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VISTO’S REPLY BRIEF IN SUPPORT OF ITS MOTION
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CASE NO. C 04-0651 EMC
MANATT, PHELPS & PHILLIPS, LLP
RONALD S. KATZ (State Bar No. 85713)
ROBERT D. BECKER (State Bar No. 160648)
BRUCE J. MCCUBBREY (State Bar No. 38817)
1001 Page Mill Road, Building 2
Palo Alto, CA 94304-1006
Telephone: (650) 812-1300
Facsimile: (650) 213-0260
Attorneys for Plaintiff
VISTO CORPORATION
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT
SAN FRANCISCO DIVISION
VISTO CORPORATION,
Plaintiff
v.
SPROQIT TECHNOLOGIES, INC.,
Defendant
Case No. C 04-0651 EMC
VISTO CORPORATION’S REPLY BRIEF
IN SUPPORT OF ITS MOTION FOR
PRELIMINARY INJUNCTION
Hearing Date: January 18, 2006
Time: 10:30 a.m.
Courtroom: C, 15th Floor
Judge: Hon. Edward M. Chen
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TABLE OF CONTENTS
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I. INTRODUCTION .............................................................................................................. 1
II. ARGUMENT ...................................................................................................................... 2
A. SPROQIT’S NON-INFRINGEMENT ARGUMENT IS WITHOUT
MERIT .................................................................................................................... 2
1. It is Indisputable That Sproqit’s System Utilizes An “Independently
Modifiable Copy Of A First Workspace Element”..................................... 2
2. The Sproqit System Generates A Preferred Version By Comparing
First and Second Version Information ........................................................ 4
a. Dr Head’s Rebuttal Experiment Confirms That The Sproqit
System Compares Version Information to Generate a
Preferred Version ............................................................................ 5
B. SPROQIT HAS FAILED TO REBUT THE PRESUMPTION THAT
CLAIM 10 OF THE ‘192 PATENT IS VALID ..................................................... 6
1. The Coda and Lotus Notes Prior Art Were Previously Considered
By The Patent Office................................................................................... 7
2. Sproqit Has Failed To Demonstrate That Claim 10 Is Obvious in
View of Coda or Lotus Notes ..................................................................... 8
a. Coda Does Not Teach Or Suggest All The Limitations Of
Claim 10 .......................................................................................... 8
b. Lotus Notes Does Not Teach Or Suggest All The
Limitations of Claim 10 .................................................................. 8
C. THE DOCTRINE OF INTERVENING RIGHTS DOES NOT
AUTHORIZE THE RELIEF REQUESTED BY SPROQIT.................................. 9
1. The Doctrine of Absolute Intervening Rights Does Not Allow The
Infringer To Made Additional Copies....................................................... 10
2. Sproqit Has No Absolute Intervening Rights ........................................... 10
3. Sproqit Has No Equitable Intervening Rights........................................... 11
D. SPROQIT HAS FAILED TO REBUT THE PRESUMPTION THAT
VISTO WILL BE IRREPARABLY HARMED FROM SPROQIT’S
PATENT INFRINGEMENT ................................................................................ 13
E. NO COGNIZABLE HARDSHIP CAN COME TO SPROQIT AS A
RESULT OF BEING ENJOINED FROM PATENT INFRINGEMENT ............ 14
F. ENFORCEMENT OF VISTO’S PATENT RIGHTS IS IN THE PUBLIC
INTEREST............................................................................................................ 15
III. CONCLUSION................................................................................................................. 15
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TABLE OF AUTHORITIES
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CASES
Al-Site Corp v. VSI Int'l Inc.,
174 F.3d 1308 (Fed. Cir. 1999)............................................................................................. 1, 7
Amazon.com, Inc. v. Barnesandnoble.com, Inc.,
239 F.3d 1343 (Fed. Cir. 2001)................................................................................................. 1
ATD Corp. v. Lydall, Inc.,
159 F.3d 534 (Fed. Cir. 1998).................................................................................................. 9
Bell & Howell Document Mgmt. Prods. Co. v. Altek Sys.,
132 F.3d 701 (Fed. Cir. 1997)................................................................................................. 14
BIC Leisure Prods. v. Windsurfing Int’l,
1 F.3d 1214 (Fed. Cir. 1993)............................................................................................. 10, 11
Bloom Engineering Co. v. N. Amer. Mfg. Co.,
129 F.3d 1247 (Fed. Cir. 1997)......................................................................................... 10, 11
Canon Computer Sys., Inc. v. Nu-Kote Int'l, Inc.,
134 F.3d 1085 (Fed. Cir. 1998)................................................................................................. 6
Genentech, Inc. v. Novo Nordisk A/S,
108 F.3d 1361 (Fed. Cir. 1997)................................................................................................ 6
Gerhardt v. Kinnaird,
162 F. Supp. 858 (E.D. Ky. 1958) ............................................................................................ 9
H.H. Robertson, Co. v. United Steel Deck, Inc.,
820 F.2d 384 (Fed. Cir. 1987)............................................................................................. 6, 13
Halliburton,
10 U.S.P.Q.2D (BNA) at 1983................................................................................................ 12
Henkel Corporation v. Coral Inc.,
754 F. Supp. 1280 (N.D. Ill. 1991) ......................................................................................... 13
Hilgraeve Corp. v. Symantec Corp.,
265 F.3d 1336 (Fed. Cir. 2001)................................................................................................. 4
