My Weblog

Setting the Record Straight

Dear reader,

I write this post only to address certain false statements and mischaracterizations raised by Netflix and their co-defendants in their recent briefs to the Federal Circuit requesting an en banc consideration of the question of defendant’s entitlement to attorney’s fees in patent cases.  This blog seems like the natural place to put this explanation as it gets a decent amount of traffic from people that I care about anyway.

 As an aside, not to disappoint anyone, but this post is not going to address the merits of the infringement case, or Judge Illston’s decision on the SJ motion, or the many briefings on that topic to the CAFC concerning United States District Court for the Northern District of California in Case No. 09-CV-1.021.  You can stop reading and skip the rest if that is what you were looking for.  Suffice it to say that I have great respect for the federal judiciary trying to process these very complicated cases, and in the end I’m sure they will get it right. 

 I *do* think it is hypocritical for lawyers having no experience in the technology or the industry to be making blanket generalizations about the merits of the case, or the patents, when they should know better, or at least should if they consider themselves competent practitioners in this field.  Perhaps the story below of the real dealings with Netflix will change a few minds.

 On to the Brief!

 The Brief’s Strained Attempt to Get The CAFC To Think Their Jurisprudence is Wrong

 You don’t have to go very far to see that Netflix admits that the Judge got the decision right in rejecting their fee request under the current standard. There is no debate about that, and they make no serious effort to suggest that their case meets the thresholds set out in the relevant cases. 

Instead of course Netflix has to convince the CAFC that they have to change the game entirely so that under the rules they should have won the game.  Not surprisingly their request is supported by the usual cast of corporate characters that likes to whine loudly now whenever an IP decision that goes against their interests. 

 What I do find fascinating is Netflix’s tone and flagrant efforts to try and bully the CAFC into accepting their case en banc with insinuations that the latter has somehow been getting it wrong all these years, simply because a handful of cases from the SCOTUS have disagreed with the CAFC’s numerous opinions over the past few years. The passages on page 65 in particular strike me as both mischaracterizing the CAFC’s decisions and insulting their intelligence.

 After trying to intimidate the CAFC into thinking they’ve got it all wrong, they go on to propose that the CAFC should instead borrow the standard from copyright cases, relying heavily on the SCOTUS decision in Fogerty from 1994.  During this little legal sleight of hand, Netflix doesn’t bother to point out to the Court that prior to 1952 the Copyright Act and Patent Act indeed had the same standard for attorney’s fees, but the latter was specifically amended to require that the Court must find the case “exceptional.” 

 But Netflix doesn’t bother telling the Court that since the Fogerty decision has come down, many of the copyright decisions rely heavily on the fact that the standards are different from patents precisely because the latter has the exceptional requirement.  Then Netflix doesn’t bother either to explain that the “exceptional” requirement in the trademark cases it cites has usually been interpreted to require a finding of culpable conduct on the part of the losing party, “…such as bad faith, fraud, malice, or knowing infringement, before a case qualifies as `exceptional.' “  For an example, check out the Third Circuit’s decision in Ferrero U.S.A., Inc. v. Ozak Trading, Inc., 952 F.2d 44, 48 (3d Cir.1991).

I simply have no doubt that if and ever the CAFC has to consider the issue of “exceptional” here, Netflix’s proof on this point will fail by a wide margin.   More importantly I don’t think it will ever reach that point, as I am very confident they will reverse the underlying SJ determination on infringement.

 The False Statements and Other Mischaracterizations In the Brief Make Certain Netflix Will Never Win After Any “Equitable Inquiry”

 A theme that Netflix likes to repeat throughout their brief is the notion that the Court should have made an inquiry into the equities of the case.  Here is an example:

 This Court's mandatory scheme in its section 285 jurisprudence is fundamentally inconsistent with an equitable inquiry into the fairness of denying fees to a prevailing accused infringer.

I welcome this invitation by Netflix to have an “equitable inquiry” here.  Because Netflix wants to portray itself as the victim and some kind of savior for the public interest, it devotes a lot of space in its briefs casting subtle aspersions on my character or my conduct is more likely to gain them favorable review by the Federal Circuit.  And since they decided to put their dealings with me into the mix as germane to the question of this “equitable inquiry” it is necessary to set the record straight and get a complete picture of these interactions.

 Let’s look at what Netflix states: 

Media Queue's conduct in this lawsuit establishes that the case was objectively reckless. The patentee, a disgruntled Netflix customer, drafted claims to a purported improvement on the admitted prior art Netflix system. His patent explicitly references the existing Netflix service. (See 40032-64 (citing Netflix no fewer than eleven times, e.g., A0045,2:51-60: "Thus, from a fundamental perspective, the Netflix system (and other prior art systems like it) do not permit any significant user interaction, control or monitoring of selections presented in a rental queue").) He then opportunistically used the disclaimer of that subject matter to advance its prosecution. (A2325.) Once he obtained his patent, the patentee then tried to sell his patent to Netflix. When he failed, he sold the patent to Media Queue, a nonpracticing entity created for the single purpose of the present lawsuit.

 A bunch of inflammatory “facts” are stated here for which of course, Netflix provides no citation.  The purpose of these “facts” of course is to try and deceive/bias the CAFC into believing this case was motivated by some hidden desire by me for revenge.

 One of my favorite lines is 

“… the patentee, a disgruntled Netflix customer.”

 Hmmm… this is interesting, since I have kept my paying subscription fairly steadily since 2001/2002, one has to wonder what Netflix considers to be a normal satisfied customer.   

Like a lot of inventors (including Netflix’s own personnel) I saw certain fundamental flaws in the early service – particularly in customer service - that merited improvement.  I was certainly not alone in these observations as one can read from early reviews of the service.  While I’m happy they have improved over time, I don’t think it’s unreasonable to ask for compensation if they happen to use my inventions in the process. 

“He then opportunistically used the disclaimer of that subject matter to advance its prosecution.”

 Since the “subject matter” they say was disclaimed is not actually in the claim language, this argument is DOA.  But the biggie is this one: 

“Once he obtained his patent, the patentee then tried to sell his patent to Netflix. When he failed, he sold the patent to Media Queue, a nonpracticing entity created for the single purpose of the present lawsuit.”

 This is whole bunch of misstatements wrapped into one, and takes some fine parsing to understand, so please pay close attention.  

Beginning at the beginning, Netflix tries to engage in some revisionist history.  The implication is that I simply got a patent and then tried to force them to buy it from me. Nothing could be further from the truth.

The real facts are that in early 2006, before I had any patent whatsoever, a friend of mine familiar with my then dozen plus pending applications on the subject indicated that he knew one of the original founders at Netflix, and that this person might be interested in buying the whole portfolio. After some initial exchanges, we entered into a formal evaluation agreement with Netflix to have further discussions about their purchase of the portfolio. 

While this may seem like a minor point (patent issued versus patent pending), it is in fact rather rare for a large company to evaluate, assess and purchase a portfolio that only consists of pending applications.  To generate any kind of nibble they must be highly interested in the inventions, and this behavior then directly contradicts Netflix’s suggestions now in their materials that they believe(d) this patent is not valid or not worthwhile. 

