Free Order - District Court of Arizona - Arizona

IN THE UNITED S TATES DIS TRICT COURT DIS TRICT OF ARIZONA

Eberle Design, Inc., and Electronic) Devices, Inc., ) ) ) Plaintiff/Counterdefendant, ) v. ) ) Reno A&E, ) ) ) Defendant/Counterclaimant. ) ____________________________)

No.

CIV-02-2575 PHX DGC CIV 03-0883 PHX DGC (Consolidated)

COURT'S REVIS ED PROPOS ED PRELIMINARY JURY INS TRUCTIONS AND VOIR DIRE

DATED: August 22, 2005

Case 2:02-cv-02575-DGC

Document 177

Filed 08/22/2005

Page 1 of 37

1.1 DUTY OF JURY Ladies and gentlemen: You are now the jury in t his case, and I want to take a few minutes to tell you something about your duties as jurors and to give you some instructions. At the end of the trial, I will give you more det ailed instructions. Those instructions will control your deliberations. You should not take anything I may say or do during the trial as indicating what I think of the evidence or what your verdict should be.

Case 2:02-cv-02575-DGC

Document 177

Filed 08/22/2005

Page 2 of 37

1.3 WHAT IS EVIDENCE The evidence you are to consider in deciding what the facts are consists of: (1) (2) (3) the sworn testimony of any witness; the exhibits which are received into evidence; and any facts to which the lawyers stipulate.

Case 2:02-cv-02575-DGC

Document 177

Filed 08/22/2005

Page 3 of 37

1.4 WHAT IS NOT EVIDENCE The following things are not evidence, and you must not consider them as evidence in deciding the facts of this case: (1) (2) (3) (4) statements and arguments of the attorneys; questions and objections of the attorneys; testimony that I instruct you to disregard; and anything you may see or hear when the court is not in session even if what you see or hear is done or said by one of the parties or by one of the witnesses.

Case 2:02-cv-02575-DGC

Document 177

Filed 08/22/2005

Page 4 of 37

1.5 EVIDENCE FOR LIMITED PURPOS E Some evidence may be admit t ed for a limited purpose only. When I instruct you that an item of evidence has been admitted for a limited purpose, you must consider it only for that limited purpose and for no other.

Case 2:02-cv-02575-DGC

Document 177

Filed 08/22/2005

Page 5 of 37

1.6 DIRECT AND CIRCUMS TANTIAL EVIDENCE Evidence may be direct or circumstantial. Direct evidence is direct proof of a fact, such as testimony by a witness about what that witness personally saw or heard or did. Circumstantial evidence is proof of one or more facts from which you could find another fact. You should consider both kinds of evidence. The law makes no dis t inction between the weight to be given to either direct or circumstantial evidence. It is for you to decide how much weight to give to any evidence.

Case 2:02-cv-02575-DGC

Document 177

Filed 08/22/2005

Page 6 of 37

1.7 RULING ON OBJECTIONS There are rules of evidence t hat control what can be received into evidence. When a lawyer asks a question or offers an exhibit into evidence and a lawyer on the other side thinks that it is not permitted by t he rules of evidence, that lawyer may object. If I overrule the objection, the question may be answered or the exhibit received. If I sustain the objection, the question cannot be answered, and the exhibit cannot be received. Whenever I sustain an objection to a question, you must ignore the question and must not guess what the answer might have been.

Case 2:02-cv-02575-DGC

Document 177

Filed 08/22/2005

Page 7 of 37

1.8 CREDIBILITY OF WITNES S ES In deciding the facts in this case, y ou may have to decide which testimony to believe and which testimony not to believe. You may believe everything a witness says, or part of it, or none of it. In considering the testimony of any witness, you may take into account: (1) the opportunity and ability of the witness to see or hear or know the things testified to; the witness' memory; the witness' manner while testifying; the witness' interest in the outcome of the case and any bias or prejudice; whether other evidence contradicted the witness' testimony; t he reasonableness of the witness' testimony in light of all the evidence; and any other factors that bear on believability.

(2) (3) (4) (5) (6) (7)

The weight of the evidence as to a fact does not necessarily depend on the number of witnesses who testify.

