Grape Technology Group Inc. et al v. Jingle Networks Inc.
Filing
203
MEMORANDUM AND ORDER DENYING 181 MOTION for Attorney Fees , Expenses and Costs filed by Jingle Networks Inc., DENYING 183 MOTION for Judgment as a Matter of Law Post-Trial Motion for Judgment as a Matter of Law for Invalidity filed by Jingle Networks Inc., DENYING 182 MOTION for New Trial filed by Grape Technology Group Inc., kgb USA Inc. Signed by Chief Judge Gregory M. Sleet on 1/9/2012. (asw)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
GRAPE TECHNOLOGY GROUP, INC.
and KGB, INC.,
Plaintiffs,
v.
JINGLE NETWORKS, INC.,
Defendant.
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Civ. A. No. 08-408 (GMS)
MEMORANDUM
I.
INTRODUCTION
In this patent infringement action, plaintiffs Grape Technology Group, Inc. and KGP, Inc.
(collectively, "Grape") allege that the advertiser-supported directory assistance service provided
by Jingle Networks, Inc. ("Jingle") infringes the asserted claims of the patents-in-suit. 1 (D.I. 1.)
The court held a six-day jury trial in this matter on December 3 through December 9, 2010. (D.I.
175.) At trial, Jingle properly moved for judgment as a matter of law ("JMOL") on a number of
grounds pursuant to Rule 50( a) of the Federal Rules of Civil Procedure (D.I. 171.), and the court
denied that motion. 2
On December 9, 2010, the jury returned a unanimous verdict in favor of Jingle on the
issue of infringement with respect to all claims. (See D.l. 175 at 2.) The jury further found that
all of the asserted claims were not invalid (I d. at 3.) The court entered judgment on the verdict
1
The patents-in-suit are U.S. Patent Nos. 6,775,371 (the '"371 Patent") and 7,023,969 (the '"969 Patent"). The
patents-in-suit are owned by Grape and exclusively licensed to kgb USA.
2
Jingle's JMOL motion was denied by oral Order during the trial on December 6, 2010.
on December 17, 2010. (D.I. 178.) Presently before the court are the parties' post-trial motions. 3
Having considered the entire record in this case, the substantial evidence in the record, the
parties' post-trial submissions, and the applicable law, the court will deny all the parties' posttrial motions. The court's reasoning follows.
II.
BACKGROUND OF THE TECHONOLOGY
The patents-in-suit relate to the field of telephone directory assistance services. The '371
patent is entitled "Technique For Effectively Providing Concierge-Like Services In A Directory
Assistance System." The inventions disclosed in the '371 patent include a directory assistance
service that provides search functionality based on the types of goods and services sought by a
caller. (See, e.g., '371 patent at 12:10-19) ("the databases provide the capability to search not just
by name and address, but also by type of goods/services .... For example, the preferred
database can answer queries soliciting the names/numbers of Chinese restaurants on a given
street."). In addition, the disclosed search results can be provided as a list of names in an order
that depends on the compensation from listed businesses to the service provider. (See '371 patent
at 12:41-42.)
The '969 patent is entitled "Communication Assistance System and Method," and
discloses improvements to information assistance systems. One of the features disclosed in the
patent permits the system to provide useful information to the user during the "closing period,"
which is "the period between the time the requested information is retrieved by a customer
service representative and the time the requester receives the requested information." (See '969
patent at 2:8-10.) This information is known as a "closing prompt message," and may include,
for example, third party advertising. (See '969 patent at 20:48-52.)
3
These motions are Jingle's motion for attorneys' fees pursuant to 35 U.S.C. § 285 (D.I. 181); Jingle's renewed
JMOL motion (D.I. 183); and Grape's motion for a new trial (D.I. 182).
2
III. STANDARD OF REVIEW
Jingle asserts that is entitled to judgment as a matter of law pursuant to Rule 50 of the
Federal Rules of Civil Procedure. Grape argues that a new trial is warranted under Rule 59 of
the Federal Rule of Civil Procedure. Jingle also claims it is entitled to attorneys' fees and costs.
A.
Renewed JMOL Motions
To prevail on a renewed motion for judgment as a matter of law following a jury trial and
verdict, the moving party '"must show that the jury's findings, presumed or express, are not
supported by substantial evidence or, if they were, that the legal conclusion(s) implied [by] the
jury's verdict cannot in law be supported by those findings."' Pannu v. Iolab Corp., 155 F.3d
1344, 1348 (Fed. Cir. 1998) (quoting Perkin-Elmer Corp. v. Computervision Corp., 732 F.2d
888, 893 (Fed. Cir. 1984)). "Substantial evidence" is defined as "such relevant evidence from
the record taken as a whole as might be accepted by a reasonable mind as adequate to support the
finding under review." Perkin-Elmer Corp., 732 F.2d at 893.
The court should only grant the motion "if, viewing the evidence in the light most
favorable to the nonmovant and giving it the advantage of every fair and reasonable inference,
there is insufficient evidence from which a jury reasonably could find liability." Lightning Lube,
Inc. v. Witco Corp., 4 F.3d 1153, 1166 (3d Cir. 1993) (citing Wittekamp v. Gulf Western Inc.,
991 F.2d 1137, 1141 (3d Cir. 1993)). "In determining whether the evidence is sufficient to
sustain liability, the court may not weigh the evidence, determine the credibility of witnesses, or
substitute its version of the facts for the jury's version." Lightning Lube, 4 F.3d at 1166 (citing
Fineman v. Armstrong World Indus., Inc., 980 F.2d 171, 190 (3d Cir. 1992)). Rather, the court
must resolve all conflicts of evidence in favor of the non-movant. Williamson v. Consol. Rail
Corp., 926 F.2d 1344, 1348 (3d Cir. 1991); Perkin-Elmer Corp., 732 F.2d at 893.
