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`medium. Deluxe’s proposed reading of the claim term not
`only runs counter to the words used by the patentee, and
`finds absolutely no support in the specification, but also
`contradicts positions previously taken by Defendant
`earlier in this very lawsuit!
`
`When the court turns to the arguments for obviousness
`made by Defendant’s expert, they evaporate. The ’633
`patent is not invalid for obviousness. Plaintiffs motion for
`summary judgment
`is granted and Defendant’s cross
`motion is denied.
`
`BACKGROUND
`
`The record reveals no genuine issue of material fact.
`
`I. PROCEDURAL HISTORY
`
`Plaintiff Medien Patent Verwaltung AG (″MPV″) filed its
`original
`complaint
`against Deluxe, Warner Bros.
`Entertainment, Inc. (″Warner Bros.″), and Technicolor Inc.
`(″Technicolor″) on May 19, 2010, alleging infringement of
`U.S. Patent No. 7,187,633 (″the ’633 patent″) (Ex. A). See
`Complaint (Dkt. No. 1). On January [*4] 6 and March 7,
`2012, the Court issued orders construing certain terms in
`the asserted claims of the ’633 patent. See First Markman
`Ruling (Dkt. No. 76); Suppl. Markman Ruling (Dkt. No.
`84). Deluxe and MPV thereafter filed cross motions for
`summary judgment on the issue of infringement, and on
`February 11, 2013 the Court granted summary judgment in
`favor of MPV, finding that Deluxe’s accused ″FCT Sound″
`film coding system infringed Claim 19 of the ’633 patent.
`See Amended Decision and Order Denying Deluxe’s Mot.
`for Summ. J. and Granting MPV’s Cross-Mot. for Summ.
`J. (Dkt. No. 119). Shortly after that ruling, MPV reached
`a favorable settlement with Warner Bros, and Technicolor.
`See Stip. of Voluntary Dismissal (Dkt. No. 124).
`
`the ’633 patent was
`Because Deluxe had argued that
`invalid,
`the court could not enter judgment after the
`finding of infringement. On April 26, 2013, the parties
`filed a joint stipulation in which (1) the parties agreed to
`treat Claim 19 of the ’633 patent as the sole representative
`claim for purposes of resolving the liability issues in this
`case, and (2) Deluxe withdrew its affirmative defense and
`counterclaim that the ’633 patent is invalid on any basis
`[*5] than obviousness, and also withdrew its
`other
`affirmative defenses of unenforceability, waiver, laches,
`and equitable estoppel. See Joint Stip. re Claims and
`Defenses
`(Dkt. No. 130). Accordingly, aside from
`damages, the only open issue in the case is obviousness.
`
`Discovery closed on July 3, 2013. These cross motions
`followed.
`
`1 Wayne Hoeberlein is MPV’s damages expert.
`
`II. STATEMENT OF FACTS
`
`A. Background of the Invention
`
`The motion picture industry loses billions of dollars each
`year to piracy. Many of the unauthorized copies of movies
`that proliferate over the Internet and in hard-copy (e.g.,
`bootleg DVDs), originate with a ″cammer″ illegally
`copying a motion picture with a camcorder as it is being
`shown in a theater. Consequently, effective tools for
`combating such piracy are extremely valuable to the
`motion picture industry. See Initial Expert Rpt. of W.
`Hoeberlein, ¶¶ 37-43 (Ex. B).1
`
`The ’633 patent describes and claims a method for
`marking a ″film medium,″ such as a 35 mm celluloid film
`print used for theatrical releases, with unique ″markings″
`that ″individualize″ the film. See ’633 Patent at 10:53-65
`(Claim 19). The method was developed by Gerhard
`Lehmann, founder and Director of MPV, as [*6] a tool to
`fight motion picture piracy. Hoeberlein Rpt. at ¶ 16. By
`placing unique codes in the soundtrack of a film print, it
`becomes possible to trace an unauthorized copy of the
`motion picture back to the theater in which it was
`originally shown, and that information can be used by the
`authorities to locate and hopefully apprehend the pirate.
`Id. at ¶¶ 21, 44-45.
