`
`UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF CALIFORNIA
`SAN JOSE DIVISION
`
`LIFESCAN SCOTLAND, LTD.,
`PLAINTIFF,
`
`VS.
`SHASTA TECHNOLOGIES, LLC., ET
`AL.,
`
`DEFENDANTS.
`
`CASE NO. CV-11-4494-EJD
`SAN JOSE, CALIFORNIA
`FEBRUARY 21, 2013
`PAGES 1 - 108
`
`FOR THE PLAINTIFF:
`
`TRANSCRIPT OF PROCEEDINGS
`BEFORE THE HONORABLE EDWARD J. DAVILA
`UNITED STATES DISTRICT JUDGE
`A-P-P-E-A-R-A-N-C-E-S
`PATTERSON, BELKNAP, WEBB & TYLER
`BY:
`GREGORY DISKANT
`EUGENE M. GELERNTER
`JACK FIGURA
`1133 AVENUE OF THE AMERICAS
`NEW YORK, NEW YORK 10036
`
`FOR THE DEFENDANTS:
`
`LATHROP & GAGE
`BY:
`JOHN SHAEFFER
`WILLIAM A. RUDY
`1888 CENTURY PARK EAST
`SUITE 1000
`LOS ANGELES, CALIFORNIA 90067
`ROPERS, MAJESKI, KOHN & BENTLEY
`BY: ROBERT P. ANDRIS
`1001 MARSHALL STREET
`SUITE 300
`REDWOOD CITY, CALIFORNIA 94063
`OFFICIAL COURT REPORTER:
`IRENE L. RODRIGUEZ, CSR, CRR
`CERTIFICATE NUMBER 8074
`PROCEEDINGS RECORDED BY MECHANICAL STENOGRAPHY,
`TRANSCRIPT PRODUCED WITH COMPUTER.
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`LIFESCAN SCOTLAND LTD. EXHIBIT 2004
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`2
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`SAN JOSE, CALIFORNIA
`
`FEBRUARY 21, 2013
`
`P R O C E E D I N G S
`(COURT CONVENED.)
`THE CLERK: CALLING CASE NUMBER 11-4494, LIFESCAN
`SCOTLAND LIMITED VERSUS SHASTA TECHNOLOGIES.
`ON FOR A PRELIMINARY INJUNCTION AND CASE MANAGEMENT
`CONFERENCE.
`THE COURT: COUNSEL, WHY DON'T YOU COME FORWARD AND
`STATE YOUR APPEARANCES IF YOU WOULD, PLEASE.
`MR. DISKANT: SURE. I'M GREGORY DISKANT FROM
`PATTERSON, BELKNAP, WEBB AND TYLER REPRESENTING LIFESCAN.
`THE COURT: THANK YOU. GOOD AFTERNOON.
`MR. DISKANT: GOOD AFTERNOON. MY PARTNER I THINK
`YOU HAVE MET.
`THE COURT: YES. IT'S NICE TO SEE YOU AGAIN.
`MR. SHAEFFER: GOOD AFTERNOON, YOUR HONOR. I'M JOHN
`SHAEFFER WITH LATHROP & GAGE FOR CONDUCTIVE TECHNOLOGIES -- I'M
`SORRY -- NOT CONDUCTIVE TECHNOLOGIES. HE'S CONDUCTIVE
`TECHNOLOGIES.
`MR. ANDRIS: GOOD AFTERNOON, YOUR HONOR. ROB ANDRIS
`HERE ON BEHALF OF SHASTA AND CONDUCTIVE TECHNOLOGIES.
`THE COURT: THANK YOU. GOOD AFTERNOON.
`MR. RUDY: GOOD AFTERNOON, YOUR HONOR. WILLIAM RUDY
`HERE FOR PHARMATECH SOLUTIONS.
`THE COURT: THANK YOU. GOOD AFTERNOON.
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`3
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`ALL RIGHT. AND WE ARE HERE FOR PLAINTIFF'S MOTION FOR
`PRELIMINARY INJUNCTION. AND YOU HAVE YOUR TECHNOLOGY ARRANGED
`AND IT'S READY TO GO THEN?
`MR. DISKANT: WE'RE GOOD TO GO.
`THE COURT: ALL RIGHT. TERRIFIC. WHAT I THOUGHT I
`WOULD DO THIS AFTERNOON WITH THE LIMITED TIME WE HAVE AVAILABLE
`TO US IS TO TRY TO CAPTURE AND USE THE TIME WE HAVE AS
`EFFICIENTLY AS POSSIBLE.
`FIRST OF ALL, LET ME INDICATE THAT I HAVE READ YOUR
`PLEADINGS AND I HAVE THE REPLY AND THE DEFENDANTS' OPPOSITION
`AND THE REPLY AND LIFESCAN'S REPLY, OF COURSE, AS WELL AS THE
`PLAINTIFF'S OPENING BRIEFS.
`THERE WERE SOME OBJECTIONS FILED AND I THINK I LOOKED AT
`THAT, AND THANK YOU FOR BRINGING THOSE TO MY ATTENTION. I'M
`NOT GOING TO RULE ON THOSE NOW. I THINK I HAVE -- AT LEAST YOU
`HAVE BEEN PRETTY GENEROUS IN PROVIDING ME THE UNIVERSE OF
`INFORMATION AND PERHAPS MANY UNIVERSES OF INFORMATION FOR THIS
`CASE.
`I SHOULD TELL YOU AT THE OUTSET -- AND THANK YOU AGAIN FOR
`THE PLEADINGS. THEY WERE VERY HELPFUL.