3
"The question is not whether there is literally no evidence supporting the party against
whom the motion is directed but whether there is evidence upon which the jury could properly
find a verdict for that party." Lightning Lube, 4 F.3d at 1166 (quoting Patzig v. 0 'Neil, 577 F.2d
841, 846 (3d Cir. 1978)). In conducting such an analysis, "the court may not determine the
credibility of the witnesses nor 'substitute its choice for that of the jury between conflicting
elements ofthe evidence."' Syngenta Seeds, Inc. v. Monsanto Co., 409 F. Supp. 2d 536, 539 (D.
Del. 2005) (quoting Perkin-Elmer Corp., 732 F.2d at 893).
B.
New Trial
Pursuant to Federal Rule of Civil Procedure 59, a court may grant a new trial "for any of
the reasons for which a new trial has heretofore been granted in an action at law in federal
court." Fed. R. Civ. P. 59(a)(l)(A). The decision to grant or deny a new trial is within the sound
discretion of the trial court. See Allied Chern. Corp. v. Daiflon, Inc., 449 U.S. 33, 36 (1980). In
making this determination, the trial judge should consider the overall setting of the trial, the
character of the evidence, and the complexity or simplicity of the legal principles which the jury
had to apply to the facts. Lind v. Schenley Indus., Inc., 278 F.2d 79, 89 (3d Cir. 1960). Unlike
the standard for determining judgment as a matter of law, the court need not view the evidence in
the light most favorable to the verdict winner. Allied Chern. Corp., 449 U.S. at 36. A court
should grant a new trial in a jury case, however, only if "the verdict was against the weight of the
evidence ... [and] a miscarriage of justice would result ifthe verdict were to stand." Williamson
v. Conrail, 926 F.2d 1344, 1352 (3d Cir. 1991).
C. Attorneys' Fees
In deciding whether to award attorney's fees, the court must undertake a two-step
inquiry. Interspiro USA, Inc. v. Figgie Intern. Inc., 18 F.3d 927, 933 (Fed. Cir. 1994). First, the
4
court "must determine whether there is clear and convincing evidence that the case is
'exceptional."' /d. (quotation omitted). Second, the court must determine whether "an award of
attorney fees to the prevailing party is warranted." /d. Exceptional cases include: "inequitable
conduct before the PTO; litigation misconduct; vexatious, unjustified, and otherwise bad faith
litigation; a frivolous suit or willful infringement." Epcon Gas Sys., Inc. v. Bauer Compressors,
Inc., 279 F.3d 1022, 1034 (Fed. Cir. 2002) (citation omitted).
IV.
DISCUSSION
A.
Infringement
Grape moves for a new trial on infringement. At trial, Grape asserted four claims of the
'371 patent (claims 4, 5, 7, and 8) against Jingle. (D.I. 190 at 3.) Ofthe four asserted claims,
claim 4 is the only independent claim asserted. (ld.) Claim 4 recites:
A method for providing a directory assistance service by a directory
assistance provider comprising:
[a] receiving a directory assistance call from a caller, the call including a
request for suggestions of businesses which provide a desired product or service;
[b] searching a database;
[c] obtaining a list of selected businesses responsive to the request,
wherein the selected businesses are ordered as a function of at least compensation
given to the directory assistance provider by the selected businesses;
[d] and suggesting at least one of the selected businesses to the caller.
(D.I. 190 at 3.)
The dispute over infringement centered on whether Jingle's accused service meets all of
the limitations imposed by element "[c]". (Id.) Grape contends that Jingle failed to present
competent evidence to rebut Grape's evidence of infringement. Therefore, according to Grape,
the jury's verdict was against the clear weight of the evidence, and a new trial is in order on the
issue of infringement ofthe '371 patent.
5
1.
Payment in Advance
In its motion, Grape asserts that Jingle "failed to present competent evidence to rebut
Grape's evidence of infringement." (D.I. 185, at 7.) Grape claims that it presented
"overwhelming evidence" at trial that claim 4 of the '3 71 Patent does not require advance
payment from listed businesses. (D.I. 192 at 3.) Grape asserts that claim 4 is silent as to when
payment must occur. (Id.) Claim 4 states that "the selected businesses are ordered as a function
of at least compensation given to the directory assistance provider by the selected businesses."
(D.I. 172 at 20.) Grape asserts that this language does not have a temporal limitation, and that
any such limitation considered by the jury was improperly suggested by Jingle. (D.I. 192 at 3-4.)
Jingle, for its part, contends that the testimony of its expert, Dr. Roch Guerin supports its
assertion that claim 4 contains an explicit limitation that the businesses pay for services in
advance. (D.I. 190 at 8.) The court agrees. Indeed, even Grape concedes that the court made a
comment at sidebar that recognized this limitation, stating, "Let me interrupt, because it's clear
to me that what the patent requires is that you pay in advance." (Trial Transcript, "Tr." at
832:10-15.) The court clearly recognized the limitation of advance payment.
Furthermore, Dr. Guerin's specifically testified to the temporal limitation of claim 4. Dr.
Guerin stated that the plain and ordinary meaning of the phrase "wherein the selected businesses
are ordered as a function of at least compensation given to the directory assistance provider by
the selected businesses" means "a set of businesses that you have paid in advance to be listed by
the information assistance provider." (Tr. at 787:13-18.) (Emphasis added). Dr. Guerin
elaborated:
So again, my perception is nothing really fancy at work here. It means a
set of businesses that you have paid in advance to be listed by the information
assistance provider. (Tr. at 787:8-18.)