In late spring Netflix made a 6 figure cash bid for the pending applications to be paid as one lump sum.  What is remarkable is that they made this offer without my ever showing them a single claim chart, or explaining to them how it would read on their technology.  In other words, they had discovered this value all by themselves.   

I turned it down and made a counteroffer through my friend. Some weeks later, they came back with a new bid that was twice their prior offer, but I turned them down again because we were still too far apart.  Based on the lack of further progress and the gap in valuation, we did not make any further inquiries to Netflix.  

Then some months later in early August 2006 - after we thought the deal was dead - we were approached out of the blue again by Netflix’s counsel.  They agreed to increase their offer of upfront money; while it was not as large as our offer to close the gap, their counsel asked us if I would do a deal in which the money was not all paid upfront, but, rather, would be paid over time based on certain milestones.  For example if a pending application did issue and become a patent, that would be worth $X. If they happened to license the patent to a third party, that would be worth another $Y, and so on. This was an idea we had floated before, but now they seemed serious.  

After only a few more days back and forth, the parties came to a final deal on the material terms of the portfolio purchase.  Given the number of potential patents and potential licenses the agreement was easily 7 figures in total compensation.  The only item that gave me any pause was that a lot of the $$ was backended and conditioned on their attorneys securing patents in the PTO.  Netflix wanted to have complete control over the prosecution of the cases, and while their representative insisted that would of course they would pursue them vigorously, I was unsure of how to protect this substantial downstream income.  

In any event after a few drafts of the final agreement were circulated and some time passed, Netflix unexpectedly informed me in November that they had reconsidered details of the deal, and wanted to alter some of the financials, including reducing the up front payment.  I did not think the changes were that dramatic, and might have otherwise accepted their offer; accompanying their request also however were changes it wanted to make to the agreement that would have made it impossible for me to police their compliance with the back end provisions concerning their obligation to pursue the pending applications in good faith to fruition. 

After considering what Netflix wanted, I expressed to them that the deal was not acceptable because under the terms they proposed they could theoretically buy my pending applications, and then simply let them go abandoned so they would not have to pay me another nickel.  What they were now offering was effectively a potentially illusory promise.  To resolve the impasse, I proposed to them some neutral language that stated that they at least could not abandon cases that the PTO objectively decided had patentable subject matter.  

To my surprise, they balked at this suggestion, signaling to me that they probably never intended to honor the agreement in good faith.  Since we could not reach agreement on this last point, the sale fell apart.

 Thus, strictly speaking the language in their brief which reads: 

….the patentee then tried to sell his patent to Netflix. When he failed,

 is also a gross distortion.  Netflix tried to BUY the patent applications, and they failed. I turned down their last proffered terms, not the other way around.  This little distortion of the facts is introduced again by Netflix to suggest that I somehow had a vendetta against them.  What is apparent now, in hindsight is that my apprehension was probably justified. 

The standstill agreement with Netflix expired in November 2006.  Consequently some weeks later in January 2007 (and in a followup a month later since they did not respond) I sent Netflix’s inhouse counsel an official notice under 35 USC §154 explaining why their system at that time was infringing several claims of the fifteen (15) pending applications in the portfolio.  As Netflix had never seen these analyses before, I hoped that they would finally understand my perspective on the scope of their potential liability, and re-invited them to discuss the agreement again. 

Instead of responding substantively to my letter, Netflix’s counsel instead sent me a letter with an enclosed “declaration” on March 23, 2007 signed by their chief technology officer, Neil D. Hunt, which they purported showed “prior art” to my pending cases. The letter made unqualified assertions that Mr. Hunt’s declaration demonstrated Netflix’s “public use” of my patented inventions and contained “publications” that were prior art, and that I “was required” to disclose this material to the PTO for my pending cases. 

It was apparent to me that having failed to buy the applications, Netflix was now desperately resorting to a weak effort to try and persuade the PTO to kill them before they matured into patents.  The one glaring problem in Netflix’s strategy, however, was the inescapable fact that most of the supporting evidence presented in Mr. Hunt’s “prior art” declaration was plainly defective, or worse simply false.  

As an example, some of the documents that Mr. Hunt claimed were “printed publications” in late 2002 simply could not have existed at the time.  This was apparent because the “publications” were purportedly emails dating from in June 2002, but in the body of the email they made reference to movies that were not released until November 2002.  It would not be possible to have an actual offer in an email to a real customer so early for a movie that did not yet exist in inventory. The only logical explanation was that these “prior art” printed publications were nothing of the sort – they had been manufactured by Netflix after the fact. 

In addition Mr. Hunt further claimed unequivocally that Netflix had stopped monitoring customer queues and alerting customers when they were empty in 2003.  Yet I had examples in hand of Netflix’s sytem doing exactly this in 2007, right at the same time Mr. Hunt provided his declaration. His statement was completely inaccurate again, if not simply false. 

I was extremely shocked that Netflix would resort to this level of deception.  Nonetheless I took the high road and gave them a chance to abort this abomination before it got out.  Out of professional courtesy, I pointed out the glaring problems to Netflix’s counsel in a formal letter and offered him a chance to check with his client about the contents of the declaration and at least get the facts and documents corrected.  Otherwise, according to his explicit request to me, I would be forced to show it to the PTO and the latter would now be in possession of what was obviously a document of questionable veracity designed solely to mislead the PTO on the merits of my invention. 

Netflix’s counsel never took the opportunity to correct the declaration.  On June 7 2007 I sent in the Neil Hunt “declaration” to the PTO as part of an information disclosure statement (IDS).  As part of the IDS I also provided an explanation to the PTO of the circumstances by which the documents came into my possession, and why I believed many of them  could not possibly be authentic “printed publications,” let alone prior art. 

The PTO then reviewed the substance of Mr. Hunt’s declaration and needless to say rejected it unceremoniously.  They found nothing about his statements or documents to be credible.  Here are the Examiner’s words, verbatim: 

The examiner finds the declaration to be insufficient to establish a showing of public use of the claimed invention…. 

Each exhibit is stated as showing a composition that was included in emails sent to actual customers. None of the exhibits have any dates. With no dates on the exhibits it cannot be accepted that they are in fact printed publications that were in the public prior to 12/16/2002. The lack of dates on the exhibits is a critical deficiency. The examiner also does not see any evidence that supports the assertion that any emails were sent to customers as alleged. The compositions that make up Exhibits 1-3 do not show an actual email that was in public use and there is no evidence to support the statement that thousands of emails were sent out that contained the compositions of Exhibits 1-3. The examiner notes that what Mr. Hunt has submitted is not an email and there is no evidence that shows the actual compositions of each exhibit were actually known in the public or used in the public domain. 

