Personalized User Model LLP v. Google Inc.

Filing 703

OPENING BRIEF in Support re 702 MOTION for Judgment as a Matter of Law on Google's Breach of Contract Counterclaim filed by Personalized User Model LLP.Answering Brief/Response due date per Local Rules is 6/2/2014. (Jacobs, Karen)

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, L.L.P.
)
and YOCHAI KONIG,
)
)
Counterclaim-Defendants.
)

C.A. No. 09-525 (LPS)

PERSONALIZED USER MODEL, L.L.P. AND DR. YOCHAI KONIG’S
MOTION FOR JUDGMENT AS A MATTER OF LAW ON
GOOGLE’S BREACH OF CONTRACT COUNTERCLAIM
OF COUNSEL:
Marc S. Friedman
DENTONS US LLP
1221 Avenue of the Americas
New York, NY 10020-1089
[phone]
Mark C. Nelson
Richard D. Salgado
DENTONS US LLP
2000 McKinney Avenue, Suite 1900
Dallas, TX 75201
[phone]
Jennifer D. Bennett
DENTONS US LLP
1530 Page Mill Road, Suite 200
Palo Alto, CA 94304-1125
[phone]
May 14, 2014

MORRIS, NICHOLS, ARSHT & TUNNELL LLP
Karen Jacobs (#2881)
Jeremy A. Tigan (#5239)
Regina Murphy (#5648)
1201 N. Market Street
P.O. Box 1347
Wilmington, DE 19899-1347
[phone]
[e-mail]
[e-mail]
[e-mail]
Attorneys for Personalized User Model, L.L.P. and
Dr. Yochai Konig

TABLE OF CONTENTS
Page
NATURE AND STAGE OF PROCEEDING ................................................................................ 1
SUMMARY OF ARGUMENT ...................................................................................................... 1
STATEMENT OF FACTS ............................................................................................................. 1
ARGUMENT .................................................................................................................................. 1
I.

LEGAL STANDARD ............................................................................................. 1

II.

JMOL SHOULD BE GRANTED TO PUM AND DR. KONIG ON GOOGLE’S
BREACH OF CONTRACT COUNTERCLAIM. .................................................. 2
A.

Google Did Not Present Sufficient Evidence To Prove That The Statute Of
Limitations Was Tolled............................................................................... 2
1. SRI’s Alleged Injury Was Not Inherently Unknowable. ...................... 2
2. Delaware’s Nonresident Tolling Statute (10 Del. C. § 8117) Has No
Application To This Dispute. ................................................................ 6

B.

Google Did Not Acquire SRI’s Right To Bring A Breach Of Contract
Claim. .......................................................................................................... 9
1. The Plain Language Of The Purchase Agreement Did Not Convey
Any Breach of Contract Claim SRI May Have Had To Google......... 10
2. The Assignment Of A Cause Of Action Must Be Express. ................ 11

C.

Google Failed To Prove That Dr. Konig “Conceived” Of The Invention
While Working At SRI. ............................................................................ 13

CONCLUSION ............................................................................................................................. 16

i

TABLE OF AUTHORITIES
Page(s)
CASES
Arachnid, Inc. v. Merit Indus., Inc.,
939 F.2d 1574 (Fed. Cir. 1991)................................................................................................11
Bd. of Trs. of the Leland Stanford Jr. Univ. v. Roche Molecular Sys., Inc.,
583 F.3d 832 (Fed. Cir. 2009)..................................................................................................12
Brandwein v. Butler,
218 Cal. App. 4th 1485 (Cal. App. 4th Dist. 2013) .............................................................9, 10
Britton v. Co-op Banking Grp.,
4 F.3d 742 (9th Cir. 1993) .........................................................................................................9
Cent. Mortg. Co. v. Morgan Stanley Mortg. Capital Holdings LLC,
No. 5140-CS, 2012 WL 3201139 (Del. Ch. Aug. 7, 2012) ...........................................2, 3, 4, 5
Co-opportunities, Inc. v. Nat’l Broad. Co., Inc.,
510 F. Supp. 43 (N.D. Cal. 1981) ............................................................................................11
Dawn Equip. Co. v. Kentucky Farms, Inc.,
140 F.3d 1009 (Fed. Cir. 1998)..................................................................................................2
Dyna–Med, Inc. v. Fair Employment & Housing Comm’n
43 Cal. 3d 1379 (Cal. App. 1987) ............................................................................................12
Hurwitch v. Adams,
151 A.2d 286 (Del. Super. Ct. 1959) .........................................................................................8
Hurwitch v. Adams,
155 A.2d 591 (Del. 1959) ..........................................................................................................6
In re Jeannette Corp.,
130 B.R. 460 (Bankr. W.D. Pa. 1991) .....................................................................................11
Jones v. Cooper Indus., Inc.,
938 S.W.2d 118 (Tex. App. 1996) ...........................................................................................11
Medtronic Vascular, Inc. v. Advanced Cardiovascular Sys., Inc.,
No. 98-80-SLR, 2005 WL 46553 (D. Del. Jan. 5, 2005) ...........................................................3
Medtronic Vascular, Inc. v. Advanced Cardiovascular Sys., Inc.,
No. 98-80-SLR, 2005 WL 388592 (D. Del Feb. 2, 2005) .........................................................3