6
So really what it is, is it's a list of selected businesses. You have a list of
businesses that have paid, that have given compensation to be listed. And so all
of those businesses have paid the information assistance service in order to be
listed. (Tr. at 788:19-21.)
Dr. Guerin's testimony that payment must occur before a business is listed
is logical: ifthe businesses are listed in the order determined by the amount that each has paid,
then surely payment must precede this ordering. Dr. Guerin's testimony provides support for the
jury's finding, which was not against the weight of the evidence.
2. Non-paying Businesses
Grape also contends that a new trial is warranted because it presented overwhelming
evidence that claim 4 allows non-paying businesses to be listed. (D.I. 185 at 9.) Grape argues
that Dr. Guerin's testimony that claim 4 requires each listed business to pay the directory
assistance provider is inconsistent with the language of the asserted claims. 4 (Id.) Grape states
that under the doctrine of claim differentiation, dependant claims are presumed to be of narrower
scope that the independent claims from which they depend. Enzo Biochem, Inc. v. Applera
Corp., 599 F.3d 1325, 1333-34 (Fed. Cir. 2010) (citingAK Steel Corp. v. So/lac & Ugine, 344
F.3d 1234, 1242 (Fed. Cir. 2003)). Therefore, claims 5 and 7 are presumed to be of narrower
scope than claim 4, which requires all listed businesses to pay at least compensation.
4
Grape argues that claims 5 and 7, which depend from claim 4, specifically contemplate the inclusion of non-paying
businesses. Those claims recite:
5. The method of claim 4, wherein businesses which provide the desired product or service and have given
said at least compensation to the directory assistance provider will be suggested to the caller before
businesses which provide the desired product or service and have not given said at least compensation to
the directory assistance provider.
7. The method of claim 4, wherein businesses which have given said at least compensation to the directory
assistance provider are listed before businesses which have not given said at least compensation to the
directory assistance provider.
7
Jingle claims that Grape has misconstrued claims 5 and 7, as those dependant claims do
not discuss "non-paying businesses." (D.I. 190 at 7.) According to Jingle, claims 5 and 7 add
limitations regarding businesses that "have not given at least compensation." (Id.) Therefore,
claims 5 and 7 are not limited to non-paying businesses, but rather encompass businesses that
have paid some compensation that does not meet the targeted "least compensation" amount
required by claim 4. The court agrees with Jingle. Simply because the dependent claims add
limitations to independent claim 4 does not alter claim 4' s requirement that all listed businesses
provide payment. Jingle's expert, Dr. Guerin, clearly articulated this point at trial:
Q: Sir, doesn't the patent itself not only disclose but actually claim lists that
include items for which no payment has been made?
A: So if I recall correctly, the patent introduces in one of the dependent claims
sort of a second list, which is a list of businesses that have not given
compensation. So basically, what it would mean, there is a first list of people who
have paid at least $20. And there is a second list of people who have paid less
than $20.
(Tr. at 830:22-831 :5.)
Furthermore, the court does not find any evidence to support Grape's argument that
"payment" as discussed in claim 4 can be a "non-payment" or zero. There is little reason to
believe that a reasonable jury would have found that "payment" as it appears in claim 4 could
actually mean non-payment, especially given Dr. Guerin's testimony on the relationship of the
independent and dependent claims. The jury's finding that claim 4 does not accept non-paying
businesses to be listed was not against the weight of the evidence.
B.
Invalidity
1.
Anticipation
8
A claim is anticipated under 35 U.S.C. § 102 "if each and every element as set forth in
the claim is found, either expressly or inherently described, in a single prior art reference."
Verdegaal Bros., Inc. v. Union Oil Co. ofCal., 814 F.2d 628,631 (Fed. Cir. 1987).
a.
The '371 Patent
At trial, Jingle argued that the asserted claims of the '371 patent were anticipated by U.S.
Patent No. 6,526,135 issued to Paxson ("Paxson"). Jingle now submits that it is entitled to
judgment as a matter oflaw that the asserted claims of the '371 patent are invalid over Paxson.
(D.I. 186 at 2.) Jingle claims that it provided clear and convincing evidence that Paxson
discloses all ofthe elements of independent claim 4. 5 Jingle asserts that Grape's technical
expert, Mr. Lanning, did not contest whether Paxson met the limitations of the preamble of claim
4, or of elements [a] and [b] of claim 4, but took the position that Paxson did not teach the
limitations ofthe final two elements, [c] and [d] of claim 4. (D.I. 186 at 3; Tr. at 870:15878:15.)
Jingle breaks element [c] into two parts, and claims that Grape admits that the first half,
"obtaining a list of selected businesses responsive to the request," is taught by Paxson because
Mr. Lanning acknowledged that Paxson "would do a selection of the different[] suppliers it had
in the system." (D.I. 186 at 3; Tr. at 872:10-11.) Jingle argues that Mr. Lanning's testimony
5
Only one independent claim of the '371 patent, claim 4, was asserted by Grape. Claim 4 recites:
A method for providing a directory assistance service by a directory assistance provider
comprising:
[a] receiving a directory assistance call from a caller, the call including a request for
suggestions of businesses which provide a desired product or service;
[b] searching a database;
[c] obtaining a list of selected businesses responsive to the request, wherein the selected
businesses are ordered as a function of at least compensation given to the directory
assistance provider by the selected businesses;
[d] and suggesting at least one of the selected businesses to the caller.
9
means that Paxson creates a "list" or "set of listings" which satisfies the first part of element [c].
(D.I.186at4.)