Home Diagnostics, Inc. v. LifeScan, Inc.,
381 F.3d 1352 (Fed. Cir. 2004)................................................................................................. 3
Hybritech, Inc. v. Abbott Laboratories,
849 F.2d 1446 (Fed. Cir. 1988)........................................................................................... 1, 14
Illinois Tool Works, Inc. v. Grip-Pak, Inc.,
906 F.2d 679 (Fed. Cir. 1990)................................................................................................. 14
In re Vaeck,
947 F.2d 488 (Fed. Cir. 1991)................................................................................................... 8
Kaufman Co. v. Lantech, Inc.,
807 F.2d 970 ............................................................................................................................ 7
Laitram Corp. v. NEC Corp.,
163 F.3d 1342 (Fed.Cir. 1998)................................................................................................ 10
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TABLE OF AUTHORITIES
(continued)
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Plastic Container Corp. v. Cont’l Plastics of Okla,
607 F.2d 885 (Fed. Cir. 1979)........................................................................................... 11, 12
Polymer Technologies v. Bridwell,
103 F.3d 970 (Fed. Cir. 1996)................................................................................................. 13
Seattle Box Co. v. Indus. Crating & Packing,
756 F.2d 1574 (Fed. Cir. 1985)......................................................................................... 11, 12
Shockley v. Arcan,
248 F.3d 1349 (Fed. Cir. 2001)............................................................................................... 11
Smith Int'l, Inc. v. Hughes Tool Co.,
718 F.2d 1573 (Fed. Cir. 1983), cert. denied, 464 U.S. 996 (1983) ....................................... 15
Sontag Chain Stores Co. v. National Nut Co.,
301 U.S. 281 (1940) ................................................................................................................ 13
T.J. Smith & Nephew Ltd v. Consolidated Med. Equip., Inc.,
645 F. Supp. 206 (N.D.N.Y. 1986) ........................................................................................... 9
Wayne-Gossard Corp. v. Sondra, Inc.,
434 F. Supp. 1340 (E.D. Pa. 1977), aff'd, 579 F.2d 41 (3rd Cir. 1978).................................. 12
STATUTES
35 U.S.C. § 252....................................................................................................................... 10, 11
35 U.S.C. §§ 301-307...................................................................................................................... 7
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I. INTRODUCTION
Visto’s motion for preliminary injunction should be granted. In its moving papers, Visto
introduced substantial and compelling evidence that claim 10 of the ‘192 patent was both valid
and infringed, that Visto was being irreparably harmed by Sproqit’s continued infringement, and
that the remaining equitable factors favored granting an injunction.
At the preliminary injunction stage, Visto need only establish a reasonable likelihood of
success on the merits when the trial court finally adjudicates the dispute. Amazon.com, Inc. v.
Barnesandnoble.com, Inc., 239 F.3d 1343, 1350 (Fed. Cir. 2001) (emphasis added); Hybritech,
Inc. v. Abbott Laboratories, 849 F.2d 1446, 1451 (Fed. Cir. 1988). Visto has demonstrated that it
is likely to succeed on the issue of infringement and validity. Now, Visto need only show that
Sproqit’s non-infringement and invalidity arguments lack “substantial merit.” See Amazon.com,
Inc., 239 F.3d at 1350-1351 (Fed. Cir. 2001) As discussed below, Visto has fully met its burden.
Sproqit’s non-infringement arguments are based upon strained claim constructions that
have already been considered and rejected by Judge Ward of the Eastern District of Texas in a
case involving the same patent. These arguments do not have substantial merit.
On the subject of validity, Sproqit incorrectly argues that claim 10 of the ‘192 patent is
obvious in view of not considered by the Patent Office. In fact, the Patent Office recently
allowed claim 10 during a reexamination proceeding wherein the Coda system and Lotus Notes
are relied on by Sproqit were considered by the examiner. There can be no greater indication that
Visto is likely to prevail on the issue of obviousness. See e.g., Al-Site Corp v. VSI Int'l Inc., 174
F.3d 1308, 1323 (Fed. Cir. 1999)(defendant’s burden of proving invalidity is “especially
difficult” when claims are allowed over prior art considered by the PTO).
Finally, reliance on the doctrine of intervening rights is misplaced. That doctrine is not
applicable to the facts of this case. Sproqit not only misconstrues the cited authority but fails to
introduce any evidence to support reliance on the doctrine. On the other hand, Visto correctly
demonstrates that Sproqit is not entitled to intervening rights.
Because Visto has demonstrated a likelihood of success on the merits and because the
principal value of the patent is its statutory right to exclude, Visto is entitled to a presumption of
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irreparable harm. The balance of hardships and the public interest also decidedly favor granting
this preliminary injunction motion.
II. ARGUMENT
A. SPROQIT’S NON-INFRINGEMENT ARGUMENT IS WITHOUT MERIT
Claim 10 of the ‘192 patent, which is infringed, describes a system for synchronizing a
“workspace element” maintained at a first store with an independently modifiable copy of the
workspace element at a second store. In the Sproqit system, shown below, the first store is
maintained behind a firewall on a corporate network and the second store is located on a
smartphone running “Sproqit Companion” software. [Head Declaration In Support of Visto’s
Motion For Preliminary Injunction, ¶ 14].
