Netscape Communications Corp., v. Valueclick, Inc. et al

Filing 327

MEMORANDUM OPINION re 312 MOTION for Reconsideration. Signed by District Judge T. S. Ellis, III on 4/2/2010. (tche)

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA
Alexandria Division

I

L

APR - 2 2010
CLERK, U.S. DISTRICT COURT ALEXANDRIA. VIRGINIA

NETSCAPE COMMUNICATIONS CORP., )
Plaintiff,
v.

)
)

No. l:09cv225

VALUECLICK, INC., et al.,

)

)

Defendants.

)
MEMORANDUM OPINION

In this patent infringement suit, plaintiff claims that defendants1 wilfully infringed, and
continue to infringe, U.S. Patent No. 5,774,670 ("the '670 patent"), colloquially known as the "Internet cookies" patent. Following full briefing and argument, the disputed patent claim terms

were construed pursuant to Markman v. Westview Instruments, Inc., 517 U.S. 370 (1996). See
Netscape Commc'ns Corp. v. ValueClick, Inc. (Netscape I), -- F. Supp. 2d --, l:09cv225 (E.D. Va. Oct. 22, 2009) (Mem. Op.). The parties thereafter filed various cross-motions for summary judgment, which motions were partially resolved in a Memorandum Opinion dated January 29, 2010. See Netscape Commc'ns Corp. v. ValueClick, Inc. (Netscape II), -- F. Supp. 2d --,

l:09cv225 (E.D. Va. Jan. 29,2010) (Mem. Op.) (hereinafter "the Memorandum Opinion").2 At

1 The six named defendants are ValueClick, Inc., Mediaplex, Inc., FastClick, Inc.,
Commission Junction, Inc., MeziMedia, Inc., and Web Clients, L.L.C., (collectively
"defendants").

2 Specifically, the parties filed various motions and cross-motions for summary judgment
as to the following issues: (i) infringement and willful infringement; (ii) invalidity defenses pursuant to 35 U.S.C. §§ 102 and 112; (iii) equitable defenses of waiver, laches, and equitable estoppel; and (iv) preemption of defendants' state law counterclaims. These issues were resolved with the exception of plaintiff s motion concerning defendants' prior art invalidity defense,
which was deferred pending further briefing.
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issue here is plaintiffs motion for reconsideration with respect to the entry of summary judgment in favor of defendants on a single issue, namely that claim 1 of the '670 patent is invalid under
the statutory on-sale bar pursuant to 35 U.S.C. § 102(b).
I.

Under the Supreme Court's seminal decision in Pfaffv. Wells Electronics, Inc., 525 U.S.

55 (1998), a party invoking the § 102(b) statutory on-sale bar must prove (i) a commercial offer
for sale of an invention that is (ii) ready for patenting prior to the statutory one-year period, i.e.,

the "critical date." The first P/q^requirement is further separated into two distinct, constituent
elements: (i) a commercial offer for sale, and (ii) a sufficient degree of identity between the

subject of the offer for sale and the patented invention. See Allen Eng g Corp. v. Bartell Indus., Inc., 299 F.3d 1336, 1353 (Fed. Cir. 2002). Importantly, both prongs of the Pfafflest must be proven by clear and convincing evidence. Clock Spring, L.P. v. Wrapmaster, Inc., 560 F.3d
1317, 1325 (Fed. Cir. 2009).

After considering the parties' pleadings, memoranda and exhibits submitted in support of
their various motions for summary judgment, and the representations made by counsel in the

course of the September 25,2009 and December 18,2009 hearings, the Memorandum Opinion found certain facts to be undisputed and material with respect to the on-sale bar analysis. See Netscape II, -- F. Supp. 2d --, 1:09cv225, at 5-9. Based on these factual findings, the

Memorandum Opinion then found, by clear and convincing evidence, that claim 1 of the '670

patent was invalid under the § 102(b) on-sale bar because: (i) plaintiff had made a commercial
offer to MCI Communications Corp. ("MCI") in September 1994; (ii) the subject of the offer was

sufficiently identical to the method disclosed in claim 1; and (iii) the method disclosed in claim 1

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was "ready for patenting" prior to October 6, 1994. Id. at 10-28.
In its motion for reconsideration, plaintiff argues that there was insufficient evidence of

identity between the method disclosed in claim 1 and the subject of the offer to MCI, but does
not challenge the fact of a commercial offer. Moreover, plaintiff contends that the invention was
not "ready for patenting" prior to October 6, 1994. Notably, in moving for reconsideration

plaintiff relies on some arguments rejected in the Memorandum Opinion, and additionally makes
new arguments not raised in the earlier summary judgment briefs, including chiefly the

application of the evidentiary corroboration requirement.3 The parties fully briefed and argued
the issues at a March 26, 2010 hearing, at which time the motion was taken under advisement.
Accordingly, the matter is ripe for disposition.
II.

At the threshold, the parties challenge the proper standard of review applicable to

plaintiffs motion for reconsideration. Plaintiff moves for reconsideration under Rules 54(b), 59(e), and 60(b)(6), Fed. R. Civ. P. Motions for reconsideration pursuant to Rules 59(e) and

60(b)(6) are considered to be requests for an "extraordinary remedy" reserved only for
"extraordinary circumstances" in which: (i) there is an intervening change in the law; (ii) new evidence not available at trial has been discovered; or (iii) a clear error of law must be corrected in order to prevent manifest injustice. See Pac. Ins. Co. v. Am. Nat 7 Fire Ins. Co., 148 F.3d 396,

arguments that plaintiff argued in its original summary judgment briefs and now reargues in support of its motion for reconsideration. Defs.' Recons. Opp'n Br. Ex. A. Although defendants contend that all of plaintiff s current arguments were previously raised, this contention is inaccurate; it is clear that plaintiff raises new arguments and Federal Circuit authority not raised in its previous summary judgment briefs.
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3 It is worth noting that defendants attach to their opposition brief a table identifying

403 (4th Cir. 1998) (setting standards for motion pursuant to Rule 59(e)); Dowell v. Stale Farm

Fire & Cas. Auto. Ins. Co., 993 F.2d 46,48 (4th Cir. 1993) (limiting relief under Rule 60(b)(6) to

"extraordinary circumstances"). By contrast, a motion for reconsideration filed under Rule 54(b),

Fed. R. Civ. P.,4 does not require a showing of extraordinary circumstances.
The Fourth Circuit has made clear that where, as here, the entry of partial summary

judgment fails to resolve all claims in a suit, Rule 54(d)--not Rule 59(e) or 60(b)--governs a

motion for reconsideration:

[A]n order of partial summary judgment is interlocutory in nature. See, e.g., 11
Moore's Federal Practice § 56.40[3] (Matthew Bender 3d ed.) ("A partial summary judgment order is interlocutory...."). Motions for reconsideration of interlocutory orders are not subject to the strict standards applicable to motions for

reconsideration of a final judgment. See 12 Moore's Federal Practice § 60.23 ("Rule 60(b) does not govern relief from interlocutory orders ").
Am. Canoe Ass'n v. Murphy Farms, Inc., 326 F.3d 505, 514-15 (4th Cir. 2003). And while

doctrines such as law of the case guide a district court's discretion to reconsider an earlier partial summary judgment ruling, it is clear that "[t]he ultimate responsibility of the federal courts, at all
levels, is to reach the correct judgment under law." Id.

