Rembrandt Transcript

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MICHAEL A. RODRIQUEZ, RPR/CM/RMR
1
IN THE UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF VIRGINIA
Alexandria Division
REMBRANDT SOCIAL MEDIA, LP, )
)
Plaintiff, )
v. ) CIVIL ACTION
)
FACEBOOK, INCORPORATED, et al., ) 1:13-cv-158
)
Defendant. )
)
REPORTER'S TRANSCRIPT
MOTIONS HEARING
Friday, August 8, 2014
BEFORE: THE HONORABLE T.S. ELLIS, III
Presiding
APPEARANCES: ROBERT HILLMAN, ESQ.
AHMED DAVIS, ESQ.
JOHN GOETZ, ESQ.
Fish & Richardson PC
1425 K St., NW, Suite 1100
Washington, DC 20005
For the Plaintiff
HEIDI KEEFE, ESQ.
PHILLIP MORTON, ESQ.
Cooley, LLP
Reston Town Center, 11951 Freedom Drive
Reston, VA 20190-5656
For Defendant Facebook
---
Official Court Reporter
USDC, Eastern District of Virginia
Alexandria Division
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THE CLERK: Rembrandt Social Media, LP vs.
Facebook, Inc., Civil Action No. 1:13-CV-158.
Counsel, would you please note your
appearance for the record.
THE COURT: All right. For Rembrandt, Mr.
Hillman, you're here?
ATTORNEY HILLMAN: I am, your Honor.
THE COURT: And with you?
ATTORNEY HILLMAN: Mr. Goetz and Mr. Davis.
THE COURT: All right. And who will argue
today?
ATTORNEY HILLMAN: I will.
THE COURT: And --
ATTORNEY HILLMAN: Excuse me, I will argue
most of it. If we're going to have argument on the
attorneys' fees motion, Mr. Goetz will do that.
THE COURT: You mean the extraordinary case
matter?
ATTORNEY HILLMAN: Yes.
THE COURT: All right.
ATTORNEY KEEFE: Good afternoon -- good
morning, your Honor, Heidi Keefe for Facebook.
THE COURT: After all, it's a Friday morning
docket.
ATTORNEY KEEFE: It is, indeed, your Honor.
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Good morning.
Heidi Keefe for Facebook. With me is Phil
Morton, and in the courtroom is Christen Dubois from
Facebook.
THE COURT: All right. Let me begin by
apologizing for the delay, but it was unavoidable. I am
not sure you found the delay edifying -- maybe
entertaining, but not edifying.
All right. We have basically three motions,
two are very closely related; that is, the motion for
judgment as a matter of law post verdict and a motion
for a new trial, and then a motion for attorneys' fees
to have this labeled as an exceptional case after the
recently decided Octane Fitness case in the Supreme
Court, which somehow on my desk I saw something that
said Octane Fitness, which changed and clarified the
standard for exceptional case, and then something had
crossed out "clarified."
I think we can all agree things have changed
with Octane. But let's take up the -- the first two
motions. And some of the arguments, as I recall three
of them, anyway, some of the arguments that are made are
pertinent to both; that is, pertinent to both the JMOL
and the new trial and some relate only to one of them.
So we'll begin, Ms. Keefe with you. I -- I
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understood you both had shows to put on; is that right?
ATTORNEY KEEFE: I don't have a show, your
Honor.
ATTORNEY HILLMAN: Just me.
THE COURT: All right. You do?
ATTORNEY HILLMAN: I have a show, your
Honor.
THE COURT: All right. Well, is the machine
working for you?
ATTORNEY HILLMAN: Well, I hope, if we move
it to the podium up here.
THE COURT: All right. Well, that's fine.
I'll --
ATTORNEY HILLMAN: Am I going to go first?
THE COURT: No, no. It's her motion. She
has --
ATTORNEY KEEFE: It's not my motion.
THE COURT: Oh, that's -- no. I'm sorry.
You will go first, of course. They're your motions,
except for the third one is yours.
ATTORNEY KEEFE: That's correct, your Honor.
I would be happy to go first on the others
and just say please deny them, but that's all I'd say.
THE COURT: I have read your materials.
Go ahead, Mr. Hillman, you may go first.
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ATTORNEY HILLMAN: I will, your Honor.
THE COURT: For planning purposes, how long
do you think you need?
ATTORNEY HILLMAN: I -- I'm going to be
fairly brief. I'm not going to try to review the whole
thing. I would guess maybe 20 minutes to half an hour.
THE COURT: All right. That's perfectly
reasonable.
Go ahead.
ATTORNEY HILLMAN: So what I -- what I'd
like to do, really, is to just get to the -- what I
think is the crucial issue, which is what actually was
your claim construction and was it honored during the
trial.
As you can see from both of our motions, our
view is that their whole case and the evidence really
was based on a misuse, a misunderstanding, a
mischaracterization of the existing claim construction.
And so what I would like to do is to start out by
reviewing that claim construction so that -- we've got
hard copies of these slides, your Honor.
Can we hand them up? Should we do it later?
THE COURT: Well, I can't look at two things
at one time. So if you want me to look at --
ATTORNEY HILLMAN: I am handing one to
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opposing counsel.
THE COURT: All right. Go ahead, Mr.
Hillman.
ATTORNEY HILLMAN: So there are really four
terms that you construed that governed the heart of the
debate here. And the ultimate issue is: What does the
diary program of the '362 -- the '316 and the '362
claims have to do in order to qualify as a diary
program?
And so we start with the definition of
"diary program," which is a computer program for
execution by the browser -- there's a misspelling there,
I apologize -- in the user system that generates a
cohesive diary page.
So the browser -- excuse me -- the diary
program has to generate the cohesive diary page. And
the cohesive diary page, itself, is defined as a diary
page in which the content data and the page design are
fully integrated for display.
The next term is critical here, because it
tells us how the diary program is going to generate the
cohesive diary page. It's the assembly term. And it
says that "Assembling the cohesive diary page means
forming the cohesive diary page to be displayed by
combining at the time of display the content data with
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the page design to generate a page definition that is in
compliance with the configuration information."
So our fundamental contention in this case,
your Honor, and it has been from the beginning,
throughout trial, still is today, that what the diary
program has to do is to carry out this combining step to
produce a page definition, not to produce the actual
displayed picture on the screen, but to produce the page
definition.
And what is that page definition?
That's the fourth term here. It's
information that completely defines the appearance of a
page. It just has to define it. It has to tell you
what the page is going to be. It doesn't have to
actually generate the displayed page, itself.
Now, I'll touch briefly on the '362 claim
where we don't even have to go to a construction, your
Honor, because the claim language, itself, and it uses
the word "applet" for diary program, and everybody
agrees that the applet in '362 is the same as the diary
program in '316; the applet for dynamically generating a
page definition. So if this confirms that this applet,
which is the same program in both patents, has as its
purpose and function the production, the generation of a
page definition.
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Now, our position is that once it's
understood and accepted that the diary program has to
generate the page definition and not the displayed
page -- that latter thing is done by the browser -- once
that's understood, the evidence inexorably leads you to
the result that BigPipe does that. BigPipe does
generate the page definition. We don't think any
reasonable jury could have come out the other way based
on the actual claim construction.
And, here, let me run through the evidence.
Here's Dr. Golbeck. So, you know, she -- she said,
well, we're talking about assembling the content and the
page design to make this page definition. We have the
diary program, and she's talking about BigPipe here.
And then, you know, as paragraphed, she has what it does
is to take the template, which is the page design, and
inserts the pagelets, which have content sections in
there, into the appropriate slots in this DIV that we've
talked about getting into the weeds, BigPipe takes these
pagelets, puts them into the slots. That's the
combination step, that's the assembly step, and that
produces a page definition, which is essentially an HTML
document that the browser then turns into the picture on
the page. So, once again, separating the functions of
the diary program and the browser. The diary program
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produces the page definition. It tells the browser then
what the page is going to look like, how to get there,
the browser executes on that definition to actually
produce the displayed page.
