I4I Ltd. Partnership v. Microsoft Corp.

• Decision Date: 11 August 2009
• Docket Number: Case No. 6:07CV113.
• Citation: 670 F.Supp.2d 568
• Parties: i4i LIMITED PARTNERSHIP and Infrastructures for Information, Inc., Plaintiffs v. MICROSOFT CORPORATION, Defendant.
• Court: U.S. District Court — Eastern District of Texas

670 F.Supp.2d 568

i4i LIMITED PARTNERSHIP and Infrastructures for Information, Inc., Plaintiffs v. MICROSOFT CORPORATION, Defendant.

Case No. 6:07CV113.

United States District Court, E.D. Texas, Tyler Division.

August 11, 2009.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Samuel Franklin Baxter, McKool Smith, Marshall, TX, Andrew Thompson Gorham, Charles Ainsworth, Robert Christopher Bunt, Robert M. Parker, Tyler, TX Douglas A. Cawley, Jeffrey A. Carter, Jennifer Lynn Henry, Jill Frances Lynch, John Austin Curry, Jonathan Randy Yim, Martin C. Robson, III, Mike McKool, Jr., Thomas Guy Fasone, III, McKool Smith, Dallas, TX, Erick Scott Robinson, Friedman Suder & Cooke, Fort Worth, TX, Gretchen Kristen Harting, John Bruce Campbell, Jr., Kevin Lee Burgess, Travis Gordon White, McKool smith, Austin, TX, Thomas John Ward, Jr., Ward & Smith Law Firm, Longview, TX, for Plaintiffs.

Matthew Douglas Powers, Weil Gotshal & Manges, Redwood City, CA, Amber Hatfield Rovner, Cabrach J. Connor, Kevin Sean Kudlac, Todd S. Patterson, Weil Gotshal & Manges, Austin, TX, Andrew Culbert, Microsoft Corporation, Redmond, WA, Ariane Nicole Newell, David Jason Lender, Lucy Muzzy, Paul E. Torchia, Steven Kalogeras, Weil Gotshal & Manges LLP, New York, NY, Eric Hugh Findlay, Findlay Craft, Tyler, TX, Isabella Fu, Microsoft Corporation, Redmond, WA, Norma N. Bennett, Fish & Richardson Pc, Houston, TX, Roger Brian Craft, Findlay Craft, Tyler, TX, for Defendants.

MEMORANDUM OPINION AND ORDER

LEONARD DAVIS, District Judge.

Before the Court are Microsoft's motion for judgment as a matter of law ("JMOL") or motion for new trial ("MNT") regarding willful infringement (Docket No. 345); i4i, Inc. and i4i, LP's (collectively "i4i") motion for enhanced damages and attorneys' fees (Docket No. 346); Microsoft's motion for JMOL and MNT regarding indirect infringement (Docket No. 347); Microsoft's JMOL and MNT regarding noninfringement (Docket No. 348); i4i's motion for a permanent injunction (Docket Nos. 349 & 364); i4i's motion for post-verdict damages, prejudgment interest, and post-judgment interest (Docket No. 350); Microsoft's MNT or remittitur regarding damages (Docket No. 351); Microsoft's MNT regarding invalidity (Docket No. 353); Microsoft's JMOL and MNT regarding anticipation and obviousness in light of Rita and DeRose (Docket No. 356); Microsoft's JMOL and MNT regarding anticipation and obviousness in light of S4 (Docket No. 359); Microsoft's motion to stay injunctive relief (Docket No. 370); and i4i's motion to strike (Docket No. 389). For the reasons stated below, i4i's motion for enhanced damages and attorneys' fees (Docket No. 346) is GRANTED in part, i4i's motion for permanent injunction (Docket Nos. 349 & 364) is GRANTED, i4i's motion for post verdict damages, prejudgment interest, and post-judgment interest (Docket No. 350) is GRANTED, and all other motions are DENIED. Furthermore, this opinion sets forth the Court's findings of fact and conclusions of law regarding Microsoft's equitable defenses of laches and inequitable conduct.

BACKGROUND

The technology in this case focuses on a particular type of electronic documents. Generally, a "document" as manifested in a computer program has two distinct parts: the content (i.e. the text that the user has created in the document) and the structure (the encoding that allows the computer to recognize the meaning of the text). A type of structural information within an electronic document sometimes comes in the form of "metacodes." Standardized computer languages were developed that utilized metacodes to allow a computer to understand the meaning behind certain text that a user placed in a document. An early example of these languages is the Standard Generalized Markup Language ("SGML"). Later, a markup language was developed called the Extensible Markup Language ("XML"). Asserted U.S. Patent No. 5,787,449 (the "'449 patent") is entitled "Method and System for Manipulating the Architecture and the Content of a Document Separately from Each Other." The '449 patented invention created a reliable method of processing and storing content and metacodes separately and distinctly. The data structure primarily responsible for this separation is called a "metacode map." According to the patent, the "metacode map" allows a computer to manipulate the structure of a document without reference to the content.