Case 2:02-cv-02575-DGC

Document 177

Filed 08/22/2005

Page 8 of 37

1.9 CONDUCT OF THE JURY I will now say a few words about your conduct as jurors. First, you are not to discuss this case with anyone, including y our fellow jurors, members of your family, people involved in the trial, or any one els e, nor are you allowed to permit others to discuss the case with you. If anyone approaches you and t ries t o talk to you about the case please let me know about it immediately; Second, do not read any news stories or articles or lis ten to any radio or television reports about the case or about anyone who has anything to do with it; Third, do not do any research, such as cons ult ing dictionaries, searching the Internet or us ing ot her reference materials, and do not make any investigation about the case on your own; Fourth, if y ou need to communicate with me simply give a signed note to the clerk to give to me; and Fifth, do not make up your mind about what the verdict should be unt il after you have gone to the jury room to decide that case and you and your fellow jurors have discussed the evidence. Keep an open mind until then.

Case 2:02-cv-02575-DGC

Document 177

Filed 08/22/2005

Page 9 of 37

1.11 TAKING NOTES If you wish, you may take notes to help you remember what witnesses said. If you do take notes, please keep them to yourself until you and your fellow jurors go to the jury room to decide the case. Do not let note-t aking distract you so that you do not hear other answers by witnesses. When you leave, your notes should be left in the jury room. Whether or not you take notes, you should rely on your own memory of what was said. Notes are only to assist your memory. You should not be overly influenced by the notes.

Case 2:02-cv-02575-DGC

Document 177

Filed 08/22/2005

Page 10 of 37

1.13 BURDEN OF PROOF ­ PREPONDERANCE OF THE EVIDENCE When a party has the burden of proof on any claim or affirmative defense by a preponderance of the evidence, it means you must be persuaded by the evidence that the claim or affirmative defense is more probably true than not true. You should base y our decision on all of the evidence, regardless of which party presented it.

Case 2:02-cv-02575-DGC

Document 177

Filed 08/22/2005

Page 11 of 37

1.14 BURDEN OF PROOF ­ CLEAR AND CONVINCING EVIDENCE When a party has the burden of proving any claim or defense by clear and convincing evidence, it means you mus t be p ers uaded by the evidence that the claim or defense is highly probable. Such evidence requires a higher standard of proof than proof by a preponderance of the evidence. You should base your decision on all of the evidence, regardless of which party presented it.

Case 2:02-cv-02575-DGC

Document 177

Filed 08/22/2005

Page 12 of 37

Non-M odel Instruction No. 1 Instructions to be Considered as a Whole If any matter is repeated or stated in different ways in my instructions, no emphasis is intended. Do not draw on any inference because of a repetition. Do not single out any individual rule or instruction and ignore the others. Consider all the instructions as a whole and each in the light of the others. The order in which the instructions are given has no significance as to their relative importance. Authorities Baji California Introductory Jury Instruction No. 1.01

Case 2:02-cv-02575-DGC

Document 177

Filed 08/22/2005

Page 13 of 37

Non-M odel Instruction No. 2 Identification of the Parties and Claims In this trial, the Plaintiffs and Counter-Defendants are Eberle Design, Inc. and Electronic Devices, Inc., and the Defendant and Counter-Plaintiff is Reno A&E. I often refer to these parties as Plaintiff or Eberle and Defendant or Reno A&E. Authorities Baji California Introductory Jury Instruction No. 1.23

Case 2:02-cv-02575-DGC

Document 177

Filed 08/22/2005

Page 14 of 37

Non-M odel Instruction No. 3 The Parties and the Nature of the Case As mentioned to you previously, this is a patent case involving U.S. Patent No. 6,087,964. Patents are often referred to by their last three digits. The patent in this case will be referred to as the `964 patent. The `964 patent relates to a vehicle detector having an operational display. During the trial the parties will offer testimony to familiarize you with this technology. Eberle Design and Electronic Devices, the Plaintiffs and Counter-Defendants in this case, contend that the `964 patent is invalid and/or unenforceable for a number of reasons that I will tell you about shortly, and that they do not infringe any valid claim of the '964 patent. Reno A & E, the Defendant and Counter-Plaintiff in this case, contends that plaintiffs are infringing the `964 patent. Reno A & E alleges that Eberle Design is making, using, selling and offering for sale its Oracle vehicle detectors that infringe the `964 patent, and that Electronic Devices is contributing to and inducing this infringement through the sale of vehicle detector components to Eberle Design. I will explain to you the meaning of these contentions in a moment, but first I will explain the U.S. patent system, the parties of a patent, and how a person gets a patent. Authorities Federal Circuit Bar Association M odel Jury Instruction No. 2.1

