Filed on behalf of:
`
`Patent Owner SightSound Technologies, LLC
`
`Paper No.
`
`By: David R. Marsh, PhD.
`Kristan L. Lansbery, Ph.D.
`ARNOLD & PORTER LLP
`
`555 12th Street, NW.
`Washington, DC 20004
`Tel: (202) 942-5068
`Fax:
`(202) 942-5999
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`APPLE INC.
`
`Petitioner
`
`V.
`
`SIGHTSOUND TECHNOLOGIES, LLC,
`
`Patent Owner
`
`Case CBM2013-00023
`
`Patent 5,966,440
`
`DECLARATION OF JOHN P. STAUTNER CONCERNING
`
`COMPUSONICS CORP. AND COMPUSONICS VIDEO CORP.
`
`SIGHTSOUND TECHNOLOGIES
`EXHIBIT 2321
`
`CBM2013-00023 (APPLE v. SIGHTSOUND)
`PAGE 000001
`
`

`

`I, John Stautner, declare as follows:
`
`1.
`
`I am a resident of The Woodlands, Texas.
`
`I provide this Declaration
`
`in connection with the above-captioned proceeding. I am being compensated by
`
`SightSound Technologies, LLC for time spent in connection with my factual
`
`research and providing testimony in this matter at the rate of $ 450 per hour. My
`
`compensation is in no way dependent on the contents of this Declaration or any
`
`testimony I may provide, nor on the outcome of this proceeding. I make this
`
`declaration of my own personal knowledge and could testify competently to the
`
`contents herein.
`
`2.
`
`I am a technologist with over thirty years of experience in digital
`
`audio and video and computer technologies.
`
`I have an undergraduate degree in
`
`Physics and a Masters of Science from the Department of Electrical Engineering
`
`and Computer Science from the Massachusetts Institute of Technology (MIT).
`
`3.
`
`In 1983, shortly after graduating the master’s program at MIT or at
`
`approximately that time, I was contacted by David Schwartz and asked to join
`
`CompuSonics as its second employee. (At first, CompuSonics was known as
`
`CompuSound. For sake of clarity, unless otherwise specified, by “CompuSonics” I
`
`mean the audio company founded by Mr. Schwartz in or around 1983 .) I worked
`
`full-time for CompuSonics beginning in late 1983 or early 1984. At the time, I
`
`was living in Cambridge, MA. Later, I relocated to Palo Alto, CA, after
`
`CompuSonics moved its base of operations there from Denver, CO.
`
`4.
`
`In 1985, I also became President of CompuSonics Video Corporation,
`
`a company affiliated with CompuSonics.
`
`I remained President of CompuSonics
`
`Video until both it and CompuSonics went out of business in late 1989 or 1990.
`
`However, at all times, CompuSonics and CompuSonics Video were small, closely
`
`related companies, and I continued to be closely involved in CompuSonics
`
`throughout my time as president of CompuSonics Video. The two companies
`
`-1-
`
`PAGE 000002
`
`

`

`shared common offices in Palo Alto, often partnered in development and
`
`marketing efforts, and pursued largely similar objectives, in all of which I was
`
`generally aware or involved.
`
`5.
`
`The objective of CompuSonics was to sell high-end audio equipment
`
`to consumers, “prosumers” and professional users. The devices sold by
`
`CompuSonics were called DSP’s, or digital signal processors, which were special-
`
`purpose devices or “audio computers”. A secondary objective of CompuSonics
`
`was to license its CSX technology, which consisted of its patents and various
`
`implementations of digital audio compression technology, operating software and
`
`hardware designs.
`
`6.
`
`DSP’s came in two series. The first CompuSonics devices to be sold
`
`were professional-grade devices in the 2000 series, which included models such as
`
`the DSP-2002 (a 2-channel digital stereo recorder) and the DSP-2004 (a digital
`
`recorder capable of simultaneously recording 4 channels). With multiple devices,
`
`recording studios could record on eight or more channels simultaneously. DSP-
`
`2000 series devices were sold to professional sound recording, post-production,
`
`mixing, and editing studios. Like all DSP’s, these devices were capable of
`
`converting analog sound signals into digital waveforms, where the signals could be
`
`recorded, edited, mixed, and mastered. The prices for devices in the DSP-2000
`
`series started at $35 ,000. The first such recorder was sold in 1984. During
`
`CompuSonics’ existence, the company sold fewer than approximately 40 DSP-
`
`2000 series devices (this is a rough estimate).
`
`7.
`
`Originally, Compusonics intended to develop a consumer audio
`
`product and use “super floppy” discs for storage on all of its DSP’s. However,
`
`because the storage capacity of floppy discs was not advancing quickly enough, I
`
`proposed using hard drives in the interim and developing a product for professional
`
`audio studio and post-production use. Thus, the DSP-2000 series devices used
`
`-2-
`
`PAGE 000003
`
`

