Leader Technologies Inc. v. Facebook Inc.

Filing 664

REPLY BRIEF re 631 MOTION for Judgment as a Matter of Law of Invalidity filed by Facebook Inc.(a Delaware corporation). (Caponi, Steven)

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

)
) CIVIL ACTION
)
)
) No. 1:08-cv-00862-LPS
)
)
)
)
)
)
)
)

REPLY MEMORANDUM IN SUPPORT OF DEFENDANT FACEBOOK, INC’S
RENEWED MOTION FOR
JUDGMENT AS A MATTER OF LAW (JMOL) OF INVALIDITY
[MOTION NO. 4 OF 4]
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 (pro hac vice)
Heidi L. Keefe (pro hac vice)
Mark R. Weinstein (pro hac vice)
Jeffrey T. Norberg (pro hac vice)
Elizabeth Stameshkin (pro hac vice)
COOLEY LLP
Five Palo Alto Square
3000 El Camino Real
Palo Alto, CA 94306
Phone: [phone]
Fax: [phone]
Dated: September 27, 2010

TABLE OF CONTENTS
Page
I.

INTRODUCTION ............................................................................................................. 1

II.

ARGUMENT..................................................................................................................... 1
A.

Swartz Discloses all Elements of the Asserted Claims.......................................... 1

B.

The iManage User Manual Anticipates All Asserted Claims................................ 3
1.

The iManage User Manual is Enabling Prior Art ...................................... 3

2.

iManage Discloses Tracking and Contexts................................................ 5

C.
D.

The Asserted Claims are Obvious.......................................................................... 7

E.

Facebook’s Conditional Request for a New Trial.................................................. 8

F.
III.

Hubert Discloses All Elements of the Asserted Claims......................................... 6

The Non-Method Claims Are Invalid as Indefinite Under IPXL Holdings........... 9

CONCLUSION................................................................................................................ 10

-i-

TABLE OF AUTHORITIES
Page(s)
CASES
Brown & Williamson Tobacco Corp. v. Philip Morris Inc.,
229 F.3d 1120 (Fed. Cir. 2000)..................................................................................................8
CFMT, Inc. v. Yieldup Int’l Corp.,
349 F.3d 1333 (Fed. Cir. 2003)..................................................................................................5
Exergen Corp. v. Wal-Mart Stores, Inc.,
575 F.3d 1312 (Fed. Cir. 2009)......................................................................................1, 2, 3, 5
IPXL Holdings, L.L.C. v. Amazon.com, Inc.,
430 F.3d 1377 (Fed. Cir. 2005)..................................................................................................9
KSR Int’l Co. v. Teleflex Inc.,
550 U.S. 398 (2007)...............................................................................................................7, 8
Minerals Separation v. Magma Copper Co.,
280 U.S. 400 (1930)...................................................................................................................6
Orion IP, LLC v. Hyundai Motor Am.,
605 F.3d 967 (Fed. Cir. 2010)........................................................................................1, 2, 3, 5
Phillips Petroleum Co. v. U.S. Steel Corp.,
673 F. Supp. 1278 (D. Del. 1987)..............................................................................................6
STATUTES
Federal Rules of Evidence 702 .......................................................................................................2
35 U.S.C. § 102(b) ...........................................................................................................................4

-ii-

I.

INTRODUCTION
Leader’s opposition attempts to paint the invalidity analysis as a classic “battle of the

experts” when no such battle exists.

The only real battle here is between the plain and

undisputed language of the prior art references themselves and the unsupported conclusions of
Leader’s expert. Because the Federal Circuit has held that those conclusions do not bar entry of
judgment as a matter of law on anticipation when anticipation is clear from the underlying
reference itself, there is no battle at all and JMOL should be granted. See Orion IP, LLC v.
Hyundai Motor Am., 605 F.3d 967, 974-78 (Fed. Cir. 2010) (reversing trial court’s denial of
motion for judgment as a matter of law on anticipation despite testimony by plaintiff’s experts
that prior art was not anticipatory); Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312,
1318-20 (Fed. Cir. 2009) (same). Leader’s opposition on obviousness is similarly unsupported
by the record and misconstrues the law.
Leader’s opposition to Facebook’s conditional request for a new trial is based on an
argument that Leader’s counsel acted properly when he misrepresented to the jury that the
Swartz reference was considered by the Patent Office during the original prosecution of the ’761
patent. This argument has already been rejected by this Court and need not be reexamined here.
II.

