Microunity Systems Engineering, Inc v. Acer Inc. et al
Filing
130
MOTION to Dismiss Plaintiff's Motion to Dismiss and/or Strike Inequitable Conduct Defenses and Counterclaims Asserted by Defendants by Microunity Systems Engineering, Inc. (Attachments: # 1 Exhibit, # 2 Text of Proposed Order)(Grinstein, Joseph)
Microunity Systems Engineering, Inc v. Acer Inc. et al
Doc. 130
IN THE I.INITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS MARSHALL DIVISION
MICROUNITY SYSTEMS ENGINEERING, lNC., a California corporation,
$ $ $
Plaintift
V.
$
ACER INC., et al.
Defendants.
$
I
$ $
Civil ActionNo. 2:10-cv-000185
TJW-CE
PLAINTIFF'S MOTION TO DISMISS AND/OR STRIKE INEQUITABLE CONDUCT DEFENSES AND COTNTERCLAIMS ASSERTED BY DEFENDANTS ACER, INC.; ACER AMERICA CORPORATION; LG ELECTRONICS INC.; LG MOBILECOMM U.S.A.,INC.; PALM,INC.; QUALCOMM INC.; SAMSUNG ELECTRONICS CO.¡ AND SAMSUNG TELECOMMUNICATIONS AMERICA. LLC.
1268392v1/011876
Dockets.Justia.com
This is the fourth lawsuit brought by MicroUnity on this patent portfolio. As this Court is no doubt aware, it previously handled MicroUnity's suits against Intel, Sony, and AMD. And,
as
has been historical practice, each of those prior defendants asserted inequitable conduct claims against MicroUnity. None of those sophisticated defendants, however, was ever able to generate
an inequitable conduct theory with any legs, even after substantial discovery. Moreover, since the
time of those first three lawsuits, the Federal Circuit has become much more strict in dealing with
inequitable conduct contentions at the pleading stage. Ãfter Exergen Corp. v. Wal-Mørt Stores, 1nc.,575 F.3d 1312 (Fed. Cir. 2009), defendants must provide detailed, fact-specific allegations of
fraud in order for their inequitable conduct allegations to survive a motion to dismiss. Recognizing the weakness of the prior inequitable conduct theories against MicroUnity, coupled with the new, tough standard for asserting those theories, most of the defendants in the
current case decided to pass on inequitable conduct. Of the fourteen defendant groupsr that MicroUnity sued, nine did not assert inequitable conduct counterclaims or defenses. For some of
the defendants, however, old habits die hard. The remaining five defendant groups
-
the Samsung
entities, the LG entities, Qualcomm, the Acer entities, and Palm
-
have pressed forward with
inequitable conduct claims nonetheless. Because these theories all fail the Exergen pleading test,
pursuant to Rules 12(bX6) and 12(f), this Court should dismiss them.2
I.
Legal Standard
The Federal Circuit has long criticized the practice by defendants
asserting inequitable conduct claims against every patentholder
t
2
of
automatically
in every patent case. As the
There are more than fourteen defendants in these cases, but some are related (e.g., Nokia Inc. and Nokia Corporation).
The Acer and Samsung entities appear to have asserted inequitable conduct as an affirmative defense, but not as a counterclaim. The otheidefendantì-asserted inequitable conduct as both a counterclaim and an affirmative defense. The proper vehicle to dismiss these improperty pled inequitable conduct affirmative defenses is a motion to strike *4 (D'D.C.2009) ("Because undei Rule t2(f). Unique Industries, lnò. v. SOSZOT Albertq Ltd., 2009 WL 2185555, at the plaintiff hut'øit"¿ tã plead inequitable conduct with the requisite particularity, that defense is hereby stricken.").
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Federal Circuit explained in 1995:
[U]njustifred accusations of inequitable conduct are offensive and unprofessional. They have been called a "plagve" on the patent system. Unjustified accusations may deprive patentees of their earned property rights and impugn fellow professionals. They should be condemned.
Molins PLC v. Textron, Inc.,48 F.3d 1172,1182 (Fed. Cir. 1995). Since Molins, the "plague" of
inequitable conduct allegations has only grown worse. So, to halt fi¡ther such growth, the Federal
Circuit recently issued an opinion announcing tough new pleading rules that defendants must meet
if they wish to prusue inequitable conduct allegations.
