Case: 12-1338CaQASE-HPEGIETICIBANJTSBOINBQI DWHI: 2E|Fi|ed3.e€@2I/20E2ed: 07/20/2012
`
`No. 2012-1338
`
`NON-CONFIDENTIAL
`
`UNITED STATES COURT OF APPEALS
`
`FOR THE FEDERAL CIRCUIT
`
`APPLE INC.,
`
`_ V. _
`
`INTERNATIONAL TRADE COMMISSION,
`
`and
`
`MOTOROLA MOBILITY, INC.,
`
`Appellant,
`
`Appellee,
`
`Intervenor.
`
`ON APPEAL FROM THE UNITED STATES INTERNATIONAL TRADE COMMISSION
`
`IN INVESTIGATION NO. 337 -TA-75O
`
`CORRECTED OPENING BRIEF AND ADDENDUM OF
`
`APPELLANT APPLE INC.
`
`Mark G. Davis
`
`E. Joshua Rosenkranz
`
`Weil, Gotshal & Manges LLP
`1300 Eye Street, N.W., Ste 900
`Washington, DC 20005
`
`Matthew D. Powers
`
`Tensegrity Law Group LLP
`201 Redwood Shores Pkwy, Ste 401
`Redwood Shores, CA 94065
`
`Alyssa Caridis
`Orrick, Herrington & Sutcliffe LLP
`51 West 52nd Street
`N Y k NY 10019
`ew or ’
`
`Mark S. Davies
`Rachel M. McKenzie
`T. Vann Pearce
`Amisha R. Patel
`
`Orrick, Herrington & Sutcliffe LLP
`1152 15th Street, NW.
`Washington, DC 20005
`
`Attorneys for Appellant Apple Inc.
`
`
`SIGHTSOUND TECHNOLOGIES
`EXHIBIT 2349
`
`CBM2013-00023 (APPLE v. SIGHTSOUND)
`PAGE 000001
`
`
`
`No. 2012-1338
`
`NON-CONFIDENTIAL
`
`UNITED STATES COURT OF APPEALS
`
`FOR THE FEDERAL CIRCUIT
`
`APPLE INC.,
`
`_ V. _
`
`INTERNATIONAL TRADE COMMISSION,
`
`and
`
`MOTOROLA MOBILITY, INC.,
`
`Appellant,
`
`Appellee,
`
`Intervenor.
`
`ON APPEAL FROM THE UNITED STATES INTERNATIONAL TRADE COMMISSION
`
`IN INVESTIGATION NO. 337 -TA-75O
`
`CORRECTED OPENING BRIEF AND ADDENDUM OF
`
`APPELLANT APPLE INC.
`
`Mark G. Davis
`
`E. Joshua Rosenkranz
`
`Weil, Gotshal & Manges LLP
`1300 Eye Street, N.W., Ste 900
`Washington, DC 20005
`
`Matthew D. Powers
`
`Tensegrity Law Group LLP
`201 Redwood Shores Pkwy, Ste 401
`Redwood Shores, CA 94065
`
`Alyssa Caridis
`Orrick, Herrington & Sutcliffe LLP
`51 West 52nd Street
`N Y k NY 10019
`ew or ’
`
`Mark S. Davies
`Rachel M. McKenzie
`T. Vann Pearce
`Amisha R. Patel
`
`Orrick, Herrington & Sutcliffe LLP
`1152 15th Street, NW.
`Washington, DC 20005
`
`Attorneys for Appellant Apple Inc.
`
`
`SIGHTSOUND TECHNOLOGIES
`EXHIBIT 2349
`
`CBM2013-00023 (APPLE v. SIGHTSOUND)
`PAGE 000001
`
`
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`Case: 12-1338CaQASE-EPERTICIBANJTSBWBQ' DWQ: 283iled3aw22/20Efled: 07/20/2012
`
`CERTIFICATE OF INTEREST
`
`Counsel for appellant certifies the following:
`
`1. We represent Apple Inc.
`
`2. That is the real name of the real party in interest.
`
`3. Apple Inc. has no parent corporation. No publicly held
`
`company owns 10 percent or more of Apple Inc’s stock.
