Intellect Wireless, Inc. v. HTC Corp.

• Decision Date: 06 September 2012
• Docket Number: No. 09 C 2945.,09 C 2945.
• Citation: 910 F.Supp.2d 1056
• Parties: INTELLECT WIRELESS, INC., Plaintiff–Counterdefendant, v. HTC CORPORATION and HTC America, Inc., Defendants–Counterplaintiffs.
• Court: U.S. District Court — Northern District of Illinois

910 F.Supp.2d 1056

INTELLECT WIRELESS, INC., Plaintiff–Counterdefendant,

v.HTC CORPORATION and HTC America, Inc., Defendants–Counterplaintiffs.

No. 09 C 2945.

United States District Court,

N.D. Illinois,

Eastern Division.

Sept. 6, 2012.

Raymond P. Niro, David Joseph Mahalek, Paul Christopher Gibbons, Paul K. Vickrey, Niro, Haller & Niro, Ltd. Chicago, IL, for Plaintiff-Counterdefendant.

George Laszlo Kanabe, Sheppard Mullin Richter & Hampton, Palo Alto, CA, Nagendra Setty, Sheppard Mullin Richter & Hampton, San Francisco, CA, Paul J. Korniczky, Robert Thomas Wittmann, Leydig, Voit & Mayer, Ltd., Chicago, IL, Daniel N. Yannuzzi, Graham M. Buccigross, Martin R. Bader, Matthew M. Mueller, Stephen Sandor Korniczky, Sheppard Mullin Richter & Hampton LLP, San Diego, CA, for Defendants-Counterplaintiffs.

FINDINGS OF FACT, CONCLUSIONS OF LAW AND ORDER

WILLIAM T. HART, District Judge.

I. INTRODUCTION

Plaintiff Intellect Wireless, Inc. (“IW”) has accused defendants HTC Corporation and HTC America, Inc. (collectively “HTC”) of infringing U.S. Patent No. 7,266,186 (“the '186 patent”) entitled “Method and Apparatus for Improved Paging Receiver and System” and U.S. Patent No. 7,310,416 (“the ' 416 patent”) entitled “Method and Apparatus for Improved Personal Communication Devices and System.” It is alleged that HTC has infringed the patents by making or selling “wireless portable communication devices that receive and display either caller ID information, non-facsimile pictures, video messages and/or Multimedia Messaging Service.” The court has jurisdiction of the subject matter and the parties.

Daniel A. Henderson is the inventor named in the patents and the owner of the assignee of the patents, IW. The Amended Complaint alleges:

Daniel Henderson is the founder of Intellect Wireless, and the sole inventor of the patents-in-suit. Mr. Henderson has been awarded 25 United States patents with several more pending that relate to picture / video messaging in wireless devices such as PDA's, portable computers and cellular phones. Mr. Henderson's prototype for a wireless picturephone device was received as part of the permanent collection of the Smithsonian Institution in the National Museum of American History. The Honorable Senator Gordon H. Smith, (OR), declared that Mr. Henderson has “truly blazed new trails in the fields of wireless technology and digital convergence” and called him a “true visionary.”

Am. Compl. ¶ 3.

HTC has filed a counterclaim alleging that the patents in suit are unenforceable due to inequitable conduct. It is charged that Henderson submitted false Rule 131 declarations to the United States Patent and Trademark Office (“PTO”) in order to establish earlier conception dates for patents cited as prior art against his patent applications-in the parlance, to “swear behind” the reference. The allegedly false statements relate to actual reduction to practice, a demonstration of the device that allegedly performed the invention and false statements in support of proof of diligence.

IW responds that any Rule 131 statements of actual reduction to practice are immaterial because the action of the PTO was based on constructive reduction to practice, and the declarations do not containany false statements respecting invention or diligence.

HTC's motion for summary judgment was denied and the issue of inequitable conduct was severed for trial. The case is now before the court after trial for entry of findings of fact, conclusions of law and an order.

There are at least 11 other related patents and patent applications within the same patent family involved in this proceeding. Both the '186 patent application, filed December 19, 2001, and the '416 patent application, filed January 28, 2005, and others in the family of patents, claim priority to a parent application which was filed on January 5, 1994 and issued as U.S. Patent No. 6,278,862 (“the '862 patent”) on August 21, 2001. The '186 patent was prosecuted as a continuation-in-part of U.S. Patent No. 7,426,264 (“the '264 patent”). The '264 patent was prosecuted as a continuation-in-part of the '862 patent. The '416 patent was prosecuted as a division of the '186 patent.

Claim 1 of the '186 patent is an exemplary claim:

1. A wireless portable communication device for use by a message recipient for receiving a picture from a message originator having a telephone number, comprising:

a receiver operably coupled to receive a message from a

message center over a wireless connection the message including a non-facsimile picture supplied by the message originator and a caller ID automatically provided by a communications network that identifies the telephone number of the message originator, the message originator sending the caller ID with the picture to the message center;

a display; and

a controller operably coupled to display the picture and

caller ID on the display.