1. It is Indisputable That Sproqit’s System Utilizes An “Independently
Modifiable Copy Of A First Workspace Element”
Sproqit’s first non-infringement argument, that the smart phone does not include an
independently modifiable copy of a workspace element, is based on two improper claim
constructions. First, Sproqit argues that the “workspace element” must be a complete e-mail
[Sproqit Opposition at 6-7]. However, the claim clearly does not include any e-mail limitation,
and the claim construction order given by the Texas court, upon which Sproqit relies does not
provide that the copy must be an exact copy.
The term a “workspace element” was defined by the Texas court as: “a subset of
workspace data, such as an e-mail, file, bookmark, calendar, or applications program which may
include version information.” [See Khaliq Decl. in Support of Visto’s Motion for Preliminary
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Injunction, Ex. A, “Claim Construction Order” at 20]. “Workspace data” was defined by the court
as: “data, including corresponding version information, which may include e-mail data, file data,
calendar data, user data, etc...” [See Id. at 19]. There is no requirement that a workspace element
be an entire e-mail file as Sproqit suggests. As can be seen, the “workspace element” can be any
subset of workspace data. [See Declaration of Dr. Head in Support of Visto’s Reply (“Head
Decl.”) ¶ 5]. The e-mail and other data items Sproqit acknowledges are on a smart phone qualify
as independently modifiable copies of workspace elements. There is no dispute that the
corresponding workspace elements for these copies are found behind the firewall. [See Weinstein
¶ 14].
The Texas court also held that “[t]he copy of the workspace element does not have to be
in the same format as the workspace element” (emphasis added). [See Claim Construction Order
at 16-17]. Under this definition, an “independently modifiable copy” may include various
individual e-mail fields, such as the message body, subject line, sender/recipient information, etc.
There is no need for the copy to include all possible e-mail fields and file attributes as Sproqit
suggests.1 [See Head Decl. ¶ 5].
Second, Sproqit argues that the copy must be a complete e-mail. The specification of the
‘192 patent does not teach that a copy of a workspace element has to be an exact copy.2 Absent a
clear disavowal or contrary definition in the specification or the prosecution history, the patentee
is entitled to the full scope of its claim language.3 See Home Diagnostics, Inc. v. LifeScan, Inc.,
1 The Texas court noted that the copy of the workspace element could exist in a different “format” from
the workspace element. This implies that the copy is not an exact copy. The removal of certain e-mail
fields on the version of the workspace element displayed on the smart phone does not negate the fact
that this version is a “copy,” rather it simply demonstrates a change of formatting where certain
message attributes are removed for efficiency. [See Head Decl. ¶ 5]
2 Sproqit draws the court’s attention to column 3, lines 32-40 to support its argument that a copy of
workspace element must include all attributes of the original. However, this portion of the
specification which addresses workspace data, simply states that workspace data “includes
independently modifiable copies of each workspace element in workspace data and independently
modifiable copies of version information.” There is no suggestion or requirement in this portion of the
specification, as Sproqit implies, that a copy of an e-mail must contain all possible fields or attributes
of the original e-mail file including “urgency,” “follow up flags,” “importance,” etc. [See Sproqit
Opposition at 7, ll. 1-3].
3 Also, the term copy is defined in the dictionary as “an imitation, transcript or reproduction of an original
work.” [Khaliq Decl. ¶ 2 Ex. A, Webster’s Dictionary at 256]. Thus a copy of a workspace element on
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381 F.3d 1352, 1358 (Fed. Cir. 2004).
There is no dispute that the smart phone includes copies of subsets of workspace data,
which is all the claim requires. As can be seen, Sproqit has imported a “complete e-mail”
limitation into claim 10 and then introduced an “exact copy” limitation.4 Both of these
constructions are erroneous and contrary to the constructions given by Judge Ward in Texas.
2. The Sproqit System Generates A Preferred Version By Comparing First and
Second Version Information
Sproqit further argues that Sproqit does not infringe because the Sproqit Companion acts
“essentially as a remote control” (brief at 1:28, emphasis added). As described above, the Sproqit
System stores independently modifiable copies of workspace elements and, unlike a remote
control, these workspace elements can be manipulated on the Companion even in disconnected
“offline” mode. As can be seen from the information on Sproqit’s own website, even those
changes made in offline mode are “automatically reflected”, viz, synchronized, when the
connection is reestablished. [See Khaliq Decl. ¶ 3, Ex. B (Sproqit web page)].
Advantages for Sproqit Users
...
Real-time Connectivity - Sproqit’s live feed between the Desktop Agent and Sproqit Companion means there is
no need to sync the device with your desktop. Changes made on your device are reflected immediately on your
desktop and vice versa.
Online and Offline Use - Your Sproqit Companion offers full functionality whether you're connected to the
network or not. Offline you can read or edit mail, notes, tasks, contacts, or send new emails. All changes are
automatically reflected to your desktop the next time you connect.