Accordingly, the motion at bar is properly brought only pursuant to Rule 54(d), Fed. R.

Civ. P., and therefore plaintiff is not required to make a showing of extraordinary circumstances.
Instead, the goal here "is to reach the correct judgment under law." Id.

4 The Rule states, in pertinent part, that
any order or other decision ... that adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties does not end the action as to any of the claims or parties and may be revised at any time before the entry of a

judgment adjudicating all the claims and all the parties' rights and liabilities.
Rule 54(d), Fed. R. Civ. P.
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III.

Plaintiff first argues that the summary judgment record does not support a finding, based

on clear and convincing undisputed evidence, that there is sufficient identity between the subject of the MCI offer for sale and claim 1 of the '670 patent. The Memorandum Opinion determined that the record evidence, considered as a whole, satisfied the clear and convincing standard
because "the ultimate factfinder [would have] an abiding conviction that the truth of [the

claimants'] factual contentions are highly probable." Pfizer, Inc. v. Apotex, Inc., 480 F.3d 1348,
1360 n.5 (Fed. Cir. 2007) (citations and quotation marks omitted). Here, plaintiff contends: (i) that the Memorandum Opinion did not address whether two Markman claim term

definitions--namely the "said http server" limitation and the sequence of steps disclosed in the claim 1 method--were offered to MCI; (ii) that the Memorandum Opinion incorrectly concluded that the "state object" claim limitation was offered for sale; (iii) that, to the extent testimonial
evidence supports a finding of identity, evidence corroborating this testimony is lacking or

insufficient; and (iv) that the record contains disputed material facts. These arguments are
addressed in turn.
A.

In Netscape I, the claim term "said http server" was construed to mean "the same http

server that received the request from the http client." Netscape I, -- F. Supp. 2d --, 1:09cv225, at 27-30. In addition, it was determined that the steps of the method disclosed in claim 1 should

be construed, as follows: (i) request for a file by the http client; (ii) transfer of the file from the
http server to the http client; (iii) transfer of the state object from the http server to the http client;

and (iv) storage of the state object by the http client. See id at 30-32. These Markman claim

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constructions were based chiefly on the patent's teaching that http servers are passive entities.
See id. at 27, 31 (recognizing that passivity of http server is central to claim construction).

Plaintiff correctly asserts that certain of these Markman claim term definitions were not explicitly
addressed in the Memorandum Opinion. Nonetheless, clear and convincing undisputed record

evidence supports the conclusion that these claim limitations, as defined in the Markman process,
were included in the offer for sale. The dispositive principle here is inherency. The doctrine of inherent anticipation is most commonly invoked with respect to prior art

references, as in the context of a patent examiner's rejection of a patent application on the ground

that the claimed invention was in the prior art,5 or in the context of a claim of invalidity on
grounds that a patented invention was used or described in a printed publication under 35 U.S.C.

§ 102(a)-(b).6 Yet, the Federal Circuit has extended the doctrine of inherent anticipation to the §
102(b) on-sale bar context, explaining that

there is no requirement that the offer [for sale] specifically identify these

limitations. Nor is there a requirement that [the inventor/assignee] must have recognized the significance of these limitations at the time of offer. If the process that was offered for sale inherently possessed each of the claim limitations, then the process was on sale, whether or not the seller recognized that his process
possessed the claimed characteristics.

Scaltech Inc. v. Retec/Tetra, L.L.C., 178 F.3d 1378,1384 (Fed. Cir. 1999) (internal citations
omitted); see also Abbott Labs. v. Geneva Pharms., Inc., 182 F.3d 1315, 1319 (Fed. Cir. 1999).

Although inherency is not proven simply by showing that something was a possible or even a
probable consequence of a given set of circumstances, "if the natural result flowing from the

5 See, e.g., In re Schreiber, 128 F.3d 1473 (Fed. Cir. 1999).

6 See, e.g., Perricone v. Medicis Pharm. Corp., 432 F.3d 1368 (Fed. Cir. 2005); Schering
Corp. v. Geneva Pharms., Inc., 339 F.3d 1373 (Fed. Cir. 2003).
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operation of the process offered for sale would necessarily result in achievement of each of the claim limitations, then [the] claimed invention was offered for sale." Scaltech, 178 F.3d at 1384 (emphasis added). And notably, it is well-established that inherent anticipation is a factual

question. See In re Schreiber, 128 F.3d 1473, 1477 (Fed. Cir. 1999); In re Buspirone Patent &
Antitrust Litig, 185 F. Supp. 2d 340, 360 (S.D.N.Y. 2002).7 As noted, the claim term "said http server," as defined in the Markman process, means "the same http server that received the request from the http client." Netscape I, -- F. Supp. 2d --, 1:09cv225, at 27-30. Although the Memorandum Opinion did not specifically address this

defined claim term, there is no doubt that the cookies-functional Web browser technology sold to MCI in the summer and fall of 1994 required the same http server that received a file request to
be the http server that returned state information in the form of a state object to the requesting http client. This characteristic is not simply an inference born of possibility or probability;

rather, it is the "natural result" that necessarily follows from the fact that http servers are passive
entities. See Scaltech, 178 F.3d at 1384. As stated in the Memorandum Opinion, the testimony

of both Netscape and MCI executives confirms that Netscape sold a Web browser to MCI.8 Both
plaintiffs and defendants' experts agree that the use of a Web browser by an http client to

navigate the Internet necessarily and inherently requires an http client to send a request to an http

7 Importantly, the Federal Circuit no longer requires proof that a person of ordinary skill
in the art at the time would have recognized the inherent disclosure. See Schering Corp. v. Geneva Pharms., Inc., 339 F.3d 1373, 1377 (Fed. Cir. 2003) (explaining that Federal Circuit has vacated its decision in Elan Pharmaceuticals, Inc. v. Mayo Foundation for Medical Education & Research, 304 F.3d 1221 (Fed. Cir. 2002), which required recognition of inherent disclosure).

8 See Defs.' Ex. 4, at 19,96-99, 101 (deposition of Dr. John Klensin of MCI); Defs.' Ex.
5, at 61-62 (deposition of Dr. Vincent Cerf of MCI); Defs.' Ex. 19, at 101-02 (deposition of Marc
Andreessen of Netscape).
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server for a file, and for the http server to respond by transmitting a file which is then assembled

and displayed on the client computer. See PL's Ex. 4 K 28; Defs.' Attach. 5 U 25. Furthermore, it
is undisputed that http servers are passive entities. As the '670 patent itself teaches, the http protocol governs the "architecture of the Web[, which] follows a conventional client-server

model" in which "[the server] accepts commands from the client and cannot request the client to
perform any action." '670 Patent Specification col. 1 11. 60-62 (emphasis added). The parties' experts confirm this fundamental aspect of the http protocol, describing http client and http server interactions within the http protocol as a "request/response exchange," or as operating

within a "request-response paradigm." See PL's Ex. 4 ^ 28; Defs.' Attach. 5 H 25. From this, it
necessarily follows that an http server will send a state object only in response to an http client request because an http server cannot, on its own and without a request, open a connection with an http client and send a state object. Put simply, under the http protocol it would be impossible for an http server to send a state object to an http client unless a request was first received.
Significantly, plaintiff, in arguing for reconsideration, points to no expert testimony or

documentary evidence suggesting that an http server could, without being prompted by an http request, send a state object directly to an http client. And in fact, the record evidence points clearly and convincingly to a contrary conclusion, namely one that is consistent with the inherency of the "said http server" limitation. For instance, Netscape co-founder and vice

president Marc Andreessen testified that the Netscape-MCI discussions focused sharply on

