Eolas Technologies Incorporated v. Adobe Systems Incorporated et al

Filing 982

REPLY to Response to Motion re 965 MOTION for Reconsideration re 914 Memorandum & Opinion, EOLAS' MOTION TO RECONSIDER CONSTRUCTION OF "EXECUTABLE APPLICATION" IN MEMORANDUM OPINION AND ORDER (DKT. NO. 914) OR, IN THE ALTERNATIVE, TO CERTIFY THE QUESTION FOR INTERLO MOTION for Reconsideration re 914 Memorandum & Opinion, EOLAS' MOTION TO RECONSIDER CONSTRUCTION OF "EXECUTABLE APPLICATION" IN MEMORANDUM OPINION AND ORDER (DKT. NO. 914) OR, IN THE ALTERNATIVE, TO CERTIFY THE QUESTION FOR INTERLO filed by Eolas Technologies Incorporated. (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

JURY TRIAL

PLAINTIFF EOLAS’ REPLY IN SUPPORT OF ITS MOTION (DKT. NO. 965)
TO RECONSIDER CONSTRUCTION OF “EXECUTABLE APPLICATION” IN
MEMORANDUM OPINION AND ORDER (DKT. NO. 914) OR, IN THE
ALTERNATIVE, TO CERTIFY THE QUESTION FOR INTERLOCUTORY APPEAL

TABLE OF CONTENTS
I.

INTRODUCTION ...............................................................................................................1

II.

ARGUMENT IN REPLY ....................................................................................................2
A.

The Direct Conflict With Controlling Federal Circuit Authority
Justifies This Motion to Reconsider. .......................................................................2

B.

Stare Decisis Compels This Court to Follow the Federal Circuit’s
Construction of the Term “Executable Application.”..............................................2

C.

The Court’s Construction Is Otherwise in Error......................................................4

D.

Alternatively, Interlocutory Appeal of the Stare Decisis Issue Is
Appropriate. .............................................................................................................5

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TABLE OF AUTHORITIES
Page(s)
CASES
Intellical, Inc. v. Phonometrics, Inc.,
952 F.2d 1384 (Fed. Cir. 1992)..................................................................................................2
Markman v. Westview Instr.,
517 U.S. 370 (1996)...............................................................................................................2, 3
Phonometrics, Inc. v. Choice Hotels Int’l, Inc.,
21 Fed. Appx. 910 (Fed. Cir. 2001).......................................................................................2, 3
Phonometrics, Inc. v. Economy Inns of Am.,
349 F.3d 1356 (Fed. Cir. 2003)..................................................................................................2
Phonometrics, Inc. v. N. Telecom,
133 F.3d 1459 (Fed. Cir. 1998)..............................................................................................2, 3
Phonometrics, Inc. v. Westin Hotel Co.,
319 F.3d 1328 (Fed. Cir. 2003)..............................................................................................2, 3
Phonometrics, Inc. v. Westin Hotel Co.,
350 F.3d 1242 (Fed. Cir. 2003)..............................................................................................2, 3
Quantum Corp. v. Tandon Corp.,
940 F.2d 642 (Fed. Cir. 1991)....................................................................................................5

McKool 398504v4

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I.

INTRODUCTION
Defendants offer no response to the fact that this Court’s construction of the term

“executable application” is in direct conflict with the Federal Circuit’s construction of the same
term: it is impossible for the term to mean both “any computer program code” and “a
compiled program that is in native machine code.” Dkt. 965 at 1, 5. Defendants also offer no
response to the fact that Eolas previously argued that this term encompassed “any computer
program code”; that the district court agreed; and that the Federal Circuit affirmed that holding.
Id. at 1, 3-4. Defendants likewise offer no response to the fact that the district court expressly
found that the intrinsic evidence defined this term to include “interpretable … codes.” Id.
Lacking responses to these dispositive points, Defendants focus on the application of
stare decisis to questions of claim construction. According to Defendants, stare decisis does not
attach to the Federal Circuit’s legal determination of the term’s “proper definition” because,
within the line of Phonometrics cases I through VI, “[i]t was [only] in post-Phonometrics II
cases … where the Federal Circuit refused to revisit the prior construction on stare decisis
grounds.” Dkt. 974 at 7. Defendants mislead the Court. The Federal Circuit only applied stare
decisis to its claim constructions in post-Phonometrics II cases because the pre-Phonometrics II
cases were also pre-Markman. That is, they preceded the Supreme Court’s holding that stare
decisis applies to the construction of claim terms. Furthermore, never in any Phonometrics case
did the Federal Circuit revisit the construction of a term previously construed by another panel.
To the contrary, as the Federal Circuit itself explained, Phonometrics I construed the term
“digital display,” Phonometrics II construed the term “substantially instantaneous,” and under
the principles of stare decisis, the construction of those terms was not subject to re-litigation.
In short, Defendants seriously mischaracterize the Phonometrics line of cases, and fail to
point the Court to any authority suggesting that it is free to revisit the construction of a term
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already construed by the Federal Circuit. Indeed, if Defendants were right, then the “proper
definition” of a claim term would change with the facts of each new case. But Defendants are not
right, as that proposition was squarely rejected by the Supreme Court in Markman.
II.

