Case 1:03-cv-00440-WY-DLM Document 412 Filed 09/29/09 Page 1 of 66 PageID #: 8500
`
`UNITED STATES DISTRICT COURT
`DISTRICT OF RHODE ISLAND
`___________________________________
`)
`UNILOC USA, INC. and
`)
`UNILOC SINGAPORE PRIVATE LIMITED, )
`)
`Plaintiffs,
`)
`)
`)
`
`))
`
`C.A. No. 03-440 S
`
`v.
`MICROSOFT CORPORATION,
`)
`Defendant.
`___________________________________)
`DECISION AND ORDER
`WILLIAM E. SMITH, United States District Judge.
`For over six years Plaintiffs Uniloc USA, Inc. and Uniloc
`Singapore Private Limited (Uniloc) and Defendant Microsoft
`Corporation (Microsoft) have battled in a high stakes patent
`dispute in this Court. It has taken them to the Federal Circuit
`once, and finally to trial where Uniloc scored a massive jury
`verdict (purportedly the fifth largest patent verdict in history).
`Before the Court are numerous post-trial motions. After careful
`consideration of the arguments and the evidence, and mindful of the
`limitations placed upon the Court in ruling upon a post-trial
`motion for judgment as a matter of law (JMOL), the Court grants
`JMOL of non-infringement in Microsoft’s favor. And while this
`holding on non-infringement arguably renders moot many, if not all,
`of the remaining issues raised by these motions, the Court believes
`it is both reasonable and potentially useful in the long run, given
`the breadth and complexity of the issues raised, to tackle a number
`
`Petitioner Ex. 1038 Page 1
`
`

`
`Case 1:03-cv-00440-WY-DLM Document 412 Filed 09/29/09 Page 2 of 66 PageID #: 8501
`
`of other important issues raised by the parties’ motions, including
`willfulness and invalidity.
`I.
`Background1
`A.
`The ‘216 Patent
`The patent-in-suit is U.S. Patent No. 5,490,216 (‘216 patent)
`entitled “System for Software Registration,” issued on February 6,
`1996. The inventor is Mr. Ric Richardson, an Australian citizen
`who founded Uniloc and made the claimed invention in Australia in
`or around 1991 or 1992.2 In broad terms, the patent is directed to
`a method of reducing unlicensed use of software through casual
`copying. The technology is intended to deter unauthorized copying
`by a purchaser of a piece of software by locking the software to a
`user and allowing it “to run in a use mode on a platform if and
`only if an appropriate licensing procedure has been followed.”
`‘216 patent, col. 2, 11. 53-55. Claim 19, the sole independent
`claim at issue, reads as follows:
`A remote registration station incorporating remote
`licensee unique ID generating means, said station forming
`part of a registration system for licensing execution of
`digital data in a use mode, said digital data executable
`
`1 The reader in search of more detail should consult the prior
`decisions in this case: 447 F. Supp. 2d 177 (D.R.I. 2006) (claim
`construction); No. 03-cv-440, Doc. No. 199, (D.R.I. Oct. 19, 2007)
`(summary judgment); 290 Fed. Appx. 337, 2008 WL 3539749 (Fed. Cir.
`2008) (reversal-in-part and remand); 2009 WL 691204 (D.R.I. Mar.
`16, 2009) (Daubert and motions in limine).
`2 Mr. Richardson founded Uniloc Australia and assignee Uniloc
`Singapore to develop and sell his invention. Uniloc USA holds the
`exclusive right to the invention in the United States.
`2
`
`Petitioner Ex. 1038 Page 2
`
`