"figuring] out a way to have the server be able to basically leave a piece of information on the
client" in the context of "the server and browser... connecting] for the purpose of loading a page or session or whatever." Defs.' Opp'n Ex. 15, at 101-02 (emphasis added). This testimony

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establishes Andreessen's understanding: (i) that the to-be-written MCI software would operate in

the context of a single http server accepting a request to connect with, and transmit a file to, an
http client; and (ii) that MCI required computer source code directing a single http server "to basically leave a piece of information on the client"--i.e., the state object containing state

information--while the client and server remained connected. Significantly, Andreessen describes this as being the essence of MCI's design requirements; his testimony does not disclose the presence or participation of a second http server that does not receive a request from the http
client. Accordingly, the inherency of the "said http server" limitation in the Web browser sold to

MCI is necessarily dictated by the nature of the http environment and confirmed by Andreessen's
undisputed testimony.

The same conclusion obtains with respect to the sequence of steps disclosed in claim 1. Again, no evidence in the record disputes the fact that an http server is a passive entity that responds to an http client's request. Accordingly, the process must begin with a request by an
http client to an http server. This result is the natural and necessary consequence of the operation

of the Web browser sold to MCI. See PL's Ex. 4 ^ 28 (describing "response/request exchange"); Defs.' Attach. 5 T| 25 (describing "response-request paradigm"). It follows that the requested file

and a state object be sent next, prior to the storage of the state object on the client computer. As
Dr. John Klensin of MCI testified in his deposition, "the state information where the user was last in the marketplace needed to be transmittedfrom the server to the client in some way. The client needed to keep it." Defs.' Ex. 4, at 98-99 (emphasis added). As noted in the
Memorandum Opinion, this testimony tracks precisely steps 3 and 4 of claim 1--that is, the

transmission of state information in the form of a state object and the storage of the state

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object--and plaintiff points to no evidence suggesting that a state object might be stored before it

is received by the http client. Indeed, such an argument would be nonsensical. Although Dr.
Klensin states that during the August 10, 1994 meeting the participants did not discuss "in which sequence of the HTTP operations these things would be done, which sequence of the client and

server,"9 the fact that this limitation was not specifically identified during the August 10, 1994 is
immaterial. As the Federal Circuit has explained, "[w]e note that there is no requirement that the
offer specifically identify these limitations" provided that "the process that was offered for sale inherently possessed each of the claim limitations." Scallech, 178 F.3d at 1384. In this case, the

nature of the http protocol--specifically the passive character of servers--necessarily and inherently requires that the Web browser sold to MCI perform the steps of the claimed process in
the order as construed in Netscape I.

In sum, the undisputed summary judgment record establishes that, in September 1994,

Netscape sold a cookies-functional Web browser to MCI before the critical date. Also clear from
the undisputed record is the fact that this Web browser operated within the limitations imposed

by the http protocol, including the fact that http servers are passive entities that interact with an http client only on an http client's request. Therefore, it necessarily follows--and is not simply a

matter of possibility or probability--that the Web browser sold to MCI prior to the critical date
inherently satisfies the "said http server" and the sequence of steps limitations disclosed in claim
1 of the '670 patent.
B.

Next, plaintiff argues that no evidence proves, as the Memorandum Opinion concluded,

Defs.' Ex. 4, at 96.
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that the state object was part of the offer for sale to MCI in August and September 1994. This

argument is wholly unpersuasive. In addition to the fact that state information is inherently
transferred in a structured manner such that it forms a state object--that is, "data having a

predetermined structure that specifies state information"10--ample record evidence demonstrates
that the state object was in fact made part of the Web browser sold to MCI prior to the critical

date.11 This follows inexorably from the fact that the term "cookie" in the http context is
synonymous with the term "state object."12 Andreessen testified at least three times during his
deposition that the cookies invention was used to satisfy MCI requirements.13 This testimony is
corroborated by John Giannandrea, a Netscape senior programmer who later served as the Web

10 As explained in the Memorandum Opinion, "claim 1 neither requires nor specifies that
a particular source code must be used," and "requires only that state information be conveyed in a
structured manner." Because "the storage of state information on a client necessarily and

inherently requires that this data be conveyed in a structured manner," it follows that the August 10, 1994 discussion of state information storage on an http client inherently anticipates claim 1
under Scaltech. Netscape II, -- F. Supp. 2d --, l:09cv225, at 18-19.

" As noted supra, the fact that the state object was not identified during the August 10,
1994 meeting as the solution to statelessness is irrelevant because "there is no requirement that

the offer specifically identify these limitations." Scaltech, 178 F.3d at 1384. More fundamentally, this argument fails because it is undisputed, as discussed in infra, that Netscape ultimately decided to use a state object in creating Web browser technology for MCI.

12 See Defs.' Opp'n Ex. 16, at 120 (Montulli agreeing that the "state object is called a
cookie"); Defs.' Attach. 4^16 (defendant's expert concluding that "[t]he cookie is a short hand

term for state object

"); see also '670 Patent Specification col. 7 11. 13-18 (teaching that, in

one embodiment, a piece of state information "is referred to as a 'cookie'").

13 See, e.g., PL's Ex. 45, at 102 (explaining that Netscape's developing software for
marketplaceMCI "eventually led to the creation of cookies"); Defs.' Opp'n Ex. 15, at 102 (recalling that "cookie" referred to "information that the server could leave on the client" and that

this process would satisfy MCI's design requirement); id. at 140 (agreeing that "the cookie functionality would be included in browsers sold not just to MCI, but to other customers as
well").
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browser division's chief technology officer, and Lou Montulli, the Netscape programmer who

invented the cookies technology and filed the '670 patent application. Specifically, Montulli
confirms that he invented the cookie mechanism in response to MCI's design requirements in the summer of 1994. See Netscape II, -- F. Supp. 2d --, 1:09cv225, at 20-21 (finding clear and

convincing undisputed evidence relating to shopping cart and commerce server project in
summer 1994). Giannandrea's deposition testimony makes clear that the invention and implementation of the cookies technology occurred prior to the critical date, namely during a

series of July and August 1994 meetings in which he and Montulli discussed "the idea that the
Web server would request that the browser send the cookie back to the Web server." Defs.' Ex.
21, at 60.