ii

Norman v. Elkin,
726 F. Supp. 2d 464 (D. Del. 2010) ...........................................................................................2
Pannu v. Iolab Corp.,
155 F.3d 1344 (Fed. Cir. 1998)..................................................................................................1
Perkin-Elmer Corp. v. Computervision Corp.,
732 F.2d 888 (Fed. Cir. 1984)....................................................................................................2
Pomeranz v. Museum Partners, L.P.,
No. 20211, 2005 WL 217039 (Del. Ch. Jan. 24, 2005) .........................................................4, 5
Portfolio Recovery Assocs., LLC v. King,
927 N.E.2d 1059 (E.D.N.Y. 2010) ............................................................................................7
Saudi Basic Indus. Corp. v. Mobil Yanbu Petrochemical Co., Inc.,
866 A.2d 1, 16 (Del. 2005) ...................................................................................................7, 8
Schmidt v. Polish People’s Republic,
742 F.2d 67 (2d Cir. 1984).........................................................................................................8
Univ. of W. Va., Bd. of Trs. v. VanVoorhies,
342 F.3d 1290 (Fed. Cir. 2003)................................................................................................11
OTHER AUTHORITIES
11 Williston on Contracts (4th ed.1999) § 30.2 ...............................................................................9
RULES AND STATUTES
10 Del. C. § 8106 .............................................................................................................................6
10 Del. C. § 8116 .............................................................................................................................6
10 Del. C. § 8117 .....................................................................................................................6, 7, 8
10 Del. C. § 8121 .........................................................................................................................6, 7
Fed. R. Civ. P. 50 .....................................................................................................................1, 2, 4

iii

NATURE AND STAGE OF PROCEEDING
A jury trial was held beginning on March 10, 2014. The Court entered judgment on the
verdict on April 17, 2014. (D.I. 689). Pursuant to Rule 50(b) of the Federal Rules of Civil
Procedure, Personalized User Model, L.L.P. (“PUM”) and Dr. Yochai Konig move the Court to
grant judgment as a matter of law (“JMOL”) in their favor on Google’s breach of contract
counterclaim.1
SUMMARY OF ARGUMENT
JMOL should be entered on Google’s breach of contract claim because: (1) no reasonable
jury could find that SRI’s alleged harm was inherently unknowable so as to toll the statute of
limitations; (2) Google failed to prove it acquired the right to bring SRI’s purported breach of
contract claim; and (3) Google failed to prove that Dr. Konig conceived of the invention in the
patent law sense while he was employed at SRI.
STATEMENT OF FACTS
The relevant facts are addressed in the Argument section below.
ARGUMENT
I.

LEGAL STANDARD
To prevail on a renewed motion for judgment as a matter of law (“JMOL”) following a

jury trial, 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 conclusions 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) (internal quotation marks omitted). “Substantial evidence is such
relevant evidence from the record taken as a whole as might be accepted by a reasonable mind as
1

Google’s claims for declaration of ownership, constructive trust and conversion also fail
for the same reasons because they rely on the same operative facts. Judgment should be entered
for PUM and Dr. Konig on these claims as well.
1

adequate to support the finding under review.” Perkin-Elmer Corp. v. Computervision Corp.,
732 F.2d 888, 893 (Fed. Cir. 1984). A court may grant a JMOL motion if it 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); see also Dawn Equip. Co. v. Kentucky Farms, Inc., 140 F.3d
1009, 1014 (Fed. Cir. 1998) (“the inquiry is whether a reasonable jury, given the record before it
viewed as a whole, could have arrived at the conclusion it did.”).
II.

JMOL SHOULD BE GRANTED TO PUM AND DR. KONIG ON GOOGLE’S
BREACH OF CONTRACT COUNTERCLAIM.
A.

Google Did Not Present Sufficient Evidence To Prove That The Statute Of
Limitations Was Tolled.

It is undisputed that Delaware’s borrowing statute applies such that the breach of contract
claim is subject to Delaware’s three-year statute of limitations. 10 Del. C. §§ 8106, 8121.
Google contends that Dr. Konig breached the contract when he assigned the ’040 patent
application to Utopy in June 2000, nearly eleven years before Google brought its claims in
February 2011. Thus, unless the statute of limitations was tolled, the breach of contract claim
expired long ago. The burden to prove tolling falls on Google. See Norman v. Elkin, 726 F.
Supp. 2d 464, 470 (D. Del. 2010) (“Plaintiff maintains the burden of proving that the statute of
limitations is tolled.”).
1.