With regard to the second part of element [c], "wherein the selected businesses are
ordered as a function of at least compensation given to the directory assistance provider by the
selected businesses," Jingle claims that its technical expert, Dr. Forys, testified that Paxson's
assignment of selected businesses to pie shares purchased by the individual businesses was a
form of ordering as a function of at least compensation. (DI. 186 at 4; Tr. at 736:5-23.)
Therefore, since the court construed the term "ordered as a function of' to have its plain and
ordinary meaning, Jingle asserts that the second part of element [c] is also satisfied by Paxson.
(D.I. 66 at 2; D.I. 186 at 4.) Further, Jingle contends that Grape's expert, Mr. Lanning,
improperly restricted the plain and ordinary meaning of this element to ordering the selected
businesses in a list format. As a result, argues Jingle, Mr. Lanning's testimony fails to provide
substantial evidence that the second part of element [c] is not met by Paxson. (D.I. 186 at 4.)
Jingle points out that Dr. Forys testified that reading the name of a business to a caller in
Paxson satisfies the "suggesting at least one of the selected businesses to the caller" element of
the claim. (D.I. 186 at 4; Tr. at 736:24-737:9.)
According to Jingle, Mr. Lanning incorrectly
placed two limitations on element [d]: that the caller must be provided a list of suggestions, and
that the caller must have a choice in the selection. (D.I. 186 at 4-5; Tr. at 874:15-876:7.) As a
result, Jingle asserts that Grape failed to provide substantial evidence that the final element [d] is
not met by Paxson. Additionally, Jingle argues that dependent claims 5, 7, and 8 were also
anticipated. (D.I. 186 at 4.)
Grape questions whether Paxson discloses "obtaining a list of selected businesses"
because "a set oflistings is a 'list' under the plain and ordinary meaning of that term." (D .I. 191
10
at 3; D.I. 186 at 3-4.) Grape contends that Jingle never made this argument at trial and is thus
precluded from making it now. Furthermore, Grape argues that even if a set of businesses is a
"list," Jingle failed to provide any evidence, let alone clear and convincing evidence, that Paxson
obtains more than one business to compile such a list. (D.I. 191 at 4.)
The court agrees. Initially, Jingle's argument that since the Paxson system does not
contain non-paying businesses, paying businesses by definition are listed/suggested first, was
never presented to the jury. Nevertheless, the court will address this argument. Dr. Forys cited
two disclosures from Paxson as evidence that it discloses "obtaining a list of selected
businesses." (See Tr. at 735:22-736:3.) First, he testified that Paxson discloses "search[ing] the
[BDSB] database for candidate business listings, plural, so [Paxson] selects a number of them."
(Tr. at 735:25-736:3; Paxson 4:38-40). But Paxson does not say that it "selects a number of
[businesses]," but instead states that it selects "a single business listing." (D.I. 191, Ex. A at 93.)
Paxson states, "The ACPS 14/CCP searches the BSDB for candidate business listings, invokes
the CDP to select a single business listing, and returns the results to the AS 18." (D.I. 191, Ex. A
at 93) (quoting Paxson 4:38-40) (emphasis added). Further, Mr. Lanning testified that "[Paxson]
doesn't create a list, it randomly chooses based on the number of choices that are there." (Tr. at
874:11-12.) Second, Dr. Forys testified that Paxson's Fig. 4, a pie-chart showing call
distributions shares, discloses "a list of selected businesses." (Tr. at 736: 19-23.) However, Fig.
4 does not show that Paxson "obtains a list of selected businesses," but rather illustrates the
distribution of call shares to different companies. In other words, simply because Paxson
suggests different companies to callers does not mean that it "obtains a list of selected
businesses." Given the fact that the Paxson specification explicitly says that it selects "a single
11
business," Mr. Lanning's testimony provided a reasonable basis for the jury's finding that
Paxson did not anticipate the asserted claims of the '371 patent.
Since Paxson fails to disclose "obtaining a list of selected businesses," it cannot disclose
"order[ing] [the list of selected businesses] as a function of at least compensation," the second
part of element [c]. Put simply, because Paxson does not create a list, it cannot order that list.
Paxson, as Mr. Lanning testified, does not order selected businesses, but rather selects a single
business using a "pseudorandom call distribution process." (Tr. at 873:19-874:14.)
Regarding element [d], Grape disputes Jingle's contention that no reasonable jury could
have found that "suggesting at least one ... business" is different than providing a caller with a
selected business. (D.I. 191 at 8.) The court agrees with Grape. Dr. Forys testified that "telling
the caller" that "the [X] Cab Company ... has been selected" meets the "suggesting" limitation
of claim 4. (See Trial Tr. at 737:4-9) (citing Paxson at 8:26-47). However, Mr. Lanning, in
rebuttal, explained that telling and "suggesting," in the context of the '371 Patent are not the
same:
[Paxson] is just telling you ... its result ... if you had a bad
experience with Garbo, and you got Garbo again and said, man, I don't want to do
Garbo anymore, your only choice would be to hang [up] and redial and hope that
the Paxson system threw the dart at a different place and didn't hit Garbo. But if
Garbo gets it again, you are going to get Garbo again.
(Tr. at 875:23-876:7.)
Both the claim language and plain meaning of the word "suggesting" support Mr.
Lanning's testimony. (See D.I. 191, Ex. B, http://thesaurus.com/browse/suggest (listing
"declare," "demand," "order," and "tell" as antonyms of suggest); see also Ex. C, 1999 Merriam
Webster's dictionary (defining "suggest" as "to seek to influence;" "to mention or imply as a
possibility;" "to propose as desirable or fitting;" "to offer for consideration")). Accordingly,
12
there was substantial evidence, to support the jury's finding that suggesting a business is different
from providing one pre-selected business.