So that's her -- her -- now, one of the
issues that -- and, really, the most important criticism
that Facebook has of that is, well, the browser has to
go out and get some external reference because that
page, that HTML document has URLs in it, addresses which
have to have stuff fetched from them in order to produce
the displayed page. We agree. There has never been a
dispute about that. But that's part of the displaying
process.
The fact that the URLs are in there that
tell the browser exactly where to find certain content
or certain style information and the browser has to go
out and do it, it's still true that that HTML document
defines what the page is going to look like.
Months and months ago, your Honor, we
debated this during the summary judgment time, and I
gave you the example of the sconce that's up on the wall
there. And I said, hey, there are two ways of telling
the browser that that -- that a picture of that sconce
has to go in the upper left-hand corner of the displayed
page. One way is to put the actual picture there. The
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other way is to say, hey, what you're going to put up in
that upper left-hand corner is the picture that's stored
at a certain post office box, go get that picture and
put it there. The browser is equally governed as to
what it's going to do. That instruction equally defines
what the page is going to look like by telling you the
address of what is going to be there as if you had the
thing in there in the first place.
So the fact that these external references
are included in what we're calling the page definition
doesn't mean that it's not a page definition. And here
is what Dr. Golbeck said about that, and what she
pointed to here was one of several passages in the '362
patent, itself, that says, hey, the page definition
includes URLs, universal addresses, and the browser's
job is going to be to get the stuff from the URLs, and
here's -- in this box here on the slide the actual
language from the patent, which says that -- it's
talking about the page definition, and it says that the
browser downloads the object information specified by
the universal addressed parts of the AUA. And then her
testimony there explains that to the jury.
There was no contrary testimony or argument
about this disclosure in the '362 patent at trial. This
was the only evidence about it.
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Now, what's next?
Here is Mr. Parker, and he agrees that all
of these external references that the browser needs to
build the page are in the HTML file that was given to it
by BigPipe. And he says, yes. Which, of course, again,
the interesting thing in this case is that there is
really no debate between the parties as to how BigPipe
works or how any part of this system works.
The only debate is what does the claim
construction require? What does the claim construction
require the diary program to do in order for it to be a
diary program?
And then, you know, with all respect, your
Honor, I want to point out what happened at sidebar. I
wasn't standing there, but I see in the transcript. And
you were discussing with Mr. Melsheimer this whole issue
of what our claim was, what our argument was, and he --
and you said, okay, you're saying that by giving -- by
BigPipe giving the browser this information, and that's
the HTML file, it has assembled. In other words, it has
met that assembly requirement. And we say, yes. And
the Court says, I think you're correct that it
completely defines it.
THE COURT: All right. Let me stop you
right here.
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THE COURT: I didn't make a decision here.
I did not issue an order.
ATTORNEY HILLMAN: I understand.
THE COURT: I am not estopped by anything I
say here.
ATTORNEY HILLMAN: I totally understand
that, your Honor.
THE COURT: Right.
ATTORNEY HILLMAN: I'm I didn't mean to
suggest otherwise.
THE COURT: And some judges who might be
even more offended than I am by your use of this.
ATTORNEY HILLMAN: I apologize if it's
offensive, your Honor.
THE COURT: No, it's not offensive. Your --
it's perfectly all right for you to do it, but I don't
want you to be under the misimpression that I think I'm
bound by this.
ATTORNEY HILLMAN: Understand.
THE COURT: I can't remember the context. I
didn't make a ruling. I didn't embody it in an opinion
or an order.
ATTORNEY HILLMAN: Your Honor, I understand
that, and I certainly have never meant to suggest
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otherwise.
ATTORNEY HILLMAN: It just struck me as --
THE COURT: Why showing it, then?
ATTORNEY HILLMAN: Well, it struck me as
relevant that the heart of our argument, which is that
BigPipe does define the diary page was something that at
least at that time it seemed like you were agreeing
with.
I'll move on, your Honor.
THE COURT: Yes, because I am not bound by
that.
ATTORNEY HILLMAN: Absolutely.
THE COURT: And I'm not sure, frankly,
that -- well, in any event, that's a short answer to it.
ATTORNEY HILLMAN: Yes. And I -- I --
THE COURT: Not -- and you're perfectly all
right. It's perfectly acceptable for you to show me
that, but I don't want you thinking that I feel bound by
it. I don't.
ATTORNEY HILLMAN: I would not -- would
never dream otherwise, your Honor.
All right. And so, as your Honor knows,
we -- we have relied on these several exchanges that you
had with Mr. Parker talking about what was the element
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that assembled the page. And -- and our position is
that when -- that these questions suggested that the
assembly at question -- at issue was assembly of the
displayed page as opposed to just the assembly of the --
of the diary -- of the page definition. And what I'm
trying to show on this slide is that Mr. Parker, who, of
course had never seen the claim construction or didn't
know about what these terms mean, even though it turns
out that that assembly word was a charged word in the
claim, and so, here you said, okay --
THE COURT: I read it.
And so he says, yeah, it's -- it's the
browser that does the assembly. But what he was talking
about, as the cross shows on the next slide, he was not
talking about assembly of the HTML file, which is what
we say is the page definition. He was talking about
reading the HTML file and retrieving these external
resources, and that's what -- I won't read through this,
but that is what this slide does. And so here we have
ships passing in the night, really.
We're talking about assembly of the -- of --
of the page definition, which is what the claim
construction says the diary program has to do, and all
this back and forth with Parker, he's talking about use
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of the page definition by the browser to go out and get
these resources, which is not part of the doing the page
definition, but part of parsing and rendering that page
definition into the displayed page. And that, your
Honor, is the crux of the problem in this case. That's
where I think the trial went wrong. That's where I
think the result is wrong, and it's inconsistent with
the proper application of the claim construction.
And so, now, let me go to validity, because
that's basically our issue on infringement of the '316
patent.
THE COURT: All right. Why don't we stop
there and let Ms. -- respond to that?
ATTORNEY KEEFE: Thank you, your Honor.
Could you put back up the definition?
I think it was your Slide 2, or something.
ATTORNEY HILLMAN: I think it was the first
slide.
ATTORNEY KEEFE: The first thing that I
wanted to say, your Honor, is that it's inappropriate at
this time for them to even be asking for JMOL. If your
Honor remembers, during our motion for summary judgment
of infringement, in their opposition to our motion for
summary judgment of infringement, Rembrandt specifically
told your Honor that application of claim construction
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to the alleged infringing device is a matter for the
jury. Absolutely. They say, quote, on Page 17 of their
opposition: "Thus, summary judgment is only appropriate
if no genuine issue of material fact exists with respect
to the application of the patent claims to the alleged
infringing device."
The Federal Circuit has recently reaffirmed
in Uniloc vs. Microsoft that, quote, "The application of
the claim construction to the accused device is a
question of fact that must be left for the jury to
decide, even when there is no dispute as to the actual
functioning of the accused product."
Your Honor then took that language in your
order, denying our motion for summary judgment of
non-infringement, and specifically said that it was up
to the jury to apply the claim construction to the
accused products.
We then moved for no jury, and they said it
was all up to the jury because the jury had to apply the
claim construction to the products. In this case, the
jury did apply the claim construction to the products.
The claim constructions that your Honor gave in jury
instructions, that no one objected to, that no one tried
to have altered or changed, were the claim constructions
that Rembrandt stipulated for these terms. And there
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are Federal Circuit cases that indicate that you can't
try to change a claim construction that you stipulated
to. The Function case, citing to the Lazar case, and
those are both in our papers.
But even if -- so, first off, we say that
it's improper to be arguing claim construction at this
point. They never objected when your Honor issued the
order in the first instance. They didn't object to the
claim construction when it was given in jury
instructions.
THE COURT: He's not arguing claim
construction change. He says it was mischaracterized,
misunderstood.
ATTORNEY KEEFE: And I don't think it was at
all. If anything, we think that Rembrandt continues to
mischaracterize the claim construction. For example, if
your Honor looks at the claim constructions that we're
talking about, the diary program, BigPipe, the
definition of diary program is: "A program that
generates a cohesive diary page." That's what we argued
to the jury. The cohesive diary page has to be fully
integrated for display. We argue that you can't
integrate something when you don't have all the parts.