SRI’s Alleged Injury Was Not Inherently Unknowable.

Google did not put forth sufficient evidence to prove that the statute should be tolled
because SRI’s alleged injury was purportedly “inherently unknowable.”

The inherently

unknowable injury doctrine is a “narrowly confined exception” that tolls the statute of limitations
only “where it would be practically impossible for a plaintiff to discover the existence of a cause
of action.” Cent. Mortg. Co. v. Morgan Stanley Mortg. Capital Holdings LLC, No. 5140-CS,

2

2012 WL 3201139, at *22 (Del. Ch. Aug. 7, 2012) (emphasis added). It therefore is not
sufficient for Google to prove merely that SRI did not know of the existence of a cause of action.
Medtronic Vascular, Inc. v. Advanced Cardiovascular Sys., Inc., No. 98-80-SLR, 2005 WL
46553, at *4 (D. Del. Jan. 5, 2005) (“Medtronic I”) (period typically begins to “run at the time of
the alleged wrongful act even if the plaintiff is ignorant of the cause of action”). As the Court
noted in its April 8, 2014 letter opinion, “[t]he pertinent inquiry is not whether the claimant
would know to a certainty that it had a claim, but rather at what point it had (or through
reasonable diligence, would have had) a basis to begin to investigate whether it had a claim.”
D.I. 677 at 7 (citing Cent. Mortg. Co., 2012 WL 3201139, at *22-23).
As the Court noted, SRI was on actual notice of Dr. Konig’s invention at least as of the
date that Dr. Sonmez, an SRI engineer, conducted a beta test of the patented product in 20002001. (D.I. 677 at 7-8). Dr. Sonmez further knew at that time that Dr. Konig had formed Utopy,
a new, Internet research technology company. Tr. 1079:21-1084:4; 1657:22-1658:12; PTX 275.
In addition to having actual notice of Dr. Konig’s invention in 2000-2001, as the Court
also noted, “[t]he ‘040 patent’s application was filed in December 1999, just months after
Dr. Konig left SRI; the close proximity of these events - which SRI could have known by
December 2005, when the patent was published - gave SRI, in the exercise of reasonable
diligence, a basis to investigate when Dr. Konig conceived of the inventions.” (D.I. 677 at 7-8).
See PTX 1; Medtronic Vascular, Inc. v. Advanced Cardiovascular Sys., Inc., No. 98-80-SLR,
2005 WL 388592, at *1 n.4 (D. Del. Feb. 2, 2005) (“Medtronic II”) (patents constitute
constructive notice because they “‘put the world on notice’ with respect to what the patentee
claims to own” and starts the limitations period running). Thus, as the Court stated, “SRI,
through reasonable diligence, would have had a basis to begin to investigate whether Dr. Konig

3

breached his SRI employment agreement well before February 2008 and any injury to it was far
from inherently unknowable.” (D.I. 677 at 7). For these reasons, no reasonable jury could find
that these facts were “practically impossible” to discover prior to February 2008. Cent. Mortg.,
2012 WL 3201139, at *22.
Google presented no evidence to rebut these undisputed facts. Instead, Google advanced
two arguments, neither of which provided a basis for the jury verdict. First, Google devoted
much of its brief in opposition to PUM’s Rule 50(a) motion to arguing that Dr. Konig
purportedly hid his invention when he left SRI in 1999. (D.I. 679 at 4-6). Whether or not Dr.
Konig disclosed his invention in 1999, however, is entirely irrelevant to whether SRI was later
aware of facts in 2001 and 2005 (indeed any time prior to February 2008) that would have
provided a basis to investigate whether it had a breach of contract claim.
Next Google took the position that the injury to SRI was inherently unknowable because
SRI purportedly had no means of knowing the conception date of Dr. Konig’s invention. See,
e.g., D.I. 679 at 5-6. That is not the correct test. Rather, the relevant inquiry is whether there
were facts available to put a diligent plaintiff on notice to inquire whether there was a cause of
action. See Pomeranz v. Museum Partners, L.P., No. 20211, 2005 WL 217039, at *13 (Del. Ch.
Jan. 24, 2005) (“Once a plaintiff is on notice of facts that ought to make her suspect wrongdoing,
she is obliged to diligently investigate and to file within the limitations period as measured from
that time.”). Google sidesteps the fact that SRI failed to conduct any inquiry at all and misstates
the nature of its cause of action. To have “inquiry notice,” SRI did not have to know when
Dr. Konig conceived the invention, but merely needed to have enough information to warrant
investigation as to whether it had a breach of contract claim. See id.; D.I. 677 at 7 (claimant