The Examiner further picked up on the questionable authenticity of the so-called “emails” that were supposedly attached to Mr. Hunt’s declaration: 

The examiner questions where copies of the emails are if they were sent out to actual customers as alleged. The evidence does not support the statement that emails were sent that contained the composition shown in Exhibits 1-3 because there are no emails of evidence to consider. Turning to the exhibits themselves, there are some issues that the examiner feels puts the credibility of the Exhibits in question. For Exhibit 3, the Spider-Man movie was not released on DVD until November of 2002. This movie was not available at the end of June. The language in the exhibit that says that Spider-Man is arriving on or around June 27, 2002 is contradicted by the fact that this movie was not released on DVD until November of 2002. The examiner personally verified this information on the Internet by looking up the DVD release date for this movie. This discrepancy is not addressed by Mr. Hunt and there appears to be no explanation for this incorrect date. Also, the spelling is wrong for this movie. Netflix actually sent out emails that called it "Spinder- Man" instead of "Spider-Man"? This is hard to believe and has no reasonable explanation as far as the examiner can tell. Also, none of the movies listed in the New Releases portion of the Exhibit were even released yet. This inaccuracy concerns the examiner as well as the other issues with this Exhibit. Exhibit 1 also says that Spider- Man is arriving on or around June 27, 2002, which is contradicted by the fact that this movie was not released on DVD until November of 2002.

He also found Mr. Hunt’s credibility was further called into the question by his statement that Netflix was no longer using the technology, when there recent emails to the contrary: 

With respect to statement #10 Mr. Hunt stated that Netflix stopped using notification messages after 2003 and is not presently using such messages. The instant applicant has provided copies of 3 emails that are dated from the years 2005, 2006, and 2007. The emails show that a sender (info@netflix.com) sent an email to a customer to inform them that their queue was empty. This suggests and calls into question the credibility of statement #10.

 Finally, the Examiner pointed out the obvious, namely that Netflix was clearly worried about the pending application and was trying to influence the PTO to not grant the patent: 

When considering a 132 declaration such as executed by Mr. Hunt, one must take into account any bias that the declarant may have. The examiner notes that although not a determining factor alone, it must be taken into account that the declarant is an employee of Netflix and that Netflix may benefit if the current application does not issue as a patent. There are obviously things happening between Netflix and the instant inventor that involve attorneys and legal matters that the examiner is not fully aware of. Taking this potential bias into account, taking the issues outlined by the examiner for the exhibits into account (dates, spelling error), and taking into account that there is evidence in the record that directly contradicts statement number 10, the examiner finds the 132 declaration to be insufficient to show that the claimed invention (in any pending claim) was in public use before the invention by applicant as Mr. Hunt alleges. The examiner does not find that the evidence supports the allegation of prior public use by Netflix and does not find it persuasive that the submitted Exhibits 1-3 are in fact printed publications that were in the public domain.

 Despite Netflix’s best efforts to kill the application, the PTO issued the patent in June 2008 as Patent No. 7389243.  

This is the pedigree of the patent that Netflix now tries to malign or suggest that they no interest in at the time. For a patent that they now assert is not relevant to their business, or is no good, they sure spent a lot of $$ trying to buy it, and when that failed, labored to see it would never see the light of day. 

What is telling as well is the fact that Netflix, on their own, have cited my patents and applications as relevant against several of their own patents and pending applications.  See e.g., the references they provided for US Patent No. 7,617,127 which you can see at http://tinyurl.com/275jspc.  Again their objective behavior belies their words now.  

The portfolio did not end up with Mediaqueue until more than a year after my last contact with Netflix.  The insinuation in their briefs therefore that I somehow turned around and sued them right away after the failed negotiations and their fiasco at the PTO is completely false.  

As the icing on the cake, I invite the interested reader to review the apology document filed by Netflix in the PTO - some two years after the fact and almost a year after the patent issued – which belatedly admits to the errors and tries to rehabilitate Mr. Hunt’s reputation.  Here is an excerpt: 

May 15, 2009

Commissioner of Patents

P.O. Box 1450

Alexandria, Virginia 223 13-1 450

Commissioner: 

I am Chief Product Officer for Netflix, Inc. A declaration signed by me on March 16, 2007 (the "Declaration", Attachment 1 to this letter) was submitted during prosecution of a patent application, U.S. No. 101771,049, "Notification System and Method for Media Queue," which has since issued as United States Patent No. 7,389,243. This letter is to inform the Patent and Trademark Office that I have recently determined that certain information in the Declaration is incorrect. 

….

The Declaration erred, however, in stating that as early as December 16, 2002, a computer system that generated electronic messages to subscribers based on the compositions was placed in public use. The owner of the '243 patent has sued Netflix, alleging that Netflix infringes the '243 patent. As part of Netflix's preparation to defend the lawsuit, I have learned that the Declaration was inaccurate. While Netflix utilized a computer system to send many different kinds of emails to subscribers for some time prior to December 16, 2002, my declaration should have reflected that the emails based on the compositions attached as Exhibits 1, 2 and 3 were sent to subscribers no later than March 2003….. 

I apologize for the inaccuracies in my Declaration and submit this letter to correct the record.

 (signature) 

Neil D. Hunt

Chief Product Officer 

(emphasis added). 

Mr. Hunt’s apology admits now, some two years after the fact, that the so-called public use by Netflix was not in fact prior art, because it did not occur until March 2003, after the effective filing date of my patent.  The rest of his letter (this time not under oath you will note) tries to downplay and undo the obvious damage to Netflix’s credibility resulting from their defective declaration of “prior art.” More interesting of course is that it raises more questions than it answers, given that Mr. Hunt states that he only “recently” learned of the problem (in 2009). This of course is completely contradicted by the fact that his own counsel was informed on more than on occasion of the substantial defects in the document two years earlier. 

It is simply amazing that Netflix would let these false papers sit in the PTO until they realized they would become a liability. It was only after being sued for infringement that they suddenly develop a newfound respect for the PTO process and tried belatedly to cure their bad behavior.           

Lest anyone thinks this story is too surreal to be believed, I invite you to view the contents of the file history of US Patent No. 7,289,343 through the Public PAIR system site offered by the USPTO.  You can access it here: 

http://portal.uspto.gov/external/portal/pair 

Just solve the CAPTCHA and punch in 10/771049 as the serial number.

To make it easier, however, I have uploaded copies of several key documents to corroborate my story, which can be viewed by clicking on the links below: 

Netflix letter to me containing Mr. Hunt’s “Prior Art” Declaration of March 23, 2007

My submission to the PTO June 7 2007

PTO comments on Sept 20 2007 rejecting Netflix declaration

Netflix apology letter two years later - May 15 2009

Thus if and when the CAFC gets to review this farce of a filing, I want to see how they treat Netflix’s contention that they have “….vindicated an important public interest in this case” as they assert on page 72 of their brief.  I can’t remember the last time I read a case holding that it was in the “public interest” to negotiate in bad faith to try and buy a patent, or worse try to mislead the PTO with false documents into thinking something is prior art to interfere with said patent.  I really want to see their citations on this one.

In closing let me just say I know it’s the job of high paid lawyers to try and denigrate patents covering features their clients are using, and Netflix’s lawyers are no exception.  What is disappointing is that I know some of theses lawyers personally, and in fact have referred them business. Seeing what a hatchet job they did on the facts on this one now makes me seriously question their ethics and judgement.  It’s depressing to see people of that caliber stoop so low to try and gain a few moments of fame.

Coming now full circle to the main question that Netflix says they want the Court to review I ask: 

does Netflix really want to have a full blown investigation into their conduct in this case and have the Court decide who behaved “equitably” and who did not? 

I’m ready when they are.