Dr. Golbeck admitted that there was CSS
missing when it was passed from the browser -- sorry,
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from BigPipe over to the browser. Dr. Golbeck admitted
on cross-examination that when the browser requires more
CSS -- and CSS, if you remember, are the instructions on
how a page looks; in other words, the instructions on
where to put the sconce on the wall, not just here is
the picture where to put it. Dr. Golbeck admitted on
cross-examination that the browser gets that information
directly from Facebook. BigPipe has nothing to do with
it.
So our argument of the claim construction
and its application is fully supported by the claim
construction, and that's what the jury's job was, it was
to take the claim construction that your Honor gave
them, and in its role as fact finder to apply that claim
construction to the facts that it was given.
The fact that Rembrandt now wishes that it
hadn't been a jury, it was their job and they did it
well and they did it right. We only argued the claim
construction given to us, the evidence absolutely
supports the decision that was rendered by the jury,
there is sufficient evidence for all of their decisions,
and we've detailed all of that out in our briefs.
They also bear a very heavy burden to show
that there is no other possible conclusion that anyone
could have come to. But that's just not possible, given
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the fact that they're ignoring from the definition of
diary program, itself, the fact that it has to generate
the cohesive diary page, which has to be fully
integrated for display, not just giving some of the
information, and that was the argument that we presented
to the jury. The jury found, after reviewing all of the
evidence put before it, including Dr. Golbeck admitting
that BigPipe didn't pass over all of the page design
information. So a cohesive diary page couldn't be
generated by BigPipe since BigPipe never even had parts
of the information that it needed.
That was the argument we made. Jury found
in our favor. There was sufficient evidence to support
the jury's verdict, and the rest of the details are in
our briefs, unless your Honor has other questions.
THE COURT: All right. Mr. Hillman, let's
go to validity now.
ATTORNEY HILLMAN: May I make two brief
comments on that?
THE COURT: Yes.
ATTORNEY HILLMAN: Number one, whether you
want to call it a fact issue or a law issue, the jury
can't reach a verdict that is diametrically opposed to
the actual claim construction, and that's the problem
here. That's point one.
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Point Number two, yes, it has to be fully
integrated, but what has to be fully integrated is the
page definition, and the page definition is fully
integrated because the URLs that defined what the page
design information and some of the content information
is, is fully integrated into that HTML document. It's
all there, as Mr. Parker agreed.
Again, we're -- we're weaving back and forth
between integrating the display and integrating the
definition. It's only the definition that has to be
integrated and done by BigPipe. Okay.
So, you know, I can just tell you in a
nutshell, the same confusion between the display and the
definition, which precedes the display, permeates the
whole validity case, and we've just got a few slides
here to show that.
So, the first one is -- here's Mr. Klausner,
and basically he's -- he's saying -- you know, he's been
asked about what is the information that completely
defines the appearance of the page, which is the
construction of the page definition. And he says, well,
it's whatever the user sees. He's talking about the
display.
And then in the next slide, he's talking
about the Renshaw reference, and he's talking about what
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this java applet does. Yeah, there's an applet there,
but it's acting like a browser. He says applet as
effectively a browser, which is doing -- which is doing
the displays, not the definition. There's no evidence
of a definition there.
And then, finally, Facebook's last brief on
the validity issue --
THE COURT: I'm sorry. Just a moment.
ATTORNEY HILLMAN: I'm sorry.
THE COURT: Go ahead, Mr. Hillman.
THE COURT: Go ahead.
ATTORNEY HILLMAN: We're all set. Okay.
This last slide just from their brief, you
know, they say, well, the calendar screen display
generated by the applet in Wang is, for example, a page
definition. Again, this is equating page definition to
what's displayed. That's not what page definition
means. Okay.
So, that's all I've got to say about
validity, your Honor.
THE COURT: All right, Ms. Keefe.
ATTORNEY KEEFE: I don't think any of my
arguments have changed. They're exactly the same as
they were before. This is just another argument of
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application of page definition. But, again, the
definition of page definition is information that
completely defines the appearance of a page, and it
can't completely define something if it doesn't have all
of the information. That's what we've always said.
And so along with all of the arguments that
I already made about claim construction and the ability
of all of the claim terms to fully support the jury's
determination, I think it's -- the same is true for
validity.
THE COURT: All right. Yes?
ATTORNEY HILLMAN: Just one thing.
It does have all the information, your
Honor. Mr. Parker admitted it. The information is the
URLs which tells you where that --
THE COURT: I understand that's your
position.
ATTORNEY HILLMAN: Okay. Okay. I just want
to be sure.
ATTORNEY KEEFE: And just so the record is
clear, the URLs are for the content. CSS is something
separate, and everyone agrees that what BigPipe passes
over does not have all of the CSS, which is the page
design, and that was where we spent most of our time on
cross-examination.
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THE COURT: I would doubt that everyone
agrees about anything in this case.
All right.
ATTORNEY HILLMAN: Your Honor, I do have one
other topic.
THE COURT: Which is?
ATTORNEY HILLMAN: Which is the doctrine of
equivalents issue, which is a separate infringement
issue of the '362.
THE COURT: All right. Yes?
ATTORNEY HILLMAN: And I just wanted to
review briefly what -- what the infringe -- what the
equivalents argument really is, because our view is
that, to this day, Facebook has not actually dealt with
our actual -- the actual equivalents argument that was
made at trial. And so we've got a little picture that
we cooked up.
THE COURT: Well, there are jury
instructions, weren't there?
ATTORNEY HILLMAN: There were jury --
THE COURT: You argued equivalents and they
argued against it.
ATTORNEY HILLMAN: They didn't argue against
our -- what they did was to criticize a straw man
argument that we had never made.
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ATTORNEY HILLMAN: That's our point.
But, again --
THE COURT: But it was doctrine of
equivalents was argued to the jury.
ATTORNEY HILLMAN: Yes, it was, your Honor.
Absolutely.
THE COURT: Excuse me just a moment.
(Off the record discussion.)
THE COURT: All right. Go on, Mr. Hillman.
So this picture that we've got here simply
shows how the Facebook system differs from what's in the
patent, and the patent has this database, the AUA
database, and what's up at the top there in those --
with those red and green outlines is the entire AUA, and
the whole thing in the patent is put into one bucket,
which they call the "AUA database."
Now, it turns out that part of that AUA is
simply sort of boilerplate, which is repeated for every
AUA in the bucket. And so if you look at the top, on
the left-hand side, the -- the red outline that says,
"HTTPS//www.Facebook.com," we've all seen URLs and
that's the sort of thing that's repeated over and over
again. And so what Facebook said is, well, there's no
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use for us to store that and the word "post" which is
another thing that's in every one of these AUAs. We
don't have to store that over and over again. We'll
just store that in the code.
And so they take -- the basically have two
buckets; one for the boilerplate, which is -- we labeled
"code," and then the rest of it, which is the guts of
what really matters is -- is in the green bucket, which
is their -- their FBID database.
And the equivalents argument, your Honor, is
that the combination of the code bucket and the FBID
bucket is equivalent to the AUA database -- to the
single bucket that -- simply separating things into two
buckets and then putting them together when you pull
them out of the buckets is insubstantially different
from -- from doing it all in one bucket. And we realize
that this is an issue of fact for the jury, but the
Court -- you now, the question is: Was the verdict
reasonable?
And we would submit that a difference, such
as simple as this, does not rebut equivalents. And I'm
not going to read through this, your Honor. We'll hand
these slides up, but the next two slides, simply, are by
Dr. Golbeck explaining why she believes that this
difference between two buckets and one bucket is
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insubstantially different. And that's -- that's
basically our case, your Honor.
THE COURT: Would you leave that up there
just to refresh my recollection?
I remember she said there was equivalents.
THE COURT: All right. Thank you. That's
enough.