4

need not know with “certainty that it had a claim, but rather . . . [whether] it had . . . a basis to
investigate”).
Indeed, the Court specifically addressed Google’s argument in its April 8, 2014 letter
opinion, including Google’s assertion that “the only evidence of [date of conception] was in
confidential Utopy documents.” (D.I. 677 at 7). As the Court correctly noted (id. at 7-8):
SRI could have inquired (of Dr. Konig, for example) about the date of conception
at any time after Dr. Sonmez (or anyone else at SRI) beta tested the embodiment
of the patented technology. The ‘040 patent’s application was filed in December
1999, just months after Dr. Konig left SRI; the close proximity of these events which SRI could have known by December 2005, when the patent was published
- gave SRI, in the exercise of reasonable diligence, a basis to investigate when Dr.
Konig conceived of the inventions.
The undisputed evidence at trial established that SRI had actual and constructive notice
of Dr. Konig’s invention well before February 2008 and could have investigated had it wanted to
do so. That is all that is required to start the limitations period running. Cent. Mortg., 2012 WL
3201139, at *22. Google has the burden to prove the statute of limitations is tolled, yet Google
offered no evidence to suggest that SRI investigated at all. The only evidence came from Mr.
Montes, who testified that even after Google advised SRI of the purported claim in 2011, SRI
refused to warrant that it had any rights, stating instead that any such rights were “speculative.”
Tr. at 1669: 2-21; DTX 412 at § 8.5.
As a result, JMOL should be entered on Google’s breach of contract counterclaim
because no reasonably jury could find that it was practically impossible for SRI to have learned
of facts prior to February 2008 that would lead a reasonable plaintiff “to diligently investigate
and to file within the limitations period as measured from that time.” Pomeranz, 2005 WL
217039, at *13.

5

2.

Delaware’s Nonresident Tolling Statute (10 Del. C. § 8117) Has No
Application To This Dispute.

Google also contends that the three-year statute of limitation should be tolled pursuant to
10 Del. C. § 8117, which provides (emphasis added):
If at the time when a cause of action accrues against any person,
such person is out of the State, the action may be commenced,
within the time limited therefor in this chapter, after such person
comes into the State in such manner that by reasonable diligence,
such person may be served with process. If, after a cause of
action shall have accrued against any person, such person
departs from and resides or remains out of the State, the time of
such person’s absence until such person shall have returned into
the State in the manner provided in this section, shall not be taken
as any part of the time limited for the commencement of the action.
As the Court correctly noted in its April 8, 2014 letter, Section 8117 “does not extend the
statute of limitations (10 Del. C. § 8106) for Google’s breach of contract claim beyond three
years.” (D.I. 677 at 6). First, Google’s strained interpretation of § 8117 is inconsistent with
Delaware’s borrowing statute, § 8121, and would eviscerate it in actions against nonresidents. It
further would encourage exactly the type of forum shopping that the borrowing statute was
intended to avoid. Second, § 8117 does not apply because SRI and Google cannot demonstrate
unavailability. Had SRI sought to bring its California ownership claims in Delaware, it could
have done so years ago by bringing an action against PUM’s predecessor-in-interest, Utopy,
which is a Delaware corporation.2
Google’s proposed application of § 8117 would toll the Delaware statute of limitation for
all claims against defendants who do not reside in the State, a proposition the Delaware Supreme
Court expressly rejected. Hurwitch v. Adams, 155 A.2d 591, 593-94 (Del. 1959) (“[I]t is said
that 10 Del. C. § 8116 [now § 8117] is plain on its face and that it applies in any action in which

2

Of course, it is undisputed that SRI could have filed suit at any time in California, where
SRI, Utopy and Dr. Konig all were and still are located.
6

the defendant is a non-resident. We think this argument, if accepted, would result in the abolition
of the defense of statutes of limitation in actions involving non-residents.”).
That is precisely what Google is attempting to do here. As Google acknowledges, “the
Agreement was between two California citizens, was signed in California, and governed an
employment relationship taking place in California.”

(D.I. 531 Ex. 1 at 1 n.1).

Further,

Google’s claims are time barred by California’s four-year statute of limitations. See Cal. Civ.
Proc. Code § 337. Nonetheless Google seeks to take advantage of a purportedly longer statute of
limitation in Delaware by asking the Court to apply section 8117 to revive this California baseddispute because Dr. Konig—who was not a party to this patent suit—agreed to accept service in
Delaware simply to avoid duplicative and needlessly costly litigation. (See D.I. 486 at 6-8).
Were Google correct, any party could revive a stale claim merely by bringing it in
Delaware the moment a party became subject to personal jurisdiction in the State, even where
Delaware has nothing to do with the parties’ dispute. This would eviscerate the statute of
limitation. For example, a business that opens a location in Delaware (thereby submitting itself
to personal jurisdiction in the State) would suddenly be vulnerable in Delaware to legal claims
that accrued all across the country and were otherwise time-barred decades ago, even where that
matter had no connection to Delaware.3 This interpretation would make Delaware a haven for
otherwise time-barred claims, which is exactly the result the Delaware legislature sought to avoid
in enacting the Delaware borrowing statute. See 10 Del. C. § 8121; Saudi Basic Indus. Corp. v.
Mobil Yanbu Petrochemical Co., Inc., 866 A.2d 1, 16 (Del. 2005) (“Borrowing statutes . . . are
3