Case 2:02-cv-02575-DGC

Document 177

Filed 08/22/2005

Page 15 of 37

Reno A&E's Proposed Non-M odel Instruction No. 1 The Patent System, Generally Patents are issued by the United States and Trademark Office, which is part of our government. The government is authorized by the United States Constitution to enact patent laws and issue patents to protect inventions. Inventions that are protected by patents may be of products, compositions, or of methods for doing something, or for using or making a product or composition. The owner of a patent has the right, for the life of the patent, to prevent others from making, using, offering for sale, selling or importing the invention covered by the patent. A patent is granted for a set period of time, which, in this case, is 20 years from the time the application for the `964 patent was filed on April 24, 1997. Once a patent expires, anyone is free to use the invention covered by the patent. During the term of the patent, however, if another person makes, uses, offers to sell, sells or imports something that is covered by the patent without the patent owner's consent, that person is said to infringe the patent. The patent owner enforces a patent against persons believed to be infringers in a lawsuit in federal court, such as in this case. To be entitled to patent protection an invention must be new, useful and nonobvious. A patent cannot legally take away from people their right to use that which was known, or that which was obvious from what was known, before the invention was made. Thus, a patent will not be valid if it deprives people of the right to use old or known products of their right to use products that were obvious at the time the invention was made. That which was already known at the time of the invention is called "prior art." You will hear about the prior art relating to the `964 Patent during the trial, and I will give you more instructions about what constitutes prior art at the end of the case. Authorities Federal Circuit Bar Association M odel Jury Instruction No. 2.2

Case 2:02-cv-02575-DGC

Document 177

Filed 08/22/2005

Page 16 of 37

Non-M odel Instruction No. 6 How a Patent is Obtained The U.S. Patent and Trademark Office is the agency of our government that examines patent applications and issues patents. When an applicant for a patent files a patent application with the Patent and Trademark Office, the application is assigned to a Patent Examiner. The Patent Examiner examines the application to determine whether or not the invention described in the patent application meets the requirements of the patent laws for patentable inventions. The Patent Examiner advises the applicant of his or her findings in a paper called an "office action". The Examiner may "reject" the claims if he or she believes they do not meet the requirements for patentable inventions. The applicant may respond to the rejection with arguments to support the claims by making changes or amendments to the claims, or by submitting new claims. If the Examiner concludes that the legal requirements for a patent have all been satisfied, he or she "allows" the claims and the application issues as a patent. This process, from the filing of the patent application to the issuance of the patent, is called "patent prosecution". The record of papers relating to the patent prosecution is referred to as the prosecution history or file history. The prosecution history becomes available to the public when the patent issues. Authorities Federal Circuit Bar Association M odel Jury Instruction No. 2.5

Case 2:02-cv-02575-DGC

Document 177

Filed 08/22/2005

Page 17 of 37

Non-M odel Instruction No. 4 The Parts of a Patent A patent includes two basic parts, a written description of the invention and the patent claims. The written description, which may include drawings, is often referred to as the "specification" of the patent. You have been provided with a copy of the `964 patent. Please refer to the patent as I identify its different sections. The cover page of the `964 patent provides identifying information, including the date the patent issued and patent number along the top, as well as the inventor's name, the filing date, the assignee Reno A & E and a list of the prior art publications considered in the Patent Office when the patent was applied for. The specification of the `964 patent begins with an abstract, found on the cover page. The abstract is a brief statement about the subject of the invention. Next, are the drawings, which appear as Figures 1 to 4D on the next 7 pages. The drawings depict various aspects or features of the invention. They are described in words later in the patent specification. The written description of the invention appears next. In this portion of the patent, each page is divided into two columns, which are numbered at the top of the pages. The lines on each page are also numbered. The written description of the `964 patent begins at column 1, line 1, and continues to column 16, line 14. It includes a background section, a summary of the invention and a detailed description of the invention, including some specific examples. The specification ends with one or more numbered paragraphs. These are called the claims. The claims may be divided into a number of parts or steps, referred to as "claim limitations." In the `964 patent, the claims begin at column 16, line 15 and continue to the end of the patent, at column 18, line 59. Authorities Federal Circuit Bar Association M odel Jury Instruction No. 2.3

