Eolas Technologies Incorporated v. Adobe Systems Incorporated et al

Filing 1276

RESPONSE in Opposition re 1273 SEALED MOTION DEFENDANTS SUPPLEMENTAL MOTIONS IN LIMINE REGARDING THE INVALIDITY TRIAL filed by Eolas Technologies Incorporated, The Regents of the University of California. (Attachments: # 1 Text of Proposed Order)(McKool, Mike)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
TYLER DIVISION
Eolas Technologies Incorporated,
Plaintiff,
vs.
Adobe Systems Inc., Amazon.com, Inc.,
Apple Inc., Argosy Publishing, Inc.,
Blockbuster Inc., CDW Corp.,
Citigroup Inc., eBay Inc., Frito-Lay, Inc.,
The Go Daddy Group, Inc., Google Inc.,
J.C. Penney Company, Inc., JPMorgan
Chase & Co., New Frontier Media, Inc.,
Office Depot, Inc., Perot Systems Corp.,
Playboy Enterprises International, Inc.,
Rent-A-Center, Inc., Staples, Inc., Sun
Microsystems Inc., Texas Instruments Inc.,
Yahoo! Inc., and YouTube, LLC
Defendants.

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§ Civil Action No. 6:09-CV-00446-LED
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JURY TRIAL
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PLAINTIFFS THE REGENTS OF THE UNIVERSITY OF CALIFORNIA AND
EOLAS TECHNOLOGIES INCORPORATED’S RESPONSE IN OPPOSITION
TO DEFENDANTS’ SUPPLEMENTAL MOTIONS IN LIMINE REGARDING THE
INVALIDITY TRIAL [DKT. NO. 1273]
Plaintiffs The Regents of the University of California and Eolas Technologies
Incorporated (collectively “Plaintiffs”) file this Response in Opposition to Defendants’
Supplemental Motions in Limine Regarding the Invalidity Trial [Dkt. No. 1273] and in support
thereof would show as follows:
I.

Supplemental Limine No. 1: No presentation in the invalidity-only trial of any
argument, evidence, testimony, or reference to licenses that are the product of
settlements.
For the same reasons set forth in Plaintiffs’ Response in Opposition to Defendants’

Motions in Limine to Defendants’ issue 4 [Dkt. No. 1236], supplemental limine number 1 should

be denied. Granting Defendants’ supplemental limine number 1 would preclude the presentation
of evidence to rebut Defendants’ arguments that the patents-in-suit are obvious, and thus, invalid.
Such licenses demonstrate market acceptance and commercial success, which support a finding
of nonobviousness. See Star Sci., Inc. v. R.J. Reynolds Tobacco Co., 655 F.3d 1364, 1376 (Fed.
Cir. 2011) (holding that “the record contains many secondary considerations that support
nonobviousness,” for example, “as evidenced by Brown & Williamson’s licenses, which cost
millions of dollars, Williams’ invention had achieved considerable market acceptance and
commercial success”); see also Datatreasury Corp. v. Wells Fargo & Co., No. 2:06-CV-72 DF,
2010 U.S. Dist. LEXIS 143587, at *9 (E.D. Tex. Sept. 27, 2010) (holding that “[l]icensing, longfelt need, and copying are all secondary considerations probative of non-obviousness” and
finding that “Plaintiff presented sufficient evidence at trial to support a ‘nexus’ between
Plaintiff’s licensing and the secondary consideration of licensing. In particular, Plaintiff showed
that its licenses covered the patents-in-suit.”).
Contrary to Defendants’ implications, it is not Plaintiffs’ burden to prove the patents-insuit are valid. Rather, Plaintiffs intend to rely upon the licenses to counter Defendants’ assertion
of obviousness. Rule 408’s prohibition on using settlement evidence “to prove or disprove the
validity” of a “disputed claim” speaks to the admissibility of evidence to prove or disprove a
cause of action, not a patent “claim.” FED. R. CIV. P. 408. Defendants are improperly attempting
to shift the burden to Plaintiffs—it is not the Plaintiffs’ burden to prove the patents are valid. See
35 U.S.C. §282; Tokai Corp. v. Easton Enters., 632 F.3d 1358, 1367 (Fed. Cir. 2011).
Defendants’ attempt to preclude Plaintiffs from rebutting Defendants’ claims of obviousness are
improper.

