Free Letter - District Court of California - California

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November 16, 2007 Honorable John J. Hughes United States Magistrate Judge Clarkson S. Fisher Building & U.S. Courthouse 402 East State Street Trenton, New Jersey 08608 Re: Broadcom Corp. v. Qualcomm Inc., Civil Action No. 05-3350 (MLC) Dear Judge Hughes: Pursuant to Your Honor's Order of October 18, the parties have met and conferred regarding an amended case management order. During those discussions, the parties reached agreement on a number of issues as follows. 1. Qualcomm shall have until December 21, 2007, to respond to Broadcom's Second Amended Complaint. The parties will exchange any additional initial disclosure information by that date as well. 2. If Qualcomm files a motion to dismiss, Broadcom shall have until January 25, 2008, to respond and Qualcomm shall have until February 15, 2008, to reply to that response. 3. The deadline to assert counterclaims shall be February 29, 2008. 4. Any motion to amend the pleadings or to join new parties shall be filed no later than October 3, 2008, and made returnable on October 27, 2008. 5. Fact discovery shall close on December 19, 2008.

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6. Interrogatories shall be limited to 35 per side, exclusive of any interrogatories served on or before September 1, 2006. 7. Expert discovery shall close on March 27, 2009. 8. The form of document productions shall be as set forth in the parties' agreement of January 20, 2006. 9. The anticipated trial date is June 2009. With Qualcomm's assistance, we have prepared the enclosed draft amended case management order, which reflects those agreed terms. As you will see, the draft order follows the language and conventions of Your Honor's original pretrial scheduling order of September 22, 2005. The parties have been unable, however, to reach agreement on two issues, which we address below. For Your Honor's convenience, the draft amended case management order notes those disagreements in the text and sets forth the parties' competing proposals. Porting of discovery from cases with overlapping facts. The first disagreement relates to the manner in which discovery from two other cases involving the parties will be used in this case, where those other cases had substantially overlapping facts. Although it is eminently sensible and efficient that such discovery be deemed produced here, Qualcomm refuses to do so, even though it agreed to that approach during negotiations regarding the California unfair competition action, which Your Honor may recall was stayed in favor of this case at Qualcomm's request and over Broadcom's objection. The two cases at issue are patent infringement actions that Qualcomm brought against Broadcom, in which it accused Broadcom of infringing patents that it alleged were essential to practice certain industry standards. The two litigations are Qualcomm v. Broadcom, No. 05-CV-01392 (RMB) (S.D. Cal.) (the "1392 case") and Qualcomm v. Broadcom, No. 05 CV 01958B (BLM) (S.D. Cal.) (the "1958 case"). The 1392 case involved accusations by Qualcomm that Broadcom infringed certain patents that Qualcomm claimed are essential to the GSM, GPRS, EDGE, and/or UMTS standards. The 1958 case involved accusations by Qualcomm that Broadcom infringed other patents that Qualcomm claimed are essential to a video compression standard called H.264. The GSM, GPRS, EDGE, UMTS, and H.264 standards are the very standards at issue in this case. Part of Broadcom's defenses in the 1392 and 1958 cases was that Qualcomm had waived its right to enforce the patents at issue by abusing the standard-setting process in connection with those standards, in particular by waiting until years after the standard was set to declare the patents essential and then only doing so as part of a strategy to undermine Broadcom as a competitor. Qualcomm pursued the 1958 case to trial, at the conclusion of which the jury recommended that Qualcomm's patents be deemed waived because of Qualcomm's failure to disclose as required. Qualcomm then withdrew the 1392 case just before it was scheduled for trial.

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Key to both cases was Qualcomm's conduct during the standard-setting process. In the 1958 case, Judge Brewster found that Qualcomm had engaged in a pattern of deception in that process. As a consequence of that gross misconduct, Judge Brewster held that Qualcomm had waived its right to enforce the patents at issue. Judge Brewster also found that Qualcomm's misconduct extended into the litigation itself, including through Qualcomm's presentation of false testimony during trial (which followed Qualcomm's use of a similar false statement to support its motion for summary judgment) and Qualcomm's post-trial production of hundreds of thousands of pages of materials relating to standard setting that should have been produced during pre-trial discovery. Judge Brewster found that "Qualcomm counsel participated in an organized program of litigation misconduct and concealment throughout discovery, trial, and post-trial . . . ." Qualcomm Inc. v. Broadcom Corp., No. 05-CV-1958-B (BLM) (S.D. Cal. Aug. 6, 2007), slip op. at 32 (attached as Exhibit A to this letter). (Qualcomm's counsel in the 1958 case were from different firms than Qualcomm's counsel in this case.) This misconduct and Qualcomm's intentional refusal to disclose its patents to the Joint Video Team ("JVT"), the standard-setting body that created the H.264 standard, led Judge Brewster to conclude that Qualcomm had willfully abused the standard-setting process: "[i]n light of all of the above evidence finally revealed, the eventual collapse of Qualcomm's concealment efforts exposes the carefully orchestrated plan and the deadly determination of Qualcomm to achieve its goal of holding hostage the entire industry desiring to practice the H.264 standard by insulating its IPR from the JVT so that the JVT would lose the opportunity to mitigate, if not avoid, Qualcomm's IPR in the development of the H.264 standard." Id. at 52. Putting aside Qualcomm's troubling litigation conduct, the discovery in both the 1958 and 1392 cases is directly relevant and, in the interest of judicial economy and efficiency, should be deemed produced here. Both cases involved abuse of some of the very standardsetting processes at issue here and porting would impose zero burden on the parties. Indeed, that discovery material is already loaded on the computers of the parties' outside counsel. Rather than agree to that simple and straightforward proposal, Qualcomm insists that Broadcom identify the specific discovery materials from those cases that Broadcom wants to have ported into this case. That makes no sense, because to do so would require Broadcom to review all of the material (which consists of millions of pages of documents and dozens or more depositions, as well as interrogatory responses and other discovery responses, all of which is covered by various protective orders entered in those other cases that strictly limit access to those materials) and would undoubtedly create numerous spurious disputes over relevance, which this Court would need to referee. As in any case, the proper time to resolve whether particular discovery materials that have already been produced are relevant is during the final pre-trial proceedings, where exhibit lists are set and evidentiary motions resolved. Qualcomm's proposal would impose unnecessary burdens on Broadcom and the Court for no legitimate purpose. Indeed, directly contrary to the position it now asserts, in discussions about this same issue in connection with the California state litigation that was stayed in favor of this action, Qualcomm agreed that the discovery in the 1392 and 1958 cases should be deemed produced. Having agreed on that point, Qualcomm asserted that discovery from two other litigations, the so-called "0660" and "1662" actions, which involved trade-secret claims that are wholly irrelevant to the present proceedings (and which Qualcomm previously had dropped), should be cross-produced as well. In addressing that issue, Qualcomm's counsel Mr. Barbur 3