`

`arrays of Maxtor 5 1/4” hard drives. Because the of expense (each 140MB drive
`
`cost on the order of $1000, I estimate), the noise emitted by the drives, and
`
`impracticality of using hard drives for consumer equipment, Compusonics
`
`intended to return to using “super floppy” discs or a similar form of removable
`
`storage once the storage capacity of the superfloppies was sufficient and once the
`
`compression technology had developed sufficiently. The combination of high
`
`capacity disk storage and a high ratio of audio compression and the cost of each of
`
`these is what would determine the eventual feasibility of building and marketing a
`
`consumer product. In the meantime, the 2000 series was a feasible product to
`
`build and market to audio professionals.
`
`8.
`
`CompuSonics also made consumer DSP devices, in the 1000 series,
`
`which were based on a single integrated circuit board design and which featured
`
`removable storage (such as an optical disk or a floppy disk). DSP-1000’s were
`
`digital stereo recorders that were chiefly intended to replace audio tape recorders in
`
`home stereo systems. Compusonics intended that the DSP-1000’s would also
`
`allow consumers to archive albums that were contained in analog storage mediums
`
`(vinyl or cassette). The goal with digital storage was that sound quality wouldn’t
`
`degrade over time in addition to providing other benefits, like random access
`
`playback and the ability to edit the audio. DSP-1000’s had the promise of giving
`
`consumers the ability to edit out clicks or defects in their existing music
`
`collections. Finally, consumers could record their own music. Like the DSP-2000
`
`series devices, DSP 1000’s stored music in digital form. For playback, digital
`
`signals would be converted to analog form and transmitted via conventional analog
`
`RCA output jacks to a home stereo system. For recording, DSP’s contained analog
`
`RCA input jacks that could receive an analog digital signal from the components of
`
`a home stereo system and convert that signal to a digital waveform.
`
`PAGE 000004
`
`

`

`9.
`
`CompuSonics made approximately 20-50 (rough estimate) DSP-
`
`1000’s in 1985 and early 1986. Some of these were pilot models and some were
`
`“production,” though we never got into any high volume production. The DSP
`
`1000’s used a floppy disk storage system as well as cartridge floppy storage and
`
`cartridge optical disk storage. Many of the units were sold to radio stations and
`
`broadcasters, where the machines were used in lieu of “cart machines.” These
`
`units were called DSP 15 00’s if they had record and play capability, and they were
`
`called DSP 1200’s if they had only play capability. Cart machines were broadcast
`
`systems that employed a tape-based recording and playback system. The short
`
`audio clips that could be saved on DSP 1500’s using floppy disks or cartridge
`
`storage were well-suited to use with broadcast radio and were a great replacement
`
`for the tape based cart machines that were commonly in use. A UK based
`
`company called “Ferrograph” even licensed the CompuSonics DSP 1500 and 1200
`
`series for sale in Europe. (As a point of clarification: we would refer to audio
`
`computers that were built using the single board design as the DSP-1000 series,
`
`which would include the DSP-1000, DSP-1200 and DSP-1500.)
`
`10. Another run of DSP-1000’s was produced in late 1986. These were
`
`sold to high-end consumer stereo dealers. Given the lack of high-density floppy
`
`disk storage sufficient to store more than a few minutes of digital audio data, these
`
`DSP-1000’s utilized a write-once optical disk drive.
`
`11.
`
`The DSP-2000 series devices sold by CompuSonics were based on a
`
`Unix operating system (or a variant of Unix called Regulus or something like that),
`
`and in this regard resembled many other computers of the day. In addition to
`
`building the machines, CompuSonics also developed the software needed to run
`
`the DSP’s recording, playback, editing and other functions. The software for the
`
`DSP-1000 series devices was written directly for the host processor and comprised
`
`its own operating system. (The DSP-1000’s did not run Unix or Regulus.) As
`
`-4-
`
`PAGE 000005
`
`