`
`Prior to Mr. Lehmann’s invention, a known method for
`individualizing film prints
`involved adding visible
`markings or codes into some number of frames of the film,
`so that if someone made an illegal copy of the movie as it
`was being shown in a theater, the visible codes would be
`copied as well. However,
`the visible nature of such
`″picture coding″ presented at least two problems. First,
`there were artistic and aesthetic issues with defacing the
`movie images with the picture codes. Second, if a pirate
`saw the codes in the unauthorized copy, it was a simple
`matter to edit out the relatively few frames that contained
`the codes. Recognizing these problems with the prior art,
`Mr. Lehmann set out to develop an improved anti-piracy
`tool for the motion picture industry. See id. at ¶¶ 137-142.
`
`At the time of Mr. Lehmann’s invention, [*7] a typical 35
`mm film print included one or more digital soundtracks, as
`well as an analog soundtrack that served as a back-up. The
`projectors typically used in movie theaters at the time used
`the digital soundtrack by default, but they were designed
`to revert or ″fallback″ to the analog soundtrack if the
`digital information was missing or contained excessive
`errors. These projectors also included digital error
`correction functionality, such that an individualizing audio
`code placed into the digital soundtrack risked being
`ignored as an error and not played back with the rest of the
`
`Noah Lerman
`
`

`

`2014 U.S. Dist. LEXIS 12360, *7
`
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`
`film’s audio, and thus would not be recorded by a
`camcorder used to make an illegal copy of the movie. See
`’633 Patent at 3:26-58, 7:32-8:36.
`
`Mr. Lehmann realized that he could use the error checking
`/reversion feature of the commonly used projectors to his
`advantage by hiding the audio codes in the analog
`soundtrack and purposely rendering the corresponding
`portion of the digital soundtrack unreadable. The projector
`would then automatically fall back to the analog
`soundtrack for a short period of time, during which the
`audio codes would be played over the theater’s sound
`system, and thus would be included [*8] in any illegal
`copy made during presentation of the movie. See id. at
`8:11-21.
`
`B. The ’633 Patent
`
`titled ″Marking of a Data Medium
`The ’633 patent,
`Material for Information Intended for Reproduction,″
`issued on March 6, 2007 from an application filed on May
`14, 2004. Id. at 1. The patent claims priority to European
`Patent Application No. EP 03015888 filed July 11, 2003
`and German Patent Application No. DE 20 2004 003 254
`filed March 2, 2004. Id. Gerhard Lehmann is the sole
`inventor. Id. MPV owns the entire right, title, and interest
`in and to the ’633 patent. See Hoeberlein Rpt. at ¶ 22.
`
`the
`In accordance with a preferred embodiment of
`invention described in the patent, a motion picture film
`is ″individualized″ by forming a sequence of
`print
`markings in a portion of the analog soundtrack that
`represent an identification code for that particular print.
`See ’633 Patent at 6:33-46. In conjunction with the
`formation of markings in a portion of
`the analog
`soundtrack,
`the corresponding portion of
`the digital
`soundtrack is removed or otherwise rendered unreadable.
`Id. at 7:32-8:10. This alteration of the digital soundtrack
`forces the film projection equipment to revert to the analog
`soundtrack [*9] and thus play back the audio markings
`with the analog soundtrack information. Id. at 8:11-21.
`Figure 4 of the ’633 patent, reproduced below, illustrates
`this aspect of the patented invention:
`
`As shown in Figure 4,2 the medium (10) is in the form of
`a celluloid motion picture film print. Id. at 7:32-33. The
`exemplary film print
`includes a single optical analog
`soundtrack (20), and three digital soundtracks (30, 32, and
`40). Id. at 7:33-51. Ordinarily, the digital soundtracks are
`read when the film is shown and the analog soundtrack
`serves as a redundant ″fallback″ to be used only if the
`digital soundtrack contains errors.
`
`Figure 4 shows that within the analog soundtrack (20) are
`markings (14) that
`typically would identify both the
`master film print from which the particular release print
`was made and the theater to which the release print was
`sent. Id. at 7:63-65. Locations (34, 36, 38, and 42) on the
`digital soundtracks (30, 32, and 40) of the film print,
`which correspond to the location of the markings (14) on
`the
`analog soundtrack (20), have been rendered
`[*10] 7:63-8:10. As a result,
`unreadable. Id. at
`the
`read-out unit of the film projection equipment falls back to
`the analog soundtrack (20) containing the markings (14).