`
`4. The following law firms and partners or associates appeared for
`
`Apple Inc. in the ITC or are expected to appear in this court:
`
`ORRICK, HERRINGTON SUTCLIFFE LLP:
`
`E. Joshua Rosenkranz
`
`Mark S. Davies
`
`Rachel M. McKenzie
`
`T. Vann Pearce
`
`Alyssa Caridis
`Amisha R. Patel
`
`WEIL GOTSHAL & MANGES LLP:
`
`Carrie M. Anderson
`
`Joshua A. Bachrach
`
`Eva A. Belich
`
`Jonathan Bloom
`
`Carmen E. Bremer
`
`Melissa Colon-Bosolet
`
`Caitlyn M. Campbell
`Anne M. Cappella
`Brian C. Chang
`Reed Collins
`
`Justin L. Constant
`
`PAGE 000002
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`
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`Case: 12-1338CaQASE-HPERTICIBANJTSBWBQ DWQ: 2E|Fi|ed?e€@23/20Efled: 07/20/2012
`
`WEIL GOTSHAL & MANGES LLP (continued):
`
`Isaac S. Crum
`
`Mark G. Davis
`
`Timothy E. DeMasi
`David M. DesRosier
`
`Michael Eisenberg
`Brian E. Ferguson
`Erick Flores
`
`Jacqueline T. Harlow (no longer with firm)
`Erin Jones (no longer with firm)
`Edward S. Jou
`
`Jason D. Kipnis
`Kevin Kudlac
`
`Jason J. Lang
`Kathy A. Le (no longer with firm)
`Joseph H. Lee (no longer with firm)
`Christopher T. Marando
`Meghan A. McCaffrey
`Arjun Mehra
`Rodney R. Miller
`Adrian C. Percer
`
`Penny R. Reid
`Danielle Rosenthal (no longer with firm)
`Stephen K. Shahida
`Caroline K. Simons
`
`Stefani Smith (no longer with firm)
`Christin Sullivan
`
`Rachelle H. Thompson
`Robert T. Vlasis
`
`Megan H. Wantland
`Robert Watkins (no longer with firm)
`Elizabeth S. Weiswasser
`
`Timothy C. Welch
`Jeff L. White
`
`Melissa J. Whitney
`Jenny C. Wu (no longer with firm)
`Patricia Young (no longer with firm)
`
`ii
`
`PAGE 000003
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`
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`Case: 12-1338CaQASE-HPERTICIBANJTSBWBQ' DWIZII: 2E|Fi|ed3.d@2Zl/20Efled: 07/20/2012
`
`COVINGTON & BURLING LLP:
`
`Christopher K. Eppich
`Samuel F. Ernst
`
`Robert D. Fram
`
`Jessica R. Gioia
`
`Danielle L. Goldstein
`
`Iris Y. Gonzalez
`
`Leslie N. Harvey
`Christine Saunders Haskett
`
`Robert T. Haslam
`
`Krista S. Jacobsen (no longer with firm)
`R. Anthony Lopez
`L.J. Chris Martiniak
`
`Jeffrey T. Pearlman
`Nathan Shafroth
`
`Anupam Sharma
`Ranganath Sudarshan
`Winslow B. Taub
`
`TENSEGRITY LAW GROUP LLP:
`
`Steven S. Cherensky
`Paul T. Ehrlich
`
`Monica Mucchetti Eno
`
`Robert L. Gerrity
`Azra Hadzimehmedovic
`
`Matthew D. Powers
`
`BRIDGES & MAVRAKAKIS LLP
`
`Lawrence Lien
`
`Christopherh Lubeck
`Michael T. Pieja
`James A. Shimota
`
`iii
`
`PAGE 000004
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`
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`Case: 12-1338CaQASE-HPERTICIBANJTSBWBQ' DWISE 2E|Fi|ed3.d@2B/20Efled: 07/20/2012
`
`Dated:
`
`July 20, 2012
`
`Respectfully submitted,
`
`/S/ E. Joshua Rosenkranz
`
`E. Joshua Rosenkranz
`
`Orrick, Herrington & Sutcliffe LLP
`51 West 52nd Street
`
`New York, NY 10019
`
`Attorney for Appellant
`
`iv
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`PAGE 000005
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`
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`Case: 12-1338CaQiASE-HPERTICIBANJTSBONBQ' DWIfit: 2E|Fi|ed3dw26l20fl§fle¢ 07/20/2012
`
`TABLE OF CONTENTS
`
`Page
`
`TABLE OF AUTHORITIES ................................................................... viii
`
`STATEMENT OF RELATED CASES ..................................................... Xi
`
`INTRODUCTION ...................................................................................... 1
`
`JURISDICTIONAL STATEMENT ........................................................... 3
`
`STATEMENT OF THE ISSUES ............................................................... 3
`
`STATEMENT OF THE CASE .................................................................. 4
`
`STATEMENT OF FACTS ......................................................................... 5
`
`Apple Makes It A Priority To Invent A Transparent Full
`Image Multi-Touch Sensor ............................................................... 5
`
`Apple’s Engineers Choose One Tentative Path Among Many
`Possible Options ............................................................................... 8
`
`Apple’s Engineers Refine The Design ............................................ 13
`
`Apple Files For A Patent On Its New Touchscreen ...................... 19
`
`The New Touchscreen Spurs The iPhone’s Spectacular
`Success ............................................................................................ 22
`
`Motorola Copies Apple’s Touchscreen After Unsuccessfully
`Trying To Develop Its Own ............................................................ 25
`
`The ITC Refuses To Bar Motorola’s Infringing Touchscreen
`Products .......................................................................................... 27
`
`SUMMARY OF THE ARGUMENT ........................................................ 30
`
`STANDARD OF REVIEW ....................................................................... 34
`
`PAGE 000006
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`
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`Case: 12-1338CaQaASE-EERTICIBANJTSBWBQI DWflt: 2E|Fi|ed3.d@27/20Efled: 07/20/2012
`
`ARGUMENT ........................................................................................... 35
`
`I.
