Personalized User Model LLP v. Google Inc.

Filing 531

MOTION for Leave to File Reply Brief in Support of Google's Motion for Reconsideration, with Exhibit 1 and Certificate of Service - filed by Google Inc.. (Attachments: # 1 Exhibit 1)(Moore, David)

EXHIBIT 1

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
PERSONALIZED USER MODEL, L.L.P.,
Plaintiff,
v.
GOOGLE INC.,
Defendant.
GOOGLE, INC.
Counterclaimant,
v.
PERSONALIZED USER MODEL, LLP and
YOCHAI KONIG
Counterdefendants.

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C.A. No. 09-525-LPS
JURY TRIAL DEMANDED

REPLY BRIEF IN SUPPORT OF GOOGLE’S MOTION FOR RECONSIDERATION
OF COUNSEL:
Charles K. Verhoeven
David A. Perlson
Joshua Lee Sohn
Antonio R. Sistos
Margaret Pirnir Kammerud
QUINN EMANUEL URQUHART
& SULLIVAN, LLP
50 California St.
San Francisco, CA 94111
Tel.: [phone]

Richard L. Horwitz (#2246)
David E. Moore (#3983)
Bindu A. Palapura (#5370)
POTTER ANDERSON & CORROON LLP
Hercules Plaza, 6th Floor
1313 N. Market Street
Wilmington, DE 19801
Tel: [phone]
[e-mail]
[e-mail]
[e-mail]
Attorneys for Defendant Google Inc.

Andrea Pallios Roberts
QUINN EMANUEL URQUHART
& SULLIVAN, LLP
555 Twin Dolphin Drive, Suite 560
Redwood Shores, CA 94065
Tel.: [phone]
Dated: October 2, 2013

Google’s Motion for Reconsideration argued that the Court made a clear error of law in
concluding that there were triable fact disputes on the meaning of “conception” merely because that
term is ambiguous. (D.I. 523.) As Google argued, and as PUM does not dispute, California blackletter law dictates that contractual ambiguity does not give rise to a question of fact unless the
ambiguity is the subject of conflicting extrinsic evidence.1 (Id. at 2-4.) Thus, while PUM repeatedly
argues “the record is replete with relevant extrinsic evidence,” that is irrelevant to Google’s Motion.
It is PUM’s failure to point to conflicting extrinsic evidence during the summary judgment briefing
that demonstrates why Google’s Motion should be granted.
Rather than rebut this central point of Google’s Motion, PUM argues that Google’s Motion
improperly raises new arguments. (Opp. at 4.) This accusation is both unfounded and ironic. It is
unfounded because, as Google detailed in its Motion and as PUM does not dispute, the summary
judgment hearing was the first time PUM argued that a question of fact existed on the issue of
contract interpretation. (Hearing Tr. 126:24-127:11.) So it is no surprise that Google did not address
this argument in its prior papers.2 It is ironic because PUM itself raises several new arguments in
opposing Google’s Motion for Reconsideration. To the extent the Court considers these arguments
at all, as detailed below, none of them warrant denial of Google’s Motion.

1

In a footnote, PUM suggests that Delaware contract law might govern the Konig-SRI
Agreement. (Opp. at 7 n. 18 (citing GMG Cap. Inv., LLC v. Athenian Venture Partners I, L.P., 36
A.3d 776, 783 (Del. 2012)). But this is clearly incorrect, as the Agreement was between two
California citizens, was signed in California, and governed an employment relationship taking place
in California.
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PUM also faults Google for not addressing the statute of limitations and whether Dr.
Konig’s invention is exempt under Section 2870 of the California Labor Code. (Opp. at 2, 9, 10.)
But those issues were already briefed and argued at length during summary judgment, so there was
no need to rehash them in Google’s Motion for Reconsideration. Rather, these issues can and should
be resolved on the existing summary judgment record.

I.