All right. Ms. Keefe.
I think Mr. Hillman said it best at the very
end of his argument, this is a question of fact for the
jury. The jury had this argument and they rejected it.
The issue for doctrine of equivalents is not
simply is it close, is it close enough. It has to meet
a rigid function-way-result test that has to be linked
with linking arguments, which were never done. The
evidence that they're not talking about that was also
presented to the jury, let's not forget that the agreed
definition of AUA was an annotated universal address,
which was a URL. I then asked Dr. Golbeck: "What is
the function of a URL?"
She said that it was to be accessible
anywhere on the Internet. She then conceded that
Facebook I.D.s, which they claim are part of this thing
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they're saying is equivalent, are not equivalent because
she admitted that they served a very different function.
They identified resources only within Facebook system,
not things that could be accessible anywhere on the
Internet. That alone, is enough to show that the jury
had substantial evidence on which they could base their
determination. That's the standard here. There was
substantial evidence. It was a question of fact for the
jury. It meets the claim construction. And Dr. Golbeck
admitted that the function was completely different.
ATTORNEY HILLMAN: Very briefly, your Honor,
two points. Number one, function way and result is not
the only way you can prove infringement. Insubstantial
difference is an equal way of proving infringement --
proving equivalents, and the two slides I got there, I
think, adequately -- more than adequately explain that.
Number two, again, Ms. Keefe, with all due
respect, came up here and said, well, look, the Facebook
I.D., which is the part that's stored in one of the
buckets is not equivalent to a full AUA. We agree, but
we never said it was. That is exactly the way in which
our infringe -- our equivalents argument has been
mischaracterized throughout the trial and even now in
the briefing and argument.
We never said that the -- the truncated I.D.
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was equivalent to the full AUA. Of course, it's not.
She's right. One of them is only useful internally and
the other externally. The argument is that the
combination of the two buckets, which do produce the
full AUA, is equivalent to having it all stored in one
bucket. That is the argument. It's never been
addressed by Facebook.
THE COURT: Yes, Ms. Keefe, I'll give you
the last word.
ATTORNEY KEEFE: Respectfully, your Honor,
they said that the AUA was the FBID, and that's exactly
what we argued to. And, again, I think our papers are
very clear on that.
Thank you.
THE COURT: All right. Then, with respect
to the extraordinary case issue, let me ask: First of
all, are Defendants up here now?
THE CLERK: Yes, your Honor.
THE COURT: Ms. Keefe, how long do you think
you need to argue the -- the final issue?
ATTORNEY KEEFE: Not very long at all, your
Honor. Again, I think our papers are very detailed and
give you all the things that you need. I'm clear --
THE COURT: Let me ask you each a question
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about that. Will you argue it, Mr. Hillman?
ATTORNEY HILLMAN: No. Mr. Goetz would
argue that --
ATTORNEY HILLMAN: -- if we need argument.
THE COURT: Let me -- the question -- after
Oncale [sic] --
ATTORNEY KEEFE: Octane?
THE COURT: Octane, I mean. There is an
Oncale [sic].
After Octane, Ms. Keefe, tell me in the most
succinct terms what you think distinguishes a case for
treatment as an extraordinary case to switch or to --
yes, attorneys' fees.
ATTORNEY KEEFE: Certainly, your Honor.
So after Octane, the standard simply is that
an exceptional case is one that stands out from others
with respect to the substantive strength of a party's
litigating position, considering both the governing law
and the facts of the case, or the unreasonable manner in
which the case was litigated.
THE COURT: All right. Now, let me ask you
this: Stands out from others, right?
ATTORNEY KEEFE: Yes.
THE COURT: Do we know from the Supreme
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Court opinion whether that's patent cases or all cases?
ATTORNEY KEEFE: Octane Fitness was a patent
case, and this is patent cases.
THE COURT: So, clearly, what the Supreme
Court is saying stands out from other patent cases
because the exceptional -- the exceptional case is a
statutory provision that applies only to patent cases?
ATTORNEY KEEFE: That's correct, your Honor.
THE COURT: All right. And your -- your
brief tells you -- excuse me a minute.
Is that a mouse?
THE CLERK: Yes, sir.
THE COURT: Why do you think this case
stands out?
I recall vividly some aspects of the
litigation. We had a trial on -- or a -- extensive
briefing and argument on the damages aspect, on several
occasions. It's hard for me to think that "stands out"
just means that there's a lot of argument about a
particular issue.
ATTORNEY KEEFE: I'm not sure --
THE COURT: If that were true, that would
mean every patent case would stand out from all the
others.
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ATTORNEY KEEFE: I'm not sure that we've
advocated at all, but it's just because there's been
lots of argument; instead, it was the manner in which
the case was litigated and the positions taken as the
case -- as Octane Fitness says, the strength, the
substantive strength of a party's litigating position or
the unreasonable manner in which the case was litigated.
In this case --
THE COURT: Well, are you referring not to
the infringement and validity, but you're referring to
the damage issue there?
ATTORNEY KEEFE: We're principally referring
to the damages issue because they took what they knew to
be a small feature and instead of actually recognizing
that feature and whether or not it had a role to play in
damages, their expert, instead, looked only to features
that had already been agreed by the parties to be not
infringing before 2009.
So their expert said that he looked to the
importance of news feed, the importance of timeline.
Never once acknowledging or mentioning that news feed
and timeline existed in non-infringing states before the
alleged infringement of adding in BigPipe; the small
feature. Your Honor found that. And instead of
acknowledging that and moving on, I think it would have
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already been potentially an exceptional case by virtue
of the sheer volume of the act as well as the fact that
there was nothing to support it.
But even after your Honor granted the
Daubert, they kept coming back and kept trying to just
redo, essentially, the same numbers with the same volume
to the point where your Honor finally had to say to them
that you haven't answered my questions.
And standing here in this courtroom after
your Honor had asked for briefing, on two separate
occasions, of what the new facts were that they were
going to try to elicit at trial and not receiving
answers, your Honor had to stand and make them answer
here at the podium what those might be. The fact that
they kept forcing that litigation is part of what made
this case exceptional.
The other part of the case that makes it --
made it exceptional, dragging in Addthis to try to
secure a venue here in the Eastern District of Virginia.
They claim that they couldn't possibly have known that
they needed to drop Addthis from this case until late,
late, late into the case when they took discovery and
found out that they didn't have a big revenue stream
associated with the alleged infringement.
But Addthis had answered an interrogatory
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four days before the hearing on the motion to transfer
saying that they made no money on the alleged infringing
features. But Rembrandt stood in this court and said
despite that interrogatory response, that Addthis was a
substantial defendant because of all of the money that
was involved for Addthis' use of the infringing
technology.
Trying to drag in a local defendant that was
let off of the case for a minimal amount, late in the
case, too late to have the case transferred, despite
knowing before the hearing on the motion to transfer
that there wasn't a lot of money involved, also adds to
the exceptionality of the case.
Further, Rembrandt engaged in what we have
termed "scorched earth discovery tactics." They
actually required us to produce in excess of six million
pages of documents while all the while telling us that
they wouldn't narrow their search terms so that there
would be a reasonable number, despite the fact that they
admitted they wouldn't even probably review most of the
documents. They simple wanted to run their own searches
on those documents.
Under Octane Fitness, exceptionality of case
does not have to be one single act. It's viewed under
your Honor's discretion in view of the totality of the
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circumstances in the totality of the case, and we
believe when you put all of those things together, as
well as even in this last go around, first exclaiming
that this must go to a jury and now trying to argue that
it shouldn't have gone to a jury or it shouldn't be --
the jury's verdict should be overturned, all in toto
render this an exceptional case under the new law of
Octane Fitness.
THE COURT: Mr. Goetz?
All right. Are the defendants -- they're up
here now?
THE MARSHAL: Yes, your Honor.
THE COURT: All right. As soon as I hear
this, we'll reconvene.
ATTORNEY GOETZ: Thank you, your Honor, may
it please the Court.
