ActiveVideo Networks, Inc. v. Verizon Communications, Inc. et al
Filing
984
MEMORANDUM OPINION AND ORDER that Defendants' Motion for Judgment as a Matter of Law of Validity of U.S. Patent No. 6,169,542 and Motion for Judgment as a Matter of Law that U.S. Patent No. 7,561,214 is Not Invalid are both GRANTED. Signed by District Judge Raymond A. Jackson on 8/17/2011 nunc pro tunc 7/29/2011 and filed on 8/17/2011. (rsim)
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Norfolk Division
FILED
AUG 1 7 2011
CLERK, U.S. DISTRICT COURT
NORFOLK. VA
ACTIVEVIDEO NETWORKS, INC.,
Plaintiff,
CIVIL ACTION NO. 2:10cv248
v.
VERIZON COMMUNICATIONS, INC.,
VERIZON SERVICES CORP.,
VERIZON VIRGINIA INC., and
VERIZON SOUTH INC.
Defendants.
MEMORANDUM OPINION AND ORDER
Before the Court are Defendants', Verizon Communications Inc., Verizon Services Corp.,
Verizon Virginia Inc., and Verizon South Inc. (collectively, "Verizon"), Motion for Judgment as
a Matter of Law of Validity of U.S. Patent No. 6,169,542; and Motion for Judgment as a Matter
of Law that U.S. Patent No. 7,561,214 is Not Invalid, both pursuant to Federal Rule of Civil
Procedure 50(a). Having carefully reviewed the Parties' pleadings, the Court ruled from the
bench regarding Defendants' Motions on July 29,2011. The reasons for the Court's rulings are
set forth more fully below. For the reasons stated herein, Defendants' Motion for Judgment as a
Matter of Law of Validity of U.S. Patent No. 6,169,542 and Motion for Judgment as a Matter of
Law that U.S. Patent No. 7,561,214 is Not Invalid are both GRANTED.
I. FACTUAL AND PROCEDURAL HISTORY
On May 27,2010, Plaintiff Active Video Networks, Inc. ("Active Video"), filed suit in the
United States District Court for the Eastern District of Virginia against Verizon alleging patent
infringement and seeking to enjoin Verizon from infringing certain patents that ActiveVideo
owns and to recover monetary damages for previous infringement. On December 2, 2010,
Verizon filed an Answer to ActiveVideo's First Amended Complaint and First Amended
Counterclaims against ActiveVideo, seeking, inter alia, declaratory judgments of noninfringement and invalidity of ActiveVideo's asserted patents and alleging ActiveVideo's
infringement of several patents owned by Verizon. In response, ActiveVideo filed an Answer to
Defendant's First Amended Counterclaims and ActiveVideo's First Amended Counterclaims on
December 16,2010 alleging invalidity and non-infringement of the patents that Verizon asserted
against it.
On July 12,2011, a jury trial was held in the United States District Court for the Eastern
District of Virginia on ActiveVideo and Verizon's claims of infringement and invalidity. During
the trial, ActiveVideo asserted infringement of four of its patents: United States Patent Nos.
5,550,578 (the '"578 patent"), 6,100,883 (the '"883 patent"), 6,034,678 (the '"678 patent"), and
6,205,582 (the '"582 patent"). Similarly, Verizon asserted infringement of two of its patents:
United States Patent Nos. 6,169,542 (the '"542 patent") and 7,561,214 (the '"214 patent").
Specifically, Verizon asserted ActiveVideo's infringement of Claim 1 of the '542 patent and
Claim 9 of the '214 patent. During the course of the trial, ActiveVideo presented evidence,
through the expert testimony of Dr. Diana Hawkins Manuelian, that each of the asserted claims
of Verizon's patents were anticipated by prior art. On July 29,2011, at the close of all the
evidence pertaining to its counterclaims, Verizon filed the instant Motion for Judgment as a
Matter of Law of Validity of U.S. Patent No. 6,169,542 and Motion for Judgment as a Matter of
Law that U.S. Patent No. 7,561,214 is Not Invalid. On July 29, 2011, after thoroughly
consideration, the Court granted both of Verizon's Motions.