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The fact that any of the licenses Plaintiffs plan to discuss at trial arose out of litigation
does not make them unreliable indicators of non-obviousness. In Datapoint Corp. v. Picturetel
Corp., Judge Fitzwater explained,
[t]he license agreement is relevant to the subject matter of the
pending action. The terms of the agreement relate at least to the
issues of patent validity and damages. Patentees like Datapoint
often use license agreements obtained in settlement of litigation
to show the commercial success and nonobviousness of a
patent.
No. 3:93-CV-2381-D, 1998 U.S. Dist. LEXIS 1145, at *6 (N.D. Tex. Jan. 23, 1998) (emphasis
added) (citing Am. Standard Inc. v. Pfizer Inc., 8 U.S.P.Q.2D (BNA) 2019, 2020-21 (S.D. Ind.
1988) (“Such agreements to license allegedly infringing products can be probative evidence of
these factors relevant to the validity of a patent.”).
Plaintiffs intend to offer into evidence and establish the prima facie proof of the nexus
between the licenses Defendants seek to preclude and the asserted patent claims because the
licenses cover the patents-in-suit—a fact the Defendants do not deny. Brown & Williamson
Tobacco Corp. v. Philip Morris, Inc., 229 F.3d 1120, 1130 (Fed. Cir. 2000) (“[I]f the marketed
product embodies the claimed features, and is coextensive with them, then a nexus is presumed
and the burden shifts to the party asserting obviousness to present evidence to rebut the
presumed nexus.”); Datatreasury Corp., at *9 (E.D. Tex. Sept. 27, 2010) (finding that “Plaintiff
presented sufficient evidence at trial to support a ‘nexus’ between Plaintiff’s licensing and the
secondary consideration of licensing. In particular, Plaintiff showed that its licenses covered the
patents-in-suit.”). The Plaintiffs’ licensing of the patents-in-suit and commercial success of
products that embody the patents must be considered in determining whether the patents-in-suit
are obvious. Geo M. Martin Co. v. Alliance Mach. Sys. Int’l LLC, 618 F.3d 1294, 1304 (Fed.
Cir. 2010) (“Secondary considerations of non-obviousness must be considered when present.”).
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Defendants’ concern of juror confusion is for naught as the licenses Plaintiffs intend to rely upon
to rebut Defendants’ claim that the patents are obvious cover the patents-in-suit, and thus,
sufficiently establish a prima facie nexus to the asserted claims. See Datatreasury Corp. v. Wells
Fargo & Co., at *9 (E.D. Tex. Sept. 27, 2010).1
II.

Supplemental Limine No. 2: No presentation in the invalidity-only trial of any
argument, evidence, testimony, or reference to whether commercial products or
proposed alternatives fall within the scope of the patents-in-suit, including reference
to the Microsoft verdict.
Plaintiffs do not intend to present evidence or argue to the jury in the validity trial that

Defendants’ websites infringe the patents-in-suit. Accordingly, Plaintiffs are not acting contrary
to the Court’s bifurcation Order and Defendants’ concern over the possibility of conflicting jury
findings is for naught.
Rather, Plaintiffs intend to offer relevant evidence of secondary considerations to
establish nonobviousness.