Just to respond to the comments from
Counsel, the first is that under the Octane Fitness
standard, the question is whether it stands out in two
respects. The first being the substantive strength of a
party's litigating position. And you have to take into
account the totality of the circumstances.
And so under that prong, when you do that,
and you look at everything that happened in the case,
you look at the motion to dismiss that was filed, that
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we won, you look at the motion to transfer that was
filed, that we won, you look at the claim construction
disputes that were had --
THE COURT: You might not had won it if you
had admitted that they didn't belong in the case.
ATTORNEY GOETZ: Yes, your Honor.
And I'll respond to the Addthis point in a
minute. But let me just continue. The claim
construction disputes were hotly disputed. Rembrandt
won all of those disputed issues. And then the summary
judgment, there was a summary judgment filed. Facebook
wanted to dismiss this case on summary judgment, and
Rembrandt won that, too. And so all of those things are
part of the totality of the circumstances that you have
to look at when considering the case under Octane
Fitness.
And -- and that leads us to the damages
question, and that's really the focus of what they're
saying. And, of course, that question, which was
decided against us on Daubert, that question was
certified by your Honor under 1292; and as part of that
certification, the Court said -- and I think rightfully
so -- that there was a substantial ground for difference
of opinion, and that's relevant to the prong under
Octane Fitness of the substantive strength of the
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parties' litigating position.
This is not a situation where we were
presenting arguments that -- that just lost as a matter
of course. There were arguments that were close. A lot
of these arguments were close and a lot of them we won,
and all of that should be taken into account and the
totality of the circumstances.
And then when you get to after the Federal
Circuit declined to take it on interlocutory appeal,
what Rembrandt did in that situation was attempt to get
clarity as -- as many of -- many courts have allowed
defendants -- or plaintiffs in that circumstance to
propose new theories.
And so we just were following that law,
attempting in good faith to do that, and there's nothing
surprising about that. In fact, many other courts --
and we understand that your Honor didn't agree with
them, and that's fine, but there are many other Courts
that routinely allow plaintiff to alter a new theory
after their first one has been struck, including Judge
Rader of the Federal Circuit when he sat as a District
Court judge. And so we don't think that, at all, stands
out from other cases. We think that it's absolutely
consistent.
And then, finally, with respect to the trial
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and -- and the JMOL arguments, we think there's a --
there's legitimate disputes there, Your Honor. And --
and it doesn't stand out from other cases in that
respect at all.
THE COURT: Why did you keep Addthis in
there when you knew it would affect the transfer motion?
ATTORNEY GOETZ: Your Honor, Addthis was a
defendant in this case because they were an infringing
defendant, and we believed that from the beginning.
And -- and counsel for Facebook makes the suggestion
that we were misrepresenting their status at the
hearing, and that's actually not true.
And if you will look at the interrogatory
that they're referring to, what Addthis had said, at
that time, and they quote it in their brief, and I don't
have it in front of me, but it's -- whether activating
the Facebook buttons, the "like" buttons generated
revenue.
Well, number one, that's a little unclear
what they -- what they were referring to then, and what
that suggested and what it suggests today is that merely
clicking on those buttons didn't generate a per click
revenue for Addthis.
Now, of course, there's a lot of other ways
that these Web sites generate revenue. And, in fact, a
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lawyer from Cooley, who was Mr. Campbell representing
Addthis was at that motion where we said Addthis made a
lot of money, and he didn't bring up the fact that --
that Addthis actually carved out the Facebook revenue
from its model, and that's what was later discovered
during the deposition.
What their witness said when we finally sat
them down and were talking with him, he said, "We
exclude from our data, in which we monetize, the clicks
on the Facebook 'like' and the 'share' buttons." And so
that wasn't -- we didn't know that when we were at this
hearing. And, at the time, all we had was an
interrogatory response. We were entitled to -- to look
into that. And when we did -- when we finally did and
realized that -- that their basic proposition that they
weren't making money, revenue, from their use of the
"like" and the "share" button because they were carving
it out for their own purposes, that was the point when
it was relevant to say, okay, it's -- it's economically
rational to settle with them and to move on.
THE COURT: All right. Ms. Keefe, I'll give
the last word, briefly.
ATTORNEY KEEFE: Just to directly address
Mr. Goetz' point, the specific interrogatory response
was, and don't forget, use of "like" and "share" is what
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had been accused of infringement by Addthis. That was
what the entire infringement allegation was based on.
The interrogatory response was: "Activation of Facebook
'like' and 'share' buttons does not generate revenue for
Addthis." And, yet, that was never discussed or
described to your Honor. And, instead, they were kept
in the case until months later, months later when they
took the deposition. They could have taken the
deposition much earlier, but months later when they took
the deposition and found out the same information, and
used that fact to settle them out of the case.
The rest of the points, your Honor, are in
my brief. I just urge your Honor to remember that it's
the totality of the circumstances of how the case is
litigated, positive and negative, all of the negatives
that we detailed in our briefs make it stand out.
THE COURT: 3:00 o'clock today. I want you
back at 3:00 o'clock. I'm going to resolve these
motions.
THE COURT: I'm going to reflect on what
you've said and look over some things.
Thank you.
(Court recessed in Rembrandt v. Facebook.)
(Court called to order at 3:20 p.m.)
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THE COURT: Well, first, let me thank you
for your patience.
The matter is before the Court on
Rembrandt's motions for judgment as a matter of law and
for a new trial, and Facebook's motion to have this case
declared an exceptional case so that there is an award
of attorneys' fees to the prevailing party.
I'll take up the first two motions together.
I think I should preface it by saying that the parties
have filed, essentially, a mountain of paper on these
motions, quite a lot of material, and that's why the
argument was set a long time, hence. I think I'd also
like to say two things: One is that the written
documents, the briefs and the materials submitted, were
all helpful and quite good. The briefs were quite good.
And secondly, I would like to welcome Mr. Hillman back
to the fray. I think he should have never left.
And, Ms. Keefe, that doesn't mean that I
don't enjoy your presentation, because I surely do. But
I am glad to see Mr. Hillman back.
ATTORNEY HILLMAN: Thank you, your Honor.
THE COURT: Now, Regional Circuit law, not
Federal Circuit law governs a District Court's decision
to grant a JMOL or a new trial, and that's true
regardless of subject matter, and I don't think the
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parties dispute that. The Federal Circuit has said it
in more than one case.
In the Fourth Circuit, a motion for a new
trial may be granted when a verdict was against a clear
weight of the evidence; that is, manifestly against the
weight of the evidence, or was against the clear weight
of the evidence or based on evidence that's false, or
would result in a miscarriage of justice. Numerous
cases hold or stand for that principle. And, of course,
the Court has broad discretion in considering motions
for a new trial. It may weigh evidence, consider
credibility of witnesses and the like.
Now, for a judgment as a matter of law,
under Fourth Circuit law, District Court should not
disturb a verdict where there is sufficient evidence for
a reasonable jury to find in the non-movant's favor. In
other words, a JMOL should only be granted if a District
Court concludes viewing the record as a whole, in the
light most favorable to the non-movant, that the
evidence presented supports only one reasonable verdict
in favor of the moving party.
Now, there are five grounds that are
asserted -- six grounds that are asserted for the new
trial, and three of those also apply to the judgment for
the JMOL. The first is a clear weight of the evidence
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established that Facebook literally infringes the
patent. That's the claim made. Second, that the clear
weight of the evidence established that Facebook
literally infringes the '362 patent. The first one was
the '316 patent, and the second one is -- I'm sorry,
I -- the clear weight of the evidence
establishes that -- or established that Facebook
literally infringes the '316. The clear weight of the
evidence presented at trial established that Facebook
literally infringes the '362 patent under the doctrine
of equivalents, and the clear weight of the evidence
established that Facebook did not prove that the patents
are invalid. Those are the first three that go to the
JMOL.
The second three go to -- and they also go
to the new trial. And the second three go to the new
trial that Facebook's witness Mr. Parker was allowed to
give improper prejudicial expert testimony and that the
Court's questioning and comments to witnesses and
Rembrandt's counsel created an unfair and prejudicial
impression that the Court supported Facebook. And six,
that Court's failure to instruct on teaching away was
erroneous and prejudicial.