`
`Case 1:03-cv-00440-WY-DLM Document 412 Filed 09/29/09 Page 3 of 66 PageID #: 8502
`
`on a platform, said system including local licensee
`unique ID generating means, said system further including
`mode switching means operable on said platform which
`permits use of said digital data in said use mode on said
`platform only if a licensee unique ID generated by said
`local licensee unique ID generating means has matched a
`licensee unique ID generated by said remote licensee
`unique ID generating means; and wherein said remote
`licensee unique ID generating means comprises software
`executed on a platform which includes the algorithm
`utilized by said local licensee unique ID generating
`means to produce said licensee unique ID.
`The relevant terms (all of which are in play at this stage)
`were construed as follows:
`
`registration system
`
`licensee unique ID
`
`use mode
`
`local licensee unique ID generating
`means
`
`remote licensee unique ID generating
`means
`
`a system that allows digital data or
`software to run in a use mode on a
`platform if and only if an
`appropriate licensing procedure has
`been followed
`
`a unique identifier associated with a
`licensee
`
`a mode that allows full use of the
`digital data or software in
`accordance with the license
`
`in functional terms, to generate a
`local licensee unique ID
`the structure to perform this
`function must be a summation
`algorithm or a summer or an
`equivalent
`
`in functional terms, to generate a
`remote licensee unique ID
`The structure to perform this
`function must be a summation
`algorithm or a summer or an
`equivalent
`
`3
`
`Petitioner Ex. 1038 Page 3
`
`

`
`Case 1:03-cv-00440-WY-DLM Document 412 Filed 09/29/09 Page 4 of 66 PageID #: 8503
`
`mode switching means
`
`has matched
`
`in functional terms, to permit the
`digital data or software to run in a
`use mode if the locally generated
`licensee unique ID matches with the
`remotely generated licensee unique ID
`the structure to perform this
`function must be program code which
`performs a comparison of two numbers
`or a comparator or an equivalent of
`such program code or comparator
`
`a comparison between the locally
`generated licensee unique ID and the
`remotely generated licensee unique ID
`shows that the two are the same
`
`includes the algorithm utilized by
`said local licensee unique ID
`generating means to produce said
`licensee unique ID
`
`includes the identical algorithm used
`by the local licensee unique ID
`generating means to produce the
`licensee unique ID
`
`algorithm
`
`a set of instructions that can be
`followed to carry out a particular
`task
`
`Product Activation
`B.
`The accused technology is Microsoft’s patented Product
`Activation system (PA). This feature is contained in software
`products sold through retail distribution worldwide, including the
`accused Microsoft Office XP, Windows XP and Office 2003 products.3
`According to Aiden Hughes, the writer of the original code for
`Microsoft in 1997 that evolved into PA, the goal of the feature was
`to limit the number of computers on which software was installed by
`
`3 PA is bypassed for original equipment manufacturer (OEM)
`licenses whereby, for example, a person purchases a Dell laptop
`with Windows or Office software already installed, and also for
`high volume license agreements with corporations. Thus, only about
`10-20% of total sales of the accused software involve the
`activation at issue here.
`
`4
`
`Petitioner Ex. 1038 Page 4
`
`

`
`Case 1:03-cv-00440-WY-DLM Document 412 Filed 09/29/09 Page 5 of 66 PageID #: 8504
`
`enforcing the limits specified in the applicable product license
`agreement, or EULA (End User License Agreement). (Trial Ex. Z-2
`(“This technology is geared towards reducing software piracy
`occurring today when end users pass along a copy of their floppies
`or CDs to a neighbor or install software products off of original
`CDs onto several machines.”).)
`There is no dispute as to how the PA system operates. Printed
`on each jewel box of a retail software product is a 25-character
`alphanumeric string called a Product Key (e.g., MQ9WT-3D8PY-6VF76-
`GMHVX-DCXFM). No two pieces of software have the same Product Key.
`A user types the Product Key into a computer to install a piece of
`software. If the Product Key is valid and the user agrees to the
`EULA that appears on his or her computer screen, the software is
`then installed but not yet activated.4 Also at this stage, a
`Product ID (PID) is created on the user’s computer from a
`combination of data sources, including the typed-in Product Key,
`Microsoft Product Code (from “bits” on the software CD) and a
`random number derived from the user’s computer. A hardware
`identifier (HWID) is also generated on the user’s machine using
`components of that computer.
`Activation of the software is only achieved when and if a user
`elects to activate. At that time, the software communicates the
`
`4 The allowed use during this “grace period” is an important
`issue and the details are discussed infra at Section IV(D).
`5
`
`Petitioner Ex. 1038 Page 5
`
`