Added support for this conclusion is found in the Netscape-MCI software licensing agreement, which provides the terms by which Netscape would license "client and server

software ... in connection with such electronic shopping mall and to provide access to and browsing capabilities with respect to the World Wide Web and the Internet generally." Defs.'
Ex. 13, at 1. Contrary to plaintiffs assertion, the document expressly discloses that the Web

browser sold to MCI was capable of performing the claimed method, as it explicitly discusses the

storage of "cookies" on a client computer.14 Although the agreement was executed in February
1995, it nonetheless provides documentary evidence corroborating other testimonial evidence on the state object's sale prior to the critical date. There is no dispute that the agreement relates to

14 See Defs.' Ex. 13 Attach. A at 2 ("Support for multiple (10) Client Cookies to handle
shopping carts/discrete one-time one-line info deliver, etc."); id. Attach. A-1 at 1.18 ("The number of cookies that can be stored in a client needs to be increased ...."); see also id. Attach. A at 3 ("Automatic transparent identification of client.").
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software technology that Netscape and MCI began discussing on August 10, 1994. Indeed,

plaintiff concedes as much when it cites the agreement, albeit inaccurately, in both its summary
judgment and motion for reconsideration briefs as evidence that "MCI's high-level system

requirements with respect to state information was limited to ... state information stor[age] on

the client side,"15 the central design requirement discussed on August 10, 1994.16 Moreover,
Article 6(b)(i) of the agreement indicates: (i) that MCI made a $500,000 prepayment for
"Netscape Software" on September 23, 1994; and (ii) that MCI would pay $2,400,000 either by
January 1, 1995, or on receipt of "Version l.A" of the client and server software. Defs.' Ex. 13,

at 9. This evidence plainly shows that the agreement records, and relates to, events that occurred
prior to its February 1995 execution. Put another way, the agreement memorializes the
Netscape-MCI relationship--which began in August 1994 and led to a $500,000 prepayment in

September 1994--all concerning the development, implementation, and delivery of software

technology that would, as the agreement states, fulfill MCI's "desire[] to develop an electronic

shopping mall."17 Defs.' Ex. 13, at 1. Thus, it is clear from the summary judgment record that a

15 PL's Summ. J. Statement of Disputed Facts U 3; see also PL's Recons. Br. at 14 & n.45.
Specifically, the statement is inaccurate because the agreement explicitly refers to the storage of "cookies"--i.e., a state object--on a client computer, and is not, contrary to plaintiffs contention, limited to the "high-level" requirement of state information storage on a client computer. Indeed, plaintiffs brief in support of summary judgment recognizes that the February 1995 agreement "discuss[es] 'cookies.'" PL's Summ. J. Br. at 18.

16 See Netscape II, -- F. Supp. 2d --, 1:09cv225, at 16-17.

17 As explained in the Memorandum Opinion, clear and convincing evidence establishes
that MCI negotiated with Netscape in the summer of 1994 to develop software for implementation in marketplaceMCI, an online shopping mall. See Netscape H, -- F. Supp. 2d --, l:09cv225, at 5, 20-21 (discussing elements of marketplaceMCI and Montulli's inventing the

cookies technology for a "shopping cart methodology" to be used in an "e-commerce server"). It is worth noting that Michael Mael, an MCI executive involved in the Netscape-MCI discussions,
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Web browser equipped to receive and store a state object, i.e., a "cookie," was sold or offered for
sale to MCI prior to the critical date.

In support of its motion for reconsideration, plaintiff argues that the Web browser sold to
MCI did not necessarily, and thus did not inherently, use the claimed cookies invention. To that end, plaintiff cites Montulli's testimony that "there were other ways of dealing with that problem,

but none of them were terribly elegant." Defs.' Opp'n Ex. 16, at 119. Yet, this statement, when placed in context, does not undermine the conclusion that the state object was inherent to the transfer and storage of state information on a client computer. Although Montulli at one point
asserted that there were other ways of addressing statelessness, the sole alternate solution identified by Montulli in his deposition--namely the http server's sending a unique, recognizable
Web address to the http client--does not require the http client to store state information, and

thus would not have satisfied MCI's specific design requirements. See id. In other words, Montulli's statement casts no doubt on the inherency of a state object because his testimony does

not disclose that there were other ways of storing state information on a client computer. Instead,
he stated that there were other ways of addressing statelessness generally, and identified one such example that did not require storage of state information on a client computer. Thus, the

evidence cited by plaintiff does not demonstrate that the use of a state object was only one of a number of means by which Montulli could have satisfied MCI's specific requirement of storing

testified in his deposition that a dispute between Netscape and the University of Illinois over the use of certain confidential Web browser technology raised substantial concern within MCI in the
fall of 1994. In response, MCI advised Netscape that further payments would not be made until

the dispute was resolved. See Defs.' Ex. 11, at 83. Yet, whether this testimony explains the delay between the September 1994 offer for sale and the execution of the February 1995
agreement is not material.
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state information on a client computer, a requirement distinct from addressing http statelessness

more generally.18 Accordingly, this evidence does not call into question the conclusion that the
state object was part of the offered technology.
C.

The parties spill much ink on whether, and to what degree, evidence supporting a finding

of invalidity must be corroborated by either testimonial or documentary evidence. Thus, it is
appropriate to clarify the corroboration requirement. Confusion concerning the corroboration requirement stems from two arguably

contradictory decisions. First, in Thomson, S.A. v. Quixote Corp., 166 F.3d 1172 (Fed. Cir. 1999), the Federal Circuit affirmed a jury verdict, based on the testimony of two putative nonparty inventors, that the patent was invalid under 35 U.S.C. § 102(g). Distinguishing its decision in Woodland Trust v. Flowertree Nursery, Inc., 148 F.3d 1368 (Fed. Cir. 1998), the Federal Circuit in Thomson held that the corroboration requirement only applied "where the inventor is self-interested in the outcome of the trial and is thereby tempted to 'remember' facts favorable to his or her case." Thomson, 166 F.3d at 1175-76. From this, it followed that corroboration was

18 Even assuming that the state object was not inherent to the storage of state information
on a client computer, plaintiffs argument still fails because it ignores evidence that Netscape and Montulli actually used the cookies technology to satisfy MCI requirements. As the Federal Circuit has explained in the context of an anticipating prior art reference, the doctrine of inherent
anticipation may be asserted in circumstances where "the reference is silent about the asserted inherent characteristic," making it necessary to fill "such a gap ... with recourse to extrinsic

evidence." See Continental Can Co. USA, Inc. v. Monsanto Co., 948 F.2d 1264, 1268 (Fed. Cir.
1991) (emphasis added). In this case, the conclusion that claim 1 was offered for sale prior to the critical date does not rest on inherency alone; rather, direct evidence--namely the deposition testimony of Andreessen, Giannandrea, and Montulli, and the Netscape-MCI software licensing

agreement--intrinsically establishes that the state object, i.e., a "cookie," was offered for sale
prior to the critical date.
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only required when the testifying inventor was asserting a claim of derivation or priority of his

invention and was (i) a named party, (ii) an employee of, or assignor to, a named party, or (iii)
otherwise in a position to gain directly and substantially from the invalidation of the contested
patent claims. Id. at 1176.