See
Exergen,575 F.3d 1312.
standards
ln Exergen, the Federal Circuit announced that the strictest of Rule 9(b) pleading
applies to inequitable conduct allegations:
Based on the foregoing, and following the lead of the Seventh Circuit in fraud cases, we hold that in pleading inequitable conduct in patent cases, Rule 9(b) requires identification of the specific who, what, when, where, and how of the material misrepresentation or omission committed before the PTO.
Id. at T327. The Federal Circuit explained what is necessary to satisff many of these elements:
. o
The specific "who": The pleading must "name the specific individual associated with the filing-or prosecution of the application . . . who both knew of the material information and deliberately withheld or misrepresented it." Id. at1329. The specific "what" and "where": The pleading must "identiff the specific prior art that was allegedly known to the applicant and not disclosed." Id. at 1327. The pleading must also "identiff which claims, and which limitations in those, the withheld references are relevant to, and where in those references the material information is found." Id. at 1329.
o
The specifrc "why" and "how": The pleading must "identify the particular claim limitatìons, or combination of claim limitations, that are supposedly absent from the information of record." Id. at 1329. It must also "identify . . . how that manipulation was meant to mislead the PTO." Id. at 1327.
Going further, the Federal Circuit then emphasized that Rule 9(b) also requires very
detailed allegations of intent:
Moreover, although "knowledge" and "intent" may be averred generally, a pleading of inequitable conduct under Rule 9(b) must include sufficient allegations of underlying facts from which a court may reasonably infer that a specific individual (1) knew of the withheld material information or of the falsity
2
1268392v11011876
of the material misrepresentation,
and (2) withheld
or
misrepresented this
information with a specific intent to deceive the PTO.
Id. at 1328-29 (emphasis added). To prove an inventor knowingly withheld a reference from the
PTO, it is insuffrcient just to plead, as defendants commonly do, that an individual knew about that
reference: "A reference may be many pages long, and its various teachings may be relevant to different applications for different reasons. Thus, one cannot assume that an individual, who
generally knew thal areference existed, also knew of the specific material information contained in that reference." Id. at 1330 (emphases added). In addition, the basis for specific intent to deceive
must extend beyond mere knowledge of withheld information. The allegation of specific intent
must be "'supported by a pleading of any facts which reflect fthe registrant's] beliefl" in
materialþ. Id. at 1328 (quotingKingAuto., Inc. v. Speedy Mffier King, únc.,667 F.zd1008,
1011 (C.C.P.A. 1981)) (modification in original).
The Exergen court also addressed the practice of making allegations "on information and
belief," without any supporting facts: "Pleading on 'information and belief is permitted under
Rule 9(b) when essential information lies uniquely within another party's control, but only
if
the
pleading sets forth the specific facts upon which the belief is reasonably based." Exergen, 575
F.3d at 1330. Such allegations must plausibly suggest a "'deliberate decision to withhold a known
material reference' or to make a knowingly false misrepresentation-a necessary predicate for inferring deceptive intent." Id. at I33I (quoting Molins,48 F.3d at 1181).
Compliance with these strict pleading rules is necessary, wamed the Federal Circuit, "lest
inequitable conduct devolve into 'a magic incantation to be asserted against every patenlee."' Id.
(quoting FMC Corp. v. Manitowoc Co. , 835 F .2d
I4lI,
1415 (Fed. Cir. 1 987).
il.
Argument
Each of the five defendant groups that asserted inequitable conduct claims and defenses
against MicroUnity pursued similar allegations. The five defendant groups alleged inequitable
J
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conduct on the basis of (1) a "Hewlett Packard (HP)" theory, (2) an "Intel./Phillips" theory; (3) a "Sun UItTaSPARC and HP PA-RISC" theory; and (a) a"'599 priority claim" theory. For ease of reference, MicroUnity demonstrates below by reference to the Qualcomm Answer (DKT No. 107)
how each of these four inequitable conduct theories fails to satisfu the Exergen pleading test,
particularly
as
to intent.3
The Defendants' "HP" Allesations Fail to Satisfi'Exergen
A.
In their "HP" theory, Defendants contend that MicroUnity was "involved in a technology
collaboration with Hewlett Packard ('HP') and several of their engineers, including Ruby Lee,
Jerry Huck, and Michael Mahon." Qualcomm Answer, at
tf50. Defendants further
assert that Lee
authored various alleged prior art publications and patents, and that Lee, Huck, and Mahan were
involved in contemporaneous microprocessor design work
in
1995 and 1996. Id., at TT53-55.