II. LEGAL STANDARDS
A.
Judgment as a Matter of Law
A district court may grant a motion for judgment as a matter of law if the nonmoving
party has been fully heard on an issue and the court finds that a reasonable jury would not have a
legally sufficient evidentiary basis to find for the party on that issue. See Fed. R. Civ. P. 50(a);
see also Wheatley v. Wicomico Cnty., Md, 390 F.3d 328,332 (4th Cir. 2004) ("Such a motion
[for judgment as a matter of law] is properly granted 'if the nonmoving party failed to make a
showing on an essential element of his case with respect to which he had the burden of proof.'"
(quoting Singer v. Dungan, 45 F.3d 823, 827 (4th Cir. 1995))). In considering a motion for
judgment as a matter of law, the court must "view the evidence in the light most favorable to ...
the nonmovant, and draw all reasonable inferences in his favor without weighing the evidence or
the witnesses' credibility." Baynardv. Malone, 268 F.3d 228,234-35 (4th Cir. 2001). However,
"[t]he party bearing the burden of proof must produce genuine evidence that creates a fair doubt;
'wholly speculative assertions will not suffice.'" Bongam v. Action Toyota, Inc., 14 Fed. App'x
275,280 (4th Cir. 2001) (citation omitted); see also Price v. City of Charlotte, N.C., 93 F.3d
1241,1249 (4th Cir. 1996) ("The movant is entitled to judgment as a matter of law 'if the
nonmoving party failed to make a showing on an essential element of his case with respect to
which he had the burden of proof.'" (citation omitted)).
B.
Anticipation
An accused infringer challenging the validity of a patent claim must prove anticipation by
clear and convincing evidence. See Eli Lilly & Co. v. Barr Labs., Inc., 251 F.3d 955, 962 (Fed.
Cir. 2001). An invention is anticipated under 35 U.S.C. § 102 where, inter alia, it was "known
or used by others in this country, or patented or described in a printed publication in this or a
foreign country, before the invention thereof by the applicant for patent," § 102(a), or it was
described in "an application for patent, published under section 122 (b), by another filed in the
United States before the invention by the applicant for patent" or "a patent granted on an
application for patent by another filed in the United States before the invention by the applicant
for patent," § 102(e). However, "[t]o be anticipating, a prior art reference must disclose 'each
and every limitation of the claimed inventionf,]... must be enabling[,] and [must] describe ...
[the] claimed invention sufficiently to have placed it in possession of a person of ordinary skill in
the field of the invention.'" HelifixLtd. v. Blok-Lok, Ltd, 208 F.3d 1339, 1346 (Fed. Cir. 2000)
(internal citations omitted).
III. DISCUSSION
In Verizon's Motion for Judgment as a Matter of Law of Validity of U.S. Patent No.
6,169,542 and Motion for Judgment as a Matter of Law that U.S. Patent No. 7,561,214 is Not
Invalid , Verizon argues that ActiveVideo failed to prove by clear and convincing evidence that
the asserted claims of Verizon's patents are invalid. Specifically, Verizon argues that
ActiveVideo's invalidity expert, Dr. Manuelian, failed to establish the presence of each and every
element of the asserted claims in the prior art references as required to prove anticipation, and
failed to demonstrate that a certain reference relied upon in her anticipation analysis of the '542
patent actually constitutes prior art. The Court addresses the sufficiency of Dr. Manuelian's
invalidity analysis with respect to each of Verizon's asserted claims in turn.
A.