ARGUMENT IN REPLY
A.

The Direct Conflict With Controlling Federal Circuit Authority Justifies
This Motion to Reconsider.

Contrary to Defendants’ suggestion, the direct conflict with controlling Federal Circuit
authority justifies this motion to reconsider. Dkt. 974 at 1-2; Dkt. 965 at 3.
B.

Stare Decisis Compels This Court to Follow the Federal Circuit’s
Construction of the Term “Executable Application.”

Defendants next suggest that, under the Phonometrics line of cases, this Court is free to
revisit the construction of a term already construed by the Federal Circuit. Dkt. 974 at 3-8. But
the Phonometrics line stands for no such proposition.1
As noted above, the district and Federal Circuit decisions in Phonometrics I were both
pre-Markman. They were thus litigated in a world with no Markman hearing; with no phrase-byphrase holding that term “x” means “y”; and with no directive that the construction of claim
terms is subject to stare decisis. The district court decision in Phonometrics II was also a product
of this pre-Markman world, and when the Federal Circuit looked back on these pre-Markman
opinions in Phonometrics II, it asked what “issue preclusive effect” they might have on the
appeal. 133 F.3d at 1464. Enter Markman, where the Supreme Court expressly rejected the
application of “issue preclusion” to questions of claim construction. Markman v. Westview Instr.,

1

The Phonometrics line includes: Intellical, Inc. v. Phonometrics, Inc., 952 F.2d 1384 (Fed. Cir.
1992) (I); Phonometrics, Inc. v. N. Telecom, 133 F.3d 1459 (Fed. Cir. 1998) (II); Phonometrics,
Inc. v. Choice Hotels Int’l, Inc., 21 Fed. Appx. 910 (Fed. Cir. 2001) (unpublished) (III);
Phonometrics, Inc. v. Westin Hotel Co., 319 F.3d 1328, 1330 (Fed. Cir. 2003) (IV);
Phonometrics, Inc. v. Economy Inns of Am., 349 F.3d 1356, 1358-60 (Fed. Cir. 2003) (V); and
Phonometrics, Inc. v. Westin Hotel Co., 350 F.3d 1242, 1243-44 (Fed. Cir. 2003) (VI).
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McKool 398504v4

517 U.S. 370, 391 (1996). The need for real finality and uniformity in this context, the Court
held, required “the application of stare decisis on those questions.” Id. This newly mandated
application of stare decisis was reflected for the first time in Phonometrics III, where the Federal
Circuit explained that:
[u]nder principles of stare decisis, moreover, future panels like the present panel
will follow the claim construction set forth by our court in the two decisions cited
above and, therefore, we would not welcome further appeals seeking to re-litigate
the meaning of that phrase.
21 Fed. Appx. at 912. Phonometrics IV, V, and VI reflected this same application of stare decisis
to the constructions already issued by another Federal Circuit panel. Dkt. 965 at 5. In short,
Defendants mislead the Court when they suggest that the early and later Phonometrics cases
reflect differing applications of stare decisis to issues of claim construction. Dkt. 974 at 4-8.
Only the later Phonometrics cases applied stare decisis; the early cases expressly applied issue
preclusion in this context—an approach now squarely rejected by the Supreme Court, by the
Federal Circuit, and by the substantial district court authority cited in Eolas’ motion, none of
which is addressed by Defendants. Dkt. 965 at 5-8; Dkt. 974 at 4-8.
Defendants further mislead the Court by suggesting that any of the Phonometrics cases
stands for the proposition that courts may revisit the construction of a particular term construed
by a prior panel. To the contrary, the Federal Circuit carefully explained—in decision IV, V and
again in VI—that Phonometrics I construed only the term “digital display”; that Phonometrics II
construed only the term “substantially instantaneous”; and that, under principles of stare decisis,
the construction of these particular terms was not subject to re-litigation. Phonometrics IV, 319
F.3d at 1330; Phonometrics V, 349 F.3d at 1359-1360; Phonometrics VI, 350 F.3d at 1243-44.
Defendants also briefly suggest that reexaminations of the ’906 patent makes stare
decisis inapplicable here. Dkt. 974 at 9. But they cite no authority for this proposition, and they
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point to nothing in the reexaminations that could possibly have overruled the Federal Circuit’s
construction. Id. The tired assertion that some unilateral statement of the examiner has relevance
here has been fully debunked in the prior briefing. Dkt. 537 at 9; Dkt. 581 at 3. Indeed, if a
subsequent panel cannot change the Federal Circuit’s construction even with a considered
decision, it is inconceivable that a PTO examiner could do so with a unilateral statement.
C.