JNG

ISSUES #5/#6: WHEN IS THE DA*N DATA SAMPLED?

The fifth/sixth area of the specification that Samsung attacked in the reexamination requests is the language that calls for “sampling data on the transition of an external clock signal” and similarly that a first portion of data is sampled “in response to a rising edge” of such signal while a second portion of data is sampled “in response to a falling edge” of such signal. Since the issues are intertwined I am discussing them both together here.

Of all the arguments raised to date in the reexam, this one has to give Rambus the most heart burn.  At its core, this attack is directed to Rambus’ claims to double data rate (DDR) DRAM, and Samsung has clearly convinced the Examiner (to date anyway) that there is no support in the original specification for these claims.

The stress is multiplied because obviously if Rambus loses this point on this patent, it will lose the same point for at least another critical patents that it has purporting to cover DDR. As those of you who follow these cases surely know, DDR is mainstream technology, and Rambus has been successful at securing higher rates for such products on the platform that it had more claims covering such products.  The claims at peril in the ‘020 include claims 5, 15, 26, 31, 33 and 41.  Clearly however if the PTO kills these DDR related claims, it is apparent Rambus’ leverage would be severely compromised in all lawsuits involving claims of similar scope.

Here is what the Examiner said about Rambus’ support in the specification for the data sampling question:

The Examiner notes that this figure (13) discloses sampling the data at the even and odd inputs of two internal clocks, but as shown in the figure, data is sampled at one of the transitions.

So there is the double whammy; first, he concludes the transitions are based on an internal clock, and second, he maintains the data is only sampled at one transition. Ergo, no double rate data is disclosed.

But will the Examiner maintain this position? Both parties had an opportunity to comment on his findings, and my review suggests that there may be sliver of hope after all for Rambus to turn this around.  This conclusion is surprising because at first glance the Examiner’s argument seems quite ….unassailable.  First, one has to start with the claim; here is what claim 15 actually recites:

15.   The controller device of claim 1 wherein the input receiver circuitry samples:

a first portion of the amount of data in response to a rising edge of an external clock; and

a second portion of the amount of data in response to a falling edge of the external clock signal.

I highlighted these portions because they are critical to the correct analysis of these claims.

Thus far the Examiner has said that the data sampling is not done “…on the transition of an external clock signal…” – but this statement reveals that he is not paying attention to the precise language of the claim. The author of the claim was extremely clever and careful, and used very broad language to denote a cause/effect relationship between the external clock signal and the data sampling. Notably, it says nothing about the sampling occurring on the transition; the claim simply states that the sampling occurs…. in response to the rising edge of the external clock signal.  There is no question, from reviewing the timing diagrams, that this is exactly what is disclosed in the ‘020 specification.  IMO, Rambus clearly points out (on page 14 of their brief) that indeed, the internal clock signal is used for the sampling as well, but that signal has its origin from the external clock signal.  Thus the claim is clearly supported by the specification (even if it is only shown in the drawings and not mentioned well in the text description) since there is an explicit cause and effect relationship:

As seen here, the rising edge of external clock 53 allows for an input sample at time 127; the falling edge of this same clock allows for an input sample at time 125.  Again the Rambus papers appear to have a solid rebuttal, but it takes some time and effort to get to the correct answer.  If the Examiner considers the points noted above, it is my prediction that he will reverse his reasoning for this claim.  The type of language used in the claim “… in response to…” is extremely broad and should be entitled to a very liberal interpretation to cover a number of scenarios, including the one shown in the specification. 

As an easy analogy, this situation is no different than stacking a set of dominoes in close proximity, and then nudging the first one at the end of the line to cause them all to fall. While the last one falls because the next to last domino knocks it over, there is no question but that the first one set the action in motion.  As in the clock example, the last one falls “…in response to” the first one being knocked over.

This particular point is extremely crucial to Rambus’ success in its ongoing battles. Look for this issue to be debated very heavily in the papers to come.  It is my belief that the PTO should eventually come around to Rambus’ thinking on this, even if it takes some time. To a large extent their current thinking appears to be heavily colored based on their misreading of the claim to say that the data is sampled on the external clock transition, instead of simply in response to.

If Rambus succeeds -  as I believe it will on this point as well - the written description score will stand 6 – 0, and more importantly, their claims on DDR will be brought back from the precipice and put back into play.

Ware Part II

As noted a few days ago, JW asked for briefing on a very narrow topic from the parties; here is the quote from his order:

The most probative dictionary submitted is the 1996 IEEE Dictionary, which defines "clock cycle" as "one period of the [clock] signal, beginning with the rising edge of the signal and ending on the following rising edge of the signal." This supports the Manufacturers' proposed construction of phrase "during the first half of a clock cycle." But absent the idealized square wave used to model a clock signal, the Manufacturers' construction is plagued by the practical question of how to measure "the beginning of the rising edge" of a clock signal. Would a person of ordinary skill understand that a "rising edge" begins when the voltage begins increasing? When the voltage crosses the midpoint from negative to positive?

As this phrase requires construction before the court may address the Manufacturers' motion for summary judgment of non-infringement, the court requests that the parties simultaneously submit a brief of up to 10 pages on this topic by August 1, 2008.

The parties have now submitted their response in accordance with the Judge's directive.

IMO, no matter what your bias or predilection may be, I think it is clear that the MM papers do a good job of addressing his specific question head on, and with a short, succinct explanation.   Their papers are very clear on this.

The Rambus papers, on the other hand, appear to wander and ramble all over the place. It is clear to me that they did not like the fact that JW had made up his mind and was leaning to the MM on the whole clock half-cycle discussion.  Since they did not like the question as posed by JW, they tried to re-open the whole battle on a whole bunch of other fronts instead to deflect his focus.

As a further example JW did not ask for Rambus' opinion on the SJ papers for example, but Rambus added in 3 pages on that topic as well.  IMO this is a tell tale sign of a party that is nervous about the Judge's thinking because they feel the need to bring up topics that were not asked about.  Reading between the lines it seems to me that Rambus feels they are in danger of losing to the MM on summary judgement on this patent; in other words, not only will Whyte not rule in their favor on SJ, he will in fact rule against them on SJ.

Now, again, perhaps Rambus will be successful in turning Judge Whyte around, but IMO they clearly have the more difficult uphill fight at this time.  If they don't win on this point, I suspect the infringement debate will all but over for the Ware patents.

Finally, the Rambus pleadings also included this little tidbit of information:

.....Rambus notes that the Manufacturers already allege nearly three-hundred (300) separate purported references. .... Despite the Court’s July 16th Order indicating that Court expects the Manufactures “to significantly narrow the number of prior art references,” the Manufacturers continue to add, rather than subtract, to their number of alleged prior art references, having just provided Rambus an additional 10 references days ago on July 28th.

Something tells me the Ware patent reexams may already be in the works...

BUT FIRST A BRIEF INTERRUPTION....

Just a few days ago Judge Whyte issued his Markman ruling for the Ware patents U.S. Patent No. 6,496,897 and 6,493,789, which are the subject of yet another Rambus lawsuit against Hynix and DRAM gang.  At first glance the order appears unequivocally in favor of Rambus, but there are a few wrinkles that will likely yield yet another barrage of paperwork in these patent holy wars.