Anticipation of Claim 1 of the '542 patent
In her anticipation analysis of Claim 1 of the '542 patent, Dr. Manuelian considered two
separate prior art references. First she considered a 1991 or 1992 embedded Covergirl
advertisement (the "Covergirl ad") originally produced by Dr. Manuelian as a demonstration of
ICTV, Inc.'s ("ICTV"), Active Video's predecessor, technology. Second, Dr. Manuelian
considered U.S. Patent No. 5,319,455 (the '"455 Patent") entitled "System for distributing
customized commercials to television viewers," which was filed on December 23, 1992. In
considering Dr. Manuelian's analysis of the Covergirl ad, Verizon argues that the Covergirl ad
should not be considered prior art for two reasons. First, Verizon contends that the Covergirl ad
was merely a demonstration produced for promotional purposes rather than a video created by
ICTV's operational system. Second, Verizon argues that the Covergirl ad was not sufficiently
available to the public because it bears a confidentiality legend stating "Copy or Public Display
Strictly Prohibited." The Court addresses each of Verizon's arguments with respect to the status
of the Covergirl ad as prior art in turn.
Under 35 U.S.C. § 102(a), a person is not entitled to a patent where "the invention was
known or used by others in this country... before the invention thereof by the applicant for
patent." The requirement that an invention be "known" by others does not require that the
invention actually be reduced to practice in order to constitute prior art, so long as the knowledge
satisfies the requirements of disclosure and enablement. See Ecolochem, Inc. v. S. Cal Edison
Co., 227 F.3d 1361,1369 (Fed. Cir. 2000) ("A presentation indicative of the state of knowledge
and use in this country therefore qualifies as prior art for anticipation purposes under § 102.");
see also Application o/Borst, 345 F.2d 851, 855 (C.C.P.A. 1965) ("[T]he criterion should be
whether the disclosure is sufficient to enable one skilled in the art to reduce the disclosed
invention to practice. In other words, the disclosure must be such as will give possession of the
invention to the person of ordinary skill. Even the act of publication or the fiction of constructive
reduction to practice will not suffice if the disclosure does not meet this standard.").
Accordingly, the Court rejects Verizon's argument that because the Covergirl ad was a
demonstration rather than an actual embodiment of the invention, it cannot constitute prior art
under § 102(a).
However, the Federal Circuit has instructed that such prior knowledge or use must be
public in order to satisfy the requirements of the statute. See Woodland Trust v. Flowertree
Nursery, Inc., 148 F.3d 1368, 1370 (Fed. Cir. 1998) ("[I]n order to invalidate a patent based on
prior knowledge or use, that knowledge or use must have been available to the public"). Dr.
Manuelian testified that she showed the Covergirl ad at many conferences. See Trial Tr. 2644,
July 28,2011. The Court finds that Dr. Manuelian's testimony that the advertisement was shown
at conferences and used as a promotional device, corroborated by the demonstration video itself,
which was copyrighted in 1992, is sufficient to at least create a factual issue as to whether the
alleged knowledge or use of the invention was public. See, e.g., Ormco Corp. v. Align Tech.,
Inc., 463 F.3d 1299, 1305 (Fed. Cir. 2006) (holding that where the alleged prior inventor
promoted his system through seminars and clinics and distributed his instruction sheet at those
clinics, the prior "knowledge or use" was sufficiently public to constitute prior art).
Having concluded that ActiveVideo submitted sufficient evidence that the Covergirl ad
constitutes prior art, the Court now turns to the issue of whether Dr. Manuelian demonstrated that
the Covergirl ad satisfies the disclosure and enablement requirements for anticipation. See Iovate
Health Scis., Inc. v. Bio-Engineered Supplements & Nutrition, Inc., 586 F.3d 1376, 1380 (Fed.
Cir. 2009) ("To be anticipatory, the ad must also describe, either expressly or inherently, each
and every claim limitation and enable one of skill in the art to practice an embodiment of the
claimed invention without undue experimentation."). Reviewing the record, the Court finds that
Dr. Manuelian sufficiently described how each and every element of Claim 1 of the '542 Patent
was disclosed in the Covergirl ad. See Trial Tr. 2648-51, July 28,2011. However, Dr.
Manuelian provided no opinion as to whether the Covergirl ad would enable one skilled in the art
to practice the invention. See Borst, 345 F.2d at 855 ("The mere fact that a disclosure is
contained in a patent or application and thus 'constructively' reduced to practice, or that it is
found in a printed publication, does not make the disclosure itself any more meaningful to those
skilled in the art (and thus, ultimately, to the public). Rather, the criterion should be whether the
disclosure is sufficient to enable one skilled in the art to reduce the disclosed invention to
practice
Even the act of publication or the fiction of constructive reduction to practice will
not suffice if the disclosure does not meet this standard.").