`Id. at 8:11-21. The markings produce a sound that is
`different from the sound reproduced from ordinary analog
`sound information.
`Ideally,
`that difference will be
`imperceptible to the theatre audience, but
`it will be
`captured on recorded copies. Id. at 8:59-67. Thus, when a
`pirated copy of a motion picture is found, the pirated audio
`soundtrack is compared to the original audio soundtrack
`for the film title in order to ″find″ the markings, which
`markings provide an identification code for the film print
`from which the pirated copy was made. Knowing the
`identity of the film print allows the studio to determine the
`particular theater where the pirated copy was made in
`order to better prevent such piracy in the future.
`
`Claim 19 of the ’633 patent, which the parties have agreed
`will serve as the lone representative claim for purposes of
`resolving the present dispute between MPV and Deluxe,
`recites the key features of Lehmann’s invention:
`
`19. A method of marking a film medium, in
`which
`information
`is
`contained
`in
`a
`
`2
`
`In the Court’s discussion of Figure 4, the numbers in parentheses refer to the numbered items on the Figure.
`
`Noah Lerman
`
`

`

`2014 U.S. Dist. LEXIS 12360, *10
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`Page 4 of 12
`
`reproduction,
`for
`sequence
`continuous
`[*11] wherein said film medium includes a
`first section containing analog information and
`a
`second
`section
`containing
`digital
`information,
`said
`analog
`information
`corresponding with said digital information,
`said method comprising the steps of: forming
`a sequence of markings on said first section,
`said markings individualizing said medium
`and being readable together with said analog
`information;
`and eliminating or making
`unreadable digital information in at least a part
`of said second section corresponding to said
`sequence of markings on said first section.
`
`’633 Patent at 10:53-65 (emphasis added). Deluxe’s
`new technical expert, Jim C. Williams, refers to this
`(″eliminating
`last
`limitation
`or
`making
`unreadable.....″) and Limitation (e). I will use that
`term as well.
`
`C. Deluxe’s Obviousness Defense
`
`The basis for Deluxe’s obviousness defense was set forth
`in an interrogatory response that was served on March 8,
`2013, two weeks before the close of fact discovery. See
`Supplemented Objections and Responses to Nos. 7-14 of
`MPV’s First Set of Interrogs. to Deluxe, 4-5 and Charts
`1-5 (″Deluxe’s Interrog. Resp.″) (Ex. C). In that response,
`Deluxe disclosed that its obviousness defense was based
`on the [*12] following references:
`
`• U.S. Patent No. 5,080,479 (″Rosenberg″);
`
`• EP 0 574 239 (″Kohut I″);
`
`• U.S. Patent No. 4,382,299 (″Dieterich″);
`
`• U.S. Patent No. 4,853,798 (″Fukuju″);
`
`• U.S. Patent No. 5,327,182 (″Kohut II″); and
`
`• U.S. Patent No. 5,544,140 (″Seagrave″).
`
`Id. at 4-5. After fact discovery had closed, MPV
`learned that Deluxe was relying on a sixth reference,
`one that its technical expert located after ″hours and
`hours and hours″ of searching:
`
`• Sony DFP-3000 Cinema Processor System
`Quick Start Guide (″DFP-3000 QSG″).3
`
`J. Williams, 06/27/13, 103:1-10
`See Dep. of
`(″Williams Dep.″) (Ex. K).
`
`Each of Deluxe’s references bears a date earlier than the
`earliest possible priority date of the ’633 patent, so MPV
`does not dispute that the references qualify as prior art.
`
`report, Williams describes various
`expert
`In his
`the above-identified references that
`combinations of
`allegedly render Claim 19 of the ’633 patent obvious. See
`generally, Expert Rpt. on Invalidity of J. Williams, 04/
`05/13 (″Williams Rpt.″) (Ex. L). The primary reference in
`each combination is the Rosenberg patent, which is the
`only one of the seven references that [*13] has anything
`to do with coding film prints. See, e.g., Williams Rpt. at ¶¶
`35-56 (discussing combination of Rosenberg and Kohut I).