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confirmed Qualcomm's agreement to port the 1392 and 1958 into the California action: "Qualcomm believes that the documents produced in the 0660 and 1662 actions ­ just like the documents produced in the 1392 and 1958 matters ­ should be deemed produced in the [California] matter . . . ." (8/14/07 letter from Barbur to Saxton, attached as Exhibit B (emphasis added).) (As far as Broadcom knows, Qualcomm has abandoned the argument that the 0660 or 1662 actions have any relevance here or that discovery from those actions should be ported into this action.) Of course, now that the allegations and claims that were pending in the California action have been, at Qualcomm's insistence, moved here, the discovery should be ported here as well. Indeed, when Qualcomm's counsel Mr. Chesler (who is also lead counsel in this case) argued in favor of the stay of the California action, he stressed the similarity of discovery and how the same discovery in the California case should be available in New Jersey: "With respect to the documents, ... any discovery that's taken place in intervening litigations that will be available is going to be available in either place, in either ­ in either this litigation or the New Jersey litigation." (Broadcom Corp. v. Qualcomm, Inc., No. 07CC01249 (Cal. Sup. Ct. Oct. 5, 2007) (Sundvold, J.) (transcript of stay hearing) at 11:9-18 (attached as Exhibit C).) Qualcomm cannot have it both ways. It cannot argue that a stay is appropriate in California because discovery would be available to be ported into the New Jersey action and then resist that porting. Number and counting of depositions. The second disagreement relates to how many depositions each party will be allowed to take and how those depositions will be counted. Broadcom believes that the 30 depositions that the Court ordered in Your Honor's original pretrial scheduling order of September 22, 2005 remains appropriate. Indeed, given the extensive discovery that has taken place in the 1392 and 1958 cases, fewer depositions may be needed than were anticipated at that time. Certainly more are unlikely to be needed. Qualcomm's assertion that it expects to take dozens of depositions of third parties is belied by the fact that during the more than 14 months the case was pending before it was dismissed, Qualcomm took no depositions of third parties at all. In any event, if either party believes during discovery that there is a need to exceed 30 depositions, it may always make an application to the Court; Qualcomm's proposal to allow from the outset as many as 60 depositions per side ­ six times the limit permitted by the Federal Rules ­ is an invitation for waste and harassment. In addition, Broadcom believes that, to the extent there are multi-day depositions, including depositions under Rule 30(b)(6), they should count against the applicable limit as one deposition per deposition day. Establishing such a baseline rule now should reduce the need to invoke Your Honor's assistance as to particular depositions in the future.

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We are available at Your Honor's convenience to present further information or argument on these issues. Please do not hesitate to contact us if Your Honor would find that useful or if we or Broadcom can be of any further assistance. Respectfully, /s/ Steven J. Kaiser Counsel for Broadcom Corporation cc: Counsel for Qualcomm Incorporated (via ECF service): William J. O'Shaughnessy, Esq. Evan Chesler, Esq. Peter T. Barbur, Esq.

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UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

BROADCOM CORPORATION, Plaintiff, v. QUALCOMM INCORPORATED Defendant

: Civil Action No. 05-3350 (MLC) : : : : (PROPOSED) AMENDED PRETRIAL : SCHEDULING ORDER : : : :

The Court having considered the positions of the Parties and good cause having been shown; IT IS on this _____ day of ____________, ORDERED THAT: 1. The Parties will complete fact discovery in this case on or before December 19, 2008. No fact discovery will issue beyond that date, except upon motion and for good cause shown. 2. The Parties will complete expert discovery in this case on or before March 27, 2009. 3. Defendant must respond to Plaintiff's second amended complaint no later than December 21, 2007. If Defendant responds by filing a motion to dismiss, Plaintiff must file its opposition no later than January 25, 2008. Any reply by Defendant must be filed no later than February 15, 2008. 4. In accordance with Fed. R. Civ. P. 30, the Parties shall be limited to [Broadcom proposes: no more than 30 depositions per side (multiple day depositions by specific agreement of counsel on conference call application, with each deposition day counting as one deposition against the aforesaid limit)/Qualcomm proposes: no more than 30 party depositions per side and no more than 60 depositions in total per side, taking into account the need for third-party discovery (multiple day depositions by specific agreement of counsel on conference call application)] except upon leave of the Court. In accordance with Fed. R. Civ. P. 33, the Parties will be limited to 35 interrogatories (including all

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subparts), per Party, exclusive of any interrogatories served on or before September 1, 2006, except with leave of the Court. 5. In accordance with Fed. R. Civ. P. 26(a)(1), each Party will submit a letter, on or before December 21, 2007, to the undersigned certifying that initial disclosure has been made. This material will not be filed with the Clerk of Court. 6. Notwithstanding the pendency of any motion to dismiss, and regardless of whether Defendant has served and filed an answer, Defendant shall serve and file counterclaims no later than February 29, 2008. 7. Any motion to amend the pleadings or to join new parties, whether by amended or third-party complaint, must be filed no later than October 3, 2008 and made returnable on October 27, 2008. 8. [Broadcom proposal: All discovery in the cases entitled Qualcomm v. Broadcom, No. 05 CV 01958B (BLM) (S.D. Cal.) and Qualcomm v. Broadcom, No. 05CV-01392 (RMB) (S.D. Cal.) shall be deemed to have been produced in this case and treated for all purposes as having been produced in this case, including without limitation as being subject to paragraph 23 of the Court's Order of March 13, 2006 relating to inadvertently produced materials.] [Qualcomm proposal: Either Party may designate relevant portions of discovery previously taken in any other litigation between the Parties to be deemed produced in this action. Such designation shall be made by written notice to the opposing party setting forth the particular documents, testimony, or other materials the designating party believes in good faith are relevant to this action within the scope of F.R.C.P. 26(b)(1). Any materials designated pursuant to this Paragraph shall be treated for all purposes as having been produced in this case, including without limitation as being subject to paragraph 23 of the Court's Order of March 13, 2006 relating to inadvertently produced materials.] 9. Any discovery or case management disputes will be brought to the Magistrate Judge's attention immediately by conference call with local counsel, with letter preceding the conference call. L. Civ. R. 37.1(a)(1); see also L. Civ. R. 16.1(f). 10. Counsel will confer in an attempt to resolve any discovery or case management disputes before making such dispute the subject of a motion. No discovery motion will be entertained absent counsel's full compliance with L. Civ. R. 37.1(a)(1); see also L. Civ. R. 16.1(f). 11. A status conference will be held before the undersigned at the Clarkson S. Fisher United States Courthouse, Trenton, New Jersey on __________ at ______. 12. The scheduling of the final pretrial conference shall be addressed during the status conference on _____________. Trial is anticipated for June 2009.