Microsoft is the developer of popular word processing and editing software known as Word ("WORD"). Over the years, WORD has had many versions with increasing functionality. In 2003, Microsoft introduced a version of WORD with XML editing capabilities. This functionality continued in the latest version of WORD, "Word 2007." On March 8, 2007 i4i LP¹ filed this action alleging that Microsoft infringed the '449 patent. A jury trial commenced on May 11, 2009. At trial, i4i contended that Microsoft's use of certain WORD 2003 and all of WORD 2007 products for processing XML documents with custom XML elements infringed claims 14, 18, and 20 of the '449 patent.² i4i further argued that Microsoft's infringement of the patent was willful. Microsoft claimed that its WORD products did not infringe the patent and that the patent was invalid. Following a seven day trial, the jury returned a verdict finding the patent valid and infringed and awarding i4i $200,000,000 in damages. The Court also conducted a bench trial regarding Microsoft's additional equitable defenses of laches and inequitable conduct.

MICROSOFT'S MOTIONS FOR JMOL & NEW TRIAL

JMOL Standard

"The grant or denial of a motion for judgment as a matter of law is a procedural issue not unique to patent law, reviewed under the law of the regional circuit in which the appeal from the district court would usually lie." Summit Tech. Inc. v. Nidek Co., 363 F.3d 1219, 1223 (Fed.Cir. 2004). In the Fifth Circuit, JMOL may not be granted unless "there is no legally sufficient evidentiary basis for a reasonable jury to find as the jury did." Hiltgen v. Sumrall, 47 F.3d 695, 700 (5th Cir.1995) (internal quotation marks omitted). A court reviews all the evidence in the record and must draw all reasonable inferences in favor of the nonmoving party, however, a court may not make credibility determinations or weigh the evidence, as those are solely functions of the jury. See Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150-51, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000).

New Trial Standard

Under Rule 59(a) of the Federal Rules of Civil Procedure, a new trial can be granted to any party to a jury trial on any or all issues "for any reason for which new trials have heretofore been granted in actions at law in courts of the United States." "A new trial may be granted, for example, if the district court finds the verdict is against the weight of the evidence, the damages awarded are excessive, the trial was unfair, or prejudicial error was committed in its course." Smith v. Transworld Drilling Co., 773 F.2d 610, 612-13 (5th Cir.1985).

MICROSOFT'S JMOL & MNT—NO DIRECT INFRINGEMENT

Microsoft first moves for JMOL arguing that no reasonable juror could find that its accused WORD products infringed the '449 patent literally or by the doctrine of equivalents. Microsoft's motion presents three general arguments.

First, Microsoft argues that i4i presented no evidence that the accused WORD products created "a data structure" as required by the Court's construction of the claim term "metacode map." The Court construed and instructed the jury that "metacode map" and "map of metacodes" in the '449 patent meant "a data structure that contains a plurality of metacodes and their addresses of use corresponding to mapped content." Claim Construction Opinion, Docket No. 111 at 11. The Court further construed "mapped content" as meaning "the content of a document corresponding to a metacode map." Id.

During trial Dr. Rhyne, one of i4i's technical experts, explained that the meaning of "a data structure" was "a physical or logical relationship among data elements designed to support specific data manipulation functions." TT 5/12/09 p.m. at 154:14-16 (citing to the IEEE dictionary). Dr. Rhyne also provided extensive testimony over the physical and logical interrelationships present in the various "data structures" comprising WORD's XML metacode and content mapping. Id. at 101:21-106:13; Plaintiffs' Illustrative 1. Furthermore, another of i4i's technical experts, Dr. Martin, established that various elements within the accused WORD products constituted a single data structure because of their physical and logical interrelationships. See TT 5/13/09 p.m. at 27:22-30:11.

Microsoft's principal argument is that the "data structure" that Dr. Rhyne found in WORD could be broken down into smaller logical "data structures." See TT 5/13/09 a.m. at 73:2-10. Microsoft argues that since there could be multiple "data structures" found within WORD's source code, the jury could not find a single "data structure" that "contained a plurality of metacodes and their addresses of use." However, Microsoft's technical expert conceded during trial that Microsoft had urged at the Court's claim construction hearing that a "data structure" was "a collection of pieces of data that are organized in a particular way ... [and] can be stored in numerous different places." TT 5/19/09 a.m. at 23:17-24:25. Further, Microsoft's motion does not identify or request any alternative definition of "data structure." Microsoft even concedes that the multiple "data structures" that it identified during Dr. Rhyne's cross examination could be broken down even further. Id.

Though Microsoft makes broad statements suggesting that the "view of `data structure' urged by Dr. Rhyne is inconsistent with the teachings of the patent," its argument reduces to a mere disagreement with the jury verdict. See Microsoft's Motion, Docket No. 348 at 12. The jury was called upon to decide...