Leader Technologies Inc. v. Facebook Inc.

Filing 606

MOTION for Judgment as a Matter of Law - filed by Facebook Inc.. (Caponi, Steven)

IN THE UNITED STATES COURT
FOR THE DISTRICT OF DELAWARE
LEADER TECHNOLOGIES, INC.,
a Delaware corporation,
Plaintiff and Counterdefendant,
v.
FACEBOOK, INC.,
a Delaware corporation,
Defendant and Counterclaimant.

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) CIVIL ACTION
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) No. 1:08-cv-00862-JJF
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DEFENDANT FACEBOOK, INC’S MOTION FOR
JUDGMENT AS A MATTER OF LAW UNDER FED. R. CIV. P. 50(a)
Steven L. Caponi (DE Bar No. 3484)
BLANK ROME LLP
1201 Market Street
Wilmington, DE 19801
Phone: [phone]
Fax:
[phone]
Attorneys for Defendant and
Counterclaimant Facebook, Inc.
Of Counsel:
Michael G. Rhodes
Heidi L. Keefe
Mark R. Weinstein
Jeffrey T. Norberg
COOLEY LLP
Five Palo Alto Square
3000 El Camino Real
Palo Alto, CA 94306
Phone: [phone]
Fax: [phone]
Dated: July 27, 2010

Pursuant to Federal Rule of Civil Procedure 50(a) and the Court’s statements on the
record on July 26, prior to the submission of this case to the jury, Facebook respectfully moves
for judgment as a matter of law on the grounds set forth below and in open court on July 26. “A
motion for judgment as a matter of law may be made at any time before the case is submitted to
the jury. The motion must specify the judgment sought and the law and facts that entitle the
movant to the judgment.” Fed. R. Civ. P. 50(a)(2). A court may grant judgment as a matter of
law against an adverse party if “the court finds that a reasonable jury would not have a legally
sufficient evidentiary basis to find for the party on that issue.” Fed. R. Civ. P. 50(a)(1).
I.

JUDGMENT AS A MATTER OF LAW ON LEADER’S CLAIMS OF INFRINGEMENT
LTI asserted claims 1, 4, 7, 9, 11, 16, 21, 23, 25, 31 and 32 of the ’761 patent at trial

(“asserted claims”). The standards for direct patent infringement under 35 U.S.C. § 271(a) are
well established; the plaintiff must prove that each and every limitation of each asserted claim is
performed or met by the defendant, either literally or under the doctrine of equivalents.
1.

Unasserted Claims

Facebook seeks judgment as a matter of law with respect to all of the claims in the ’761
patent for which no evidence was presented at trial, including claims 2, 3, 5, 6, 8, 10, 12, 13, 14,
15, 17, 18, 19, 20, 22, 24, 26-30, 33-35, several of which were previously asserted but dropped
during discovery. No evidence was presented with respect to any of these claims. As such, no
reasonable jury could find infringement of any these claims, literally or under the doctrine of
equivalents, through any theory based on direct infringement.
2.

No “Control or Direction” Over “Users”

Facebook additionally seeks judgment as a matter of law of non-infringement with
respect to all asserted claims on the ground that Leader has presented no legally sufficient
evidentiary basis for a reasonable jury to find that Facebook exercises direction or control over
any user (including Facebook employees or third parties) with respect to the claim elements that
user must satisfy, or the claim step that user must perform, as required by, for example,