`
`THE ITC ERRED IN HOLDING THAT APPLE’S
`
`TRANSPARENT FULL IMAGE MULTI-TOUCH SENSOR
`
`WAS OBVIOUS .............................................................................. 35
`
`A. Apple’s Transparent Full Image Multi-Touch Sensor
`Is Exactly The Type Of Innovation The Patent
`System Is Meant To Foster ..................................................... 36
`
`1.
`
`2.
`
`The prior art factors strongly support the
`conclusion that the ’607 patent was not obvious ............ 36
`
`Objective indications reinforce the conclusion the
`’607 patent was not obvious ............................................ 44
`
`B. The ITC’s Rationale For Finding Apple’s Touchscreen
`Obvious Was Legally Flawed .................................................. 48
`
`II.
`
`THE ALJ ERRED IN HOLDING THAT THE PERSKI
`
`PATENT ANTICIPATED APPLE’S TRANSPARENT FULL
`
`IMAGE MULTI-TOUCH SENSOR ............................................... 55
`
`A. Motorola Did Not Sustain Its Burden Of Proving That
`Perski’s Sensor Was Sufficiently Fast And Accurate
`For Full Image Multi-Touch .................................................... 56
`
`1. Motorola presented no evidence that Perski’s
`disclosed scanning algorithm can detect touches
`“at the same time as viewed by a user” .......................... 57
`
`2. Motorola presented no evidence that Perski’s
`disclosed method can accurately detect multiple
`touches ............................................................................. 63
`
`B. Perski Is Not Prior Art To The ’607 Patent ............................ 64
`
`III. THE COMMISSION BASED ITS FINDING THAT THE ’828
`
`PATENT WAS NOT INFRINGED ON THE ALJ’S
`
`INCORRECT CONSTRUCTION OF THE
`
`“MATHEMATI CALLY FITTING AN ELLIPSE” TERM IN
`
`THE ’828 PATENT ......................................................................... 67
`
`vi
`
`PAGE 000007
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`
`CONCLUSION ........................................................................................ 78
`
`ADDENDUM
`
`Notice Regarding Initial Determination on Violation of Section
`337 and Recommended Determination on Remedy and Bond,
`Dated Jan. 13, 2012 ......................................................................... A33-34
`
`Initial Determination on Violation of Section 337 and
`
`Recommended Determination on Remedy and Bond, Dated
`Jan. 13, 2012 (Excluding Attachments) ........................................ A35-497
`
`Notice of Commission Decision To Review in Part and on Review
`
`To Affirm a Final Determination Finding No Violation of Section
`337; Termination of Investigation, Dated Mar. 16, 2012 .......... A498-501
`
`Commission Opinion, Dated Mar. 28, 2012 ................................ A516-530
`
`Patent No. 7,663,607, Dated Feb. 16, 2010 ................................ A531-563
`
`Patent No. 7,812,828, Dated Oct. 12, 2010 ................................. A564—648
`
`Material has been deleted from pages 1, 6-14, 17-18, 25-27, 37-40, 45-
`46, 58-59, 61, and 7 7 -7 8 of the Non-Confidential Opening Brief of
`Appellant Apple Inc. This material is deemed confidential business
`information pursuant to 19 U.S.O. § 1337(n) and 19 O.F.R. § 210.5, and
`pursuant to the Protective Order entered November 30, 2010, and the
`Orders Amending the Protective Order entered January 14, 2011, and
`June 16, 201 1. The material omitted from these pages contains
`confidential deposition and hearing testimony, confidential business
`information, confidential patent application information, and
`confidential licensing information.