`

`noted, the main functionality supported in software was the ability to record and
`
`edit digital audio signals. All DSP devices featured on-board compression
`
`algorithms that reduced the memory required to store a given recording.
`
`Developing sophisticated compression algorithms, supported in hardware and
`
`software, was critical to CompuSonics’ and CompuSonics Video’s mission to sell
`
`digital recording devices. The compression algorithms software was written to be
`
`run on the Texas Instruments TMS 320 digital signal processing chips which were
`
`utilized in both the DSP-2000 series and DSP-1000 series devices.
`
`12. And like other computers of the era, DSP’s came with serial ports and
`
`parallel ports that allowed the device to connect to other computers, networks, and
`
`telecommunications lines. Just as other forms of digital data could be transmitted
`
`by computers, CompuSonics developed and tested software that enabled DSP’s to
`
`transmit digital audio files locally and over distances. CompuSonics referred to
`
`transmitting, via a digital communication link, digital audio files from a DSP in
`
`one location to a DSP in another location as “telerecording.”
`
`13.
`
`In 1985 and 1986, CompuSonics engaged in internal testing and one
`
`demonstration that I am aware of to show how DSP-2000 devices could be used to
`
`send digital audio data over telecommunications lines and record the transmission.
`
`In the course of all of these tests and the demonstration, CompuSonics retained
`
`control of the DSP devices on both ends of the telecommunications link.
`
`CompuSonics never made or received payment for the data transfers it made
`
`during the course of these transmissions.
`
`14.
`
`The demonstration referred to in the foregoing paragraph involved a
`
`1985 experimental transmission and recording of audio from Chicago to NY. In
`
`that demonstration, digital audio signals were transmitted from one CompuSonics
`
`DSP-2002 machine to another Compusonics DSP-2002 machine, with
`
`CompuSonics personnel controlling both machines. There was no payment
`
`-5-
`
`PAGE 000006
`
`

`

`associated with this transmission and none was contemplated or discussed. At that
`
`time, with telerecording, the focus of Compusonics was simply achieving the
`
`transmission of the signal—i.e., moving data from point A to point B digitally. We
`
`did not formulate a specific method or plan for how the telerecording could be
`
`used as part of a transaction.
`
`15.
`
`Telerecording capability never existed on any DSP that was sold or
`
`commercially available by Compusonics. Compusonics did not pursue
`
`telerecording as a practical application or incorporate telerecording capabilities
`
`into the DSP due to numerous challenges that stood in the way of the adoption of
`
`telerecording. Very few high-capacity digital connections existed, they were very
`
`expensive, and virtually none reached consumers in their homes. Also, the
`
`compression algorithms available were insufficient to fit a meaningful amount of
`
`digital music onto available storage means, and furthermore were insufficient to
`
`reduce the size of the data to where it could be transmitted in a time-effective
`
`manner. In other words the transmission of high fidelity music would take much
`
`longer to accomplish than the duration of the audio being transmitted. To the
`
`extent we did identify potential practical or commercial applications of the
`
`telerecording technology at that time, we anticipated that it could be used by audio
`
`professionals and perhaps in the broadcast market to transfer audio segments
`
`between studio locations.
`
`16.
`
`In or around this timeframe, between approximately 1984 - 1987, as
`
`part of its marketing activities, employees and officers of CompuSonics, including
`
`David Schwartz and myself, occasionally mentioned the idea of an “Electronic
`
`Record Store.” This was not an idea that we actually developed, but rather one to
`
`which we believed CompuSonics devices, and possibly telerecording, could
`
`perhaps be used in the future. In connection with presentations concerning the
`
`“Electronic Record Store,” CompuSonics suggested that content could be
`
`-6-
`
`PAGE 000007
`
`

