings to ask the reporter
to search through pages of notes. Instead, at the touch of a button, the computer finds the
testimony in question and flashes it onto the monitor.” B. J. Shorak, Computer Courtrooms:
Views of the National Shorthand Reporters Association, the Advocate, October 1989, at 43

(Defs.’ Ex. 11). Perhaps it would be reasonable to infer that any software that vitiates the need to

24


Minute Order Form (06/97)

United States District Court, Northern District of Hlinois

Name of Assigned Judge
or Magistrate Judge

Matthew F. Kennelly

Sitting Judge if Other
than Assigned Judge

CASE NUMBER 01 C 6204 DATE 8/19/2004
CASE Engate vs. Esquire
TITLE
{In the following box (a) indicate the party filing the motion, ¢.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
MOTION: of the motion being presented]
DOCKET ENTRY:
qd) o Filed motion of [ use listing in “Motion” box above.]
(2) Oo Brief in support of motion due
(3) im} Answer brief to motion due. . Reply to answer brief due.
(4) oO Ruling/Hearing on set for at
(5) Oo Status hearing[held/continued to] [set for/re-set for] on set for at
(6) oO Pretrial conference[held/continued to] [set for/re-set for] on set for at
(7) oO Trial[set for/re-set for}on at
(8) ia {Bench/Jury trial] [Hearing] held/contined to at
(9) Qa This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
OFRCP4(m) CO Local Rule 41.1 COFRCP41(a)(1) OO FRCP41(a)(2).
ao {Other docket entry] For the reasons set forth on the attached Memorandum Opinion and Order,
the Court grants in part and denies in part Esquire and Atkinson-Baker’s motion for partial summary
judgment on invalidity (183). The Court grants Engate’s motion to dismiss Esquire’s unfair competition
claim (235) and denies Esquire’s motion for summary judgment on its unfair competition claim (247).
The Court grants Engate’s motion for reconsideration (267), but denies the defendants’ motion for
reconsideration (266). The Court’s 7/30/04 Memorandum Opinion and Order is vacated.
(il) @f [For further detail see order attached to the original minute order.]

No notices required, advised in open court.

No notices required.
req) umber of notices

Document
Number

Notices mailed by judge’s staff,

Notified counsel by telephone.

AUG, 2.8.2004

docketing Li (a

date maited notice

A | Docketing to mail notices.

Mail AO 450 form.

Copy to judge/magistrate judge.

BMNCO LOelLslg “SA

courtroom
deputy’s
initials

oY HhAZ

OR Md Og Gye ke

Date/timne received in

2 i | centtal Clerk's Office railing deputy intiks

27



does not necessarily constitute prior art because there is no evidence that a version of Flexcap
with the features described by Middlebrooks was in use prior March 24, 1992, the critical date.
Because the technology used in the L.A. courtroom in 1982 was an Xscribe system, the Court
could infer that the Flexcap capabilities listed in the user’s manual, which mirrored those
described in the L.A. Times article, were available prior to the critical date. But this analysis
relies on Middlebrooks’ declaration, which the Court cannot rely on because we cannot decide on
summary judgment that we find Middlebrooks to be credible, given that he is an employee of a
firm, Stenograph, that markets software that might be covered by Engate’s patents. Accordingly,
the Court denies the defendants’ motion for summary judgment as to Claim 1 of Patent
5,815,639 and Claim 4 of Patent 5,926,787.

I. Claims 1 and 3 of U.S. Patent No. 6,023,675

Claim 1 of the ‘675 patent covers the real-time digital recording of a testimonial
proceeding that is translated in real time by a CAT system into text that is delivered in real time
to a terminal located in a different place from where the words are spoken and transmitted from
the second location in real time to a terminal located in a third location, whete the text is

displayed.” Claim 3 of the patent covers the audio recording of the testimonial proceeding that

% Claim 1 of the ‘675 patent specifically states:

1, A method utilized during a testimonial proceeding, the method comprising:
capturing representations of spoken words in real time at a first premises;
converting the representations into text in real time;
delivering the text in real time to a remote system, the remote system being
disposed at a second premises;
communicatively coupling at least one terminal and the remote system;
delivering, by the remote system, the text in real time to the at least one
terminal, the at least one terminal being disposed at at least a third
premises; and
(continued...)

47


courtroom, the Knox article discusses prices for setting up CICs, making clear that Xscribe’s
software was on sale. Knox, supra, at 6. When the cost of the technology is published, the court
can infer that the seller wants to exploit the product commercially. See Harrington
Manufacturing Co., 815 F.2d at 1481 (footnote omitted). Thus we conclude that the defendants
have shown by clear and convincing evidence that the CICs in Chicago, Detroit and Phoenix
were in public use, and Engate has failed to raise a genuine issue of fact that the CICs served a
primarily experimental purpose. The use of functions that enhanced real-time transcription
services in the CICs constituted public uses that occurred prior to the critical date of the patents
at issue in this case.

2 Closed captioning of television programs

The National Captioning Institute (“NCI”) began providing real-time captioning of
television broadcasts in 1982. Laura Malt, Behind the screen. Getting captions on the air,
Electronic Media, March 19, 1990, at 14 (Defs.’ Ex. 5.1); Marshall S. Jorpeland, Court Reporter
Helps Make The Silent Screen Speak, NSR, April 1982, at 21 (Defs.’ Ex. 18). When real-time
closed captioning was first offered, it took seven seconds for the text of spoken words to appear
on the television screen. Malt, supra. By 1990, it took only four seconds for a transcription of
the spoken words to appear on the screen. Jd.

Using a stenoptype machine, a real-time captioner “breaks” spoken words into

phonetic strings. That information is sent electronically to a computer at NCI.

The phonetic string is translated into words by computer and then the captioning

information is sent back to the broadcast origin point where it merges with a

regular broadcast signal and is transmitted. Decoder boxes, which cost about

$200, “grab” the signal, translate the data into text and display the letters on the

screen along with the picture.

Jerry Wolffe, United Press International, Nov. 11. 1991 (Defs.’ Ex. 5.2). The text would appear

11


(Defs.’ Ex. 10) (explaining how a judge could search a completed transcript for all occurrences
of the word “objection” within five lines of the words “sustained” or “overruled”). And
“[a]ttorneys cfould] also program the computer to automatically highlight certain words
whenever they occur.” Knox, supra, at 9. The systems users could take notes during the trial
that could be “printed out with the trial transcript, either interspersed with the text or indexed to
the text and printed separately.” Id.

Courtroom computers also had access to LEXIS; WESTLAW; the Federal Judicial
Center’s docketing system CHASER; ASSYST, a program designed by the U.S. Sentencing
Commission to aid in computing sentences under the Federal Sentencing Guidelines; and
ABA/Net, which included an “electronic mail and PC-to-fax transmission capability” and
enabled “multiple users to edit documents on-screen collectively.” Knox, supra, at 8; see also
Strand, supra, at 47-48. Using these features in concert with real-time transcription, “[s]ome
innovative users have found that it is even possible to telecommunicate back to the home office
the realtime proceedings as they are occurring in the courtroom.” Madden, supra, at 14.

