throbber
IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`TEXARKANA DIVISION
`
`CIVIL ACTION NO. 5:03-CV—39
`
`§ § §
`
`§ §
`







`
`DATATREASURY CORPORATION,
`Plaintiff,
`
`v.
`
`FIRST DATA CORPORATION, FIRST
`DATA MERCHANT SERVICES
`CORPORATION, TELECHECK
`SERVICES, INC. d/b/a TELECHECK
`INTERNATIONAL, INC. and
`MICROBILT CORPORATION,
`Defendants.
`
`DECLARATION OF PROFESSOR JOHN E. HILES
`
`1.
`
`My name is John Hiles.
`
`I am over the age of twenty-one, have not been
`
`convicted of a crime involving moral turpitude, and am not otherwise disqualified from
`
`making this declaration.
`
`The following information, which is within my personal
`
`knowledge, is true and correct.
`
`2.
`
`In connection with preparing this declaration and expert report, I have
`
`attachments thereto.
`
`3.
`
`All of my opinions provided in this declaration are:
`
`21.
`
`Based upon sufficient facts and data to allow me to reach the
`
`opinions contained in this declaration;
`
`b.
`
`My opinions expressed herein are the product of reliable principles
`
`and methods;
`
`Fidelity National Information Services,
`Inc. v. DataTreasury Corporation
`|PR2014—OO491
`
`Exhibit 2002
`
`

`
`c.
`
`My opinions expressed herein constitute a reliable application of
`
`those principles and methods to the facts of this case; and
`
`d.
`
`My opinions expressed herein are based upon information of a type
`
`reasonably relied upon by experts in the arts analogous to the ‘988 and ‘ 137 patents.
`
`4.
`
`5.
`
`I submit this declaration in rebuttal to the First Data Motion.
`
`By my education,
`
`training, and experience,
`
`as evidenced by my
`
`curriculum vitae (attached to this expert report and declaration), I am qualified to provide
`
`testimony on the understanding of persons of ordinary skill in the art would relative to the
`
`‘988 and ‘ 137 patents at the time of their filing and invention date.
`
`6.
`
`It is my opinion that a person of ordinary skill in the art at the time of the
`
`‘988 and ‘137 patents’ filing would have the equivalent of a Bachelor of Science in a
`
`technical discipline involving computational science, such as electrical engineering,
`
`computer systems engineering, or applied physics, and practical experience in the field of
`
`networked computing, computer hardware or software product development, or software
`
`engineering.
`
`In addition this person should have exposure to Computer Industry User
`
`Group, Vendor Training, or Trade Association events over a period of at least two years.
`
`7.
`
`My opinion based on my technical assessment in response to the First
`
`Data Motion is that it does not provide the evidence to invalidate a single claim of either
`
`the DataTreasury ‘988 and ‘137 Patent. It has also been brought to my attention that First
`
`Data was required to demonstrate the invalidity of the claims of the ‘988 and ‘ 137 patents
`
`with clear and convincing evidence. First Data did not demonstrate the invalidity of a
`
`claimed invention in either the ‘988 or ‘137 patents. My analysis for reaching this
`
`

`
`opinion as to the Validity of the ‘988 and ‘ 137 patents are provided in detail
`
`in the
`
`paragraphs which follow.
`
`8.
`
`In reaching my conclusions, I have been instructed by DataTreasury’s
`
`patent counsel to review the various positions and opinions provided by First Data and
`
`determine if I agree with their positions as to validity of the claims in the ‘988 and ‘ 137
`
`patents. First Data presented United States Patent 5,373,550 (the Campbell Patent),
`
`United States Patent 4,264,808 (the Owens Patent), International Patent Application
`
`Number PCT/US96/20358 (the FSTC Application), and a textbook by Daniel Minoli
`
`titled Imaging In Corporate Environments (the Minoli Textbook) to invalidate one or
`
`more claims of the ‘988 and ‘ 137 patents.
`
`I have been instructed by the patent counsel to, for the purpose of my declaration,
`
`assume that the F STC Application was prior art with relationship to the ‘988 and ‘ 137
`
`patents, even though the patent counsel intends to argue the question of that applications
`
`priority status.
`
`I have been instructed by patent counsel that to invalidate any one of the 93
`
`claims of the ‘988 and ‘ 137 patents one must consider the prior art in the context of the
`
`complete invention as it is claimed and consider how the Markman Order considered
`
`such term in its claim construction.
`
`I have been instructed that all elements of a claim if
`
`it is to be invalidated must be expressly present or considered by me as a person skilled in
`
`the art to be inherent in the particular piece of prior art. In paragraph 9 of my declaration
`
`and report I address the technical elements of the ‘988 and ‘I37 Patents in terms of the
`
`Markman Drder definitions. In paragraph 12 of my declaration and report, I address First
`
`Data’s invalidity position as of anticipation and/or obviousness by the Campbell Patent,
`
`