Rembrandt, also, alternatively claims that
JMOL must be granted because there was insufficient
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evidence for the jury to find non-infringement and
validity, as I said earlier, and that the evidence
presented supports only one reasonable verdict in favor
of Rembrandt.
Now, as I said, I gave the standard for new
trial, and for the JMOL, under Fourth Circuit law, Court
should not disturb a verdict where there was sufficient
evidence for a reasonable jury to find in the
non-movant's favor. The Dotson case so holds, as do
countless others, and so, in other words, a JMOL should
only be granted if the District Court were to conclude,
if I were to conclude that viewing the record in the
whole -- as a whole in the light most favorable to
Rembrandt -- I beg your pardon -- light most favorable
to Facebook, that the evidence presented supports only
one reasonable verdict in favor of Rembrandt.
Now, focusing first on infringement,
distilled to its essence, both on the issues of validity
and infringement, as I see it, they come down to an
evidentiary battle; a battle which Facebook won on both
infringement and validity.
In effect, a jury chose to believe
Facebook's testimony and to put less or to not to
believe or to accept the testimony of Rembrandt's
witnesses.
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Rembrandt alleged at trial that Facebook
literally infringed the Claims 4, 20 and 26 of the '316
patent, which depended from Claims 1 and 17. These
claims require assembly of a cohesive diary page by
combining the content data and page design. The Court's
claim construction defined cohesive diary page
as cohesive diary -- let me find it -- as "A diary page
in which the content data and page design are fully
integrated for display." And this really turned on --
on BigPipe and the function of BigPipe, and there was
disputed testimony about that.
Now, Rembrandt asserts that Dr. Golbeck's
testimony conclusively established infringement and the
jury's verdict of non-infringement was against the
weight of the evidence.
As I read the record, I don't agree. It's
to be sure Golbeck said that there was infringement, but
I think there was ample evidence to the contrary on
which a jury could find that there was not infringement.
There was ample evidence from which the jury could find
that big program (sic) did not perform the required
steps and does not combine content dated with page
design to assemble a cohesive diary page.
And let's remember that these Markman
constructions, for the most part, certainly with respect
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to cohesive diary page, diary program -- and diary
program, those two definitions were not definitions that
were disputed. They were agreed, stipulated to
definitions.
I did determine or I did construe the phrase
"Assembling the cohesive diary page by dynamically
combining the content data and page design in accordance
with the configuration information." I did have a
definition of that; meaning, forming the cohesive diary
page to be displayed by combining at the time of display
the content data with the page design to generate a page
definition that is in compliance with the configuration
information. And there was a lot of testimony about
where that happened and how it happened and which --
whether it happened at BigPipe or somewhere else.
Dr. Golbeck testified that -- well, she
testified it was infringement. On cross-examination,
she testified that content data includes photos and text
on Web page and that page design includes CSS
information, which, by the way, is the information that
contains instructions for the HTML regarding how to view
a document, how to position things on the screen, what
colors, fonts, et cetera. And she also stated that when
BigPipe hands over data to the Web browser, BigPipe does
not read the content, doesn't even try to figure out
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what's inside the content. BigPipe also does not parse
the HTML of a page, generate the HTML, or even know its
contents.
So, I think a jury could have understood Dr.
Golbeck as saying that what BigPipe gives to the browser
does not include the actual content data such as photos
or videos or the page design information, including CSS
information. The browser retrieves that content data
and page design after BigPipe is finished giving the
browser the data.
Now, I think the jury could have understood
Dr. Golberg [sic] as acknowledging -- Golbeck as
acknowledging that the browser obtains photos, videos,
embedded objects, applets, CSS information from the
Facebook server, which is not contained in what BigPipe
hands to the browser.
So, I think a jury could find, even looking
at Golbeck's testimony, that BigPipe does not obtain the
content data or page design, and I can't say that it was
against either the clear weight of the evidence, nor can
I conclude that the jury was bound and could only find
as a -- the -- there was infringement because BigPipe --
what BigPipe did fit under the definitions that I gave,
and that the parties, in large measure, agreed to.
So -- and a lot had to do with the testimony
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and the argument of Counsel. And it isn't against the
clear weight of the evidence, in my view, for the jury
to have concluded that BigPipe does not perform the step
of dynamically combining the content data and page
design in such a way that it is fully integrated for
display.
Now, Mr. Hillman, today, made a very
persuasive -- he makes an argument, and my -- as I sat
here listening to it, I wondered whether Ms. Keefe was
saying to herself, I'm glad he didn't make the jury
argument. It might have been persuasive to the jury. I
don't know. But I think it was clearly a jury issue,
and I -- I certainly do not think that it is either
manifestly against the weight of the evidence, nor do I
think the infringement decision was -- went the wrong
way, and that a reasonable jury could only, on the basis
of the evidence presented, decide that there was
infringement. So, JMOL and new trial are not warranted.
Now, Rembrandt says that Parker's testimony
was improper expert testimony. However, at the time, as
I noted, 701 permits lay witnesses to offer an opinion
on the basis of relevant, historical or narrative facts
that the witnesses perceived, and I think I cite the
Wonzer case for that proposition in the Fourth Circuit.
And Parker was a Facebook engineer, who oversaw projects
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using the accused BigPipe system. And Parker's
testimony, in my view, as I said at the time, was proper
percipient witness testimony, and he offered his
testimony to explain how BigPipe works.
And I'm fairly clear about this, Ms. Keefe,
he was never asked his opinion about infringement and he
didn't know anything about definitions; am I correct?
ATTORNEY KEEFE: You are correct, your
Honor.
THE COURT: So, I -- I don't find that his
testimony was excludable. I think it was admissible
under 701, as I ruled, and that the jury was able to
consider that, and that certainly presented a factual
issue and dispute for the jury to decide on
infringement. And as -- for infringement on the '362
patent, I think the jury also had a legally sufficient
evidentiary basis to find that Facebook hadn't infringed
the '362, for some of the same reasons.
Claim 1 of the '362 patent, from which Claim
8, the sole asserted claim depends, recites, among other
things, a transmission to the user of an applet for
dynamically generating page definition. And page
definition is defined as information that completely
defines the appearance of the page, and the jury had all
of these definitions.
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In other words, Claim 1 incorporates
substantially -- well, substantially similar requirement
discussed above, and the same reasoning, I think,
applies, and certainly the jury could have taken it in
that way reasonably.
So, Rembrandt, I think, is not entitled to
either a new trial or judgment as matter of law and the
issue of non-infringement of either the '316 or '362
patent because the jury could find that BigPipe, at the
time it transmitted information to the browser, did not
actually have the information necessary to generate a
page definition.
Now, I think to summarize, that the question
of infringement boils down to a classic difference of
view among witnesses and lawyers in which Dr. Golberg --
Golbeck testified that the patents infringed, and Mr.
Parker testified as to BigPipe's function from which it
followed in argument and reasoning that there wasn't
infringement. The jury had to decide. And it was
appropriate for the jury to do so. It did decide.
Also, I think the jury had an adequate basis
to determine that the '362 patent did not infringe under
the doctrine of equivalents. Claim 1 of the '362 patent
recites an annotated universal address that is present
in an AUA database containing at least one AUA, and AUA
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was construed to mean information consisting of the
universal address or one or more annotations associated
with it. A universal address is a uniform resource
locator, and an AUA database is a collection of one or
more AUAs. Again, these are all definitions in the
Markman determination, and those were stipulated
definitions.
Now, Dr. Golbeck testified that Facebook did
not literally -- no, that -- assuming that -- that
Facebook didn't literally satisfy the AUA database, she
testified that there was still infringement because of
the doctrine of equivalents, that there was no
substantial difference between Facebook and -- and the
patent in that regard. In other words, that Facebook
had an equivalent of an AUA database because Facebook
servers generated URLs based, in part, on the
information obtained from a database.