`
`vii
`
`PAGE 000008
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`
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`Case: 12-1338CaQASE-HPERTICIBANJTSBWBQ' DWQ: 2E|Fi|ed3.d@29/20Efled: 07/20/2012
`
`TABLE OF AUTHORITIES
`
`CASES
`
`Page(s)
`
`Ahamai Techs., Inc. 0. Cable & Wireless Internet Serbs, Inc.,
`
`344 F.3d 1186 (Fed. Cir. 2003) ........................................................... 46
`
`Alco Standard Corp. 0. Tennessee Valley Auth.,
`808 F.2d 1490 (Fed. Cir. 1986) ..................................................... 31, 44
`
`Allen Archery, Inc. v. Browning Mfg. Co.,
`819 F.2d 1087, 1092 (Fed. Cir. 1987) ................................................. 44
`
`Apple Inc. 0. Samsung Elecs. Co.,
`No. 11-cv-01846, 2012 WL 1123752 (N.D. Cal. Apr. 4, 2012) ............ 76
`
`Crocs, Inc. v. ITC,
`
`598 F.3d 1294 (Fed. Cir. 2010) ............................................... 34, 45, 53
`
`In re Cyclobenzaprine Hydrochloride Extended-Release Capsule
`Patent Litig., 676 F.3d 1063 (Fed. Cir. 2012) ............................... 51, 52
`
`Diamond Rubber Co. v. Consol. Rubber Tire Co.,
`
`220 US. 428 (1911) ..................................................................... passim
`
`In re Giacomini,
`
`612 F.3d 1380 (Fed Cir. 2010) ............................................................ 65
`
`Graham 0. John Deere Co.,
`
`383 US 1 (1966) ............................................................... 36, 46, 52, 54
`
`Hybritech Inc. v. Monoclonal Antibodies, Inc.,
`802 F.2d 1367 (Fed. Cir. 1986) ........................................................... 52
`
`Innovention Toys, LLC v. MGA Entm’t, Inc.,
`637 F.3d 1314 (Fed. Cir. 2011) ........................................................... 4O
`
`KSR Int’l Co. v. Teleflex, Inc.,
`550 US. 398 (2007) ..................................................................... passim
`
`Viii
`
`PAGE 000009
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`
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`Case: 12-1338CaQASE-HPERTICIBANJWBQ’ DWI-hem 28 FileRhng/ZI/20Efled: 07/20/2012
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`Mahurkar 0. CR. Bard, Inc.,
`
`79 F.3d 1572 (Fed. Cir. 1996) ............................................................. 65
`
`McGinley 0. Franklin Sports, Inc.,
`262 F.3d 1339 (Fed. Cir. 2001) ........................................................... 54
`
`Microsoft Corp. v. i4i Ltd. P’ship,
`131 S. Ct. 2238 (2011) ............................................................. 54, 56, 62
`
`Mintz v. Dietz & Watson, Inc.,
`
`679 F.3d 1372 (Fed. Cir. 2012) ................................................... passim
`
`Nippon Steel Corp. v. United States,
`458 F.3d 1345 (Fed. Cir. 2006) ........................................................... 34
`
`Ortho-McNeil Pharm., Inc. v. Mylan Labs, Inc.,
`520 F.3d 1358 (Fed. Cir. 2008) ........................................................... 52
`
`Power-One, Inc. v. Artesyn Techs, Inc.,
`599 F.3d 1342 (Fed. Cir. 2010) ........................................................... 44
`
`Radio Steel & Mfg. Co. v. MTD Prods, Inc.,
`731 F.2d 840 (Fed. Cir. 1984) ............................................................. 76
`
`In re Roemer,
`
`258 F.3d 1303 (Fed. Cir. 2001) ........................................................... 43
`
`Rolls-Royce, PLC 0. United Techs. Corp.,
`603 F.3d 1325 (Fed. Cir. 2010) ........................................................... 39
`
`Sinorgchem Co., Shandong v. ITC,
`511 F.3d 1132 (Fed. Cir. 2007) ........................................................... 74
`
`Sorenson v. ITC,
`
`427 F.3d 1375 (Fed. Cir. 2005) ........................................................... 34
`
`Trintec Indus, Inc. v. Top-U.S.A. Corp.,
`295 F.3d 1292 (Fed. Cir. 2002) ..................................................... 32, 56
`
`Vizio, Inc. v. ITC,
`
`605 F.3d 1330 (Fed. Cir. 2010) ........................................................... 34
`
`1X
`
`PAGE 000010
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`
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`Case: 12-1338CaQASE-EPERTICIBANJWBQ’ DWI-hem]. 28 FileRhng/ZI/20Efled: 07/20/2012
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`Zenon Envt’l, Inc. v. US. Filter Corp.,
`506 F.3d 1370 (Fed. Cir. 2007) ........................................................... 67
`
`CONSTITUTION AND STATUTES
`
`US. Const. art. 1, § 8, c1. 8 .................................................................. 2, 55
`
`19 U.S.C. § 1337 .................................................................................... 3, 4
`
`28 U.S.C. § 1295 ........................................................................................ 3
`
`35 U.S.C. § 102 ........................................................................................ 56
`
`35 U.S.C. § 103 ........................................................................................ 35
`
`REGULATIONS
`
`19 C.F.R. § 210.42 ................................................................................... 3O
`
`MISCELLANEOUS
`
`Apple Inc. Annual Report (Form 10-K) (Oct. 26, 2011),
`http://investor. apple.com/secffling.cfm?filingID= 1 193 125- 1 1-
`282113&CIK=320193 ................................................................... 24, 46
`
`Steve Jobs, CEO, Apple Inc., Address at the Macworld Conference
`and Expo (Jan. 9, 2007),
`http://WWW.iphonebuzz.com/complete-transcript-of—steve-jobs-
`macworld-conference-and-eXpo-january-9-2007-23447.php .............. 23
`
`Richard L. Robbins, Subtests of “Nonobviousness”: A Nontechnical
`Approach to Patent Validity,
`112 U. Pa. L. Rev. 1169 (1964) ........................................................... 46
`
`Lance Whitney, Apple Crowned Top Smartphone Vendor of 2011
`By Gartner, CNET, Feb. 15, 2012,
`http://news.cnet.com/8301- 13579_3-57378209-37/app1e-
`crowned-top-smartphone-vendor-of—20 1 1 -by-gartner/. ................ 24, 46
`
`PAGE 00001 1
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`STATEMENT OF RELATED CASES
`
`No other appeal from this International Trade Commission (“ITC”)
`
`proceeding was previously before the Court or any other appellate court.