`
`Case 1:03-cv-00440-WY-DLM Document 412 Filed 09/29/09 Page 6 of 66 PageID #: 8505
`
`following information via the internet5 to the remote Microsoft
`Clearinghouse server located in Redmond, Washington: the PID; the
`HWID; and other activation-specific data generated by Microsoft.6
`Together, this sequence of data (described as “one big string” by
`Microsoft’s expert Dr. Dan Wallach) forms a “digital license”
`request sent to the remote Clearinghouse. Once this data (also
`called the “license object”) arrives at the Clearinghouse and is
`confirmed as valid, it is put through a software algorithm. The
`algorithm used depends on the product: for Office it is the MD5
`(message digest) algorithm, and for Windows the SHA-1 (secure hash)
`algorithm. After processing by the algorithm, the result is a
`shortened fixed-bit output (what Microsoft deems the “license
`digest” and Uniloc tags the “remote licensee unique ID”). The
`output is encrypted with a secret, private key known only to
`Microsoft. The result of the encryption, or the digital signature,
`is concatenated with the original license data and sent back to the
`user’s computer.
`The software uses a public key to decrypt the digital
`signature and recover the hashed license. The user side software
`also inputs the concatenated original license data into the same
`MD5 or SHA-1 algorithm as was used on the data at the
`
`5 Uniloc dropped its theory regarding telephone activation.
`6 Uniloc’s expert referred to this data as “X”: activation
`date, expiration date, and so forth.
`6
`
`Petitioner Ex. 1038 Page 6
`
`

`
`Case 1:03-cv-00440-WY-DLM Document 412 Filed 09/29/09 Page 7 of 66 PageID #: 8506
`
`Clearinghouse. Those two values, the decrypted signature (what
`Microsoft describes as the “license digest” and Uniloc deems the
`“remote licensee unique ID”) and output of the user side algorithm
`(what Microsoft also describes as the “license digest” and Uniloc
`deems the “local licensee unique ID”) are compared. If they are
`the same, the software accepts the digital license as genuine and
`the software is activated.7
`
`7 (Trial Ex. M-9 and N-9A (DDX-69).) Though some details are
`disputed, these diagrams fairly represent the system.
`7
`
`Petitioner Ex. 1038 Page 7
`
`

`
`Case 1:03-cv-00440-WY-DLM Document 412 Filed 09/29/09 Page 8 of 66 PageID #: 8507
`
`II. Procedural Travel
`Uniloc sued on September 26, 2003. Following discovery,
`briefing, a technical tutorial and a Markman hearing the parties
`submitted, and the Court construed, 24 claims. Uniloc contended
`approximately eight aspects of PA infringed five independent (and
`multiple dependent) claims of the ‘216 patent, under a handful of
`assorted theories. In October of 2007, this Court granted summary
`judgment in Microsoft’s favor on non-infringement. On appeal,
`Uniloc narrowed its case to Claims 12 and 19, contending the output
`of the PA algorithm constituted a “licensee unique ID.” In 2008,
`the Federal Circuit affirmed this Court’s claim construction but
`
`8
`
`Petitioner Ex. 1038 Page 8
`
`

`
`Case 1:03-cv-00440-WY-DLM Document 412 Filed 09/29/09 Page 9 of 66 PageID #: 8508
`
`found a genuine issue of material fact as to whether PA uses the
`same algorithm on both the user and server side to generate
`licensee unique IDs, finding this Court erred in concluding that it
`did not.8 See Uniloc USA, Inc. v. Microsoft Corp., 290 Fed. Appx.
`337, 342-43 (Fed. Cir. 2008).9
`Following remand, with the case narrowed and theories more
`defined, Microsoft sought leave once again to move pursuant to Rule
`56 on several remaining issues of non-infringement and invalidity
`(some of which this Court did not reach the first time around and
`some newly raised). Uniloc opposed this second bite at the summary
`judgment apple and pressed for a trial date. The Court agreed with
`Uniloc but urged Microsoft to preview its arguments in its pretrial
`memorandum and, if appropriate, raise them at the Rule 50 stage.10
`
`8 In dissent, Chief Judge Michel would have affirmed judgment
`under Microsoft’s construction of licensee unique ID that this
`Court and the majority rejected: that the inputs must include at
`least one piece of personal information (PA uses no such inputs).
`9 On this point (the use of the same algorithm) there seems to
`be no dispute that PA does use the same algorithm on both sides of
`the system. This Court clearly made a mistake on this point, which
`even Microsoft acknowledged at oral argument before the Circuit.
`The parties skirmish over this in another context discussed below,
`but one wonders why Uniloc did not simply file a motion for
`reconsideration at the time. Perhaps time, money and aggravation
`could have been avoided if it had done so.
`10 This background gives some needed context to one of the
`dominant themes of Uniloc’s argument -- that Microsoft’s
`contentions fail because the jury rejected them. While this is
`correct as to some issues and arguments, the Court always intended
`to address some of Microsoft’s arguments for judgment as a matter
`of law at the appropriate time. Having been strongly opposed to
`allowing these arguments to be heard before trial, Uniloc’s attempt
`9
`
`Petitioner Ex. 1038 Page 9
`
`