Here, again, the jury was fully instructed
on what the doctrine of equivalents required. I don't
recall even an objection as to the instruction on
doctrine of equivalents. There may have been, but, in
any event, they were, in my view, fully instructed on
the doctrine of equivalents, function-way-result-test,
and substantial difference and the like, and the jury
had to decide from the evidence they were presented and
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there -- I think fairly read, there was a conflict in
the evidence and the jury decided -- resolved that
conflict.
Dr. Golbeck, for example, admitted in
cross-examination that the two databases served
different function because the Facebook database
identifies resources only in Facebook's system while the
AUA database identifies URLs that are accessible
anywhere on the Internet, not just on one system, and
there were other things. The jury had ample evidence on
which to conclude that Facebook did not infringe the
'362 patent under the doctrine of equivalents.
Now, we come to invalidity. The jury found
Claim 8 of the '362 patent invalid over the prior
Renshaw art. Rembrandt argues that the applet disclosed
in Renshaw does not generate a page definition as
claimed. Now, that's certainly an argument. And I
think there was evidence from which a jury could --
found that.
There was also ample evidence on which to
conclude that Renshaw disclosed all the limitations of
Claim 8. Facebook's expert on invalidity, Dr. Klausner,
explained that Renshaw teaches an applet showing
multiple Web pages on a single screen. Each page is
dynamically generated by an applet taught by Renshaw.
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That's what he testified to. He also explained that
Renshaw applet receives instruction on how to present
the page; and based on these instructions, dynamically
generates the information that completely describes the
appearance of the page. He was cross-examined and --
but that's what he said. The jury could choose to
believe him; that is, that the Renshaw applet generates
a page definition as defined by the claim construction
that the Court adopted. And page definition, I think,
was one of those that was stipulated to.
Yes, page design -- page definition, yes,
information that completely defines the appearance of a
page.
So -- so, I think Rembrandt is not entitled
to a new trial or to a JMOL on the issue of invalidity
of the '362 patent.
Now, the '316 patent, there's also an
argument, Rembrandt contends that Klausner -- Mr.
Klausner failed to show that the combination of Rasansky
and Wang disclosed the diary program and assembling
steps an asserted claims; that is, that the '316 patent
was obvious in light of Rasansky and Wang.
Again, the jury had ample evidence on which
to base a finding of invalidity of the '316, and on
obviousness grounds. He testified and the parties
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stipulated that a person of ordinary skill in the art
would have had at least a Bachelor's Degree in
information technology, computer science or an
equivalent degree, at least two years of practical
experience. He also testified such -- Klausner did,
that such a person would be able to use CSS, HTML,
JavaScript, then the Java programming language and could
develop Web server or Web browsers software. I don't
recall that testimony being contradicted in Klausner.
But even if it was, it's up to the jury. They could
have chosen to believe Mr. Klausner.
Mr. Klausner also explained that Java
applets, that's the technology used in the Wang patent,
existed since the mid '90s and were designed to make Web
experience more dynamic. He also testified that the
combination of Wang disclosing the Java applet and
Rasansky disclosing a series of page design templates
used to generate calendar Web pages from the stored
databases and sent down to the browser disclosed the
diary program and assembly step of the '316. And he
said this was so because Wang sends from the Web server
to the client the applet that draws and assembles the
cohesive diary page, diary calendar, the page.
In other words, Wang performs the actual
assembly and combination step recited in the claims.
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And a person of ordinary skill in the art would combine
the two because references disclosed Web calendar
programs and both use a standard Web language like HTML.
Moreover, Mr. Klausner identified a
motivation to comply -- to combine the two, which he's
obligated to do under the law. And so Wang states that
it's beneficial to implement a Web calendar using a Java
applet as opposed to the standard HTML approach in
Rasansky.
Rembrandt fails to show why Mr. Klausner's
testimony on these points is insufficient, so they're
not entitled to a new trial or JMOL on that basis.
Now, let's turn to the other matters raised.
Rembrandt also alleges that the Court's conduct during
trial, including questioning of witnesses and
interacting with Counsel resulted in miscarriage of
justice based on an impermissible bias or appearance of
bias in favor of Facebook and against Rembrandt.
Rembrandt alleges that the Court's tone towards --
that's their term -- tone towards Rembrandt attorneys
and witnesses was dismissive, derisive, sarcastic.
I don't accept that. It certainly was not a
concern raised by Rembrandt during trial.
But, more specifically, Rembrandt alleges
that the Court's questioning of two Adina -- Aduna
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witnesses, Bleeker and Ter Horst, was prejudicial
because I asked them about their potential financial
interest in the litigation. That's not an inappropriate
question and doesn't show bias against them.
And I think for -- by the way, I don't
recall, maybe there was an objection, but I don't recall
objections to that. I think I also asked somebody, I
can't remember who it was, but I think Rembrandt
complained that I asked somebody who invented the
Internet. That was in a lighthearted sort of way, and I
never required an answer, as I recall. But, in any
event, that certainly is not a basis in the law, as I
see it, for a new trial.
Now, the law is -- is quite clear and legion
on this case. It's the Court's duty to conduct a trial
and the Court has a duty not to create an appearance of
impartiality by continued intervention on the side of
one party or -- or to prevent the effective functioning
of Counsel. I don't think any fair reading of this
record would show that. I think if you added up the
times in the transcript that I asked questions as
opposed to the trial transcript of -- as a whole, it
would be a pretty small percentage.
Now -- and it is the Court's obligation, and
I do ask questions to clarify things, especially in
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patent cases where it's very difficult to understand
things by a lay jury sometimes. So -- particularly in
complex cases, the District Court has a duty to ensure
that the facts are properly developed and that they're
bearing upon the question and issues are clearly
understood by the jury. A good case for that is United
States against Seeright at 978, F.2d.
So, I occasionally ask questions to clarify
a confusing or unclear point. And at the end of the
case, I instructed the jury that nothing I said or did
should be taken by them as indicating any verdict I
thought they should reach, that their verdict should be
their sole and exclusive duty and responsibility. I'm
fairly clear that's an instruction I typically give, and
I gave in this case.
Yeah, I've already addressed the questions
about the inventor of the Internet. It's an interesting
question, by the way, and there is some dispute about
it. The only thing I know for certain is that it was
not Al Gore.
Now, something is made of the fact where I
made a comment at -- at sidebar about cheerleader
testimony, and Rembrandt says that I was dismissive
towards Dr. Golbeck. Well, the jury didn't hear that.
I offered that merely -- in my years of teaching this
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sort of -- sort of thing, I -- I made that comment.
Counsel for the parties could have made whatever they
want of it. The jury never heard that. Certainly no
objection at that time. I don't know why it's raised
now.
And I explicitly instructed the jury during
closing arguments that I occasionally asked questions to
clarify something, not to help one side or the other;
and that I also told them, as I said before, that
nothing the Court may say or do in the course of the
trial should be taken by you as indicating what verdict
I think you should reach. What the verdict is, is your
sole and exclusive duty and responsibility.
Now, I did pose questions to Mr. Parker
using claim construction language. He had never seen
the claim construction, but there's no reason I can't
use or Counsel couldn't use a claim construction
language in asking him a question. It's perfectly
appropriate. Indeed, I invited Counsel for Rembrandt to
do precisely that when Rembrandt did object to the line
of questioning of Mr. Parker at sidebar, and I told
Mr. -- or whoever it was, counsel for Rembrandt at the
time, you may ask any questions -- any further questions
you want concerning the question I asked. You can ask
him what he meant and all sorts of things.
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Now, I did interrupt Rembrandt in the
closing argument for a couple of reasons. One is the
attorney was mentioning his three sons. That's not an
appropriate argument. I remember years ago, not in a
case quite like this, but in a Title 7 case an attorney
stood up, and it involved sexual harassment of women,
and began talking about his daughters. And I told him
he had to stop it. You can't do that. It's not about
what happened to you. You can't get up there and
testify about your life.
In any event, it was very brief and
insignificant.