The use of real-time transcription in these courtrooms plainly constituted a public use, not
an experimental one. The CICs were sponsored by the National Court Reporters Association to
display the new services court reporters were capable of providing. The judges and lawyers used
the technology on a day-to-day basis to do their work; they were not testing the efficacy of the
system for software developers. Furthermore, no promise of confidentiality was imposed on the
users. Quite the contrary, articles about the CICs, featuring interviews with judges and lawyers
who used the system, were published in well-known magazines with national circulation.

Although Xscribe Corp. donated the real-time transcription software used in the Phoenix

10



software “enables the attorney to view the transcript text and to do a full text search and retrieval
while the video tape shows the person giving the testimony.” /d. at 1. But the portions of the
user manual cited by the defendants do not say the text of the transcript can be displayed for real-
time review, one of the limitations of Claims 12, 13, 19 and 25. Because the Discovery VideoZX
user manual does not describe all the limitations of the claims, it is not an invalidating prior
printed publication. Accordingly, the Court denies the defendants’ motion for summary
judgment as to Claims 12, 13, 19 and 25 of the ‘510 patent.

10. Claim 1 of US. Patent No. 5,815,639 & Claim 4 of U.S. Patent No. 5,926,787

Claim 1 of the ‘639 patent and Claim 4 of the ‘787 patent cover a CAT system
comprising a library of key strokes and their corresponding alphabetic and numeric translations
or pronounceable syllables that the CAT system uses to translate the stenographer’s keystrokes
into exact words in real time or, if there is no exact word in the dictionary that matches the

keystrokes, into phonetic syllables stored in the library”? The application for Patent 5,815,639

22 Claim 1 of the ‘639 patent specifically states:

1. A reporting system for providing in real-time to a viewing terminal text
representative of spoken words that is readable by a lay person, said reporting
system operates on coded representations of spoken words in a first phoneme
formal generated in real time, said reporting system comprising:

a cross-reference library storing associations between coded representations of
spoken words in the first phoneme format and corresponding exact
alphabetic and numeric text;

a phoneme library for storing associations between coded representations of
spoken words in the first phoneme format and pronounceable but not exact
representations of spoken words in a second phoneme format;

a transcriber retrieving from said cross-reference library exact alphabetic and
numeric text for coded representations of spoken words in the first
phoneme format that have associations stored in said cross-reference
library;

said transcriber retrieving from said phoneme library coded representations of

(continued...)

43


computer that can be displayed on that computer with the sections of the transcript associated to
the message.’ The application for Patent 5,369,704 was filed on March 24, 1993. Articles
discussing the technology in public use in CICs describe many of the elements comprising Claim
1, For example, the articles state that real-time transcripts could be sent to multiple computers
linked to a CAT system in the CICs prior to the critical date. Knox, supra, at 4. The LAN
network in the Phoenix CIC “electronically link[ed] a number of otherwise separate personal
computer work stations together so they can communicate with each other and so they can share
one central data base that is created and maintained on a specific item of computer hardware
called a ‘file server.” Strand, supra, at 10. Users on the network could definitely send messages
to each other using electronic mail or ABA/Net. Madden, supra, at 14; Knox, supra, at 8.
However, one element of Claim 1 is missing from the articles describing the CICs. No

articles state — either explicitly or implicitly — that one user on the network could send a message

" More specifically, Claim 1 of the ‘704 patent covers:

1. A transcription network comprising:

transcription means for generating transcript signals representative of spoken
words in real time;

an attorney’s terminal receiving the transcript signals generated by said
transcription means for display;

an associate’s terminal receiving the transcript signals generated by said
transcription means for display;

said associate’s terminal providing for the generation of messages to be
transmitted to said attorney’s terminal, and, prior to transmissions,
providing for the association of the generated messages with selected
portions of the transcript signals; and

said attorney’s terminal providing for the display of the selected portions of the
transcript signals through access to the associated messages received from
said associate’s terminal.

Claim 1 of U.S. Patent No. 5,369,704 (issued Nov. 29, 1994).

31


is sent to a location away from where the testimony is occurring and then from that location to a
third location.* The application for the ‘675 patent was filed on November 3, 1998.

The defendants argue that Claims | and 3 were anticipated by closed captioning because
captions made using a CAT system were transmitted from NCI’s offices to at least two locations.
A United Press International article explained:

{uJsing a stenotype machine, a real-time captioner “breaks” spoken words into
phonetic strings, That information is sent electronically to a computer at NCI.
The phonetic string is translated into words by computer and then the captioning
information is sent back to the broadcast origin point where it merges with a
regular broadcast signa! and is transmitted. Decoder boxes, which cost about
$200, “grab” the signal, translate the data into text and display the letters on the
screen along with the picture.

There is only a three- to five-second delay from the time something is
spoken “live” on television to having it translated into a caption and sent to the
home of a hearing-impaired person, [NCI manager of public relations Morgan]
Bramblet said.

Wolffe, supra. Engate argues closed captioning did not anticipate Claims | and 3 because the
text and audio signals were displayed on a television screen rather than a computer terminal. We

have already rejected this distinction as immaterial. Closed-captioning as described by Wolffe is

2(..continued)
displaying at the at least one terminal the delivered text for real time review.

Claim 1 of U.S. Patent No. 6,023,675 (issued Feb. 8, 2000).
*4 Claim 3 of the ‘675 patent specifically states:

3. The method of claim 1 further comprising:

capturing audio signals corresponding to the spoken words;

delivering the captured audio signals to the at least one terminal via the remote
system; and

reproducing at the at least one terminal the delivered audio signals.

Claim 3 of U.S. Patent No. 6,023,675 (issued Feb. 8, 2000).
48


issues and choose which issues she wants the system to identify in the transcript.'' The
application for Patent 5,940,800 was filed on August 31, 1998. The technology available in CICs
in the 1980s and early 1990s enabled users to create a list of issues that would be identified in the
transcript as it was forwarded to the user’s computer from the CAT system. As we mentioned
above, in the Chicago, Detroit and Phoenix CICs “attorneys c[ould] ‘issue-code’ their copies of
the testimony as it happens, by assigning numbers to subjects of particular interest and marking
the transcript electronically whenever the subject is mentioned.” Knox, supra, at 8-9. Engate
has failed to create a genuine issue of fact about the issue-coding functionality available in the
CICs. Accordingly, the Court holds that Claim 15 was anticipated by the CICs and is invalid
under 35 U.S.C. § 102(b).

6. Claim 1 of U.S. Patent 5,369,704

Claim 1 of the ‘704 patent covers the transmission of a real-time transcript from a CAT
system to User 1's computer and User 2's computer, which is networked to User 1's computer

and, therefore, able to send messages associated to selected parts of the transcript to User 1's

"' Specifically, Claim 15 of the ‘800 patent states:

15. A method used during a transcription proceeding for categorizing
transcript text, the method utilizing at least a stenographic system, a screen, and a
user input device, the method comprising:

converting, using the stenographic system, representations of spoken words to

transcript text in real time;

displaying the transcript text on the screen for real time review;

displaying on the screen a list of issue categories;

accepting, via the user input device, an input selecting at least one issue

category from the list of issue categories; and

associating at least a portion of the transcript text with the selected at least one

issue category.