`
`Case 1:03-cv-00440-WY-DLM Document 412 Filed 09/29/09 Page 10 of 66 PageID #: 8509
`
`Following motions in limine and Daubert challenges to damages
`experts, Uniloc withdrew its claim for infringement of Claim 12 the
`evening before trial began. After ten days of trial with ten live
`witnesses and ten witnesses by deposition, the jury found: (1)
`Microsoft infringed Claim 19; (2) Claim 19 was valid; (3)
`infringement was willful; and (4) Uniloc was entitled to
`$388,000,000 in damages.
`Microsoft seeks a judgment that it does not infringe Claim 19,
`or alternatively that Claim 19 is invalid either because it is
`anticipated or obvious. It further contends no jury could
`reasonably have found infringement was willful, or award such
`excessive damages. Microsoft’s overall theme is that the jury
`failed to grasp the complexity of the case (and Microsoft’s
`defenses) due to Uniloc’s “ceaseless rhetoric and innuendo”; Uniloc
`defends its verdict with vigor, saying Microsoft’s motions are
`nothing but a pitch for a “do-over” in the form of a bench trial,
`while all this Court needs is its rubber stamp. For its part,
`Uniloc seeks enhanced damages, prejudgment and postjudgment
`interest and a permanent injunction.
`III. Judgment As a Matter of Law (JMOL) Standard of Review
`First Circuit standards define the procedural contours of the
`instant review; Federal Circuit precedent applies on substantive
`
`to use the verdict as a shield to Microsoft’s legitimate summary
`judgment motions is somewhat overreaching.
`10
`
`Petitioner Ex. 1038 Page 10
`
`

`
`Case 1:03-cv-00440-WY-DLM Document 412 Filed 09/29/09 Page 11 of 66 PageID #: 8510
`
`patent law issues. See Go Med. Indus. Pty., Ltd. v. Inmed Corp.,
`471 F.3d 1264, 1272 (Fed. Cir. 2006) (“On procedural issues not
`unique to patent law, we apply the standard of review of the
`regional circuit.”).
`JMOL is appropriate when “a party has been fully heard on an
`issue during a jury trial and the court finds that a reasonable
`jury would not have a legally sufficient evidentiary basis to find
`for the party on that issue.” Fed. R. Civ. P. 50(a). Post-trial,
`JMOL is called for under Fed. R. Civ. P. 50(b) when the facts and
`inferences are one-sided and “point so strongly and overwhelmingly
`in favor of the movant that a reasonable jury could not have
`returned the verdict.” Acevedo-Diaz v. Aponte, 1 F.3d 62, 66 (1st
`Cir. 1993) (internal citation omitted); see Soto-Lebron v. Fed.
`Express Corp., 538 F.3d 45, 56 (1st Cir. 2008). The Court must not
`evaluate “the credibility of witnesses, resolve conflicts in
`testimony, or evaluate the weight of evidence,” but rather view the
`evidence in the light most favorable to Uniloc, giving it all fair
`and reasonable inferences. Gibson v. City of Cranston, 37 F.3d
`731, 735 (1st Cir. 1994). Of course, review of the jury’s verdict
`is also affected by the applicable burden of proof. See Mentor
`H/S, Inc. v. Med. Device Alliance, Inc., 244 F.3d 1365, 1375 (Fed.
`Cir. 2001) (noting in context of invalidity based on clear and
`convincing evidence that courts grant JMOL for the party bearing
`the burden of proof only in extreme cases).
`
`11
`
`Petitioner Ex. 1038 Page 11
`
`

