mbH v. CISCO Sys. INC.

• Decision Date: 26 July 2010
• Docket Number: Civ. No. 09-72-SLR,09-232-SLR.
• Parties: SIGRAM SCHINDLER BETEILIGUNGSGESELLSCHAFT mbH, Plaintiff, v. CISCO SYSTEMS, INC., Defendant. Cisco Systems, Inc., Plaintiff, v. Sigram Schindler Beteiligungsgesellschaft mbH, Defendant.
• Court: U.S. District Court — District of Delaware

726 F.Supp.2d 396

SIGRAM SCHINDLER BETEILIGUNGSGESELLSCHAFT mbH, ¹ Plaintiff, v.CISCO SYSTEMS, INC., Defendant.

Cisco Systems, Inc., Plaintiff,

v.Sigram Schindler Beteiligungsgesellschaft mbH, Defendant.

Civ. Nos. 09-72-SLR, 09-232-SLR.

United States District Court,D. Delaware.

July 26, 2010.

COPYRIGHT MATERIAL OMITTED.

COPYRIGHT MATERIAL OMITTED.

Steven J. Balick, Esquire and John G. Day, Esquire of Ashby & Geddes, Wilmington, DE. Counsel for Teles AG Informationtechnologien. Of Counsel; David W. Long, Esquire, Mark L. Whitaker, Esquire and Monica Lateef, Esquire of Howrey LLP, Washington, D.C.

Jack B. Blumenfeld, Esquire and Rodger D. Smith II, Esquire of Morris, Nichols, Arsht & Tunnell LLP, Wilmington, DE. Counsel for Cisco Systems, Inc. Of Counsel: J. Anthony Downs, Esquire and Lana S. Shiferman, Esquire of Goodwin Procter LLP, Boston, MA.

MEMORANDUM OPINION

SUE L. ROBINSON, District Judge.

I. INTRODUCTION

Presently before the court are ten motions brought in two related patent infringement actions involving SSBG and Cisco Systems, Inc. (“Cisco”) relating to Teles's U.S. Patent Nos. 6,954,453 (“the '453 patent”), 7,145,902 (“the '902 patent”) and 7,483,431 (“the '431 patent”) (collectively, the “patents in suit”). The procedural history of these actions is complex and detailed below. Pending before the court are: (1) Teles's motion to amend its pleadings (Civ. No. 09-72, D.I. 86; Civ. No. 09-232, D.I. 170); (2) Cisco's motion to dismiss for lack of subject matter jurisdiction (Civ. No. 09-72, D.I. 198; Civ. No. 09-232, D.I. 281); (3) Cisco's motion to exclude the opinion of SSBG's expert Christopher Spadea on commercial success (Civ. No. 09-72, D.I. 202; Civ. No. 09-232, D.I. 285); (4) SSBG's motion to limit the testimony of Cisco's expert Thomas La Porta (Civ. No. 09-72, D.I. 205; Civ. No. 09-232, D.I. 288); (5) SSBG's motion to limit the testimony of Cisco's expert Kevin Negus (Civ. No. 09-72, D.I. 206; Civ. No. 09-232, D.I. 289); (6) SSBG's motion for partial summary judgment of no inequitable conduct (Civ. No. 09-72, D.I. 216; Civ. No. 09-232, D.I. 299); (7) Cisco's motion for summary judgment of noninfringement (Civ. No. 09-72, D.I. 218; Civ. No. 09-232, D.I. 301); (8) SSBG's motion for partial summary judgment of infringement (Civ. No. 09-72, D.I. 222; Civ. No. 09-232, D.I. 305); (9) Cisco's motion for partial summary judgment for invalidity of the '431 patent pursuant to 35 U.S.C. § 112 and for confirmation of the priority date for the '431 patent (Civ. No. 09-72, D.I. 223; Civ. No. 09-232, D.I. 306); and (10) Cisco's motion for summary judgment of invalidity (Civ. No. 09-72, D.I. 227; Civ. No. 09-232, D.I. 310). ² The court has jurisdiction over these matters pursuant to 28 U.S.C. § 1338.

II. BACKGROUND A. The Parties and Patents in Suit

The patents in suit relate to voice over internet protocol (“VoIP”) telephony. Cisco provides routers and other network products that provide access to VoIP service providers. Teles is the listed owner by assignment of the patents in suit. In mid-2009, Teles transferred ownership of the '453, '902 and '431 patents by assignment to SSBG, a German corporation owned solely by Prof. Sigram Schindler, founder of Teles and inventor of the patents in suit. SSBG represents that it and Prof. Schindler own a controlling interest in Teles, and Teles has been granted a non-exclusive license to manufacture, use and sell products under the patents.

The patents in suit share a common specification claiming priority to original German patent applications filed in October 1996. The '453 patent issued from PCT No. PCT/DE97/02363, filed on October 7, 1997. The application issuing as the '902 patent was filed as a divisional application from the '453 patent application (U.S. Patent Application No. 09/147,970). The '431 patent was filed as a continuation of the '902 patent application (U.S. Patent Application No. 11/456,549).