From this, Defendants piece together knowledge by MicroUnity of the alleged HP prior art and HP
design activities based solely upon MicroUnity's association with Lee, Huck, and Mahon:
Upon information and belief, Moussouris, as CEO of MicroUnity, and Hansen, as chief arihitect of the MicroUnity media processor [sic], were in contact with the HP team (and Lee, Huck, and Mahon, in particular) dwing the technology collaboration, and were aware or became aware of the multimedia instruction set extensions to the HP processers prior to the issue date of the '840 Patent.
Id., at !f56 (emphasis added). Because the HP prior art and contemporaneous design work was
material to the prosecution of the MicroUnity patents, reason the Defendants, MicroUnity's failtlre to disclose it to the PTO amounts to inequitable conduct. Id., atfll57-64. These contentions come nowhere close to proper allegations of deceptive intent. Exergen requires that Defendants present "sufücient allegations of underlying facts from which
þis]
court
may reasonably infer that [Microunity] knew of the withheld material IHP prior art and later
3
Needless to say, MicroUnity's failure to challenge now any other element of inequitable conduct (e.g., maÛerialþ, falsity) under thi motion to dismiss standard should not be read as MicroUnþ's concession that those elements exist.
1268392v11011876
design
workl."
Exergen,575 F.3d at 1328-29. But the only fact that Defendants plead to
establish MicroUnity's supposed awareness of the HP prior art and other activities is that the
MicroUnity inventors worked with Lee, Huck, and Mahon. Qualcomm Answer, at fl56'
Defendants do not allege that Lee, Huck, or Mahon told the MicroUnity inventors about the HP
prior art or other activities; nor do they contend that the HP prior art or other activities were used or relied upon during their collaboration with Microunity. In essence, Defendants resort to "guilt by
association"
-
Defendants contend that the MicroUnity inventors knew Lee, Huck, and Mahon, so
they must also have known about the Lee, Huck, and Mahon materials. These are not suff,rcient allegations of underlying facts from which knowledge of the HP prior art and other activities may
be infened.
Moreover, even if it could simply be assumed (as the Defendants do) that MicroUnity was
generally aware of the alleged HP prior art and other work, more is required under Exergen.
"A
reference may be many pages long, and its various teachings may be relevant
to different
applications for different reasons. Thus, one carurot assume that an individual, who generally knew that a reference existed, also reference." Exergen,575 F.3d at 1330 (emphases added). Defendants do not allege, however, that
MicroUnity had any knowledge of the specific, allegedly invalidating features of the HP prior art
or other work.
Furthermore, Defendants even fail to allege that most of the "HP prior art" is actually prior
arf. Defendants do identify certain patents and publications from Ms. Lee that allegedly precede the 1995 filing date of the'840 patent. Qualcomm Answer, atn54. But as to Lee, Huck, and
Mahon's work on the HP "second-generation multimedia instruction set extensions," Defendants
assert only that this occurred
in "1995 and !996,prior to the issue date of the '840, '061, and '318
Patents." Id., at fl55 (emphasis added). This is not an allegation, of course, that these HP
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multimedia extensions actually preceded the priority date multimedia extensions
of those patents. And it is
these
- not the Lee patents or publications -
that Defendants speculate
MicroUnity became aware of during its technology collaboration with HP. Id., at 156. Indeed,
Qualcomm's Answer appears only to contain an offhand allegation that MicroUnity was even
aware of the Lee patents or publications, and this is wholly unsubstantiated. Id., af 164.
B.
The Defendants' "InteVPhillips" Allesations Fail to SatisÙ Exergez
In this theory, Defendants contend that an intemal email from the MicroUnity marketing
group was circulated to the MicroUnity inventors in August 1995. Qualcomm Answer, at'!f65. According to Defendants, the email indicated that certain of MicroUnity's then-competitors, such
as Intel and Phillips, were pursuing plans to add multimedia capabilities to their processors that
rryere
"remarkably similar" to MicroUnity's plans. Id., atfl66. Defendants speculate that the email,
was
in referring to Intel's plans, was referring to Intel's "MMX instruction set," and that this
understood by the MicroUnity inventors when they received the
email. Id., atl67.