`Rosenberg describes a method for optically implanting
`invisible and inaudible ″location markers″ in the analog
`soundtrack of a film print that can be used to calculate an
`identification number for the print. See Rosenberg at
`2:18-26, 2:46-3:12 (Ex. D). The patent, which issued from
`an application filed in 1990, dealt with an older type of
`film print that contained only an analog soundtrack, as
`opposed to the more modem film prints described in the
`’633 patent
`that
`contain both digital
`and analog
`soundtracks. See id. at 5:4-15 and Fig. 1 (describing film
`with only a single optical soundtrack 6). Consequently,
`Rosenberg did not confront, let alone solve, the technical
`challenges of implementing an audio coding scheme on a
`film print having a default digital soundtrack and a
`redundant analog soundtrack.
`
`Using Rosenberg as his primary reference, Williams
`separately relies on each of the other six references —
`Kohut I, Kohut II, Dieterich, Fukuju, Seagrave, and
`DFP-3000 QSG — as disclosing the ″eliminating or
`information″ element of
`making unreadable digital
`[*14] Claim 19 of the ’633 patent (Limitation (e)), which
`turns out to be the critical portion of the claim for our
`purposes. See Williams Rpt. at ¶¶ 51-56, 57, 76-83,
`106-17, 137-44 and 162-67.
`
`III. PLAINTIFF’S PATENT IS NOT INVALID FOR
`OBVIOUSNESS
`
`A. Summary Judgment of Nonobviousness May
`Properly Be Granted in a Patent Case
`
`When ″there is no genuine dispute as to any material fact
`and the movant is entitled to judgment as a matter of law,″
`summary judgment should be granted. FED. R. CIV. P.
`56(a); see also IGT v. Bally Gaming Int’l, Inc., 659 F.3d
`1109, 1115 (Fed. Cir. 2011). Summary judgment may
`properly be granted on the issue of nonobviousness. See,
`e.g., Unigene Labs., Inc. v. Apotex, Inc., 655 F.3d 1352,
`1360-64 (Fed. Cir. 2011); Crown Operations Int’l, Ltd. v.
`Solutia Inc., 289 F.3d 1367, 1378 (Fed. Cir. 2002);
`
`3 Copies of the references are attached as Exhibits D-J respectively.
`
`Noah Lerman
`
`

`

`2014 U.S. Dist. LEXIS 12360, *14
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`Page 5 of 12
`
`MeadWestvaco Corp. v. Rexam PLC, 809 F. Supp. 2d 463,
`474-76 (E.D. Va. 2011). Such a motion does not require a
`court to find that a challenged patent claim is valid, but
`rather only that the claim is not invalid in view of the
`particular prior art references cited by the defendant. See
`Michael Foods, Inc. v. Papetti’s Hygrade Egg Prods., Inc.,
`1994 U.S. App. LEXIS 18323, 1994 WL 379016, at *2
`(Fed. Cir. July 20, 1994).
`
`The [*15] party that moves for summary judgment bears
`the initial burden of showing that there is no genuine issue
`of material fact. See Celotex Corp. v. Catrett, 477 U.S.
`317, 323, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986). In
`determining whether a genuine issue of material fact
`exists, the court views the evidence in the light most
`favorable to the nonmoving party and resolves all doubts
`in the nonmovant’s favor. See Anderson v. Liberty Lobby,
`Inc., 477 U.S. 242, 255, 106 S. Ct. 2505, 91 L. Ed. 2d 202
`(1986); Transmatic, Inc. v. Gulton Indus., Inc., 53 F.3d
`1270, 1274 (Fed. Cir. 1995). When that initial burden is
`met, the nonmoving party then must demonstrate why
`summary judgment should be denied. See Anderson, 477
`U.S. at 256-57. Here both parties have cross moved for
`summary judgment; each bears the burden on its motion
`and neither has identified a genuine issue of material fact.
`Plaintiff has identified a genuinely disputed issue of law
`— namely, a new issue of claim construction — but that
`raises no genuine issue of fact, since claim construction is
`for the Court.