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13. The attorneys for all Parties are further directed to meet together by agreement, initiated by counsel for the Plaintiff no later than ten (10) days before the date of the pretrial conference to: a. discuss settlement; b. stipulate to as many facts and issues as possible; c. prepare a Final Pretrial Order in the form and content as required by the Court. Plaintiff's counsel will prepare the Final Pretrial Order and will submit it to all other counsel for approval and execution. The original and one copy of the executed Final Pretrial Order will be delivered to the pretrial conference. All counsel are responsible for the timely submission of the Final Pretrial Stipulation and Order; d. examine all exhibits and documents proposed to be used at trial; and e. complete all other matters which may expedite both the pretrial and trial of the case. 14. An original and one copy of the proposed Final Pretrial Order is to be submitted five (5) days in advance of the pretrial conference. 15. Appropriately colored markers (obtained from the Clerk's Office) will be affixed to the exhibits at or prior to the time they are shown to opposing counsel at the meeting of counsel referred to above, and each marker will bear the number of the exhibit to which it is affixed. 16. At the pretrial conference counsel should be prepared to discuss settlement of the case. Clients must be made available by telephone. 17. The Court may, from time to time, schedule conferences as may be required, either on its own motion or at the request of counsel. 18. Since all dates set forth herein are established with the assistance and knowledge of counsel, there will be no extensions except for good cause shown and by leave of Court, even with consent of all counsel. 19. Failure to appear at subsequent conferences, or to comply with any of the terms of this Order, may result in sanctions. 20. Counsel are advised that the Court has various audio/visual and evidence presentation equipment available for use at trial at no cost to the Bar. This equipment includes an evidence presentation system, which consists of a document camera, digital

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projector, and screen. The projector may be used to display images which originate from a variety of sources, including television, VCR, and personal computer. The document camera may be used to display documents, photographs, charts, transparencies and small objects. For further information, please contact the Courtroom Deputy Clerk, Denis Glynn at 609-989-0545. 21. Counsel are invited to use the George H. Barlow Attorney Conference Room located on the third floor of the Courthouse Annex. The room is equipped with telephones, laptop access/printer, copier, and fax.

_____________________________ JOHN J. HUGHES United States Magistrate Judge ALL PROPOSED ORDERS AND LETTER MEMORANDA SENT TO CHAMBERS SHOULD BE IN WORDPERFECT FORMAT AND E-MAILED TO: [email protected]. ANY FILINGS WITH THE CLERK'S OFFICE SHOULD BE IN PDF FORMAT.

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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA

QUALCOMM INCORPORATED, Plaintiff, v. BROADCOM CORPORATION,

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Defendants.
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Civil No: 05-CV-1958-B(BLM) ORDER ON REMEDY FOR FINDING OF WAIVER

I.

INTRODUCTION On March 21, 2007, this Court entered an Order (1) finding in favor of Defendant

Broadcom Corporation ("Broadcom") and against Plaintiff Qualcomm Incorporated ("Qualcomm") on Broadcom's Third Affirmative Defense that U.S. Patent Nos. 5,452,104 (Pl's Trial Ex. 1) ("the `104 patent") and 5,576,767 (Pl's Trial Ex. 3) ("the `767 patent") are unenforceable due to waiver; and (2) setting hearing on an Order to Show Cause as to what the appropriate remedy for Qualcomm's waiver should be. (Doc. No. 528 at 2.)
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Following hearing on the Order to Show Cause and careful consideration of relevant court and deposition transcripts, declarations, and other documents submitted by both parties, the Court hereby issues the following remedy for Qualcomm's waiver: that the `104 and `767 patents, their continuations, continuations-in-part, divisions, reissues, or any other dependent or derivative patents of either patent, shall be and are hereby ordered unenforceable.

II.

BACKGROUND Qualcomm filed the present suit against Broadcom for patent infringement of the

`104 and `767 patents on October 14, 2005, based on Broadcom's manufacture, sale, and offers to sell H.264-compliant products. (Doc. No. 1.) Broadcom filed its First Amended Answer and Counterclaims on December 8, 2006, in which it alleged (1) a counterclaim that the `104 patent is unenforceable due to inequitable conduct; and (2) a Third Affirmative Defense that the `104 and `767 patents are unenforceable due to waiver. (Doc. No. 370.) A jury trial was held on the legal issues from January 9, 2007, to January 26, 2007. The jury unanimously returned a verdict (1) in favor of Broadcom and against Qualcomm of non-infringement of the `104 and `767 patents; and (2) in favor of Qualcomm and against Broadcom for non-obviousness of the `104 and `767 patents. (Doc. No. 499.) The jury also unanimously returned an advisory verdict on the equitable issues: (1) finding by clear and convincing evidence in favor of Broadcom and against Qualcomm that the `104 patent is unenforceable due to inequitable conduct; and (2) finding by clear and convincing evidence in favor of Broadcom and against Qualcomm that the `104 and `767 patents are unenforceable due to waiver. (Id. at 14.) The Court held an evidentiary hearing on the equitable issues of inequitable conduct and waiver on February 9, 2007. On March 21, 2007, the Court entered an Order: (1) finding in favor of Qualcomm and against Broadcom on Broadcom's counterclaim of
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inequitable conduct as to the `104 patent; (2) finding in favor of Broadcom and against Qualcomm on Broadcom's affirmative defense that the `104 and `767 patents are unenforceable due to waiver based on Qualcomm's conduct before the Joint Video Team ("JVT"), the standards-setting body that created the H.264 standard; and (3) setting hearing on an Order to Show Cause as to what the appropriate remedy for Qualcomm's waiver should be. (Doc. No. 528 at 2.) The Court conducted a hearing on its Order to Show Cause on June 25, 2007. After the verdict was entered, Broadcom again demanded discovery of Qualcomm's records that previously had been concealed, but whose possible existence was only revealed during Broadcom's cross-examination of Qualcomm witness Viji Raveendran on one of the last days of trial. Thereafter, after over three more months of denials, refusals, and opposition, Qualcomm reversed its position, allegedly to avoid further dispute over the matter, and produced on April 13, 2007, over 110,000 pages of emails, company correspondence, and memoranda, and on May 15, 2007, over 120,000 more pages, some of which have now been filed with the Court, none of which have been disputed by Qualcomm.

III.