Because
MicroUnity failed to disclose to the PTO any information about Intel or Phillips's plans or
products, conclude the Defendants, it engaged in inequitable conduct. Id., atnn68-72. These allegations do not form a suffrcient basis for an inequitable conduct claim. First, under Exergen, Defendants must "identit/ the specific prior art that was allegedly known to the
applicant and not disclosed." Exergen,575 F.3d at 1327. Yet other than vague references to
"Intel's plans" and "Phillips's plans," Defendants fail to identiff any specific Intel or Phillips
reference allegedly known to the MicroUnity inventors but not disclosed to the PTO.
Second, Exergen requires that Defendants present "sufficient allegations
facts from which
of underlying
þis]
court may reasonably infer that [Microunity] knew of the withheld material
[Intel/Phillips prior
art]."
Exergen, 575 F.3d at 1328-29. Here, the only evidence cited by
Defendants of MicroUnity's supposed knowledge of the unidentified Intel/Phillips prior art is the
1268392v11011876
faú that Intel and Phillips were mentioned in a marketing email as developing
"remarkably
a
similar" mediaprocessing capabilities. Qualcomm Answer, atn66. But this Court cannot draw
reasonable inference that just because the inventors \¡rere allegedly aware of Intel and Phillips'
competitive plans, they therefore \ilere aware of some unidentified Intel and Phillips prior art
references that constituted potentially invalidating prior
art.
Defendants attempt to overcome this
problem (at least as to Intel), by arguing that "[u]pon information and belief, the MicroUnity []
email was referring to Intel's intent to add DSP-like functionality to its processors by including the
MMX instruction set." Id., atl67. But Defendants do not allege that the MicroUnity email
actually mentioned
MMX.
Indeed, Defendants allege no facts to suggest that the MicroUnity
inventors were aware of any information that constituted prior art that described or even mentioned
MI\D( or its features.a And Defendants' "information and beliefl' allegations
them there. Exergen,575 F.3d at 1330'
are not enough to get
Third, Defendants must come forward with facts to suggest that the MicroUnity inventors, even
if they supposedly
knew of some unidentified Phillips and Intel prior art, had specific
knowledge of the allegedly invalidating features of that unidentified prior art. Exergen,575 F'3d at
1330. Again, Defendants make no such allegations as to the Intel/Phillips supposed "pdor art".s
C.
Exergen
This theory is premised on the fact that someone on a "I-Jsenet" internet message board
posted a question to one of the MicroUnity inventors on November 7,1995. Qualcomm Answer,
a
Defendants, careful wording of their MND( allegations reveal that there is no basis for any contention that MicroUnity ever believed that MND( was actually prior art. Defendants assert that the MicroUnity inventors "knew of lntel's MND( instruction set extensions prior io the issue date of the '840 and '061 Patents." Qualcomm Answer, 169; see also id., atl70 (asserting lorowledgè of MlrÐ( before filing date of the '318 patent), As with the alleged IIP design
allegation of any awareness that MMX existed before the priqiry-date of those patents. Nor, of course, it is a substantiated allegation of awareness of MI\D( at all.
u"iiuiti.r, hòwever, thir ir
noi*
t Defendants likewise make no attempt to explain why Intel did not assert this Intel "prior art" in its extensive litigation
over many of the same patents.
r268392v11011876
alll74. According to the Defendants, the nameless
questioner mentioned in their intemet post the
existence of the "PA-RISC and UIITaSPARC multimedia extensions." Id.,
atl75.
Accordingly,
the Defendants assert that the MicroUnity inventor was thereby made aware of PA-RISC and
UItTaSPARC and their applicability to the MicroUnity inventions. Id.,
at176. The subsequent
failure to disclose PA-RISC and UItTaSPARC to the PTO, argue the Defendants, amounted to
inequitable conduct. Id., a|fln77 -79.
Again, Defendants' "Sun UItTaSPARC and HP PA-HSC" theory is wholly devoid of any specific factual allegations that would support an inequitable conduct claim. As an initial matter,
Defendants fail to identifu any particular prior art reference that contains the "Sun UItTaSPARC
and HP PA-RISC multimedia extensions." See Exergen,575 F.3d at T327 (noting that defendants
must "identit/ the specific prior art that was allegedly known to the applicant and not disclosed") (emphasis added). Indeed, the alleged Usenet conversation occurred in November 1995, three months after the filing date of the initial MicroUnity patent. Defendants fail to allege even that the
unidentified "Sun UItTaSPARC and HP PA-ilSC" references were priority date for the patents.
