Free Memorandum - District Court of Arizona - Arizona

1 Lawrence G. Scarborough (No. 6965)
George C. Chen (No. 19704)

2 BRYAN CAVE, LLP

Two North Central Avenue, Suite 2200 Telephone: (602) 364-7000 Michael D. Rounds (admitted pro hac vice) 5371 Kietzke Lane

3 Phoenix, AZ 85004-4406 4

5 WATSON ROUNDS 6 Reno, NV 89511 7
Telephone: (775) 324-4100 Henry C. Bunsow (admitted pro hac vice) HOWREY, SIMON, ARNOLD & WHITE San Francisco, CA 94105

8 Michelle A. Madriaga (admitted pro hac vice) 9 525 Market Street, Suite 3600 10 Telephone: (415) 848-4900 11 Attorneys for Reno A & E 12 13 14 15 EBERLE DESIGN, INC., 16 17 18 19 20 21 22 23 24
-vsEBERLE DESIGN, INC., and RENO A & E, Counter-claimant, -vsRENO A & E, Defendant. Plaintiff, ) CIV 02 2575 PHX DGC (LEAD) ) CIV 03-883 PHX DGC ) (Consolidated) ) ) RENO A & E'S SUPPLEMENTAL ) MEMORANDUM IN SUPPORT OF ITS ) MOTION FOR JUDGMENT AS A MATTER ) OF LAW PURSUANT TO RULE 50 ) ON VALIDITY AND ENFORCEABILITY ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA

25 ELECTRONIC DEVICES, INC., 26 Counter-defendants. 27 28

1
HOWREY SIMON ARNOLD & WHITE

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1

Based on the Court's comments during the hearing on September 1, 2005, Reno A & E

2 provides the following supplemental authorities in support of its Motion for Judgment as a Matter of 3 Law Pursuant to Rule 50 on Validity and Enforceability. As Reno A & E has argued, Eberle has failed 4 to set forth clear and convincing evidence during its case-in-chief. Thus, Reno A & E is entitled to 5 judgment as a matter of law that the '964 patent is valid and enforceable. Koito Mfg. Co. v. Turn-Key6 Tech, LLC, 381 F.3d 1142 (Fed. Cir. 2004). 7 I. 8
THE `964 PATENT IS NON-OBVIOUS AS A MATTER OF LAW For obviousness based on a combination of elements disclosed in the prior art, every element

9 must be identified in a specific reference, and there must be some motivation, suggestion or teaching to 10 make the specific combination. In re Kotzab, 217 F.3d 1365, 1370 (Fed. Cir. 2000). However, mere 11 identification in the prior art of each individual part of a claim is insufficient, as a matter of law, to 12 defeat patentability of the whole claimed invention. Id. at 1369-70. To avoid hindsight reconstruction, 13 one must show why one of ordinary skill in the art would select elements from specific cited references 14 for combination in the manner claimed. Id. at 1372; In re Rouffet, 149 F.3d 1350, 1357 (Fed. Cir. 15 1998). In Kotzab, the Court warned that when the invention involves a seemingly simple concept (e.g., 16 the idea of a single sensor controlling multiple valves versus multiple sensors controlling multiple 17 valves), one must be especially aware of the hindsight trap. Kotzab, 217 F.3d at 1372 (finding non18 obviousness where there was no identification of the specific understanding that would have motivated 19 one of ordinary skill to combine without having had prior knowledge of the patentee's invention). 20
To establish obviousness, Eberle must identify a person of ordinary skill in the art at the time of