At least one court has construed § 8117 as applying “only in a circumstance where the
defendant had a prior connection to Delaware, meaning that the tolling provision envisioned that
there would be some point where the defendant would return to the state or where plaintiff could
effect service on the defendant to obtain jurisdiction.” Portfolio Recovery Assocs., LLC v. King,
927 N.E.2d 1059, 1062 (E.D.N.Y. 2010) (applying Delaware law). It is undisputed that Dr.
Konig had no prior connection with Delaware. Nor is there any suggestion that Dr. Konig ever
tried to evade process in Delaware.
7

typically designed to address a specific kind of forum shopping scenario—cases where a plaintiff
brings a claim in a Delaware court that (i) arises under the law of a jurisdiction other than
Delaware and (ii) is barred by that jurisdiction’s statute of limitations but would not be timebarred in Delaware, which has a longer statute of limitations.”).4 Google is engaging in classic
forum shopping by bringing its claim in Delaware, where it hopes to take advantage of a
purportedly longer statute of limitations by application of § 8117.5
Section 8117 also does not apply because Google cannot demonstrate unavailability. As
the court explained in Hurwitch v. Adams, 151 A.2d 286, 288 (Del. Super. Ct. 1959), aff’d, 155
A.2d 591 (Del. 1959), “the obvious purpose and the only purpose” of Section 8117 “is to allow
reasonably diligent plaintiffs the statutory period within which to obtain service upon an absent
or once absent and later elusive defendant.” Id. at 288. See also Schmidt v. Polish People’s
Republic, 742 F.2d 67, 71 (2d Cir. 1984) (“[T]olling a statute of limitations because of
defendant’s absence from a jurisdiction is largely intended to diminish the incentive to avoid
service of process.”).

4

Google’s attempt to rely on Saudi Basic fails. That case involved the unusual
circumstance where the plaintiff filed suit in Delaware, rather than in Saudi Arabia where the
action arose, and attempted to invoke Delaware’s shorter statute of limitations to bar defendants’
counterclaim, which was not time-barred in Saudi Arabia. The Delaware Supreme Court found
that § 8117 should apply rather than the borrowing statute – for reasons consistent with the
borrowing statute – to prevent forum shopping by plaintiff, because “literal construction of the
borrowing statute, if adopted, would subvert the statute’s underlying purpose.” 866 A.2d at 16.
Here, SRI/Google’s breach of contract counterclaim, which arose, if at all, in California, expired
long ago in California.
5

Google has argued that it somehow did not engage in forum shopping because it filed its
counterclaim in this infringement action in Delaware. What Google ignores, however, is that
Google stands in the shoes of SRI, which could have filed this California-based action in
California long ago, had it chosen to do so. Google cannot now rely on § 8117 to revive a stale
claim simply because it chose to bring the breach of contract claim in Delaware rather than in
California.
8

Dr. Konig was not an absent or later elusive defendant. He voluntarily consented to
jurisdiction in Delaware when requested to do so. Nor was SRI diligent. It could have brought
suit in Delaware against Utopy, a Delaware corporation, which was at all times amenable to suit
in Delaware.6 SRI, in fact, could have brought the same conversion, declaration of ownership,
and constructive trust claims against Utopy that Google currently brings against Utopy’s
successor, PUM, and could have sought the same relief Google seeks here. 7 Yet, SRI never
pursued any claim, despite having had actual and constructive notice of Dr. Konig’s invention.
B.

Google Did Not Acquire SRI’s Right To Bring A Breach Of Contract Claim.

There is no record evidence to support Google’s claim that the Purchase Agreement
conveyed a right to bring a breach of contract claim against Dr. Konig. Google has the burden to
prove that it has standing to bring this claim. See Britton v. Co-op Banking Grp., 4 F.3d 742,
746 (9th Cir. 1993) (“An assignee of a contractual right must prove the validity of his ownership
claims.”). The Purchase Agreement must be interpreted under California law. DTX 412 § 9.6.
“Whenever possible,” courts “attempt to discern the parties’ intent first from the plain language
of the contract.” Brandwein v. Butler, 218 Cal. App. 4th 1485, 1505 (Cal. App. 4th Dist. 2013)
(quoting 11 Williston on Contracts (4th ed.1999) § 30.2, p. 16).
A year and a half after PUM filed this lawsuit, Google paid SRI $40,000 to buy certain
purported patent rights. DTX 412. Google now claims that these rights included any breach of
6