`I WANT TO TELL YOU AND IN RELATIONS TO DECIDING WHETHER OR
`NOT TO GRANT THE MOTION FOR PRELIMINARY INJUNCTION, I REALLY
`FOCUSSED ON, AND I INVITE YOU FOR PURPOSES OF TIMING, I'M GOING
`TO INVITE COUNSEL TO SPEND SOME TIME ON THE LIKELIHOOD OF
`SUCCESS ON THE MERITS. I THINK THAT ISSUE IS SOMETHING THAT I
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`4
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`WOULD REALLY LIKE YOU TO FOCUS YOUR COMMENTS ON AS WE GO
`FORWARD.
`BUT I KNOW IT'S THE PLAINTIFF'S BURDEN. DID YOU HAVE A
`PRESENTATION THAT YOU WANTED TO MAKE INITIALLY? IS THAT --
`MR. DISKANT: YOUR HONOR, I PREPARED A PRESENTATION,
`BUT I'M, FRANKLY, MORE INTERESTED IN ADDRESSING EVERYTHING YOUR
`HONOR IS INTERESTED IN. SO CERTAINLY LIKELIHOOD OF SUCCESS ON
`THE MERITS IS A SIGNIFICANT PART OF THAT PRESENTATION.
`THE COURT: WELL, I THOUGHT IT WOULD BE, RIGHT. AND
`I'M SURE YOUR COLLEAGUES OPPOSITE HAVE SOME RESPONSES TO THAT
`AS WELL.
`WHAT I THOUGHT WE WOULD DO THIS AFTERNOON IS TO PERHAPS
`MOVE IN, PERHAPS, 30 MINUTE INCREMENTS AND, OF COURSE, THE
`PLAINTIFFS COULD GO FIRST AND YOU CAN PRESENT WHAT YOU FEEL YOU
`CAN AND KNOWING NOW WHAT YOU KNOW I'M INTERESTED IN AND PRESENT
`FOR 30 MINUTES AND THEN I'M HAPPY TO HEAR FROM THE DEFENSE ANY
`RESPONSE.
`WE'LL PROBABLY TAKE A COUPLE OF RECESSES JUST TO ALLOW US
`TO CLEAR OUR THOUGHTS A LITTLE BIT AND GIVE THE PARTIES AN
`OPPORTUNITY TO TAKE A BREAK, AND THEN WE'LL COME BACK.
`AND I MAY HAVE ADDITIONAL QUESTIONS OR I MIGHT ASK TO HAVE
`SOME ADDITIONAL PRESENTATIONS.
`LET ME ASK THIS, DOES THE DEFENSE HAVE ANY AUDIO-VISUAL
`PRESENTATION THAT YOU'RE GOING TO PRESENT?
`MR. SHAEFFER: YES, WE DO. AND IT WOULD BE
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`5
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`RESPONSIVE TO THEIRS. SO WE CAN PICK AND CHOOSE WHAT WE WANT
`WHEN WE WANT IT.
`THE COURT: GREAT. WHY DON'T WE DO THAT. SO LET'S
`BEGIN WITH YOUR 30 MINUTES NOW THEN.
`MR. DISKANT: YOUR HONOR, WE HAVE SOME SLIDES THAT
`I'LL HAND UP A COPY TO THE COURT, AND I HAVE ONE FOR YOUR
`CLERKS TO SHARE.
`THE COURT: ALL RIGHT.
`MR. DISKANT: I'M SORRY.
`THE COURT: THAT'S OKAY.
`MR. DISKANT: AND LET ME START BY THANKING THE COURT
`FOR HEARING US ON THIS EXPEDITED BASIS.
`THIS IS A VERY IMPORTANT MOTION FOR MY CLIENT, AND I KNOW
`YOUR HONOR MOVED US WAY UP ON THE CALENDAR SO WE COULD BE HEARD
`PROMPTLY, AND WE ARE VERY GRATEFUL BECAUSE THIS IS A VERY, VERY
`IMPORTANT MOTION FOR LIFESCAN AND ITS BUSINESS AND ITS FUTURE.
`THE COURT: YOU'RE WELCOME. I'M SORRY WE CAN ONLY
`FIND THIS LIMITED TIME FOR YOU IN OUR SCHEDULE, BUT I'M HOPEFUL
`THAT I THINK BOTH SIDES WILL BE ABLE TO PRESENT SUFFICIENT
`INFORMATION SO THAT I CAN MAKE A REASONED AND WELL INFORMED
`DECISION ON THIS.
`LET ME ALSO ASK -- PARDON ME. I THINK THERE ARE THREE
`OTHER MOTIONS THAT ARE PENDING. AND I'VE LOOKED AT THOSE, AND
`I SHOULD TELL YOU I'M PROBABLY GOING TO RULE ON THOSE ALSO.
`AND I DON'T THINK I NEED THE BENEFIT OF ANY ADDITIONAL
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`6
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`ARGUMENTS OR ANY ADDITIONAL PLEADING. YOU'RE CONSISTENT IN
`YOUR WONDERFUL PLEADINGS, AND SO I THINK I'M GOING TO GIVE YOU
`RULINGS ON ALL OF THIS AT ONE TIME, I JUST WANT TO LET YOU KNOW
`THAT.
`
`MR. DISKANT: THAT'S FINE FROM OUR POINT OF VIEW AND
`I KNOW MY WIFE WOULD BE HAPPY TO HEAR I DON'T HAVE TO COME BACK
`FOR ANOTHER ARGUMENT. THANK YOU, YOUR HONOR.
`LET ME START AND TRY AND USE THIS HALF HOUR JUST TO TRY TO
`ZERO RIGHT IN ON THE MERITS.
`CAN YOU MOVE TO SLIDE 12.
`AND WHAT I WANT TO DO IS TO BASICALLY TELL YOU ABOUT THE
`INVENTION, WHY IT'S NOVEL, WHY IT'S IMPORTANT, WHY THEY
`INFRINGE IT, AND WHY THEY'RE UNLIKELY TO PROVE THAT THE
`INVENTION IS INVALID.