Thomson was distinguished--but not expressly overruled--by a subsequent panel decision in Finnigan Corp. v. Int'l Trade Comm'n, 180 F.3d 1353 (Fed. Cir. 1999). In Finnigan, the Federal Circuit stated that testimonial evidence alone rarely satisfies the clear and convincing standard because "it is rare indeed that some physical record ... does not exist." Id. at 1366-67; see also Sandt Tech., Ltd. v. Resco Metal & Plastics Corp., 264 F.3d 1344, 1350-51 (Fed. Cir. 2001) (expressing, in dictum, that testimonial evidence, as contrasted with documentary evidence, "provides the most reliable proof of corroboration). And while the corroboration

requirement was historically applied to prior public use disputes under § 102(a) and (b),
inventorship disputes under § 102(f), and priority disputes under § 102(g), the Federal Circuit saw no reason to apply a different rule to other subsections of § 102. See Finnigan, 180 F.3d at

1367 & n.10.19 Taking aim at Thomson, which essentially applied the corroboration requirement
based on the purported inventor's level of interest and relationship to the case, the Federal Circuit in Finnigan expressly held that "corroboration is required of any witness whose testimony alone is asserted to invalidate a patent, regardless of his or her level of interest." Id. at 1369. This

result was consistent with Thomson, the Federal Circuit explained, principally because Thomson

19 Citing Finnigan, the Federal Circuit in 2003 expressly held that "[c]orroboration is also
required where, as here, the testimony is from an accused infringer concerning the sale (or offer to sell) or public use of an invention more than one year before the filing of a patent." Lacks Indus, v. McKechnie Vehicle Components USA, Inc., 322 F.3d 1335, 1349 (Fed. Cir. 2003).
-16-

(i) addressed the sufficiency, not the necessity, of corroboration, and (ii) involved both
documentary and testimonial evidence.

One district court has noted in discussing Thomson and Finnigan, that "[i]t is not at all

that easy to understand why patent invalidity, of all things, should rank with treason in terms of
the need for special corroboration." Engate, Inc. v. Esquire Deposition Servs., L.L.C., 331 F. Supp. 2d 673, 685 (N.D. 111. 2004). Consequently, courts--including the Federal Circuit--have

applied the corroboration requirement somewhat inconsistently. On the one hand, the Federal

Circuit has affirmed a decision invalidating patents based solely on the testimony of one witness.
See Eisenberg v. Alimed, Inc., 2000 U.S. App. LEXIS 19121 (Fed. Cir. Aug. 8,2000). On the

other hand, the Federal Circuit has emphasized that "a patent cannot be invalidated based on one person's testimony alone without corroborating evidence, particularly documentary evidence."
Adenta GmbHv. OrthoArm, Inc., 501 F.3d 1364, 1371 (Fed. Cir. 2007). Yet, it seems that courts have increasingly concluded that Thomson has been overruled by implication, and therefore the
Finnigan corroboration requirement applies in all circumstances. As one district court has

observed,

We agree with Judge Sachs of the Western District of Missouri who, in deciding a
summary judgment motion, said that even though Thomson has not been

overruled, in light of all the "subsequent decisions [that] have either returned to the rule as it was enunciated before Thomson, see Oney v. Ratliff, 182 F.3d 893, 896-97 (Fed. Cir. 1999), or have distinguished Thomson under circumstances suggesting that its holding may not be viable, see Finnigan, 180 F.3d at 1367-68," the Court's "safest" option is "to operate under the assumption that the corroboration requirement still exists." K&K Jump Start/Chargers, Inc. v. Schumacher Elec. Corp., 82 F. Supp. 2d 1012, 1018 n.7 (W.D. Mo. 2000). One can only hope that the Federal Circuit will resolve the conflict created by its
decisions on this issue.

See Engate, 331 F. Supp. 2d at 685. This observation is persuasive. Until the Federal Circuit

-17-

further clarifies this issue, the safest course, in the circumstances, is to apply the Finnigan
corroboration requirement broadly, including to on-sale bar claims. Despite the confusion concerning when the corroboration requirement applies, the

manner of its application is well-settled. Put another way, the principles that guide a court's evaluation of the sufficiency of corroborating evidence are clear. The seminal decision in this regard is Woodland Trust v. Flowertree Nursery, Inc., 148 F.3d 1368 (Fed. Cir. 1998). In that case, the Federal Circuit endorsed the following factors first identified by its predecessor institution, the U.S. Court of Customs and Patent Appeals, in In re Reuter, 670 F.2d 1015,1021
n.9(C.C.P.A. 1981):

(1)

the relationship between the corroborating witness and the alleged prior
user;

(2)
(3) (4) (5)

the time period between the event and trial;
the interest of the corroborating witness in the subject matter of the suit; contradiction or impeachment of the witness' testimony; the extent and details of the corroborating testimony;

(6)

the witness' familiarity with the subject matter of the patented invention
and the prior use;

(7)

probability that a prior use could occur considering the state of the art at
the time; and

(8)

impact of the invention on the industry, and the commercial value of its
practice.

Woodland Trust, 148 F.3d at 1371 (quoting Price v. Symsek, 988 F.2d 1187, 1195 n.3 (Fed. Cir.
1993)).

These factors are notable in two respects. First, although the witness's interest in the

-18-

litigation is irrelevant to whether the corroboration requirement applies in the first instance under
Finnigan, the witness's interest is relevant to the sufficiency of corroboration. Second, the

Woodland Trust factors expressly contemplate that an inventor's testimony may be corroborated
by other testimony, and thus invalidity may be determined even in the absence of documentary evidence. See TypeRight Keyboard Corp. v. Microsoft Corp., 374 F.3d 1151, 1159 (Fed. Cir. 2004) ("Both physical evidence and oral testimony of a disinterested party can serve to satisfy the corroboration requirement."); see also Engate, 331 F. Supp. 2d at 685-86 (rejecting argument

that "testimonial evidence from multiple witnesses alone is never sufficient to invalidate a
patent"). At bottom, the Woodland Trust factors reflect a "rule of reason" analysis, by which a
"court examines all pertinent evidence"--including circumstantial evidence--"to determine the

credibility of the inventor's story." Brown v. Barbacid, 276 F.3d 1327, 1335 (Fed. Cir. 2002)

(citations and internal quotation marks omitted). And contrary to plaintiffs unsupported
argument that "Federal Circuit authority insists that there still be corroboration for each and

every limitation,"20 the Federal Circuit's predecessor institution, the U.S. Court of Customs and
Patent Appeals, explained in the context of an interference proceeding that "[t]he law does not impose an impossible standard of'independence' on corroborative evidence by requiring that
every point of a reduction to practice be corroborated by evidence having a source totally

independent of the inventor" because "such a standard is the antithesis of the rule of reason."

Knorr v. Pearson, 671 F.2d 1368,1374 (C.C.P.A. 1982).21 Similarly, the Federal Circuit more

20 D1 >

PL's Recons. Br. at 9.

21 The decisions of the Court of Customs and Patent Appeals govern here pursuant to
South Corp. v. United States:

-19-

recently expressed the same view in rejecting a patentee's "attempts to discredit each piece of evidence, one by one, to show that clear and convincing evidence invalidating the patent was

lacking" on a motion for judgment as a matter of law. Adenta, 501 F.3d at 1372. Accordingly, the Federal Circuit's decisions make clear that the corroboration requirement's fundamental aim is to determine whether the "testimony of the witnesses together with the documentary evidence
provide[] a coherent and convincing story." Id. at 1371.

