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` 1
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` 1 IN THE UNITED STATES DISTRICT COURT
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` 2 FOR THE EASTERN DISTRICT OF TEXAS
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` 3 MARSHALL DIVISION
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` 4 AMERANTH, INC. )(
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` 5 )( CIVIL DOCKET NO.
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` 6 )( 2:10-CV-294-JRG-RSP
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` 7 VS. )( MARSHALL, TEXAS
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` 8 )(
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` 9 PAR TECHNOLOGY CORP., )( MAY 30, 2012
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` 10 ET AL. )( 1:30 P.M.
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` 11 CLAIM CONSTRUCTION HEARING
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` 12 BEFORE THE HONORABLE JUDGE ROY S. PAYNE
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` 13 UNITED STATES MAGISTRATE JUDGE
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` 14
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` 15 APPEARANCES:
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` 16
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` 17 FOR THE PLAINTIFF: (See attached sign-in sheet.)
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` 18
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` 19 FOR THE DEFENDANTS: (See attached sign-in sheet.)
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` 20
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` 21 COURT REPORTER: MS. SHELLY HOLMES, CSR
` Deputy Official Court Reporter
` 22 2593 Myrtle Road
` Diana, Texas 75640
` 23 (903) 663-5082
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` 24
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` 25 (Proceedings recorded by mechanical stenography,
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` transcript produced on a CAT system.)
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` 1 I N D E X
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` 3 May 30, 2012
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` 5 Appearances 1
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` 6 Hearing 3
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` 7 Court Reporter's Certificate 106
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` 1 LAW CLERK: All rise.
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` 2 THE COURT: Good afternoon. Please be
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` 3 seated.
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` 4 For the record, we are here for the Markman
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` 5 hearing in Ameranth, which is Case No. 2:10-294.
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` 6 Would counsel introduce themselves for the
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` 7 record?
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` 8 MR. PHILLIPS: Yes, Your Honor, Larry
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` 9 Phillips on behalf of plaintiff, Ameranth, and I'm here,
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` 10 Your Honor, on behalf of my partner, Michael Smith, who
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` 11 was out of town, and wanted to introduce John Osborne
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` 12 with the Osborne Law Firm who will be speaking today on
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` 13 behalf of the plaintiff. And Mike Fabiano is also here
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` 14 today. He will not be speaking. And we also have our
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` 15 client, Keith McNally, who is president and lead
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` 16 inventor with Ameranth.
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` 17 THE COURT: All right. Thank you.
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` 18 MR. JONES: Your Honor, Mike Jones on behalf
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` 19 of Par Technology and Partech, Inc., and here today with
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` 20 me representing those two defendants is Mr. Blake
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` 21 Bettinger -- Blaine Bettinger, excuse me -- and
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` 22 Mr. Frederick Price and Mr. George McGuire who will be
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` 23 making the presentation, Your Honor, and we're ready to
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` 24 proceed.
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` 25 THE COURT: All right. Thank you.
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` 1 I have typically found it most helpful to
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` 2 proceed on a claim-by-claim basis so that we get both
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` 3 sides making their presentation on the same claim.
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` 4 Do counsel have any preference regarding
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` 5 whether you -- it's all right with me if you proceed
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` 6 from your desk -- from the table there if that works
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` 7 better for you, as long as you're by a mic, or if you
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` 8 need the technology up here, you can just take turns at
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` 9 the lectern. Any preference one way or the other?
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` 10 MR. OSBORNE: I think probably the lectern
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` 11 for me, Your Honor.
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` 12 THE COURT: All right.
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` 13 MR. McGUIRE: Yes, Your Honor, we'll go to
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` 14 the lectern, as well.
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` 15 THE COURT: All right. Good. Well, then
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` 16 you may proceed.
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` 17 MR. OSBORNE: Your Honor, so we'll be
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` 18 proceeding on a term -- disputed term-by-term basis as
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` 19 you indicated.
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` 20 THE COURT: And if I said claim-by-claim, I
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` 21 meant term-by-term, but --
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` 22 MR. OSBORNE: I -- we know what you meant.
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` 23 We think the same way.
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` 24 I wonder if the -- if the Court might be
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` 25 interested in a short background preliminary before I
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` 1 get to the first --
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` 2 THE COURT: That's --
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` 3 MR. OSBORNE: -- term?