HTC contends that Henderson misrepresented his invention to the PTO in order to swear behind U.S. Patent No. 5,452,356 (the “Albert reference”), which has a priority date of February 10, 1993. Henderson claimed a conception date of January 19, 1993. HTC contends that the Rule 131 declarations falsely claimed actual reduction to practice and contained false descriptions of Henderson's invention in order to support his claim of diligence during an 11–month period from the January 1993 conception date to the January 4, 1994 filing date of his earliest patent application.

IW states that Henderson made no materially false statements in support of any showing of reduction to practice nor in support of proof of diligence, and, moreover, that he made no statements with specific intent to deceive the PTO.

The PTO has promulgated a federal regulation, 37 C.F.R. § 1.131, which governs the content of affidavits or sworn declarations of prior invention. The purpose, origin and application of this rule is explained in detail in Mahurkar v. C.R. Bard, Inc., 79 F.3d 1572 (Fed.Cir.1996).

This court has developed a rule requiring corroboration where a party seeks to show conception through the oral testimony of an inventor. Price [ v. Symsek ], 988 F.2d [1187,] 1195 [ (Fed.Cir.1993) ]. This requirement arose out of a concern that inventors testifying in patent infringement cases would be tempted to remember facts favorable to their case by the lure of protecting their patent or defeating another's patent. Eibel Process Co. v. Minnesota & Ontario Paper Co., 261 U.S. 45, 60, 43 S.Ct. 322, 67 L.Ed. 523 (1923); accord Deering v. Winona Harvester Works, 155 U.S. 286, 300–01, 15 S.Ct. 118, 39 L.Ed. 153 (1894); The Barbed Wire Patent, 143 U.S. 275, 284–85, 12 S.Ct. 443, 36 L.Ed. 154 (1892); Gasser Chair Co. v. Infanti Chair Mfg. Corp., 60 F.3d 770, 776 (Fed.Cir.1995); New Idea Farm Equip. Corp. v. Sperry Corp., 916 F.2d 1561, 1567 (Fed.Cir.1990). While perhaps prophylactic in application, given the unique abilities of trial court judges and juries to assess credibility, the rule provides a bright line for both district courts and the PTO to follow in addressing the difficult issues related to invention dates.

In assessing corroboration of oral testimony, courts apply a rule of reason analysis. Price, 988 F.2d at 1195. Under a rule of reason analysis, “[a]n evaluation of all pertinent evidence must be made so that a sound determination of the credibility of the inventor's story may be reached.” Id.

This court does not require corroboration where a party seeks to prove conception through the use of physical exhibits. Id. The trier of fact can conclude for itself what documents show, aided by testimony as to what the exhibit would mean to one skilled in the art. Id.

Reduction to practice follows conception. To show actual reduction to practice, an inventor must demonstrate that the invention is suitable for its intended purpose. Scott v. Finney, 34 F.3d 1058, 1061 (Fed.Cir.1994). Depending on the character of the invention and the problem it solves, this showing may require test results. Id. at 1062;Manville Sales Corp. v. Paramount Sys., Inc., 917 F.2d 544, 550 (Fed.Cir.1990). Less complicated inventions and problems do not demand stringent testing. Scott, 34 F.3d at 1062. In fact, some inventions are so simple and their purpose and efficacy so obvious that their complete construction is sufficient to demonstrate workability. Id.;King Instrument Corp. v. Otari Corp., 767 F.2d 853, 861 (Fed.Cir.1985), cert. denied,475 U.S. 1016, 106 S.Ct. 1197, 89 L.Ed.2d 312 (1986).

Where a party is first to conceive but second to reduce to practice, that party must demonstrate reasonable diligence toward reduction to practice from a date just prior to the other party's conception to its reduction to practice. Griffith v. Kanamaru, 816 F.2d 624, 625–26 (Fed.Cir.1987).

Id. at 1577–78.

The version of Rule 131 in force since 2004 provides in pertinent part:

(a) When any claim of an application ... is rejected, the inventor of the subject matter of the rejected claim ... may submit an appropriate oath or declaration to establish invention of the subject matter of the rejected claim prior to the effective date of the reference or activity on which the rejection is based.

* * *

(b) The showing of facts shall be such, in character and weight, as to establish reduction to practice prior to the effective date of the reference, or conception of the invention prior to the effective date of the reference coupled with due diligence from prior to said date to a subsequent reduction to practice or to the filing of the application. Original exhibits of drawings or records, or photocopies thereof, must accompany and form part of the affidavit or declaration or their absence must be satisfactorily explained.

37 C.F.R. § 1.131.

There are three ways to show prior invention: (1) actual reduction to practice prior to the effective date of the reference; (2) conception of the invention prior to the effective date of the reference coupled with due diligence...