Antor Media Corporation v. Metacafe, Inc.

Filing 161

MOTION to Stay Motion of Defendants Google Inc. and YouTube, LLC to Join MacMillan Publishers, Inc. and MacMillan Publishers LTD.'s Motion to Stay Pending Reexamination by Google, Inc., YouTube, Inc.. (Smith, Melissa)

Antor Media Corporation v. Metacafe, Inc.

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Case 2:07-cv-00102-DF

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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS MARSHALL DIVISION

ANTOR MEDIA CORPORATION, Plaintiff, v. METACAFE, INC., GOOGLE INC., YOUTUBE, LLC (incorrectly sued as YouTube, Inc.), SONY PICTURES ENTERTAINMENT, INC., SONY ELECTRONICS, INC., SONY COMPUTER ENTERTAINMENT AMERICA, INC., SONY BMG MUSIC ENTERTAINMENT GP, SONY CORPORATION, SONY CORPORATION OF AMERICA, GROUPER NETWORKS, INC., GOTUIT MEDIA CORP., DISCOVERY COMMUNICATIONS, INC., MACMILLAN PUBLISHERS, INC., PURE VIDEO NETWORKS, INC., DIGITAL PLAYGROUND, INC., NEW FRONTIER MEDIA, INC., SBO PICTURES, INC., VIVID ENTERTAINMENT, LLC, SUN MICROSYSTEMS, INC., and MLB ADVANCED MEDIA, L.P., Defendants. And Related Counterclaims. CIVIL ACTION NO. 2:07-CV-102 JURY TRIAL REQUESTED

MOTION OF DEFENDANTS GOOGLE INC. AND YOUTUBE, LLC' TO JOIN MACMILLAN PUBLISHERS, INC. AND MACMILLAN PUBLISHERS LTD.'S MOTION TO STAY PENDING REEXAMINATION Introduction Defendants Google Inc. ("Google") and YouTube, LLC (incorrectly sued as YouTube, Inc.) ("YouTube"), by their undersigned attorneys, hereby join the motion of Macmillan Publishers, Inc.