`
`There are no cases that will directly affect or be directly affected
`
`by the Court’s decision in the pending appeal. Apple Inc. (“Apple”) filed
`
`a complaint with the ITC alleging (as relevant here) that Motorola
`
`Mobility, Inc. (“Motorola”) is infringing Apple’s patents including (as
`
`relevant here) US. Patent Nos. 7,633,607 and 7,812,828. A case
`
`pending between Apple and Samsung Electronics Co. originally
`
`involved the patents at issue here, but the claims involving both patents
`
`were dismissed without prejudice. Apple Inc. 0. Samsung Elecs. Co.,
`
`Case No. 11-CV-01846-LHR (N.D. Cal. filed Apr. 15, 2011). There are
`
`several other district court actions in which Apple has alleged that
`
`Motorola and other makers of electronic devices infringe different Apple
`
`patents.
`
`Xi
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`PAGE 000012
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`Case: 12-1338CaQASE-HPERTICIBANJWBQ’ DWI-hem 28 FileRhng/ZB/20Efled: 07/20/2012
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`Confidential
`
`Material Omitted
`
`INTRODUCTION
`
`Rarely has one product revolutionized an industry as Apple’s
`
`touchscreen has. Just five years after Apple released the iPhone, it is
`
`hard to remember a time when we did not routinely touch the screens of
`
`our cell phones, tablets, and other portable electronic devices with our
`
`fingers. We did not tap to select “apps”; flick our index finger through
`
`articles, books, photographs, and music; or pinch our fingers together or
`
`apart to zoom in and out of pictures, maps, and text. We commanded
`
`our devices with keypads, track balls, or styluses.
`
`One reason it is hard to remember that world is that virtually
`
`every major device manufacturer has mimicked Apple’s patented
`
`touchscreen. This case is about one such copycat. Motorola tried to
`
`develop a useful touchscreen of its own, but failed. When Apple routed
`
`Motorola in the marketplace,—
`
`— and copied Apple’s hardware and software.
`
`After Motorola initiated a patent attack against Apple in the fall
`
`of 2010, including in the ITC, Apple brought this action. Without a hint
`
`of irony, Motorola defended on the ground that this revolutionary
`
`technology—which the once-prolific innovator could not figure out for
`
`PAGE 000013
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`Case: 12-1338CaQASE-HPERTICIBANJWBQ’ DWI-hem 28 FileRhng/ZZl/20Efled: 07/20/2012
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`itself—was obvious and anticipated. The ITC agreed and invalidated
`
`one of Apple’s core patents. It gutted another patent by construing a
`
`critical claim limitation in a nonsensical way that neither party had
`
`proposed.
`
`Those rulings are wrong—and detrimental to future innovation.
`
`Apple is “unique” among its competitors because “it designs and
`
`develops nearly the entire solution for its products, including the
`
`hardware, operating system, numerous software applications, and
`
`related services.” A14,162. The development of both hardware and
`
`software is eXpensive. Apple “must make significant investments in
`
`research and development” and has protected its investments by
`
`obtaining “a significant number of patents.” Id. Here, Apple’s
`
`investments resulted in a patent on a “transparent” touch sensor that
`
`can “detect multiple touches or near touches that occur at a same time
`
`and at distinct locations.” A561, col. 21:34-41. Apple has invested in
`
`innovation eXpecting that the patent system “promote [s]
`
`Progress,”
`
`US Const. art. 1, § 8, cl. 8, by rewarding innovation. When an agency
`
`invalidates or guts patents as path breaking as these, it discourages
`
`further investment and restrains Progress.
`
`PAGE 000014
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`Case: l2-1338CaQaASE-HPERTICIBANJTI‘360NBQ’ DWI-Beat") 28 FileRhng/ZB/20Efled: 07/20/2012
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`JURISDICTIONAL STATEMENT
`
`Apple invoked the ITC’s authority under Section 337 of the Tariff
`
`Act of 1930, as amended. A737. See 19 U.S.C §§ 1337(a)(1)(B)(1), (b)(1).
`
`On March 28, 2012, the ITC issued its final determination finding no
`
`violation of Section 337 . A529. Apple timely filed its petition for review
`
`on April 12, 2012. See 19 U.S.C. § 1337(c); 28 U.S.C. § 1295(a)(6).
`
`STATEMENT OF THE ISSUES
`
`Apple’s skilled engineers created the first touchscreen that could
`
`accurately and quickly sense and interpret multiple touches on a
`
`transparent screen. That touchscreen spurred the spectacular success
`
`of a revolutionary electronic device, the iPhone. The questions
`
`presented are:
`
`1. Did the ITC err in declaring the patented touchscreen obvious,
`
`where (i) Apple alone recognized the problem with existing user
`
`interfaces and thus Apple alone saw a reason to combine technologies to
`
`create a new user interface; (ii) Apple’s engineers had to overcome
`
`significant technical problems to make the touchscreen work; (iii) the
`
`touchscreen was largely responsible for the praise, copying, and
`
`PAGE 000015
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`Case: 12-1338CaQASE-HPERTICIBANJTSEWBQ’ DWI-hem?) 28 FileRhng/ZB/20Efled: 07/20/2012
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`commercial success of the iPhone; and (iv) the Patent and Trademark
`
`Office granted Apple a patent fully aware of the cited prior art?