`
`Case 1:03-cv-00440-WY-DLM Document 412 Filed 09/29/09 Page 12 of 66 PageID #: 8511
`
`IV. Non-infringement
`Microsoft first asserts that there is no evidence to support
`the conclusion that it directly infringed Claim 19. It then argues
`no reasonable jury could find infringement by a preponderance of
`evidence as to four of the elements Uniloc was required to prove
`infringed: (i) “licensee unique ID”; (ii) “licensee unique ID
`generating means”; (iii) “registration system”; and (iv) “mode
`switching means.”
`A.
`Direct Infringement
`For reasons that will become obvious in the discussion that
`follows, the issue of direct versus indirect infringement received
`no attention at trial. In its pretrial memorandum, Uniloc
`discussed the law of direct infringement and indirect infringement
`under 35 U.S.C. § 271(b). The parties submitted agreed upon jury
`instructions on both theories. At trial, it was not clear which
`theory (or theories) Uniloc was actually pressing. Following most
`of the evidence, and after Microsoft orally summarized its Rule 50
`motions, Uniloc dropped its request that the jury be instructed on
`indirect infringement. (See Stip. regarding Pl.’s Claims for
`Infringement of Claim 12 and for Indirect Infringement (Doc. No.
`365).) Uniloc therefore was required to prove Microsoft directly
`infringed Claim 19. Microsoft contends that Uniloc has failed to
`prove the statutory requirements of direct infringement.
`
`12
`
`Petitioner Ex. 1038 Page 12
`
`

`
`Case 1:03-cv-00440-WY-DLM Document 412 Filed 09/29/09 Page 13 of 66 PageID #: 8512
`
`Before confronting the substance of the dispute, there is a
`waiver hurdle to clear. Microsoft did not make this precise
`argument either before or during trial; rather, it made broad non-
`infringement arguments (literal and equivalents) at all stages,
`with limitation-specific details. Although in general regional
`circuit law governs procedural aspects of a JMOL motion, where (as
`here) the “precise issue pertains uniquely to patent law” Federal
`Circuit authority controls. Duro-Last, Inc. v. Custom Seal, Inc.,
`321 F.3d 1098, 1105-06 (Fed. Cir. 2003) (holding that pre-verdict
`JMOL motion on inequitable conduct and on-sale bar did not preserve
`right to make post-verdict motion on obviousness where defenses
`required different elements of proof). The requisite pre-verdict
`specificity varies with the circumstances of each case, and the key
`inquiry is whether the motion fairly informs the opposing party of
`its alleged evidentiary deficiencies. See Junker v. Eddings, 396
`F.3d 1359, 1363 (Fed. Cir. 2005). Here, given the overlap in proof
`and agreement as to how PA works as between the user and
`Clearinghouse, Microsoft’s post-verdict direct infringement
`challenge is appropriate. Microsoft’s failure to highlight the
`issue was no doubt a consequence of its belief that Uniloc was
`proceeding on a theory of indirect infringement (or both theories)
`until its casual dismissal of its indirect theory just before
`closing argument. This is not a case of a new argument thwarting
`
`13
`
`Petitioner Ex. 1038 Page 13
`
`

`
`Case 1:03-cv-00440-WY-DLM Document 412 Filed 09/29/09 Page 14 of 66 PageID #: 8513
`
`the purposes of Rule 50 because Uniloc’s opportunity to shore up
`its proof has passed.
`On the substance, the statute provides that “whoever without
`authority makes, uses, offers to sell, or sells any patented
`invention, within the United States or imports into the United
`States any patented invention during the term of the patent
`therefor, [directly] infringes the patent.” 35 U.S.C. § 271(a).
`The parties agree Claim 19 is a system, or apparatus, claim and not
`a method or process for locking software.11 It calls not for a
`single device “but rather a system comprising multiple distinct
`components.” NTP, Inc. v. Research In Motion, Ltd., 418 F.3d 1282,
`1313 (Fed. Cir. 2005) (“[T]he nature of those components . . .
`permits their function and use to be separated from their physical
`location.”). “To infringe an apparatus claim, the device must meet
`all of the structural limitations.” Cross Med. Prods., Inc. v.
`Medtronic Sofamore Danek, Inc., 424 F.3d 1293, 1311-12 (Fed. Cir.
`2005); see Hewlett-Packard Co. v. Bausch & Lomb, Inc., 909 F.2d
`1464, 1468 (Fed. Cir. 1990) (“[A]pparatus claims cover what a
`device is, not what a device does.”)
`Microsoft contends Claim 19 requires both a local side and
`remote side, and, therefore, the entire accused system that
`
`11 Of the 20 claims in the ‘216 patent all but 4 claim a
`“registration system.” 3 others claim a method, leaving oddball
`Claim 19 (a “remote registration station . . . forming part of a
`registration system”).
`
`14
`
`Petitioner Ex. 1038 Page 14
`
`