ActiveVideo stipulated that one of ordinary skill in the art as it pertains to the '542 Patent
is "someone who has at least an undergraduate degree in electrical engineering, computer
science, or a similar discipline, and has at least three years experience in the field of interactive
video distribution networks or systems, including a familiarity with delivering advertising
through an interactive video distribution system." Trial Tr. 2623, July 28,2011. Dr. Manuelian
admittedly did not possess a degree in electrical engineering, computer science, or similar
technical discipline, but rather was an expert in the field of user interfaces. Therefore, she did not
(and could not) opine as to whether one of ordinary skill in the art would have been able to
combine the Covergirl ad with his or her own knowledge of the art and practice the invention.
See In re Graves, 69 F.3d 1147, 1152 (Fed. Cir. 1995); see also Schumer v. Lab. Computer Sys.,
Inc., 308 F.3d 1304,1315-16 (Fed. Cir. 2002) ("Typically, testimony concerning anticipation
must be testimony from one skilled in the art and must identify each claim element, state the
witnesses' interpretation of the claim element, and explain in detail how each claim element is
disclosed in the prior art reference."). Specifically, Dr. Manuelian did not provide an opinion on
whether one of ordinary skill in the art would have known how the advertisements would be
transmitted through the video distribution system, i.e. through the head end facility as required by
the claim, which is knowledge necessary to enable one to practice the invention. Further,
ActiveVideo provided no additional evidence or testimony as to whether the Covergirl ad would
enable one of skill in the art to practice the invention. Therefore, the Court finds that
ActiveVideo has not presented sufficient evidence from which a reasonable jury could conclude
that the Covergirl ad would enable one of skill in the art to practice Claim 1 of the '542 Patent.
In addition to considering the Covergirl ad, Dr. Manuelian also concluded that Claim 1 of
the '542 Patent is anticipated by the '455 Patent. Verizon contends that the '455 Patent fails to
disclose the elements of "receiving, at said head end facility over a return path, a request to
register said advertisement in a menu" and "obtaining, at said head end facility over said return
path, a selection request for said entry," but instead describes receiving requests at the node only.
During her analysis of Claim 1 of the '542 Patent, Dr. Manuelian offered an opinion that the step
of "receiving, at said head end facility over a return path, a request to register said advertisement
in a menu" is fully disclosed in the '455 Patent. See Trial Tr. 2657, July 28,2011. However,
upon close review of the '455 Patent, it is clear that the system described in the '455 requires
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processing and storage of the video information and data in the nodes rather than at the head end
facility. Specifically, the '455 Patent describes how the home interface controller passes the
user's request to receive an advertisement to the node and not to the head end facility. Although
the '455 Patent states that the nodes may be located "at a central location, such as a headend," the
nodes are separate and apart from the head end facility. See, e.g.,ActiveVideo Networks, Inc. V.
Verizon Commons Inc., No. 2:10cv248,2011 WL 3251499, at *19 (E.D. Va. Apr. 7,2011)
(construing the term "node" to mean "equipment in a cable distribution network that facilitates
communication between the headend and a group of home interface controllers").
Similarly, Dr. Manuelian failed to point to anything within the '455 Patent to demonstrate
disclosure of the step of "obtaining, at said head end facility over said return path, a selection
request for said entry," as she failed to show that the request for the entry is received at the head
end facility rather than at the node. See Trial Tr. 2658, July 28,2011.
Accordingly, because Dr.
Manuelian failed to demonstrate that the various requests described in the '542 Patent are
received at the head end facility, rather than at the node, in the '455 Patent, the Court finds that
she failed to demonstrate that each and every element of Claim 1 of the '542 Patent is disclosed
in the '455 Patent. Thus, ActiveVideo has not presented sufficient evidence from which a
reasonable jury could conclude that Claim 1 of the '542 Patent is anticipated by either the
Covergirl ad or the '455 Patent.