`
`the FSTC Application, the Owens Patent and the state of the art as represented by those
`
`patents and by the Minoli Textbook. Section 12 presents a patent construction table that
`
`follows the claims of the DataTreasury ‘988 or ‘ 137 Patents and shows how their
`
`independent claims remain valid despite the arguments of the First Data Motion.
`
`9.
`
`First Data argues that all 93 claims of DataTreasury’s ‘998 and ‘ 137
`
`patents are invalid in view of the prior art. Instead of analyzing all the elements of all 93
`
`claims, I have been asked by patent counsel for DataTreasury to look at all independent
`
`and dependant claims asserted by First Data to be invalid.
`
`10.
`
`In order to avoid possible confusion over diagrams that appear in the First
`
`Data Motion, Attachment I to this Declaration compares four diagrams that appear in the
`
`First Data Motion with those diagrams as they appear in their original form in the
`
`Campbell Patent, the Minoli Textbook, and the FSTC Application. Three of the
`
`Diagrams were included in the First Data Motion and referred to as prior art without
`
`calling attention to their having been modified. In the fourth instance, the First Data
`
`Motion does call attention to the presence of modifications but not to what part of the
`
`diagram was old and what was new. Attachment I shows the original form of the
`
`diagrams and separately duplicates the versions, which appear in the First Data Motion,
`
`containing captions and additional graphics added by First Data.
`
`11.
`
`The Data Treasury ‘988 and ‘ 137 Patent claims contain at least the
`
`following nine technical claim elements as provided in the Court’s Markman Order (page
`
`references, for example, p.16, refer to the Court’s Markman Order).
`
`I have added my
`
`comments to each entry in order to point to the specific properties of these elements and
`
`definitions; later in Section 12, these properties form the basis of my disagreement with
`
`

`
`the technical arguments raised by First Data in an attempt to prove anticipation or
`
`obviousness.
`
`Subsystem (p.8) “The Court defines this term as “an organization of computer
`components that comprises a functional unit that is part of a larger system.”
`
`Two part of this definition will play a key role in my analysis of the First Data
`arguments. Subsystems must be organizations of computer components and that
`means that Subsystems cannot be banks, or financial institutions, or other
`organizations. Second, a key property of a sub-system is that it belongs to a
`larger system.
`
`Subsystem identification information (p. 16) “the information that identifies the
`remote data subsystem or a subsystem that is a part of the remote data access
`subsystem.”
`
`This information identifies a particular Remote Data Access Subsystem (or a
`particular subsystem within a particular Remote Data Access Subsystem).
`Because of the definition of Subsystem, Subsystem Identification Information
`identifies computer components that are or are part of the Remote Data Access
`Subsystem. Thus Subsystem Identification Information does not refer to the name
`or location of an organization such as a bank. Throughout the Campbell Patent,
`there is reference to information that identifies sending or receiving banks, for
`instance in Fig. 1. According to the Markman definition, this is not Subsystem
`Identification Information.
`
`Nor does Subsystem Identification Information refer to the name or location of a
`storage device that is part of some archive lying outside of a Remote Data Access
`Subsystem (see the Markman definition of Remote Data Access Subsystem,
`below).
`
`Remote Data Access Subsystems for capturing and sending paper transaction
`data and subsystem identification information comprising at least one imaging
`subsystem for capturing the documents and receipts and at least one data access
`controller for managing the capturing and sending of the transaction data. The
`key definitions in the Texarkana Markman Order follow. Subsystem (p. 16) “an
`organization of computer components that comprises a functional unit that is part
`of a larger system.” Data access subsystems (p. 8) “a subsystem that provides for
`the input of transaction data into the overall system and provides that data to other
`parts of the overall system.” With the data access subsystem providing
`encrypted subsystem identification information and encrypted paper
`transaction data (p. 58) “data access subsystem encrypts subsystem
`identification information and encrypts paper transaction data and provides the
`encrypted information and encrypted data for transmission to the data processing
`
`