DISCUSSION A. STANDARD OF LAW

As the Court found in its March 21 Order, Broadcom has the burden of proving its affirmative defense of waiver and remedy therefor by clear and convincing evidence. (Doc. No. 528 at 13.) A district court may in its discretion hold a patent unenforceable in considering an affirmative defense of inequitable conduct by inventors and/or their agents before the United States Patent and Trademark Office ("PTO"), but the remedy depends on equitable considerations arising from the circumstances involved. See Refac Int'l, Ltd. v. Lotus Dev. Corp., 81 F.3d 1576, 1581, 1585 (affirming a finding of unenforceability based on an
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inequitable conduct affirmative defense and holding that a "district court must . . . weigh the threshold findings of materiality and intent in light of all the circumstances to determine whether they warrant a conclusion" of inequitable conduct). As the Court stated in its Order finding waiver, "[i]n that context, the Court here considers with respect to waiver the extent of the materiality of the omitted information and the circumstances surrounding [Qualcomm's] omissions in connection with the proceedings in the JVT." (Doc. No. 528 at 33.) While the Court is still unable to find, nor have the parties presented, case guidance for an equitable remedy to a finding of waiver by a patentee or assignee as an affirmative defense, it appears to the Court, as it stated in its Order, that "the remedy should not be automatic, but should be fashioned to give a fair, just, and equitable response reflective of [Qualcomm's] offending conduct." (Id.) The Court has not found a patent decision assessing the remedy for a finding of waiver based upon conduct of silence in the face of a duty to speak. The Rambus case, in which the Federal Circuit established the obligation to speak, did not involve a remedy for a breach of that obligation, because the party which allegedly violated the rule had not possessed intellectual property rights that read on or directly applied to the activities of the standards development process. See Rambus Inc. v. Infineon Techs. AG, 318 F.3d 1081, 1102 - 05 (Fed. Cir. 2003). Therefore, this Court, by analogy to the available remedies for redressing inequitable conduct before the United States Patent and Trademark Office ("PTO"), holds that the remedy available here may vary from no remedy to declaring the involved patents totally unenforceable. Qualcomm argues that Broadcom may not have any remedies beyond itself, because it raised the waiver issue only by a separate affirmative defense and not by a counterclaim or cross-claim. This contention is without merit. The Federal Circuit has upheld the unenforceability of a patent to the world due to inequitable conduct before the PTO even when pled as an affirmative defense by the defendant. See McKesson Info. Solutions, Inc. v. Bridge Med., Inc., 487 F.3d 897, 908, 926 (Fed. Cir. 2007); Semiconductor Energy Lab.
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Co., Ltd. v. Samsung Elecs. Co., Ltd., 204 F.3d 1368, 1372, 1378 (Fed. Cir. 2000); Refac Int'l, Ltd. v. Lotus Dev. Corp., 81 F.3d 1576, 1578, 1585 (Fed. Cir. 1996). Therefore, the Court finds that it may award remedy for a waiver affirmative defense beyond unenforceability only as to Broadcom.

B.

ANALYSIS 1. Overview of the Joint Video Team ("JVT"), related standards organizations, their Intellectual Property Rights ("IPR") Policy and Guidelines, and Qualcomm

In late 2001, the joint project JVT was launched by two parent standards bodies: (1) the Video Coding Experts Group ("VCEG") of the International Telecommunication Union Telecommunication Standardization Sector ("ITU-T") and (2) the Moving Picture Experts Group ("MPEG") of the International Organization for Standardization ("ISO") / International Electrotechnical Commission ("IEC"). (Def's Trial Ex. 5163 (JVT Terms of Reference ["ToR"]); Trial Tr., 267, Jan. 17, 2007.) The JVT was created to enhance standard video coding performance in the face of limited bandwith or storage capacity.1 As a joint project, the JVT would be able to more efficiently produce a single "technically aligned, fully interoperable" standard that would offer "the best possible technical performance under the practical constraints of being implementable on various platforms and for various applications." (JVT ToR at 1.) According to the JVT ToR, JVT meetings are "open to, and contributions accepted from, all parties qualified for participation in meetings according to the rules of either parent body." (JVT ToR at 3.) As sector members of the ITU-T, Qualcomm and Broadcom can "influence a great variety" of the activities of the Telecommunication

See Press Release, ITU-T, ITU-T and ISO/IEC to produce next generation video coding standard: Joint Video Team to Deliver Quality Improvement (Feb. 8, 2002), http://www.itu.int/ITU-T/news/jvtpro.html. 5
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Standardization Sector, including the JVT, by "presenting [their] views" and "participating actively."2 Qualcomm and Broadcom must annually pay a minimum of 31,800 Swiss Francs (approximately $26,500) to enjoy the benefits of Sector Membership in the ITU-T, but may annually pay up to 2,544,000 Swiss Francs (approximately $2,4119,000), with higher contributions correlating to a higher class of sector member.3 The American National Standards Institute ("ANSI") is the United States' representative member in both the ISO and IEC, as the national body most representative of standardization and electrotechnical standardization, respectively, in the United States.4 As Company Members of ANSI, Qualcomm and Broadcom enjoy the privilege of "active participation in ANSI and its programs," including the ISO and IEC and by extension the JVT, by paying annual dues ranging from $750 to $25,000 depending on their global sales revenue.5

See ITU-T Membership, http://www.itu.int/ITU-T/membership/sector.html (last visited Jul. 17, 2007); ITU Global Directory, http://www.itu.int/cgi-bin/htsh/mm/scripts/mm.list?_search=SEC&_languageid=1 (last visited Aug. 6, 2007). See How to join as a Sector Member, http://www.itu.int/ITU-T/membership/join-sector.html (last visited Aug. 6, 2007). See Member bodies, http://www.iso.org/iso/en/aboutiso/isomembers/MemberList.MemberSummary?MEMBE RCODE=10 (last visited Jul. 17, 2007); Members of the IEC, http://www.iec.ch/cgi-bin/procgi.pl/www/iecwww.p?wwwlang=e&wwwprog=membrs3. p (last updated Jul. 18, 2007); Overview of the ISO System, http://www.iso.org/iso/en/aboutiso/introduction/index.html (last modified Sept. 12, 2006); IEC Membership, http://www.iec.ch/about/members-e.htm (last visited Aug. 6, 2007). See ANSI Membership Roster, https://eseries.ansi.org/Source/directory/Search.cfm (last visited Jul. 17, 2007); ANSI Membership - A Value Proposition, http://www.ansi.org/membership/overview/overview.aspx?menuid=2 (last visited Aug. 6, 2007); ANSI Company Membership Application, http://publicaa.ansi.org/sites/apdl/Documents/Membership/ANSI%20Member-Company6
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Qualcomm has paid hundreds of thousands of dollars to ANSI and the ITU-T to reap the benefits of membership, including the entitlement to actively participate in the JVT and the creation of the H.264 standard. These standards organizations pool resources to efficiently create universal technology standards for the benefit of (1) the world through the advancement of technology and (2) companies worldwide such as Qualcomm through greater cross-platform product compatibility and therefore revenue. According to the JVT ToR, the JVT "progress[es] in compliance with the Intellectual Property Rights ("IPR") policies and IPR reporting requirements and procedures of both [parent] organisations [sic]" regarding patent and copyright issues. (JVT ToR at 4.) More specifically, the JVT collects IPR information during the standardization process as follows: According to the ITU-T and ISO/IEC IPR policy, members/experts are encouraged to disclose as soon as possible IPR information (of their own or anyone else's) associated with any standardization proposal (of their own or anyone else's). Such information should be provided on a best effort basis. For collecting such information, JVT has decided to use it's [sic] own Patent Declaration form ­ note that this is distinct from the ITU ISO IEC Patent Statement and Licensing Declaration that is to be submitted to the ISO Secretary General and ITU TSB Director when the contributed technology becomes part of the final standard. (JVT ToR at 9.) This language applies to Qualcomm, as a member of the ITU-T and