`
`An issued United States patent enjoys a presumption of
`validity that can be overcome only by clear and
`convincing evidence of invalidity. See35 U.S.C. § 282; see
`also United States Surgical Corp. v. Ethicon, Inc., 103 F.3d
`1554, 1563 (Fed. Cir. 1997). [*16] Accordingly, the party
`challenging the validity of the patent has the burden to
`prove that the patent is invalid, and ″a moving party
`seeking to have a patent held not invalid at summary
`judgment must show that the nonmoving party, who bears
`the burden of proof at trial, failed to produce clear and
`convincing evidence on an essential element of a defense
`upon which a reasonable jury could invalidate the patent.″
`Crown, 289 F.3d at 1378 (quoting Eli Lilly & Co. v. Barr
`Labs., Inc., 251 F.3d 955, 962-63 (Fed. Cir. 2001)).
`
`B. Obviousness Requires More than Merely Identifying
`Various References Disclosing
`Individual Claim
`Elements
`
`measures the difference between the claimed invention
`and the prior art to determine whether ’the subject matter
`as a whole would have been obvious at the time the
`invention was made’ to a person having ordinary skill in
`the art.″ Id. (quoting Alza Corp. v. Mylan Labs., Inc., 464
`F.3d 1286, 1289 (Fed. Cir. 2006)). The factual issues that
`[*17] be considered include: (1) the scope and
`may
`content of the prior art, (2) the level of ordinary skill in the
`art, (3) the differences between the claimed invention and
`the prior art, and (4) objective indicia of nonobviousness,
`such as commercial success of the patented invention. See
`Graham v. John Deere Co., 383 U.S. 1, 17-18, 86 S. Ct.
`684, 15 L. Ed. 2d 545 (1966).
`
`″Obviousness requires more than a mere showing that the
`prior art
`includes separate references covering each
`separate limitation in a claim under examination.″
`Unigene, 655 F.3d at 1360 (citing KSR Int’l Co. v. Teleflex
`Inc., 550 U.S. 398, 418, 127 S. Ct. 1727, 167 L. Ed. 2d 705
`(2007)). Rather, obviousness requires ″the additional
`showing that a person of ordinary skill at the time of the
`invention would have selected and combined those prior
`art elements in the normal course of
`research and
`development to yield the claimed invention.″ Id. (citing
`KSR, 550 U.S. at 421).
`
`Importantly, ″Care must be taken to avoid hindsight
`reconstruction by using ’the patent in suit as a guide
`through the maze of prior art references, combining the
`right references in the right way so as to achieve the result
`of the claims in suit.’″ In re NTP, Inc., 654 F.3d 1279, 1299
`(Fed. Cir. 2011) (quoting Grain Processing Corp. v.
`American-Maize Prods. Co., 840 F.2d 902, 907 (Fed. Cir.
`1988)); [*18] see also KSR, 550 U.S. at 421 (″A factfinder
`should be aware . . . of the distortion caused by hindsight
`bias and must be cautious of arguments reliant upon ex
`post reasoning.″).
`
`C. The Prior Art Fails to Disclose Altering a Film
`Medium to Eliminate Digital Information or Render It
`Unreadable
`
`The ″method of marking a film medium″ recited in Claim
`19 of the ’633 patent takes advantage of a number of
`well-known phenomena — notably the placement of
`markings on an analog film track that duplicates one or
`more digital
`tracks — via the following allegedly
`innovative step:
`
`Obviousness under 35 U.S.C. § 103 is an issue of law
`based on underlying issues of fact. See Unigene, 655 F.3d
`at 1360 (citing Eisai Co. v. Dr. Reddy’s Labs., 533 F.3d
`1353, 1356 (Fed. Cir. 2008)). ″An obviousness analysis
`
`eliminating or making unreadable digital
`information in at least a part of said second
`section [of the film medium]4 corresponding to
`said sequence of markings on said first
`
`4 The parties do not dispute that the phrase ″second section″ refers to a portion of a film medium — specifically, the digital
`portion (as opposed to the analog portion, which is the ″first section″ of the film medium).
`
`Noah Lerman
`
`

`

`2014 U.S. Dist. LEXIS 12360, *18
`
`Page 6 of 12
`
`section.
`
`’633 Patent at 10:63-65 (emphasis added). This step
`is referred to as ″Limitation (e)″ in the report of
`Deluxe’s technical expert, Williams. As discussed in
`the specification of the ’633 patent, this involved
`purposefully eliminating or obscuring digital sound
`information on a film print. Doing so will cause
`standard movie theater projection equipment
`to
`revert temporarily to the back-up analog soundtrack,
`on which (according to the patent) there [*19] have
`been placed markings (audio codes) that can be read
`and played back by the projection equipment. See
`’633 Patent at 8:11-21. Thus, the invention ensures
`that the embedded audio codes are included in any
`unauthorized copy of the film, along with the rest of
`the audio and video content presented by the
`projection equipment.