Sproqit argues that the Sproqit System does not compare version information because
a smart phone, for example, means that it can be an imitation or reproduction. This does not imply
that it has to be at all times an exact duplication of the original file.
4Sproqit chooses to narrowly focus its “exact copy” argument by reference to extraneous e-mail fields such
as “high importance” and “follow-up flags”—fields which were not even used in Dr. Head’s
experiments. Dr. Head’s e-mail experiments focused on synchronizing only one field of the e-mail
(read/unread status) which was clearly present and visible on the copy of the workspace element on
the smart phone. [See Head Decl. In Support of Visto’s PI Motion ¶ 16-20, Tests 1-7]. Sproqit’s
attempt to show non-infringement by demonstrating that additional fields are not present on the copy
of the workspace element on the smart phone has no bearing on an infringement analysis. Visto need
only demonstrate that a reasonable operation of defendant’s product satisfies the limitations of the
claim. See Hilgraeve Corp. v. Symantec Corp., 265 F.3d 1336, 1343 (Fed. Cir. 2001) (“an accused
device may be found to infringe if it is reasonably capable of satisfying the claim limitations.”)
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“events are queued and pushed from the remote device to the desktop computer and vice versa,”
[See Sproqit Opposition at 8-9].5 This argument is specious. The so called “events” include
version information. Each event represents a change to the original and/or the independently
modifiable copy. The events are placed in queues, and these queues are by definition stacks of
versions organized by time (in this case from least recent to most recent). The system processes
the “events” so that the most recent version is selected as the preferred version. When changes are
made on both ends, the system selects the last version modified on the handheld. [See Head Decl.
¶’s 8-11].
a. Dr Head’s Rebuttal Experiment Confirms That The Sproqit System
Compares Version Information to Generate a Preferred Version
Sproqit’s argument that the “comparison” step is not met is belied by the very evidence
that Sproqit relies upon. Claim 10 merely requires “means for generating a preferred version
from the first workspace element and from the copy by comparing the first version information
and the second version information.” In the case where changes are made on both the desktop
and the handheld smart phone during disconnected operation, the events are placed in a queue on
each respective device. [See Roitblatt ¶ 23]. When the system is reconnected, the queues are
transmitted to each other simultaneously and acted upon. Id. These queuing actions do, in fact,
involve the processing of version information. As Dr. Head’s experiments show, the system
always picks the last version from the hand held when confronted with competing versions. [See
Head Decl. ¶’s 8-11 (Dr. Head’s experiments)]. The system therefore undoubtedly compares
versions in the queues and identifies whether “if only one or both versions of a particular
workspace element have been modified” and includes routines for cycling through each change so
that the last version is selected and synced as the preferred version on both memory stores. [See
Weinstein Decl. ¶ 30].
5 To support this theory, Sproqit relies on the experiments of Mr. Roitblatt who runs two demos, one
showing numerous changes to the read/unread status of workspace element in MS Outlook (at the first
store), which changes are sent to the smart phone (second store) and processed in sequence. The
second demo is similar to the first, except changes are made to the content of an e-mail at MS
Outlook. Sproqit argues that these experiments demonstrate that the Sproqit System does not compare
version information.
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In order to demonstrate that the Sproqit System compares version information in
generating a preferred version, Dr. Head has conducted an experiment where a workspace
element (MS Outlook calendar entry), is modified sequentially at both the first store (Desktop
PC) behind the firewall, and at the second store (smart phone) in offline mode. [See Head Decl.,
¶’s 8-9]. Dr. Head’s experiments show that upon reconnection of the Sproqit Companion to the
Sproqit Agent, the latest change made on the Sproqit Companion is selected as the preferred
version and stored on both sides, even if that change is made before the last change was made at
the Desktop PC. [See Head Decl. ¶ 8]. This directly refutes Sproqit’s argument that changes are
simply sent as they are queued because in this scenario, changes on the Sproqit Companion are
selected as preferred, even though later changes were made to the same workspace element on the
Desktop PC. Thus, in order to select between incongruous modifications to a workspace element
and its copy, the Sproqit Agent must compare the respective version information of the
workspace element and its copy before selecting one as the preferred version. [See Head Decl. ¶’s
8, 10].
B. SPROQIT HAS FAILED TO REBUT THE PRESUMPTION THAT CLAIM
10 OF THE ‘192 PATENT IS VALID
A patent is presumed valid, and this presumption exists at every stage of the litigation. See
Canon Computer Sys., Inc. v. Nu-Kote Int'l, Inc., 134 F.3d 1085, 1088 (Fed. Cir. 1998). A party
challenging validity must prove invalidity by clear and convincing evidence. See Genentech, Inc.
v. Novo Nordisk A/S, 108 F.3d 1361, 1364 (Fed. Cir. 1997). Thus, where the challenger fails to
identify any persuasive evidence of invalidity, the very existence of the patent satisfies the
patentee's burden on the validity issue. See H.H. Robertson, Co. v. United Steel Deck, Inc., 820
F.2d 384, 388 (Fed. Cir. 1987) (stating that a preliminary injunction is determined "in the context
of the presumptions and burdens that inhere at trial on the merits"). Sproqit has failed to
introduce any clear and convincing evidence sufficient raise a substantial question on the issue of
validity.
