Bedrock Computer Technologies, LLC v. Softlayer Technologies, Inc. et al

Filing 803

NOTICE by Yahoo! Inc. Yahoo!'s Offer of Proof Concerning Exclusion of Evidence of the Second Ex Parte Reexamination (Bright, Christopher)

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UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS TYLER DIVISION BEDROCK COMPUTER TECHNOLOGIES LLC, PLAINTIFF, v. SOFTLAYER TECHNOLOGIES, INC., CITIWARE TECHNOLOGY SOLUTIONS, LLC, GOOGLE, INC., YAHOO!, INC., MYSPACE INC., AMAZON.COM INC., PAYPAL INC., MATCH.COM, INC., AOL LLC, and CME GROUP INC., DEFENDANTS. § § § § § § § § § § § § § § Case No. 6:09-cv-269-LED JURY TRIAL DEMANDED DEFENDANT YAHOO! INC’S OFFER OF PROOF CONCERNING THE EXCLUSION OF EVIDENCE OF THE SECOND EX PARTE REEXAMINATION Pursuant to Federal Rule of Evidence 103, Defendant Yahoo! Inc. (“Yahoo!”) files this Offer of Proof. The Court has granted Plaintiff Bedrock Computer Technologies, LLC’s (“Bedrock”) motion to exclude certain evidence, testimony, reference, attorney argument, or other comment regarding the United States Patent and Trademark Office’s Second Reexamination of the ‘120 patent. This evidence would raise serious questions regarding the validity of the ‘120 patent and also goes directly towards the issue of willfulness. Two re-exams have been granted in this case by the United States Patent and Trademark Office. The ex parte petition for the first reexamination (“first reexam”), Application No. 90/010,856, was filed with the USPTO on February 9, 2010. The petition for the second ex parte reexamination (“second reexam”), Application No. 90/011,426, was filed on January 10, 2011. The USPTO issued a NIRC in the first reexam on January 14, 2011. About one month later, on February 22, 2011, the USPTO issued an order granting the second reexam. The USPTO's order in the second reexam is based upon some common prior art. For example, in its order, the USPTO that prior art references, U.S. Patent No. 4,695,949 (“Thatte”) and U.S. Patent No. 6,119,214 (“Dirks”), which were at issue in the first reexam, raised a substantial new question of patentability, and therefore the USPTO granted the second reexam. The USPTO found that, even though the two references were considered in the first reexam, the petition for the second reexam presented the two references “in a new light.” See DX-105. The acknowledgement that the Thatte reference would again be examined in the second reexamination is relevant to the jury’s assessment as to whether the ‘120 patent was obvious or anticipated when issued in 1999. Yahoo! made arguments pertaining to the issues of validity and willfulness during the first day of trial on April 27, 2011. See April 27, 2011 Morning Trial Tr. at 4:1-7 (“We think the second reexam should come in. Our client, objectively and subjectively, would look at the entire record in front of the Patent Office, not only the first reexam that’s been issued, but the second reexam, which is pending. And it’s pending on some of the same art which was the subject of the first reexam”). Similar arguments would have been presented during the course of trial, particularly in response to Bedrock’s arguments that the first reexamination confirms the patent’s validity. Evidence presenting the facts of the second reexamination further relate to willfulness. The precluded exhibits would have been used to establish that a finding of infringement was not willful under the operative standard, including the objective recklessness standard. Tyco Healthcare Group LP v. E-Z-EM, Inc., Case No. 2:07-cv-262, 2010 U.S. Dist. LEXIS 57652, *6 (Jun. 8, 2010 E.D. Tex.) (Ward, J.). Following the Federal Circuit’s ruling in In re Seagate, evidence of reexamination should be presented during trial to provide the jury with a complete 2 record for determining whether the accused infringer was reckless. In re Seagate Technology, LLC, 497 F.3d 1360, 1371 (Fed. Cir. 2007) (“If this threshold objective standard is satisfied, the patentee must also demonstrate that this objectively-defined risk (determined by the record developed in the infringement proceeding) was either known or so obvious that it should have been known to the accused infringer.”). Yahoo! Inc. would have presented evidence of the Second Reexamination to challenge the credibility and soundness of Bedrock’s positions as to validity and willfulness. If allowed, Yahoo! would have specifically presented DX-105 and 1471 and testimony about them and the second reexamination from Bedrock's witnesses, including Dr. Nemes and Dr. Jones who offered testimony about the validity of the ’120 patent, in order to (1) question the validity of the ‘120 patent in light of the USPTO’s decision to re-examine the claimed invention based on new questions of patentability, and (2) present its defense to allegations of willful infringement. Yahoo! would also present testimony from its witnesses for the same purposes, including testimony from one or more of David Filo, Joel Williams, and Nicholas Godici. Dated: April 29, 2011 Respectfully submitted, /s/ Christopher D. Bright Christopher D. Bright Fay E. Morisseau (Texas Bar No. 14460750) MCDERMOTT WILL & EMERY LLP 1000 Louisiana, Suite 1300 Houston, TX 77002 Tel: 713.653.1700 Fax: 713.739.7592 1 These exhibits are not attached due to the size of the file histories. 3 Yar R. Chaikovsky John A. Lee Bryan K. James MCDERMOTT WILL & EMERY LLP 275 Middlefield Rd., Suite 100 Menlo Park, CA 94025 Tel: 650.815.7400 Fax: 650.815.7401 Christopher D. Bright MCDERMOTT WILL & EMERY LLP 18191 Von Karman Ave, Ste. 500 Irvine, California 92612 Tel: 949.757.7178 Fax: 949.851.9348 Natalie A. Bennett MCDERMOTT WILL & EMERY LLP 227 West Monroe Chicago, IL 60614 Tel: 312.984.7631 Fax: 312.984.7700 Jennifer Doan Texas Bar No. 08809050 HALTOM & DOAN Crown Executive Center, Suite 100 6500 Summerhill Rd. Texarkana, Texas 75503 Tel: 903.255.1002 Fax: 903.255.0800 ATTORNEYS FOR DEFENDANT YAHOO! INC. 4 CERTIFICATE OF SERVICE This is to certify that all counsel of record who are deemed to have consented to electronic service are being served with a copy of this document via the Court’s CM/ECF system per Local Rule CV-5(a)(3) on this the 29th day of April, 2011. Any other counsel of record will be served by first class mail. /s/ Christopher D. Bright Christopher D. Bright 5

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