`SO LET ME JUST SORT OF START RIGHT THERE. AND I CAN START
`WITH THE BASIC SUBJECT MATTER, WHICH ARE DISPOSABLE TEST
`STRIPS. AND THIS IS SOMETHING THAT HAS COME ALONG MOSTLY IN
`THE LAST 20 YEARS OR SO. AND IT'S A GREAT LIFE SAVING BENEFIT
`TO PATIENTS WITH DIABETES AROUND THE WORLD.
`AND THE CONSTRUCTS THAT SORT OF LIMIT DESIGN CHOICES AND
`DRIVE DESIGN CHOICES WITH DISPOSABLE TEST STRIPS ARE THAT THEY
`HAVE TO BE CHEAP BECAUSE THEY USE LOTS OF THEM; AND SO THEY
`HAVE TO BE MANUFACTURED AT A HIGH RATE AND INEXPENSIVELY; THEY
`HAVE TO BE DISPOSABLE. YOU WANT TO THROW THEM AWAY AFTER ONE
`USE. THERE ARE REUSABLE SENSORS, AND THAT'S A WHOLE OTHER KIND
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`OF SCIENCE, BUT THESE ARE ONE-TIME ONLY DESIGNS; AND YOU HAVE
`TO WORK WITH A LIMITED AMOUNT OF BLOOD BECAUSE THE DIABETIC IS
`UNFORTUNATELY PRICKING THEMSELVES SOMETIMES MANY TIMES A DAY
`AND YOU WANT TO WORK WITHIN A SMALL FRAME OF REFERENCE AS YOU
`CAN.
`
`NOW, ALL OF THESE DEVICES, YOU KNOW, WORK WITH
`ELECTRICITY. AND I HAVE JUST SHOWN UP ON THE SCREEN THERE'S A
`REFERENCE SENSOR AND WORKING SENSOR. AND YOU CAN HAVE A
`VARIETY OF COMBINATIONS, AND THERE ARE A VARIETY OF SHAPES.
`BUT BASICALLY IT'S LIKE THE TWO ENDS OF YOUR GROUND AND YOUR
`LIVE WIRE AND IT'S COMPARING ELECTRICITY.
`THE BLOOD HAS GLUCOSE IN IT. AND THE GLUCOSE GOES THROUGH
`A CHEMICAL REACTION IN THE TEST STRIP AND THE CHEMICAL REACTION
`GENERATES ELECTRONS, ELECTRICITY, AND IT GETS MEASURED AT AN
`EXTREMELY HIGH LEVEL. AND I'M NOT SURE I COULD DO MUCH MORE
`THAN THAT ANYWAY.
`THE COURT: THE HARDWARE STORE DEFINITION OF WHAT
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`THIS DOES.
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`MR. DISKANT: RIGHT. SO ANYWAY -- BUT THESE ISSUES
`THEN DEFINE THE PROBLEMS THAT SCIENTISTS WORK WITH WHEN THEY'RE
`DESIGNING THESE STRIPS.
`SO NOW I WANT TO TALK ABOUT WHAT PEOPLE HAVE DONE BEFORE
`THE '105 PATENT. AND THIS REALLY CUTS TO THE CHASE. YOU KNOW,
`WHY IS IT THAT THIS IS A NOVEL INVENTION? WHAT IS IT THAT IT
`HAS DONE THAT IS NEAT? THAT IS CLEVER? THAT IS INVENTIVE?
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`AND HERE ARE THREE PROBLEMS THAT THE TEST STRIP ART DEALT
`WITH, AND THEY WERE ALL SOLVED BEFORE THE '105 PATENT AND IN
`ENTIRELY DIFFERENT WAYS THAN THE '105 PATENT.
`AND THE '105 PATENT SAW WHAT WAS WRONG WITH THESE PRIOR
`SOLUTIONS WHEN NO ONE ELSE SAW THE PROBLEM. PEOPLE SAID, OH,
`LOOK, WE SOLVED THE PROBLEM, WE'RE DONE.
`SO THE FIRST PROBLEM IS INSUFFICIENT BLOOD. AND WHAT THAT
`MEANS IS THAT YOU SAW THE WORKING SENSOR. IT HAS TO BE COVERED
`WITH BLOOD. IF IT'S NOT FULLY COVERED WITH BLOOD, YOU'RE GOING
`TO GET A WRONG READING. SO IT'S VERY IMPORTANT THAT THE SENSOR
`BE COVERED WITH BLOOD.
`SO HOW DO YOU KNOW THAT THE SENSOR IS COVERED WITH BLOOD?
`AND THE PRIOR ART HAD A SOLUTION. AND THE SOLUTION WAS A
`TRIGGER.
`AND ESSENTIALLY THE BLOOD WOULD ENTER THE TEST STRIP AND
`BASICALLY IT FLOWS BY CAPILLARY ACTION THROUGH THE TEST STRIP
`AND IT ENTERS THE TEST STRIP, AND IT FLOWS DOWN OVER THE
`SENSORS AND IN THE PRIOR ART IT HIT A TRIGGER. AND THE TRIGGER
`SAID, OH, THE BLOOD HAS GOTTEN THIS FAR, IT MUST BE COVERING
`THE SENSORS.
`AND THERE ARE A LOT OF IDEAS LIKE THIS. AND NOW WE'RE
`LOOKING INSIDE OF THE '105 PATENT. AND IT'S SAYING INACCURATE
`RESULTS CAN BE OBTAINED IF THE WORKING SENSOR IS NOT FULLY
`COVERED WITH BLOOD.
`AND IT'S TALKING ABOUT PRIOR ART SOLUTIONS OF INITIATING
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`THE TEST MEASUREMENT BY DETECTING THE PRESENCE OF THE SAMPLE
`LIQUID TO TRIGGER, WHICH I'LL ILLUSTRATE LIKE THAT
`(INDICATING).