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1. The Coda and Lotus Notes Prior Art Were Previously Considered By The
Patent Office.
Defendant’s burden of demonstrating invalidity is "especially difficult" when, as is the
present case, the infringer attempts to rely on prior art that was before the patent examiner during
prosecution. See Al-Site Corp v. VSI Int'l Inc., 174 F.3d 1308, 1323 (Fed. Cir. 1999). This is
particularly true in the case where a patent has undergone a thorough reexamination. See
Kaufman Co. v. Lantech, Inc., 807 F.2d 970:
...the challenger's burden of proof imposed by that presumption, as an evidentiary
matter, is usually more difficult to sustain. Where, as here, the patent in suit has
been reexamined under 35 USC §§ 301-307, the presumption of validity again
remains unaltered. The challenger, as usual, must not only come forward with
evidence of a prima facie case of invalidity but ultimately prove facts, under a
clear and convincing standard, that support a conclusion that the patent is invalid.
The ‘192 patent issued over the prior art (Coda and Lotus Notes) cited by Sproqit.
Because this same art was previously and thoroughly considered by the patent office it has no
bearing on the validity of either the original or the reexamined ‘192 patent claims.6
The Coda prior art, related to the Andrew File System (AFS)7 was specifically discussed
in a reference considered by the examiner during prosecution of the original ‘192 patent. [See
Khaliq Decl. ¶ 4, Ex. C (‘192 cited references) and ¶ 5, Ex. D (Braun et. al.)]. Moreover, during
reexamination six Coda references, including those specifically relied on by Sproqit’s expert, Dr.
Weinstein, and two AFS references were considered by the examiner before allowing the ‘192
claims as patentable over these references. [See Khaliq Decl. ¶ 6 Ex. E (IDS)]
Regarding Notes, twenty-two separate Lotus Notes references including references now
cited by Sproqit were considered by the examiner before allowing the reexamined claims of the
‘192 patent. [See Id.] Moreover, in parallel Texas litigation, Lotus Notes prior art was raised in a
6 In rendering an opinion that claim 10 is obvious in view of Coda and Lotus Notes, Sproqit’s expert Dr.
Weinstein incorrectly states that “[n]either of these appear to have been considered by the Patent
Office.” This statement is preceded by Dr. Weinstein’s sworn testimony that he has “reviewed the
‘192 patent ... the file history and the cited references; as well as claim 10 as issued during re-
examination and certain parts of the reexamination file history.” However, contrary to Dr. Weinstein’s
assertions, this prior art was expressly considered by the patent office during prosecution of the ‘192
patent. [See Khaliq Decl. ¶ 6, Ex. E (‘192 Patent Reexamination Information Disclosure Statements)]
7 Dr. Weinstein asserts that the “Andrew” File System was renamed to “Coda,” which were both originally
developed at Carnegie Mellon University. [See Weinstein Declaration ¶ 42].
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summary judgment motion by the defendant seeking to invalidate claims of the ‘192 patent. That
motion was subsequently denied. [See Khaliq Decl. ¶ 7, Ex. F (Judge Ward’s Order Denying SJ
Motion)].
2. Sproqit Has Failed To Demonstrate That Claim 10 Is Obvious in View of
Coda or Lotus Notes
To establish a prima facie case for obviousness, three basic criteria have to be met: (1)
there must be some suggestion or motivation, either in the references themselves or in the
knowledge generally available to one of ordinary skill in the art to modify the reference or
combine reference teachings; (2) there must be a reasonable expectation of success; and (3) the
prior art references (or references when combined) must teach or suggest all the claim limitations.
See In re Vaeck, 947 F.2d 488 (Fed. Cir. 1991). At the minimum none of the art cited by Sproqit
shows synchronization with a smart phone through a HTTP or SSL port in a firewall.
a. Coda Does Not Teach Or Suggest All The Limitations Of Claim 10
Coda does not teach or suggest “a communications channel through a firewall.” The use
of authentication procedures for validating the identity and access rights of an individual does not
constitute a “firewall” to one of ordinary skill in the art. [See Head Decl. ¶ 15; see also Visto’s
Motion For Preliminary Injunction at 8-10]. Second, Coda does not teach the use of an HTTP or
an SSL port. [Head Decl. ¶ 16]. The document relied on by Sproqit, titled, “tunneling SSL WWW
Proxy,” does not provide any suggestion for establishing a communications channel through a
firewall, using an HTTP or SSL port to synchronize workspace elements as described in claim 10.
[Head Decl. ¶ 16]. Third, Coda does not teach the use of a smart phone.8 In fact, smart phones
were not even in existence at the time that Coda was developed. [Head Decl. ¶ 17] Finally, in
Coda, synchronization between servers and clients is always initiated by the client (“Venus”
component), not from within a firewall as required by claim 10. [See Head Decl. ¶ 18]
b. Lotus Notes Does Not Teach Or Suggest All The Limitations of Claim 10
Notes is not designed to communicate over an HTTP or SSL port, (port 80 and port 443,
8 Smart phone is used in the ‘192 patent and is commonly understood to refer to a device that
integrates computing capabilities and telephone capabilities in the same device, such as a
PDA. [See ‘192 patent, col. 3, ll. 58-60].