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` 4 THE COURT: That's fine.
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` 5 MR. OSBORNE: Okay. If we could go to Slide
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` 6 2.
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` 7 As -- as the background, as I was saying,
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` 8 this is the second Markman proceeding in this Court
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` 9 involving claims from the same patent family. The first
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` 10 was by Judge Everingham in 2010, as you saw in our
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` 11 briefing.
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` 12 What you did not see in our briefing was
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` 13 that a third Markman will be upcoming in this Court on a
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` 14 newly-issued patent that was issued in March of this
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` 15 year. The case is 2:12-164. It was filed shortly
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` 16 after the patent issued. We'll be serving that
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` 17 complaint, and -- and it's already assigned to -- to
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` 18 Your Honor, so there will be a hope for consistency
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` 19 between the three constructions.
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` 20 THE COURT: That's always helpful.
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` 21 MR. OSBORNE: So we just wanted to make you
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` 22 aware of that because in addition to a consistency
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` 23 because the Markmans already exist, there's another one
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` 24 on the way.
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` 25 THE COURT: All right. Thank you.
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` 1 MR. OSBORNE: On Slide 3, we just have small
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` 2 snippets of the cover pages of the two patents on the
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` 3 left that are presently asserted. Another patent in the
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` 4 Ameranth patent family that is not asserted is the third
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` 5 one over, the '733 patent, and then the new patent, the
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` 6 '077, is the one upcoming in the third case, the second
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` 7 case against the Par defendants.
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` 8 The '850 and '325 patents are the ones
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` 9 presently asserted in this case. All of these claims in
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` 10 all of the patents share terminology and Ameranth
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` 11 believes should be construed consistently where there --
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` 12 there is an overlap, and there's an overlap in overall
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` 13 perspective of the patents that infuses all the claims.
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` 14 Going to the next slide, 4.
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` 15 Judge Everingham recognized in his Markman
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` 16 order two years ago that there were two aspects to the
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` 17 patents. One was display on different kinds of devices
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` 18 for clients, and the second aspect was consistency
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` 19 between centrally maintained information and information
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` 20 presented on different kinds of -- of devices for our
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` 21 clients.
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` 22 The quote that we put up there is from Judge
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` 23 Everingham's Markman from two years ago in which he
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` 24 indicated that, first, there was the aspect of being
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` 25 automatically adapted to display properly on various
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` 7
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` 1 devices, and, second, synchronization between a central
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` 2 database and multiple handheld devices.
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` 3 And note here that Judge Everingham did not
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` 4 equate synchronization to real-time communication since
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` 5 he didn't include it in his construction -- he didn't
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` 6 include real-time in his construction.
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` 7 Next slide.
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` 8 The asserted claims are directed to -- let
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` 9 me back up and say eight claims are being asserted in
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` 10 this case. All of those claims are directed to a client
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` 11 server system for synchronizing hospitality information
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` 12 for consist display across these various claimed
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` 13 elements in an internet-enabled system.
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` 14 THE COURT: Mr. Osborne, were you involved
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` 15 in the -- the Menusoft cases?
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` 16 MR. OSBORNE: Yes, I was.
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` 17 THE COURT: Was real-time urged to Judge
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` 18 Everingham as a part of a --
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` 19 MR. OSBORNE: Yes, it was.
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` 20 THE COURT: -- construction?
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` 21 MR. OSBORNE: Yes, it was, by me. We were
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` 22 wrong.
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` 23 THE COURT: Okay. And that was in
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` 24 connection in synchronous or what -- what --
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` 25 MR. OSBORNE: Synchronous communications in
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` 8
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` 1 the preamble, and synchronous communications in the
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` 2 preamble is disputed terminology that Mr. McGuire of Par
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` 3 asserts does have a real-time aspect.
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` 4 THE COURT: Okay.
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` 5 MR. OSBORNE: So in addition to this first
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` 6 bullet point, this also provides the capability for
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` 7 synchronization between or with other hospitality and/or
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` 8 third-party applications.
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` 9 These claims encompass hospitality
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` 10 applications, such as online mobile ordering,
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` 11 reservations, frequency programs, wait lists, ticketing,
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` 12 payment processing. These are all referred to in the
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` 13 specification. And they all, in the spirit of the
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` 14 patents, require a synchronized user interface across
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` 15 different computing components or elements of this
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` 16 overall synchronized client server system.