`
`As its own technical expert concedes, Deluxe has failed to
`identify any single prior art reference that teaches altering
`the digital soundtrack of a film print in order to purposely
`cause the projection equipment to play back the analog
`soundtrack. See Williams Dep. at 80:16-81:5; 84:16-19;
`106:1-12;
`108:7-21;
`122:19-123:7;
`132:19-134:9;
`137:24-138:11; 150:7-13; 153:23-154:2; 160:17-162:2;
`166:2-174:11; 184:9-17. This
`feature can fairly be
`characterized as a key distinguishing feature over the prior
`art, enabling audio codes to be placed in the analog
`soundtrack instead of the digital soundtrack where they
`[*20] error
`potentially could be ignored by the digital
`correction logic in the projection equipment.5See ’633
`Patent at 8:22-28.
`
`Rather than relying on any single reference, Williams’s
`report identifies six separate prior art combinations that
`allegedly render Claim 19 of the ’633 patent obvious. Each
`combination involves the so-called ″Rosenberg″ patent
`(U.S. Patent No. 5,080,479) with a second reference, and
`each combination allegedly renders Limitation (e)
`obvious. In support of its motion for summary judgment,
`MPV explains why each of the six prior art combinations
`identified in the Williams Report fails to render Limitation
`(e) obvious. In opposing the motion, Deluxe has briefed
`only one of the six — the combination of Rosenberg with
`Sony’s DFP-3000 instruction manual. See Williams Rpt.,
`
`Jackson Ex. N, Section F at 26. I assume that Deluxe has
`abandoned Williams’s other arguments; MPV’s brief, and
`especially the Supplemental Report of its expert, Charles
`Seagrave, cogently explain why. I will, in an excess of
`caution, address all six arguments, but briefly, except for
`the argument
`that
`relates
`to Rosenberg plus Sony
`DFP-3000, which consumes the lion’s share of the parties’
`briefing.
`
`1. Rosenberg with Kohut I, Kohut II, Dieterich, or
`Fujuku
`
`Four of the six references on which Deluxe [*22] relies
`for disclosure of the ″eliminating or making unreadable″
`element of Claim 19 — Kohut I, Kohut II, Dieterich and
`Fukuju — relate to schemes for detecting and correcting or
`otherwise addressing errors found in digital soundtracks
`on media, either film (Kohut I and II) or high density
`non-film discs (Dieterich) or recording media (Fujuku). As
`Williams expressly admits, none of the four patents
`expressly discloses ″eliminating or making unreadable
`digital information in at least a part of said second section
`[digital soundtrack] corresponding to said sequence of
`markings on said first section [analog soundtrack].″ In
`order to argue that these four patents disclose Limitation
`(e), Williams theorizes that the developers would have had
`to eliminate digital information or render it unreadable in
`some manner in order to test the switching circuitry or
`error correction mechanisms that the inventors claimed.
`See, e.g., Williams Rpt. at ¶¶ 56-57, 83, 117, 144.
`Williams’s treatment of Kohut I is representative:
`
`Although Kohut I does not expressly state
`″eliminating or making unreadable digital
`information,″ one of ordinary skill in the art
`would recognize
`that
`this
`limitation is
`necessarily [*23] present in Kohut
`
`I. Specifically,
`the
`in order to fully test
`switching circuit 218 disclosed in Kohut I, the
`inventors would have had to make the digital
`information received at circuit 208 unreadable
`in a variety of ways, including elimination,
`and observe the expected switch from digital
`to analog on the output from switching circuit
`218 that is input to circuit 28.
`
`Williams Rpt. at ¶ 56 (emphasis added).