21 the invention. 35 U.S.C. 103; Al-Site Corp. v. VSI Int'l, Inc., 174 F.3d 1308, 1324 (Fed. Cir. 1999) 22 (identification of ordinary skill in the art supplies the "primary guarantee of objectivity" in the 23 obviousness analysis). However, Eberle has no evidence describing such a person. Mr. Foderberg 24 admitted during trial that he gave no opinion as to who is a person of ordinary skill in the art. Further, 25 Mr. Russell's testimony, which can be used for limited background purposes, also does not provide 26 such evidence. Notwithstanding the many other weaknesses to its analysis, Eberle's failure to set forth 27 the qualifications and work experience of a person of ordinary skill in the art undercuts any force of its 28
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1 obvious arguments. Al-Site, 174 F.3d at 1324. The jury cannot reach a proper decision on obviousness 2 without knowing, for e.g., if that person was an electrical engineer who would have a working 3 knowledge of circuitry or an industry technician who has general knowledge of traffic cabinet. 4 Further, the jury cannot properly determine how much weight, if any, to accord the opinions related to 5 obviousness rendered by Mr. Foderberg, who testified that he did not consider nor did he understand 6 the electronic circuitry in the '964 patent or the prior art. On the basis of this failure alone, Reno A & 7 E is entitled to judgment as a matter of law that the '964 patent is non-obvious. 8
Eberle has also failed to provide clear and convincing evidence of a suggestion or teaching in

9 each reference to combine each element to make the specific combination. Rouffet, 149 F.3d at 1357; 10 Kotzab, 217 F.3d at 1372. For example, Mr. Foderberg did not identify any suggestion in any 11 reference that would lead one of ordinary skill in the art without prior knowledge of the '964 patent to 12 combine the bar graph on a radar gun and the display on the G-90. Further, Mr. Foderberg has 13 oversimplified the technology and used impermissible hindsight, e.g., the '964 patent as a template, for 14 piecing together elements contained in separate pieces of prior art to argue the claims of the '964 patent 15 are obvious. Kotzab, 217 F.3d at 1372. Finally, any testimony by Mr. Foderberg to supply the missing 16 suggestion to combine by broadly describing the progression of technology up to the time of the 17 invention is yet another attempt at impermissible hindsight reconstruction. Al-Site, 174 F.3d at 1324. 18 In the case of Mr. Russell, any such testimony is not admissible for the purposes of obviousness. 19 These flaws in Eberle's obviousness analysis are confounded by Mr. Foderberg's failure to use the 20 correct standard for obviousness as well as the court's claim construction. Accordingly, judgment as a 21 matter of law as to the non-obviousness of the `964 patent should be granted. 22 II. 23
THE `964 PATENT IS ENFORCEABLE AS A MATTER OF LAW To establish inequitable conduct, Eberle must first prove by clear and convincing evidence that

24 the inventors of the '964 patent made a material misrepresentation or omission of information to the 25 Patent Office, and second that there was a threshold level of culpable intent to deceive. N.V. Akzo v. 26 United States ITC, 808 F.2d 1471, 1481 (Fed. Cir. 1986) ("Akzo I"); N.V. Akzo v. E.I. Dupont De 27 Nemours, 810 F.2d 1148, 1153 (Fed. Cir. 1987) ("Akzo II"); Dayco Prods., Inc. v. Total Containment, 28
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1 Inc., 329 F.3d 1358, 1362 (Fed. Cir. 2003). The elements of intent and materiality must be determined 2 separately and then balanced together before inequitable conduct can be determined. Akzo II, 810 F.3d 3 at 1153 (finding no inequitable conduct where there was materiality but no requisite intent). The lower 4 the materiality, the greater the degree of intent that must be proven. Id. Where the reasons given for 5 withholding are plausible, "intent to deceive cannot be inferred simply from the decision to withhold 6 the reference." Dayco, 329 F.3d at 1367 (finding intent to withhold based on good faith belief that the 7 reference was in a different field from the claimed invention was not an intent to deceive). 8
Eberle has failed to prove the '964 patent is unenforceable as a matter of law because there is no

9 clear and convincing evidence in the record of misrepresentation or omission, culpable intent or 10 materiality. As to the prior art that Eberle alleged should have been disclosed, the cited references are 11 not material, nor has Eberle set forth sufficient evidence of materiality. Thus, Eberle must prove a 12 greater the degree of culpable intent. Id. Not surprisingly, Eberle has no evidence of the threshold 13 level of culpable intent by Mr. Potter or the other inventors to deceive the Patent Office. Each inventor 14 signed the inventor's oath in support of the '964 patent application. Mr. Potter testified at trial as to his 15 good faith belief that the references Eberle cited were well outside the field of his invention and that he 16 did not disclose these references because it did not even occur to him to do so. Id. The evidence as a 17 matter of law does not meet the threshold level of culpable intent or of materiality. Thus, on each 18 individual ground, the court must find the cited references do not render the '964 patent unenforceable. 19
Affidavits or arguments to the Patent Office do not constitute material misrepresentations