Claim 15 of U.S. Patent No. 5,940,800 (issued Aug. 17, 1999).
30


that occurred in public; the public access to and knowledge of the public use; whether there was
any confidentiality obligation imposed on persons who observed the use; whether persons other
than the inventor performed the testing; the number of tests; the length of the test period in
relation to tests of similar devices; and whether the inventor received payment for the testing.”
Id, (citations omitted). Which factors are determinative varies on a case-by-case basis. For
example, “[a]lthough a written promise of confidentiality is a factor to be considered in
appropriate circumstances, such as when persons other than the patentee conduct the
experiments, the absence of such a promise does not make a use ‘public’ as a matter of law, or
outweigh the undisputed fact that no information of a confidential nature was communicated to
others.” Allied Colloids Inc. v. American Cyanamid Co., 64 F.3d 1570, 1576 (Fed. Cir. 1995)
(citations omitted). Similarly, “testing at the potential customer’s site does not raise a public use
bar as a matter of law.” Id.

Engate argues that the uses of real-time transcription services and related functions
described in the newspaper and journal articles cited by the defendants were experimental. We
will evaluate each claimed public use to determine whether the defendants have made a prima
facie case that the pre-critical date uses were public uses and whether Engate has raised a genuine
issue of fact that the uses were actually experimental.

1. Computer-integrated courtrooms in the United States

In the mid-1980s, the courtrooms of federal district judges Prentice Marshall in Chicago
and Roger Strand in Phoenix and a state court judge in Detroit began featuring real-time

transcription services? The Courtroom of the Future, Time, Aug. 4, 1986, at 60 (hereinafter

2 The Court had the privilege of serving as Judge Marshall’s law clerk from September
1982 through August 1984, which predated the use of real-time transcription in Judge Marshall’s

7



issue of fact as to invalidity. The Court finds by clear and convincing evidence that each element
of this claim was anticipated by the CICs in Chicago, Detroit and Phoenix.

Engate argues that the articles cited by the defendants and relied upon by the Court do not
anticipate the claim because no one article describes all the elements of the claim. If the Court
were concluding that Claim 5 is invalid because it was anticipated by a printed publication,
Engate would be correct that the publication would have to include — either explicitly or
inherently — every element of the claim. However, the basis for our conclusion that Claim 5 is
invalid is that the technology described in the claim was in public use prior to the critical date.
The Court cites the articles as evidentiary support for what technology was in use in the CICs,
not as an independent ground for finding the claim invalid. The Court can rely on several
sources to describe all the technological elements available in the courtrooms that — when used
together ~ constituted functionalities claimed in Engate’s patents.

2. Claim 7 of U.S. Patent No. 6,026,395

Claim 7 of the ‘395 patent covers the capability to conduct natural language or Boolean

logic searches on a real-time transcript while it is being generated.” The application for this

&(...continued)
have limited our citations to one or two articles.

7 Claim 7 of the ‘395 patent specifically states:

7. A method performed by a computing system during a proceeding in which
a transcript representative of spoken words is generated in real-time, the method
comprising:

generating a transcript in real time;

storing the transcript;

accepting, during generation of the transcript, a user input representative of a

first search request;
identifying at least a portion of the stored transcript corresponding to the first
(continued...)

21



transcript was being created and the video recorded. In support of its position, Engate refers to
the deposition testimony of Fred Middlebrooks, a Stenograph employee, in which he stated that
Discovery VideoZX could not synchronize video to the transcript until the transcript had been
completed. Middlebrooks Dep. at 17 (PI.’s Ex. L). Claim 32 does not state that the user must be
able to search for text and the associated video image in real time. However, Claim 32
incorporates Claim 26, so the video images must be synchronized to the transcript in real time to
meet all the elements of Claim 32. Even though we found Claim 26 was anticipated by closed
captioning, we cannot conclude on the present record that the first few elements of Claim 32
were anticipated by closed captioning and the searching and playback elements were anticipated
by Discovery VideoZX. There is no indication that Discovery VideoZX was utilized with closed
captioning, and for a prior use to anticipate a claim, all the elements of the claim must have been
in use together as described in the claim. Apple Computer, 234 F.3d at 20. Middlebrooks’
deposition testimony creates a genuine issue of fact as to whether Discovery VideoZX invalidates
Claim 32 as prior art.

The defendants argue that regardless of whether Discovery VideoZX had the features
described in the press release, the press release itself constitutes a printed publication that
invalidates Claim 32. Engate responds that the press release is ambiguous as to whether the
transcript and video are synchronized in real time. Although one reasonable interpretation of the
press release is that the software described therein could synchronize video images to the text in
real time, we agree with Engate that other interpretations of the press release are reasonable.
Accordingly, the press release alone cannot invalidate Claim 32 of Engate’s patent as a prior

printed publication.

38


The defendants also argue that by 1992, the technology described in Claim 32 was in use
in the Dallas CIC. The court reporter in the Dallas courtroom used a CAT system to translate
“the reporter’s phonetic stenographic notes into readable English text . . . instantaneously.”
Andrews, supra, at 37.

To supplement the record being produced by the court reporter’s real-time
translation, a camera installed in our courtroom videotapes witnesses as needed.

When testimony is conducted through an interpreter, a videotape is made in case

the accuracy of the translation is questioned Jater. With the consent of all parties,

other witnesses can be videotaped for playback (just as testimony could be read

back) in the event the witnesses are not available should there by a retrial.

The real-time transcript is encoded with time signals by the computer. The
videotape is automatically encoded with the same signals. Once the user has

performed a search for a word or phrase on the transcript, the computer can then

use the signals to locate that testimony quickly on the videotape. On a 4-hour

videotape it takes under 2 minutes. This search capability is invaluable in editing

videotaped depositions, and it is a tremendous time-saver if a jury requests that

part of the testimony be read back. The testimony in question can be quickly

located and played back on a courtroom monitor.
Id, at 38. Engate argues that because Andrews’ article describing the Dallas CIC was published
in September 1992, the technology it describes did not anticipate Claim 32. Engate is correct
that we cannot assume that the technology described by Judge Andrews was available prior to
March 24, 1992. Therefore, the Court must deny the defendants’ motion for summary judgment
on Claim 32. In summary, the Court grants the defendants’ motion for summary judgment as to
Claims 26, 27 and 28 but denies it as to Claim 32 of Patent 5,949,952.

9. Claims 12, 13, 19 and 25 of U.S. Patent No. 6,282,510

Claim 12 of the ‘510 patent covers the creation of a real-time transcript that is linked in

real time to an audio recording of the speaker and can be stored in the transcription system,

displayed on a screen, and searched so that the audio recording associated with the part of the

39


conditions are pleaded and proven” — was the only cause of action Rubin could pursue against
the lawyers for filing the allegedly frivolous case against him. Jd. at 1200, 847 P.2d 1044.