First while he rejected the DRAM maker’s arguments, and was favorably disposed to Rambus’ logic, the Judge decided that there was not a whole lot of distinction between the write enable (WE) signals and the mask bit term as argued by Rambus:

To begin, Rambus's construction of "mask bit" is synonymous with the specification's definition of "WE bit" or "WE signal." Rambus argues that a mask bit is a "binary digit indicating whether to write data," while in the specification, Rambus noted that a WE signal "indicates whether an associated byte is to be written or not during a write operation." See, e.g., Claim Construction Hrg. Tr. 377:3-378:15 (Jun. 5, 2008) (Mr. Detre urging that a "mask bit" and "write enable signal" are synonymous).

Because of this fact he went on to rule:

Nonetheless, the court cannot adopt Rambus's construction as proposed because it remains ambiguous. By defining a "mask bit" as a "binary digit indicating whether to write data," the construction blurs two distinct concepts. On the one hand, a DRAM receives a bit of information indicating whether an operation will be a read or a write operation. See '789 patent, col. 2, ll. 4-6. The Ware specification refers to this signal as a "W/R signal." Id. On the other hand, a DRAM can also receive a bit of information during a write operation indicating whether a particular piece of data should be written or not. The court's understanding of the specification and the claims indicate that Rambus's claims embrace the latter, but not the former. Nonetheless, Rambus's proposed construction of "mask bit" – "a binary digit indicating whether to write data" – could be misconstrued in the context of these claims to cover a "W/R signal" as well as the specification's "WE signal." Accordingly, the court opts to modify slightly Rambus's proposed construction. A "mask bit" is simply a "binary digit indicating whether to mask data involved in a write operation." This construction clarifies that the "mask" in "mask bit" refers to the action of masking data, and not the structure of a mask of data. It may also prevent future confusion about the scope of Rambus's claims.

You have to love Judges who reject both parties’ arguments for a claim, and then go on to say that this should “…prevent confusion.”  Speaking from experience, it is hard to imagine a more confusing scenario than the Judge picking a brand new interpretation that then requires a whole new set of claim contentions, infringement evidence, etc..

What is intriguing about his analysis is that is truer to the specification, but slightly changes the nuance of the term. In Rambus’ request, they wanted the bit to be a bit indicating whether to write data.  In his order he now says the bit indicates whether to mask data.  Semantically and operationally they may turn out to be the same, and I have not studied it enough to decide who should win. But given the nature of these lawsuits I suspect this twist has given more wiggle room to the memory makers and I predict we will see many more filings arguing about this new definition very shortly.

Second, the Judge decided there was not enough information presented by the parties to help him decide who should win on the language calling for a first mask bit to be received "during a first half of a clock cycle of the external clock signal" and a second mask bit "during a second half of a clock cycle of the external clock signal."  In his discussion he seemed to be leaning towards the DRAM makers, but he has asked for supplemental briefing by August 10.  The final resolution of this issue is also critical before there is any clear understanding of the infringement positions.  If the MM win on this point, there is no infringement. If they lose, I suspect we will see the bulk of the fight on the new “mask bit” variant offered by the Judge.

Finally the Judge indicated he was going to issue his ruling on the DRAM maker’s invalidity arguments for written description. Given his determination for the “mask bit” language, I suspect he is going to shoot down this request.

In the end, even if Rambus wins on the new claim points as well I suspect the main result will be a reexamination of the Ware patents also in due course. 

One clock to rule them all

ISSUE #4: DO YOU REALLY NEED TWO CLOCKS?

The fourth area of the specification that Samsung challenged in the reexamination deals with the use of certain language in claims 5, 9 -12 and 41 – 49.  The Examiner lumped these into a category of claims dealing with clock signals which Samsung argues must be two separate clocks because the specification only shows two external clock signals. Hence, according to Samsung the addition to the claims of an embodiment in which only a single clock is used must be tied to the later filing, because it is not in the original disclosure.

As an initial matter the grouping of claims is a bit odd since many of them don’t seem to relate to the external clock signal issue. But that’s another story.

The Examiner so far disagrees with Samsung and says there is plenty of support for language that only mentions an (single) external clock.

Samsung’s argument on this front is very hyper-technical and again tries to borrow from bits and pieces of the arguments made by experts, the claim constructions from the Hynix case, etc. In other words, they again require the Examiner to consider a bunch of extrinsic evidence to the specification.  And, once again, the Examiner clearly does not seem to be paying much attention to this kind of evidence.

Here is the nub of Samsung’s argument:

“…Under the Patent Owner’s proposed construction of an external clock signal as “periodic signal from a source external to the device to providing timing information (see Reply at page 45) the clock signal generated by the clock generator is not an external clock signal because it can only be an external clock signal once it is received from the external source. Only the clocks that are actually received by the devices, CLOCK1 and CLOCK2, would meet this proposed construction as they are the clocks that provide timing information to the device. In other words, from the perspective of the claimed memory controller, there are two clock signals: CLOCK1 and CLOCK2.”

This comes from their comments, pages 18 – 19 filed May 15.  I must say I read this passage several times and it still makes little sense to me.  I think the key is the very last sentence, which kind of gives away the real weakness in the argument.  For Samsung to succeed, the Examiner must look at the claim “…from the perspective of the claimed memory controller…”  Needless to say, I think this argument is doomed to fail, because one doesn’t get to kill claims based on an isolated “perspective”; the claim element is either there, or not. The tree falling in the forest does physically make a sound, whether or not it is perceived by others.

Also, Rambus rightly points to FIG. 8A to explain that there is, indeed, just one “external” clock signal that is sent to the device; all that happens is that this same clock signal is tapped at different taps along the clock line:

This is taken from their Reply filed April 15 on page 9.  In other words, the CLOCK1 and CLOCK2 language is effectively just a label, not an indication that there are two clocks.  The blue box I added shows where the two taps are used for the device 51.

Once more the reason for this attack angle is plain to see: Samsung could kill a lot more Rambus patents if its logic were adopted.

But so far the Examiner agrees with Rambus. Once more what jumps out at you from reading his analysis is that is very short, to the point, and he is focusing solely on the specification, and never mentions anything about either party’s experts, court rulings, etc.:

"As shown in figures 8A and 8B of the ‘696 patent, a single clock signal is sent, but is characterized as either “early” or “late,” hence one rise and one fall pulse (two clock signals) that are derived from the single clock signal".

Based on what I’ve seen I am reasonably sure and expecting the Examiner to maintain his reasoning on this one.  There just isn’t enough there in the Samsung response to convince me that are going to turn him around on this one.

At this point of the clock cycle I show Rambus winning 4 – 0 on the written description issues.   

I travel on vacation for the next two weeks, so the next installment will not show up until the end of this month earliest.

Now it starts to get REALLY interesting….

ISSUE #3: ARE THERE REALLY TWO SETS OF OUTPUT DRIVERS?

The third area of the specification that Samsung challenged in the reexamination deals with the use of certain language in claims 2 – 8 and 38 – 49.  What these claims recite is a first plurality of output drivers/circuit for outputting block size information, and a second plurality of output drivers/circuitry for outputting an operation code.