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In the sample Patent Disclosure Form included in the ToR, the JVT reiterates:
20 21 22 23 24 25 26 27 28 2006.pdf (last visited Aug. 6, 2007). 7
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JVT requires that all technical contributions be accompanied with this form. Anyone with knowledge of any patent affecting the use of JVT work, of their own or of any other entity ("third parties"), is strongly encouraged to submit this form as well. (JVT ToR at 12.) The JVT explains that form submissions should be made on "a best effort, good faith basis," as "[t]he intent is that the JVT experts should know in advance of any patent issues with particular proposals or techniques, so that these may be addressed

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well before final approval." (Id.) If the submitter has a patent "associated with the technical content" of the standard being created by the JVT, the submitter must indicate on the form whether it will: (1) grant royalty-free licenses to practice the patent; (2) grant licenses "on a worldwide, non-discriminatory basis and on reasonable terms and conditions"; (3) grant royalty-free licenses on the condition that all other patent holders do the same; or (4) not grant any of the aforementioned licenses, in which case the standard will be designed so as not to cover the patent. (JVT ToR at 13.) As for the "ITU ISO IEC Patent Statement and Licensing Declaration" that must be submitted separately to the ITU and ISO before final approval of the standard being created by the JVT, "any party participating in the work of the ITU, ISO or IEC should" alert these bodies to the existence of patents "embodied fully or partly" in a standard under consideration.6 Patent holders submitting this form to the ITU and ISO have similar licensing options as offered by the JVT form above: they must (1) grant royalty-free licenses to practice their patent; (2) grant licenses "on a non-discriminatory basis on reasonable terms and conditions"; or (3) not grant any of the aforementioned licenses, in which case the standard will be designed so as not to cover the patent.7 This language also applies to Qualcomm, as a "party participating in the work of the ITU, ISO or IEC" by way of the JVT. As held by this Court in its March 21 Order and described in more detail below, (1) waiver of patent rights must be shown by clear and convincing evidence; (2) JVT participants treated the JVT IPR policies as imposing a duty to disclose patents that reasonably may be essential to practice the H.264 standard; (3) the `104 and `767 patents reasonably may be essential to practice the H.264 standard; (4) Qualcomm participated in

Common Patent Policy for the ITU-T/ITU-R/ISO/IEC, http://www.itu.int/ITU-T/dbase/patent/patent-policy.html (last visited Aug. 6, 2007).
7

6

See id. 8
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the JVT as early as January 2002; (5) Qualcomm had knowledge that the `104 and `767 patents reasonably might be essential to practice the H.264 standard; and (6) therefore, Qualcomm had a duty to disclose the `104 and `767 patents to the JVT. However, instead of disclosing the `104 and `767 patents to the JVT and offering to license them royalty-free or under non-discriminatory, reasonable terms during the development phase of the JVT work on the H.264 standard, Qualcomm closely monitored and participated in the development of the H.264 standard, all the while concealing the existence of at least two patents it believed were likely to be essential to the practice of the standard, until after the development was completed and the standard was published internationally. Then, without any prior letter, email, telephone call, or even a smoke signal, let alone attempt to license Broadcom, Qualcomm filed the instant lawsuit against Broadcom for infringement of the `104 and `767 patents, seeking damages and permanent injunction against Broadcom based on its development and manufacture of H.264 compliant products. Qualcomm sought to unfairly benefit from having subverted the standards-making process of the JVT and, as the Court found in its March 21 Order, waived its right to enforce the patents-in-suit.

2.

The Court FINDS by clear and convincing evidence that Qualcomm participated in the JVT as early as January 2002

In the Court's March 21 Order finding in favor of Broadcom on its affirmative defense of waiver, the Court had already found by clear and convincing evidence that Qualcomm participated in the JVT as early as September 2002. (Doc. No. 528 at 22.) However, with the new evidence produced by Qualcomm post-trial, the Court FINDS well beyond clear and convincing evidence that Qualcomm participated in the JVT as early as January 2002, well before the release of the H.264 standard in May 2003. The evidence unequivocally contradicts Qualcomm's assertions at summary judgment, during trial, and at the post-trial hearing on waiver and inequitable conduct that it did not participate in the
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JVT until after May 2003. As early as January 2002, Qualcomm hired an outside consultant, Jordan Isailovic, to attend JVT meetings on Qualcomm's behalf and to send reports to Qualcomm summarizing the progress of the JVT. For example, after ostensibly attending a JVT meeting in Geneva, Switzerland that took place from January 29 to February 1, 2002, Mr. Isailovic sent an email to three Qualcomm employees, including Qualcomm's initial Rule 30(b)(6) witness Christine Irvine, on February 11, 2002, with the subject heading "JVT Geneva Report," stating the following: The Report on the JVT Geneva Meeting is included as an attachment. As you can see, the Report has many details. I hope that you and your team can get a good idea about JVT . . . If you or any member of your team needs any of the documents mentioned in the Report, please let me know and I will get it. (Doc. 543-2, Ex. A, Tab 3 at 24, Tab 4 74.)

13

Two days later on February 13, 2002, Ms. Irvine forwarded Mr. Isailovic's email to
14

six other Qualcomm employees, including Qualcomm trial witness and senior staff
15

engineering manager Viji Raveendran and Qualcomm deposition witness James Determan.
16

(Id., Tab 5 at 77.) On February 25, 2002, Ms. Irvine forwarded by email over three pages
17

of notes she took on her most recent JVT phone conference to fellow Qualcomm
18

employees Raveendran and Jay Yun. (Id., Tab 7 at 83.) The next day on February 26,
19

2002, Ms. Raveendran sent an email to two Qualcomm employees with the subject heading
20

"JVT mtg tomorrow" that stated, "Chris is going to the JVT mtg. and will be driving
21

tomorrow." (Id., Tab 8 at 88.)
22

On March 5, 2002, Qualcomm consultant Isailovic sent an email to five Qualcomm
23

employees, Ms. Irvine, Ms. Raveendran, Mr. Determan, John Ratzel, and Amnon Silberger
24

with the subject heading "Requested Documents and Info" that stated in part as follows:
25

John, Chris at all [sic],
26

Here is the response to list of documents and info you requested today:
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1. JVT, sw for the TML 9.x . . . 2. MPEG Web site: . . . 3. JVT, ABT example document: See the attachment . . . 4. Contact information for the Thomson JVT expert who has software for the H.26L [working name for the standard that became H.264]: . . . Let me know if you need anything else. Jordan (Id., Tab 9 at 90 - 91.) The following day on March 6, 2002, Mr. Isailovic sent another email to Qualcomm colleagues Irvine, Ratzel, Raveendran, Silberger, Determan, and Steve Morley, with the subject heading "JVT/H26L" and an attached file "jm17.zip" that stated: This may be the latest version (evaluable [sic]) . . . PS: Chris, please forward this to the rest of the group; I don't have all addresses. (Id., Tab 10 at 94.)