20 merely because the applicant attempts to distinguish prior art in a way favorable to issuance of the 21 patent. Akzo I, 808 F.3d at 1481 (holding no inequitable conduct based on submission of affidavits 22 distinguishing prior art where court did not find a "proved material misrepresentation or proved intent 23 to mislead") (emphasis added); Dayco, 329 F.3d at 1367 (finding no culpable intent where attorney's 24 declaration concluded in good faith that a reference was far-afield and not material). The applicant is 25 free to advocate a particular interpretation of prior art references and the examiner is free to reach his 26 own conclusion. Akzo I, 808 F.3d at 1481. Here, Eberle has no evidence that the declarations 27 submitted in support of the `964 application are false and has not shown the declarations contain 28
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1 material information. Id. Significantly, Eberle has presented no evidence of, much less proven, a 2 culpable intent to deceive the Patent Office through use of these declarations. Id. Mr. Potter testified 3 that he believed in good faith that his declaration was truthful. Further, each declarant, including Mr. 4 Potter, signed an oath and attested to his belief in the truthfulness of the declaration. While Eberle may 5 disagree with the statements contained within the declarations, Eberle cannot prove as a matter of law 6 the requirements of culpable intent, materiality or misrepresentation by mere allegation of inequitable 7 conduct. 8
As to the alleged on-sale bar activities Eberle argues should have been disclosed, there is no

9 evidence of culpable intent or proven materiality based on Mr. Potter's failure to disclose. In its 10 motion, Reno A & E has demonstrated in detail that there was no sale or offer for sale of the Model C 11 until months after the critical date. Accordingly, no on-sale disclosure duty remotely existed nor did 12 Mr. Potter believe he had such a duty. Even assuming arguendo that there was on-sale bar activity 13 prior to the critical date, Eberle has no evidence nor has it proven that Mr. Potter had the culpable 14 intent to deceive the Patent Office. Akzo I, 808 F.3d at 1481. Eberle must prove material 15 misrepresentation or prove intent to mislead Eberle with clear and convincing evidence. Id. Thus, 16 Eberle's mere allegation that Mr. Potter should have made a disclosure to the Patent Office does not 17 come close to meeting the heavy burden required to prove inequitable conduct. Id.; Dayco, 329 F.3d 18 at 1362. Based on the foregoing, judgment as a matter of law that there was inequitable conduct 19 should be entered. 20 /// 21 22 23 24 25 26 27 28
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1 III. 2

CONCLUSION For the foregoing reasons, Reno A & E respectfully respects that the Court grant its JMOL in

3 favor of Reno A & E on inequitable conduct, obviousness, anticipation and the on-sale bar. 4 Dated: September 2, 2005 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
-6HOWREY SIMON ARNOLD & WHITE

Respectfully submitted,

By: s/George C. Chen Attorneys Reno A & E BRYAN CAVE, LLP (00145700) George C. Chen (019704) Two North Central Avenue, Suite 2200 Phoenix, AZ 85004-4406 Telephone: (602) 364-7000 WATSON & ROUNDS Michael D. Rounds (admitted pro hac) 5371 Kietzke Lane Reno, NV 89511 Telephone: (775) 324-4100 Henry C. Bunsow (admitted pro hac) Michelle A. Madriaga (admitted pro hac) HOWREY, SIMON, ARNOLD & WHITE 525 Market Street, Suite 3600 San Francisco, CA 94105 Telephone: (415) 848-4900

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
Charles Hauff Daniel Pote Snell & Wilmer One Arizona Center 400 East Van Buren Phoenix, AZ 85004

CERTIFICATE OF SERVICE The undersigned hereby certifies that a true and correct copy of the foregoing was served on all counsel of record on September 2, 2005 via the Court's CM/ECF System including:

Dated: September 2, 2005

s/Donna McGinnis

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