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Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318 (Fed. Cir. 2008) and BMC Resources, Inc. v.
Paymentech, L.P., 498 F.3d 1373 (Fed. Cir. 2007). Claims 1, 9, 21 and 23 contain at least one
claim step or claim element that requires user involvement to satisfy all elements of such claim,
such as the creation by a user of user-defined or user-created data in a first context, user
environment or user workspace, and the user accessing or employing that data and/or an
application in a second context, user environment or user workspace. Muniauction applies to
both the apparatus and method claims asserted, as both include an explicit step that a distinct
third party, the user, must perform. Additionally, asserted claim 16 requires the act of accessing
the user environment via a portable wireless device.
LTI has presented no legally sufficient evidentiary basis that Facebook exercised “control
or direction” over any user with respect to any of these claims. No such evidence was presented
to support such a claim, and the evidence that was presented affirmatively negated the existence
of the requisite direction or control, including by way of example the testimony of Facebook
employees Christopher Cox, Andrew Bosworth and Joshua Wiseman, Michael Kearns, during
the cross examination of Dr. Vigna, and the terms of use entered into evidence during Dr.
Vigna’s examination, and other evidence presented at the trial. No reasonable jury could find
that Facebook, in accordance with the standards provided by controlling law, controls or directs
the actions, decisions or choices a user makes when using the Facebook website, and users
remain free to use the site as they wish. This includes each and every user step required under
each of the usage scenarios presented in Dr. Vigna’s testimony – including by way of example,
uploading of photos, navigation throughout the site and adding content to other pages.
Muniauction holds that the control or direction standard is satisfied in situations where
the law would traditionally hold the accused direct infringer vicariously liable for the acts
committed by another party that are required to complete performance of the claim steps.
Facebook neither performed every step of the asserted claims nor had another party perform
steps on its behalf, and Leader has identified no legal theory under which Leader might be
vicariously liable for the actions of users. Leader’s claim of direction and control fails both
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factually and as a matter of law under the controlling Muniauction and BMC Resources
decisions, and no reasonable jury could find for Leader on this issue.
3.

No Direct Infringement.

Facebook seeks judgment as a matter of law with respect to Leader’s claim for direct
patent infringement on the ground that Leader has presented no legally sufficient evidentiary
basis from which a reasonable jury could find that Facebook performs each and every element of
any asserted claim, literally or under the doctrine of equivalents, under the claims as properly
construed. With respect to each of the independent claims, they include: claim 1 (“a computerimplemented tracking component of the network-based system for tracking a change of the user
from the first context to a second context of the network-based system and dynamically updating
the stored metadata based on the change, wherein the user accesses the data from the second
context”), claim 9 (“tracking movement of the user from the user environment of the web-based
computing platform to a second user environment of the web-based computing platform; and
dynamically updating the stored metadata with an association of the data, the application, and the
second user environment wherein the user employs at least one of the application and the data
from the second environment”), claim 21 (“tracking movement of the user from the user
workspace to a second user workspace of the web-based computing platform; dynamically
associating the data and the application with the second user workspace in the metadata such that
the user employs the application and data from the second user workspace.”) and claim 23 (“a
computer-implemented tracking component of the web-based server for tracking change
information associated with a change in access of the user from the first user workspace to a
second user workspace, and dynamically storing the change information on the storage
component as part of the metadata, wherein the user accesses the data from the second user
workspace.”).
With respect to each of these claim elements, Leader has not presented a legally
sufficient evidentiary basis from which a reasonable jury could find that any aspect of these

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claim elements is satisfied by Facebook. By way of example, Leader has presented no evidence
of the claimed tracking or tracking component that tracks change or movement of the user from a
first to a second context, environment or workspace. Leader has also failed to show any instance
in which the user’s movement or change, or any other action identified in any of the
infringement usage scenarios presented by Leader at trial through the testimony of Dr. Vigna,
results in a dynamic update, modification, amendment or any other form of change whatsoever to
any metadata stored in a first context, environment or workspace, including by way of example
the photo table data identified by Dr. Vigna during his testimony.
The evidence also establishes that the alleged metadata that Dr. Vigna identifies in the
alleged second context, workspace or environment is separate and distinct from the metadata he
identifies in the first context, contrary to the language of the claims requiring an update or
change to “the stored metadata” or “the metadata,” the antecedent basis “the” making clear that
the update or change must operate on the same metadata in both contexts, environments or
workspaces.