Additionally, the court finds no merit in Jingle's argument that it provided clear and
convincing evidence that Paxson discloses all the elements ofthe dependent claims 5, 7, and 8.
In making this argument, Jingle presents claims that it never presented to the jury, and submits
arguments that contradict its own trial experts6 . Moreover, under Jingle's suggested reading of
claims 5 and 7, those claims are rendered superfluous, as they have the same scope as claim 4.
See Comark Commc 'ns. Inc., v. Harris Corp., 156 F.3d 1182, 1187 (Fed. Cir. 1998) ("[T]he
doctrine of claim differentiation ... create[ s] a presumption that each claim in a patent has a
different scope.").
b.
The '969 Patent
Jingle submits that it is entitled to judgment as a matter of law that the asserted claims of
the '969 patent are invalid as anticipated by U.S. Patent No. 5,339,352 issued to Armstrong, et al.
("Armstrong"). Only one independent claim ofthe '969 patent, claim 1, was asserted by
Plaintiffs. Claim 1 of the '969 patent recites:
[PREAMBLE] A communication assistance system for providing
access to information corresponding to a plurality of subscribers, the system
compnsmg:
[a] a telephone switch for receiving calls from a plurality of requesters
desiring to access said information corresponding to subscribers;
[b] a first database configured to store said information corresponding
to each of said subscribers, including phone numbers of each of said
subscribers;
[c] a closing prompt module coupled to said first database so as to
select a closing prompt code from a plurality of available closing prompt
codes each of said closing prompt codes associated with a desired closing
prompt message so as to provide a selected closing prompt message,
6
Dr. Forys testified that those businesses which pay are suggested before those businesses that do not. (Tr. at 739:6740-6.)
13
wherein anyone of the available closing prompt messages is provided to a
requester
[d] wherein said closing prompt module selects said closing prompt
code, from any one of said available closing prompt codes, relating to a
subscriber information other than the subscriber information requested by
said requester.
(D.I. 186 at 9.)
Jingle claims that Grape's expert, Mr. Lanning, did not dispute that Armstrong discloses
the preamble and elements [a]-[ c], but testified that the last limitation of claim 1 was not satisfied
by Armstrong because the cellular telephone companies are not subscribers and Armstrong does
not provide "targeted third-party advertising." (Id; Tr. at 853:20-855:2.) Jingle submits that Mr.
Lanning's testimony is based on an erroneous interpretation of the meaning of element [d]. (D .I.
186 at 10.) The court construed the term "subscriber" to mean "any individual or business entry
whose information is stored for retrieval by the communication assistance system." (D.I. 66 at
3.) According to Jingle, Mr. Lanning admitted in his testimony that cellular telephone
companies such as Sprint, AT&T, and Verizon were users of the directory assistance system
disclosed by Armstrong and that these cellular telephone companies had announcements stored
for retrieval by Armstrong's directory assistance system. (D.I.186 at 10; see Tr. at 851:14852:11.) Further, Jingle submits that Mr. Lanning's narrow view of what businesses are within
the definition of a "subscriber" is at odds with the court's broad construction of that term. (Id. at
11.) Additionally, Jingle claims that Mr. Lanning misconstrues the term "targeted third party
advertisement," which it posits is not a limitation of claim 1. 7 (Id.) Dr. Forys testified that the
messages played for the subscriber cellular telephone companies in Armstrong meet this
limitation. (Id; Tr. at 705:13-706: 12.) Therefore, Jingle submits that the evidence it presented
7
Jingle argues that, "The claim element does not require that the closing prompt message be targeted for the calling
party. The claim element only requires that the message delivered to the caller be related to a subscriber different
than the subscriber whose information was requested in the directory assistance call." (D.I. 186 at 11.)
14
established by clear and convincing evidence that element [d] of claim 1 is satisfied by
Armstrong. (D.I. 186 at 11.)
Grape contends that the jury's verdict that Armstrong does not anticipate the '969 patent
should stand. The court agrees. Grape argues that Dr. Forys relied on a single example from
Armstrong as evidence that it discloses the limitation "closing prompt message ... relating to a
8
subscriber information other than the subscriber information requested by said requester." This
example, Grape points out, is identical to the prior art system disclosed in the '969 patent's
9
Background Section, and upon which the '969 patent directly sought to improve. (D.I. 191 at
15.) Indeed, Mr. Lanning testified, "You have to look at the time frame that these patents are
filed. And for this patent, we're looking at the 2000 time frame, the year 2000. So you look at the
situation. The legal people say what was the state of the art? What things were happening in the
2000 time frame?" 10 (Tr. at 853:8-13.) Mr. Lanning testified that a "service provider" in this
context, is a "cellular carrier." (Tr. at 853: 14-15.) Since the '969 patent discloses this element
of Armstrong, and because that fact was testified to by Mr. Lanning, Jingle's argument that no
reasonable jury could find that Armstrong does not anticipate the '969 patent is without merit.
Furthermore, the court does not find that Mr. Lanning misconstrued element [d]. As Mr.
Lanning explained, a person of skill in the art would understand the plain meaning of the term
"relating to a subscriber information other than the subscriber information requested by said
8
The example Dr. Forys gave was "(An] OSS switch [that] can be programmed to instruct the audio subsystem 27
to play specific announcements on a trunk group basis. For example, the message structure could provide a new
field for identifying the carrier, to allow provision of a message customized for each cellular carrier." (Tr. at 706:914; citing Armstrong at 13:20-25.)
