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AT&T CORP. v. MICROSOFT CORPORATION

February 17, 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"). The 580 patent at issue in this litigation is a reissue of U.S. patent 4,472,832 (the "832 patent"), issued with 39 claims. The 580 patent added claims 40-43, without amending the first 39 claims. 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 Page 2 is presumed.*fn2

  Currently before this Court is Microsoft's motion for partial summary judgment on invalidity of claims 40-43 of the 580 patent. For the reasons set forth below, Microsoft's motion for partial summary judgment is denied.

  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 Page 3 (1986). The burden of demonstrating the absence of any genuine dispute as to a material fact rests with the moving party: See, 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 movant may meet this burden by demonstrating a lack of evidence to support the nonmovant's case on a material issue on which the nonmovant has the burden of proof. Celotex, 477 U.S. at 323.

  To defeat a summary judgment motion, the nonmoving party must do "more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Indeed, the nonmoving party must "set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e); accord Matsushita Elec., 475 U.S. at 587. In evaluating the record to determine whether there is a genuine issue as to any material fact, the "evidence of the nonmovant is to be believed and all justifiable inferences are to be drawn in his favor." Liberty Lobby, 477 U.S. at 255.

  On a summary judgment motion to invalidate a patent, the party asserting invalidity bears a heavy burden. Tillotson, Ltd. v. Walbro Corp., 831 F.2d 1033, 1036 (Fed. Cir. 1987); Schumer v. Lab. Computer Sys., Inc., 308 F.3d 1304, 1315 (Fed. Cir. 2002); see also 35 U.S.C. § 282 (2003) (the burden of Page 4 establishing invalidity of a patent or a claim rests on the party asserting invalidity). In the case of reissue patents, the movant's burden is "made heavier" because the reissue patent has undergone "a fresh examination." Interconnect Planning Corp. v. Fell, 774 F.2d 1132, 1139 (Fed. Cir. 1985). Indeed, as reissue patents are "clothed in a statutory presumption of validity," Interconnect Planning, 774 F.3d at 1139, the party asserting invalidity must establish its claim by clear and convincing evidence. WMS Gaming, Inc. v. Int'l Game Tech., 184 F.3d 1339, 1355 (Fed. Cir. 1999).

 II. Merits

  Microsoft argues that claims 40-43 of the 580 patent are invalid for three independent reasons: (1) under 37 C.F.R. § 1.175 (1986) because they are based on a defective reissue declaration; and (2) under 35 U.S.C. § 102(b) because they are anticipated by prior art that was known to AT&T, but never disclosed to the United States Patent and Trademark Office (the "PTO"); and (3) under 35 U.S.C. § 251 because they violate the recapture rule. (MS Br. at 1.)

  A. Reissue Declaration

  Pursuant to 35 U.S.C. § 251, a patentee may file a reissue application on a patent if, without any deceptive intent, Page 5 he "claim[ed] more or less than he had a right to claim in the patent." 35 U.S.C. § 251.' At the time the 580 patent was pending, 37 C.F.R. § 1.175 ("Rule 175") required applicants to file a reissue declaration with their reissue application, containing the following information:
(3) "When it is claimed that [the] patent is inoperative or invalid by reason of the patentee claiming more or less than he had a right to claim in the patent,' [the reissue declaration must] distinctly specify [] the excess or insufficiency in the claims"; and
(5) [The reissue declaration must] [p]articularly specify[] the errors relied upon, and how they arose or occurred.
37 C.F.R. § 1.175(3) & (5) (1986). While a reissue declaration must generally "specify every difference between [the] original and reissue claims," Nupla Corp. v. I XL Mfg. Co., 114 F.3d 191, 193 (Fed. Cir. 1997), "word-for-word correspondence is [not] required between a reissue declaration and the changes made in a reissue application." Dethmers Mfg. Co. v. Automatic Equip. Mfg. Co., 272 F.3d 1365, 1370 (Fed. Cir. 2001). Rule 175 only requires the reissue declaration to specify: (i) each error relied upon; (ii) how or why the error arose; and (iii) that the error arose without deceptive intention. Dethmers, 272 F.3d at 1370 (citing 37 C.F.R. § 1.175(a)); Nupla, 114 F.3d at 195. Microsoft argues that reissue claims 40-43 of the 580 patent are invalid because AT&T's reissue declaration failed to comply with Page 6 the requirements of Rule 175, which was in effect in 1986, when AT&T filed the reissue application.

  On September 18, 1986, two years after the 832 patent issued, AT&T filed a reissue application that led to the issuance of the 580 patent. (MS Ex. 3 at 23-24.) The 580 patent contains four new reissue claims, 40-43, but left the original 39 claims unmodified. (MS Ex. 3 at 48-49.) As required by Rule 175, the patentees, Dr. Bishnu S. Atal and Mr. Joel R. Remde, submitted a reissue declaration with their application that identified certain errors in the 832 patent's claims. (MS Ex. 3 at 51-54.) Specifically, the patentees detailed ...


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