`
`Case 1:03-cv-00440-WY-DLM Document 412 Filed 09/29/09 Page 15 of 66 PageID #: 8514
`
`allegedly infringes Claim 19 does not exist until the local side
`user installs and runs the PA software on his computer. Thus,
`“there can be no direct infringement of an apparatus claim by one
`entity where a third party completes the apparatus, such as by
`establishing one of its elements.” (Def.’s Mot. For JMOL (Doc.
`371-2 p. 45) (relying in part on Cross Med. Prods., 424 F.3d at
`1310-11 (finding that accused product did not directly infringe
`claim term “operatively joined” where limitation of anchor seat
`contacting bone was not met until surgeon connected them)).)
`Despite its common sense appeal, the argument is ultimately
`unconvincing. A reasonable jury could find Microsoft makes, uses
`or sells the entire apparatus claimed, and Cross Medical does not
`compel a different result. Claim 19 sets forth a handful of means
`the system must contain, and there is no “participation” or
`“control” limitation relative to the end-user. See Fantasy Sports,
`Props., Inc. v. SportsLine.com, Inc., 287 F.3d 1108, 1119 (Fed.
`Cir. 2002). Accepting Microsoft’s argument that the local side of
`Claim 19 requires an end-user’s participation, similar to the
`surgeons’ participation in Cross Medical, would be akin to
`importing a method step into this software system -- something the
`language of Claim 19 does not support.
`What is more, there can be little doubt Microsoft makes, uses
`and controls the Clearinghouse server and is the “mastermind” of
`the software, causing each local and remote component to (arguably)
`
`15
`
`Petitioner Ex. 1038 Page 15
`
`

`
`Case 1:03-cv-00440-WY-DLM Document 412 Filed 09/29/09 Page 16 of 66 PageID #: 8515
`
`complete “infringement” by the entire system. BMC Resources, Inc.
`v. Paymentech, L.P., 498 F.3d 1373, 1381-82 (Fed. Cir. 2007)
`(discussing joint infringement of patented process); see also NTP,
`418 F.3d at 1313-18 (affording broad interpretation to “use” under
`§ 271(a) in considering whether use of system was within the United
`States based on control and receipt of benefit); Inline Connection
`Corp. v. AOL Time Warner Inc., 472 F. Supp. 2d 598, 599-600 (D.
`Del. 2007) (holding that accused infringer could not avoid
`liability on the basis that it did not provide all components and
`thus did not “use” entire system); Civix-DDI, LLC v. Cellco P’ship,
`387 F. Supp. 2d 869, 883-86 (N.D. Ill. 2005) (rejecting argument
`that to directly infringe a system claim infringer must directly
`use each component). The bottom line is that nothing Microsoft
`offers or this Court has reviewed supports finding that Claim 19
`cannot, as a matter of law, capture direct infringement by
`Microsoft in this case.12
`B.
`“Licensee Unique ID” (LUID)
`Turning to the individual limitations, “[i]t is . . . well-
`settled that each element of a claim is material and essential, and
`
`12 Uniloc’s reliance on Intel Corp. v. United States Int’l
`Trade Comm’n, 946 F.2d 821, 831-32 (Fed. Cir. 1991) is not helpful.
`Claim 19 does not neatly fit the “programmable” or “capable” family
`of cases, which in any event has been denied the broad reading
`Uniloc proffers. See, e.g., Fantasy Sports Props., Inc. v.
`SportsLine.com, Inc., 287 F.3d 1108, 1117-18 (Fed. Cir. 2002).
`Moreover, Microsoft is correct that the “executable” language in
`the claim refers to the commercial software meant to be protected
`(i.e., Office or Windows). See ‘216 patent, col. 2, ll. 14-23.
`16
`
`Petitioner Ex. 1038 Page 16
`
`