No evidence was presented on this point, and the evidence at trial through

witnesses Cox, Bosworth, Wiseman and Kearns, as well as Vigna, affirmatively established the
absence of this element in the accused Facebook site. No reasonable jury could find for Leader
on this claim element.
Leader has also not presented any legally sufficient evidentiary basis from which a
reasonable jury could find that the elements of dynamically updating, dynamically associating, or
dynamically storing information in the metadata in the second context, environment or
workspace are satisfied. Leader has presented no evidence from which a reasonable jury could
conclude that any updating, associating or storing of metadata as recited in these claim elements
of claims 1, 9, 21 and 23, respectively, occurs “automatically and in response to the preceding
event” of the movement or tracked movement or change of the user to the second context,
environment or workspace, as required by the claim construction order and memorandum of
Judge Farnan dated March 8, 2010. Even under the manner in which Leader has interpreted the
claims, these claim elements are not met because the evidence establishes that the information
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Dr. Vigna identifies as the metadata in the second context, or environment, is not updated
“when” the user accesses the user-defined data the photo from that second context, environment
or workspace.
With respect to each of the asserted independent claims, they also include the following
requirements, which are not met: claim 1 (“a computer-implemented context component of the
network-based system for capturing context information associated with user-defined data
created by user interaction of a user in a first context of the network-based system, the context
component dynamically storing the context information in metadata associated with the userdefined data, the user-defined data and metadata stored on a storage component of the networkbased system”), claim 9 (“creating data within a user environment of a web-based computing
platform via user interaction with the user environment by a user using an application, the data in
the form of at least files and documents”), claim 21 (“creating data related to user interaction of a
user within a user workspace of a web-based computing platform using an application”), claim
23 (“a computer-implemented context component of a web-based server for defining a first user
workspace of the web-based server, assigning one or more applications to the first user
workspace, capturing context data associated with user interaction of a user while in the first user
workspace, and for dynamically storing the context data as metadata on a storage component of
the web-based server, which metadata is dynamically associated with data created in the first
user workspace”).
With respect to each of these claim elements, Leader has not presented a legally
sufficient evidentiary basis from which a reasonable jury could find that each aspect of these
claim elements is satisfied by Facebook. By way of example, Leader has presented no evidence
of the creation of user-defined or user-created data in the first context, environment or
workspace. Dr. Vigna’s testimony indicates that Leader relies instead on the uploading or
provision of previously-created content from the user’s computer, not on the creation of the data
within the first context, environment or workspace as the claims require.

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Leader has also produced no legally sufficient evidentiary basis as to any other element
of any asserted claim. This includes the additional elements set forth in each dependent claim.
Leader has also failed to show the actual performance by anyone of the claimed methods set
forth in claims 9, 11 and 16.
Leader has therefore failed to show infringement of any asserted claim of the ’761 patent,
either literally or under the doctrine of equivalents. Because literal infringement requires that
each and every element of the claim be exactly met by the accused system, and because no
reasonable jury could find that each element is met, judgment as a matter of law is appropriate
under Fed. R. Civ. P. 50(a).
Additionally, with respect to the doctrine of equivalents, Leader has presented no legally
sufficient evidentiary basis for a reasonable jury to find that Facebook infringes any claim under
the doctrine of equivalents, which requires Leader to show that the differences between the
accused product and the allegedly equivalent claim limitations are insubstantial to one of
ordinary skill in the art, or that the accused product performs substantially the same function, in
substantially the same way and achieving substantially the same result as the claim element.
DeMarini Sports, Inc. v. Worth, Inc., 239 F.3d 1314 (Fed. Cir. 2001).
With respect to the doctrine of equivalents, Leader has failed to present evidence from
which a reasonable jury could find equivalence with respect to any claim element. Dr. Vigna’s
testimony established that Leader’s evidence and argument on the doctrine of equivalents is
merely subsumed into its claim of literal infringement, contrary to PC Connector Solutions LLC
v. SmartDisk Corp., 406 F.3d 1359 (Fed. Cir. 2005). Dr. Vigna was not able to identify even a
single difference, or a single not literally present claim element, that he applied to his analysis.
When asked in cross-examination if there are any “scars” on the Facebook website, referring to
differences between Facebook and the claim elements, Dr. Vigna said there were none. Leader
has also therefore also failed to present the particularized evidence and linking argument as to
either the insubstantiality of differences between the claimed invention and the accused device,