`BLOOD FLOWS OVER THE REFERENCE SENSOR, THE WORKING SENSOR
`AND HITS THE TRIGGER AND THE THING GOES, OKAY, WE'RE GOOD TO
`GO.
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`WITH THE WINARTA PATENT, WHICH IS ONE OF THE TWO
`REFERENCES THAT THEY SPEND MOST OF THEIR EFFORT TALKING ABOUT,
`IS A CLASSIC EXAMPLE OF THE PRIOR ART SOLUTION OF THE TRIGGER.
`HERE IS WINARTA. YOU HAVE A REFERENCE ELECTRODE, A
`WORKING ELECTRODE, A PSEUDO-WORKING ELECTRODE.
`THE COURT: THIS IS SLIDE 17 FOR THE RECORD?
`MR. DISKANT: THIS IS SLIDE 17. WOULD YOU LIKE ME
`TO NAME EACH ONE?
`THE COURT: THAT MIGHT BE HELPFUL.
`MR. DISKANT: I'LL CERTAINLY DO THAT, JUDGE.
`THIS IS SLIDE 17. AND THE PSEUDO-WORKING ELECTRODE IS NOT
`MEASURING BLOOD. IT'S JUST ACTING AS A TRIGGER. IT'S LIKE THE
`PSEUDO, IT'S NOT DOING THE MEASUREMENT.
`"THE PSEUDO-WORKING ELECTRODE, W-O, IS POSITIONED SO THAT
`THE SAMPLE FLUID REACHES IT LAST. THE RESULTING CURRENT AT W-O
`THUS TRIGGERS THE READING METER TO START THE MEASUREMENT."
`SO THAT WAS THE SOLUTION LIKE THAT. AND THE PRIOR ART
`CONSIDERED THIS PROBLEM SOLVED, DONE.
`NOW, OUR INVENTORS OF THE '105 PATENT REALIZED THERE WERE
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`TWO PROBLEMS WITH THE TRIGGER AND NOWHERE IN THE PRIOR ART,
`THEY HAVE NOT POINTED TO ANYONE WHO HAS IDENTIFIED THESE
`PROBLEMS WITH THE TRIGGER. OUR INVENTORS SAW IT WAS NOT A GOOD
`ENOUGH SOLUTION FOR TWO REASONS:
`FIRST, THE FACT THAT THE BLOOD GOT TO THE TRIGGER DID NOT
`MEAN THAT THE SENSOR WAS ACTUALLY COVERED WITH BLOOD. IT MIGHT
`BE, BUT IT MIGHT NOT BE.
`THE COURT: SO THE FLOW COULD BE DISRUPTED IN SOME
`
`MANNER?
`
`MR. DISKANT: OR IT COULD BE AS IN THIS ILLUSTRATION
`FLOWING IN A STRANGE PATTERN.
`SO IT'S NOT A GUARANTY THAT THE BLOOD THAT HAS COVERED
`THIS ELECTRODE, IT'S JUST PASSING BY, HITS THE TRIGGER, TAKES
`THE MEASUREMENT, BUT YOU GET THE WRONG ANSWER.
`AND THE OTHER IS THAT IT'S WASTING BLOOD. THE BLOOD HAS
`TO GET TO THE TRIGGER. THE TRIGGER IS NOT DOING ANYTHING
`EXCEPT SAYING, OH, THE BLOOD IS HERE. SO YOU'RE NOT MEASURING
`THAT BLOOD. SO THESE ARE TWO PROBLEMS WITH THE -- THAT PRIOR
`ART SOLUTION.
`THAT'S SLIDE 18. I'M SORRY.
`SLIDE 19, MANUFACTURING DEFECTS. AND, AGAIN, THE PRIOR
`ART BASICALLY THOUGHT QUALITY CONTROL IS ALL YOU NEED. THAT'S
`ALL YOU CAN DO. IT'S DIFFERENT THAN A REUSABLE SENSOR.
`IF YOU HAVE A REUSABLE SENSOR WHICH EXISTS IN OTHER
`DEVICES, YOU CAN TEST IT AT THE FACTORY AND MAKE SURE IT'S
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`WORKING AND SHIP IT OUT.
`YOU BUY A BATTERY. THE BATTERY HAS BEEN TESTED SO YOU
`KNOW IT WORKS. THESE ARE DISPOSABLE, ONE TIME ONLY. YOU CAN'T
`TEST THEM.
`SO THE ONLY SOLUTION IN THE PRIOR ART, AND THIS IS SLIDE
`20, OCCASIONAL DEFECTS IN PRODUCTION WE'RE TALKING ABOUT. AND
`THE ONLY PRACTICAL WAY IS TO RELY ON QUALITY CONTROL.
`AND, AGAIN, THEY HAVE PRODUCED NOTHING IN THE PRIOR ART
`THAT SAYS THAT PROBLEM HAS NOT BEEN SOLVED WITH QUALITY CONTROL
`AND THAT'S IT.
`PROBLEM 3, ACCURACY. OBVIOUSLY YOU WANT THE MOST ACCURATE
`READING YOU CAN HAVE. AND THE PRIOR ART SAID THE ANSWER WAS
`AVERAGING.
`AND NANKAI, WHICH ARE THE TWO REFERENCES THEY RELY ON VERY
`HEAVILY, NANKAI IS THE OTHER ONE. AND NANKAI IS AN AVERAGING
`PATENT.
`WE'RE NOW LOOKING AT SLIDE 22. 41, 42, AND 43 ARE THE
`WORKING ELECTRODES. AND THERE ARE THREE THAT ARE GOING TO BE
`AVERAGE.
`AND NANKAI SAYS, OH, YOU GET GREATER ACCURACY BY HAVING A
`PLURALITY OF ELECTRODE SYSTEMS THAN GETTING A MEAN OR AN
`AVERAGE.