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respectively). Lotus Notes uses port 1352, a completely separate port which usually requires
making changes to most corporate firewalls, changes that would not be necessary when using
HTTP or SSL ports. [See Head Decl. ¶ 20]. Second, Notes does not teach or suggest a “general
synchronization module for operating within a first firewall.” Sproqit relies on a Notes
document, Fig. 6 of Ex. I, at 16 to Dr. Weinstein’s declaration as disclosing a general
synchronization agent. However, this document simply shows how web pages can be created and
posted on a Notes Web Server, where a Notes Server is replicating documents in one direction to
the Web Server through a firewall. There is no bi-directional synchronization of workspace
elements taught or suggested in this document as required by claim 10. Third, Notes was never
designed or implemented with “smart phones.” It is impermissible hindsight for Sproqit to
suggest that Notes could be extended to use with smart phones. See ATD Corp. v. Lydall, Inc.,
159 F.3d 534, 546 (Fed. Cir. 1998)(“Determination of obviousness cannot be based on the
hindsight combination of components selectively culled from the prior art to fit the parameters of
the patented invention.”). Finally, there is no “synchronization start module for operating within
the first firewall” as required by claim 10. In Notes, replication between a client and a server is
always initiated by the client. [See Head Decl. ¶ 23].
C. THE DOCTRINE OF INTERVENING RIGHTS DOES NOT AUTHORIZE
THE RELIEF REQUESTED BY SPROQIT
There is no support for Sproqit’s invocation of intervening rights as a basis for the denial
of a preliminary injunction. In advancing this argument, which lacks any legal foundation or
precedent, Sproqit mischaracterizes several cases which do not even remotely support this
proposition.9
9 In Gerhardt v. Kinnaird, 162 F. Supp. 858, 865 (E.D. Ky. 1958), the court denied an injunction because
the court found evidence that plaintiff broadened the claims in reissue in response to defendant’s
actions in designing a non-infringing product and therefore possible fraud on the PTO had been
committed because the reissue was not properly sought to cure an error without deceptive intent as
required by statute.
Sproqit also cites to T.J. Smith & Nephew Ltd v. Consolidated Med. Equip., Inc., 645 F. Supp. 206, 211
(N.D.N.Y. 1986) for same proposition. However, in this case, the court denied the injunction because
plaintiff failed to meet its burden on demonstrating a likelihood of success on the merits, which was
irrelevant to any intervening rights defense that defendant had raised. Regarding intervening rights,
the court simply noted that it would address that issue upon the availability of additional evidence. Id.
at 211.
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1. The Doctrine of Absolute Intervening Rights Does Not Allow The Infringer
To Made Additional Copies
As Sproqit admits, absolute intervening rights, where applicable, apply only to tangible
articles that were produced prior to the reissue or reexamination. [Opposition Brief at 15]. The
doctrine, therefore, is consistent with the relief Visto seeks here, which includes enjoining Sproqit
from making any new copies of its software or selling any copies created after the date of
reexamination. BIC Leisure Prods. v. Windsurfing Int’l, 1 F.3d 1214, 1220 (Fed. Cir. 1993)
2. Sproqit Has No Absolute Intervening Rights
An accused infringer may raise the defense of intervening rights only if (1) none of the
infringed claims of the reissue (or reexamined) patent were present in the original patent; and (2)
even when applicable, the doctrine only allows for the continued use or sale of infringing
products previously made before the date of reexamination issuance. See 35 U.S.C. § 252; BIC
Leisure Prods. v. Windsurfing Int’l, 1 F.3d 1214, 1220 (Fed. Cir. 1993); see also Laitram Corp. v.
NEC Corp., 163 F.3d 1342, 1346-47 (Fed.Cir. 1998).
The doctrine of absolute intervening rights only applies if claims from the reexamined
patent which were also present in the original patent are not infringed. Sproqit has not met its
burden in showing that it is entitled to an intervening rights defense, because claims from the
original patent which are also in the reexamined patent are both valid and infringed, and Sproqit
has not introduced any evidence to the contrary. Claims 6-8 of the ‘192 patent (also at issue in
this case) were infringed before reexamination.10 Claims 6-8 were originally dependent claims but
were rewritten into independent form during reexamination proceedings to include all the
Another case cited by Sproqit for the proposition that an intervening rights defense precludes granting a
preliminary injunction is Bloom Engineering Co. v. N. Amer. Mfg. Co., 129 F.3d 1247 (Fed. Cir.
1997). In that case, the Court simply affirmed the district court’s holding that the plaintiff was not
entitled to damages before the grant of the reexamination certificate because the claims were
substantively changed during reexamination (and defendant did not also infringe claims of the original
patent that were present in the reissue). Id. at 1251.
10 Claims 6-8 also contain several of the same elements as claim 10 (as reexamined). These claims were
allowed over Lotus Notes and Coda without substantive changes. Thus, Sproqit was adequately
advised as to the full scope of the ‘192 patent even before reexamination. For example, the
amendment to claim 10 in the fifth element, “wherein if only one of the first workspace element and
the copy has been modified...” is also present in claim 8. Thus the only limitations that were
previously not in any of the original patent claims are “smart phone” and “HTTP and SSL port.”