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or with respect to the function, way and result test, as required by Motionless Keyboard Co. v.
Microsoft Corp., 486 F.3d 1376, 1382 (Fed. Cir. 2007).
Additionally, to the extent Dr. Vigna gave testimony on the doctrine of equivalents, it
was tied only to the independent claims and not to dependent claims. As no evidence was
presented with respect to the asserted dependent claims, no reasonable jury could find for Leader
on those claims, and judgment as a matter of law should be entered as to them as well.
Further, Federal Circuit law is clear that the doctrine of equivalents may not be employed
in a manner that wholly vitiates a claim limitation. Scimed Life Systems, Inc. v. Advanced
Cardiovascular Systems, Inc., 242 F.3d 1337, 1346 (Fed. Cir. 2001).

The evidence and

testimony of Facebook witnesses and Dr. Kearns, as well as the cross-examination of Dr. Vigna,
and other evidence presented at trial, established the complete absence of each of the claim
elements in the asserted claims, including the elements discussed above in connection with
Leader’s literal infringement claim.

To apply the doctrine of equivalents as Leader has

suggested would entirely vitiate each of these claim elements.
Additionally, the claim of doctrine of equivalents is barred by the doctrine of prosecution
history estoppel under Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 535 U.S. 722
(2002), and its progeny.

Each of the claims was the subject of substantial narrowing

amendments throughout the prosecution of the ’761 patent, in which the applicants were forced
to surrender subject matter in response to rejections by the Patent Office relating to the
patentability of the alleged invention. These surrenders are detailed in Leader’s responses in the
file history of the ’761 patent filed with the PTO on November 3, 2005, May 5, 2006, and in the
Examiner’s Amendment dated August 30, 2006. By way of example, Leader is estopped from
attempting to apply the doctrine of equivalents with respect to any system that does not
dynamically update or modify the stored metadata, automatically and in response to the user’s
tracked movement to a second context, environment or workspace, an element that was added in
an Examiner’s amendment, or the claim elements requiring creation of data in the first context,

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environment or workspace in May 5, 2006 amendments. Facebook incorporates its arguments
set forth in its summary judgment motion on non-infringement (Motion No. 3) on this issue.
Finally, the doctrine of equivalents likewise cannot be applied in the manner suggested
by Leader because to do so would ensnare the prior art. The claims, if written in a way to cover
the accused Facebook website, would impermissibly ensnare the Yahoo, eBay and Amazon
websites that pre-dated the patent as detailed in the testimony of Professor Kearns.
Leader has therefore failed to show infringement, literally or under the doctrine of
equivalents, with respect to any asserted claim of the ’761 patent.
4.

No Indirect Infringement.

The Court has properly refused to give an instruction on Leader’s claims for indirect
infringement under 35 U.S.C. §§ 271(b), (c). Judgment as a matter of law should be formally
entered as to these claims because Leader has presented no legally sufficient evidentiary basis as
discussed by the Court.
II.

JUDGMENT AS A MATTER OF LAW ON FACEBOOK’S INVALIDITY DEFENSES.
A.

On Sale Bar

Facebook’s defense of invalidity of the ’761 patent based on the on sale bar is governed
by 35 U.S.C. § 102(b), which provides that a claim is invalid if the alleged invention described in
the claim was “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.”
1.

Priority Date.