Rubin argued that even if § 47(b) barred his solicitation claim, he should be able to
maintain a claim of unfair competition against the lawyers for stirring up a baseless suit against
him for their own profit. The California Supreme Court found that § 47(b) barred Rubin’s unfair
competition claim under the Business and Professions Code. The court reasoned that a party
cannot avoid the heightened pleading requirements necessary to maintain a malicious prosecution
claim by renaming the cause of action to allege a statutory offense such as unfair competition.
Id. at 1203, 847 P.2d 1044. The court explained:

In the typical derivative action filed in the wake of allegedly tortious litigation-

related communications, the aggrieved plaintiff had been a party in the antecedent

proceeding in which the challenged communications occurred, and now seeks

redress for injuries alleged to have resulted from them. Unless the conditions

requisite to a malicious prosecution action are pleaded and proven, section 47(b)

denies relief in such circumstances, not only because that result is deemed

necessary to secure the greater interest in ensuring unhindered access to the courts,

but also because, as we noted in Silberg, supra, 50 Cal. 3d 205, the original

litigation itself provides an efficient forum in which to “expos[e] during trial the

bias of witnesses and the falsity of evidence, thereby enhancing the finality of

judgments and avoiding an unending roundelay of litigation, an evil far worse

than an occasional unfair result.”

Id, at 1203, 847 P.2d 1044 (citing Si/berg, 50 Cal. 3d at 214, 786 P.2d 365).

Similarly, in Kashian v. Harriman a state appellate court considering an unfair
competition claim concluded that the filing of “meritless lawsuits on behalf of ‘sham plaintiffs’
to deceive the defendants into believing the suits had more support than they did in fact” was the
type of communicative conduct that was covered by the §47(b) privilege. Kashian v. Harriman,

98 Cal. App. 4th 892, 917, 120 Cal. Rptr. 2d 576, 596 (2002) (citation omitted). Ultimately, the

court found that the unfair competition claim was not barred by § 47(b), because the plaintiff

54


3. Claims 4 and 8 of U.S. Patent No. 5,884,256

Claims 4 and 8 of the ‘256 patent cover a computer interface that enables the user to
annotate portions of the text with supplemental information related to the selected portion of the
text as it is being delivered in realtime to the user’s computer from the CAT system.” The
application for Patent 5,884,256 was filed on April 9, 1998. The software available in Judge
Strand’s CIC “permit[ted] the judge and the lawyers to insert notes of their own in the testimony
as it unfolds and to program the computer to high-light any key words which they expect to
figure in the trial.” Strand, supra, at 11. These notes could be interspersed through the testimony
or indexed to the relevant portions of the text. Knox, supra, at 9. Engate has failed to come
forward with evidence creating a genuine issue of fact as to whether the software capabilities
available in CICs anticipated their patent claims. Accordingly, the Court grants the defendants
summary judgment as to the invalidity of Claims 4 and 8 of the ‘256 patent.

4. Claim 10 of U.S. Patent No. 5,884,256

° Both Claims 4 and 8 relate back to Claim 1 of the ‘256 patent, which states

1. A transcription network utilized during a testimonial proceeding by a user,
the transcription network comprising:

an attorney terminal having a user interface;

a stenograph system that converts spoken words to text and delivers the text to
the attorney terminal for real time display; and

the user interface of the attorney terminal enabling the user to select portions
of the delivered text and associate supplemental information with each of
the selected portions during the testimonial proceeding.

Claim 1 of U.S. Patent No. 5,884,256 (issued March 16, 1999). Claim 4 states “[t}he
transcription network of claim 1 wherein the supplemental information comprises a note that
annotates a selected portion of the delivered text.” Claim 4 of U.S. Patent No. 5,884,256 (issued
March 16, 1999). Claim 8 states “[t]he transcription network of claim 1 wherein the
supplemental information comprises a message relating to a selected portion of the delivered
text.” Claim 8 of U.S. Patent No. 5,884,256 (issued March 16, 1999).

27


Court to dismiss Esquire’s unfair competition claim. Esquire, in turn, has moved for summary
judgment on its unfair competition claim and, with Atkinson-Baker, seeks summary judgment on
the invalidity claim. For the reasons explained below, the Court grants in part and denies in part
the defendants’ motion for summary judgment as to their counterclaim of invalidity. The Court
grants Engate’s motion to dismiss Esquire’s unfair competition claim and denies Esquire’s
motion for summary judgment on the same claim.
Standard of Review
As we have stated previously, summary judgment is appropriate in a patent case, as in any

««e

other case, “‘where the pleadings, depositions, answers to interrogatories, and admissions on 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 a judgment as a matter of law.” C.R. Bard, Inc. v. Advanced
Cardiovascular Systems, Inc., 911 F.2d 670, 672 (Fed. Cir. 1990) (quoting Fed. R. Civ. P. 56(c)).
In assessing a summary judgment motion, the Court’s “function is not to weigh the evidence but
merely to determine if ‘there is a genuine issue for trial,” Bennett v. Roberts, 295 F.3d 687, 694
(7 Cir. 2002) (citation omitted). The Court evaluates admissible evidence in the record in the
light most favorable to the nonmoving party. Chiuminatta Concrete Concepts, Inc. v. Cardinal
Industries, Inc., 145 F.3d 1303, 1307 (Fed. Cir. 1998). But “[t]he nonmovant will successfully
oppose summary judgment only when it presents ‘definite, competent evidence to rebut the
motion.’” Vukadinovich v. Board of School Trustees of North Newton School Corp., 278 F.3d :
693, 699 (7" Cir. 2002) (citation omitted). The Court must keep in mind that “[tJhe purpose of
the summary process is to avoid a clearly unnecessary trial; it is not designed to substitute

lawyers’ advocacy for evidence, or affidavits for examination before the fact-finder, when there


them out and matches them up with the corresponding English word,” With said.
“Words the computer can’t find, or can’t recognize, are spelled out on the

screens phonetically.”

Id. at 3. The real-time transcript created by the system was transmitted to a “small television
screen” on the defense table and judge’s bench. /d. The article does not corroborate Sanchez’s
declaration because she did not state that she was using the Xscribe system described in the
article. Engate argues that on its own, the article is insufficient to prove that the Dallas CIC
anticipated its patents, because in the Dallas CIC, the transcript was delivered to a television
screen rather than a computer terminal, and it is not clear from the article that the Xscribe
software had a separate phoneme library. As we have said before, the Court finds it immaterial
that the transcript was delivered to a television screen rather than a computer terminal; if the
system could send the transcript to a television, it could send the output to a computer monitor.
But the Court agrees with Engate’s second challenge to the article because the only evidence that
establishes that Xscribe’s software utilized a separate phoneme library is dependent, in part, on
Middlebrooks’ declaration.