`

`transferred over distances directly to consumers. Other than articulating this
`
`general concept and potential future application of telerecording, Compusonics did
`
`not envision any particular business model or type of transaction or method for
`
`payment for the music. Instead, CompuSonics suggested various possibilities for
`
`using its devices with telecommunications equipment—just as there are many
`
`ways one can conduct telecommunications with a general-purpose computer.
`
`17. Among other things, I recall general discussions concerning:
`
`(1) allowing users to obtain content via cable television services utilizing coaxial
`
`cabling, and having any costs of obtaining the content added to a subscriber’s
`
`monthly cable bill (we believed that cable was an attractive option given the
`
`bandwidth of cable); (2) transmitting content via telephone lines to consumer
`
`homes (we had worked with AT&T who envisioned their Accunet potentially
`
`being used in this capacity) without any specified billing or payment method; and
`
`(3) the concept of using telerecording to transmit digital files containing master
`
`records to retail distribution locations, where a copy of the recording could be
`
`printed locally on floppy disks and sold to consumers. All of these ideas involved
`
`the concept that the audio signals would be recorded onto floppy disks or other
`
`removable media. None of the ideas relating to the so-called “electronic record
`
`store” were pursued or specifically articulated beyond as just discussed.
`
`18. David Schwartz and others at CompuSonics discussed these
`
`“electronic record store” ideas in connection with promotional and marketing
`
`activities to generate interest and excitement about potential uses for our stereo
`
`equipment and in hopes of spurring sales and investments. These were broad and
`
`futuristic technology ideas at the time that did not yet have any associated specifics
`
`or business model at the time. David Schwartz referred to the concept as
`
`“Futurama City” during a lecture at Stanford University on or about February 20,
`
`1987.
`
`I was present for this lecture, at that time, Compusonics was making no
`
`-7-
`
`PAGE 000008
`
`

`

`efforts to develop the concept nor the functionalities that would be required in
`
`DSP’s to support downloading digital content in exchange for electronic payment.
`
`19.
`
`Thus, while in theory CompuSonics’ DSP devices, like other
`
`computers of the day, could have been configured to receive digital data via
`
`telecommunications lines in exchange for payment, CompuSonics did not devote
`
`engineering time, business development time, or any other time to making an
`
`electronic record store or to making the DSP devices compatible with any such
`
`consumer download service, nor to my recollection was CompuSonics working on
`
`developing any business model or on making any overtures to music industry
`
`partners or others to develop a feasible approach to this potential future music
`
`delivery method. As discussed above, the primary focus of CompuSonics was
`
`developing and getting to market a high volume consumer product that would
`
`replace the tape recorder.
`
`20.
`
`CompuSonics did not plan the use of telerecording in any specific or
`
`particular type of transaction methodology and no DSP was ever configured to
`
`transmit or accept payment information. To my knowledge, CompuSonics never
`
`discussed creating a machine with any type of payment capabilities. Further, to my
`
`knowledge, no DSP product sold or commercially available ever had telerecording
`
`capability. Some of the early DSP-1000 series had the DATI parallel port
`
`transmitter/receiver hardware or chip populated on the board, though it was
`
`unsupported by the software as I recall. This was really just a concept that we
`
`tested internally and demonstrated on the occasion mentioned above.
`
`21.
`
`Similarly, CompuSonics never developed a system or method for
`
`selling digital audio or video signals over telecommunications lines, nor did
`
`CompuSonics ever develop or write software that would enable DSP’s to be used
`
`to transfer money electronically. Specifically, CompuSonics never wrote or
`
`specified software that would allow individuals to exchange account or credit card
`
`-8-
`
`PAGE 000009
`
`

`

`information in conjunction with transmission of digital audio signals.
`
`I am
`
`unaware of any person or company having ever configured or used a DSP to sell
`
`digital audio signals, transfer a credit card number, or otherwise provide account
`
`information in exchange for the receipt of digital audio or video content.
`
`22.
`
`I have reviewed the document marked as exhibit 1310 by Apple. The
`
`discussion in this article does not represent a business concept that CompuSonics
`
`was pursuing at the time. Specifically, the idea of “routing music through an IBM
`
`PC” was not something that CompuSonics was pursuing as CompuSonics was
`
`focusing on applications for its DSP machines, and not anticipating having a PC do
`
`any operating or storing of any music at that time. This was because we believed
`
`that the storage capacity and computational capacity was superior on the DSP as
`
`compared to a PC. The statements in this article regarding what CompuSonics was
`
`doing and considering are not accurate. (We later conceived and developed a
`
`program for the PC to control the DSP, but that did not involve transferring audio
`
`between the DSP and the PC, but rather involved having the PC control functions
`
`of the DSP via the low-speed serial connection.)
`
`23.
`
`I have reviewed the document marked as eXhibit 1315 by Apple.
`
`I am
`
`familiar with this slide and believe it generally reflects the manner in which the
`
`Chicago to NY demonstration occurred.
`
`I do not believe this slide was ever
`
`provided to the public, but was likely shown as part of a typical slide show for a
`
`few seconds or a minute or so during a presentation.
`
`I believe this slide reflects the
`
`idea of a professional use of the telerecording technology, with an audio studio on
`
`each end of the connection. The music recording equipment presented on each
`
`side of the diagram (1.6., symbolized by the treble clef and microphone), and the
`
`reference to our professional DSP-2002 machines, suggests to me that this was a
`
`intended to convey a studio to studio transmission with each side transmitting and
`
`recording music. There is no payment suggested or contemplated by this diagram.
`
`-9-
`
`PAGE 000010
`
`