The Court’s Construction Is Otherwise in Error.

Defendants focus their merits-related response on the point that the Court’s construction
of “executable application” improperly gives independent claim 1 a more narrow scope than
dependent claim 2. Dkt. 965 at 9-10; Dkt. 974 at 10-11. Defendants offer an example involving a
“transportation apparatus” and “aircraft,” but then treat that example in a manner that has no
connection to this Court’s analysis, the prosecution history, or the prior decisions at issue. This
Court reasoned that a shift in focus during prosecution from “controllable” to “executable”
reflected an intention to move from a broad application including scripts to a narrow application
excluding them. Dkt. 914 at 8-9. Critically, that conclusion is contradicted by the Illinois district
court’s express holding on this point. Dkt. 965 at 9-10. But in any event, using Defendants’
example, this would be as if the Court found that a shift during prosecution from “aircraft” to
“transportation apparatus” reflected an intention to narrow the claim to exclude aircraft, thus
justifying the construction of “transportation apparatus” as “a machine for transport that excludes
aircraft.” Plainly this would make little sense if the patent included a dependent claim “in which
the transportation apparatus is an aircraft.” It is the same here with respect to “executable
application” and “controllable application.” Id.
Defendants offer no response to Eolas’ explanation that the “compiled program” and
“native machine code” limitations are neither drawn from the specification nor the subject of any
prosecution-history disclaimer. Dkt. 965 at 8-9. Defendants further ignore the specification’s
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teaching that the TYPE element may identify executable applications written in languages such
as postscript.

’906 Patent at 13:5-7 (“[o]ther types are possible such as …

‘application/postscript’.”). And as Adobe explains, PostScript is an interpreted language: “The
PostScript interpreter executes the Postscript language ….” See http://www.adobe.com/
products/postscript/pdfs/PLRM.pdf.2
D.

Alternatively, Interlocutory Appeal of the Stare Decisis Issue Is Appropriate.

In urging the Court to deny interlocutory certification, Defendants assert that the Federal
Circuit discourages such appeals on claim construction and that fact-specific rulings are not wellsuited for certification. Dkt. 974 at 12-13. The issue for interlocutory appeal, however, is not an
“ordinary claim construction issue”, nor a fact specific ruling. Rather, the question is whether the
Court is bound by stare decisis to apply the Federal Circuit’s construction of “executable
application” as a matter of law. Accordingly, Defendants’ suggestion that the Federal Circuit
would need to review the reexamination record is incorrect—nothing in the reexaminations could
overrule the Federal Circuit’s construction. Considering that a subsequent panel cannot change
the Federal Circuit’s construction even with a considered decision, a PTO examiner certainly
cannot not do so with a unilateral statement. Defendants also represent that the stare decisis issue
is not a “controlling” question in this case, citing Quantum Corp. v. Tandon Corp., 940 F.2d 642
(Fed. Cir. 1991). Dkt. 974 at 13-14. Defendants incorrectly imply that to be “controlling,” the
question must decide the lawsuit. Id. In Quantum, the two orders whose certifications were
denied involved “discovery and a refusal to defer the willfulness issue.” 940 F.2d at 644.
Whether stare decisis governs a Markman order certainly presents a legal determination that
would present a “controlling issue of law.”
2

Defendants offer only conclusory responses to Eolas’ other merits-related points. Dkt. 974 at
10-11; Dkt. 965 at 8-10.
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Dated: September 16, 2011.

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]
J.R. Johnson
Texas State Bar No. 24070000
[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]
MCKOOL SMITH, P.C.
300 West Sixth Street, Suite 1700
Austin, Texas 78701
Telephone: [phone]
Telecopier: [phone]
ATTORNEYS FOR PLAINTIFF
EOLAS TECHNOLOGIES INC.

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CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the above and foregoing document has
been served on all counsel of record via the Court’s ECF system on September 16, 2011. Per the
Court’s request, a true and correct copy of the above and foregoing document has also been
delivered to Mr. Michael T. McLemore, the Technical Advisor in this case, via Federal Express.
/s/ Josh Budwin
Josh Budwin

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