Middlebrooks stated in his declaration that the technology he described was available in
both the OmniCat and Flexcap Cat systems. Middlebrooks Decl. 4.4. The Flexcap software was
owned by Xscribe Corp., which provided the system used in Los Angeles. A Flexcap User’s
Manual attached to Middlebrooks’ declaration explained that when the stenographer’s strokes
did not match any words in the software’s library, they were “translated phonetically.” Defs.’ Ex.
27.2 at B3. Although the user manual does not refer to a phoneme “library,” it lists the phonetic
translations for corresponding stenographic strokes, in effect demonstrating that the software had

a phoneme library. Because the copyright for the user’s manual is 1992, Engate argues that it

46


was filed on May 20, 1993, and the application for Patent 5,926,787 was filed on August 31,
1998.

The defendants rely on two declarations to support their argument of anticipation. A
Stenograph employee stated in his declaration that

{p]rior to March 24, 1992, there were CAT systems in use in this country in which
the CAT system contained both phonetic and regular dictionaries. In particular, I
had worked with such a CAT system, the OmniCat system. The OmniCat system
had both a main dictionary and user programmable job dictionaries, which
contained direct translations of keystrokes. In addition to these dictionaries, it
also contained an additional dictionary which contained phonetic representations
of letters and syllables. The CAT system compared the stenographic strokes to
the words stored in the dictionaries. If it located an exact match, the located word
was entered into the transcript. If the CAT system could not locate an exact word
in the user dictionaries, it would then compare the stenographic characters to the

22. continued)
spoken words in the second phoneme format that are pronounceable by a
lay person using coded representations of spoken words in the first
phoneme format for which said cross-reference library stores no
associations; and

communication means for delivering both the exact alphabetic and numeric
text and the coded representations of spoken words in the second phoneme
format to the viewing terminal for display.

Claim 1 of U.S. Patent No. 5,815,639 (issued Sept. 29, 1998).

Similarly, Claim 4 of the ‘787 patent specifically claims that “[t]he reporting system of
claim 1 wherein said processing system utilizes a phoneme library to identify the substitute text.”
Claim 4 of U.S. Patent No. 5,926,787 (issued July 20, 1999). And Claim 1, on which Claim 4
depends, states:

1. A reporting system used by at least a lay person, the reporting system comprising:

a screen;

a processing system that attempts to identify exact textual representations for words
spoken in real time;

said processing system identifying substitute text for those of the words spoken that
the processing system fails to identify exact textual representations; and

said processing system directing display of the exact textual representations and the
substitute text on the screen.

Claim 1 of U.S. Patent No. 5,926,787 (issued July 20, 1999).

44


USA, 948 F.2d at 1269. “Whether a prior art reference anticipates a patent claim” and “[wJhether
a claim limitation is inherent in a prior art reference” are questions of fact. Finnigan Corp. v
International Trade Commission, 180 F.3d 1354, 1362 (Fed. Cir. 1999) (citations omitted).
Engate argues that the articles cited by the defendants do not describe the technology used
prior to the critical date with sufficient specificity to determine whether the pre-critical date
technology had all the features disclosed in Engate’s patents. Engate further argues that the
declarations submitted by the defendants to supplement any vagaries in the articles do not satisfy
the defendants’ burden of proof. Engate correctly states that “[t]he law has long looked with
disfavor upon invalidating patents on the basis of mere testimonial evidence absent other
evidence that corroborates that testimony.” Finnigan Corp., 180 F.3d at 1366. “Generally, oral
testimony of prior public use must be corroborated in order to invalidate a patent.” Juicy Whip,
fac. v. Orange Bang, Inc., 292 F.3d 728, 737-38 (Fed. Cir. 2002) (citing Finnigan Corp., 180
F.3d at 1366-68). “(T]he need for corroboration exists regardless of whether the party testifying
concerning the invalidating activity is interested in the outcome of the litigation (¢.g., because
that party is the accused infringer) or is uninterested but testifying on behalf of an interested
party.” Finnigan Corp., 180 F.3d at 1367. That means that even testimony of pre-critical date
public use by a disinterested witness must be corroborated. Jd. at 1367-68 (discussing the facts
in The Barbed-Wire Patent, 143 U.S. 275 (1892)). The Federal Circuit has explained that this is

because “‘[wlitnesses whose memories are prodded by the eagerness of interested parties to elicit
testimony favorable to themselves are not usually to be depended upon for accurate information,”
and therefore such testimony rarely satisfies the burden upon the interested party, usually the

accused infringer, to prove invalidity by clear and convincing evidence.” Jd. at 1366 (quoting

14


subsequent cases that have relied on Finnigan's understanding of the corroboration requirement.
The Court has found only one Federal Circuit case in which the court, relying
on Thomson, did not require corroboration of a disinterested or nonparty witness. See Kisenberg
v. Alimed, Inc., 243 F.3d 555 (Fed. Cir. 2000) (unpublished). See also Ecolab, Inc. v. Gardner
Mfg. Co., No. 98-2294, 2002 WL 31641260 (D. Minn. Nov. 20, 2002) (following Thomson in
ruling on motion to reconsider opinion following Fi innigan). In contrast, several published
Federal Circuit cases relying on Finnigan have said testimony must be corroborated regardless of
the witness’s level of interest in the litigation? See, e. &., TypeRight Keyboard Corp. v. Microsoft
Corp., 374 F.3d 1151, 1159 (Fed. Cir. 2004); Dow Chemical Co. v. Mee Indus., Inc., 341 F.3d
1370, 1378 (Fed. Cir. 2003); Juicy Whip, Inc., 292 F.3d at 738; Texas Digital Systems, Inc. v.
Telegenix, Inc., 308 F.3d 1193, 1217 (Fed. Cir. 2002). We agree with Judge Sachs of the
Western District of Missouri who, in deciding a summary judgment motion, said that even
though Thomson has not been overruled, in light of all the “{s]ubsequent decisions [that] have
either returned to the rule as it was enunciated before Thomson, see Oney v. Ratliff, 182 F.3d 893,
896-97 (Fed. Cir. 1999), or have distinguished Thomson under circumstances suggesting that its
holding may not be viable, see Finnigan, 180 F.3d at 1367-68,” the Court’s “safe[st]” option is
“to operate under the assumption that the corroboration requirement still exists.” K & K Jump
Start/Chargers, Inc. v. Schumacher Electric Corp., 82 F. Supp. 2d 1012, 1018 n.7 (W.D. Mo.
2000). One can only hope that the Federal Circuit will resolve the conflict created by its
decisions on this issue.

Although the Court will follow the strong version of the corroboration requirement, we

> The Federal Circuit also relied on Fi innigan in an unpublished decision, Berry Sterling
Corp. v. Pescor Plastics, Inc., 215 F.3d 1351, at *4 (Fed. Cir. 1999) (unpublished).

16


that is directly connected to the transcription means to display the converted text”).