in existence prior to the
Second, even assuming from Defendants' allegations that the MicroUnity inventor had
general knowledge of the existence
of
some unidentified Sun UItTaSPARC and HP PA-zuSC
references, Defendants fail to allege sufficient facts to demonstrate that he "knew of the specific
material information contained in [those] reference[s]." Id.at 1330. Defendants contend that the
intemet questioner's analogy between the Sun UItTaSPARC and HP PA-RISC multimedia
extensions, on the one hand, and MicroUnity's "instructions [that] operate simultaneously on many packed data items within their operands," on the other, means that MicroUnity was aware that the
Sun UIITaSPARC and HP PA-zuSC multimedia extensions "included instructions for dynamic
partitioning for parallel processing." Qualcomm Answer,
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al176. This leap of logic is wholly
unwananted. Simultaneous processing on multþle packed items is facially not the same thing
as
"dynamic partitioning of media data that is narrower than the data path for parallel processing," the
specific feature of Sun UItTaSPARC and HP PA-RISC that Defendants contend is anticip atory. Id.,
at
fl78. In fact, the specific question
posed by the questioner itself broke any link between Sun
UItTaSPARC/HP PA-RISC and the actual MicroUnity inventions. The questioner asked: "'The
[MicroUnity] slide indicates that the size of the sub-register data items can be from 1 to 64 bits.
How is the size specified?"' Id. at t175. The question indicates that the questioner was unfamiliar
with how the MicroUnity mediaprocessor could dynamically partition the data path for parallel
processing,6 which contradicts Defendants' assertion that the questioner had indicated
to
the
MicroUnity inventor that PA-RISC and UIITaSPARC already had such capability.
Indeed, Defendants nowhere allege that Sun UItTaSPARC and HP PA-RISC actually could do "dynamic partitioning of media datathat is naffower than the data path for parallel processing." Defendants cite no portion of any reference that discloses that feature. As such, Defendants fail even to allege the most basic of prerequisites to an inequitable conduct claim
- the existence of
specific material in a reference that should have been disclosed to the PTO in the first instance.
D.
The Defendants' "'599 Priorit)¡ Claim" Allegations Fail to Satisfu Exergen
Defendants' final inequitable conduct theory relates to an allegedly improper amendment to
a
priority claim, as opposed to a withheld reference. In this particular lawsuit (No.
2: 10-cv-0001 85
TJW-CE) only Samsung has asserted this theory, as an affirmative defense. Because MicroUnity
believes this theory is spelled out in the most detail (such as it is) in Qualcomm's Answet in Civil
Action No. 2:10-cv-00091 TJW-CE (DKT No. 143), MicroUnity refers below to that document.
u
This Court's construction of the limitation "capable of dynamic partitioning" in the original MicroUnity case was "capable of dividing width-wise into a variable number of elements." MiøoUnity Sys. Eng'g, Inc. v. Dell, Irzc., No. 2:04-cv-00120, slip op. at 9 (E.D. Tex. Aug. 29,2005). On a motion to dismiss the Court may take judicial notice of prior litigation materials that are a matter of public record. Hqll v. Hodgkins,2008 WL 972695, at *2, No. 6:07-cv-246 (E.D. Tex. Apr. 8, 2008) ("In deciding a l2(b)(6) motion to dismiss, it is proper to take judicial notice of matters of
public record.").
1268392v11011876
Defendants contend that in initially applying for the '599 patent
in
1999, the MicroUnity
inventors only intended to make a priority claim to provisional application601097,635. Qualcomm
Answer (in 2:10-cv-00091),
fl67.
Defendants concede, however,
that'the specification of the
'599 paterÍ. . . included apriority claim as a continuation-in-partto the'318 Patent." Id., at !l 178
(emphasis added). So Defendants focus instead upon the separate priority claim made under oath
by the inventors, in which priority was asserted only to Provisional Application 601097,635 (the
"Provisional Application"). Id., at 1167
.
Defendants then try to invent a false statement made to the PTO by looking to a request for
a Certificate of Correction filed by the MicroUnity inventors in 2003. In that Certification, the
MicroUnity inventors sought to amend the priority language in the '599 specification in order "to
change the priority claim of the '599 Patent to include the '603 and '840 Patents in the priority
chain." Id.,
atfl7g.
In filing this request, MicroUnity represented that the "priority amendment
was 'of a clerical nature and/or of a mistake of minor character that occurred in good
fatth''"
Id.