Samsung made the case that the specification, in FIG. 7A, only shows one connection for each device to the bus; thus, they assert, the very same drivers that provide the operation code also provide the block size information. Hence, according to Samsung, there is in fact no “first” and “second” output drivers; there is only one set.

The Examiner concurs and says:

“The Examiner agrees, that the original disclosure of the ‘696 patent disclose a single output driver is used to transmit both the block size information and operation code.”

The Examiner further pointed out that FIG. 10 only shows a single N type output driver 76.

What this means, practically, is that the Examiner believes the original specification from 1990 does not support these claims. That means they would only be entitled to a much later priority date, in fact, the date when Rambus first submitted the claim: December 21, 2001.

It is clear why this holding, if maintained, would wreak havoc on this patent, because that finding effectively means all the JEDEC materials in the late 1990s would all be prior art. Note, also, how this finding by the Examiner poignantly identifies the key friction between Rambus and all the JEDEC members in the litigation: which came first, JEDEC, or the claims?

Here the Examiner’s analysis clearly suggests that Rambus’ claim of two different output drivers was not conceived until much, much later than the original filing. In fact, he is suggesting that it did not come into existence until after Rambus had participated in the JEDEC meetings and began filing new applications to include this type of terminology.

At first glance it might be tempting to say, oh well, who cares, it is just these 16 or so claims in this one patent, Rambus can afford to lose a few. But the problem is that this finding would contaminate a large number of other Rambus patents with the same deficiency: i.e., they have the same language in their claims, and were not filed until much after the original 1990 filing.   Out of curiosity I punched in the language “second output driver” for the Rambus patents, and found no less than twenty three (23) of their patents (including the ‘020 discussed here) which use this terminology:

1	7,313,639		Memory system and device with serialized data transfer
2	7,231,306		Method and apparatus for calibrating static timing offsets across multiple outputs
3	7,225,311		Method and apparatus for coordinating memory operations among diversely-located memory components
4	7,216,187		Memory system including a circuit to convert between parallel and serial bits
5	7,199,605		Method and apparatus for low capacitance, high output impedance driver
6	7,061,273		Method and apparatus for multi-mode driver
7	7,032,057		Integrated circuit with transmit phase adjustment
8	7,002,500		Circuit, apparatus and method for improved current distribution of output drivers enabling improved calibration efficiency and accuracy
9	6,975,159		Method of operation in a system having a memory device having an adjustable output voltage setting
10	6,909,387		Circuit, apparatus and method for improved current distribution of output drivers enabling improved calibration efficiency and accuracy
11	6,870,419		Memory system including a memory device having a controlled output driver characteristic
12	6,772,351		Method and apparatus for calibrating a multi-level current mode driver
13	6,715,020		Synchronous integrated circuit device
14	6,608,507		Memory system including a memory device having a controlled output driver characteristic
15	6,462,591		Semiconductor memory device having a controlled output driver characteristic
16	6,462,588		Asymmetry control for an output driver
17	6,378,020		System having double data transfer rate and intergrated circuit therefor
18	6,094,075		Current control technique
19	6,070,222		Synchronous memory device having identification register
20	6,035,365		Dual clocked synchronous memory device having a delay time register and method of operating same
21	6,032,215		Synchronous memory device utilizing two external clocks
22	5,995,443		Synchronous memory device
23	5,915,105		Integrated circuit I/O using a high performance bus interface

For example claim 41 of the ‘105 patent has a similar problem.  I did not verify all of them, but the implication is clear. If Samsung is successful with the PTO in this argument, many of the claims in the above patents which use this terminology would be vulnerable to the same attack. Of course, not all of these may be important to Rambus, but it should be quite apparent that this is more than a bad case of indigestion for the ‘020 patent; this is a wholesale patent virus.  Theoretically, Samsung or someone else could file a challenge on these patents tomorrow using the Examiner’s argument.

What many people fail to understand as well, is that the PTO marches to its own beat. It is not required to obey or respect a Court's determination for claims, because they have independent authority to examine and (in)validate claims.  The standard they use is also much broader than that used by a Court, so their conclusions are frequently quite different.

When I reviewed Samsung’s argument and it seems simple and convincing.  Basically Samsung noted that the part of the spec relied upon by Rambus (FIG. 4) only shows that that the block size and op code are put out on different bus cycles.  According to Samsung, there is no disclosure of specific bus lines to be used for each set of information.

Again the Examiner agreed with this proposition. It is very straightforward: if it he does not see a description in the specification, no amount of “expert” citations or legal opinions appear to move him from this perspective.  In this respect, again, he is merely relying on the textual content of the disclosure.

When I read Rambus’ response to this, it is not extremely clear and is confusing in places. They seem to be arguing about tangential points.  But then in the middle of the discussion, there is a very simple diagram that is not as well elaborated as it should be… namely, Rambus refers to FIG. 2 of the patent.  They say it shows multiple bus lines, but they don’t really explain it very well.

I took it upon myself to annotate the figure some more, and surprisingly, it reveals that Rambus may be correct on this after all:

Unlike Rambus, I’ve identified specifically, with arrows, how for each device (DRAM 14) there must be at least two separate sets of drivers… this is because every bus line (BUSDATX) must have a separate driver to work.  So all of the “dots” in the figure can represent an individual driver (76 in the spec) if you will.

Then, if you look at FIG. 4, you discover another bit of cleverness. The figure does show, in fact, that one set of drivers (the lower bits of BUSDAT) are used for the ACCESSTYPE (op code) while a different set (the higher bits of BUSDAT) are used for the BLOCKSIZE information.  I’ve reproduced this below from Rambus’ filing:

 

The problem that Rambus faces is that these figures were not well elaborated when they were presented with the original disclosure. There is a lot in there that does not jump out at you, and the lack of any accompanying description makes it vulnerable to challenge.

At the beginning of this exercise I believed Samsung would win this point. Now, after reviewing these paper carefully, I am convinced Rambus will eventually succeed.  Consequently the written description issues, in my opinion, stand 3 – 0 for Rambus.

More later.

Nonetheless I am convinced and I am predicting the Examiner will change his mind and reverse his decision if Rambus can simply get this basic explanation more clearly in his brain. As I indicated, the discussion in the brief is not as good as it could be, and doesn’t set out the standard of law that allows a patentee to rely on the content of drawings to supplement the raw text content and support a claim.  Thus in my opinion the PTO (the Examiner or someone above him) is going to have to reckon with these figures and eventually rule in their favor.

And the beat goes on…

Rambus the stock lives somewhere ...in Bizarro world. Yesterday it was down big in a positive market, today it is up big in negative market. Apparently people are placing their bets on an injunction ruling before August.   Good luck with that!

I updated the entries in the scorecard table to include links to the actual Patent Office filings as I obtained them.  For those of you worried about viruses and other cooties download them yourself if you like.

But first, a word about interpartes reexam.

There was some interesting investor literature circulated a few months back by Tessera suggesting that interpartes reexams aren’t so serious after all, because (they claim) the PTO just takes so long to determine these things there is nothing to fear.  The patents are all valid and enforceable they say while the reexam is going on.