With respect to the effective filing date of the ’761 patent, Leader has presented no
legally sufficient evidentiary basis for a reasonable jury to find that the ’761 patent is entitled to
the filing date of the provisional application, December 11, 2002. Additionally, no reasonable
jury could fail to find that the ’761 patent is not entitled to the filing date of the provisional
application. Under PowerOasis, Inc. v. T-Mobile USA, Inc., 522 F.3d 1299 (Fed. Cir. 2008),

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Leader bears the burden of proving that it is entitled to the priority date of its provisional
application. Facebook has presented a prima facie case of anticipation of each claim of the ’761
patent through the testimony of Mr. McKibben, Leader’s documents and discovery responses,
which establish both Leader’s admissions that the Leader2Leader product practiced each asserted
claim, and that the product was offered for sale more than one year before the December 10,
2003 filing date. The question of whether the ’761 patent is entitled to the benefit of the
provisional application’s filing date was not considered by the PTO during prosecution of the
patent. Leader therefore bears the burden of showing that the provisional application fully
discloses each and every element of each asserted claim, and that it enables one of ordinary still
in the art to make and use the claimed invention, as is required under 35 U.S.C. § 119(e)(1) and
35 U.S.C. § 112, ¶ 1.
The evidence at trial, including the provisional application itself, the testimony of Jeffrey
Lamb and the testimony of Professor Greenberg, and the testimony of Dr. Herbsleb, showed that
the provisional application fails to fully disclose or enable multiple elements of each asserted
claim, including the tracking of user movement from one context, workspace or environment to
another, the storage and updating of metadata in more than one context, workspace or
environment, and the dynamic update or change of the metadata as recited in the claims.
Accordingly, no reasonable jury could find that the ’761 patent is entitled to the benefit of the
provisional patent application’s filing date.
2.

Offers for Sale

With respect to the on sale bar, the law requires that the invention was both the subject of
a commercial sale or offer of sale, and ready for patenting before the critical date. Pfaff v. Wells
Elecs., Inc., 525 U.S. 55, 67 (1998). No reasonable jury could fail to find that both of these
requirements were satisfied based on the evidence. An invention is ready for patenting either
when it is reduced to practice or when the inventor prepares drawings or other descriptions of the
invention that are sufficiently specific to enable a person skilled in the art to practice the

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invention. Id. at 67-68. Both variants of ready for patenting are met here, as the trial evidence
including the testimony of Mr. McKibben and the documents entered into trial showed that
Leader2Leader was operational no later than late 2001 and early 2002 and, in any case, well
before the offers for sale that occurred before the critical date. Additionally, Leader prepared
documents, including the August 1999 functional specification entered into evidence and on
which Mr. McKibben testified as supporting an early invention date, establishing readiness for
patenting years before the provisional patent filing. No reasonable jury could therefore fail to
find that the alleged invention was ready for patenting prior to the critical date.
Additionally, no reasonable jury could fail to find that the Leader2Leader embodied the
asserted claims of the ’761 patent for the reasons discussed earlier, in light of Leader’s
interrogatory responses entered into evidence, the admissions of Mr. McKibben at trial and in
deposition, and the documents entered into evidence at trial.
Additionally, no reasonable jury could fail to find that Leader2Leader was subject to at
least three offers for sale, to The Limited, Boston Scientific and Wright-Patterson Air Force
Base, to whom Leader made commercial offers for sale as detailed in the testimony of Mr.
McKibben and the documents entered into evidence.
B.

Anticipation

Facebook’s defense of anticipation of the ’761 patent is based 35 U.S.C. § 102, which
requires that Facebook show that each element of each asserted claim whose validity is
challenged is disclosed, either explicitly or inherently, by the prior art references upon which
Facebook relies. With respect to the prior art, no reasonable jury could fail to find that U.S.
Patent No. 6,236,994 to Swartz, Published European Patent Application EP 1 087 306 to
Laurence Hubert, U.S. Patent No. 7,647,349 to Laurence Hubert (which contains the disclosures
of its published European counterpart), and iManage as described in the iManage DeskSite 6.0
User Reference Manual, each anticipate claims 1, 4, 7, 9, 11, 21, 23, 25, 31 and 32. With respect
to claim 16, it is separately anticipated by iManage as described by Professor Greenberg.