12

Post-trial, Qualcomm produced at least 118 additional emails discussing the work of
13

the JVT sent between (1) Qualcomm employees, including Ms. Irvine, Ms. Raveendran,
14

and Mr. Determan; (2) Qualcomm consultant Isailovic; and/or (3) a Qualcomm email list
15

"dc-system-eng" dated from March 11, 2002, to July 22, 2004. (Id., Tabs 12 - 129.) One
16

hundred seven of these emails were sent before the H.264 standard was released in May
17

2003. (Id., Tabs 12 - 118.)
18

Not only did Qualcomm consultant Isailovic attend JVT meetings as early as
19

January 2002, Qualcomm employees have been attending JVT meetings "for a while"
20

before April 2002, well before the H.264 standard was released in May 2003. Qualcomm
21

employee Amnon Silberger wrote an email to four other Qualcomm employees, including
22

Mr. Yun, on April 30, 2002, which stated:
23 24 25 26 27 28

We have been attending these standard body meetings for a while now. These are the MPEG/JVT/JPEG meetings and the SMPTE meetings. To ease the load, all the system engineers in our group rotate in attending these (Chris, Jay, Viji, Jim Determan and myself). (Id., Tab 44 at 306.) Messrs. Yun and Silberger attended the May 2002 JVT meeting in Fairfax, Virginia. On May 8, 2002, Mr. Yun sent a three-page meeting report email to
11
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eight Qualcomm employees, including Ms. Irvine, Ms. Raveendran, Mr. Determan, and Mr. Silberger, with the subject header "WG11 (MPEG Fairfax - day 3)" that stated explicitly, "I've attended some JVT meetings and saw some demo (so did Amnon)." (Id., Tab 57 at 361.) Furthermore, Qualcomm voted on ballots affecting JVT as early as June 2002. On June 11, 2002, Mr. Yun wrote an email to Ms. Irvine, Ms. Raveendran, Mr. Silberger, and Mr. Determan stating the following: Below is an email ballot for L3.1 (USNB [United States National Body] for MPEG). It calls for an ad hog [sic] group to collect and generate comments on US comments on JVT CD (Committee Draft). By not replying to this email, we agree to the formation of the AHG [ad hoc group]. (Id., Tab 70 at 415.) Mr. Yun sent another email to those same four Qualcomm employees

11

the same day, stating:
12

One more email ballot from L3.1.
13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

This has two questions, the first one approves the REGISTRATION of JVT CD and the second one approves the CD with a conditional disapprove, which means that the USNB has some comments that it wishes to be reflected. I don't see any reason we should disagree with the two questions. We need not do anything to do so. Let me know if any of you want to investigate this further and discuss. (Id., Tab 71 at 419.) Qualcomm's post-trial production of documents directly and unequivocally exposes as blatantly false Qualcomm's steadfast assertions at summary judgment, during trial, and at the post-trial hearing on waiver and inequitable conduct that it did not participate in the JVT until after May 2003. The Court FINDS well beyond clear and convincing evidence that Qualcomm participated in the JVT from as early as January 2002, even earlier than the Court originally found in its March 21 Order and, more importantly, well before the JVT released the H.264 standard in May 2003. Participation does not require submission of proposals, speeches, objections or leadership roles. The Court finds Qualcomm's involvement to be vigorous participation -- a difference appears to the Court to be the
12
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motive for participation -- i.e., to insulate its IPR from the work of the JVT so as to preserve it for unilateral enforcement if that became possible after the H.264 standard was settled upon.

3.

The Court FINDS by clear and convincing evidence that Qualcomm was aware as early as August 2002 that JVT participants treated the JVT IPR policies as imposing a duty to disclose patents that reasonably may be essential to the H.264 standard

In the Court's March 21 Order finding in favor of Broadcom on its affirmative defense of waiver, the Court found by clear and convincing evidence that JVT participants treated the JVT IPR policies as imposing a duty to disclose patents that reasonably may be essential to the H.264 standard. With the new evidence produced by Qualcomm post-trial, the Court now FINDS by clear and convincing additional evidence that Qualcomm was aware of this treatment by JVT participants as early as August 2002. In August 2002, Qualcomm consultant Isailovic forwarded an email to Qualcomm employees Ratzel, Determan, Irvine, Raveendran, Silberger, and Yun with the subject heading "Fwd: [jvt-ipr] Re: Face-to-Face JVT IPR Meeting." (Doc. No. 543-2, Ex. A, Tab 92 at 529.) The body of the forwarded email stated in pertinent part: The future licensing terms [for H.264 / MPEG-4 AVC] will be defined by the holders of essential patents; at this time it is unknown who are these patent holders, so this needs to be determined first. The question is how. In my understanding, the objective is to invite "potential holders of essential patents" to the face-to face-meeting [sic] to discuss this issue. Therefore in my understanding the most important agenda point is the procedure to identify essential patent holders in an objective manner. (Id., Tab 92 at 530 - 31.) Then in September 2002, Mr. Isailovic forwarded another email to Qualcomm employees Morley, Ratzel, Determan, Irvine, Raveendran, Silberger, and Yun with the subject heading "Fwd: [jvt-ipr] Call for H.264 / MPEG-4 AVC [Advanced Video Coding]
13
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patents." (Doc. No. 543-2, Ex. A, Tab 94 at 545.) The body of the forwarded email stated in pertinent part: This is to let you (as you may have noticed already that MPEG LA is calling for essential MPEG-4 AVC/ H.264 patents, with the aim to come to a joint license soon. (Id., Tab 94 at 546.) One month later in October 2002, Mr. Isailovic forwarded an email to Qualcomm employees Ratzel, Raveendran, Determan, Irvine, Silberger, and Yun, which Ms. Raveendran in turn forwarded to two other Qualcomm employees with the subject heading "Fwd: [jvt-ipr] Confirmation of JVT IPR meeting in Geneva." (Doc. No. 543-2, Ex. A, Tab 97 at 567.) In the body of her email, Ms. Raveendran wrote, "FYI. Some information on licensing issues and IPR in JVT." (Id.) The body of the forwarded email listed a suggested agenda for the JVT-IPR meeting open to all JVT and IPR experts at the Geneva JVT conference, which included (1) an "(ongoing) determination of essential patent holders" and (2) the "expected process once essential patent holders are identified." (Id., Tab 97 at 568.) These three emails demonstrate that Qualcomm was aware as early as August 2002 that the JVT was actively attempting to identify holders of patents essential to the H.264 standard. Later, in September 2003, Qualcomm employee Harinath Garudadri wrote an email to another Qualcomm employee and a Qualcomm email list "multimedia.all" with his "notes from the first day of the JVT meeting." (Id., Tab 120 at 682.) One of Mr. Garudadri's bullet points was: IPR policies of [JVT parent body] VCEG and ITU. Gary said formal notification was required. List of IPR holders for H.264/AVC is in Appendix F of MPEG doc and ITU-T web site. Each contribution has the IPR statements at the end. (Id.) (emphasis added.) JVT chairman Gary Sullivan confirmed at trial that he delineated