ARGUMENT
A.

Swartz Discloses all Elements of the Asserted Claims

Facebook clearly demonstrated at trial that Swartz discloses each limitation of Leader’s
asserted claims. See Appendix A to Facebook’s Opening Brief (D.I. 635). In a tacit admission
of how relevant Swartz is, Leader’s opposition argues about only two elements it contends are
missing: tracking of user movement, and a context “as construed by the Court.” D.I. 645 at 13.
But rather than present evidence that those elements are lacking, Leader’s argument rests on the
1

naked conclusions of Dr. Herbsleb.

Because the plain language of Swartz discloses both

elements, Dr. Herbsleb’s conclusory testimony to the contrary provides no basis for denying
Facebook’s motion. See Orion, 605 F.3d at 976-77; Fed. R. Evid. 702. Likewise, Dr. Herbsleb’s
testimony that all the references are document-centric rather than user-centric is immaterial. D.I.
645 at 5. The claims do not require a particular “centricity.” The only elements that matter to
the invalidity analysis are those in the claims.
Regarding the tracking element, Swartz could not be clearer when in disclosing that
“knowledge integration middleware is preferably employed to identify (including tracking,
monitoring, analyzing) the context in which information is employed so as to enable the use
of such context in the management of knowledge.” D.I. 636, Ex. 22 at Col. 6:22-26 (emphasis
added). This alone refutes all of Leader’s arguments that this element is missing.
Leader also argues that this language relates to tracking document use rather than
changes in user contexts. D.I. 645 at 13. In Exergen, the Federal Circuit reversed a jury verdict
and found the asserted claims anticipated, rejecting attempts to distinguish the prior art based on
functions “in addition to” those in the claims. 575 F.3d at 1318-19. This is precisely what
Leader argues in its opposition – that Swartz is not anticipatory because it tracks document use,
while ignoring the fact that Swartz also tracks users. Figure 5 in Swartz states that its system
creates a “Record of Transactions” that includes “Context info from users & apps…” D.I. 636,
Ex. 22 at Fig. 5; see also id. at Col. 4:33-35, Col. 8:55-59. Thus, because Swartz clearly tracks
user interactions it does not matter that Swartz also tracks document use.
Leader’s claim that Swartz does not disclose contexts, environments and workspaces is
even more specious. The term “context” appears numerous times throughout Swartz and the
discussion of one of the preferred embodiments discloses that the “context” is the environment in
which the information is used: “Such a system also preferably captures metadata associated with
2

the information shared, stored and accessed by the users of the data so as to characterize the
‘context’ in which the information is being used.” D.I. 636, Ex. 22 at Col. 8:56-59. Swartz
further discloses that its system “is used to assist in the integration of disparate information
sources and their corresponding applications,” id. at Col. 6:17-22. This is materially no different
from the ’761 patent’s definition of “workspace,” which is “a collection of data and application
functionality related to a user-defined topic.” D.I. 636, Ex. 4, ’761 patent, at Col. 7:49-51
(definition of “board”), 3:32-35 (“workspace” and “board” have same meaning). Leader’s expert
used the terms “context” and “workspace” interchangeably. See D.I. 635 at n.1. Dr. Herbsleb’s
conclusory claim that “context” in Swartz means “this regulatory compliance scheme” ignores
that Swartz uses “context” to refer to an environment, just like the asserted claims.
In both Orion and Exergen, the Federal Circuit reversed a jury’s finding that prior art was
not anticipatory notwithstanding the existence of conflicting expert testimony. See Orion, 605
F.3d at 974-78; Exergen, 75 F.3d at 1318-20. The Federal Circuit in both cases looked beyond
the experts’ attempts to distinguish the prior art and found anticipation when all elements of the
asserted claims were apparent from the face of the prior art itself. Id. As in Orion and Exergen,
no reasonable jury could have credited Dr. Herbsleb’s claims that tracking and contexts are
missing from Swartz. Judgment as a matter of law is therefore appropriate.
B.