`
`subsystem.”
`
`In order for a Remote Data Access Subsystem to be present it must, among other
`properties, send Subsystem Identification Information to the rest of the system of
`which it is a part. And that identification information must refer to computer
`components that are part of the Remote Data Access System. Identification
`information that refers to a storage device used for an archive function (as is the
`case for “Index” information described in the FSTC Application, p. 18, 11. 1-14)
`does not meet this test and thus is not Subsystem Identification Information.
`Without the presence of Subsystem Identification Information, a component
`would not satisfy the Markman definitions of a Remote Data Access Subsystem
`and would not establish anticipation or obviousness for ‘988 or ‘ 137 Patent claim
`elements that require the presence of a Remote Data Access Subsystem.
`
`Data Access Controller for managing the capturing and sending of the
`transaction data. Defined by the Texarkana Markman Order as, Data Access
`Controller (p. 18) “a computer chip, circuit board, or a computer that interfaces
`between the imaging subsystem and the remainder of the overall claimed system,
`and controls the operation of the imaging subsystem.”
`
`The Data Access Controller provides two functions, capturing and sending. Thus
`a controller that only provided for sending and not capturing, would not satisfy
`the requirement of a Data Access Controller.
`
`Intermediate Subsystem or Data Collecting Subsystem — The Court will
`construe the phrase “data collecting subsystem” to mean “a subsystem that
`receives data from remote data access subsystems and transmits that data to a
`central data processing subsystem.”
`
`Central Data Processing Subsystem for processing, sending, verifying and
`storing the paper transaction data and the subsystem identification information.
`Defined by the Texarkana Markman Order as, Central Data Processing
`Subsystem (21) “a subsystem for centralized execution of processing, sending,
`and storing data received from one or more remote data access subsystems.”
`
`The functions of the Central Data Processing Subsystem apply to both paper
`transaction data and subsystem identification information.
`
`According to Markman definitions for Central Data Processing Sub-System and
`the ‘988 and ‘ 137 claims that refer to Central Data Processing Sub-Systems, the
`data that is processed must be received from one or more remote data access sub-
`systems; thus, the Central Data Processing Subsystem and the Remote Data
`Access Subsystem are tied together and both must be present. As in the case of
`the Campbell patent and the FSTC application, systems that process, send and
`store data but that do not contain central data processing Subsystems or Remote
`Data Access Subsystems as defined by the Markman definitions do not establish
`
`

`
`anticipation or obviousness in reference to the Data Treasury ‘988 and ‘ 137 patent
`claims that require those two specific sub-systems to be present.
`
`Communication Network for the transmission of the transaction data within and
`between said one or more data access subsystems and said at least one data
`processing subsystem, with the data access subsystem providing encrypted
`subsystem identification information and encrypted paper transaction data to the
`data processing subsystem. Defined by the Texarkana Markman Order as,
`Communication Network (p. 32) “a connection of computer and/or devices to
`facilitate the transmission of data between the computer and/or devices .
`. .” “The
`Court will construe the phrase, ‘Within and between said one or more data
`access subsystems and said at least one data processing subsystem’ to mean
`that the communication network facilitates the transmission of transaction data
`within the one or more data access subsystems, and within the data processing
`subsystem, and it also facilitates the transmission of transaction data between the
`various subsystems.” (p. 32 of the Markman Order).
`
`The Communication Network transmits encrypted transaction data and subsystem
`identification information between and within Subsystems. The Markman Order
`definition of Communication Network and the claim elements in the Data
`Treasury ‘988 and ‘137 Patents that refer to Communication Network are thus
`tied to the presence of Data Processing Subsystems and Remote Data Access
`Subsystem. The Markman definition of Management Subsystem is clearly tied to
`the presence of data that arrives from a Remote Data Access Subsystem and is
`transmitted to a Central Data Processing Subsystem. Thus, in the absence of a
`Remote Data Access Subsystem and a Central Data Processing Subsystem a
`component that managed the processing, sending and storing of transaction data
`would not constitute a Management Subsystem for the purposes of anticipation or
`proving obviousness in relation to the ‘988 and ‘ 137 Data Treasury patents.
`
`Management Subsystem for managing the processing, sending, and storing of
`the transaction data. Management Subsysteml data management subsystem
`(p. 13) “a subsystem that receives data from remote data access subsystems and
`transmits that data to a central data processing subsystem.” Processing (27) “the
`performance of operations upon data and information, in contrast to the
`processing overhead of the operating system and networks.”
`
`Encrypted Subsystem Identification Information and Encrypted Paper
`Transaction Data. Defined by the Texarkana Markman Order as, (p. 58) “data
`access subsystem encrypts subsystem identification information and encrypts
`paper transaction data and provides the encrypted information and encrypted data
`for transmission to the data processing subsystem.” The Markman order
`definition of encrypted sub-system identification information and encrypted paper
`transaction data is likewise tied to the presence of a data access sub-system and
`the Data Processing Subsystem. Thus, the data being encrypted must come from
`
`