Utopy was an assignee of the patent rights from June 2000 until March 2, 2006, when it
assigned those rights to Levino Ltd. See PTX 499. That assignment was 4-5 years after SRI
engineer Dr. Mustafa Sonmez was given the invention for testing in 2000-2001, and after the
issuance of the ’040 patent in December 2005, during which time SRI was on notice and could
have sued Utopy in Delaware.
7

SRI could have sought ownership relief against Utopy alone, because Dr. Konig no
longer owned the patent and therefore was not necessary for resolution of ownership. Dr. Konig
also could have participated as an officer of Utopy, or SRI could have sought Dr. Konig’s
consent if need be, as Google later did.
9

contract claim that SRI may have had against Dr. Konig. But the plain language of the Purchase
Agreement, Federal Circuit precedent, and canons of contractual interpretation refute this
assertion as a matter of law. Further, Google failed to provide any evidence at all to meet its
burden of proving that it acquired a breach of contract claim (and not just speculative patent
rights). Indeed, other than entering the Purchase Agreement into evidence, Google offered no
proof and did not bring a single witness to trial to testify about the Purchase Agreement.

1.

The Plain Language Of The Purchase Agreement Did Not Convey
Any Breach of Contract Claim SRI May Have Had To Google.

The plain language of the Purchase Agreement conveyed to Google only “speculative”
patent rights and causes of action pertaining to those patents, and specifically called out that SRI
made “no representations or warranties with respect to Google’s ability to perfect such rights and
interests.” DTX 412 § 8.5. The grant clause is in a section entitled “Transfer of Patent Rights.”
DTX 412 § 4. In that section, the Agreement conveyed “any perfected or unperfected claims of
ownership that [SRI] may have in the Patents,” DTX 412 at § 4.1 (emphasis added), and
causes of action . . . and other enforcement rights under, or on account of, any of
the Patents . . . including, without limitation, all causes of action and other
enforcement rights for (1) damages, (ii) injunctive relief, and (iii) any other
remedies of any kind for past, current, and future infringement; and (iv) rights to
collect royalties or other payments under or on account of the Patents . . .
Id. at § 4.2(c) (emphasis added). As these provisions show, the agreement conveyed patents, and
causes of action and enforcement rights for infringement and royalties relating to the patents, and
nothing more. There is no mention of a breach of contract claim.
Reading the entire Purchase Agreement “as a whole,” Brandwein, 218 Cal. App. 4th at
1505, confirms this. Section 1.2 of the Agreement states in full what SRI believed it was selling
to Google (“Seller wishes to sell to Google any rights it has in the Patents”). DTX 412 at § 1.2.
Likewise, § 1.3 states what Google believed it was buying: “Google wishes to purchase the

10

Patent Rights.” Id. at § 1.3. Accordingly, there is no plausible reading that would encompass the
conveyance of more than “Patent Rights.”
2.

The Assignment Of A Cause Of Action Must Be Express.

Google cannot sidestep the plain language of the Purchase Agreement by arguing that it
implicitly includes the right to assert a breach of contract claim against Dr. Konig. The law is
clear that a conveyance of a cause of action must be express and cannot be implied, because a
cause of action is an independent asset with its own monetary value. In re Jeannette Corp.,
130 B.R. 460, 463 (Bankr. W.D. Pa. 1991) (holding that party was not entitled to debtor’s
settlement proceeds where Asset Purchase Agreement did not specifically include causes of
action); Co-opportunities, Inc. v. Nat’l Broad. Co., Inc., 510 F. Supp. 43, 46-47 (N.D. Cal. 1981)
(“Although Mr. McGee arguably assigned his copyrights and ‘all’ the assets of BMC to plaintiff,
there is no specific assignment of accrued causes of action.”).
The Federal Circuit has also made clear that the assignment of a patent does not include
accrued causes of action, even if the causes of action relate to the patent, unless the assignment
expressly states that it does. See Arachnid, Inc. v. Merit Indus., Inc., 939 F.2d 1574, 1579 (Fed.
Cir. 1991) (“assignment [of right to damages for an infringement committed before such
assignment] must be express, and cannot be inferred from an assignment of the patent itself.”)
(emphasis added); see also Univ. of W. Va., Bd. of Trs. v. VanVoorhies, 342 F.3d 1290, 1295
(Fed. Cir. 2003) (determining that scope of patent assignment agreement is limited by its plain
language); Jones v. Cooper Indus., Inc., 938 S.W.2d 118 (Tex. App. 1996) (assignor did not lose
cause of action for breach of agreement concerning patents after patents were transferred).
Because Google cannot point to any language that expressly conveys a breach of contract
claim, that asset was not conveyed. The doctrine of expressio unius est exclusio alterius dictates