Defendants contend, however, that the amended priority claim was made in bad faith, because the
MicroUnity inventors "did not intend to claim priority to the '840 Patent when they filed the'599 patent." Id., aI!.[180. Instead, reason the Defendants, the original priority claim under oath to the
Provisional Application evinces the only true intent as to priority at the time of filing- Id.
This Court should dismiss the'599 priority claim theory because these allegations form no plausible basis for claiming inequitable conduct. The Federal Circuit in Exergen held that "a
pleading of inequitable conduct trnder Rule 9(b) must include sufficient allegations of underlying facts from which a court may reasonably infer that a specific individual (1) knew of the withheld
material information or of the falsity of the material misrepresentation, and (2) withheld or
misrepresented this information with a specific intent to deceive the PTO." Exergen,575 F.3d at
l32g-2g (emphasis added). Whether a defendant's allegations justify such a reasonable inference
10
1268392v1/011876
is not a question that should be judged based solely upon cherrypicked evidence, even at the
motion to dismiss stage. Rather, "[a] reasonable inference is one that is plausible and that flows logically from the facts alleged, including any objective indications of candor and eood faith." 1d
at1329 n.5 (emphasis added). Defendants' '5gg priority claim theory is implausible on it face. Defendants admit that the specification of the '599 Patent claims priority to at least the '318 Patent by describing itself as a
"continuation-in-part of the '318 Patent." They frrther admit that the specification disclosed that
the '599 was also "'related to' the '603 and '840 Patents." Qualcomm Answer, Tf167,
178.
Defendants ffguo, however, that the inventors' attempt to correct the reference to the '603 and
'840 Patents to claim actual priority to these patents
Patent was "related to" these patents
-
instead of merely claiming that the '599
-
involved "a false and misleading statement to the USPTO'"
as
Id., atfllï9. But Defendants' theory is contradicted by the admitted fact that the '599 Patent,
originally filed and then later issued, contained an express priority claim to the '318.
It is wholly implausible for
Defendants to suggest that, although the inventors expressly
claimed priority to the '318 Patent in their original patent specification, they still intended not to
claim priority to the earlier '840 Patent. After all, Defendants acknowledge that the '318 Patent
"claimfs] dynamic partitioning" like the '840 Patent. Id., att]141. And the Request for Certificate
of Correction cited by Defendants notes that the '318 Patent itself claims priority to the '840
Patent. Request for Certificate of Correction at 2, 3 (Ex. A).7 There is thus no plausible reÍNon
why a party would claim priority to a third application in a chain of continuation or divisional
t
On a l2(bx6) motion, a court may consider documents attached to the motion if they are referred to in the challenged claim and are central to it. Cotlins v. Morgan Stanley Dean Witter,224 F.3d 496, 498-99 (5th Cir. 2000) ("We note approvingly, however, that various other circuits have specifically allowed that '[d]ocuments that a defendant attaches to u -otion to dismiss are considered part of the pleadings if they are referred to in the plaintiff s complaint and are central to her claim."' (quoting Venture Assocs. Corp. v. Zenith Data Sys. Corp.,987 F.2d 429,431(7th Cir. 1993)).
11 1268392v11011876
applications (the '3188), but not claim priority to the first application in the chain (the '840).
Because Defendants have offered no argument as to why the inventors would have intended this odd result, MicroUnity's later assertion of "mistake" is the only reasonable explanation.
To support their claim of fraud, Defendants provide a lengthy explanation as to why "[t]he specification of the '599 Patent is significantly different from the specification of the '318, '603,
and '840 Patents." Id., atfll68. For example, Defendants allege:
Every claim of the '599 Patent is directed to systems and methods related to wide operand architecture or data. None of the claims include claim elements for dynamically partitioning execution units for parallel processing. 171. The specifications of the'318, '603, and'840 Patents do not describe wide operand architectures.
n0.
Id., at 1[1170-71. Defendants in making this argument thus draw a sharp, categorical distinction
between the subject matter of all three prior patents (the '318, '603, and'840) and the '599 Patent.
Defendants, however, never draw that same categorical distinction between the '318 and
the '840 patents. As such, Defendants do not and simply cannot explain why the inventors would
have intended to claim
priorþ to the equally "significantly different" '318 Patent, yet not to the
'840 Patent, which is earlier in the same chain. So Defendants are forced instead to allege that the
express priority claim to the '318 Patent in the '599 Patent was a mistake: "lJpon information and
beliet Moussouris and Hansen only intended to claim priority to the provisional application
number 601097,635 when they filed the '599 Patent." Id., at fl180. This places the Defendants in thebizarre position of arguing that what MicroUnþ asserted was a mistake (the failure to claim
priority expressly to the '840 patent) was not truly
a mistake
a mistake, but that
what Microunity says is not
a mistake.