Case 2:02-cv-02575-DGC

Document 177

Filed 08/22/2005

Page 18 of 37

Non-M odel Instruction No. 5 The Significance of Patent Claims The claims of a patent are a main focus of a patent case because it is the claims that define the patent owner's rights under the law. That is, the claims define what the patent owner may exclude others from doing during the term of the patent. The claims of a patent serve two purposes. First, they set out the boundaries of the invention covered by the patent. Second, they provide notice to the public of those boundaries. Thus, when a product is accused of infringing a patent, it is the patent claims that must be compared to the accused product to determine whether or not there is infringement. It is the claims of the patent that are infringed when patent infringement occurs. The claims are at issue as well when the validity of a patent is challenged. In reaching your determinations with respect to infringement and invalidity, you must consider each claim separately. In this case, we will be concerned with claims 1-11, 13-15, 17, 21, 24-28, 30-42 and 44 of the `964 patent. Reno A & E contends that all of these claims are infringed. Eberle contends that these claims are not infringed, and that they are invalid and unenforceable. The language of patent claims may not be clear to you. I will instruct you now about the meaning of some of the claim language. You must use these meanings I give you when you decide the issues of infringement and invalidity. I will repeat these meanings to you again in my final instructions to you. Authorities Federal Circuit Bar Association M odel Jury Instruction No. 2.4

Case 2:02-cv-02575-DGC

Document 177

Filed 08/22/2005

Page 19 of 37

Non-M odel Instruction No. 7 Limitations of the Claims at Issue In claim 1, the term "vehicle detector" means that the vehicle detector itself includes the variable display device. In claim 1, the term "means for detecting" means the oscillator circuit and microprocessor as identified in the `964 specification. In claim 1, the term "occupancy state of a loop detection zone" means whether a vehicle is within the range of a loop of wire typically embedded into the surface of a road. In claim 1, the term "manually actuatable switches coupled to said detecting means for enabling operator control of function state selection and selection of any one of a plurality of vehicle detector parameter values" means at least two switches electronically connected with the detector means. The switches allow the operator to select different function states or a value for a parameter. In claim 1, the term "variable display device" means a display device that is changeable and not fixed. In claim 1, the term "function states" means a state of a vehicle detector function, where that function has at least two states and is related to the mode in which the vehicle detector is operating. In claim 1, the term "identification of a selected vehicle detector parameter" means a visual identification of the current selected parameter from more than one parameter selected by the operator using one of the switches. A parameter is a vehicle detector function that is set with values. In claim 1, the term "actual value of a vehicle detector parameter selected by at least one of said function switches" means the value entered by the operator corresponding to a parameter selected from more than one parameter. The switches are used to select both vehicle detector parameters and their values. In claim 2, the means for detecting must include a microprocessor. In claim 3, the display device must be a liquid crystal display.

Case 2:02-cv-02575-DGC

Document 177

Filed 08/22/2005

Page 20 of 37

In claim 4, the term "relative sensitivity" means the threshold value used by the detector to determine if a loop change is sufficient to indicate occupancy of a vehicle detection zone. In claim 5 the term "loop frequency" means the number of oscillations in a period of time. In claim 6, the term "loop inductance" means a varying magnetic field established by the area and number of turns of wire in the detection loop. In claim 7, the term "loop inductance change" ("delta L/L") is measured in percentage and is established by the change in the inductance due to the proximity of a vehicle. In claim 8, the term "delay time" is typically measured in seconds, and is the minimum time that will expire before a call signal is generated after the detection of a vehicle. In claim 9, the term "maximum presence time" is typically measured in seconds or minutes, and is the maximum time period that will expire after the detection of a vehicle before a call signal is dropped. In claim 10, the term "extension time" is typically measured in seconds, and is the time period that will expire after the detection of a vehicle leaving the loop before a call signal is dropped. In claim 11, the term "pulse mode" means a call signal consisting of a signal pulse of fixed length. In claim 11, the term "presence mode" means a call signal that continually persists until the vehicle leaves the loop. In claim 13, the term "end-of-green" means that the call signal is dropped immediately after receiving a signal indicating that the traffic signal's green light has terminated. The common terms between claims 1 and 14 have the same meaning. In claim 14, the term "segment" means the minimum region that can be activated