The defendants sought partial summary judgment on Engate’s claim of direct
infringement, and the Court granted the motion, finding the defendants could not be held
vicariously liable for any infringement by independent contractor court reporters who provide the
bulk of the defendants’ deposition services. Engate, Inc. v. Esquire Deposition Services, L.L.C.,
236 F. Supp. 2d 912 (N.D. Il. 2002). The Court subsequently granted the defendants’ motion for
summary judgment on Engate’s claim that the defendants’ employee court reporters infringed
Engate’s patents, holding Engate had failed to offer any evidence that the employees “have
actually performed the feature functionalities disclosed in Engate’s patents.” Engate, Inc. v.
Esquire Deposition Services, L.L.C., No. 01 C 6204, 2003 WL 22117805, at *8 (N.D. Ill. Sept.
10, 2003). Most recently, the Court granted the defendants’ motion for summary judgment on
Engate’s claim that the defendants induced court reporters and lawyers to directly infringe
Engate’s patents. Engate, Inc. v. Esquire Deposition Services, L.L.C., 01 C 6204, 2004 WL
609800 (N.D. Hl. March 26, 2004).

Although all of Engate’s claims against the defendants have been adjudicated, the case
remains before the Court on two counterclaims filed by the defendants. The first counterclaim
alleges that twenty-two of the twenty-six claims Engate contended the defendants had infringed
are invalid because, among other reasons, they were in public use, on sale or described in a
printed publication at least one year before Engate filed its patent applications. See 35 U.S.C. §
102(b). The second counterclaim ~ filed exclusively by Esquire — alleges in essence that Engate
sued the defendants for infringement, knowing it could not prove its case, in hopes of forcing the

defendants to sign licensing agreements with Engate to avoid costly litigation. Engate asks the


anticipated Claims 26, 27 and 28 of the ‘952 patent.

first offered for sale on April 12, 1991. Press Release, Stenograph Legal Services Unveils New

Litigation Support Product, Stenograph Corp. (April 12, 1991) (Defs.’ Ex. 7.1). According to the

The defendants argue that Claim 32 was anticipated by the DiscoveryVideo ZX2 software

press release:

Id.

Discovery VideoZX instantly translates a court reporter’s machine-written
phonetic shorthand transcription of live oral testimony (which may be in the
English, Spanish, German, French, Italian, Portuguese, Arabic, or Korean
language) into text, while simultaneously synchronizing live or pre-recorded audio
and video recordings on video tape. Once the text or transcript has been edited by
the court reporter, the data is converted into DiscoveryZX format for use within
SLS’s full-text retrieval software.

Full-text retrieval enables a user to free-form search and retrieve any word
or string of words from a textual database or large document. A user, such as a
judge or attorney, may view the entire translated transcript consisting of a number
of large textual databases and video recorded sessions or select a particular
segment for viewing. By a single keyboard command, the full-text retrieval
software prompts the user to mount the correct video tape in the VCR and the
tape, once verified, immediately searches for the corresponding video and audio
segment.

Playback of the video is accomplished in one of two ways. The
Discovery VideoZX program runs on a standard MS-DOS-based computer that is
connected to a NEC PC-VCR via an RS-232 serial cable. Once the video segment
is located, the video can be played back via a standard television or video monitor
or directly within the VGA monitor attached to the PC by use of a full-motion
video card located within the PC. Ifa full-motion video card is employed, the
user may view simultaneously full-motion video and the text where the search
originated. Full VCR control is provided for playback, pausing, fast-forwarding,
rewinding, and other VCR commands. The full-motion video card also allows for
multiple image sizes, including full-screen, 1/4 screen and 1/16 screen.
Additionally, one or more external video monitors may be connected if the video
will be used within a courtroom. This option allows monitors to be positioned for
the judge, attorneys, and jury for viewing convenience.

Engate argues that the Discovery VideoZX software did not anticipate Claim 32 because it

did not actually have the capability to synchronize the transcript and video in real time as the

37



ask the court reporter to read back recent testimony must enable users to search the real-time
transcript, But we cannot infer that the searching described in the articles used Boolean logic.
The defendants argue that to anticipate, the articles need not mention Boolean searching, because
the parties have agreed that Claim 7 is anticipated by any reference that allows for either natural
language or Boolean searches. This is well and good, but there is nothing in the articles from
which we can infer that the searches used natural language either; they just as easily could have
involved simple scrolling back through the text until the user found what he or she was seeking.
Because the articles fall short of describing every limitation of Claim 7, they neither corroborate
all the portions of Sanchez’s declaration necessary to entitle the defendants to summary judgment
invalidating the patent, nor do they constitute anticipating printed publications.

The defendants argue that user manuals and promotional materials for the software
programs DiscoveryZX and CaseView constitute printed publications that invalidate Claim 7.
The 1989 user manual for DiscoveryZX version 3.0 explains how the user can search a document
for a word, such as “insurance.” Defs.’ Ex. 4.1 at Introduction - 11. The defendants admit that
version 3.0 alone did not have real-time capabilities, so the manual cannot anticipate Claim 7.
But the defendants argue DiscoveryZX version 3.1 had real-time capabilities; the version 3.1
manual incorporates by reference all the functions, such as searching, described in the version 3.0
manual. The defendants’ argument is based on a passage in the version 3.1 manual, which states:
“If you have never used DiscoveryZX before, we suggest you go through the main DiscoveryZX
tutorial using the program’s demonstration transcripts. These instructions assume you are
already comfortable with the DiscoveryZX program.” Defs.’ Ex. 4.4 at 25. The Court does not

believe this passage is sufficient for us to conclude that the version 3.1 manual describes all the

25


IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION
ENGATE, INC., )
Plaintiff, }
ve ‘ Case No. 01 C 6204

ESQUIRE DEPOSITION SERVICES, L.L.C. }
and ATKINSON-BAKER, INC. )
Defendants. }

MEMORANDUM OPINION AND ORDER! DOCKETED

MATTHEW F. KENNELLY, District Judge: AUG 2 3 2004

Engate, Inc. holds the rights to several patents covering certain functions that can be used
by court reporters and attorneys to enhance the utility of real-time transcription services. Engate
sued several court reporting services, including the only two remaining defendants, Esquire
Deposition Services, L.L.C., and Atkinson-Baker, Inc., alleging that they infringed the patents.
The Court has construed several disputed elements of the patents, such as what “real time”
means. Engate, Inc. v. Esquire Deposition Services, L.L.C., No. 01 C 6204, 2003 WL 223306
(N.D. Ill. Jan. 30, 2003) (defining “real time” to mean “as instantaneously as possible, limited by
the ability of the reporter to transcribe text, the ability of the [computer-aided transcription]

system to convert the transcribed text into readable text, and the ability of the software/hardware

' The Court amends the opinion in accordance with its rulings on the plaintiff’s and
defendants’ motions to reconsider. We grant the plaintiff's motion to reconsider, which affects
the outcome on Claim 32 of the ‘952 patent. We deny the defendants’ motion to reconsider but
have amended our opinion in various respects to address arguments contained in that motion.

1

yy


composed of the elements comprising Claims 1 and 3 of the ‘675 patent. Accordingly, the Court
finds Claims | and 3 are invalid.