9
The Background Section states, "Another drawback to current telephone assistance systems is the failure to utilize
meaningfully the period between the time the requested information is retrieved by a customer service representative
and the time the requester receives the requested information. This period is referred to as the closing period where
the directory assistance service provides a closing prompt to the requester. Typically, this closing prompt is a single
recorded message such as the familiar "We are connecting you to NPA.nxx.xxxx. Thank you for using XYZ" where
XYZ is the name ofthe service provider of the requester." ('969 Patent at 2:6-17; Tr. at 853:7-19).
10
The Armstrong patent was published in 1994. (Armstrong, at 1.)
15
requestor," in the context of this patent, to require targeting the "closing prompt message" to a
caller's request. (See Tr. at 843:23-845:18.) "[C]laims 'must be read in view ofthe
specification, of which they are a part."' Phillips v. AWH Corp., 415 F.3d 1303, 1315 (Fed. Cir.
2006) (citing Markman v. Westview Instruments, Inc., 52 F.3d 967,978 (Fed. Cir. 1995)). The
'969 patent specification states, "[T]he present invention is able to produce a closing prompt
targeted to a requester ... This feature works to tailor the closing prompt to a particular caller,
increasing the advertising and related promotional revenue capacity of the closing prompt
feature." ('969 Patent at 4:37-59.) Mr. Lanning also testified that there is a significant difference
between the "subscriber" and the cellular carrier. (See Tr. at 852: 17-23) ("Well, the subscriber,
that is you and me that have our phones, if we have a phone, we're a subscriber or a customer.
So this message on top isn't dealing with a subscriber or a customer, it's dealing with the cellular
telephone company.") Given Mr. Lanning's testimony, and the construction of the claims in
light of the patent as a whole, the jury's finding was not against the weight of the evidence.
2. Obviousness
Under 35 U.S.C. § 103, a patent may not be obtained on subject matter that "would have
been obvious at the time the invention was made to a person having ordinary skill in the art." The
framework for determining obviousness involves three factual inquiries: (1) ascertaining the
differences between the claimed invention and the prior art; (2) ascertaining the differences
between the claimed invention and the claims at issue; and (3) resolving the level of ordinary
skill in the art. Graham v. John Deere Co., 383 U.S. 1, 17 (1966). "Obviousness is a question of
law based on underlying findings of fact. In re Kubin, 561 F.3d 1351, 1355 (Fed. Cir. 2009).
To determine whether an invention is patentable over the prior art, "a court must ask
whether the improvement is more than the predictable use of prior elements according to their
16
established functions." KSR Int'l Co. v. Telejlex Inc., 550 U.S. 398,417,419 (2007). "Granting
patent protection to advances that would occur in the ordinary course without real innovation
retards progress .... " !d.
a. The '371 Patent
Jingle claims it is entitled to judgment as a matter of law that the asserted claims of the
'371 patent are invalid for obviousness under 35 U.S.C. § 103 over U.S. Patent No. 5,689,547
issued to Moine ("Moine") in combination with U.S. Patent No. 6,078,866 issued to Buck, et al.
("Buck"). Jingle contends that Grape failed to provide any evidence that the preamble and
elements [a] and [b] of claim 4 are not met by Moine. (D.I. 186 at 6; see also Tr. at 880:15881 :3.) Jingle further submits that Grape did not dispute that Buck discloses the limitations of
elements [c] and [d] of claim 4, but instead argued that it would not have been obvious to one of
skill in the art to combine Buck with Moine. (D.I. 186 at 7; Tr. at 740:18-743:14.) Dr. Forys
also testified that Buck disclosed ordering an Internet search result list according to the amount
of money paid in advance by the parties. (Tr. 743:5-744:22.) Therefore, according to Jingle, the
combination of these two patents is simply the ordering Internet technology disclosed in Buck
with an existing electronic process, as recited in Moine. (D.I. 186 at 7.)
Jingle claims that Dr. Forys testified that Moine disclosed all the limitations of claim 4,
except the second part of element [c], i.e., how the list of results is ordered. (I d.) Jingle submits
that, based on the Supreme Court's reasoning in KSR, the Federal Circuit has subsequently held
that applying computer and internet technology to replace older electronics has been
commonplace in recent years. See Muniauction Inc. v. Thomson Corp., 532 F.3d 1318, 1327
(Fed. Cir. 2008). Jingle argues that the combination of Moine and Buck merely applies Internet
technology to existing electronic processes, and therefore would have been obvious to a person
17
of skill in the art. 11 (D.I. 186 at 7.) Additionally, Jingle contends that because Mr. Lanning's
testimony is insufficient to support the verdict for claim 4, it is also insufficient to support the
verdict ofnonobviousness for claims 5, 7, and 8. (Id. at 9.)