Evidence chronicling the failure of others in the market to

successfully design around the patents-in-suit has been admitted in other cases as it is relevant to
secondary considerations of non-obviousness. Cf. In re Brimondine Patent Litig., 666 F. Supp.
2d 429, 446 (D. Del. 2009); DePuy Spine, Inc. v. Medtronic Sofamor Danek, Inc., 526 F. Supp.
2d 162, 175 (D. Mass. 2007); Elan Corp. PLC v. Andrx Pharms., Inc., 2008 U.S. Dist. LEXIS
94525, *273 (S.D. Fla. Aug. 12, 2008).
For these reasons, Plaintiffs request the Court deny Defendants’ supplemental limine no.
2.
1

Defendants’ reliance on Honeywell Int’l, Inc. v. Nikon Corp., No. 04-1337-JJF, 2009 U.S. Dist.
LEXIS 17115, at *5-8 (D. Del. Mar. 4, 2009) is misplaced. In Honeywell, the Special Master
excluded the licenses as evidence of commercial success under Fed. R. Evid. 403, noting that
Honeywell’s failure to present evidence of a sufficient nexus to the patents-in-suit would lead to
juror confusion. Here, juror confusion will be avoided because the nexus is established because
the licenses only cover the patents-in-suit. See Datatreasury Corp. v. Wells Fargo & Co., at *9
(E.D. Tex. Sept. 27, 2010).
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III.

Supplemental Limine No. 3: No presentation of any argument, evidence, testimony,
or reference to prior litigation that involves any party or counsel currently involved
in this case.
It is Plaintiffs’ understanding that Defendants’ supplemental limine number 3 would

apply equally to Plaintiffs and Defendants. Given this understanding, Plaintiffs agree that,
except for impeachment purposes, the parties should be precluded from presenting any argument,
evidence, testimony, or making reference to prior litigation that involves any party or counsel
currently involved in this case.
Plaintiffs oppose Defendants’ efforts to preclude reference to prior litigation that involves
any party or counsel currently involved in this case, when such reference is being used to
impeach a witness’ testimony with prior inconsistent statements. The Court should, therefore,
deny the portion of Defendants’ supplemental limine number 3 that would preclude Plaintiffs
from referencing prior litigation that involves any party or counsel in the current case for
impeachment purposes.
IV.

CONCLUSION
The foregoing establishes that Defendants’ supplemental limine numbers 1 and 2 should

be denied and supplemental limine number 3 be granted, in part, to preclude the parties from
presenting any argument, evidence, testimony, or making reference to prior litigation that
involves any party or counsel currently involved in this case except for impeachment purposes.

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Dated: January 23, 2012

MCKOOL SMITH, P.C.
/s/ Mike McKool
Mike McKool
Lead Attorney
Texas State Bar No. 13732100
[e-mail]
Douglas Cawley
Texas State Bar No. 04035500
[e-mail]
Holly Engelmann
Texas State Bar No. 24040865
[e-mail]
MCKOOL SMITH, P.C.
300 Crescent Court, Suite 1500
Dallas, Texas 75201
Telephone: [phone]
Telecopier: [phone]
Kevin L. Burgess
Texas State Bar No. 24006927
[e-mail]
Josh W. Budwin
Texas State Bar No. 24050347
[e-mail]
Gretchen K. Curran
Texas State Bar No. 24055979
[e-mail]
Matthew B. Rappaport
Texas State Bar No. 24070472
[e-mail]
J.R. Johnson
Texas State Bar No. 24070000
[e-mail]
MCKOOL SMITH, P.C.
300 West Sixth Street, Suite 1700
Austin, Texas 78701
Telephone: [phone]
Telecopier: [phone]

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Robert M. Parker
Texas State Bar No. 15498000
[e-mail]
Robert Christopher Bunt
Texas Bar No. 00787165
[e-mail]
Andrew T. Gorham
Texas State Bar No. 24012715
[e-mail]
PARKER, BUNT & AINSWORTH, P.C.
100 E. Ferguson, Suite 1114
Tyler, Texas 75702
Telephone: [phone]
Telecopier: [phone]
ATTORNEYS FOR PLAINTIFFS
THE REGENTS OF THE UNIVERSITY
OF CALIFORNIA AND EOLAS
TECHNOLOGIES INCORPORATED

CERTIFICATE OF SERVICE
The undersigned certifies that the foregoing document, attachment, and exhibits were
filed electronically in compliance with Local Rule CV-5(a) and served via email on all counsel
of record on January 23, 2012.

/s/ Lindsay Martin
Lindsay Martin

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