And one time Counsel was unclear on the time
divide between opening and closing and one time Counsel
failed to stay at the podium. That's necessary,
otherwise Mr. Rodriquez, here, can't hear and transcribe
the proceedings. None of that even comes close to the
level of a new trial or JMOL or any prejudice. This
case was a jury issue. The jury decided it after full
testimony by both sides and argument by both sides.
Now, they also -- Rembrandt argues that I
didn't instruct the jury on teaching away, and I think
the record is clear on that that -- the reasons why I
did that. The -- there was no expert testimony from
reasons in that regard, and so it really amounted to my
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giving an instruction on a lawyer's argument. In any
event, I -- there's no -- the reference such as the one
cited by Golbeck in the matter doesn't teach away if it
merely expresses a general preference for an alternative
invention, but does not criticize, discredit or
otherwise discourage investigation into the invention
claimed.
And I also conclude -- concluded that yes,
I -- I think I said that I wasn't going to include a
teaching away instruction because it would substitute a
lawyer's argument for -- for what would be required as
expert testimony. And that was my view then and it is
now.
And then the law on this is all fairly
clear. There is some discretion in framing jury
instructions. If the instructions correctly state the
law and adequately cover the issues in the case, they're
proper. And I think there is no flaw in the
instructions that's been pointed out to me such that the
error seriously prejudiced the plaintiff's case. I
don't think there was. The instructions in this case
were sufficient considered -- construed as a whole, and
construed as -- in light of the whole record, they
adequately informed the jury of the controlling legal
principles without misleading or confusing the jury,
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and -- and to the extent that they didn't get the
charge, I adhere to the settled principle that a charge
should not be given on a matter whether or not raised in
the pleadings if it isn't supported by the evidence.
So, in the end, I conclude that Rembrandt's
motion for a JMOL and new trial should be denied.
Again, it's my view that this was quite clearly a
testimonial battle and an argument of the lawyers.
Mr. Hillman has noted that or has argued
that he thinks there was a mischaracterization of claim
terms and that they didn't understand or misunderstood
the claim terms. The claim terms were there and
defined, and the jury had them, and the lawyers could
argue them. If the jury misunderstood them, it isn't in
the JMOL or new trial jurisprudence to correct the
misunderstanding. Of course, we have no idea what the
jury understood or misunderstood. We know that they
found verdicts after being fully instructed and
listening to days of testimony, and this was clearly a
case that should go to the jury and be decided by the
jury.
Now, we come to the issue of whether this is
an exceptional case so as to award reasonable attorneys'
fees. And the recent Octane Fitness test has further
elucidated the term "exceptional" in Section 285 to mean
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that an exceptional case is simply one that stands out
from others with respect to the substantive strength of
a party's litigating position considering both governing
law and the facts of the case or the unreasonable manner
in which the case was litigated.
I think it's clear that whether it's an
outstanding case should be judged as against the other
patent cases because that's the only context from which
Section 285 applies. And I have had a number of patent
cases.
Now, Ms. Keefe raises a number of issues as
to why she thinks this was an exceptional case. Let
me -- before I cover those, I think it's important to
know that I can't say that the Octane Fitness clarifies
the exceptional case situation. It draws no bright line
or gives no bright-line rules or defines precisely what
would make something exceptional, but she raises a
number of factors. She talked about the case being
over-litigated. She -- that they -- the damages problem
that kept coming back, and there are a number of issues
that she raises, and some of them pushed at this.
But, in the end, Ms. Keefe, I don't think
this is exceptional.
Yes, I think there were problems in
discovery; but, you know, if a party is a -- is really
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seriously adversely upset about discovery, you should
move for sanctions there. It's then fresh before the
magistrate judge and me, and it could be reviewed. And
I don't recall whether there were sanctions imposed or
not. Were there?
ATTORNEY KEEFE: There were not, your Honor.
THE COURT: That's -- that's generally my
view of those things in most of these cases.
And I agree to some extent with you, Ms.
Keefe, that having to produce 6 million documents is
absurd, and I'm going to maybe say something about that
in the future. It isn't a good thing to do. On the
other hand, it certainly is an exceptional. That kind
of documentation sort of excessiveness happens both in
Plaintiff and Defendant's side for both patent cases and
non-patent cases, but it isn't exceptional in this case
over other patent cases.
Did Rembrandt over-litigate the case with
respect to damages?
Well, clearly, Rembrandt made a mistake, in
my view, on damages, and it was a big mistake.
Now -- and as Mr. Hillman or Mr. Goetz
pointed out, I endorsed an effort to have a -- an
interlocutory appeal in it. And he is quite right to
say that in doing so I had to certify that it was a
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close question.
All right. I'm stuck with that. Do I think
it was a close question, not really, but I decided it.
I was -- thought I -- I was sure I was right. But it
did seem to me that the parties felt very well strongly
on this issue. It was highly important to the case, and
I thought it would be useful for the Court of Appeals to
have its view on this, and if I was wrong, then we ought
not to have to come back and do it again if I was wrong.
I don't often certify things, and I did
certify that it was subject to differing opinions. In
any event, I don't think that the damages litigation in
this case makes this an exceptional case. I think Mr.
Goetz or Mr. Hillman, one of you all, argued that, well,
lots of courts let you do a do-over.
Well, all those circumstances are different,
and I'm not lots of courts. It was very clear when this
case was ready for trial, and you don't get do-overs.
You've got to do it right in the first place.
Now, of course, you still have an
opportunity to argue to the Court of Appeals that I was
wrong on that. I don't think it's pertinent anymore.
It's kind of moot now, but -- it's rendered moot, I
think. But, in any event, I don't think this -- that
the damages position taken by Rembrandt makes this an
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exceptional case. They decided what they should base --
what revenue stream they should base the damages on.
They were wrong about that, in my opinion. And I -- I
endorsed an interlocutory appeal request. None of that,
I think, is exceptional.
You didn't say anything today, Ms. Keefe,
about the publicity blitz before the case, but I don't
take that to be -- make this an exceptional case.
And -- and I think their efforts to come up
with a -- to try to get damages back in the case is what
reasonable lawyers would try to do to argue -- that let
us do a do a do-over or this isn't really a do-over.
It's something a little different from a do-over.
That's just what lawyers, I think, are -- that's their
stock and trade, to figure out a way out of a tight
space.
So, in the end, I am not going to label this
an exceptional case such that fees should be reversed,
and I will enter an order accordingly. I'm not going to
write opinions on these matters. Enough is enough. I'm
going to move on.
Anything further on behalf of either party
in this case?
ATTORNEY HILLMAN: No, your Honor.
ATTORNEY KEEFE: No, your Honor.
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65
Thank you.
THE COURT: Let me underscore again that it
was a pleasure to have both of you here. I wish, Mr.
Hillman, you had been here more often.
THE COURT: And I look forward to seeing
both of you in the future.
ATTORNEY KEEFE: Thank you very much, your
Honor.
THE COURT: In fact, I think I'm seeing one
of you in the future.
ATTORNEY KEEFE: Or not.
THE COURT: Are you in that case, Mr.
Hillman?
ATTORNEY HILLMAN: Not that I know of, your
Honor.
THE COURT: All right. Thank you.
It's always a pleasure to have really good
lawyers with good briefs.
---
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66
CERTIFICATE
I, MICHAEL A. RODRIQUEZ, an Official Court
Reporter for the United States District Court, in the
Eastern District of Virginia, Alexandria Division, do
hereby certify that I reported by machine shorthand, in
my official capacity, the proceedings had upon the
motions hearing in the case of REMBRANDT SOCIAL MEDIA,
LP, v. FACEBOOK, INCORPORATED, et al.
I further certify that I was authorized and
did report by stenotype the proceedings in said motions
hearing, and that the foregoing pages, numbered 1 to 66,
inclusive, constitute the official transcript of said
proceedings as taken from my machine shorthand notes.
IN WITNESS WHEREOF, I have hereto subscribed
my name this 11th day of August , 2014.
/S/
Michael A. Rodriquez, RPR/CM/RMR
Official Court Reporter

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