B.
Anticipation of Claim 9 of the '214 patent
In addition to analyzing Claim 1 of the '542 Patent, Dr. Manuelian also provided
anticipation analysis for Claim 9 of the '214 Patent. During her analysis of Claim 9 of the '214
patent, Dr. Manuelian considered a single prior art reference, European Patent Application No.
0721253 (the "EP 253 Application"), which was published on October 7,1996, and concluded
that the EP 253 Application disclosed each and every element of Claim 9 of the '214 patent.
Verizon argues that Dr. Manuelian's analysis is flawed because she is not a person of ordinary
skill in the art and she failed to demonstrate that several elements of Claim 9 were present in the
EP 253 Application by clear and convincing evidence. The Court finds that Dr. Manuelian failed
to show by clear and convincing evidence that each and every element of Claim 9 of the '214
patent is disclosed in the EP 253 Application.
In particular, Dr. Manuelian failed to show by clear and convincing evidence that the EP
253 Application discloses the element of "including with the first indication a second indication,
wherein the second indication is included when there is at least one multiplex channel associated
with the first anchor channel." Relying on an example from the EP 253 Application, Dr.
Manuelian opined that the "ESPN" logo constituted the "first indication" corresponding to the
anchor channel, while the "ESPN2" logo was the "second indication" corresponding to the
multiplex channel associated with the anchor channel. See Trial Tr. 2679-80, July 28,2011.
However, although the ESPN and ESPN2 channels may happen to originate from a common
broadcast provider, see ActiveVideo Networks, 2011 WL 3251499, at *27 (requiring that the
multiplex channel originate from a common broadcast provider as the first anchor channel), Dr.
Manuelian provided no explanation for how a user would be able to ascertain that any given
channel located to the right of another channel in the station index originated from a common
broadcast provider. Indeed Figure 14A of the EP 253 Application lists channels side by side
(such as "TNT" and "E!") that do not meet the definition of an anchor channel and multiplex
channel because they do not originate from a common broadcast provider. Thus, the "second
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indication," as highlighted by Dr. Manuelian, would be provided even where there are no
mulitplex channels associated with the first anchor channel, which is in contravention of the
language of Claim 9.
Furthermore, Dr. Manuelian fails to identify how the EP 253 Application discloses a
"first command" for selecting multiplex channels, versus a "second command" for selecting
anchor channels. Although Dr. Manuelian demonstrated the selection of the second anchor
channel by highlighting, on Figure 14A of the EP 253 Application, how the user could scroll
vertically from ESPN2 to the Disney channel below it in the station index, the user could just as
easily scroll to the right of ESPN2 to select the listed DirectTV channel, which is not a multiplex
channel of ESPN. Dr. Manuelian's opinion that the EP 253 Application allows for navigation
two different ways, is not sufficient to show that navigation to the anchor channels must be
different in form from navigation between corresponding multiplex channels. See Trial Tr. 268384, July 28,2011. Thus, the Court finds that Dr. Manuelian failed to demonstrate this element of
Claim 9 of the '214 patent by clear and convincing evidence. Because ActiveVideo failed to
demonstrate that each and every element of Claim 9 of the '214 patent is disclosed in the EP 253
Application, the Court declines to submit the issue of invalidity of Claim 9 to the jury.
IV. CONCLUSION
The Court finds that ActiveVideo has not presented sufficient evidence to sustain its
claims of invalidity on any of Verizon's asserted claims. Accordingly, the Court declines to
tender the issue of invalidity of Verizon's asserted claims to the jury. For the foregoing reasons,
Defendants' Motion for Judgment as a Matter of Law of Validity of U.S. Patent No. 6,169,542
and Motion for Judgment as a Matter of Law that U.S. Patent No. 7,561,214 is Not Invalid are
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both GRANTED.
The Court DIRECTS the Clerk to send a copy of this Memorandum Opinion and Order
to counsel and parties of record.
IT IS SO ORDERED.
Raymond A. Jackson
United States District Judge
Norfolk, Virginia
AugustfT, 2011
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