The iManage User Manual Anticipates All Asserted Claims
1.

The iManage User Manual is Enabling Prior Art

The evidence elicited at trial by Facebook showed that the iManage User Manual
(“iManage”) was publicly available before the priority date of the ’761 patent. In order for
iManage to qualify as prior art, it needed to be publicly accessible more than one year before the
critical date of December 10, 2002. The copy of iManage submitted into evidence established

3

that the reference was “© COPYRIGHT 1999, 2000, 2001” and “last updated” July 26, 2001
(D.I. 636, Ex. 23 at AUT0020002), which is more than a year prior to the critical date. iManage
also includes a statement that the manual is “intended for end users of iManage DeskSite.” Id. at
AUT0020011. This is sufficient to establish that iManage was a printed publication that was
publicly available more than one year prior to the critical date.
Leader’s opposition ignores this evidence and relies on the fact that one of the copies of
iManage admitted at trial, DTX1010, was originally stamped “confidential” by the party that
produced it in discovery. Leader ignores that a non-confidential version of iManage was also
admitted by the Court as Exhibit DTX0925E, and that Dr. Greenberg testified that the document
he relied upon bore no confidentiality designation. Declaration of Elizabeth Stameshkin in
Support of Reply Memorandum in Support Facebook’s Inc.’s Renewed Motion for Judgment as
a Matter of Law (“Stameshkin Supp. Decl.”), Ex. A at 1709:6-20. Leader offered no evidence to
rebut the statements in iManage itself, namely that it was available to users of iManage in July of
2001. Absent any rebuttal evidence, no reasonable jury could have concluded that iManage does
not qualify as a printed publication under 35 U.S.C. § 102(b).
Leader also failed to offer evidence that the claimed invention was not enabled by
iManage. At trial, Dr. Greenberg testified that iManage is an enabling reference as to the
asserted claims. Stameshkin Supp. Decl., Ex. A at 1535:5-1536:3. In response, Dr. Herbsleb
testified that iManage did not enable someone to build the iManage software. Id. at 1792:111793:9. But Dr. Herbsleb was applying the wrong test. The test is not whether one of skill in the
art could build the iManage product using the manual, or even the Leader product. The test is
whether someone could, without undue experimentation, make and use the claimed invention.
The Federal Circuit, which has held that “Title 35 does not require that a patent disclosure enable
one of ordinary skill in the art to make and use a perfected, commercially viable embodiment
4

absent a claim limitation to that effect.” CFMT, Inc. v. Yieldup Int’l Corp., 349 F.3d 1333,
1338 (Fed. Cir. 2003). The only person who testified to whether or not iManage enabled
someone to make and use the claimed invention was Dr. Greenberg, who testified that it did.
Because Dr. Herbsleb applied the wrong test, his testimony is not in conflict with Dr.
Greenberg’s. No reasonable jury could have found that iManage was not enabling.
2.

iManage Discloses Tracking and Contexts

As with Swartz, Leader again identifies only two limitations (the tracking component and
contexts) as allegedly absent from iManage. D.I 645 at 8-9. However, again, Leader ignores the
plain disclosures of iManage and relies on unsupported conclusory statements by its expert that
are refuted by the reference itself. See Orion, 605 F.3d at 976-77; Exergen, 75 F.3d at 1318-20.
Leader argues that iManage has “no view shots anywhere in the manual where you can sort of
pull up some user and see what a user has done.” D.I 645 at 8 (D.I. 637, Ex. 1 at 1797:8-10).
However, nothing in the asserted claims requires the ability to “pull up some user and see what a
user has done.” Instead, each of the asserted claims is limited to tracking user movement
between contexts, environments and/or workspaces, and storing that information in the metadata
associated with the data. As Facebook’s expert testified, iManage tracks user movement in a
number of ways, including by automatically recording information about which “User” accessed
documents, when they did so, from what location, for how long and using which application:

5

D.I. 636, Ex. 23 at Fig. 3.26. No reasonable jury could find that tracking is missing from
iManage in light of the above which shows, e.g., user BOWEN (col. 1), checking in a document
(col. 3, row 1) with an application (col.2) at a particular time (col. 4), from a particular location
(col. 7.) along with tracking various other activities by user BOWEN. Furthermore, the Court at
Leader’s urging defined “context” as “environment,” and thus “context information” necessarily
includes information about the user’s environment. The location of the user (col. 7 in Fig. 3.26)
and the application the user is running (col. 2 in Fig. 3.26) both reflect the user’s environment
and are therefore “context” information as a matter of law.
C.

Hubert Discloses All Elements of the Asserted Claims

As with Swartz and iManage, Leader incorrectly asserts that Hubert does not include the
tracking and context elements present in the asserted claims. D.I 645 at 10-11. Leader also
claims that Hubert does not disclose a network or web-based system, as is required by the claims.
Facebook proved at trial, however, that Hubert does include all three of these elements.
Leader’s claim that Hubert does not disclose a network based system borders on the
absurd. Paragraph 23 of Hubert discloses that “Meta-document 20 is then transmitted over the
Internet 36 to source (or environment) 32.” D.I. 636, Ex. 24, ¶ 0023. Whether Hubert claims a
network-based system in the claims written at the end of the Hubert patent themselves has
absolutely no relevance. In order to show anticipation, Facebook need only show the presence of
all elements of the asserted claims in a single reference, not that those elements are claimed in
the prior art patent. Phillips Petroleum Co. v. U.S. Steel Corp., 673 F. Supp. 1278, 1288 (D. Del.
1987) (“[T]he question is not the precise scope of the claim in the prior patent, but what is
disclosed in the specification and made known to the world.”) (citing Minerals Separation v.
Magma Copper Co., 280 U.S. 400, 402 (1930)) (internal quotations omitted). No reasonable
jury could find that Hubert does not disclose the Internet.
6

The same paragraph, No. 23, also specifically discloses the required “environment” from
the claims:

“Meta-document 20 is then transmitted over the Internet 36 to source (or

environment) 32.” D.I. 636, Ex. 24, ¶ 0023 (emphasis added).

This statement directly

contradicts Dr. Herbsleb’s claim that “there’s absolutely nothing about a context, or environment
…” in Hubert.
Finally, contrary to Leader’s assertions, the evidence plainly shows that Hubert includes
tracking. See D.I. 636, Ex. 24 at ¶ 009 (“There is also a need for a system and method of
managing documents that can track document distribution data. There is a further need for a
system and method of managing documents that can track a document’s path of distribution
and a document’s changes”) (emphasis added). In tracking the path of a document with all the
changes made to it, the Hubert system necessarily tracks the users that touch that document. The
plain language of Hubert and the testimony adduced from Dr. Greenberg are so clear that no
reasonable jury could fail to conclude that Hubert discloses every element of the claims.
D.

The Asserted Claims are Obvious

Leader’s arguments on obviousness must be rejected for the same reasons discussed
above. Leader simply argues that because each reference is purportedly lacking the tracking
element, no combination can produce this missing element. As discussed above, however, each
reference not only uses the word “tracking” but discloses the exact same tracking concept
claimed in the asserted claims.
Leader’s arguments also misrepresent the current state of the law and ignores Supreme
Court precedent. Leader insists that Facebook failed to provide the necessary evidence of
“motivations to combine” the prior art, but Leader is wrong on the law and the facts. Legally,
there no longer exists a requirement to find an explicit “motivation to combine” references. KSR
Int’l Co. v. Teleflex Inc., 550 U.S. 398, 402 (2007) (“The diversity of inventive pursuits and of
7