Sproqit has not introduced any evidence that it would have designed around these limitations.
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elements of the original claim from which they depend. Dependent claims amended during
reexamination to include all the elements of the original claim are not “substantively amended”
and are entitled to their full retroactive effect. Bloom Eng'g Co. v. North Am. Mfg. Co., 129 F.3d
1247, 1250 (Fed. Cir. 1997). This alone is enough to defeat any intervening rights defense. See
BIC Leisure Prods, 1 F.3d at 1220.
Second, Sproqit has not introduced any evidence that it has an inventory of accused
products or made offers to sell any tangible products in existence before the grant of the
reexamination certificate.11 See 35 U.S.C. § 252 (absolute intervening rights protects only
“specific things so made”); see also Shockley v. Arcan, 248 F.3d 1349 (Fed. Cir. 2001)(the
Federal Circuit held that absolute intervening rights does not apply to products offered for sale
but not yet manufactured). Even if Sproqit does have an inventory of software, it has no right to
make new products or copies.
3. Sproqit Has No Equitable Intervening Rights
The doctrine of equitable intervening rights is a discretionary doctrine which authorizes
courts to fashion a remedy to allow for the continued manufacture, use, or sale of a patented
product or process in order to protect investments and business commenced before reissue or
reexamination based on the theory that the infringer relied on the original claims of a patent
before developing the infringing products. See 35 U.S.C. § 252, 2nd. ¶; see also Seattle Box Co.
v. Indus. Crating & Packing, 756 F.2d 1574, 1576 (Fed. Cir. 1985). However, equitable
intervening rights does not protect an infringer from being enjoined from selling infringing
products indefinitely. See Plastic Container Corp. v. Cont’l Plastics of Okla, 607 F.2d 885, 902
(Fed. Cir. 1979) (“Continental seeks to continue to infringe the Hall Reissue and even expand its
operations throughout the remainder of the life of the Hall Reissue without royalty fees or
damages. This would effectively extinguish the patentee's rights under the guise of protecting the
investment of an infringer.”).
11 The Accused Products are software products which can be easily manufactured at little cost. Sproqit has
not shown that it has an inventory of software products that is created before the ‘192 reexamination
certificate issued.
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Courts have looked at various factors when balancing the equities of intervening rights:
(1) whether substantial preparation was made before the reissue, Seattle Box Co. v. Indus. Crating
& Packing, 756 F.2d 1574, 1579 (Fed. Cir. 1985); (2) whether the infringer continued
manufacturing before reissue on advice of its patent counsel, Id.; (3) whether there were existing
orders or contracts, Id.; (4) whether non-infringing goods can be manufactured from the inventory
used to manufacture the infringing product and the cost of conversion, Id.; (5) whether there is a
long period of sales before the patent reissued for which damages cannot be assessed, Wayne-
Gossard Corp. v. Sondra, Inc., 434 F. Supp. 1340, 1363 (E.D. Pa. 1977), aff'd, 579 F.2d 41 (3rd
Cir. 1978); and (6) whether the infringer has made profits sufficient to cover its investment,
Plastic Container, 607 F.2d at 903. The only investment considered is that made after the
issuance of the original patent and before the reissue. Halliburton, 10 U.S.P.Q.2D (BNA) at
1983; Plastic Container, 607 F.2d at 902. These factors clearly weigh in favor of Visto.
First, any preparation, investment or expenditure that Sproqit claims it made before the
issuance of the reexamination certificate based on purported reliance on the scope of the original
claims is completely specious given the fact that Sproqit infringes several other claims of the ‘192
patent which were not substantively amended, as well as claims from other patents in suit.12
Second, Sproqit has failed to introduce any evidence, such as advice of patent counsel, to
support its defense that it concluded that the original claims were invalid and not infringed before
making investments and developing the Accused Products. Aside from its conclusory statements
that it believed that the original ‘192 patent claims were either invalid or not infringed, Sproqit
has not introduced any tangible evidence to support this claim other than a single casual remark
from its CEO, Mr. Mansour in an e-mail inquiry regarding Visto’s patents. [See Mansour Decl.
Ex. B]13. The evidence cited by Sproqit is particularly weak. There was no advice of counsel and
12 Visto does not concede Sproqit’s assertion that claim 10 of the ‘192 patent was substantively amended.
13 Mr. Wilson: “Do you know if the Sproqit Active clients might be in violation of [sic] an[y] of these
patents [referring to Visto’s patents].” Mr. Mansour: “Nope! we hare [sic]in GREAT shape. We’re the
only ones who have a completely different architecture.” [Mansour Decl. Ex. B]. This statement,
which is not made by patent counsel and which is not supported by any analysis, fails to meet
Sproqit’s burden in demonstrating that it determined that the original claims were invalid or not
infringed before proceeding with development of the Sproqit System.
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no prior art is mentioned. Indeed, no claims are patents are mentioned and no basis for non-
infringement is given.
Finally, regarding factors three to five, Sproqit has not introduced any evidence whether it
had existing orders and contracts for the Accused Products before the reexamination certificate
issued; whether non-infringing goods can be manufactured from the inventory used to
manufacture the infringing product and the cost of conversion; and whether there was a long
period of sales before the patent reexamination certificate issued for which damages cannot be
assessed. Only factor six, lack of any profits sufficient to cover its purported investment of
$8,000,000 and 60,000-80,000 man hours, ostensibly favors Sproqit. Since on balance, these
factors favor Visto, Sproqit’s claim to equitable intervening rights should be denied.