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` 17 It's important to realize that this
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` 18 invention was conceived over 13 years ago, in 1998, when
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` 19 the internet wasn't what it is today and when wireless
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` 20 communications were not what they are today.
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` 21 Capabilities and deployment were just not where they are
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` 22 today. But these patents from way back, going on 15
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` 23 years now, or 14 years, are a virtual blueprint for all
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` 24 modern internet-enabled hospitality systems.
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` 25 Next slide, please. Next. 7.
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` 1 On Slide 7, we have a graphic which
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` 2 illustrates the issue that the inventors were facing in
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` 3 1998 in that there were all kinds of different potential
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` 4 display mechanisms, but they all had to be configured
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` 5 differently. The displays had to be configured
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` 6 differently mainly because of size of display. The
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` 7 overriding objective of the patents was to provide
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` 8 consistent user interfaces on these different types of
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` 9 displays.
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` 10 For example, in the menu or ordering
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` 11 embodiment, the smaller the output display, the more
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` 12 screens are required to display the same information.
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` 13 And you can see this from top to bottom. To get the
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` 14 same menu information displayed with a -- a layer of
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` 15 cascades of menus to go from entrees to particular
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` 16 things that could be entrees to modifiers and those kind
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` 17 of things, not terms that are subject to these claims,
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` 18 but a menu application is one type of hospitality
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` 19 application. And this -- this is the -- this is the
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` 20 battle they were fighting when they were -- when they
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` 21 were doing the menu application, which is the
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` 22 application that's most spoken of in the specification.
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` 23 And the point being that synchronizing the
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` 24 user interfaces means presenting the same information to
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` 25 each user no matter the size of their screen.
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` 1 Can we go to Slide 8?
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` 2 You can see three examples of handheld
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` 3 screens for menu application. These all happen to be
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` 4 screens of licensees of the patents, Menusoft being one
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` 5 that was the adverse party to Ameranth in the prior
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` 6 claim construction in the prior case. These are all
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` 7 handheld screens of point of sale software licensees of
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` 8 the patentees, as I said.
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` 9 The corresponding standard, POS -- and when
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` 10 I say POS, I mean point of sale -- corresponding
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` 11 standard POS display of a menu would show the same
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` 12 information, but would need fewer screens to do so. You
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` 13 can see that aspect, for instance, on the right side of
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` 14 the Menusoft handheld screen. You see the next button,
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` 15 third up from the bottom, all the way on the right, that
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` 16 means if you hit that button, it'll show you some more
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` 17 things that are available to select at that level of the
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` 18 menu.
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` 19 You might not see a next button in that same
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` 20 place if you had a laptop screen or a full desktop
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` 21 screen. So to maintain con -- maintain consistency
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` 22 between what you're seeing on the handheld and what
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` 23 you're seeing on a bigger screen, you had to parse it
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` 24 out, you had to divide it up for the smaller screen.
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` 25 That's what the patents were directed to in regards to
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` 1 the menu application.
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` 2 Next.
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` 3 On this slide, we see the client server
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` 4 nature of the invention. We have a central database,
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` 5 central computer, central server that communicates out
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` 6 through the internet to provide different types of users
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` 7 on different types of devices the same information
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` 8 that's maintained back at this central database server.
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` 9 This client server system provides a mechanism which
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` 10 results in the same information presented to any one of
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` 11 these users, no matter the kind of device.
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` 12 The current information needed by a user
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` 13 will be provided by the central server, and the
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` 14 particular application software will present it on the
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` 15 device screen appropriate for that screen, but it's
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` 16 still going to match what any other user on any other
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` 17 device would have seen.
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` 18 No. 10.
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` 19 The parties agree on a number of things.
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` 20 They agree that the -- the preamble is a limitation and
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` 21 is integral to the construction of the claims as a
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` 22 whole, as it was in Judge Everingham's construction.
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` 23 The parties agree the -- the invention is client
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` 24 server-based. That's consistent with Judge Everingham's
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` 25 construction. And the web is a client server system, as
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` 1 stated in the patents and known to a person of skill in
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` 2 the art. And these -- these particular claims that are
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` 3 being asserted in this case are claims directed to
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` 4 internet web communication.