11

“that ‘the expression of certain things in a [contract] necessarily involves exclusion of other
things not expressed.’” Dyna–Med, Inc. v. Fair Employment & Housing Comm’n, 43 Cal. 3d
1379, 1391, n.13 (Cal. App. 1987). Applying that doctrine here, SRI conveyed only those causes
of action relating to “enforcement rights under, or on account of, any of the Patents . . .” Any
other causes of action, including any breach of contract claim, were thus excluded.
Ignoring the requirement that assignment of a cause of action must be express, Google
claims that the breach of contract claim was implicitly included in the assignment because
winning the breach of contract claim was necessary for Google to perfect its ownership of the
patents. D.I. 679 at 7. But even if the right to perfect title were included—which it was not—and
even if the agreement could “implicitly” convey such rights, the breach of contract claim is not a
necessary step to perfecting title. To the contrary, there is no ownership remedy available from
Dr. Konig because Dr. Konig long ago assigned his ownership rights in the patents to Utopy,
PUM’s predecessor-in-interest. Bd. of Trs. of the Leland Stanford Jr. Univ. v. Roche Molecular
Sys., Inc., 583 F.3d 832, 842 (Fed. Cir. 2009), aff’d 131 S. Ct. 2188 (2011) (prior assignment
divests inventor of ability to subsequently assign patents rights).
It was Google’s burden to prove that SRI sold a breach of contract claim against
Dr. Konig in addition to its alleged patent rights. Yet Google offered no evidence on this point. 8
When a party with the burden of proof fails to offer any evidence, that failure is dispositive of its
claim.

8

Google’s argument that Dr. Franco’s mere presence at trial is evidence of SRI’s intent to
convey a breach of contract claim, see D.I. 679 at 8, does not overcome the failure of the parties
to include such a conveyance in the Agreement. Indeed, notwithstanding having brought
Dr. Franco to trial, Google did not elicit any testimony from him at all about the Agreement.
12

C.

Google Failed To Prove That Dr. Konig “Conceived” Of The Invention
While Working At SRI.

Despite having the burden to do so, Google did not even attempt to prove at trial that
Dr. Konig conceived of the invention under the patent law definition while employed at SRI. At
Google’s urging, the Court ruled on the meaning of conception, but determined, as PUM argued,
that the term “conceived” in the Agreement referred to the patent law definition of conception.
Jury Instruction 5.3 (D.I. 663). Nevertheless, Google’s focus throughout the trial and in its
closing argument was on proving merely that Dr. Konig had “the idea” for the invention while at
SRI, and on arguing that, contrary to the Court’s construction, this was sufficient for conception.
Simply put, Google aimed at an incorrect legal standard and in doing so failed to present
sufficient evidence to meet its burden based on the correct standard. That is not surprising given
that Google conceded at the summary judgment hearing that it was not asserting that conception
under the patent law meaning occurred during Dr. Konig’s employment with SRI. See 5/8/2013
Tr. 111:15-16 (“We are not making that assertion”); see also id. at 111:20-23.
Google’s focus throughout the trial was proving merely that Dr. Konig had “the idea” for
the invention while at SRI.

Various exchanges between Google’s counsel and Dr. Konig

illustrate this strategy:
Q. Now, sir, let’s sum up. You came up with the idea for Utopy and your Personal Web
while you were at SRI, didn’t you, sir?
A. Again, the idea in the sense of, we want to personalize, we want to estimate its
probability. Not with a solution on how to do it.
Tr. 1075:15-20 (emphasis added).
Q. While you were at SRI, you came up with the idea for Personal Web. You founded a
company to exploit that idea, you didn’t tell SRI about any of it while you were still
there, and you took it when you left; right?
A. To the level that we have the idea in July, that’s correct.

13

Tr. 1076:24-1077:4 (emphasis added).

Despite the Court’s ruling on the meaning of

“conception,” Google continued to focus unwaveringly on “ideas” in its closing argument to the
jury, repeatedly emphasizing to the jury that Dr. Konig had the “idea” while at SRI. See, e.g.,
Tr. 1962:12-14 (closing argument by Google, arguing that “as early as ‘98, early ‘99, way, way
before he left SRI, [Konig] was already talking about this idea with Mr. Twersky”) (emphasis
added); Tr. 1968:16-17 (“There is no question here, absolutely no question that he had the
idea.”) (emphasis added).
But merely having an “idea” for an invention is not the test. As the Court explained,
“someone with just an abstract idea cannot transfer ownership of that idea because no ownership
rights exist in ideas.” Tr. 1859:10-12.
The documentary evidence also does not support that Konig “conceived” the inventions
while at SRI. Google primarily relied on two marketing documents Dr. Konig and Mr. Twersky
used to attract investors, which described their general goal and framework in the summer of
1999. See, e.g., DTX 151, DTX 161. One document was a white paper from May 1999 that
contemplated an invention that would involve personalization of web searches. DTX 161. The
second document, from July 1999, also merely set forth goals that Dr. Konig hoped he could
achieve. DTX 151; see, e.g., Tr. at 1051:4-10; 1053:2-18. Google did not even attempt to show
that either document would have enabled “a person having ordinary skill in the field of the
technology . . . to make the invention without undue research or experimentation or the exercise
of inventive skill.” Jury Instruction 5.3 (D.I. 663). Rather, the documents at best merely confirm
what no one disputes: that Dr. Konig had at least an abstract idea of the invention by that time.
This is not sufficient evidence that he had “conceived” of the invention under the Court’s
construction.