Case 2:02-cv-02575-DGC

Document 177

Filed 08/22/2005

Page 21 of 37

to indicate the relative magnitude of a parameter. In claim 14, the term "bar graph" means a one-dimensional graph indicating an increase in magnitude with a larger bar (more segments activated) and a decrease in magnitude with a smaller bar (fewer segments activated). In claim 14, the term "message indicators" means a message indicator representing the parameter and includes all conventional LCD techniques, including dedicated segment and pixel-type displays. In claim 15, the term "loop inductance" has the same meaning as I have previously given to you for claim 6. In claim 17, the display device must be a liquid crystal display, as I mentioned in claim 3. In claim 21, the terms "message indicators" and "function states" have the same meaning as I have previously given to you for claims 1 and 14. In claim 24, the term "frequency" has the same meaning as I have previously given to you for claim 5. In claim 25, the term "delay time" has the same meaning as I have previously given to you for claim 8. In claim 26, the term "maximum presence time" has the same meaning as I have previously given to you for claim 9. In claim 27, the term "extension time" has the same meaning as I have previously given to you for claim 10. In claim 28, the terms "pulse mode" and "presence mode" have the same meaning as I have previously given to you for claim 11. In claim 30, the term "end-of-green" has the same meaning as I have previously given to you for claim 13. The common terms between claims 1 and 31 have the same meaning. In claim 32, the term "first display portion" means the portion of the screen

Case 2:02-cv-02575-DGC

Document 177

Filed 08/22/2005

Page 22 of 37

displaying more than one alphanumeric character representing the value of a parameter. In claim 32, the term "second display portion" means the portion of the screen capable of displaying more than one parameter. In claim 33, the term "means for displaying the sensitivity value " is a liquid crystal display. In claim 33, the term "relative sensitivity" has the same meaning as I have previously given to you for claim 4. In claim 34, the term "means for displaying the sensitivity value" has the same meaning as I have previously given to you for claim 33. In claim 34, the terms "selectively actuatable indicators" and "graph-like indication of sensitivity" have the same meaning as I have previously given to you for the term "bar graph" in claim 14. In claim 35, the term "multiple channel detector means" means that the means for detecting in the vehicle detector must support more than one channel or be capable of detecting the occupancy of more than one loop. In claim 35, the term "means for indicating an active channel" means that the display device must indicate whether a channel is active or disabled. In claim 36, the term "loop frequency" has the same meaning as I have previously given to you for claim 5. In claim 37, the term "loop inductance" has the same meaning as I have previously given to you for claim 6. In claim 38, the term "loop inductance change" has the same meaning as I have previously given to you for claim 7. In claim 39, the term "delay time" has the same meaning as I have previously given to you for claim 8. In claim 40, the term "maximum presence time" has the same meaning as I have previously given to you for claim 9.

Case 2:02-cv-02575-DGC

Document 177

Filed 08/22/2005

Page 23 of 37

In claim 41, the term "extension time" has the same meaning as I have previously given to you for claim 10. In claim 42, the terms "pulse mode" and "presence mode" have the same meaning as I have previously given to you for claim 11. In claim 44, the term "end-of-green function" has the same meaning as I have previously given to you for claim 12.

Case 2:02-cv-02575-DGC

Document 177

Filed 08/22/2005

Page 24 of 37

Non-M odel Instruction No. 8 Issues to be Decided I will now give you some information about the issues that will be presented to you at this trial and the law that you must follow in reaching your verdict. At the close of the trial, you will be given a verdict form and questions that you must answer in reaching your verdict. I will give you more specific instructions then to follow as you deliberate to reach your verdict. Authorities Federal Circuit Bar Association M odel Jury Instruction No. 3

Case 2:02-cv-02575-DGC

Document 177

Filed 08/22/2005

Page 25 of 37

Non-M odel Instruction No. 9 Invalidity First, Eberle contends that claims 1-11, 13-15, 17, 21, 24-28, 30-42 and 44 of the `964 patent are invalid for a number of reasons. Although the `964 patent was granted by the Patent and Trademark Office, it is your job to determine whether or not the legal requirements of patentability were met; that is, it is your job to determine whether or not the `964 patent is invalid. I will now explain to you briefly the legal requirements for each of the grounds on which Eberle relies to contend that the `964 patent claims are invalid. I will provide more details for each ground in my final instructions. Authorities Federal Circuit Bar Association M odel Jury Instruction No. 3.2.1

Case 2:02-cv-02575-DGC

Document 177

Filed 08/22/2005

Page 26 of 37

Non-M odel Instruction No. 10 Anticipation Eberle Design contends that the inventions covered by claims 1-10, 31-33 and 3641 of the `964 patent are not new. An invention that is not new is said to be "anticipated" by the prior art. In order to prove that a claim is anticipated by the prior art, Eberle Design must prove by clear and convincing evidence that each and every limitation of the claim is present in a single item of prior art. A claim may be anticipated by more than one piece of prior art, but for you to find that the claim is anticipated, all of the claim elements must be found in a single piece of prior art. Authorities Federal Circuit Bar Association M odel Jury Instruction No. 3.2.2.