THE EXCEPTION FOR “TECHNICAL” TERMS IN CAL. CIV. CODE § 1644 IS
INAPPLICABLE HERE
PUM now argues – for the first time – that Cal. Civ. Code § 1644 does not require that

“conception” be understood in its ordinary and popular sense because Section 1644 has an exception
for cases where contractual language is “used by the parties in a technical sense.” (Opp. at 5
(quoting Cal. Civ. Code § 1644)). But the “technical sense” exception is for cases where the parties
are engaged in particular trade and the trade usage of a word has a technical meaning at odds with its
ordinary and popular meaning. For example, in the venerable case of Ermolieff v. R.K.O. Pictures,
19 Cal. 2d 543 (1942), the California Supreme Court held that the term “United Kingdom” in a
movie contract could be construed to include Erie (Ireland) because “according to the custom and
usage of the moving picture industry Erie is included in the United Kingdom.” Id. at 549. This sort
of idiosyncratic trade usage is what is captured by the “technical sense” exception to the normal
“ordinary and popular meaning” presumption of Section 1644. See Appalachian Ins. Co. v.
McDonnell Douglas Corp., 262 Cal. Rptr. 716, 720 (Cal. Ct. App. 1989) (“the words of a contract
are to be understood in their ordinary and popular sense unless a contrary intent is shown, such as a
specialized meaning due to trade custom”); Body-Steffner Co. v. Flotill Prods., 147 P.2d 84, 86 (Cal.
Ct. App. 1944) (“it is always open to the parties to the contract to prove that by the general and
accepted usage of the trade or business in which both parties are engaged and to which the contract
applies the words have acquired a meaning different from their ordinary and popular sense.”)
Here, Dr. Konig was employed as computer scientist, not a patent lawyer. Thus, it cannot be
said that the parties meant to define “conception” according to its specialized meaning in the patent
law trade. Indeed, under PUM’s logic every contractual term in any contract where the parties are
engaged in “technical” scientific work – every pharmaceutical contract, every computer science
contract, every engineering contract – be shorn of the usual presumption that words get their
ordinary meaning. The exception would swallow the rule. PUM cites no authority for the
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proposition that the “technical sense” exception should sweep so widely. In fact, PUM cites no
cases on Section 1644 at all.
In fact, Dr. Konig would have no way of knowing even how to comply with the Agreement if
conception was defined according to the patent law. Non-lawyer scientists would not be objectively
expected to understand the patent-law meaning of conception, and indeed Dr. Konig testified that he
did not understand the patent-law meaning of conception before this litigation. (D.I. 521 at 15.) As
PUM’s patent-law interpretation defies the objective intentions of both parties, it must be rejected.
See Cal. Civ. Code § 1636 (contract must be interpreted to effectuate the intention of the parties).
II.

THE “LAST RESORT” CANON THAT AMBIGUOUS CONTRACT LANGUAGE
BE RESOLVED AGAINST THE DRAFTER DOES NOT APPLY HERE
PUM also now argues that conception should be interpreted against SRI and given its patent

law meaning because Cal. Civ. Code § 1654 states that “an ambiguity is to be construed against the
draftsman.” (Opp. at 7.) But PUM ignores that section 1654 only applies “in cases of uncertainty
not removed by the preceding rules” – i.e., all the preceding canons of contract interpretation. Cal.
Civ. Code § 1654. In other words, § 1654 is a “last resort” that “applies only when other canons of
construction, including consideration of extrinsic evidence of the parties’ intent, fail to resolve the
ambiguity.” Vine v. Bear Valley Ski Co., 13 Cal. Rptr. 3d 370, 379 n.2 (1st Dist. 2004);
Realnetworks, Inc. v. DVD Copy Control Ass'n, 641 F. Supp. 2d 913, 948-49 (N.D. Cal. 2009)
(Section 1654 “is often referred to as the rule ‘of last resort.’”). PUM does not even try to show that
this is true here. Rather, as Google has explained, the canons concerning the objective intentions of
the parties and the presumption of ordinary and popular meaning already resolve any ambiguity over
the meaning of “conception.” Thus, the Court need not, and should not, invoke the “last resort”
canon of Section 1654.