modern technology counsels against confining the obviousness analysis by a formalistic
conception of the words teaching, suggestion, and motivation . . . .”). To the contrary, a
combination of prior art elements performing their known functions is obvious as a matter of
law. Id. at 415-16. And in any event, Facebook provided testimony that in fact did suggest
motivations to combine the references. D.I. 637, Ex. 1 at 1564:16-1566:4.
Finally, the secondary considerations proffered by Leader are based on the incorrect and
conclusory testimony of Dr. Herbsleb, and therefore do not support the jury’s verdict. Regarding
long felt need, Dr. Herbsleb testified that Bell Labs in 2002 was struggling with how teams could
share documents. Stameshkin Supp. Decl., Ex. A at 1847:4-17. He does not, however, establish
the nexus between this “need” and the claims at issue, for example, by explaining why there was
a long-felt need to track user movement from one context to another, and update metadata
associated with user-defined data based on that change. Dr. Herbsleb’s testimony on commercial
success is similarly unhelpful, as it relies solely on the success of Facebook as an alleged
commercial embodiment of the invention without establishing a nexus between that success and
the claimed invention. Brown & Williamson Tobacco Corp. v. Philip Morris Inc., 229 F.3d
1120, 1130 (Fed. Cir. 2000) (“A nexus between commercial success and the claimed features is
required.”). The commercial failure of Leader2Leader, the only product that both parties agree
practices the asserted claims, demonstrates that merely practicing the claimed invention is not
enough to create commercial success.

No reasonable jury could have found secondary

considerations of non-obviousness based on this record.
E.

Facebook’s Conditional Request for a New Trial

In opposing Facebook’s conditional request for a new trial, Leader remarkably continues
to argue that it appropriately suggested to the jury that the Swartz reference was considered by
the PTO during the original prosecution of the ’761 patent. This Court has already ruled on that
8

issue and found Leader’s comments to be improper. Stameshkin Supp. Decl., Ex. A at 1645:1723 (“Such questioning by Mr. Andre was inappropriate due to my in limine ruling. By contrast,
on direct, Facebook stayed appropriately within the narrow scope of my ruling, elicited only
disputed [sic] evidence that Swartz is not mentioned on the face of the ’761 patent.”). The Court
has also ruled that Leader’s conduct prejudiced Facebook. Id. at 1647:1-2. The only issue raised
by Facebook’s motion is whether the Court’s remedy of a curative instruction was sufficient to
remedy this prejudice. Facebook believes it was not.
The conduct was egregious—counsel repeatedly pushed the issue despite multiple rulings
barring the questions and being told to “move on.” The improper line of questions implied to the
jury that Facebook had been hiding-the-ball through its entire grueling element by element
testimony, and misrepresented the facts and law of the case. D.I. 637, Ex. 1 at 1582:3-1583:14.
The fact that this inappropriate behavior occurred immediately before the weekend break only
enhanced its deleterious effect on the jury, who were left with a weekend to cogitate how and or
why Leader was implying that Facebook was hiding something. The curative instruction, while
greatly appreciated, was not given until the close of the case, many days after the misconduct
occurred, essentially attempting to unring a bell that had sounded long ago. For at least these
reasons, the curative instruction was insufficient.
F.

The Non-Method Claims Are Invalid as Indefinite Under IPXL Holdings

Leader’s opposition provides no analysis in response to Facebook’s argument in its
opening brief that Facebook is entitled to JMOL of invalidity of claims 1, 4, 7, 21, 23, 25, 31,
and 32 because they are indefinite under IPXL Holdings, L.L.C. v. Amazon.com, Inc., 430 F.3d
1377 (Fed. Cir. 2005). For the reasons set forth in Facebook’s opening brief, Facebook’s Motion
for Summary Judgment No. 1 (D.I. 384) and Facebook’s forthcoming reply in support of Motion
for Summary Judgment No. 1 (to be filed by September 30, 2010), this Court should grant
9

Facebook’s motion for judgment as a matter of law that claims 1, 4, 7, 21, 23, 25, 31 and 32 are
invalid as indefinite.
III.

CONCLUSION
For the foregoing reasons, Facebook’s motion should be granted.

Dated: September 27, 2010
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]

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.

10