25

the IPR policy of the JVT at the beginning of every JVT meeting, and from Garudadri's
26

email, Qualcomm was aware at least by September 2003 that formal IPR notification was
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consistently requested of all IPR holders even if they did not make technical proposals. (Trial Tr., 43 - 44, Jan. 18, 2007.) Since, as established above, Qualcomm had been attending JVT meetings as early as January 2002 in which Mr. Sullivan routinely repeated this IPR policy at each meeting, the Court concludes that Qualcomm was well aware of the policy even earlier than that. Furthermore, amongst the documents Qualcomm produced post-trial was Philips International's June 21, 2002, letter to the ISO International Technology Task Force accompanying its JVT Patent Disclosure form, which made it clear that Philips treated the JVT's IPR policies as imposing a duty to disclose. (Doc. No. 543-2, Ex. A, Tab 74.) Under the subject heading "Re: JVT," Philips wrote: In response to the RFTI [Request for Technical Information] made at the MPEG meeting May 6-10, 2002 we submit in the required JVT Patent Disclosure Form, a list of Philips' patents which have been deemed necessary for the implementation of MPEG2 Video, and which have been deemed necessary for the implementation of the JVT Baseline and/or Main Profiles. Philips has made the listed patents available for implementation of the MPEG2 Video standard, in accordance with ISO IPR rules, on reasonable and non-discriminatory terms. To be consistent and to avoid discriminating against licensees under the MPEG2 Video standards, Philips is again prepared to make these patents available under reasonable and nondiscriminatory terms for the JVT Baseline and Main Profiles. (Id., Tab 74 at 435) (emphasis added.) From this, Qualcomm was aware that JVT participant Philips viewed the JVT Patent Disclosure Form as "required" for patents "deemed necessary for the implementation of the JVT Baseline and/or Main Profiles." Qualcomm was further aware that Philips was prepared to license its patents for the JVT standard "[t]o be consistent" with "[JVT parent] ISO IPR rules." Later in this letter, expressing concern that "the JVT will not be in a position to take an informed decision on the feasibility of a royalty-free Baseline Profile," Philips stated Video compression technology has attracted wide interest in the electronics industry for quite some years. As a consequence many patents and patent applications exist in many countries of the world covering not only the basics of compression technology, but also many varieties within such compression schemes.
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To our mind it is an illusion to assume[] that it would be possible to ensure a royalty free JVT Baseline Profile by the evaluation effort based on the patents now being submitted. First, there is a very substantial risk that the submitted list of patents is not complete. Second, an effort, undertaken to avoid the use of patent rights that are not available under royalty-free conditions, could well result in the use of other not yet identified patent rights. Both issues place at the end the so defined JVT Standard in an even much worse position when patents of not-involved companies start playing a role. (Id., Tab 74 at 435 - 36.) From this, Qualcomm was aware of the concern of JVT

6

participant Philips that the H.264 standard would practice patents that had not yet been
7

disclosed to the JVT and offered for licensing under royalty-free or reasonable and non8

discriminatory terms.
9

Furthermore, Philips closed its letter by stating, "In the interests of transparency
10

Philips is copying this letter to members of the JVT Group, many of whom are licensees
11

under the MPEG2 Video patents, in order to demonstrate Philips [sic] continued
12

commitment to transparency and non-discrimination in the licensing of IPR on standards."
13

(Id., Tab 74 at 436.) Therefore, while it is not apparent when Qualcomm received the copy
14

of Philips' letter, since Philips copied the letter to all JVT members, the Court concludes
15

that Qualcomm probably received a copy not long after it was sent on June 21, 2002.
16

The Court already found by clear and convincing evidence in its March 21 Order
17

that JVT participants treated the JVT IPR policy as imposing a duty of disclosure for
18

patents that reasonably might be necessary to practice the H.264 standard. Now,
19

considering the new evidence produced late by Qualcomm post-trial, the Court FINDS by
20

additional clear and convincing evidence that Qualcomm was aware of this treatment as
21

early as August 2002.
22 23

4.
24 25

The Court FINDS by clear and convincing evidence that Qualcomm had knowledge by early March 2002 that its Adaptive Block Size Transform ("ABT") related patents, including the `104

26

and `767 patents, reasonably might be necessary to practice the
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H.264 standard In the Court's March 21 Order finding in favor of Broadcom on its affirmative defense of waiver, the Court found by clear and convincing evidence that Qualcomm had knowledge that the `104 and `767 patents might reasonably be necessary to practice to H.264 standard as early as 2002 and July 2005 respectively. (Doc. No. 528 at 27.) With Qualcomm's post-trial production of additional documents, the Court now FINDS by additional clear and convincing evidence that Qualcomm had knowledge as early as March 2002 that its ABT related patents, including the `104 and `767 patents, reasonably might be necessary to practice the H.264 standard. Qualcomm's own witness Chong Lee, an inventor of both the `104 and `767 patents, testified at trial that the `104 and `767 patents related to ABT technology. Mr. Lee testified that his May 1992 paper "Intraframe Compression of HDTV Images Based on Adaptive Block Size Discrete Cosine Transform" described the `104 patent invention. (Trial Tr., 94, Jan. 10, 2007.) He stated that the paper "discusses the technology involved in both 104 and -- 104 that included ABS DCT [Adaptive Block Size Discrete Cosine Transform] and DQT [Differential Quadtree Transform]" and reiterated that the `104 patent describes "intraframe compression." (Id. at 70, 94.) In contrast, Mr. Lee specified that the `767 patent describes "interframe compression." (Trial Tr., 70, Jan. 10, 2007.) Mr. Lee testified: I approached the problem [addressed in the `767 patent] by using multiple block sizes in an adaptive fashion to solve the problem of obtaining both quality and efficiency of the [video interframe] compression. (Id. at 107 - 08.) When asked whether the `767 patent approach was similar to ABS DCT, Mr. Lee responded: Yes. Exactly. Just like we were describing ABS DCT as adaptive block size technique that involves transforms on different block sizes, this technique involves adaptive block sizes by applying what's called motion compensation, looking for similarities in large blocks versus small blocks. (Id) (emphasis added.)