`
`5 There is, apparently, no technical reason why the individualizing codes could not be hidden in the digital soundtrack of a film
`print, so long as the error correction circuitry is configured appropriately to permit playback of the codes. See, e.g., ’633 Patent
`at 8:22-28 (Jackson Ex. A); Ex. I at 28:55-29:56. It was generally assumed at the time of Lehmann’s invention that the film industry
`was moving away from distribution of celluloid film prints in favor of digital film distribution. See Jackson Ex. M. MPV argues
`that a person of ordinary skill in the art in 2003 would not have been motivated to adopt the approach reflected in Claim 19 of the
`’633 patent, but rather would have been led to place individualizing codes in the digital soundtrack to ensure that the anti-piracy
`measures could not be circumvented simply by copying the film in a theater equipped with digital projection equipment and
`would remain viable in the future — in short, that what was ″obvious″ was the exact opposite of the claimed invention. The Court
`does not need to resolve that issue in order to decide the cross motions, but it is [*21] an appealing observation.
`
`Noah Lerman
`
`

`

`2014 U.S. Dist. LEXIS 12360, *23
`
`Page 7 of 12
`
`implicit″
`″necessarily
`that Williams
`testing
`This
`hypothesizes is unconfirmed by a scintilla of evidence
`demonstrating that it was actually undertaken occurred in
`connection with any of these four patents. Moreover, none
`of the four patents either discloses or suggests the use of
`the sort of testing that Williams hypothesizes. ″In order to
`invalidate a patent based on prior knowledge or use, that
`knowledge or use must have been available to the public.″
`Woodland Trust v. Flowertree Nursery, Inc., 148 F.3d
`1368, 1370 (Fed. Cir. 1998). So even if the hypothesized
`testing occurred, it could not be considered ″prior art″
`because information about such testing was not made
`publicly available.
`
`Finally, there is no suggestion in any of the patents — and
`no evidence from persons skilled in [*24] the art — that
`anyone understood that deliberate defacement of a digital
`soundtrack could be employed as Lehmann employed it:
`to force a movie projector to revert to a corresponding
`audio track where an identifying marking that would show
`up on an infringing print of a motion picture could be
`found. Indeed, the record reveals that the inventors of
`Deluxe’s own infringing patent, U.S. Patent No. 7,394,519
`(the ’519 Patent), both testified that neither of them was
`aware, as late as 2006, of an instance in which the digital
`soundtrack of a film print had been intentionally altered to
`force a reversion to the analog soundtrack. See Wary EBT
`at 93:3-6; Mossman EBT, 69:12-15 (cited in Jackson Ex.
`N, the Seagrave Rebuttal Rpt. at 12, ¶ 33).
`
`2. Rosenberg with Seagrave
`
`The fifth patent that Williams says can be read together
`with Rosenberg to render the invention obvious is U.S.
`Patent No. 5,544,140 (″Seagrave″). The inventor of
`Seagrave (or one of
`the named inventors), Charles
`Seagrave (who was working for Dolby Laboratories at the
`time of the invention), happens to be MPV’s technical
`expert! Mr. Seagrave describes the invention disclosed in
`the ’140 patent as being directed to the implementation
`[*25] of a digital soundtrack on a motion picture film.
`Like any typical digital reproduction system,
`the one
`whose invention is claimed in Seagrave (Dolby Digital ®)
`includes an error detection and correction capability. In the
`event that errors detected in the digital soundtrack cannot
`be corrected or exceed a specified threshold, Seagrave
`employs the technique (which, as is undisputed, existed
`well before the patent in suit) of reversion — switching
`from the digital soundtrack to the analog soundtrack to
`ensure continuity of playback. This is accomplished, not
`by eliminating the digital soundtrack or rendering it
`unreadable — the method claimed in the patent-in-suit —
`but by muting the sound (i.e., turning the volume all the
`way down), which does not make the soundtrack
`unreadable, but rather inaudible. See Seagrave Rebuttal
`Rpt., Jackson Ex. N, at 25-26.
`
`Seagrave combined with Rosenberg probably presents the
`closest case for Deluxe’s obviousness argument, but it
`does not work, either. As noted by the inventor himself, the
`purpose of the reversion processing described in Seagrave
`is to ensure that audible sound is reproduced for the
`audience from the analog soundtrack in the event that
`[*26] errors in the digital soundtrack are not correctable
`— which would, presumably, interfere with the sound
`quality emanating from the digital
`soundtrack. By
`contrast, the identifying codes in Rosenberg are expressly
`disclosed as being inaudible. Thus, during ordinary
`operation, using the reversion circuitry of Seagrave to
`force a projector to fall back to the analog soundtrack in
`place of the digital soundtrack would not have been
`viewed as a desirable way to read Rosenberg’s inaudible
`codes. See Jackson Ex. N at ¶ 72.