12. Claims 4 and 6 of U.S. Patent No. 5,970,141

Claim 4 of the ‘141 patent covers a transcription network comprised of a CAT system
that creates a real-time transcript and transmits it in real time to an attorney’s terminal and a
second terminal that is in a different location from the attorney’s terminal, where the second
terminal is linked to the attorney’s terminal in such a way that messages associated with parts of
the transcript can be sent from the second terminal to the attorney’s terminal. Claim 6 of the
same patent adds a third terminal to the above configuration that is linked to the CAT system but
not the attorney’s terminal.”° The application for the ‘141 patent was filed April 9, 1998.

The defendants’ argue Claims 4 and 6 were anticipated by the Phoenix CIC. They point

25 Claim 4 of the ‘141 patent specifically claims that “[t]he transcription network of claim
1 wherein the messages are associated with protions of the text.” Claim 4 of U.S. Patent No.
5,970,141 (issued Oct. 19, 1999). Claim 1 of the ‘141, on which Claim 4 depends, states:

1. A transcription network utilized during a testimonial proceeding, the
transcription network comprising:

an attorney terminal;

a converter assisting in the conversion of spoken words to text;

a remote terminal disposed at a location remote from the attorney terminal and
the converter;

the converter delivering the text to the attorney terminal and to the remote
terminal for real time display; and

the remote terminal supporting communication of messages regarding the real
time display to the attorney terminal.

Claim 1 of U.S. Patent No. 5,970,141 (issued Oct. 19, 1999).

26 Claim 6 of the ‘141 patent specifically covers “[t]he transcription network of claim 1
further comprising an additional terminal communicatively coupled to the converter but not
communicatively coupled to attorney terminal.” Claim 6 of U.S. Patent 5,970,141 (issued Oct.
19, 1999).

49



previously explained, the CAT system utilized in the Phoenix CIC transmitted real-time
transcripts to multiple computers within the courtroom that were linked together using a local
area network. Strand, supra, at 10. The computers were “located on the judge’s bench, at each
counsel’s table, and at the courtroom deputy clerk’s station, the court reporter’s position, the
secretary’s desk, and each law clerk’s desk.” /d. To ensure that each party and the judge’s files
remained confidential, each party and the court were provided with their own space on the
database protected by security codes. Jd. at 11, ABA/Net was available on the computers, which
enabled users to email from their workstations. Jd. at 47-48.

The Court would have to take too large of an inferential step to conclude that these
elements comprise the transcription and communication network described in Claim 16. Judge
Strand explained that one computer terminal was provided for each party. Claim 16 envisions a
set-up in which each party has at least two computer terminals that receive the real-time
transcript from the CAT system. The defendants rely on an article and a declaration to argue that
more than one computer could have been added to the network for each party, First, the
defendants cite an article written by Judge Frank Andrews and published in September 1992
describing the technology available in a CIC in Dallas. The article explained that computers in
the Dallas CIC

are located at each counsel table, at the bench, and at the reporter’s workstation.

Each computer is part of a local area network (LAN) that makes the court

reporter’s trial transcript immediately available for review. (Though linked

together through the LAN, each computer can function independently of the

others. The LAN can be expanded to accommodate additional users as
necessary.)

(continued)
Claim 16 of U.S. Patent No. 5,369,704 (issued Nov. 29, 1994).

33


completed and did not mention when audio files were synchronized with the text, one can
reasonably infer that the synchronization process was the same for both audio and video files, as
the press release on which the defendants relied equated the two functions.

The defendants herald two other pieces of evidence as invalidating Claims 12, 13, 19 and
25 of the ‘510 patent. They claim that a brochure and user manual for Discovery VideoZX
describe every limitation of the claims and, therefore, are invalidating prior printed publications.
The brochure explains that: “As the court reporter takes down testimony, the spoken information
is electronically synchronized with the videotape. The videotaped testimony can then be
searched by keyword or phrase, which allows you to not only see what was said, but also how the
person said it.” Defs.’ Ex. 7.3. However, the brochure does not carry a date. The sole source
for the date of the brochure is the declaration of Richard Stirewalt, owner of a court reporting and
litigation support company, who states that his firm received the brochure prior to March 24,
1992. Stirewalt Decl. | 4. Both parties agreed (at oral argument on defendants’ motion to
reconsider) that under the Court’s understanding of the corroboration requirement, the Court
cannot rely on Stirewalt’s testimony about the vintage of the brochure unless it is corroborated.
Because the defendants have not corroborated Stirewalt’s claim about the brochure, we cannot
assume the brochure was printed or published prior to the critical date and, therefore, it does not
constitute an invalidating prior printed publication.

The Discovery VideoZX user manual was copyrighted in 1991. It explains how once the
stenographer begins writing steno, “[t]he translated steno appears almost immediately on the
OZpe system. VideoZX creates a Video Index File, automatically synchronizing the video tape

information with the steno.” Defs.’ Ex. 7.7 at 23. An earlier section of the manual states that the

42



Claim 10 of the ‘256 patent claims “{t]he transcription network of claim 1 wherein the
user interface of the attorney terminal enables a user to sequentially review the selected portions
by skipping at least part of unselected portions of the delivered text.” Claim 10 of U.S. Patent
No. 5,884,256 (issued March 16, 1999). The defendants rely on two declarations for their
assertion that software enabled users to skip over portions of unselected text prior to the critical
date. Sandstrom’s declaration states that “[a]s a real-time transcript was received, the
DiscoveryZX user interface allowed the user to search the transcript and select portions of the
transcript. The selected portions might have supplemental information associated with them.
The user could jump from one selected portion of the text to the next, skipping unselected
portions.” Sandstrom Decl. 15. Sanchez similarly states that

[p]rior to March 24, 1992, users could review selected portions of the real-time

transcript by skipping at least part of unselected portions of the transcript. Asa

real-time transcript was received, the software in the workstations allowed the

user to search the transcript and select portions of the transcript, and to either have

or not have supplemental information associated with it. The user could jump

from one selected portion of the text to the next, skipping unselected portions.
Sanchez Decl. 411. The search function described by Sandstrom and Sanchez is on all fours
with Claim 8 of Engate’s patent. But as we previously discussed, if we relied on Sandstrom’s
declaration to corroborate Sanchez’s, we would have to make a determination of Sandstrom’s
credibility, which we cannot do on summary judgment.

But that does not end our inquiry. Sandstrom offered documentary evidence to
substantiate his claims about the pre-critical date capabilities of the DiscoveryZX software.

Although we cannot rely on Sandstrom’s declaration even if it is corroborated, we can consider

whether this documentary evidence alone meets the clear and convincing standard of proof to

28



on the bottom third of the television screen, scrolling three lines at a time. Malt, supra. Closed
captioning used the same CAT technology used for real-time transcription in courtrooms.
Madden, surpa, at 12; Donald R. Johnston, Computers: Shorthand For Change, Fulton County
Daily Report, March 13, 1989 (Defs.’ Ex. 24).