`
`Case 1:03-cv-00440-WY-DLM Document 412 Filed 09/29/09 Page 17 of 66 PageID #: 8516
`
`that in order for a court to find infringement, the plaintiff must
`show the presence of every element or its substantial equivalent in
`the accused device.” Lemelson v. United States, 752 F.2d 1538,
`1551 (Fed. Cir. 1985). Infringement is a question of fact reviewed
`for substantial evidence, and Uniloc bears the burden of proof by
`a preponderance of evidence. Finisar Corp. v. DirecTV Group, Inc.,
`523 F.3d 1323, 1332 (Fed. Cir. 2008). The absence of even one
`limitation, however, defeats an action for literal infringement.
`Bayer AG v. Elan Pharm. Research Corp., 212 F.3d 1241, 1247 (Fed.
`Cir. 2000).
`On this first limitation at issue, the Court construed a LUID
`as a unique identifier associated with a licensee. Although
`Uniloc’s theory regarding the LUID was a moving target through the
`earlier stages of this litigation, its final LUID theory, pressed
`at trial, targeted the output of the PA algorithm on both the local
`and remote sides.
`The issue of uniqueness has been hotly contested from the
`start. See Uniloc USA, Inc. v. Microsoft Corp., 447 F. Supp. 2d
`177, 184-85 (D.R.I. 2006) (rejecting Microsoft’s proposed
`construction that uniqueness of the identifier must be “one-of-a-
`kind” akin to DNA, and holding that the LUID will “consist of
`varying levels of uniqueness that are wholly dependent upon the
`inputs”); Uniloc USA, 290 Fed. Appx. at 342 n.1, 344 (agreeing with
`construction and considering “unique identifier” a jury question);
`
`17
`
`Petitioner Ex. 1038 Page 17
`
`

`
`Case 1:03-cv-00440-WY-DLM Document 412 Filed 09/29/09 Page 18 of 66 PageID #: 8517
`
`(Trial Tr. 136:25-138:5, Apr. 7, 2009 (declining to give precise
`definition but instructing jury that “unique” should be sufficient
`to provide some sufficiently distinguishing identifier of the
`licensee).) In its motion, Microsoft does not seriously dispute
`that its license digest is mathematically a unique value. Its
`primary challenge goes to the rest of the definition -- whether it
`is an identifier associated with a licensee. This is
`unquestionably a close call. But ultimately the jury’s answer on
`this question must stand, because it is supported by the trial
`record.13
`Uniloc’s argument demonstrates the inevitable blending of
`unique and associated in the context of the claimed invention. As
`expressed by Mr. Klausner, “the Product Key and the PID and the
`license and the hash digest are all associated [with the licensee]
`
`13 Microsoft argues that “unique” renders Claim 19 indefinite,
`but it does not. (Microsoft did not waive the point; it has always
`been on the radar screen –- see Doc. No. 209-2 p.8 n.4; Doc. No.
`291 p.1-2, 21 n.4.) The Court disagrees that a person skilled in
`the art could not determine whether a system such as PA creates a
`unique value. In the shadow of the “exacting standard” for
`indefiniteness, it is of no matter that experts squabble over
`precise mathematical bounds. Halliburton Energy Servs., Inc. v. M-
`I LLC, 514 F.3d 1244, 1249-50 (Fed. Cir. 2008). In an anti-piracy
`software locking system, reasonable meaning of a not one-of-a-kind
`unique identifier can attach even without the precise bookend
`definition Microsoft seeks (without ever suggesting one). Defining
`unique by what it is not, rather than affirmatively stating what it
`must be, does not in this case make it “insolubly ambiguous” under
`35 U.S.C. § 112 ¶ 2, nor does it prevent fair notice of what is
`claimed. Id. at 1250 (citations omitted); see Exxon Research &
`Eng’g Co. v. United States, 265 F.3d 1371, 1375 (Fed. Cir. 2001)
`(claim is indefinite if “reasonable efforts at claim construction
`prove futile”).
`
`18
`
`Petitioner Ex. 1038 Page 18
`
`