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III.

“CONCEPTION” SHOULD NOT BE DEFINED IN A PATENT-LAW SENSE ON
THE THEORY PATENT-LAW CONCEPTION WAS NECESSARY FOR DR.
KONIG TO ACQUIRE PATENT RIGHTS
PUM further argues that “conception” should be defined in its patent-law sense because

patent-law conception was supposedly necessary for Dr. Konig to acquire patent rights. (Opp. at 6.)
Citing Burroughs Wellcome Co. v. Barr Labs., Inc., 40 F.3d 1223, 1228 (Fed. Cir. 1994), PUM
argues that “the rules of patent conception ensure that patent rights attach only when an idea is so far
developed that the inventor can point to a definite, particular invention.” (Id.) But this is not true:
proof of conception is generally not a requirement for patentability. Patents will be granted for
inventions that are novel (35 U.S.C. § 102), non-obvious (§ 103) and fully-described (§ 112),
without any inquiry into when the invention was “conceived.”
Conception only becomes relevant in specialized circumstances. For example, in the
Burroughs case cited by PUM, there was a battle over whether certain individuals should have been
named as inventors, so the court needed to determine when the invention was conceived to
determine whether this conception date was before or after the putative co-inventors’ involvement.
Burroughs, 40 F.3d at 1227-28. Conception was also historically important in interferences between
two alleged patentees, in which the patent would be awarded to the person who was the “first to
conceive” as long as he was suitably diligent in reducing his invention to practice. See Brown v.
Barbacid, 436 F.3d 1376, 1378 (Fed. Cir. 2006). These circumstances have no relevance here.
Thus, there is no reason to think that the Konig-SRI Agreement meant to define “conceived”
according to a patent-law definition that is not even germane to most patents, let alone all the other
inventions, discoveries, and improvements that were encompassed within Dr. Konig’s transfer
obligations. Indeed, it is important to note how broad Dr. Konig’s transfer obligations were. As
PUM recognizes (Opp. at 6), under the plain language of the Agreement, he had a duty to transfer
“all discoveries, improvements, and inventions, including software, conceived or made by me during

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the period of my employment.” (D.I. 414, Ex. A.) There is no indication that his transfer
obligations were even limited to patentable inventions. In fact, the plain language shows otherwise.
Furthermore, at the moment that Dr. Konig thought of a discovery, improvement, or
invention, there would be no way for him to know whether such discovery, improvement, or
invention would ever be patentable. Thus, it makes no sense to say that such discoveries,
improvements, and inventions only fall within the Agreement if and when they reach patent-law
conception – a standard that some of them might never reach at all. “Conceived” should be given
the same meaning for all the discoveries, improvements, and inventions encompassed within Dr.
Konig’s transfer obligations, not given a different meaning depending on a forward-looking guess as
to which discoveries, improvements, and inventions will end up being patented, or may be subject to
some other intellectual property protection, such as trade secrets.
Respectfully submitted,
OF COUNSEL:
Charles K. Verhoeven
David A. Perlson
Joshua Lee Sohn
Antonio R. Sistos
Margaret Pirnie Kammerud
QUINN EMANUEL URQUHART
& SULLIVAN, LLP
50 California St.
San Francisco, CA 94111
Tel.: [phone]
Andrea Pallios Roberts
QUINN EMANUEL URQUHART
& SULLIVAN, LLP
555 Twin Dolphin Drive, Suite 560
Redwood Shores, CA 94065
Tel.: [phone]

POTTER ANDERSON & CORROON LLP

By: /s/ David E. Moore
Richard L. Horwitz (#2246)
David E. Moore (#3983)
Bindu A. Palapura (#5370)
Hercules Plaza, 6th Floor
1313 N. Market Street
Wilmington, DE 19801
Tel: [phone]
[e-mail]
[e-mail]
[e-mail]
Attorneys for Defendant Google Inc.

Dated: October 2, 2013
1124825 / 34638

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