`
`While the Seagrave patent does not disclose any testing of
`the sort hypothesized by Williams, we know that such
`testing actually occurred. After reading Williams’s report,
`Mr. Seagrave revealed (in his rebuttal report) that his team
`at Dolby Laboratories did in fact alter
`the digital
`soundtrack of a film print in order to see whether the
`system could revert to the analog soundtrack when there
`were simply too many errors present
`in a digital
`soundtrack so that correction or concealment was not
`feasible during ordinary operation - what he referred to as
`″a last resort.″ See Seagrave Rebuttal Rpt. at 26, ¶ 68. The
`inventors of Seagrave did not contemplate ever purposely
`damaging [*27] the digital soundtrack in order to force
`reversion as part of the ordinary playback of a movie,
`whether to catch pirates or for any other reason. In any
`event, Deluxe cites no evidence suggesting that the public
`was aware of this aspect of Dolby Laboratories’ testing
`protocol, so the ″testing″ argument fails for the Seagrave
`patent for the same reason it fails for the Kohut I and II,
`Dieterich, and Fujuku patents.
`
`3. Rosenberg with Sony DFP-3000
`
`The sixth and last reference that Deluxe combines with
`Rosenberg is Sony’s DFP-3000 QSG (Ex. J) (Jackson Ex.
`N, Section F at 26). The DFP-3000 QSG is a user’s guide
`for a projection booth sound system of the type that could
`be used in a movie theater. See DFP-3000 QSG at 1-1.
`Like the other secondary references, the DFP-3000 QSG
`describes the well-known ability to revert from playback
`of a digital signal
`to a redundant analog signal. Id.
`(describing ″comprehensive fallback system″).
`
`DFP-3000 QSG differs from the five prior art patent
`references discussed above in that
`it does disclose
`instructions for testing the reversion functionality. But
`those instructions point in a decidedly different direction
`than any of the other references. DFP-3000 [*28] QSG
`teaches that the reversion functionality should be tested by
`
`Noah Lerman
`
`

`

`2014 U.S. Dist. LEXIS 12360, *28
`
`Page 8 of 12
`
`blocking off the light-emitting diodes (″LEDs″) that the
`projector uses to read the digital soundtrack,
`thereby
`causing the system to revert to the analog soundtrack. Id.
`at 6-10 (stating that ″blocking the [projector’s] LEDs will
`allow you to confirm operation of the SDDS ACM
`(Analog Concealment Mode) fallback to optical or other
`preset″).
`
`Deluxe’s argument that this prior art combination renders
`Claim 19 obvious rests on an interpretation of Claim 19
`under which the step of ″eliminating or making unreadable
`digital information in at least part of said second section
`[of the film medium]″ can be performed without doing
`anything at all to the digital portion of the film medium,
`but
`instead inhibiting the ability of
`the projection
`equipment to read information. Deluxe’s expert Williams
`opines as follows:
`
`information from a portion of the
`eliminating digital
`digital film soundtrack (the ″second section″) or rendering
`such information unreadable on the film track itself. Since
`Williams obviously reads the claim language differently,
`MPV asks the court to construe the claim.
`
`Deluxe argues that it is too late for a new Markman phase,
`but it hardly lies in Deluxe’s mouth to make that argument,
`since it
`is Deluxe’s eleventh-hour reference and the
`associated construction given to a patent term by Williams
`that injects this new issue into the case. Until recently,
`Deluxe took the position that the ’633 patent disclosed
`altering the digital soundtrack of a film print to force a
`projector to revert to playback of the analog soundtrack.
`For example, in its Claim Construction Brief, Deluxe
`argued:
`
`DFP-3000 QSG teaches blocking the LED
`used to read each of
`the three digital
`soundtrack information streams on a quad
`format feature. This teaches each and every
`″eliminating″
`″making
`example
`of
`and
`unreadable″ depicted in Figure 4 of the ’633
`Patent. Specifically, DFP-3000 QSG teaches
`blocki