`
`Case 1:03-cv-00440-WY-DLM Document 412 Filed 09/29/09 Page 19 of 66 PageID #: 8518
`
`because they’re all unique, and there’s no one else in the world
`that has that.” (Trial Tr. 173:4-7, Mar. 25, 2009.) Since no two
`Product Keys are alike, a “user associates themselves via their
`typing it in.” (Id. at 11-18.) From there, the PID (generated in
`part from the Product Key) is unique and associated; and since the
`PID is unique and associated, the algorithm output (generated in
`part from the PID) follows suit:
`The user has to enter a valid product key, so in this
`case the user is entering the information and then starts
`to type in the product key, and that’s now the product
`key that’s associated with that user. The user has
`entered it . . . [a]nd that association, as we will later
`see, maintains between the user and the product key and
`its derivatives throughout the Microsoft system, going
`from the local side to the remote side and back.”
`(Trial Tr. 144:1-10, Mar. 24, 2009.)
`Uniloc also relied on Microsoft documents that refer to the
`Product Key and PID as unique numbers or sequences that are
`customer-specific. (See, e.g., Trial Ex. 248 (“customer-specific
`Product ID” and “user’s unique Product Key”); Trial Ex. 129
`(“program uses the Product Key to create the customer’s unique, 20-
`digit Product ID number”) (all emphasis added).)
`Microsoft highlights several flaws in Uniloc’s theory. First,
`it says that by focusing on the inputs Uniloc skims past the one-
`way algorithm that purposefully destroys the ability to connect
`back to those values. Microsoft portrays this as a fundamental
`difference in the systems because PA was designed to maintain
`licensee anonymity, and destroy any association. It also points to
`19
`
`Petitioner Ex. 1038 Page 19
`
`

`
`Case 1:03-cv-00440-WY-DLM Document 412 Filed 09/29/09 Page 20 of 66 PageID #: 8519
`
`undisputed evidence that the output is temporary and not kept by
`Microsoft. Next, it argues that Uniloc’s starting block, the
`Product Key, is at most connected with software and not a person
`(because the evidence showed many people can type the same Product
`Key into multiple computers and thus create many PIDs and LUIDs).14
`See Uniloc USA, 290 Fed. Appx. at 348 (Michel, C.J., dissenting in
`part) (“[T]he Product Key at most identifies a particular copy of
`the software, and does not personally identify the user of that
`copy.”). Finally, according to Microsoft, upon a careful read many
`so-called “contemporaneous” documents do not discuss an association
`between the PA algorithm output and an actual person. (See, e.g.,
`Trial Ex. 129 (“like fingerprints on people, the Product ID is
`different for any two customer licenses); Trial Ex. 246 (“Product
`ID is unique to that software installation”) (all emphasis added).)
`Microsoft’s argument is not without support and certainly not
`frivolous, as Uniloc suggests. And, it highlights the gray area in
`which the parties have battled on this issue: on one hand, the
`unique association called for cannot solely come from platform-
`related information, or the HWID, Uniloc USA, 290 Fed. Appx. at
`343-44; yet on the other, it must not be required to include
`personal information about the licensee. Id. at 344 (holding that
`vendor-supplied information like Product Key “could be the basis
`
`14 (See Trial Tr. 196:23-197:6, Mar. 25, 2009 (Mr. Klausner
`agreeing that with reinstalls using the same Product Key, the odds
`you would get the same PID are “very, very low.”).)
`20
`
`Petitioner Ex. 1038 Page 20
`
`

`
`Case 1:03-cv-00440-WY-DLM Document 412 Filed 09/29/09 Page 21 of 66 PageID #: 8520
`
`for” a LUID as information unique to, and not necessarily about,
`the user). Just as unique is a relative term in the context of the
`‘216 invention so too must association be a relative term.
`Uniloc’s evidence centers on the notion that an association with a
`licensee can be created simply by virtue of the uniqueness of the
`LUID at the start of the process, because no other user can
`generate the same LUID. The Court cannot outright reject this
`theory as a matter of law. The purpose of the system in the ‘216
`patent is to protect a piece of software and control its
`distribution to and use by unlicensed users. Given Uniloc’s
`evidence as to the inp