Case 2:02-cv-02575-DGC

Document 177

Filed 08/22/2005

Page 27 of 37

Non-M odel Instruction No. 11

On-Sale Bar The sale or offer for sale in the United States of a product may be prior art to a patent claim covering the product. That is, if the product was sold or offered for sale more than one year before the application for the patent was filed, in this case before April 24, 1997, then the patent covering that product may be invalid because of the "onsale" bar. I will instruct you further regarding the "on-sale" bar at the end of the case. In order to prove invalidity based on the on-sale bar, Eberle must prove that it is highly probable that the invention claimed in the `964 patent was on sale before April 24, 1997. Authorities Federal Circuit M odel Instruction 10.6.5, ¶ 1, modified for use as a preliminary instruction.

Case 2:02-cv-02575-DGC

Document 177

Filed 08/22/2005

Page 28 of 37

Non-M odel Instruction No. 12

Obviousness Eberle contends that claims 1-11, 13-15, 17, 21, 24-28, 30-42 and 44 of the `964 patent are invalid for obviousness. A patent claim will be invalid, even if it is not anticipated by the prior art, if the claimed invention would have been obvious to a person of ordinary skill in the field of the invention at the time it was made. The ordinary skilled person is a person of average education and training in the field of the invention and is presumed to be aware of all of the relevant prior art. You will hear evidence about the skill and experience of such a skilled person during the course of the trial In order to prove invalidity based on obviousness, Eberle must prove that it is highly probable that the invention claimed in the `964 patent would have been obvious to a person of ordinary skill in the art at the time the invention was made.

Authorities Federal Circuit Bar Association M odel Jury Instruction No. 3.2.3

Case 2:02-cv-02575-DGC

Document 177

Filed 08/22/2005

Page 29 of 37

Reno A&E's Proposed Non-M odel Instruction No. 2

Inequitable Conduct Plaintiffs contend that Reno A & E may not enforce the `964 patent against them because Reno A & E engaged in inequitable conduct before the Patent and Trademark office when it obtained the `964 patent. To prove that inequitable conduct occurred, Eberle Design and Electronic Devices must prove that it is highly probable that the patent applicant, or the applicant's attorney or representative, withheld or misrepresented material information, and did so with an intent to mislead or deceive the Patent and Trademark Office. Authorities Federal Circuit Bar Association M odel Jury Instruction No. 3.2.5

Case 2:02-cv-02575-DGC

Document 177

Filed 08/22/2005

Page 30 of 37

Reno A&E's Proposed Non-M odel Instruction No. 3 Direct Infringement I will now describe Defendants contentions. Reno A & E contends that Eberle Design infringes claims 1-11, 13-15, 17, 21, 24-28, 3042 and 44 of the `964 patent by its manufacture, use, sale or offer for sale of its Oracle vehicle detectors. This is called direct infringement. Reno A & E must prove direct infringement by showing that it is more probable than not that Eberle Design's products literally contain each and every limitation of one or more of the claims of the `964 Patent. Authorities Federal Circuit Bar Association M odel Jury Instruction No. 3.1.1

Case 2:02-cv-02575-DGC

Document 177

Filed 08/22/2005

Page 31 of 37

Non-M odel Instruction No. 13

Indirect Infringement Reno A& E contends that Electronic Devices indirectly infringes claims 1-11, 1315, 17, 21, 24-28, 30-42 and 44 of the `964 patent by contributing to or encouraging others to directly infringe. There are two types of indirect infringement - contributory infringement and inducing infringement. To prove contributory infringement of the `964 patent claims, Reno A & E must prove that it is more probable than not that Electronic Devices sold or supplied to Eberle Design a component or part that is a material part of the patented invention, that is not a staple article of commerce, and is not suitable for other substantial, noninfringing uses. Reno A & E must also prove that Eberle Design directly infringed the `964 patent claims, and that Electronic Devices knew that the component or part was especially made for use in an infringing manner. To prove that Electronic Devices induced Eberle Design to infringe the `964 patent claims, Reno A & E must prove that it is more probable than not that Electronic Devices encouraged or instructed Eberle Design to use a product in a manner that directly infringes the `964 patent, and that Electronic Devices knew or should have known that the encouragement or instructions would likely result in Eberle Design's actual infringement of the `964 patent. Authorities Federal Circuit Bar Association M odel Jury Instruction No. 3.1.2, modified.