These principles, applied here, compel the conclusion that the summary judgment record

satisfies the Finnigan corroboration requirement under the factors enumerated in Woodland
Trust. The evidence in the summary judgment record pertaining to the identity issue is found in: (i) deposition testimony of Andreessen, Giannandrea, and Montulli of Netscape; (ii) deposition testimony of Drs. Vincent Cerf and Klensin of MCI; (iii) reports by plaintiffs and defendants'

experts; (iv) the Netscape-MCI software licensing agreement; and (v) the draft client-side

cookies source code entered into the Netscape source code repository on October 3 or 4, 1994.22

As a foundation for decision in this and subsequent cases in this court, we deem it fitting, necessary, and proper to adopt an established body of law as precedent.

That body of law represented by the holdings of the Court of Claims and the Court of Customs and Patent Appeals announced before the close of business on September 30,1982 is most applicable to the areas of law within the substantive jurisdiction of this new court. It is also most familiar to members of the bar. Accordingly, that body of law is herewith adopted by this court sitting in bane.
S. Corp. v. United Stales, 690 F.2d 1368,1370 (Fed. Cir. 1982) (in bane); see also 8-21 Chisum on Patents § 21.02 (discussing Federal Circuit's adoption of predecessor courts' holdings).

22 Plaintiff argues that the draft cookies source code cannot serve as corroborating
evidence because defendants have not submitted any expert testimony deciphering the source
code. Yet, the absence of a defendants' expert on this point is immaterial because two of

plaintiffs experts have analyzed the source code. Notably, the conclusion reached by plaintiffs experts is clear and undisputed: computer code pertaining to Web browser cookie functionality existed as of October 3 or 4, 1994. See PL's Ex. 42 IN 22-31 (expert report of Edwin Aoki); PL's
-20-

To begin with, the record evidence establishing identity between the matter sold or offered for sale and claim 1 is largely from plaintiffs executives and programmers, persons who presumably have an interest in defeating defendants' identify claim. Notwithstanding this, their testimony confirms, rather than undermines, the conclusion that claim 1 was offered for sale prior to the

critical date. Most probative are Andreessen's and Montulli's statements, taken together, that clearly and convincingly establish that the invention of cookies technology was a direct result of

MCI's demand for storage of state information on a client computer.23
Moreover, although plaintiff asserted in the course of oral argument that Dr. Klensin is an

"interested party" because he is a retained expert, this fact does not make him an "interested party" as understood by the Federal Circuit. More precisely, Dr. Klensin is neither a named
party, nor an employee of, or assignor to, a named party, nor a person who is otherwise in a

position to gain directly and substantially from the invalidation of the contested patent claims.
See Thomson, 166 F.3d at 1175-76. Yet, even assuming arguendo that Dr. Klensin is an

Ex. 43 ffi| 35-47 (expert report of Judson Valeski).

In this regard, it is also worth noting defendants' argument that the summary judgment record contains other corroborating evidence, namely the alpha version of the software sent to MCI in September 1994. Yet, this evidence does not affect or alter the corroboration analysis because, as noted in the Memorandum Opinion with respect to defendants' public use invalidity defense, "the record evidence does not indicate whether the 'alpha' or 'beta' versions of plaintiffs Web browser sent to [MCI] were cookies-functional." See Netscape II, -- F. Supp. 2d --, 1:09cv225, at 30. Accordingly, this evidence neither confirms nor refutes the other record evidence relating to identity.

23 See PL's Ex. 45, at 102 (Andreessen testifying that the development of software for
MCI "eventually led to the creation of cookies"); Defs.' Opp'n Ex. 15, at 140 (Andreessen
testifying that the "cookie functionality would be included in browsers sold ... to MCI"); Defs.'

Ex. 16, at 114-19 (Montulli recounting that he invented the Web cookie in response to a client demand for a "shopping cart methodology" that would address the "sessionless nature of HTTP" within the context of an "e-commerce server").
-21-

interested party, any concern that Klensin's testimony may be biased in favor of invalidity is

mitigated by the fact that his testimony with respect to claim 1 is consistent with the testimony of plaintiffs witnesses. See Adenta, 501 F.3d at 1372 ("While the court determined that Heiser and Schendell were clearly interested parties, as they were named parties to the suit, their testimony
was corroborated by the testimony of [non-interested parties] Voudouris, Russell, and Tuneberg."). Indeed, Dr. Klensin, Dr. Cerf, and Andreessen recount the same specific sequence

of events that ultimately culminated in the sale of the claim 1 method to MCI: (i) Netscape first proposed that state information be stored on the http server; (ii) MCI rejected this proposal and

required state information to be stored on the client computer; and (iii) Netscape and MCI clearly
understood by the August 10, 1994 meeting's conclusion that state information would be stored

on a client computer.24 These undisputed facts are central to the conclusion that claim 1 was
offered for sale prior to the critical date.

This testimonial evidence is further corroborated by undisputed documentary evidence.

Specifically, the Netscape-MCI software licensing agreement makes clear that MCI purchased
Web browser technology capable of receiving and storing a cookie--a synonym for a state object--and that MCI paid Netscape a $500,000 prepayment for this technology on September

23, 1994.25 See Defs.' Ex. 13, at 9. The draft cookies source code entered into the Netscape

24 See Defs.' Ex. 4, at 19, 96-99, 101 (deposition of Dr. John Klensin of MCI); Defs.' Ex.
5, at 61-62 (deposition of Dr. Vincent Cerf of MCI); Defs.' Ex. 19, at 101-02 (deposition of Marc Andreessen of Netscape).

25 It is worth emphasizing, as discussed supra, that although the agreement was executed
in February 1995, it is clear that the agreement records and memorializes events that occurred prior to the critical date concerning the sale of cookies technology to MCI for implementation in
marketplaceMCI.
-22-

source code repository on October 3 or 4,1994, as interpreted by plaintiffs experts, also

confirms that the cookies technology was being implemented prior to the critical date. See PL's
Ex. 42 ffl| 22-31 (expert report of Edwin Aoki); PL's Ex. 43 ffl| 35-47 (expert report of Judson
Valeski).

In response, plaintiff cites the Federal Circuit's decision in Adenta GmbHv. OrthoArm, Inc. In Adenta, the Federal Circuit held that OrthoArm's motion for judgment as a matter of law

as to invalidity was correctly denied on the ground that the trial record contained ample
corroborating evidence to support the jury's invalidity verdict. See 501 F.3d at 1370-73. Specifically, the Federal Circuit held that the following evidence was sufficient to allow the jury to find public use by clear and convincing evidence: (i) testimony by five witnesses, both
interested and disinterested, that the invention was displayed at a trade show; (ii) a transmitted fax containing drawings of the invention; (iii) a German patent application disclosing an

embodiment of the invention; (iv) a transmitted fax requesting the display of the invention; (v) an
article containing photographs of the invention; and (vi) a letter from Adenta's lawyers

recognizing that the invention had been displayed at the trade show.26 See id. Plaintiff argues
that invalidity can only be proven by clear and convincing evidence where the same quantum of

evidence presented in Adenta exists. Yet, Adenta stands for no such proposition. Although the evidence presented in that case was sufficient to meet the clear and convincing standard, the