`
`2. Did the ITC err in finding that another prior art reference
`
`anticipated Apple’s new touchscreen where the reference (i) teaches
`
`only a touchscreen that senses “a single touch[]” by “either a finger or a
`
`special stylus”; (ii) operates differently; and (iii) does not predate
`
`Apple’s invention?
`
`3. Did the ITC err in superimposing on the claim term
`
`“mathematically fitting an ellipse” in another Apple patent the
`
`anachronistic requirement that the software “actually” fit an ellipse
`
`before ellipse parameters are calculated even though that was contrary
`
`to both the parties’ proposed claim constructions and the patents
`
`preferred embodiment?
`
`STATEMENT OF THE CASE
`
`On October 29, 2010, Apple filed a complaint with the ITC under
`
`19 U.S.C. § 1337, alleging that Motorola’s products infringed three
`
`Apple patents. Two—US. Patent Nos. 7,633,607 and 7,812,828—are at
`
`issue in this appeal.
`
`(Apple does not seek review on the third patent,
`
`which will expire in August 2013.) The ITC initiated an investigation.
`
`PAGE 000016
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`
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`Case: 12-1338CaQASE-EPERTICIBANJWBQ' Dmmr 28 FileRhng/27/20Efled: 07/20/2012
`
`On January 13, 2012, Administrative Law Judge (“ALJ”)
`
`Theodore Essex issued an initial determination finding that Motorola
`
`did not violate Section 337. Apple petitioned the ITC for review.
`
`Motorola filed a contingent petition. The ITC granted review in part on
`
`March 16, 2012, and affirmed the finding of no violation on March 28,
`
`2012.
`
`STATEMENT OF FACTS
`
`Apple Makes It A Priority To Invent A Transparent Full Image
`Multi—Touch Sensor
`
`Before the iPhone, no one was touching transparent screens on
`
`handheld devices in the fashion we routinely do now. There were
`
`transparent touchscreens that could detect a single touch in a specific
`
`spot—like an ATM that beeps in confused protest when you accidentally
`
`touch two places at once. A6657. There were also transparent screens
`
`that could sometimes detect more than one touch—depending upon
`
`exactly where on the screen they were—but not always and not reliably.
`
`A551, col. 223-9, 16-22; A7164, 7382. In industry parlance, these were
`
`not “full image” touchscreens. Engineers had figured out ways to
`
`provide full image multi-touch capability only on opaque surfaces.
`
`PAGE 000017
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`
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`Case: 12-1338CaQASE-HPERTICIBANJWBQ’ DWI-hem 28 FileRhng/ZE/20Efled: 07/20/2012
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`Thus, for example, they could embed the requisite sensors in the now-
`
`familiar laptop trackpad:
`
`Confidential
`
`Material Omitted
`
`
`
`Opaque Tu Huh—Pad
`{cannot Have 1CD Display Under In uch Pad]
`
`A671 1. But no one had invented a transparent, full image touchscreen
`
`that accurately detected and responded to multiple touches at once,
`
`regardless of where the screen is touched, in a way that has now become
`
`standard.
`
`In the summer of 2003, Steve Jobs, then CEO of Apple, aspired to
`
`devise a touchscreen unlike any other. Jobs had long focused on how
`
`users interact with electronic devices. He had led Apple to develop the
`
`Mac with its metaphorical desktop and user-friendly mouse. Then came
`
`the iPod with a click wheel. He imagined an encore performance even
`
`more revolutionary than what came before.—
`
`PAGE 000018
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`
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`Case: 12-1338CaQASE-HPERTICIBANJWBQ’ DWI-hem 28 FileRhng/29/20Efled: 07/20/2012
`
`Confidential
`
`Material Omitted
`
`— A15,431; see
`
`A30,258-59.
`
`So, at Jobs’s direction, Apple set out to achieve what no one else
`
`had ever done. Al5,43l; see A30,233-35. Running the touchscreen
`
`effort was Steve Hotelling,—
`
`— A
`
`15,43l, A7 379-80. Hotelling knew it was a head-scratcher—-
`
`— _
`
`1415.431.—
`
`——
`
`Id. (emphasis added).
`
`But the challenge energized him, because—
`
`——
`
`Id. (emphasis
`
`added); see A30,257-58.
`
`The team was not lacking in experience or expertise. A named
`
`inventor of more than 50 patents, A30, 144, Hotelling was a Stanford-
`
`trained electrical engineer, A7379. By the time he joined Apple in 2002,
`
`he had spent a decade inventing solutions for input devices. A7379,
`
`PAGE 000019
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`
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`Case: 12-1338CaQASE-HPERTICIBANJTSEONBQ’ DWI-hem 28 FileRhng/ZI/20Efled: 07/20/2012
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`Confidential
`
`Material Omitted
`
`13,719, 30,216-17. Hotelling hired Josh Stricken, who had three
`
`degrees (including a PhD.) from the Massachusetts Institute of
`
`Technology. Al5,557. His master’s thesis project at MIT was a
`
`multipoint touchscreen using a fiber optic touch pad. Id.