(including
a
priority claim to
a patent in the
'840 chain, the '318) was actually
t The'318
patent is a continuation of
the'603 patent, which is a divisional of the'840. Request for Certificate of
Correction, at 3.
t2
1268392v11011876
Defendants surely need more than their mere assertion of "information and belief' to support this tortured theory of mistake. Exergen,575 F.3d at 1330-31.
Moreover, Defendants affrrmatively attempt
indications of candor and good
to
suppress MicroUnity's "objective
faith," Exergen,575 F.3d at 1329 n.5, by omitting from their
pleading the actual corrections that the allegedly false Petition for Certificate of Correction sought. Defendants instead resort to paraphrasing, describing the requested changes simply as "changfing] the priority date of the '599 Patent" and "changling] the priority claim of the '599 Pafent to include the '603 and '840 Patents in the priority chain." Qualcomm Answer, nnI66,l7g.e
The precise change requested by the MicroUnity inventors in the Certificate is as follows
(underlines indicating requested additions and strike-throughs representing requested deletions):
This application is+elated claims the benefit of prioritv to Provisional Application No. 60/097,635 filed Aug.24,1998, and is a continuation in part of U.S. patent application Ser. No. 091169,963, filed Oct. 13, 1998 Y#eh-isin-fi*m rela*ed-+e. now U.S. Patent 6.006.318. which is a continuation of U.S. patent 5.82 ic L \v. evL. svvr¡vs!¡v¡¡ation Ser. No. 081754.827 filed Nov. 22, 1999 which is a divisional of U.S. patent application Ser. No. 08/516,036, filed Aug. 16,
1995, now U.S. Pat. No. 5,742,840.
Request
for Certificate of Correction at 2 (Ex.
A). It is striking that the priority claim in the
specification of the '599 Patent originally used the same "related to" language to refer to both the Provisional Application and to the '840 Patent. Defendants would have the Court conclude from
these facts that the MicroUnity inventors originally intended to claim priority to the Provisional
Application, but did not intend to claim priority to the '840 Patent. Yet the inventors' correction
sought to change both "related to" references to proper priority claims. Inherent in Defendants' theory therefore is the supposition that the first use of "related to" as to the Provisional Application
e
Indeed, Defendants do not plead any specific change requested by Moussouris and Hansen that Defendants contend was not actually a mistake. Failing to plead the specihc change requested that Defendants contend was sought in bad faith is fatal by itself under Exergen. 575 F.3d 15 1327 ("[Wle hold that in pleading inequitable conduct in patent cases, Rule 9(b) requires identification of the specific who, what, wher¡ where, and how of the material misrepresentation or omission commiüed before the PTO.").
13
1268392v1/011876
was a genuine good faith mistake, but that the second use of "related to" was an intentional failure
to claim priority to the '840 Patent. Such a conclusion is illogical and unreasonable. Thus,
MicroUnity's statement that the amendment to the priority claim to correct the failure to correctly
claim priority to the '840 Patent was "of a clerical nature and/or of a mistake of minor character
that occurred in good faith" is by far the most plausible explanation for the facts presented in
Defendants' pleading. Exergen,575 F.3d at1331 ("Moreover, the circumstances that SAAT has alleged, even
if
true, do not plausibly suggest any 'deliberate decision to withhold a known
material reference' or to make a knowingly false misrepresentation-a necessary predicate for inferring deceptive intent." (quoting Molins,48 F.3d at 1181).
Finally, to support their argument that the MicroUnity inventors never intended to claim
earlier priority in the '599, Defendants also contend that the '599 included a "substantially new specification and claimed entirely new subject matter" from the '318, '603, and '840 patenfs. Id.,
at fll81
.
As Defendants implicitly concede, however , the '599 application contained an Appendix
entitled "Zevs System Architecture," id.,
atll92, which did repeat a substantial portion of the
original '840 specification, making the "continuation-in-part" priority claim otherwise correct. So
Defendants argue that the '599 Appendix was not a proper Appendix under PTO rules, and thus cannot be considered when comparing the'599 disclosure to the disclosure in earlier MicroUnity patents. Id., at lTTlS3-S7. Accordingly, conclude the Defendants, the '599 priority claim was false.