That may be true, but that’s like saying a prisoner on death row is still alive and kicking. Just because the PTO may take its time to rule doesn’t mean you aren’t going to get the ax in the end.  What they forget to tell you are a couple of things: (1) the BPAI has something like a 95% plus rejection rate for patent owners who appeal the Examiner, so most everyone capitulates rather than waste $$ and time in the PTO; (2) the longer the patent takes to re-issue with a new certificate, the greater the potential damages the patent owner forfeits as a result of intervening rights.  So, sure, you can delay the PTO all you want if you don’t mind potentially losing all those infringement damages prior to the date the PTO re-births the patent for you.

Oh, and by the way, if you happened to get lucky and file your infringement action before the reexam started the Court might not stop your case dead in its tracks.  But don’t think about filing a case while your case is in reexam purgatory, your chances are effectively … nill. Even the ED Texas Courts are suddenly realizing it makes no sense to be hearing cases when a more qualified technical body such as the PTO can first tell you if the patent is valid or not. 

I note also that these comments were made by inhouse folks at Tessera (I don’t think any outside attorney concerned about his malpractice insurance would make these kinds of fanciful claims) and further that Tessera dumped one of their patents in the ITC litigation (6,458,681) in May voluntarily shortly a reexamination was filed.  Thus the suggestion that interpartes reexam is nothing to worry about is just plain silly in my opinion, and it seems like the marketplace sure doesn’t believe that fantasy either.

In any event, back to Rambus, and round 2 of their reexam

ISSUE #2

The second issue the Examiner considered was related to the first, namely, whether the claims of the ‘020 patent, by virtue of reciting “operation codes” and “block size information” were only described as part of a “packet” and thus must be part of a “multiplexed” bus.  This was just an attempt to get a second bite at the apple, and again they apparently reached too far.

This argument was made by Samsung for claims 1, 2, 5-7, 9-19, 21, 25 – 35, 37-38, 41-42 and 44-49 of the ‘020 patent.

The Examiner shot them down with substantially the same analysis that he used before: the language is not in the claims, so you lose.  He notes that there is nothing categorical in the specification that mandates a multiplexed bus. Once again he didn’t resort to any fancy appendices, charts or expert testimony (see a pattern here?) 

CONCLUSION:

Rambus should win this 2^nd round of the reexamination as well, so score is 2 - 0.  Tomorrow we look at Samsung’s argument that there is no support in the specification for a “…second plurality of output drivers.”

And now, on with the show

Before we get to the main program it is apparent from today’s trading activity that SOMETHING has spooked the investor community for Rambus stock. The Nasdaq had its best showing in weeks (up 2.3%) while Rambus tanked down almost 9%, and at one point reached 15.61.

This strange activity seems to coincide with a couple of events, one of them in the ongoing Hynix litigation, where Hynix has asked for a reduction of damages based on the recent LG/Quanta case ruling.  Basically Hynix is arguing that since Rambus licensed Intel for controllers, and there is no use for such controllers other than for “controlling” DRAM, then the latter should be considered impliedly licensed as well whenever Intel sells a chip under the Rambus license.

I won’t get into all of that just yet, suffice it to say that I believe there is a colorable argument there and I leave it to another day and another talented lawyer to give some insights here.  Regardless of the merits, I suspect that the good Judge will have his hands full with yet ANOTHER complex legal issue that will keep him occupied for another few months. But the market is super sensitive right now, and one gets the impression that they believed that if Hynix has any chance of success on this Rambus would be in a world of hurt because it would effect all of their cases in the same way.

The other notable event, of course, was the PTO mailing yet another adverse Office Action to the Rambus patents in the reexam proceedings. There was an entry on the docket for control no. 95/000166 on 7/3 indicating that the Examiner had mailed an Office Action, and if the rest of us had been paying attention I guess it would have been obvious (from the same Examiner’s treatment of the 95/001008 case we are discussing here…) that the result would be negative. Multiply that by four, and you have a bunch of bad news all bunched together.

For those keeping score, the tally looks something like this:

Reexam	Patent	Status	Notes
95/000166	6426916	Non-final OA mailed 7/3/08	87 page decision is mostly unfavorable to Rambus
95/000178	6324120	Non-final OA mailed 7/3/08	84 page decision is mostly adverse to Rambus
95/000183	6182184	Non-final OA mailed 7/3/08	56 page decision is mostly adverse to Rambus
95/000250	6452863	Non-final OA mailed 7/3/08	73 page decision is mostly adverse to Rambus
95/001008	6715020	Non-final OA mailed 2/15/08 Rambus responded 4/15/08 Samsung responded 5/15/08	67 page decision is mostly adverse to Rambus
95/001013	6697295	PTO ordered reexam 1/9/08	PTO agrees the patent should be reexamined
95/001026	6378020	PTO ordered reexam 4/9/08	PTO agrees the patent should be reexamined
90/010082	6038195	PTO ordered reexam 2/15/08	PTO agrees the patent should be reexamined

You can see from the filings that this thing is now going at break neck pace, requiring the parties to respond in very short time periods.  Also, because the ‘008 is the most advanced, and has significant overlap with the other cases, it offers the most opportunity for study and speculation on the future of the rest of the applications.

Note, some people have asked me why Samsung does not go after the 5,915,105 and 6,034,918 patents. The short answer is, they already have a license, as a result of Rambus folding its cards in the infamous VA litigation (debacle?).  So if Hynix is going to get it done, they have to do it on their own (Correction: I misread the VA patent numbers; Samsung COULD file an ex parte case, but the lack of such to date suggests otherwise).

One last note before delving into the meat of the discussion; the Examiner in all the cases is Mr. Ovidio Escalante. This gentleman is well versed in reexamination/litigation battles, having worked on the RIM/NTP disputes and other high profile cases.  His writing and analysis appear very sound, straightforward and meticulous.  He does not seem fond of the overly complex technical ramblings at this time about why the claims are or are not supported in the specification.  Right now he has ruled against Rambus on the bulk of the material points, but I do not believe he is intransigent or stubborn.  From all indications he is a fair reviewer, and I believe his opinions will change over time. My goal in these posts is to try and predict where I think he will end up in this complex mess.

And now as promised, on with the show

ISSUE #1

Samsung has raised the issue that many of the claims are not supported by the parent to the '020 patent. They make this point because if they succeed in convincing the Examiner they are right, it would open up a whole ‘nother universe of prior art that could be used against the patent in reexamination (and litigation).  As noted yesterday, Samsung has challenged no less than 7 separate aspects of the claims using this line of defense.

So the first sub-issue is that Rambus has challenged the PTO’ ability to even examine the priority date of the claims. I predict Rambus will fail with this argument, because the PTO legal staff has already ruled against them on this point in the related 95/000166 proceedings, and there is no reason to suspect they will change their minds.

Since that challenge will not fly IMO, Rambus will have to address the rejections on the merits.  The first issue the Examiner considered was whether the claims of the ‘020 patent require a multiplexed bus?  Otherwise, Samsung says that the notion of a non-multiplexed bus was not introduced until much later in the prosecution, so Rambus should be stuck with that later priority.