`
`and go to these two specific kinds of Subsystems. In their absence within a
`system that encryption does not support anticipation or obviousness.
`
`Transmitting the transaction data and the subsystem identification
`information within and between the remote location(s) and the central
`location. (Please see the Texarkana Markman Order definitions listed previously
`for Subsystem and Subsystem Identification Information.)
`
`Both the Data Treasury ‘988 and ‘ 137 Patents conclude their description of the
`
`background of the invention (col. 3, ll. 14 thru 23 for the ‘988 Patent and col. 3, 11. 22-26
`
`for the ‘ 137 Patent) with the following statement: “Accordingly, there is a need for a
`
`single system which offers comprehensive support for the tasks involved in the
`
`automated processing of documents biometric and electronic data from sale business
`
`banking and general consumer transactions.” Then, in the Summary of the Invention
`
`both Patents state, “It is an object of the present invention to provide a system for central
`
`management storage and verification of remotely captured electronic and paper
`
`transactions from credit cards, smart cards, debit cards, documents and receipts involving
`
`sales, business, banking and general purpose consumer applications...” (col. 3, ll. 31 thru
`
`35 for the ‘988 Patent and col. 3, 11. 38-43 for the ‘ 137 Patent). The Data Treasury ‘988
`
`and ‘ 137 Patents describe an invention that provides this type of comprehensive support
`
`in a single system. A person of ordinary skill in the art who reads the Markman Order
`
`definitions that have been collected in this section, would recognize the interlocking
`
`nature of these definitions. A person of ordinary skill in the art would recognize that the
`
`interactions among the Subsystems taught in the ‘988 and ‘ 137 Patents form a necessary
`
`and substantial property of Data Treasury’s invention. Similarly, a person of ordinary
`
`skill in the art would understand definitions like the ones found in the Markman Order,
`
`which require the mutual presence of Subsystems like the Remote Data Access
`
`

`
`Subsystem and Central Data Processing Subsystem. A person of ordinary skill in the art
`
`would understand that an integrated system like the one taught in the Data Treasury ‘988
`
`and ‘ 137 Patents was more than the sum of its parts. And they would recognize that an
`
`assortment of equipment, scanners, computers, networks, etc. not organized into such a
`
`comprehensive system would be different and neither anticipate nor prove obvious an
`
`integrated, comprehensive system. From this, I conclude that the claim elements in the
`
`‘988 and ‘ 137 Patents and the corresponding definitions in the Markman order describe
`
`an integrated comprehensive system that is not present in and, therefore, not invalidated
`
`by the Campbell patent, the FSTC application, the Minoli textbook or the Owens patent.
`
`Section 12 will show that the individual claim of the ‘988 and ‘ 137 Patents are not
`
`anticipated by the prior art referenced in the First Data motion. That section will also
`
`show that the prior art reference in the First Data motion does not establish obviousness
`
`of the comprehensive system as defined by the Markman order and described in detail in
`
`the ‘988 and ‘ 137 Patents.
`
`I strongly disagree that the First Data motion proves
`
`invalidation of the ‘988 and ‘137 Patents, either in any individual claim or in totality of
`
`the patents.
`
`The First Data Motion fails to prove that the prior art contained in any one of the
`
`four cited sources (i.e., the Campbell Patent, the FSTC Application, the Owens Patent, or
`
`the Minoli Textbook) anticipates either the ‘988 or ‘ 137 Patents. The First Data Motion
`
`similarly fails to prove that the combination of these four sources establishes the
`
`obviousness of the invention taught in the ‘988 and ‘ 137 Patents. A person of ordinary
`
`skill in the art would read the Markman Order and the ‘988 and ‘ 137 Patents to require
`
`that such a proof of invalidation would require a system in which the combined and
`
`

`
`simultaneous presence of the inventions elements, as defined by the Markman Order,
`
`were present. This test is not met by any system or combination of systems described in
`
`the First Data Motion. In the absence of such a proof, I don’t understand how one can
`
`represent -- in particular with clear and convincing evidence -- that such prior art material
`
`invalidates a single claim of DataTreasury’s ‘988 and ‘ 137 Patents.
`
`10
`
`

`
`
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`2.2.3.END
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