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AT&T CORP. v. MICROSOFT CORPORATION

February 9, 2004.

AT&T CORP., Plaintiff -against- MICROSOFT CORPORATION, Defendant


The opinion of the court was delivered by: WILLIAM PAULEY, District Judge

MEMORANDUM AND ORDER

Plaintiff AT&T Corp. ("AT&T") brings this patent infringement action against Microsoft Corporation ("Microsoft"), alleging that certain of Microsoft's products containing speech codecs*fn1 infringe its United States Patent No. Reissue 32,580 (the "580 patent"). Microsoft denies infringement of the 580 patent and seeks dismissal of the complaint together with a declaratory judgment of noninfringment, invalidity and unenforceability of the 580 patent. See AT&T Corp. v. Microsoft Corp., 01 Civ. 4872 (WHP), 2003 WL 21459573 (S.D.N.Y. June 24, 2003). Familiarity with this Court's prior Memoranda and Orders is presumed.*fn2 Page 2

Currently before this Court is AT&T's motion for partial summary judgment on Microsoft's affirmative defense and counterclaim of inequitable conduct. For the reasons set forth below, AT&T's motion for partial summary judgment is granted.

  BACKGROUND

  Microsoft's inequitable conduct defense and counterclaim concerns whether the inventors of the 580 patent, Dr. Bishnu S. Atal and Mr. Joel R. Remde, and the in-house patent attorney who prosecuted that application, Jack S. Cubert, Esq., intentionally failed to disclose material prior art to the United States Patent and Trademark Office (the "PTO") during prosecution of the 580 patent. Specifically, Microsoft claims that AT&T should have disclosed to the PTO a 1980 paper co-authored by Dr. Atal and Dr. Manfred R. Schroeder entitled "Improved Quantizer for Adaptive Coding of Speech Signals at Low Bit Rates" (the "1980 Paper").*fn3 (AT&T Ex. 1, Ex. 3 at 35-36.) Microsoft contends Page 3 that the 1980 Paper anticipated one or more of the 580 patent claims, making it material, and raising an inference of intent to deceive the PTO. The facts underlying this motion are not in dispute.*fn4

 
A. Prosecution History of AT&T's 580 and 832 Patents
  The 580 patent at issue in this litigation is a reissue of U.S. Patent No. 4,472,832 (the "832 patent"). The 832 patent contains 39 claims. See AT&T, 2003 WL 21459573, at *1. On December 1, 1981, AT&T filed an application for the 832 patent on behalf of the inventors, Dr. Atal and Mr. Remde. (AT&T 56.1 Stmt. ¶ 1; AT&T Ex. 4 at ATT 161-ID.) Jack S. Cubert, Esq. prosecuted the 832 patent and PTO Examiner E.S. Matt Kemeny ("Examiner Kemeny") examined that application. (AT&T 56.1 Stmt. ¶¶ 2, 3; AT&T Ex. 4 at ATT 161-ID, 211-ID.) AT&T did not disclose the 1980 Paper to the PTO during the prosecution of the 832 patent, and the PTO did not cite to the 1980 Paper during the prosecution of the 832 patent. (AT&T 56.1 Stmt. ¶¶ 4-5; AT&T Ex. 4 at ATT 227-ID.) The PTO issued the 832 patent on September 18, 1984. (AT&T Ex. 4 at ATT 161-ID.) Page 4

  On September 18, 1986, AT&T filed a reissue application, which was also prosecuted by Cubert and examined by Examiner Kemeny. (AT&T Ex. 6 at ATT3-ID.) The 580 patent left the original 39 claims unaltered and added claims 40-43. See AT&T, 2003 WL 21459573, at *1. AT&T did not disclose, and the PTO did not cite to any additional references other than the ones disclosed during prosecution of the 832 patent. (AT&T Ex. 6 at ATT 3-ID; AT&T 56.1 Stmt. at ¶ 11.) The PTO issued the 580 patent on January 19, 1988. (AT&T Ex. 6 at ATT 3-ID.)

  B. The 1980 Paper and the 057 and 124 Patents

  In 1980, Drs. Atal and Schroeder co-authored the 1980 Paper, which they presented at the Institute of Electrical and Electronics Engineers, Acoustics, Speech and Signal Society conference on April 9-11, 1980. (AT&T Ex. 1 at MSATT 34539; Deposition of Bishnu S. Atal, Ph.D., dated March 5, 2003 ("Atal Dep.") at 226-28.) On April 8, 1980, one day before the conference, AT&T filed a patent application on behalf of Dr. Atal based on the subject matter of the 1980 Paper. (AT&T Exs. 1, 8; Atal Dep. at 226-28.) On October 12, 1982, the PTO approved this application and issued U.S. Patent No. 4,354,057 (the "057 patent"). Like the 832 and 580 patents, Cubert prosecuted the 057 patent for AT&T and Examiner Kemeny examined the application for the PTO. (AT&T Ex. 8.) Page 5

  On October 12, 1984, AT&T filed a reissue application for the 057 patent. That application was also prosecuted by Cubert and examined by Examiner Kemeny. The PTO issued U.S. Patent No. Reissue 32,124 (the "124 patent") on April 22, 1986, five months before AT&T filed its 580 reissue application. The parties refer to the 124 and 057 patents as the "Center Clipping Patents."

  Thus, Cubert shepherded all four of the AT&T applications through prosecution on behalf of AT&T and PTO Examiner Kemeny examined each of the patent applications on an ongoing basis from April 1980 through January 1988.

  DISCUSSION

 I. Summary Judgment Standard

  Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); accord Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). The burden of demonstrating the absence of any genuine dispute as to a material fact rests with the moving party. See, Page 6 e.g., Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970); Grady v. Affiliated Cent., Inc., 130 F.3d 553, 559 (2d Cir. 1997). The ...


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