Case 2:02-cv-02575-DGC

Document 177

Filed 08/22/2005

Page 32 of 37

Non-M odel Instruction No. 14 Damages Reno A & E claims that it has suffered damages as a result of Eberle Design's infringement. If you find that there has been an infringement, the owner of the patent is entitled to an award of damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention. Reno A&E contends that it is entitled to lost profits that Reno A & E would have made if Eberle Design had not infringed and/or a reasonable royalty on each of Eberle Design's sales of any infringing product. Reno A& E also claims that it has suffered reasonable royalty damages as a result of Electronic Devices' alleged infringement. I will explain to you at the end of the case how you can determine what measure of damages is adequate, and, if appropriate, how lost profits are calculated or a reasonable royalty is determined. Reno A & E must prove by the more probable than not standard the damages it has suffered as a result of any infringement.

Authorities Federal Circuit Bar Association M odel Jury Instruction No. 3.1.3, modified.

Case 2:02-cv-02575-DGC

Document 177

Filed 08/22/2005

Page 33 of 37

Non-M odel Instruction No. 15 Willful Infringement Reno A & E claims that Eberle Design and Electronic Devices have knowingly and willfully infringed the `964 patent claims. To prove willful infringement, Reno A & E must prove that Eberle Design and Electronic Devices knew of the `964 patent and the Eberle Design and Electronic Devices did not have a reasonable belief either that the patent was invalid or unenforceable or that it did not infringe the patent. Reno A & E's willful infringement claim requires a higher burden of proof - the clear and convincing standard - than Reno A & E's other claims, which require proof by the more probable than not standard. I will explain in more detail what these standards are and, at the end of the case, how you decide willful infringement. Authorities Federal Circuit Bar Association M odel Jury Instruction No. 3.

Case 2:02-cv-02575-DGC

Document 177

Filed 08/22/2005

Page 34 of 37

1.12 OUTLINE OF TRIAL The next phase of the trial will now begin. First, each side may make an opening statement. An opening statement is not evidence. It is simply an outline to help you understand what that party expects the evidence w ill show. A party is not required to make an opening statement. The trial will then proceed in four steps: First, Plaintiff/Counterdefendant Eberle will present evidence on its claim that the 964 patent is invalid, and counsel for Defendant/Counterclaimant Reno A&E may crossexamine. Second, Reno will present evidence in res ponse to Eberle's claim of invalidity and will also pres ent evidence in support of its claim that Eberle has infringed the 964 patent. Counsel for Eberle may cross-examine during this second step. Third, Eberle may pres ent evidence in response to Reno's claim of infringement and rebuttal evidence in support of its claim of invalidity. Fourth, Reno may present rebuttal evidence in support of its infringement claim. After the evidence has been pres ent ed, the attorneys will make closing arguments and I will instruct you on the law that applies to the case. After that, you will go to the jury room to deliberate on your verdict.

Case 2:02-cv-02575-DGC

Document 177

Filed 08/22/2005

Page 35 of 37

2.2 BENCH CONFERENCES AND RECES S ES From time to time during t he trial, it may become necessary for me to talk with the attorneys out of the hearing of t he jury , either by having a conference at the bench when the jury is present in the courtroom, or by calling a recess. Please understand that while you are waiting, we are working. The purpose of these conferences is not to keep relevant information from you, but to decide how certain evidence is to be treated under the rules of evidence and to avoid confusion and error. We will, of course, do what we can to keep the number and length of these conferences to a minimum. I may not always grant an at t orney 's request for a conference. Do not consider my granting or denying a request for a conference as any indication of my opinion of the case or of what your verdict should be.

Case 2:02-cv-02575-DGC

Document 177

Filed 08/22/2005

Page 36 of 37

2.4 S TIPULATIONS OF FACT The parties have agreed to certain facts that have been stated to you. You should therefore treat these facts as having been proved.

Case 2:02-cv-02575-DGC

Document 177

Filed 08/22/2005

Page 37 of 37