`
`Apple’s Engineers Choose One Tentative Path Among Many
`Possible Options
`
`For all its intellectual firepower and experience, the team did not
`
`hit upon a solution quickly or directly. It got there through inspired
`
`guesswork, parallel research tracks, a few false starts, and healthy
`
`doses of ingenuity.
`
`As if to illustrate the numerous challenges for posterity, early in
`
`the life of the project,—
`
`PAGE 000020
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`
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`Case: 12-1338CaQASE-HPERTICIBANJTSEONBQ’ DWI-hem]. 28 FileRhng/ZI/20Efled: 07/20/2012
`
`Confidential
`
`Material Omitted
`
`— Id. Capacitance is an object’s
`
`ability to store electricity. Capacitance sensing is based on the simple
`
`fact that when a finger approaches a charged object, it sucks electrons
`
`from the object. A555, col. 9:23-26. The stolen electrons cause a tiny
`
`reduction in the object’s capacitance. A555, col. 9:26-31; A30,230. The
`
`typical way to measure this change was with a tiny voltmeter. A555,
`
`col. 9:31-36; see A31,728-29.
`
`Step two was to figure out what to make the sensor out of.
`
`Hotelling chose indium tin oxide, or “ITO.” A7643, 15,431. ITO has the
`
`advantage of being relatively transparent when painted in a thin layer
`
`over a surface, A30,262-63, but it is not completely transparent, which
`
`presented some problems. It also conducts electricity, but unfortunately
`
`very poorly, which presented other problems.
`
`Step three was how to deal with the transparency problems—
`
`specifically, how to enable a display to shine through a layer of ITO
`
`without illuminating a distracting pattern of sensors and circuits etched
`
`across the face of the screen.—
`
`PAGE 000021
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`
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`Case: 12-1338CaQASE-HPERTICIBANJWBQ’ DWI-hem 28 FileRhng/ZZ/20Efled: 07/20/2012
`
`Confidential
`
`Material Omitted
`
`— A15,431. -
`
`— Id.
`
`
`
`PAGE 000022
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`
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`Case: 12-1338CaQASE-HPERTICIBANJWBQ’ DWI-hem 28 FileRhng/ZB/20Efled: 07/20/2012
`
`Confidential
`
`Material Omitted
`
`— A7644. By “pixel array,” Hotelling was referring to rows
`
`and columns of individual sensors. Id.; 30,266-67. The ITO (or other
`
`conductive medium) is painted onto the screen and etched into a
`
`checkerboard pattern. Each tiny square is an individual sensor
`
`separated from the others by tiny channels. A30,233; see A553, col.
`
`5:29-34. It is therefore called “self-capacitance.” A533, col. 5:29-34. In
`
`order for each box in the checkerboard to act as an individual sensor, it
`
`was necessary to run a lead from each box to a capacitive sensing
`
`circuit. The circuitry for each box had to be crammed in the channels
`
`running between the checkerboard rows and columns. _
`
`11
`
`PAGE 000023
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`
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`Case: 12-1338CaQASE-HPERTICIBANJWBQ’ DWI-hem 28 FileRhng/ZZl/20Efled: 07/20/2012
`
`Confidential
`
`Material Omitted
`
`
`
`A7644.
`
`Ingenious. But, as with any experimental technology, the solution
`
`raised more problems. One problem,—
`
`12
`
`PAGE 000024
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`
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`Case: 12-1338CaQASE-HPERTICIBANJWBQ’ DWI-139% 28 FileRhng/ZB/20Efled: 07/20/2012
`
`A7643; see A542, fig. 7 (depicting an illustrative pattern). -
`
`Confidential
`
`Material Omitted
`
`— A13,878. -
`
`— A7643-
`
`Apple’s Engineers Refine The Design
`
`Not satisfied that the particular capacitance design that Hotelling
`
`sketched was perfect, the Apple team examined all sorts of multi-touch
`
`demonstrations on opaque surfaces in the hopes of learning something
`
`about how best to apply the technology to transparent surfaces.
`
`A13,877, 15,422-23, 16,145. They also—
`
`— 1413,878-
`
`One of the most fruitful contacts was with a company named
`
`FingerWorks. A7 402-03, 13,874. One of FingerWorks’ most intriguing
`
`inventions was a way of detecting the size, shape, and relative position
`
`of each touch. Earlier methods of processing touch data could not
`
`distinguish between a finger tap and a pinch or finger and a palm.
`
`A13,263. But FingerWorks figured out a way that could distinguish
`
`13
`
`PAGE 000025
`
`
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`Case: 12-1338CaQASE-EPERTICIBANJTSEWBQ’ DWI-hem?) 28 FileRhng/ZB/20Efled: 07/20/2012
`
`among many types of hand touches and gestures. A618-19, col. 6:66-
`
`Material Omitted
`
`7:46; A7339-400, 30,041-45, 30,357-59. The solution was software that
`
`mathematically converted each cluster of touched electrodes into
`
`parameters defining an ellipse. A7 399-402. By 2003, The New York
`
`Times, Time, and Wired had all praised the software in FingerWorks’
`
`multitouch keyboards. A7408-09, 7485-87.