14

The scientific evidence presented at trial was that Dr. Konig conceived of the invention
after leaving SRI. For example, Dr. Konig testified that he did not begin to find a solution that
could be implemented until after he left SRI in August 1999. Tr. 1028:6-8; 1090:7-12. This is
consistent with every other statement Dr. Konig has made regarding the conception date in this
case, including at his depositions. E.g., Tr. 1090:5-12 (the first “initial solution, something that
engineer can implement and get the basic idea was this September 21st document”). Similarly,
the first draft of a written document stating a concrete solution to implement Dr. Konig and
Mr. Twersky’s ideas was created on September 21, 1999. PTX 532; Tr. 1090:5-12; 1091:131095:15.9 Google presented no competent evidence of any disclosure of an actual user model
before Dr. Konig left SRI.10
Having failed to even try to prove the date of conception based on the correct legal
definition, Google tries to sustain the jury’s erroneous verdict by relying on Mr. Twersky’s
testimony and interrogatory responses served earlier in the case, both of which were later
corrected. (D.I. 679 at 1-2). But neither of these can support a jury verdict where the actual
contemporaneous documents offer no evidence that one skilled in the art could have actually
made the invention without undue experimentation prior to September 21, 1999. Notably,
Google did not even offer any expert testimony at all on the topic. Because there was a complete
absence of evidence of any earlier conception and patent law sense, JMOL should be granted.

9

Although the document bears no date, Dr. Konig testified that the approximate date is
September 21, 1999, and that he created it after working for more than a month on his invention
after leaving SRI. Tr. at 1090:22-1091:14.
10

Google also cannot rely on an August 30, 1999 email to support the jury verdict, see
D.I. 679 at 2, both because it postdates Dr. Konig’s employment with SRI and because there was
no document attached to the email, and therefore nothing that could establish that the patent had
been conceived in the patent law sense as of that date.
15

CONCLUSION
For the foregoing reasons, the Court should enter JMOL for PUM and Dr. Konig.
MORRIS, NICHOLS, ARSHT & TUNNELL LLP

/s/ Karen Jacobs
________________________________________
Karen Jacobs (#2881)
Jeremy A. Tigan (#5239)
Regina Murphy (#5648)
1201 N. Market Street
P.O. Box 1347
Wilmington, DE 19899-1347
[phone]
[e-mail]
[e-mail]
[e-mail]
OF COUNSEL:
Marc S. Friedman
DENTONS US LLP
1221 Avenue of the Americas
New York, NY 10020-1089
[phone]

Attorneys for Personalized User Model, L.L.P. and
Dr. Yochai Konig

Mark C. Nelson
Steven M. Geiszler
Richard D. Salgado
DENTONS US LLP
2000 McKinney Avenue, Suite 1900
Dallas, TX 75201
[phone]
Jennifer D. Bennett
DENTONS US LLP
1530 Page Mill Road, Suite 200
Palo Alto, CA 94304-1125
[phone]
May 14, 2014

16

CERTIFICATE OF SERVICE
I hereby certify that on May 14, 2014, I caused the foregoing to be electronically filed
with the Clerk of the Court using CM/ECF which will send electronic notification of such filing
to all registered participants.
Additionally, I hereby certify that true and correct copies of the foregoing were caused to
be served on May 14, 2014, upon the following individuals in the manner indicated:
BY E-MAIL

BY E-MAIL

Richard L. Horwitz
David E. Moore
POTTER ANDERSON & CORROON LLP
1313 N. Market St., 6th Floor
Wilmington, DE 19801

Brian C. Cannon
QUINN EMANUEL URQUHART
& SULLIVAN, LLP
555 Twin Dolphin Dr., 5th Floor
Redwood Shores, CA 94065
Charles K. Verhoeven
David A. Perlson
Antonio R. Sistos
Andrea Pallios Roberts
Joshua Lee Sohn
QUINN EMANUEL URQUHART
& SULLIVAN, LLP
50 California Street, 22nd Floor
San Francisco, CA 94111

/s/ Karen Jacobs
____________________
Karen Jacobs (#2881)