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Dockets.Justia.com

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and Macmillan Publishers Ltd.'s (collectively "Macmillan") to stay this action pending a final decision on the ex parte reexamination of the U.S. Patent No. 5,734,961 ("the '961 patent") at issue in this case. (See Docket No. 47.) Google and YouTube seek the same stipulation for a stay that Macmillan requests, modeled upon this Court's order in DataTreasury Corp. v. Bank of America Corp., No. 2:05-cv-00292-DF. Specifically, Google and YouTube affirm that they would accept the following stipulation language: As a condition of the stay, Defendants may not argue invalidity at trial based on one or more prior art printed publications that were submitted by the petitioner in the reexamination proceedings. However, Defendants will be permitted to rely for obviousness on the combination of a printed publication reference that was submitted by petitioner in the reexamination with prior art that was not so submitted. Google and YouTube agree with the arguments presented in Macmillan's motion to stay and incorporate those arguments by reference. Additionally, Google and YouTube believe that a short summary of the DataTreasury litigation, including relevant activity in that case subsequent to Macmillan's motion, will be helpful to the Court. Google and YouTube also briefly provide additional support for the DataTreasury stipulation due to the Supreme Court's decision in KSR International Co. v. Teleflex Inc., 127 S. Ct. 1727 (2007) and Antor's conduct in dumping an extreme amount of documents on the PTO, preventing a meaningful analysis of those references. Argument I. The Court Held in DataTreasury That the Nokia Stay Is No Longer Appropriate. Antor has argued that if the Court is going to grant a stay, Macmillan, Google and YouTube should be forced to agree to a stipulation with the same language as in Antor Media Corp. v. Nokia, Inc., No. 2:05-cv- 00186-DF. The history of the DataTreasury action--which this Court previously observed to be indistinguishable from the Antor litigation--shows this argument should be rejected. Indeed, in one of the pending DataTreasury cases, this Court recently adopted the same stipulation that Google, YouTube, McMillan, and Digital Underground now seek, despite the plaintiff's request
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to enter a Nokia-type stipulation. It should do so here as well. A brief history of DataTreasury is instructive. The Court Initially Grants a Nokia-type Stay in DataTreasury. In DataTreasury, the plaintiff filed suit against multiple defendant banks, including First Data Corporation, on U.S. Patent Nos. 5,901,988 and 6,032,137 (the "Ballard patents"). See DataTreasury Corp v. First Data Corp, et al., No. 5:03-cv-00039-DF. Subsequently, DataTreasury Corporation filed suit against additional defendants, again on the Ballard patents. See, e.g., DataTreasury Corp. v. Wells Fargo & Company et al., No. 2:06-cv-00072-DF. Several of the new defendants sought to stay proceedings pending completion of the reexamination in the PTO. Id., Dkt. No. 260 (motion to stay). Like Antor in this case, plaintiff DataTreasury asserted that a stay would be an "indefinite stay" and cause it prejudice. Id., Dkt. No. 313 (response), at 22-23. This Court disagreed, and granted the stay. Id., Dkt. No. 326 (order). The Court, however, held that the DataTreasury case was indistinguishable from Antor Media Corp. v. Nokia. Id., Dkt. No. 326, at 8-9 ("Defendants' attempt to distinguish Antor fails"). Thus, the Court granted the stay subject to the DataTreasury defendants entering a stipulation that was essentially identical to the Nokia stipulation: The parties agree that the stay will be granted only on condition that [an individual defendant] agrees not to challenge United States Patent Numbers 5,910,988 and/or 6,032,137 based on any prior art printed publications that were considered in the reexamination process. Id., Dkt. No. 326, at 10. The Court Revises the DataTreasury Stay. Subsequently, one of the DataTreasury defendants, Electronic Data Systems Corporation, asked the Court to clarify the scope of that stipulation to make certain it would not be read to preclude the use of such references for obviousness in litigation. Id., Dkt. No. 401 (motion to clarify). Specifically, Electronic Data Systems argued:
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EDS proposes that the Court make a slight but significant clarification to the required stipulation--namely, to append to the stipulation the following sentence: [An individual defendant] will be permitted to rely for obviousness on the combination of a printed publication reference that was considered in the reexamination with prior art that was not so considered. EDS believes that the current stipulation should not be read to ban the subsequent use, for obviousness purposes, of prior art that was not considered by the PTO in combination with references that were so considered in the reexamination. Nevertheless, EDS is concerned that, if a Defendant accepts the stipulation and the patents survive the reexamination, Plaintiff will attempt to expand the scope of the stipulation. Id., Dkt. No. 401, at 4. Four days later, the Court issued an Order modifying the DataTreasury stipulation to permit obviousness arguments in litigation using references considered in the reexamination as Electronic Data Systems requested. Id., Dkt. No. 411 (order). The modified stipulated incorporated nearly verbatim the language that Electronic Data Systems had proposed: As a condition of the stay, Defendant may not argue invalidity at trial based on one or more prior art printed publications that were submitted by the petitioner in the reexamination proceedings. However, Defendant will be permitted to rely for obviousness on the combination of a printed publication reference that was submitted by petitioner in the reexamination with prior art that was not so submitted. Id., Dkt. No. 411 (order) (emphasis added). The Court Chooses the Revised DataTreasury Stay over the Nokia Stay. Recently, a second set of DataTreasury patents, the "Huntington" patents, became the subject of a separate PTO reexamination proceeding. On September 14, 2007, the parties in DataTreasury litigation