26 Notably, Adenta addressed the application of the corroboration requirement on a
motion for judgment as a matter of law following trial on the invalidity defense and the jury's resolution of a factual dispute. Accordingly, the question in Adenta was whether there was sufficient evidence on which a jury could find invalidity clearly and convincingly. See Adenta, 501 F.3d at 1370-73. By contrast, in this case, as discussed infra, the relevant evidence concerning the sale of claim 1 prior to the critical date is consistent and uncontradicted, and thus the issue need not be submitted to a jury because no material factual dispute exists.
-23-

Federal Circuit did not require, and no inference can be drawn, that the same quantum of

evidence is necessary in every case. Put simply, Adenta does not instruct courts to conduct a
checklist-like analysis. Instead, Adenta itself recognizes that the rule of reason analysis under Woodland Trust contemplates a case-by-case weighing of the evidence in the particular circumstances presented, using a multi-factor approach. See id. at 1372 ("OrthoArm attempts to discredit each piece of evidence, one by one, to show that clear and convincing evidence invalidating the patent was lacking. However, the jury considered all the evidence."); accord

Sandt Tech., 264 F.3d at 1350 ("Each corroboration case must be decided on its own facts with a view to deciding whether the evidence as a whole is persuasive." (citation and quotation marks omitted)). In the final analysis, it is only necessary that the "testimony of the witnesses together
with the documentary evidence provide[] a coherent and convincing story." Adenta, 501 F.3d at 1371. In this case there can be no doubt that the consistent testimony of Netscape and MCI executives and programmers, which is further corroborated by documentary evidence, tells a "coherent and convincing story" concerning the sale of claim 1 to MCI prior to the critical date, thereby satisfying the corroboration requirement under the Woodland Trust factors.
D.

Finally with respect to identity, Netscape contends that the summary judgment record
contains only disputed evidence concerning whether the offer of sale to MCI prior to the critical date met the limitations found in claim 1 of the '670 patent. Distilled to its essence, Netscape's argument is that while the storage of state information on an http client was discussed at the
August 10, 1994 meeting, the remaining claim 1 limitations were not identified, and thus claim 1

was not offered for sale prior to October 6, 1994. This argument fails on legal and factual

-24-

grounds.

To begin with, it is well-established, as discussed supra, "that there is no requirement that the offer specifically identify these limitations," provided that "the process that was offered for sale inherently possessed each of the claim limitations." Scaltech, 178 F.3d at 1384. Furthermore, as also discussed supra, clear and convincing record evidence discloses that the

limitations purportedly missing from the offer for sale were in fact inherent to--and in fact made
a part of--the Web browser technology sold to Netscape prior to the critical date.

Plaintiffs cited evidence neither compels a contrary conclusion nor creates a dispute of material fact. Specifically, Dr. Cerf s statement that "sometime after August, several months after August, [Netscape] produced a product that [MCI was] able to validate performed the way

that [MCI] needed it to"27 is irrelevant to the on-sale bar analysis. As the Federal Circuit has
explained, even assuming arguendo that Netscape delivered the product to MCI after October 6, 1994, "[i]t is immaterial that the record shows no delivery... until after the critical date."
Weatherchem Corp. v. J.L Clark, Inc., 163 F.3d 1326, 1333 (Fed. Cir. 1998). Moreover, Dr. Cerf s additional statement that "there is some distance between [the August 10,1994 discussion of storing state information on the client] and the specifics and the

details that are found in the patent"28 does not create a material dispute of fact concerning the
specificity of the Netscape-MCI discussions that precludes entry of summary judgment in favor
of defendants as to claim 1. As explained in the Memorandum Opinion, the parties'

disagreement as to whether specific attributes of the general method disclosed in claim 1, such as

27Pl.'s0pp'nBr.Ex.2,at61-63. 28 PL's Ex. 2, at 136-37.
-25-

name-value pairs or secure encryption, were discussed at the August 10, 1994 meeting is relevant

only to claims 2-8 and 15-26; the parties' disagreement is irrelevant to the general four-step
method disclosed in claim 1. See Netscape II> -- F. Supp. 2d --, 1:09cv225, at 22 (citing disputed evidence and finding that summary judgment cannot be entered in favor of defendants on the other contested patent claims). Nor does Dr. Cerf s statement preclude a finding that

claim 1 was offered for sale prior to the critical date. Indeed, record evidence of events occurring between August 10 and October 6, 1994, proves otherwise. More precisely, the record evidence, taken as a whole, establishes clearly and convincingly that discussions and negotiations between
Netscape and MCI began on August 10, 1994, and continued through the fall of 1994. See id. at

10-14 (detailing negotiations and finding offer for sale as of early September 1994); see also
Defs.' Ex. 5, at 82-83 (Dr. Cerf confirming follow-up meetings with Netscape); Defs.' Ex. 8, at 64 (Netscape vice president James Sha testifying that he had many subsequent meetings with

MCI personnel after August 10, 1994). Evidence of what was offered for sale is not restricted to
the August 10,1994 meeting, as Netscape implicitly argues. Instead, as discussed supra and in the Memorandum Opinion, the undisputed record evidence--which includes deposition

testimony by both Netscape and MCI employees, who participated in the August 10, 1994

meeting and/or thereafter developed the software for MCI--establishes clearly and convincingly: (i) that MCI sought software technology that facilitated storage of state information on a client
computer; (ii) that Netscape sold Web browser technology to MCI capable of storing state

information on a client computer by September 1994; and (iii) that Montulli invented the cookies
technology in the summer of 1994 specifically to satisfy MCI's design requirements, and wrote

-26-

computer source code implementing the invention by October 3 or 4,1994.29
IV.

Plaintiff next argues that the second Pfaff prong was not satisfied, and thus it was error to
conclude that the method disclosed in claim 1 of the '670 patent was "ready for patenting" prior to October 6, 1994, the critical date. Under Pfaff, there are two means of establishing that an

invention is "ready for patenting": (i) by adducing "proof that the invention was reduced to
practice"; and (ii) by adducing "proof that prior to the critical date the inventor had prepared
drawings or other descriptions of the invention that were sufficiently specific to enable a person

skilled in the art to practice the invention." Pfaff, 525 U.S. at 67-68. As noted supra, this prong of the Pfaff test must be established by clear and convincing evidence, meaning that "the ultimate factfinder [must have] an abiding conviction that the truth of [the claimants'] factual contentions
are highly probable." Pfizer, Inc. v. Apotex, Inc., 480 F.3d 1348, 1360 n.5 (Fed. Cir. 2007) (citations and quotation marks omitted).