B. The Technology at Issue

1. Generally

This case concerns internet telephony. Traditional telephony involves routing a telephone call over the public switched telephone network (the “PSTN”) from one telephone to another. The patents in suit and the accused Cisco products relate to VoIP technology through which a telephone call may be routed over a data network, such as the internet, rather than the PSTN.

The patents describe two methods of data transfer: line-switching (or circuit switching) and packet-switching. Line-switching connections are synchronous connections. ('902 patent, col. 1:45-48) When a line-switching call is put through, a continuous, real-time connection is established using the full bandwidth of a channel. ( Id. at col. 1:49-52) Data is transferred from one line section to an adjoining line section through a switch. ( Id. at col. 1:45-48) Although a line-switching connection is free of any time delay and has a fixed bandwidth, such connections are expensive, since costs accumulate irrespective of the data actually being transferred. ( Id. at col. 1:52-58)

A packet-switching exchange involves the transfer of data, such as audio or video data or computer files, which are packeted and transferred as data packets. ( Id. at col. 1:59-62) Packet-switching is asynchronous, and a fixed connection need not be maintained. ( Id. at col. 1:62-67) The data packets are transferred time-delayed between two adjoining line sections by a switch; “each packet is treated individually and not in conjunction with the others.” ( Id. at col. 1:62-2:2) Packet-switching is used on the internet, whose data packets are termed “IP packets” (for “Internet Protocol”). ( Id. at col. 2:3-5) IP packets have a length of 16 bytes or more because they contain information in their headers, such as sender and receiver addresses. ( Id. at col. 2:5-11) Because of this length, a time delay occurs in the packet-switch (an IP-switch or router ³ ) when transferring data. “This time delay can be so great, when there is a heavy load on the packet-switching apparatus which passes a data packet over the router to the destination address, that certain applications are no longer possible.” ( Id. at col. 2:10-15) Such delay is problematic with internet telephony; when the delay of individual packets is significant, a normal conversation is no longer possible. ( Id. at col. 2:16-22)

2. Overview of the invention

The patents disclose that, “[b]ased on the prior art, the present invention is concerned with the problem of providing a method for transferring data from a first switch to a second switch and providing a switch[ ] for carrying out the method which, depending on the data origin and headers of a user or network management system, allows flexible data transfer between the switches and more particularly cost-effective data transfer with real-time properties,” ( Id. at col. 3:17-19) (emphasis added) “The solution according to the present invention makes it possible during [a] packet-switching connection between two switches to achieve a dynamic change-over [from a packet-switching connection] to [a] line-switching connection without interrupting the connection.” ( Id. at col. 3:20-24) In other words, a line-switching connection is “established only when required, i.e., when a packet-switching data transfer no longer has the desired bandwidth,” such that data blockage is bypassed. “Slight time delays” may be present, but the bypass enables the data transfer to occur “substantially in real time.” ( Id. at col. 3:26-34)

The patents describe utilizing switches having both line-switching and packet-switching functionality. ( Id. at col. 3:43-46) That is, the switch has “a packeting device for packeting and unpacketing data, an IP-switching device for routing data packets, a line-switching device for establishing connections for switching through data channels and a control device which directs incoming data either to the IP-switching device or to the line-switching device depending on the control signals.” ( Id. at col. 3:46-53; fig. 4) “The important factor is therefore the possibility of dynamically switching between packet-switching and line-switching during one transfer.” ( Id. at col. 7:20-22) The internal control commands (as to whether packet-switching is to take place through an IP-switch or line-switching is to take place through a line-switching device) are produced in a control unit, which is itself “substantially a switch” that monitors and controls open connections. ( Id. at col. 8:49-60) The switching decision is made by the control unit based on specified transfer parameters. ( Id. at col. 9:46-56)

Together, the patents in suit contain 210 claims to various methods and apparatus encompassed by the invention, for example, methods for data transfer and data switching apparatus. SSBG asserts that Cisco infringes the following claims: (A) claims 2, 34, 68, 69, 71, 74-77, 79, 82-85, 87, 90-92, 95, 98, 100-01, and 104 of the '902 patent; (B) claims 34-36 and 38 of the '453 patent; and (C) claims 1, 3, 6, 8, 11, 13, 16, 18, 45, 46 and 47 of the ' 431 patent. (D.I. 281, JA6440 at ¶ 10 ⁴ ) Certain of these claims have been identified by the parties in connection with their claim construction papers (in which the parties seek the construction of sixty-three (63) terms). The court focuses its limited resources on those most essential claim terms and issues addressed by the parties in their summary judgment motions.

C. Litigation History

The '453 patent issued on October 11, 2005. On October 18, 2005, Cisco filed a declaratory judgment action against Teles in the United States District Court for the District of Columbia, seeking a declaration that the '453 patent is invalid and not infringed (hereinafter, “ Teles I ”). (Civ. No. 09-232, D.I. 1) ⁵ On March 24, 2006, Teles filed suit against Quintum Technologies, Inc. (“Quintum”) ⁶ in this judicial district for infringement of the ' 453 patent (hereinafter, “ Quintum ”). (Civ. No. 06-197-SLR)

The '902 patent...