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` 5 The parties agree on the construction of
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` 6 central database, stored, and wireless handheld
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` 7 computing device. And there was no dispute about web
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` 8 server. It doesn't need any construction. And note
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` 9 also that both sides' proposals for web page, which is a
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` 10 disputed term -- web page is disputed -- but the
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` 11 parties' constructions -- their proposals include
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` 12 viewability by a user in a web browser, and that's a
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` 13 user interface.
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` 14 Next slide.
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` 15 Claim 12 of the '850 patent covers most of
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` 16 the claim construction disputes. There are some
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` 17 dependent claims that have disputed aspects. Some of
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` 18 those relate back to what's claimed in -- I mean, some
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` 19 of the disputes relate back to what's claimed -- what's
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` 20 disputed in the -- Claim 12. So Claim 12 is just the
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` 21 focus. It's not all encompassing, but it is the focus
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` 22 of -- of this claim construction.
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` 23 Next.
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` 24 Ameranth asserts that this claim and the
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` 25 other asserted claims are clear and unambiguous when
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` 1 interpreted in light of the intrinsic record. Our
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` 2 constructions are based on the intrinsic evidence.
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` 3 Every one of our proposed constructions come directly
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` 4 from the specification, and Ameranth's constructions are
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` 5 consistent with Judge Everingham's previous
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` 6 constructions of the same terms in other claims.
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` 7 Next.
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` 8 Just pointing out, some of the issues we
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` 9 have with Par's proposals, we believe they're untenable
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` 10 for a number of reasons, including, for example, that
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` 11 their -- their proposals are unsupported for two
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` 12 hospitality applications on each wireless handheld
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` 13 computing device and/or web page.
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` 14 They argue that "S," quote, unquote,
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` 15 requires a plural construction without properly
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` 16 considering the overall intrinsic context. We think the
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` 17 intrinsic context illustrates that "S" doesn't mandate
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` 18 plurality here and, in fact, mandates one or more, any
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` 19 number.
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` 20 THE COURT: Mr. Osborne, it would be most
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` 21 helpful to me to take up these issues where they appear
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` 22 in the terms.
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` 23 MR. OSBORNE: Okay.
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` 24 THE COURT: So if we -- it would be helpful
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` 25 to me if we can go to the --
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` 1 MR. OSBORNE: Understood, Your Honor.
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` 2 THE COURT: -- first term. And you can
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` 3 refer back to these when --
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` 4 MR. OSBORNE: Okay. Well, with that, why
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` 5 don't I just go directly to the -- the disputes about
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` 6 the preamble?
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` 7 THE COURT: All right.
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` 8 MR. OSBORNE: On Slide 17.
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` 9 Here are -- we just have a slide up here
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` 10 that shows the claim language, our proposed
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` 11 construction, their proposed construction. And I've
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` 12 highlighted the issues in their claim construction that
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` 13 we have issues with.
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` 14 Next, please.
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` 15 THE COURT: It -- one thing is, I know
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` 16 we're -- we're talking about a preamble here, and I --
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` 17 you mentioned that there's some agreement that it's a
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` 18 limitation, and --
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` 19 MR. OSBORNE: Yes.
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` 20 THE COURT: -- and in your terms integral.
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` 21 What -- what elements within the claim does the -- does
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` 22 the preamble provide the antecedent basis for? What --
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` 23 why -- why do you take the position that it's integral
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` 24 for --
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` 25 MR. OSBORNE: Well --
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` 1 THE COURT: -- construction of these terms?
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` 2 MR. OSBORNE: -- synchronous is a form of
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` 3 synchronized, but it's not exactly the same thing. But
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` 4 this whole clause, information management and
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` 5 synchron -- synchronous communications system for use
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` 6 with wireless handheld computing devices and the
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` 7 internet, that explains what's being done here.
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` 8 It's a system that's configured specifically
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` 9 to make use by a handheld computing device over the
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` 10 internet useable. And, for instance, for use with is --
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` 11 are three words that we highlight in our construction of
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` 12 hospitality applications. We believe that indicates
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` 13 that the hos -- hospitality applications are -- are to
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` 14 be used with something that has a user interface.