`

`I also note that the diagram contains an image of traditional telephones and a
`
`telephone line. The only purpose of the telephones depicted in the diagram would
`
`have been so that individuals on either end could communicate with each other to
`
`initiate the transmission or to confirm that the transmission was proceeding
`
`successfully.
`
`24.
`
`I have reviewed the document marked as exhibit 1320 by Apple.
`
`I am
`
`familiar with this slide and recall it being presented during the Stanford lecture,
`
`where it was shown briefly as part of the slide presentation.
`
`I do not believe this
`
`slide was ever provided to the public, although it could have been shown as part of
`
`a slide show briefly during a slide presentation. This slide is consistent with my
`
`recollection that CompuSonics identified a variety of possibilities regarding the
`
`delivery of audio content and the transmission of audio signals, although none
`
`were specified with any particularity or pursued.
`
`25.
`
`I have reviewed the video of the lecture that David Schwartz and I
`
`gave at Stanford University in February 1987 that was submitted by Apple. The
`
`video confirms my recollection as described herein that by far, the primary focus
`
`of CompuSonics was compression technology and storage technology, the two
`
`necessary and critical ingredients for making a consumer DSP-1000 a feasible
`
`product. The great majority of the lecture was devoted to the latest developments
`
`in removable storage technology, audio compression algorithms and
`
`methodologies, the single board audio computer that was the basis for the DSP-
`
`1000, the database and control program running on the PC, and the DSP-1000
`
`itself, which at the time used a removable cartridge optical disk drive. For
`
`example, the slide entitled “Consumer Applications” discusses that the
`
`functionality of the DSP-1000 permitted users to preserve their favorite recordings
`
`for archival purposes, record their own music, custom dubbing and home music
`
`editing. There was mention of the parallel port as a communications port on the
`
`-10-
`
`PAGE 00001 1
`
`

`

`back panel and a suggestion that CompuSonics would offer a converter for that
`
`port to accept data from compact disc output. However, this use of the parallel
`
`port, to my recollection, was never actually supported. Although connection to the
`
`AT&T Accunet using the parallel port is mentioned in the “Futurama City”
`
`context, there was no support for such functionality in the software of the DSP
`
`product. As mentioned above, while the DATI parallel port transmitter/receiver
`
`hardware or chip was populated on some earlier machines, it was never supported
`
`in software.
`
`26.
`
`I have reviewed the document marked as exhibit 1333 submitted by
`
`Apple, which is an image of a box that appears to be a DSP—1000 with a button that
`
`reads “telerecord.” I specifically recall that this box and the creation of this image
`
`were made for promotional purposes only. This box was a mock-up of what could
`
`have been a future product that was never created or produced. It’s possible that
`
`we used that box at some point as part of a prototype to demonstrate recording to a-
`
`floppy disk, however the button labeled “telerecord” did not work and was not
`
`actually connected to anything (it was merely a nonoperational button appearing on
`
`the box used in the image). An accurate image of the DSP—1000 as actually
`
`marketed and sold in late 1986 is attached hereto as exhibit 2322. This image was
`
`used in advertising and reflects the DSPlOOO as it actually existed. Consistent with
`
`my recollection, there is no “telerecord” button on this machine.
`
`I swear under penalty of perjury that the foregoing is true and correct.
`
`Signed this 20th day of December, 2013, at San Francisco, CA.
`
` JOHN P. STA TNER
`
`-11-
`
`PAGE 000012
`
`