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`THE COURT: AND IN THAT SLIDE THE BLOOD WOULD BE
`INTRODUCED AT CLAIM 3, 21, 22?
`MR. DISKANT: NO, NO. THOSE PLUG INTO THE METER.
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`THIS IS A TRUNCATED SLIDE. LATER IN THE PRESENTATION I'LL
`ACTUALLY SHOW YOU HOW THE BLOOD FLOWS.
`THE COURT: OKAY.
`MR. DISKANT: BUT BASICALLY IMAGINE IT FLOWING FROM
`THE TOP OF THE SCREEN, DOWN OVER 41, 42, AND 43 AND HITTING 5,
`THE REFERENCE.
`THE COURT: I SEE.
`MR. DISKANT: AND THIS WAS A SOLUTION TO A SLIGHTLY
`DIFFERENT PROBLEM. THE SOLUTION IN NANKAI AND THE ART WERE
`FOCUSSING ON THE FACT THAT WHEN YOU'RE MAKING THESE DISPOSABLE
`TEST STRIPS THROUGH HIGH VOLUME MANUFACTURING, IT WAS HARD TO
`GET THEM ALL EXACTLY THE SAME. SO YOU GET VARIATIONS IN THE
`MEASUREMENTS CAUSED BY NORMAL MANUFACTURING PROCESSES OF
`DISPOSABLE TEST STRIPS.
`AND ITS SOLUTION WAS, OH, WE'LL AVERAGE. AND THAT'S A
`PERFECTLY GOOD SOLUTION, BUT IT DOESN'T PERCEIVE THAT THERE'S
`ANOTHER PROBLEM.
`AND THE PROBLEM, AND HERE OUR PATENT NOW WE'RE IN THE '105
`IN SLIDE 23, OUR PATENT RECOGNIZES IT'S, YOU KNOW, PREFERABLY A
`COMBINATION, IT'S SUM OR MEAN AND THAT'S BECAUSE YOU'LL DO
`OTHER PROCESSES.
`BUT EITHER WAY COLLECTING THE DATA FROM TWO ELECTRODES IS
`BETTER THAN ONE, BUT THIS DATA IS VERY INTERESTING AND THERE'S
`A LOT OF IT IN THE PATENT.
`AND WHAT THE INVENTORS DID WAS THEY CONTROLLED THE
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`EXPERIMENT WHERE THEY HAD A TEST STRIP WITH TWO SENSORS AND
`THEY TOOK MEASUREMENTS. AND WHAT THEY FOUND IS THAT, AND I'LL
`GET TO OUR INVENTION IN A MOMENT, BUT IF ALL YOU DO IS TAKE
`MEASUREMENTS AND AVERAGE THEM, IF YOU HAVE PROBLEMS OF
`MANUFACTURING DEFECTS OR IF YOU HAVE PROBLEMS OF INSUFFICIENT
`BLOOD ON THE ELECTRODE, YOU'RE GOING TO GET THE WRONG ANSWER.
`AN AVERAGE IS GOING TO MAKE IT WORSE.
`AND WHAT I'M SHOWING HERE IF YOU FOLLOW THIS, THERE ARE
`EIGHT SAMPLES. THEY ARE ALL EXACTLY THE SAME. ONE MILLILITER
`OF BLOOD -- MICROLITER OF BLOOD, SORRY, AND THE NUMBERS THAT
`ARE IN THE WORKING 1 AND WORKING 2 COLUMN, THEY SHOULD ALL BE
`EXACTLY THE SAME BECAUSE YOU HAVE A CONTROLLED AMOUNT OF
`GLUCOSE IN THESE EXPERIMENTS, THEY SHOULD ALL BE ABOUT 7.
`AND WHAT YOU SEE IS SOMETIMES THEY ARE, AND SOMETIMES THEY
`AREN'T, ESPECIALLY IN WORKING ELECTRODE NUMBER 2, THE ONE THAT
`IS DOWNSTREAM.
`SO FOR THE FIRST ONE IT'S ZERO AND THE THIRD ONE IT'S
`ZERO. EITHER THAT'S COMPLETELY DEFECTIVE OR THE BLOOD JUST
`NEVER GOT THERE.
`BUT THEN IN THE SECOND AND THE BOTTOM TWO IT'S 6, IT'S 5
`AND A HALF, IT'S 3 AND A HALF. IT'S JUST WRONG.
`WHY IS IT WRONG? PROBABLY BECAUSE THERE'S INSUFFICIENT
`BLOOD ON THE SENSOR, BUT AVERAGING THE RIGHT NUMBER 7 AND THE
`WRONG NUMBER 3 AND A HALF DOESN'T GET A BETTER ANSWER.
`AND SO THE PROBLEM WITH AVERAGING IS THAT IT DIDN'T
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`14
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`RECOGNIZE THE PROBLEM OF AN INSUFFICIENT BLOOD COVERING THE
`ELECTRODE.
`AND SO THOSE ARE THE THREE PROBLEMS, AND THE INVENTORS
`CAME UP WITH SOMETHING NOVEL. THEY CAME UP -- AND NOW IT'S
`SLIDE 27. THEY CAME UP WITH AN INNOVATIVE WAY OF USING A
`CLEVERLY DESIGNED TEST STRIP TO SOLVE ALL THREE OF THOSE
`PROBLEMS.
`AND ESSENTIALLY WHAT THEY HAVE, THEY HAVE TWO WORKING
`SENSORS, THEY'RE THE SAME SIZE, THEY GENERATE THE SAME AMOUNT
`OF CURRENT IF EVERYTHING IS WORKING PROPERLY.
`AND BEFORE YOU DO ANYTHING ELSE, YOU COMPARE THEIR
`NUMBERS. AND THEY SHOULD BE ABOUT THE SAME BECAUSE THEY'RE THE
`SAME SIZE.