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` 15 Mr. McGuire may point to different issues
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` 16 indicate -- that -- that militate it in his mind why he
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` 17 thought the -- the preamble should be a limitation, but
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` 18 those are mine, not an exhaustive list, but important
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` 19 ones.
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` 20 THE COURT: All right.
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` 21 MR. OSBORNE: Slide 18, please.
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` 22 Ameranth believes that its construction is
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` 23 completely consistent with Judge Everingham's prior
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` 24 construction of analogous or near exact language in
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` 25 other claims of the same patents. Ameranth's proposal
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` 1 modifies this prior construction only slightly and only
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` 2 insofar as use with wireless handheld computing devices
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` 3 and the internet is explicitly recited in these asserted
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` 4 claims in lieu of menu which was recited in the claims
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` 5 that were asserted and construed in the prior case.
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` 6 So you take out -- take out "for use with
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` 7 wireless handheld computing devices and the internet"
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` 8 and put in "menu," and it was specifically "menu
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` 9 generation and transmission," and that's the difference
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` 10 in the preamble between the two cases.
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` 11 Par's construction is confusing. It would
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` 12 require a construction within a construction and
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` 13 includes unrecited and unrequired limitations, which we
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` 14 highlight in the prior chart.
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` 15 Par's construction relies heavily on what we
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` 16 believe are misplaced dictionary definitions of
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` 17 synchronous and communications, which were rejected by
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` 18 Judge Everingham. And they also ignore a definition on
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` 19 the same page that doesn't align -- that does align with
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` 20 the prior construction and is consistent with the
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` 21 specification.
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` 22 Specifically, Par ignored a definition in
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` 23 the Microsoft Computer Dictionary. They cited overall
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` 24 as intrinsic evidence, pertinent to handheld device
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` 25 synchronization, even though it relied on the very same
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` 1 dictionary for other things. And this is explained
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` 2 fully in the -- Ameranth's reply brief.
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` 3 Next.
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` 4 The patents describe the recited synchronous
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` 5 communication system as directed to maintenance of
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` 6 operational consistency, of user interfaces provided by
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` 7 hospitality application software. This first quote
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` 8 we've excerpted on this page shows the focus was on
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` 9 applications with specialized display and synchronous
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` 10 communications requirements on nonstandard screens --
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` 11 devices.
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` 12 Synchronous communication in the patents is
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` 13 about providing consistency throughout the system. It's
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` 14 not about clocks and timing signals. Par's reliance on
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` 15 extrinsic evidence related to clocks and timing sig --
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` 16 signals is thus not applicable. And I'll point out that
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` 17 in the prior claim construction when Judge Everingham
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` 18 disagreed with us on the synchronous communications
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` 19 definition, we argued then that clocks and timing
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` 20 signals weren't pertinent. Our proposal for real-time
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` 21 then was based on the particular claims being asserted
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` 22 and the reality of most modern systems there, but we
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` 23 never relied on any clocks or timing signals as -- as
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` 24 Par is now.
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` 25 Next.
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` 1 So a principal dispute in the construction
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` 2 of the preamble is over real-time. We put forth simply
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` 3 that a preferred embodiment cannot be read into a claim.
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` 4 Plenty of cases, Function Media from this district, hold
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` 5 that. I don't have to explain that to the Court. And
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` 6 undisputedly the specification disclose -- disclosure
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` 7 includes both real-time and nonreal-time communication,
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` 8 as we see in the next slide.
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` 9 THE COURT: How do you -- how do you deal
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` 10 with the argument that was raised in the briefs about
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` 11 the Cupps patent where your inventor used the term,
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` 12 "i.e., real-time synchronization of data" in
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` 13 differentiating that?
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` 14 MR. OSBORNE: There's several different
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` 15 points there. One is that statement was not made in
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` 16 distinguishing Cupps as not having a real-time aspect.
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` 17 Cupps wasn't even connected in the system. It did facts
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` 18 or telephone-type communication. So that was a
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` 19 statement made that was not necessary to get that
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` 20 allowance over Cupps.
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` 21 And, further, there was a statement just
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` 22 down the page on the page that Mr. McGuire cited which
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` 23 said that the inventors were not making any statements
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` 24 with respect to Cupps that should be -- that should
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` 25 affect any disclaimer. They disagreed with what the
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