By 1991, NCI performed closed captioning for all prime-time network television
broadcasts, cable and syndicated television shows, proceedings in the U.S. House of
Representatives, and home videos. Wolffe, supra; Madden, supra, at 12; Karen Foerstel, House
Debate Now Available Closed-Caption, Roll Call, Feb. 25, 1991 (Defs.’ Ex. 19). NCI closed-
captioned live programing, such as Anita Hill and Clarence Thomas’ testimony during Justice
Thomas’ Senate confirmation hearings, Wolffe, supra, as well as news updates about the Persian
Gulf War. The Persian Gulf War: Answering the Call to Action, The Washington Post, Jan. 27,
1991, at A26 (Defs.’ Ex. 17). Engate has failed to raise a genuine issue of fact that any of these
uses of closed captioning were merely experimental; the defendants have proven by clear and
convincing evidence that the prevalence of closed captioning by the early 1990s constituted
public use.

B Whether closed captioning and technology used in CICs anticipated Engate’s patents

Having found that closed captioning and the use of real-time court reporting and litigation
support software in courtrooms as of the early 1990s were public rather than experimental uses,
the Court must consider whether these public uses render Engate’s patents invalid. Engate
argues we cannot grant the defendants’ motion for summary judgment on invalidity because the
defendants have not proven that the technology in public use, on sale or described in printed

publications had all of the features covered by Engate’s patents. Engate is correct that a pre-

12


out that the Phoenix CIC used a Novell local area network to link work stations for the judge,
court reporter, attorneys and judge’s staff. Strand, supra, at 10. They further argue that because
the computers in the courtroom had ABA/net, id. at 47-48, users could send messages to other
users that included a part of the real-time transcript. Sanchez Decl. 13. But these features fall
short of meeting all the elements of Claim 4 and 6. The defendants provide no evidence that the
transcript could be transmitted by the CAT system in real time to a remote terminal. The
defendants seem to imply that the attorney terminal could e-mail the real-time transcript to the
remote terminal, but that is not equivalent to having the CAT system send the real-time transcript
to the remote terminal.?” Therefore, the Court denies the defendants’ motion for summary
judgment as to counts 4 and 6 of patent ‘141.

In summary, the Court grants the defendants’ motion for summary judgment on their
counterclaim of invalidity as to Claim 5 of U.S. Patent No. 5,740,245; Claims 4, 8 and 10 of U.S.
Patent No. 5,884,256; Claim 15 of U.S. Patent No. 5,940,800; Claims 26, 27 and 28 of U.S.
Patent No. 5,949,952; and Claims 1 and 3 of U.S. Patent No. 6,023,675. The Court denies the
defendants’ motion for summary judgment on Claims | and 16 of U.S. Patent 5,369,704; Claim 7
of U.S. Patent No. 6,026,395; Claim 32 of U.S. Patent No. 5,949,952; Claims 12, 13, 19 and 25
of U.S. Patent No. 6,282,510; Claim 1 of U.S. Patent No. 5,815,639; Claim 4 of U.S. Patent No.
§,926,787; and Claims 4 and 6 of U.S. Patent No. 5,970,141.

Unfair Competition
Esquire’s second counterclaim alleges that Engate’s suit constituted unfair competition in

violation of California Business and Professions Code § 17200 et seg. Esquire claims that

27 Nor can we assume that the remote terminal would receive the e-mailed transcript in
“real time.”

50


Engate that regardless of whether Esquire has met the necessary pleading requirements for stating
a cause of action for unfair competition, the unfair competition claim is barred by an absolute
privilege extended to communicative acts made in judicial proceedings, such as the filing ofa
complaint alleging infringement of 131 patented claims.

California Civil Code § 47 (b)(2) states that “[a] privileged publication or broadcast is
one made: ... [iJn any .. . judicial proceeding.” The California Supreme Court has explained
that “{t]he principal purpose of section 47[(b)] is to afford litigants and witnesses the utmost
freedom of access to the courts without fear of being harassed subsequently by derivative tort
actions.” Silberg v. Anderson, 50 Cal, 3d 205, 213, 786 P.2d 365 (1990) (citations omitted). To
effectuate this purpose, § 47(b) provides absolute immunity from liability in a derivative tort
action seeking redress for prior litigation-related activity ~ that is, it provides absolute immunity
from a claim alleging that a communication or communicative conduct in an earlier proceeding
constituted a tort. Rubin v. Green, 4 Cal. 4th 1187, 1193, 847 P.2d 1044 (1993) (footnote
omitted); Silberg, 50 Cal. 3d at 215, 786 P.2d 365. Although § 47(b) was initially enacted to
forestall defamation claims, the California courts have extended its application to all torts except
malicious prosecution. Rubin, 4 Cal. 4th at 1194, 847 P.2d 1044 (citation omitted); Silberg, 50
Cal. 3d at 212, 786 P.2d 365 (citations omitted). “Malicious prosecution actions are permitted
because ‘[t]he policy of encouraging free access to the courts . . . is outweighed by the policy of
affording redress for individual wrongs when the requirements of favorable termination, lack of
probable cause, and malice are satisfied.” Silberg, 50 Cal. 3d at 216, 786 P.2d 365 (quoting
Albertson v. Raboff, 46 Cal. 2d 375, 382, 295 P.2d 405 (1956)).

Except for communicative conduct serving as the basis for a malicious prosecution claim,

52


Barbed-Wire Patent, 143 US. at 284).

The defendants argue the corroboration requirement does not apply to disinterested non-
parties. They rely on Thomson v. Quixote Corp., 166 F.3d 1172, 1176 (Fed. Cir. 1999), in which
the Federal Circuit “h[e]!d that corroboration is required only when the testifying inventor is
asserting a claim of derivation or priority of his or her invention and is a named party, an
employee of or assignor to a named party, or otherwise is in a position where he or she stands to
directly and substantially gain by his or her invention being found to have priority over the patent
claims at issue.” Although the Federal Circuit held in Finnigan, four and a half months after
Thomson, that the corroboration requirement applies to disinterested non-parties, the defendants
argue that the Court must follow Thomson because the Finnigan court merely distinguished
Thomson but did not overrule it (and lacked the authority to do so). The defendants are correct
that the Court cannot disregard Thomson, but because Finnigan has never been overruled, the
Court cannot ignore that case either. Thus the Court is faced with an intra-circuit split.

The Court questions whether Finnigan’s strong version of the corroboration requirement
— born out of a nineteenth century dispute — should remain the standard for proving invalidity in
the twenty-first century. The Court can think of few areas of law in which one witness’s
testimony is always insufficient to meet the applicable burden of proof. Treason has a similarly
strict corroboration requirement, see U.S. Const. art. III, § 3, and the federal perjury statute used
to have a two-witness rule, see Hubbard v. United States, 514 U.S. 695, 709 (1995), but aside
from that, there is no area of federal law where a similar rule applies. It is not all that easy to
understand why patent invalidity, of all things, should rank with treason in terms of the need for

special corroboration. Nonetheless, the Court is not prepared to disregard Finnigan and several

15