Grape disputes Jingle's assertion that the combination ofMolne and Buck render the '371
patent obvious for two reasons: Jingle failed to provide evidence of the level of ordinary skill in
the art as required by Graham v. John Deere Co., 383 U.S. 1, 17 (1966); and substantial
evidence supports the jury's finding ofnonobviousness. The court agrees with both of Grape's
contentions. First, Grape is correct, Jingle failed to provide any evidence of the level of ordinary
skill in the art, a factual inquiry that must be resolved to determine obviousness. See KSR, 550
U.S. at 406; see also supra, note 11. The court finds Jingle's reliance on Chore-Time Equip.,
Inc. v. Cumberland Corp., 713 F.2d 774, 779 (Fed. Cir. 1983), to be unpersuasive. In ChoreTime, the Federal Circuit found no error in the District Judge's "determination that because the
subject matter of the patent and prior art were in this case so easily understandable, a factual
determination of the level of skill in the art was unnecessary." 713 F .2d at 779 (emphasis
added). The prior art in Chore-Time related to bird feeders and the District Court found the level
of skill was "a level of skill as that of the ordinary layman of average intelligence." /d at 779
n.2. (internal quotations omitted). Here, the asserted prior art relates to far more complex
science: call distribution systems; cellular radiotelephone systems; Internet site searching
technologies; and other technologies beyond the grasp of most laypersons. As a result, Jingle
11
Jingle states that its expert, Dr. Forys referenced a person "in the industry" when discussing the prior art, and that
that testimony is sufficient evidence to establish the level of ordinary skill in the art. (D.I. 186 at 7.) The court does
not agree. Dr. Forys's brief, and unsupported, "reference" of a person in the industry hardly creates any evidence
that the ordinary level of skill in the art is "an individual working in the telecommunications industry," as Jingle
claims. (Id.) In fact, Jingle cites "Trial Tr. at 7-18" as the part of the transcript where Dr. Forys makes this
reference, but Dr. Forys's testimony does not appear on pages 7-18. Moreover, in his expert report, Dr. Forys
inconsistently defined the level of skill in the art as a "B.S. degree in Electrical or Computer Engineering or
equivalent training as well as 3-5 years of experience in the fields of call center architecture and their components
especially involving directory assistance as well as marketing and advertising." (D.I. 191 at 13, Ex. D at 11-12.)
The court agrees with Grape that Jingle failed to provide any evidence of ordinary skill in the art. (D.I. 191 at 11.)
18
was required to present evidence to allow the court to determine the level of skill in the art, and it
failed to do so.
Second, substantial evidence supports the jury's finding that it would not have been
obvious to one of skill in the art to combine Buck and Moine. Mr. Lanning testified that it would
not have been obvious to combine Moine and Buck because each deals with two separate and
divergent fields: telephone directory storage, and internet site searching, respectively. (Tr. at
882:5-13.) Further, Mr. Lanning testified that a person of skill in the art would not have a
reasonable expectation of combining these sciences at the time of invention. He stated, "So it
would not have been obvious at all to connect to the Internet. We were having all kinds of issues
just trying to learn how to [talk] over wireless cellular phones systems in the 2000 time frame."
(Tr. at 883:10-13.) Furthermore, Jingle admits that Mr. Lanning testified that Moine "does not
teach a call to a directory assistance system." (D.I. 186 at 6; Tr. at 880:20.) "The burden falls on
the patent challenger to show by clear and convincing evidence that a person of ordinary skill in
the art would have had reason to attempt to ... carry out the claimed process, and would have
had a reasonable expectation of success in doing so" Pharmastem Therapeutics, Inc. v. Viacell,
Inc., 491 F.3d 1342, 1360 (Fed. Cir. 2007). Jingle has not met that burden.
Next, Jingle cites Muniauction Inc. v. Thomson Corp., 532 F.3d 1318, 1327 (Fed. Cir.
2008), in support of its argument that the '371 patent is obvious as a matter oflaw. (D.I. 186 at
8.) Jingle argues that "the Federal Circuit [in Muniauction] ... held that applying computer and
internet technology to replace older electronic has been commonplace in recent years." (!d.)
However, Grape correctly points out that it is well established that there are no per se rules of
obviousness. See In re Ochiai, 71 F.3d 1565, 1572 (Fed. Cir. 1995) ("[R]eliance on per se rules
of obviousness is legally incorrect and must cease."). Here, unlike in Muniauction, the Internet
19
reference, does not merely achieve the same goal as the other prior art reference only using
Internet technology. 532 F.3d at 1321-23. Rather, as Jingle points out, Buck discloses ordering
listings, while Moine does not. (D.I. 186 at 7.) Therefore, the jury's finding is not against the
weight of the evidence, and because there was sufficient evidence to support its finding of
nonobviousness for claim 4, the jury's finding of nonobvious for claims 5, 7, and 8 are also
substantiated.
b. The '969 patent
Jingle argues that it is entitled to judgment as a matter of law that the asserted claims of
the '969 parent are invalid for obviousness under 35 U.S.C. § 103 over U.S. Patent No.
6,269,337 issued to Desmond, eta!. ("Desmond") and U.S. Patent No. 6,647,257 issued to
Owensby ("Owensby"). Jingle claims that it presented clear and convincing evidence at trial that
the combination of Desmond and Owensby disclosed each and every element of the asserted
claims ofthe '969 patent. (D.I. 186 at 12; Tr. at 717:5-726:17.) Jingle contends that Grape's
expert, Mr. Lanning, did not dispute that the combination of Desmond and Owensby disclosed
each and every element of the asserted claims, but rather argued that it would not have been
obvious to a person of skill in the art to combine them because "these patents are for very
different reasons and address very different problems." (D.I. 186 at 12; Tr. at 861 :22-864:22;
864:18-22.)
Jingle claims that Mr. Lanning applied a legally incorrect presumption in coming to this
conclusion. (D.I. 186 at 12.) According to Jingle, Mr. Lanning's assumption "that a person of
ordinary skill attempting to solve a problem will be led only to those elements of prior art
designed to solve the same problem" has been rejected by KSR. 550 U.S. at 420-21. Therefore,
since Mr. Lanning ignored the Court's holding that "[a] person of ordinary skill is also a person
20
of ordinary creativity, not an automaton," Jingle claims it is entitled to judgment as a matter of
law. ld.