29 It is worth briefly addressing plaintiffs two additional arguments. First, the fact that
Dr. Klensin's calendar shows that "[Netscape] decides they can support name-value pairs" on
October 10, 1994, is irrelevant to whether claim 1 was offered for sale. Name-value pairs is a

limitation found in claim 2, not in claim 1. Second, plaintiffs citation to Plumtree Software, Inc.
v. Datamize, LLC, 473 F.3d 1152 (Fed. Cir. 2006), is wholly inapposite. Plumtree Software

involved an offer by an inventor to create a kiosk for a trade show. The inventor created the kiosk using a method he later patented. Interpreting Pfaff, the Federal Circuit in Plumtree
Software held that no offer for sale could be made where, unlike here, the inventor agreed to

produce a product, but did not necessarily agree to use the later-patented method to produce the product. See id ("This reference to the software/hardware package is ambiguous as to whether it required MA to provide the kiosk system software or to perform the patented method. Moreover, Plumtree has made no showing that extrinsic evidence would compel an interpretation that MA was bound to perform the patented method."). Thus, the invention at issue in Plumtree Software was a process by which the kiosk was produced. Here, by contrast, there is no claim that MCI required Netscape to use a certain software-writing process to produce the sold product--i.e., the
computer source code--implementing the cookies technology.
-27-

The Memorandum Opinion found by clear and convincing evidence that the cookies

invention was ready for patenting prior to October 6, 1994, under both theories. Specifically, the

fact that Montulli entered draft cookies source code into the Netscape source code repository on
October 3 or 4, 1994, was found to establish, by clear and convincing evidence, that the cookies

invention was reduced to practice prior to the critical date. See Netscape II, -- F. Supp. 2d --,
1:09cv225, at 25-26. Additionally, the record evidence was also found to establish clearly and

convincingly: (i) that Montulli conceived of the invention in July or August 1994; (ii) that
Montulli reviewed the design and software architecture of the cookies invention with John

Giannadrea--Montulli's supervisor and later Netscape's Web browser division's chief technology officer--during a series of design meetings in July and August 1994; and (iii) that Montulli thereafter began to reduce the invention to computer source code, which he began

logging into the Netscape source code repository on October 3 or 4, 1994. Taken together, these
facts supported a finding that, prior to the critical date, Montulli made an enabling disclosure that

would have allowed Giannandrea, a person skilled in the art, to practice the claimed invention
under the Federal Circuit's decision in Robotic Vision Systems v. View Engineering, 249 F.3d 1307,1312 n.2 (Fed. Cir. 2001) (holding that the second Pfaff prong is satisfied despite no

"actual completion of such software ..., provided that there is a disclosure that is sufficiently

specific to enable a person skilled in the art to write the necessary source code to implement the
claimed method").
A.

With respect to the "ready for patenting" Pfaff prong, plaintiff first challenges the

conclusion that the cookies invention was reduced to practice solely because Montulli logged

-28-

draft cookies computer source code into the Netscape source code repository on October 3 or 4,
1994. This challenge succeeds.

Under the Federal Circuit's decision in In re Omeprazole Patent Litigation v. Apotex
Corp., 536 F.3d 1361, 1373 (Fed. Cir. 2008), reduction to practice under § 102(b) must be

established by proof that the inventor: (i) constructed an embodiment or performed a process that met all the invention's limitations; and (ii) determined that the invention would work for its

intended purpose. In some circumstances, "[t]esting is required to demonstrate reduction to practice ... because without such testing there cannot be sufficient certainty that the invention
will work for its intended purpose." Id (citation and quotation marks omitted).

In this case, an embodiment capable of performing the entire process disclosed in claim 1

would require the existence of both client/browser-side computer source code and server-side
computer source code. The client/browser-side source code is necessary to the client computer's storage of the state object, and the server-side source code is necessary to the http server's

creation and transmission of the state object in the first instance. Here, Montulli did not construct an embodiment of the claimed invention by writing draft cookies source code by October 6, 1994, the critical date. Although client/browser-side source code was logged into the Netscape source code repository on October 3 or 4, 1994, it is undisputed that server-side source code was not entered into the Netscape source code repository until October 13, 1994, one week

after the critical date. See PL's Ex. 42 ffi| 22-31 (expert report of Edwin Aoki); PL's Ex. 43 ffl[
35-47 (expert report of Judson Valeski). The fact that a client computer may have been able to
receive and store the state object is, by itself, insufficient to support a conclusion that the draft

browser-side source code constituted an embodiment capable of performing all of the limitations

-29-

disclosed in claim 1 .30
Moreover, even assuming that client-side source code was sufficient because, as

defendants argue, "[the client- and server-side] software components would necessarily have

worked together in a seamless fashion," the record evidence does not establish that the cookies
invention was reduced to practice prior to the critical date for two additional reasons. First,

Giannandrea's testimony that "by definition, all of the browser features are intended to work with

any web server,"31 does not prove that Montulli constructed an embodiment that performed the
process prior to the critical date. Second, no evidence in the summary judgment record addresses
whether the source code as it existed on the critical date, namely October 6, 1994, would have

worked for its intended purpose, or whether further testing may have been required to confirm its
functionality. See In re Omeprazole, 536 F.3d at 1373.

In response, defendants make two related arguments concerning whether completed

server-side source code is required to prove that the cookies invention was ready for patenting under the reduction to practice theory. First, defendants argue that incomplete source code is sufficient to prove reduction to practice provided that the source code enables a person skilled in
the art to practice the invention. This argument fails because it conflates the two separate

30 Given this, it is unnecessary to reach or address plaintiffs argument that defendants are
required to submit expert testimony explaining the content and import of the computer source
code. Nonetheless, it is worth noting that the summary judgment record contains a description of

the source code by plaintiffs experts that makes sufficiently clear that the source code relates to cookie functionality. See PL's Ex. 42 fflj 22-31 (expert report of Edwin Aoki) (analyzing "cookie specific source code" and identifying "mkaccess.c" and "mkhttp.c" files for cookie functionality
relating to Web browsers and http servers); PL's Ex. 43 lfl| 35-47 (expert report of Judson Valeski) (same).

3lDefs.'Ex.21,at70.
-30-

theories identified in Pfaff under which a party may prove that an invention was ready for

patenting. As the Supreme Court explained in Pfaff, the "[ready for patenting] condition may be
satisfied in two ways: [1] by proof of reduction to practice ... or [2] by proof that... the

inventor had prepared drawings or other descriptions of the invention that were sufficiently

specific to enable a person skilled in the art to practice the invention." Pfaff, 525 U.S. at 67-68 (emphasis added). These theories are distinct, and thus even assuming the incomplete source code constituted an enabling disclosure, this fact does not prove that the cookies invention was ready for patenting under the first theory, namely by proof of reduction to practice. Enabling disclosures are relevant only to the second ready for patenting theory. Furthermore, defendants argue that claim 1 does not disclose a particular source code, and therefore the existence of
source code is not necessary to prove reduction to practice.32 Although claim 1 describes a

particular method and not specific software capable of performing the method, proof of reduction
to practice necessarily requires that the process be performed. See In re Omeprazole, 536 F.3d at 1373 (requiring performance of process and determination that invention works for intended

purpose). In this respect, there is no doubt that claim 1 can only be reduced to practice and

performed where, unlike here, source code fully implementing the claimed method is written
prior to the critical date. Cf. Robotic Vision Sys. v. View Eng'g, 112 F.3d 1163, 1166 (Fed. Cir.

1997) ("The patent cannot be held to fail to comply with the best mode requirement for lack of the word 'software,' the use of which was plainly apparent to one skilled in the art. Such a
disclosure was implicit in the specification.").

recognized that "[source code] has something to do with reduction to practice." See Transcript at
19 (Mar. 26, 2010).

32 It is worth noting that in the course of oral argument, defendants' counsel correctly

-31-

Accordingly, plaintiff correctly argues that the summary judgment record does not, on this theory, establish that the cookies invention offered fo