concerning these same patents filed a consented motion to stay. Dkt. No. 796 (unopposed motion to stay). The scope of the stipulation was the only dispute between the parties. Id., at 1-2. DataTreasury argued that the original Nokia stipulation should be required. Defendants sought a stipulation with the revised DataTreasury language. Id., at 2.
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On September 17, 2007, the Court granted the stay subject to the revised DataTreasury stipulation, not the old Nokia stipulation. Specifically, the stipulation the Court adopted reads: As a condition of the stay, Defendants may not argue invalidity at trial based on one or more prior art printed publications that were submitted by the petitioner in the reexamination proceedings. However, Defendants will be permitted to rely for obviousness on the combination of a printed publication reference that was submitted by petitioner in the reexamination with prior art that was not so submitted. Id., Dkt. No. 798 (order granting stay). Thus, although the Court in DataTreasury initially imposed the Nokia-style stipulation on the DataTreasury defendants, upon Electronic Data Systems' motion, the Court recognized that it would confer undue windfalls on plaintiffs to preclude a defendant's obviousness case entirely, and modified the stipulation. Id., Dkt. No. 411. The Revised DataTreasury Stay Should Be Entered in the Antor Litigation That the Court Previously Found Indistinguishable from DataTreasury. The Court's recognition of the appropriateness of the revised DataTreasury stipulation language over the Nokia language is equally applicable to the Antor Media line of cases. Again, the Court previously found the Antor Media litigation indistinguishable from the DataTreasury litigation. DataTreasury Corp. v. Wells Fargo & Company et al., No. 2:06-cv-00072-DF, Dkt. No. 326, at 8-9. Thus, the DataTreasury stay is

plainly appropriate in this case. And any attempt by Antor to impose a Nokia stay on Google and YouTube should be rejected just as DataTreasury's attempt to recapture the Nokia stay was rejected in the DataTreasury litigation. II. The Supreme Court's KSR Decision Further Shows the Revised DataTreasury Stay Is Appropriate. The Supreme Court's recent decision in KSR International Co. v. Teleflex Inc., 127 S. Ct. 1727 (2007), provides a further basis for entering the revised DataTreasury stay that does not preclude obviousness arguments in litigation using references considered in the reexamination. In KSR, the Supreme Court rejected the Federal Circuit's "rigid" application of tests such as the
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"teaching, suggestion, or motivation" formula for obviousness, in favor of the "expansive and flexible approach" set forth in Graham v. John Deere Co., 383 U.S. 1 (1966). In rejecting "rigid or mandatory formulas" to evaluate obviousness, the Supreme Court noted that the abilities of those skilled in the art should not be underestimated and "in many cases a person of ordinary skill will be able to fit the teachings of multiple patents together like pieces of a puzzle." KSR, slip op. at 16-17. The KSR decision issued after the existing reexamination requests as to the '961 patent were filed. Thus, the reexamination petitioners did not, and could not have, alerted the PTO to the significance of KSR in the specific context of the '961 patent.1 Nevertheless, the Nokia stay would prevent Google and YouTube from using any of the references considered in the reexamination in litigation to demonstrate Plaintiff's patents are an obvious combination of the prior art under KSR. The Nokia stay would prevent Google and YouTube from making the KSR obviousness arguments that were not and could not have been made in the reexaminations. The DataTreasury stay properly allows use in this litigation any of the references considered in the reexamination as "pieces of the puzzle" that one skilled in the art would fit together to demonstrate obviousness under KSR. To preclude Google and YouTube from raising any of the more than 1200 references raised in the reexamination for obviousness purposes in litigation would confer an entirely unjustified windfall on Antor. Indeed, it would permit the '961 patent to escape meaningful scrutiny under KSR in any forum. Preventing this windfall provides further basis for the revised DataTreasury stipulation that would allow Google and YouTube to use references considered in the reexamination to argue obviousness in this litigation. As KSR provides a significant obviousness hurdle to the '961 patent, Google and YouTube would have definitely relied on it in any reexamination proceeding. Thus, it is not just speculation that Google and YouTube (or Macmillan or Digital Underground) would have done something different if they had been involved with the reexamination request, as Antor suggested in opposing MacMillan's motion. (Surreply, at 4).
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III.