Furthermore, Jingle claims it presented sufficient evidence that a person of ordinary skill
in the art, that is, "a person that knows the telecommunications business," would have combined
Desmond and Owensby to achieve the subject matter of claim 1. (D.I. 186 at 13; Tr. at 724:2726: 17.) Dr. Forys testified that Desmond provided an example of a directory assistance call
during which "the caller may choose to have the listed party's telephone number be
automatically dialed." (Tr. at 725:6-7.) Dr. Forys further explained that Owensby was designed
to play a targeted advertisement in a call "prior to connection and/or at predetermined intervals
during the transmission ofthe call." (Tr. at 725:13-726:4.) Jingle claims that Desmond discloses
placing a call to the number requested by the calling party in a directory assistance call, and
Owensby teaches playing advertisements targeted to a calling party while a call is being
connected. (D.I. 186 at 13-14.) Dr. Forys testified that it would have been obvious to a person
in the business to combine Desmond and Owensby. (Id. at 14.) Furthermore, Jingle argues that
because Mr. Lanning's testimony cannot support the verdict for claim 1, it also fails to support
the verdict for claims 5, 20, and 25. (Id.)
Grape disputes Jingle's assertion that it is entitled to judgment as a matter of law that the
asserted claims of the '969 patent are invalid for obviousness over Desmond and Owensby. As a
preliminary matter, Grape disagrees that Mr. Lanning ever admitted that Desmond and Owensby
disclosed each limitation of the asserted claims. (D .I. 191 at 18.) Grape contends that Mr.
Lanning testified that the combination of Desmond and Owensby fails to disclose a "closing
prompt message" as recited in the claims of the '969 patent. (Id.) However, the trial transcript
does not contain this testimony. While Mr. Lanning did testify that Owensby "is not a directory
21
assistance system in any way," he did not testify that the combination of Desmond and Owensby
fails to disclose "a closing prompt message." (See Tr. 864:6-7.) Additionally, Mr. Lanning did
testify that in his opinion, it would not have been obvious to one skilled in the art to combine
these patents because "[they] are for very different reasons and address very different problems."
(Tr. at 864:21-22.)
Grape also contends that Jingle did not offer any evidence of the level of ordinary skill in
the art, as required by KSR, and discussed above. See Sec. IV.2.a. The court agrees that Jingle
was required to present evidence establishing the level of ordinary skill in the art, and failed to
do so. Given Mr. Lanning's testimony and Jingle's failure to establish the level of ordinary skill
in the art, the jury's finding was not against the weight of the evidence.
3.
Attorneys' fees
Jingle asks the court to grant its motion for attorneys' fees, expenses and costs (D.I. 181).
The court does not find this case to be exceptional by clear and convincing evidence as required
by 35 U.S.C. § 285, and therefore will deny Jingle's motion. In deciding whether to award
attorney's fees, the court must undertake a two-step inquiry. Interspiro USA, Inc. v. Figgie
Intern. Inc., 18 F.3d 927, 933 (Fed. Cir. 1994). First, the court "must determine whether there is
clear and convincing evidence that the case is 'exceptional."' !d. (quotation omitted). Second,
the court must determine whether "an award of attorney fees to the prevailing party is
warranted." !d.
Exceptional cases include: "inequitable conduct before the PTO; litigation
misconduct; vexatious, unjustified, and otherwise bad faith litigation; a frivolous suit or willful
infringement." Epcon Gas Sys., Inc. v. Bauer Compressors, Inc., 279 F.3d 1022, 1034 (Fed. Cir.
2002) (citation omitted).
22
An award of attorney fees under § 285 is not intended to be an "ordinary thing in patent
cases," and should be limited to circumstances in which it is necessary to prevent "a gross
injustice" or bad faith litigation. Forest Labs., Inc. v. Abbott Labs., 339 F.3d 1324, 1329 (Fed.
Cir. 2003); see also Aptix Corp. v. Quickturn Design Sys., Inc., 269 F.3d 1369, 1375 (Fed. Cir.
2001) (affirming an award of attorney fees under § 285 for the "extreme litigation misconduct"
of falsifying evidence); Beckman Instruments, Inc. v. LKB Produkter AB, 892 F.2d 1547 (Fed.
Cir. 1989) (affirming an award under § 285 following repeated violations of a permanent
injunction and a district court finding of a "strategy of vexatious activity").
Grape's conduct in this case does not rise to a level of bad faith or vexatious litigation
that warrants an award of attorneys' fees and costs. Though the parties in this case engaged in
"hardball" litigation tactics throughout the pendency of this litigation, none of their conduct was
"exceptional" in that regard. See Forest Labs., Inc. v. Ivax Pharms., Inc., No. 03-891-JJF, 2008
U.S. Dist. LEXIS 14623, at *6-7, 2008 WL 522296 (D. Del. Feb. 26, 2008) (noting that "hardfought" litigation does not necessarily constitute "vexatious or bad faith litigation" for purposes
of awarding attorney fees under§ 285). For the most part, both sides defended their respective
positions throughout this litigation in apparent good faith. The court finds, therefore, that none
of the parties are entitled to an award for attorneys' fees and costs in this case.
V.
CONCLUSION
For the reasons stated above, the court will deny all of the outstanding post-trial motions.
Dated: January_c;_·_, 2012
23
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
GRAPE TECHNOLOGY GROUP, INC.
and KGB, INC.,
Plaintiffs,
v.
JINGLE NETWORKS, INC.,
Defendant.
)
)
)
)
)
)
)
)
)
)
)
Civ. A. No. 08-408 (GMS)
ORDER
For the reasons stated in the accompanying memorandum of the same date, IT IS
HEREBY ORDERED that:
1. The plaintiffs' Motion for a New Trial (D.I. 182) is DENIED;
2. the defendant's Motion for Judgment as a Matter of Law (D.I. 183) is DENIED; and
3. the defendant's Motion for Attorneys' Fees, Expenses, and Costs (D.I. 181) is DENIED.
Dated: January
_j_, 2012
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