`AND IF THEY'RE BOTH COVERED WITH THE SAME AMOUNT OF BLOOD,
`THEY'RE BOTH COVERED, WELL, THEN YOU SHOULD GET THE SAME
`READING.
`AND YOU DON'T KNOW WHAT IT'S GOING TO BE BECAUSE THIS
`PATIENT IS A NEW PATIENT AND YOU DON'T KNOW HOW MUCH GLUCOSE IS
`IN THEIR BLOOD BUT YOU KNOW IT'S GOING TO BE THE SAME IN TWO
`SAMPLES.
`AND SO IT COMPARES THE TWO AND IT SAYS, OH, THEY'RE ABOUT
`THE SAME AND THEN WE'LL GO FORWARD. BUT IF THEY'RE NOT ABOUT
`THE SAME EITHER BECAUSE ONE OF THEM IS NOT COMPLETELY COVERED
`WITH BLOOD OR BECAUSE ONE OF THEM IS DEFECTIVE, WELL, THEN IT
`SAYS ERROR. AND IT TELLS THE USER, THROW AWAY THE STRIP.
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`THEY'RE CHEAP AND YOU'RE GOING TO GET THE WRONG NUMBER. JUST
`THROW IT AWAY. YOU CAN'T FIX IT, JUST THROW IT AWAY.
`ON THE OTHER HAND, IF IT PASSES THAT ERROR TEST, THEN
`YOU'VE GOT A MORE ACCURATE COMBINATION OF DATA OR AVERAGE OF
`TWO SENSORS.
`BUT IMPROVED ACCURACY ELIMINATES THESE PROBLEMS AND THE
`SENSORS ARE ALL DOING SOMETHING. YOU'RE NOT WASTING BLOOD AS
`YOU ARE IN THE IDEAS LIKE THE TRIGGER IDEAS.
`AND SO THAT IS THE CORE TO THE INVENTION. AND AS I SAY,
`THESE ARE PROBLEMS THE ART DOESN'T EVEN ACKNOWLEDGE. YOU'RE
`NOT GOING TO SEE ANY PRIOR ART PATENT THAT SAYS, OH, THE
`TRIGGER IS NOT A SOLUTION.
`YOU'RE NOT GOING TO SEE A PRIOR ART PATENT THAT SAYS IN
`THIS DISPOSABLE ART THAT SAYS, OH, AVERAGING IS NOT THE
`SOLUTION.
`THESE ARE PROBLEMS THAT OUR INVENTORS IDENTIFY, THEY DID
`TESTS TO PROVE THAT THEY WERE REAL PROBLEMS, AND THEY SOLVED IT
`WITH A VERY CLEVER DESIGN.
`THE COURT: WASN'T THERE CONVERSATION IN THE FIELD
`THAT THERE WERE INACCURACIES IN TESTING? IS THAT --
`MR. DISKANT: THERE ARE NO -- IN THIS WORLD WE LIVE
`IN THE PRINTED TEXT OF PRIOR ART RATHER THAN ANYTHING ELSE, BUT
`IN THE WORLD OF PRIOR ART, AND WE HAVE SEEN NOTHING AND THEY
`HAVE CITED TO NOTHING THAT SAYS THAT THE TRIGGER IS NOT A
`COMPLETE SOLUTION TO THE PROBLEM OF COVERAGE.
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`16
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`THE COURT: THE TRIGGER IS?
`MR. DISKANT: IS NOT.
`THE COURT: IS NOT.
`MR. DISKANT: NO ONE DOUBTED THE TRIGGER WORKED.
`WINARTA SAYS THE TRIGGER WORKED. IT SOLVES THE PROBLEM.
`NO ONE DOUBTED IN THIS ART OF DISPOSABLE TEST STRIPS THAT
`AVERAGE IMPROVED ACCURACY AND THAT WAS IT. I MEAN, THESE
`ISSUES DON'T APPEAR.
`AND SO WHEN YOU THINK ABOUT AN INVENTION, YOU HAVE TO HAVE
`A PROBLEM TO SOLVE AND THE FIRST INNOVATIVE THING OUR INVENTORS
`DID IS PERCEIVE THE PROBLEM AND THEY PROVED THE PROBLEM WAS
`REAL THROUGH TESTING. AND THEN THEY SOLVED THE PROBLEM.
`NOW, IN THE INTEREST OF STAYING AT HALF AN HOUR, I'LL SKIP
`OVER SOME OF THESE THINGS BUT --
`THE COURT: WELL, YOU'LL HAVE ADDITIONAL TIME. I
`MEAN, WE'RE GOING TO EXHAUST OUR FULL AFTERNOON. YOU'RE NOT
`JUST GOING TO HAVE 30 MINUTES -- PARDON ME. WE'RE GOING TO DO
`30 MINUTES INCREMENTS.
`MR. DISKANT: WELL, I'LL KEEP GOING AND SEE WHERE I
`
`WIND UP.
`BUT BASICALLY THIS IS SPELLED OUT PRETTY CLEARLY IN THE
`PATENT.
`YOU KNOW, NOT ONLY CAN THIS METHOD DETECT WHEN ONE OF THE
`SENSOR PARTS HAS NOT BEEN PROPERLY COVERED, IT CAN DETECT WHEN
`THERE'S A MANUFACTURING DEFECT IN EITHER ONE.