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No reasonable jury could fail to find that each of these references qualifies as a printed
publication prior art reference that discloses, either expressly or inherently, each element of these
asserted claims as explained during the testimony of Professor Greenberg. No reasonable jury
could fail to find that each of these references provides an enabling disclosure because each is
either entitled to a presumption of enablement as an issued U.S. patent that has not been rebutted,
or because no reasonable jury could fail to find enablement in light of the evidence presented by
Dr. Greenberg and other evidence at trial.
Separately with respect to the Hubert ’349 issued U.S. patent, it is prior art under 35
U.S.C. § 102(e) because it is entitled to a priority date of September 24, 1999 as a continuation to
an earlier U.S. Application to which priority was properly claimed under 35 U.S.C. § 120. With
respect to Leader’s claim of entitlement to an invention date of August 1999 that pre-dates
Hubert ’349, which was asserted during the testimony of Mr. McKibben, Leader has presented
no legally sufficient evidentiary basis upon which a reasonable jury could find that Leader has
provided adequate corroboration of its claimed date of conception, or that Leader exercised
reasonable diligence from such date to the date of actual or constructive reduction to practice.
C.

Obviousness

Facebook’s defense of obviousness of the ’761 patent is governed by 35 U.S.C. § 103(a)
and the Supreme Court’s decision in KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398 (2007). The
factors to consider include the scope and content of the prior art, the differences between the
prior art and the claims of the patent and the level of ordinary skill in the art.
With respect to claim 16, no reasonable jury could fail to find that it is rendered obvious
in light of the combination of Swartz ’994 and U.S. Patent No. 6,434,403 to Ausems, the
combination of either Hubert ’306 or Hubert ’349 with Ausems, or the combination of iManage
with Ausems, as detailed during the testimony of Professor Greenberg.

Obviousness is a

question of law based on underlying facts, and no reasonable jury could conclude that the factors
for obviousness were not satisfied by the prior art presented by Dr. Greenberg.

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With respect to claims 1, 4, 7, 9, 11, 21, 23, 25, 31 and 32, no reasonable jury could fail
to find that these claims are obvious in view of the combination of Swartz ’994, the Hubert
references, and iManage and the other combinations explained by Professor Greenberg.
D.

Indefiniteness

Facebook also moves for judgment as a matter of law with respect to claims 1, 4, 7, 21,
23, 25, 31 and 32 on the ground that these claims are invalid as indefinite under IPXL Holdings,
L.L.C. v. Amazon.com, Inc., 430 F.3d 1377 (Fed. Cir. 2005), because these claims impermissibly
attempt to claim an apparatus or computer-readable medium, as well as an explicit step that must
be performed by a user. These grounds are set forth in the pending motion for summary
judgment of invalidity that has been deferred until after the completion of phase 1, which are
incorporated by reference, but judgment as a matter of law is also sought and is also appropriate
on this legal question pursuant to Fed. R. Civ. P. 50(a).

Dated: July 27, 2010

By: /s/ Steven L. Caponi
Steven L. Caponi (DE Bar No. 3484)
BLANK ROME LLP
1201 Market Street
Wilmington, DE 19801
Phone: [phone]
Fax:
[phone]
Attorneys for Defendant and
Counterclaimant Facebook, Inc.

Of Counsel:
Heidi L. Keefe
Mark R. Weinstein
Jeffrey T. Norberg
COOLEY LLP
Five Palo Alto Square
3000 El Camino Real
Palo Alto, CA 94306
Phone: [phone]
Fax: [phone]
870761 v1/HN

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