This argument was made by Samsung for claims 1, 2, 5-7, 9-19, 25 – 25, 37-38, 41-42 and 44-49 of the ‘020 patent. Effectively Samsung’s tact is to get the Examiner to say “yes” because, while it would make the claims harder to kill – prior art wise - it would help them much much more with the infringement case. This is a clear case of some clever dodgery to try and make the Examiner help you in the other battles.

This particular aspect of the filings was pivotal for both sides, and it was apparent by the amount of discussion each side devoted to it in their follow ups to the Examiner.  The repercussions would be hugely disadvantageous for Rambus if it lost because this argument could apply effectively every claim in the tree of this patent.

Fortunately for Rambus the Examiner in this case has already determined that this argument is flawed, and he will not use it against the patent.   I agree with his logic – in this context – because in reexamination the claims are supposed to be interpreted as broadly as reasonably possible; a different standard than in infringement lawsuits.  Also, because nothing in Samsung’s papers is very compelling -  in my opinion - I suspect he is unlikely to change his stance. 

This decision bodes well for Rambus and strongly suggests they will see similar results on this issue in the related cases.

The Examiner’s argument, I thought, was very straightforward: the words are not in the claim, so there is no basis to put them there.  In fact, the dependent claims specifically make use of the “multiplexed” language, which means that the independent claims must be broader than that.   Paradoxically, Rambus’ use of broader language in the claims worked in their favor on this point, because the written description requirement is typically tougher on claims that recite specific points that are hard to find in the specification.

One other high level observation: in general this Examiner does not appear to care for or need to rely on extrinsic evidence submitted by the parties in the form of expert declarations, the CAFC decision in Infineon, the jury verdict in the Hynix case, and other such props. He seems very focused on using the four corners of the patent specification, the prosecution history record, and the basic code of federal regulations to support his findings. Everything else seems superfluous to him as he never mentions it, even in passing.  Thus, if I were the lawyers, I’d concentrate my arguments next time on these parts of the evidence, because he does not seem impressed by expensive high powered expert testimony on how to read patents.

CONCLUSION:

Rambus should win this round of the reexaminations.  Tomorrow we look at Samsung’s argument that the operation codes and block size information must be part of a packet on a “multiplexed” bus. 

Ok now things are really cooking in the Rambus Reexams..

For those of you who have followed my analyses in other fora in the Rambus litigations, welcome!

As many of you know, Rambus recently won a victory against Hynix in Federal Court in San Jose, and that trial is now winding down. Judge Whyte is considering whether an injunction is warranted against Hynix's commodity DRAM parts.  That fight should last another...2 years with any CAFC review, unless Hynix pulls a surprise and decides to settle.

But the above case is just the tip of the iceberg. Rambus has filed a number of other cases against other DRAM makers. In short Rambus is in a "patent" holy war right now.

To even the odds, one DRAM maker, Samsung, has decided to take another route to try and eviscerate the Rambus patents: through the PTO reexamination procedures. Samsung files reexams 

Reexamination is a procedure that grants the PTO the chance to re-review patents after they are already issued.  Generally speaking the goal of the requester is to convince the PTO that the patent is too broad, and thus should be invalidated or at least narrowed in scope.  If the requester is successful, this can have multiple unpleasant effects for the patent owner, including: a) losing past infringement damages (due to intervening rights); b) losing future damages (due to the claims being narrowed).

Defendants prefer the PTO because the latter is typically much more savvy and circumspect in examining patents. Furthermore, the patent owner does not enjoy the presumption of validity, so the doors are thrown open for the Examiner to review the patent anew.

The use of reexamination procedures is controversial because the patent owner would obviously prefer to keep the case in federal court in front of the Judge. By asking the PTO to intervene, it throws a wrench into into such plans. 

Moreover unless the patent owner is willing to go the distance, the odds of succeeding in a reexamination against a stubborn Examiner are extremely low. In an informal survey I conducted of BPAI decisions over the past 2/3 years, I counted almost 100 appeals in reexams (both interparte and ex parte) and discovered that the patent owner won less than 10% of the time. These are horrendous odds and should give anyone facing such situation great pause.

Of course it is true that one has recourse to the CAFC, but there is no study that suggests one's odds improve there. In fact, last year the CAFC handed down the Translogic case, one of the more significant decisions in some time, to little fanfare.

What was special about Translogic is that the CAFC for the first time had an opportunity to simultaneously review both a judgement in favor of the patent owner from a jury award (from an Oregon District Court) and decision by the BPAI against the same patent resulting from an adverse reexamination.  For the first time - that I can recall - the CAFC upheld the killing of the BPAI, and then turned around and vacated the jury award as well. Double bonus for defendant Hitachi! Patent dead, jury award (in excess of $100m) also gone!

What this shows is that reexams are more important than ever. This fact is not lost on the investing community either, as several companies in the past year have seen their stocks tank as a result of an unfavorable PTO decision in reexamination.  Tessera Takes Hit  Reexams tend to have other unfriendly side effects as well, such as causing Courts to suspend case progress until the PTO sorts things out.  ED Texas Judge Stays Case

It is quite apparent therefore why Samsung has decided to file for reexamination of eight (8) separate Rambus patents. They (rightly) perceive that their chances of success are much greater with the PTO.

Of the 8 pending cases, at least one (95/001008 for US Patent No. 6,715,020) is at a reasonably advanced stage that it is possible to glean some insights and understandings about the relative strength of the parties' positions.  This first case is also key because many of the arguments raised by Samsung to the PTO have broader applicability to many, many more of the Rambus patents.  More specifically, Samsung has challenged the sufficiency of the Rambus disclosures (a theme that has been repeated several times with the district courts) but this time they appear to have a more receptive ear with the PTO.  If Samsung is successful with this line of attack, it will have a strong ripple effect and likely compromise numerous other Rambus patents having the same claim "DNA" so to speak.  Samsung has also succeeded in getting the Examiner to believe their position that the claims are also invalid in light of prior art not originally considered in the patent's original prosecution.

Samsung clearly is going for the fences here.. but will they succeed?

I've now looked the main primary filings by Rambus, Samsung, and the Examiner in charge of the case.  All in all, there are approximately 25! main issues that the Examiner needs to resolve. First and foremost he needs to decide whether Rambus is entitled to the original 1990 filing date. There are no less than seven (7) separate "written description" challenges presented on this front. In my opinion, this aspect of the Examiner's opinion is the most critical, since anything he determines here will have broad impact on many other Rambus cases.

Over the next few weeks I plan to reveal my thinking and analysis for how I think this grand saga is going to play out in front of the PTO for each of these challenges. I will give specific predictions on what I think the Examiner will consider, and where I think the parties will win, and where they will lose.

I begin tomorrow with the written description challenges, because, as I indicated, they are very crucial to the other Rambus cases. Later, as time permits, I will address the prior art arguments as well. To a large extent I consider the latter secondary since Rambus can likely afford to lose a few claims in one patent. But they cannot afford a determination from the PTO that throws several dozen other patents into chaos.

JNG

Please note I am not employed by either party in the reexams, nor do I represent anyone involved in any of the other ongoing litigation proceedings. This exercise is purely for intellectual sport since I practice in this field and make a living making these types of judgement calls every day.  No one should take anything in these posts as constituting legal and/or investing advice of any kind.