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Qualcomm recognized as early as March 2002 that its ABT related patents might be reasonably necessary to practice the H.264 standard. A report entitled "Report of activities for the last six months" and dated March 6, 2002, that was produced from Qualcomm's records stated: Since our group is actively involved in the ITU, MPEG, and SMPTE standards meetings, we are looking into proposing some of the features of our ABSDCT compression algorithm to one of these standard bodies. I had the task of compiling the details of MPEG, JVT (Joint Video Team) and ABSDCT compression features. I reviewed the JVT draft and prepared a spreadsheet detailing the aspects of these algorithms. We haven't had a chance to discus [sic] this yet. The purpose behind this is for us to decide whether our ABSDCT Intra and interframe algorithms will fit in the JVT scenario. (Doc. No. 543-2, Ex.A, Tab 11 at 96.) As stated above, the `104 patent deals with intraframe video compression, while the `767 patent deals with interframe video compression. From this report, Qualcomm demonstrates its awareness of the connection between these patents and the H.264 standard being developed by the JVT. On March 26, 2002, Qualcomm engineer Silberger sent an email to three Qualcomm employees, including Ms. Irvine and Jay Yun, with the subject heading "JVT ABS submission," which stated: For several days now, Jay and myself have been looking at ways to incorporate our ABS into H.26L [another name for H.264] for submission in the JVT May Meeting. (Doc. No. 543-2, Ex. A, Tab 17 at 122) (emphasis added.) Clearly, Mr. Silberger is here acknowledging that Qualcomm's adaptive block size technology is so related to the work being done in the JVT that it should be offered for incorporation into the developing H.264 standard. The next day on March 27, 2002, Mr. Yun responded to Mr. Silberger's email, stating: After discussing JVT ideas with Amnon, I remembered that there were some recent proposals that have to do with variable block sizes. I re-read those proposals, Jordan's report and our patents and come up with the following observations.
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(Id., Tab 20 at 131) (emphasis added.) Addressing JVT proposals already made by others to add an 8x8 transform, a 16x16 transform, and a 2x2 transform, Mr. Yun wrote: 1. [. . .] They are all integer transforms that mimic DCT. With these, perhaps we can recommend our variable block size scheme that is different than the proposal which only uses fixed-size sub-blocks for the entire 16x16 block (i.e., you can only have all 8x8s, all 4x4s, all 8x4s or all 4x8s, etc.)? . . . But Jordans' report says that this adaptive block-size ideas will not be included in the baseline but in some high quality applications, so we may be able to prove that there is a significant gain in quality by using out [sic] scheme. (Id.) (emphasis added.) Mr. Yun continued: 2. Our original patents mention DCT almost exclusively and says that it is for "pixel data." Should we "extend" our patents to include all transforms and all data types (like residuals)? 3. We should go to all JVT meetings at least for the time being to be on top of their work on ABT, which Jordan says is brand new. 4. Similar to ideas in 1, we can use our interframe ABS patent and then either recommend BSA [sic ABS] for motion block size assignment/representation and/or attach or block JVT's scheme for using variable block size for motion estimation (they use fixed size sub-blocks, though). (Id., Tab 20 at 131 - 32) (emphases added.) Both the `104 and `767 patents mention DCTs

16

multiple times: in the claim language and repeatedly throughout every section of the `104
17

patent, and in the description of preferred embodiments in the `767 patent. (`104 patent;
18

`767 patent.) Furthermore, as Mr. Lee explained at trial, the `767 patent describes
19

interframe compression using adaptive block sizes.
20

Then, in July 2002, Ms. Raveendran sent an email to Qualcomm JVT consultant
21

Isailovic, in which she wrote:
22 23 24 25 26 27 28

About patent reviews for JVT and studying ABT with respect to our patent, it was decided that we would like a summary of various aspects of ABT in JVT. There are a lot of details and if you can help narrow down the focus, that would be a good start. (Id., Tab 86 at 504) (emphasis added.) A few months later in November 2002, Qualcomm engineer Yun wrote an email with the subject heading "JVT slides," stating that "monitoring ABT is of importance since
19
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there may be patent infringement issues related to ABSDCT." (Id., Tab 102 at 600) (emphasis added.) Qualcomm engineer Silberger responded to Mr. Yun's email on the same day, carbon copying Ms. Raveendran and writing, "One thing, didn't we kind of conclude that they are not infringing our ABSDCT?" (Id., Tab 102 at 599.) This email exchange makes it clear that, prior to November 2002, Qualcomm had already given consideration to whether the H.264 standard in development would infringe Qualcomm's ABS DCT patents, which include the `104 and `767 patents. This is further confirmed by the December 2002 document entitled "JVT 12/9-14/02 meeting goals, prioritized list," in which the item "ABT" is followed by the question, "Is there a potential IPR issue with ABSDCT?" (Id., Tab 109 at 635) (emphasis added.) Then, in April 2003, Qualcomm employee Tom Kilpatrick sent an email to Viji Raveendran and another Qualcomm employee addressing a new "bi-weekly working engineering meeting." (Id., Tab 118 at 673.) Mr. Kilpatrick wrote, "One of the things to be addressed in Viji's meetings are progress on Digital Cinema patents vs JVT standard." (Id.) (emphasis added.) Qualcomm's outside expert Dr. Iain Richardson testified at trial that Qualcomm designed a product implementing an audio compression system, the QDEC1000, based on the `104 patent. (Trial Tr., 126 - 27, Jan. 11, 2007.) Qualcomm employee Irvine then confirmed through deposition testimony at trial that the QDEC-1000 was sold to "Technical or Digital Cinema." (Trial Tr., 84 - 85, Jan. 18, 2007.) Therefore, Qaulcomm knew of a link between the `104 patent and the H.264 standard and set up biweekly meetings to "address" the issue in April 2003. This newly discovered evidence augments the already convincing evidence explicitly naming the `104 and `767 patents that the Court discussed in its March 21 Order, indicating Qualcomm's knowledge of a link between those patents and the H.264 standard. Therefore, the Court FINDS by additional clear and convincing evidence that Qualcomm had knowledge that the `104 and `767 patents reasonably might be necessary to practice the H.264 standard as early as March 2002, well before the JVT released the H.264 standard in
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May 2003. At no time before the H.264 standard was initially published as adopted did Qualcomm reveal to the JVT or its parent bodies Qualcomm's IPR, specifically the `104 and `767 patents.

5.

The Court FINDS by clear and convincing evidence that Qualcomm intentionally organized a plan of action to shield the `104 and `767 patents from consideration by the JVT with the anticipation that (1) the resulting H.264 standard would infringe those patents and (2) Qualcomm would then have the opportunity to become an indispensable licensor to anyone in the world seeking to produce H.264-compliant products

The Court has already found above and in its March 21 Order that Qualcomm waived its rights to enforce the `104 and `767 patents against Broadcom by its silence when it had a duty to speak before the JVT. However, faced with the additional evidence produced post-trial by Qualcomm, the Court concludes that the conduct of Qualcomm's employees before trial, and its employees and hired witnesses during pre-trial, trial, and post-trial outlines misconduct even more extensive than the Court previously found in its March 21 Order. Merely the reiteration of the chronology of events above and below tells the story of the gravity of the conduct. The facts speak for themselves. The totality of the circumstances leads the Court to conclude by clear and convincing evidence that Qualcomm intentionally organized a plan of action to shield the `104 and `767 patents from consideration b