The Nokia Stay Is Overbroad in Light of Antor's Document Dump. Further demonstrating the appropriateness of not precluding obviousness arguments, like in

the revised DataTreasury stipulation, is the fact that the PTO could not possibly examine in detail each of the more than 1200 references dumped by Antor on the PTO. The extensive number of references precludes meaningful analysis under KSR, or any other standard. Antor has in the past tried to justify its dump of 1200 references based on its duty of candor to the PTO. 37 C.F.R. § 1.56. While of course Antor does have a duty to make material disclosures, that does not excuse its conduct before the PTO. Indeed, the PTO's Manual of Patent Examining Procedure states that massive document dumps like Antor has done are not proper: It is desirable to avoid the submission of long lists of documents if it can be avoided. Eliminate clearly irrelevant and marginally pertinent cumulative information. If a long list is submitted, highlight those documents which have been specifically brought to applicant's attention and/or are known to be of most significance. Manual of Patent Examining Procedure § 2004(13) ("Aids to Compliance With Duty of Disclosure"). Antor does not suggest it has done anything to eliminate "clearly irrelevant and marginally pertinent cumulative information," as required. Nor has it shown it has "highlight[ed] those documents" which are of the most significance to the PTO. Instead, Antor's indiscriminate dump of prior art on the PTO shows its hope that the most significant references will become lost in the shuffle. See Molins PLC v. Textron, Inc., 48 F.3d 1172, 1184 (Fed. Cir. 1995) ("`burying' a particularly material reference in a prior art statement containing a multiplicity of other references can be probative of bad faith"); Penn Yan Boats, Inc. v. Sea Lark Boats, Inc., 359 F. Supp. 948, 965 (S.D. Fla. 1972), aff'd and adopted as Fifth Circuit opinion, 479 F.2d 1328 (5th Cir. 1973) ("Obviously, the purpose of this misrepresentation was to bury the Wollard patent in a long list of allegedly old prior art patents in the hope that the Patent Examiner, having already allowed the Stuart claims, would ignore the list and permit the Stuart patent to issue."). This is improper.
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It is demonstrably unfair for Google and YouTube to be prevented from being able to present these references in litigation when they cannot all possibly have been meaningfully examined by the examiner. This would not be preventing Google and YouTube from getting two bites at the apple, it would be preventing them from getting any bite.

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Conclusion For the foregoing reasons and the reasons outlined by Macmillan, Macmillan's motion for a stay of this action pending a final decision by the Patent Office on the ex parte reexamination of the '961 patent should be granted. DATED: November 5, 2007 Respectfully submitted, By /s/ Melissa R. Smith LEAD ATTORNEY State Bar No. 24001351 Harry L. Gillam, Jr. State Bar No. 07921800 GILLAM & SMITH, L.L.P 303 South Washington Ave. Marshall, Texas 75670 Telephone: [phone] Facsimile: [phone]

/s/ Charles K. Verhoeven Charles K. Verhoeven, pro hac vice [e-mail] Attorney In Charge David A. Perlson, pro hac vice [e-mail] QUINN EMANUEL URQUHART OLIVER & HEDGES, LLP 50 California Street, 22nd Floor San Francisco, California 94111 Telephone: [phone] Facsimile: [phone] Attorneys for Defendants Google Inc. and YouTube, LLC.

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CERTIFICATE OF SERVICE The undersigned certifies that the foregoing document was filed electronically in compliance with Local Rule CV-5(a) on November 5, 2007. As of this date, all counsel of record has consented to electronic service and are being served with a copy of this document through the Court's CM/ECF system under Local Rule CV-5(a)(3)(A).

/s/ Melissa R. Smith

CERTIFICATE OF CONFERENCE In compliance with Local Rule CV-7(h), the undersigned counsel for Google Inc. and YouTube, LLC has conferred with counsel for Antor Media Corporation in a good faith attempt to resolve the matter without Court intervention. Antor is opposed to this motion.

/s/ Melissa R. Smith

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