Id., atlJl89.
Yet whether the Appendix was proper or not is a separate legal issue from inequitable conduct. What Defendants must allege now is suffrcient facts to demonstrate intent. Thus, to
satisff Exergen, Defendants need to allege specific facts to show not only that the Appendix was improper under PTO rules, but also that MicroUnity was aware
of this impropriety
but
intentionally attempted to include the Appendix anyway. But Defendants do no such thing. Just
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1268392v1/011876
because the Appendix was impermissible under PTO rules (according
to Defendants) does not
mean that MicroUnity knew this but lied to the PTO
in making its priority claim anyway.
MicroUnity's Appendix was filed in full view of the PTO, which was free to object if it thought the
Appendix was improper. To impute fraudulent intent due to reliance on an allegedly improper Appendix is nonsensical.
E.
This Court Should Deny Leave to Amend circumstances,
In normal
a court might permit a defendant asserting thin inequitable
conduct allegations to replead them consistent with Exergen. But in asserting these improper inequitable conduct charges, the Defendants here were not working from a blank slate. Rather,
they had the benefit of three prior cases and all the inequitable conduct theories that had been
developed in those cases. Moreover, they drafted their inequitable conduct allegations in full view
of Exergen As such, Defendants should not be permitted another opportunity to do what they
could have done
satisfies Exergen.
-
but failed to do - the first time: plead inequitable conduct in a manner that
IIL
Conclusion
Pursuant
to Rule 12, this Court should dismiss the inequitable conduct
defenses and
counterclaims asserted by the Samsung entities, the LG entities, Qualcomm, the Acer entities, and
Palm.
Respectfu
lly Submitted,
/s/ Joseph S. Grinstein Stephen D. Susman, Attomey-in-Charge State BarNo. 1952100 ssusman@susmangodfrey. com Max L. Tribble, Jr.
State
8arNo.20213950
mtribble@susmangodfrey. com Joseph S. Grinstein
15
1268392v1/011876
State
BarNo.24002188
i grinstein@ susmangodfrey. com
SUSMAN GODFREY L.L.P. 1000 Louisiana Street, Suite 5100 Houston, Texas 77002 Telephone: (7 13) 651-9366 Facsimile: (713) 654-6666
Sidney Calvin Capshaw State Bar No. 03783900 ccapshaw@capshawlaw. com CAPSFIAW DERIEIIX, L.L.P. 1127 Judson Rd - Ste220 PO Box 3999 Longview, TX 7 5 601 -5 | 57 (903) 236-e800 Fax: (903) 236-8787
Otis W. Carroll State BarNo.00794219 nancy@icklaw.com
IRELAND, CARROLL & KELLEY, P.C. 6101 South Broadway, Suite 500 Tyler, TX75703
Telephone: (903) 561-1 600 Facsimile: (903) 58 1 -107 I
Michael F. Heim State BarNo. 09380923 mheim@hpcllp.com HEIM, PAYNE & CHORUSH, L.L.P. 600 Travis, Suite 6710 Houston, Texas 77002 Telephone: (7 13) 221 -2000 Facsimile: (7 13) 221 -2021
Douglas R. V/ilson
State BarNo.24037719 dwilson@hpcllp.com HEIM, PAYNE & CHORUSH, L.L.P. 9442 Capital of Texas Hwy. PIazaI, Suite 500-146 Austin, Texas 78759 Telephone : (5 12) 3 43 -3 622
Facsimile: (5 12) 3 45 -2924
George M. Schwab
t6
1268392v11011876
State
BarNo. 58250 (CA)
sschwablô smspatent. com LAV/ OFFICES OF GEORGE M. SCHWAB 235 Montgomery St., Suite 1026 San Francisco, CA 94104 Telephone: (41 5) 889-521 0
Attorneys
for
MICROI-INITY
SYSTEMS
ENGINEERING. INC.
CERTIFICATE OF SERVICE
I hereby certify that on September 1,20I0,I electronically filed the foregoing document
with the clerk of the court for the U.S. District Court, Eastem District of Texas, using the electronic filing system of the court. The electronic case filing system sent a "Notice of Electronic Filing" to the attomeys of record who have consented in writing to accept this Notice as service of this document by electronic means.
/s/ Joseph S. Grinstein Joseph S. Grinstein
T1
1268392v11011876
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