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`AND HERE IS THE SOLUTION BASICALLY. BY DOING THE
`COMPARISON AND THROWING OUT THE BAD DATA, SO NOW ONLY THE THREE
`THAT I HAVE HIGHLIGHTED ARE THE ONES THAT PASS THE ERROR TEST,
`AND THAT'S WHAT IT SAYS, ERROR CHECKED IN THE NEXT TO THE LAST
`COLUMN. THEY CHECK THE ERROR AND HERE YOU'RE GETTING NUMBERS
`THAT ARE VERY CLOSE TO 14. 7 AND 7 IS WHAT IT SHOULD BE. AND
`THE INVENTORS NOTE THAT THIS IS MORE PRECISE AND MORE ACCURATE
`AND A BETTER SOLUTION.
`SO THE CLAIM -- THAT'S THE INVENTION. THE CLAIM IS PRETTY
`STRAIGHTFORWARD.
`THE COURT: THIS IS 31, IS IT?
`MR. DISKANT: 31. WE'RE STILL AT CLAIM 3 WHICH
`DEPENDS FROM CLAIM 1, AND BASICALLY YOU'LL SEE THAT MOST OF THE
`TEXT OF THIS CLAIM IS DEVOTED TO DESCRIBING THE UNIQUE TEST
`STRIP THAT IS AT THE HEART OF THIS INNOVATION.
`AND A FIRST WORKING SENSOR. AND I'LL CUT THROUGH THIS --
`THE COURT: NO. THIS IS HELPFUL. THANK YOU.
`MR. DISKANT: AND A SECOND WORKING SENSOR PART.
`AND TAKE A LOOK. IT'S DOWNSTREAM FROM THE FIRST ONE. I
`HAVE AN ARROW JUST POINTING DOWN THERE.
`IT'S DOWNSTREAM FROM THE FIRST SENSOR PART. IT GENERATES
`CHARGE CARRIERS IN PROPORTION TO THE CONCENTRATION OF YOU CAN
`SAY GLUCOSE.
`AND THE -- HERE'S -- "WHEREIN SAID FIRST AND SECOND
`WORKING SENSOR PARTS ARE ARRANGED SUCH THAT IN THE ABSENCE OF
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`AN ERROR CONDITION, THE QUANTITY OF SAID CHARGE CARRIERS
`GENERATED BY SAID FIRST WORKING SENSOR ARE SUBSTANTIALLY
`IDENTICAL TO THE SECOND."
`SO THAT'S HOW IT IS SET UP. THEY HAVE TO BE SET UP SO
`THERE'S NO ERROR CONDITION, AND YOU'RE GOING TO GET
`SUBSTANTIALLY THE SAME RESULTS FROM THE TWO SENSORS.
`AND THE REFERENCE SENSOR IS UPSTREAM.
`THE COURT: SO CAN WE --
`MR. DISKANT: AND JUST TO BE CLEAR THE BLOOD --
`THE COURT: WHAT IS THE INVENTIVE MEASURE OF THIS
`
`PATENT?
`
`MR. DISKANT: INVENTIVE MEASURE?
`THE COURT: WHERE DOES THE MEASUREMENT COME IN? I'M
`LOOKING DOWN IF YOU COULD GO -- LET'S SEE. I THINK I HAVE --
`MR. DISKANT: DOWN HERE, MEASURING THE ELECTRIC
`
`CURRENT.
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`THE COURT: IT'S JUST UNDER THAT. IT LOOKS LIKE
`IT'S THE SECOND PARAGRAPH UNDER 1. I HAVE IT IN FRONT OF ME
`HERE. CAN YOU GET RID OF THAT LITTLE BOX?
`MR. DISKANT: I CAN'T, BUT I HAVE THE PATENT HERE.
`THE COURT: JUST ABOVE 2, ONE OR TWO PARAGRAPHS
`ABOVE 2 THAT READS "APPLYING THE SAMPLE LIQUID TO SAID
`MEASURING DEVICE AND MEASURING AN ELECTRIC CURRENT AT EACH
`SENSOR PART PROPORTIONAL TO THE CONCENTRATION OF SAID SUBSTANCE
`IN THE SAMPLE LIQUID."
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`19
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`CAN YOU TELL ME WHAT THAT MEANS?
`MR. DISKANT: SURE. BASICALLY IT'S A METHOD PATENT.
`SO JUST TO WORK THROUGH THE WHOLE METHOD. YOU START BY HAVING
`A TEST STRIP AND THEN THE TEST STRIP IS DESCRIBED IN DETAIL.
`THEN YOU APPLY THE SAMPLE LIQUID, BLOOD IN THIS CASE, TO
`THE TEST STRIP.
`THEN YOU MEASURE AN ELECTRIC CURRENT AT EACH WORKING
`SENSOR PART PROPORTIONAL TO THE CONCENTRATION OF THE GLUCOSE IN
`THE BLOOD.
`
`THE COURT: SO IT'S MEASURING THE CURRENT?
`MR. DISKANT: IT'S MEASURING THE CURRENT BECAUSE
`IT'S AN ELECTRICAL SYSTEM AND SO BASICALLY WHAT YOU'VE GOT --
`AND THAT'S WHY THESE ARE WORKING SENSORS. THESE ARE ELECTRICAL
`TERMS. THE BLOOD GOES INTO THE TEST STRIP AND THROUGH A
`CHEMICAL REACTION THE BLOOD GENERATES ELECTRONS.
`THE ELECTRONS ARE THEN MEASURED BY THE WORKING SENSORS AND
`THE REFERENCE SENSOR GENERATING A CURRENT.
`THE CURRENT THEN IS PROPORTIONAL TO THE GLUCOSE, THAT'S
`THE BASIC IDEA.
`THE COURT: THAT'S THE NEXT PIECE, THE PROPORTION.
`TELL ME ABOUT THAT PROPORTIONALITY.
`MR. DISKANT: THE PROPORTIONALITY IS THE BASIC IDEA
`OF ALL OF THESE INSTRUMENTS. THIS WHOLE FIELD IS BUILT ON THE
`KNOWLEDGE THAT THE ELECTRIC CURRENT IS PROPORTIONAL TO THE
`GLUCOSE CONCENTRATION, OTHERWISE THEY WOULDN'T WORK.