`
`FingerWorks’ devices were opaque. Unlike small trackpads on
`
`laptops, FingerWorks had developed capacitive touch sensors on large
`
`opaque multi-touch surfaces that replaced keyboards and mice. A7 399-
`
`400, 7402-03, 30,338-39. FingerWorks had never layered a capacitive
`
`sensor over a transparent screen. A15,515-16, 30,251. _
`
`— A15,516. But they agreed to collaborate
`
`with Apple to give it a try. Eventually, Apple acquired FingerWorks.
`
`A7418. With it, Apple also acquired a groundbreaking patent—the ’828
`
`patent—covering FingerWorks’ ellipse-fitting multi-touch process.
`
`A7420, 7452; see A565 (assignee).
`
`The Apple team also drew lessons from an approach that Sony
`
`Computer Science Laboratories developed. Sony described its approach
`
`14
`
`PAGE 000026
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`
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`Case: 12-1338CaQASE-HPERTICIBANJWBQ' DWI-hem? 28 FileRhng/27/20Efled: 07/20/2012
`
`in an article entitled, SmartS/ein: An Infrastructure for Freehand
`
`Manipulation on Interactive Surfaces. A13,597-604. SmartSkin
`
`involves a “grid” of “copper wires” running vertically and horizontally.
`
`A13,598. Each “crossing point” in the grid “acts as a (very weak)
`
`capacitor.” Id. When a “conductive and grounded object”—e.g., a
`
`finger—“approaches a crossing point,” it sucks electrons away from the
`
`grid. Id. “As a result, the received signal” becomes “weak” and by
`
`“measuring this effect, it is possible to detect proximity of a conductive
`
`object.” Id. Because the change in capacitance is measured by
`
`comparing a horizontal wire to a vertical one, A30,032, this design is
`
`called “mutual capacitance,” as distinguished from “self capacitance.”
`
`A555, col. 9:52-62.
`
`Like conventional input devices, the SmartSkin sensor was
`
`opaque; that was the only way to hide the copper wires. Sony’s
`
`engineers were not focused on transparent touchscreens. Their agenda
`
`was to “extend[] [the] computerized workspace beyond the computer
`
`screen” by “turn[ing] real-world surfaces, such as tabletops or walls, into
`
`interactive surfaces.” A13,597 (emphasis added). They would project
`
`images onto those surfaces (and onto the user’s hand) as depicted below.
`
`15
`
`PAGE 000027
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`
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`Case: 12-1338CaQASE-HPERTICIBANJWBQ’ DWI-hem 28 FileRiang/ZE/20Efled: 07/20/2012
`
`
`
`Figure 14: A palm is used to trigger a curresnunding ac—
`tiun {opening menu items}. The user than taps on [me of
`these menu items.
`
`A13,601.
`
`In a section entitled “Conclusions and Directions for Future
`
`Work,” the SmartSkin article provides a few sentences on four “research
`
`directions” that the authors were “interested” in maybe some day
`
`exploring. A13,603. For example, they dreamed of inventing “‘pet’
`
`robots” that “would behave more naturally when interacting with
`
`humans” and devices that could “infer the user’s emotions.” Id. The
`
`final possible direction was the “ [u]se of transparent electrodes.” Id.
`
`None of these suggestions for future work included any detail about
`
`how to make the sensor. Nearly 10 years after SmartSkin was
`
`published, Sony’s engineers never created a transparent sensor and, so
`
`far as appears from the record, they never even tried. It remained in
`
`16
`
`PAGE 000028
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`
`
`Case: 12-1338CaQASE-HPERTICIBANJWBQ’ DWI-33W 28 FileRhng/29/20Efled: 07/20/2012
`
`the dusty folder of ideas abandoned as impractical or pointless, along
`
`with the empathetic robotic Fido.
`
`Confidential
`
`Material Omitted
`
`A16,145 (emphasis added).— A30,271-
`
`73.
`
`As intriguing as the SmartSkin approach was, the Apple team did
`
`not drop everything to pursue it.—
`
`A14,335-—
`
`——— -
`
`Id.
`
`Translating the SmartSkin approach to a transparent screen
`
`presented numerous quandaries. The main problems arose from the
`
`huge difference in conductivity between the copper wires that
`
`SmartSkin used and the transparent ITO in Apple’s adaptation.
`
`17
`
`PAGE 000029
`
`
`
`Case: 12-1338CaQASE-HPERTICIBANJWBQ’ DWI-13930 28 FileRhng/BI/20Efled: 07/20/2012
`
`Copper “has a very high conductivity” (or low resistance). A31,7 82.
`
`Material Omitted
`
`Even with the very conductive copper wire, the capacitance signal that
`
`the SmartSkin grid generates is “very weak,” A13,598, and
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