Moreover, only an “innocent infringer is entitled to the protection provided by intervening
equitable rights.” Sontag Chain Stores Co. v. National Nut Co., 301 U.S. 281, 293 (1940).
“Equitable intervening rights protect parties who in good faith innocently develop and
manufacture an invention not claimed by an original patent.” Henkel Corporation v. Coral Inc.,
754 F. Supp. 1280, 1320 (N.D. Ill. 1991). Given that Sproqit is unable to show any infringement
or validity analysis and continues to infringe valid claims from the original patents, Sproqit is not
entitled to intervening rights.
D. SPROQIT HAS FAILED TO REBUT THE PRESUMPTION THAT VISTO
WILL BE IRREPARABLY HARMED FROM SPROQIT’S PATENT
INFRINGEMENT
A strong showing of likelihood of success on the merits coupled with continuing
infringement raises a presumption of irreparable harm to the patentee. H.H. Robertson, 820 F.2d
at 390. Absent a finding clearly negating irreparable harm, such as that future infringement is no
longer likely; that the patentee is willing to forgo its right to exclude by licensing the patent, or
that the patentee has delayed in bringing suit, there is no basis for finding that the presumption of
irreparable harm has been overcome. See Polymer Technologies v. Bridwell, 103 F.3d 970, 976
(Fed. Cir. 1996).
Sproqit argues that since it has limited sales of its product, Sproqit’s continued existence
poses no threat to Visto. [See Opposition at 20]. It is well recognized, however, that the principal
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value of the patent grant is its statutory right to exclude, thus the very nature of the patent grant
weighs against finding that monetary damages can suffice to make the patentee whole.
Hybritech, Inc. v. Abbott Laboratories, 849 F.2d 1446, 1456-1457 (Fed. Cir. 1988). In previously
denying Sproqit’s motion for a continued stay of this case, This court recognized this very fact:
“[a]lthough, should Visto prevail on the merits of its infringement claims, it will be entitled to
monetary damages, uncertainty and imprecision in the valuation of damages and consequential
effects of infringement may render such an award less than completely adequate.” [See Docket
No. 96 (Order Denying Sproqit’s Motion For a Further Stay)]. The fact that Sproqit itself
acknowledges that it is nearly insolvent (see Mansour Decl. ¶ 19) makes it more than likely that
Sproqit will be unable to compensate Visto in monetary damages should Visto prevail at trial.
E. NO COGNIZABLE HARDSHIP CAN COME TO SPROQIT AS A RESULT
OF BEING ENJOINED FROM PATENT INFRINGEMENT
The hardship on a patentee denied an injunction after showing a strong likelihood of
success on validity and infringement can result in serious hardship to the patentee’s limited right
to exclude competitors in the marketplace. Illinois Tool Works, Inc. v. Grip-Pak, Inc., 906 F.2d
679, 683 (Fed. Cir. 1990). A defendant, accused of infringing a valid patent, cannot claim a
legitimate hardship simply because it is a small company and has no revenue sources apart from
the accused products. See Bell & Howell Document Mgmt. Prods. Co. v. Altek Sys., 132 F.3d
701, 708 (Fed. Cir. 1997).
Sproqit’s argument that an injunction will have a devastating impact on Sproqit because it
will have to essentially cease operations in the U.S. if it cannot sell its only product is not
legitimate hardship of which Sproqit can complain of under the law. Sproqit has no right to sell
infringing products, regardless of whether it has no other revenue sources apart from the Accused
Products. Visto has invested tremendous resources and energy in obtaining and enforcing its
intellectual property. Sproqit’s continued infringing presence in the marketplace is a deprivation
of not only Visto’s statutory right to exclude, but also makes it increasingly difficult for Visto to
distinguish itself from the competition and establish itself as a market leader.
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F. ENFORCEMENT OF VISTO’S PATENT RIGHTS IS IN THE PUBLIC
INTEREST
“[P]ublic policy favors protection of the rights secured by valid patents.” Smith Int'l, Inc.
v. Hughes Tool Co., 718 F.2d 1573, 1581 (Fed. Cir. 1983), cert. denied, 464 U.S. 996 (1983).
Since Visto has made a clear showing of the validity and enforceability of the patent at issue and
of Sproqit’s infringement of the asserted claim, the public interest favors granting Visto’s Motion
for Preliminary Injunction.
III. CONCLUSION
For the reasons discussed herein, and in Visto’s opening papers, Visto respectfully
requests that its Motion For Preliminary Injunction be granted.
Dated: January 4, 2006 Respectfully submitted,
MANATT, PHELPS & PHILLIPS, LLP
/s/ Robert D. Becker
Ronald S. Katz
CA State Bar No. 085713
Robert D. Becker
CA State Bar No. 160648
1001 Page Mill Road, Building 2
Palo Alto, CA 94304
Telephone: 650-812-1300
Facsimile: 650-213-0260
Attorneys for Plaintiff
Visto Corporation
20149692.1
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