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`20
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`AND THE WAY IT WORKS, AND WE HAVE A DISPUTE ABOUT THIS
`WHICH I THINK IS --
`THE COURT: WHICH IS WHY I ASKED YOU TO TALK ABOUT
`IT JUST NOW.
`MR. DISKANT: SURE. BASICALLY IN MATHEMATICS
`PROPORTIONALITY -- CAN I HAVE A PIECE OF PAPER FOR THE ELMO?
`IN MATHEMATICS YOU'VE GOT A STRAIGHT LINE RUNNING THROUGH
`THE ZERO POINT AND THIS IS 1 AND THIS IS 2, YOU MULTIPLY 1
`BY -- IT'S NOT -- BUT YOU KNOW THE IDEA.
`THAT'S STRICT MATHEMATICAL PROPORTIONALITY.
`AND ELECTRICAL CHEMICAL CONDUCTION, THIS CONDITION ALMOST
`NEVER EXISTS. AND WHAT YOU HAVE IN REALITY ARE A FIXED
`PREDICTABLE RELATIONSHIP BETWEEN GLUCOSE AND ELECTRIC CURRENT
`THAT CAN BE --
`THE COURT: THAT'S A KNOWN.
`MR. DISKANT: THAT'S A KNOWN. AND HERE WHAT YOU
`HAVE TO DO IS YOU HAVE TO START BY ELIMINATING THE BACKGROUND
`NOISE. AND THERE'S BACKGROUND NOISE BECAUSE THE ELECTRODES
`GENERATE LITTLE BUZZ AMOUNTS OF ELECTRICITY.
`SO THE FIRST STEP IN THE MEASUREMENT PROCESS IS TO FIGURE
`OUT WHAT THE BACKGROUND NOISE IS AND ELIMINATE IT, JUST LIKE IF
`YOU BUY SOMETHING AT THE GROCERY STORE AND THEY WEIGH THE
`PACKAGE FIRST AND PUT THE GOODS IN IT.
`SO YOU ELIMINATE THE BACKGROUND NOISE. AND THEN YOU DO A
`STRAIGHT LINE MULTIPLICATION OF -- FROM THE GLUCOSE TO THE
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`CURRENT, BUT IT DOESN'T PASS THROUGH ZERO. IT WILL BE A
`STRAIGHT -- SORRY. IT WILL BE A STRAIGHT LINE THAT DOESN'T GO
`THROUGH ZERO. SO YOU CAN'T GET TO THIS NUMBER BY MULTIPLYING
`THIS NUMBER. YOU HAVE TO ADD SOMETHING BUT IT'S A STRAIGHT
`LINE RELATIONSHIP.
`AND THEN AFTER YOU GET THAT STRAIGHT LINE RELATIONSHIP,
`THERE'S A LITTLE TWEAK BECAUSE OF TEMPERATURE ADJUSTMENTS AND
`THAT'S IT.
`SO IN THE ART OF ELECTRICAL CHEMICAL SENSORS THAT'S
`PROPORTIONAL AND THEIR CONTENTION IS THAT ONLY STRICT
`MATHEMATICAL PROPORTIONALITY THAT PASSES THROUGH ZERO AND HAS
`NO MINIMAL ADJUSTMENT COUNTS. SO THAT'S IT FOR THE DISPUTE.
`THE COURT: OKAY.
`MR. DISKANT: I DON'T THINK THEY DISAGREE ABOUT WHAT
`WE SAID ABOUT WHAT WE DO. AND OUR DISPUTE IS REALLY THAT THIS
`TERM -- IF THEY'RE RIGHT -- LET ME PUT IT DIFFERENTLY.
`IF THEY'RE RIGHT, THEN MANY OF THESE PATENTS ARE
`MEANINGLESS. THIS IS NOT SOMETHING THAT HAS ANYTHING TO DO
`WITH THEIR STRIP. IT HAS TO DO WITH HOW OUR METERS ARE
`PROGRAMMED.
`THE COURT: THAT'S THE OTHER QUESTION.
`MR. DISKANT: YES.
`THE COURT: THIS MEASUREMENT IS DONE BY THE MACHINE?
`MR. DISKANT: THAT'S CORRECT. THAT'S CORRECT.
`THE COURT: AND THE MACHINE IS PROGRAMMED AND IT
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`DOES WHATEVER IT DOES.
`MR. DISKANT: THAT'S CORRECT.
`THE COURT: AND THE STRIP IS THE CONDUIT, IF YOU
`WILL, WHATEVER YOU WANT TO CALL IT.
`MR. DISKANT: YEAH. THE STRIP TAKES THE BLOOD AND
`DOES THE CHEMICAL REACTION, GENERATES THE ELECTRICITY, AND BY
`ITS DESIGN, BY ITS UNIQUE DESIGN, GENERATES ELECTRICITY IN A
`CERTAIN, YOU KNOW, WITH THE FIXED RELATIONSHIP BETWEEN THE
`SENSORS THAT ENABLES THE METER THEN TO DO A COMPARISON.
`WOULD YOU LIKE ME TO CONTINUE?
`THE COURT: YES, PLEASE.
`MR. DISKANT: SO INFRINGEMENT I THINK I CAN DO VERY
`QUICKLY. THEIR STRIP IS BASICALLY A COPY OF OURS IN THESE
`RELEVANT RESPECTS.
`THEY HAVE GOT A FIRST WORKING SENSOR AND A SECOND WORKING
`SENSOR DOWNSTREAM A LITTLE BIT, AND THIS IS ALL AGREED UPON.
`THE ONLY DISPUTE IS THIS: DOES OUR METER, DOES OUR METER
`MEASURE AN ELECTRIC CURRENT AT EACH WORKING SENSOR PART