Case 1:03-cv-00440-WY-DLM Document 374 Filed 05/29/09 Page 1 of 63 PageID #: 5417
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`UNITED STATES DISTRICT COURT
`DISTRICT OF RHODE ISLAND
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`__________________________________________
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`UNILOC USA, INC. and
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`UNILOC SINGAPORE PRIVATE LIMITED
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`Plaintiffs,
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`MICROSOFT CORPORATION,
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`Defendant.
`__________________________________________)
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`vs.
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`Civ. A. No. 03-CV-440 (WES)
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`PLAINTIFFS’ OPPOSITION TO DEFENDANT’S
`MOTIONS FOR JUDGMENT AS A MATTER OF LAW,
`NEW TRIAL, OR REMITTITUR
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`Sheri L. Pizzi (R.I. Bar No. 5720)
`TAYLOR DUANE BARTON
`& GILMAN, LLP
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`10 Dorrance Street, Suite 700
`Providence, Rhode Island 02903
`(401) 273-7171 (Telephone)
`(401) 273-2904 (Facsimile)
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`Paul J. Hayes, Esq.
`Dean G. Bostock, Esq.
`MINTZ, LEVIN, COHN, FERRIS,
` GLOVSKY AND POPEO, P.C.
`One Financial Center
`Boston, MA 02111
`(617) 542-6000 (Telephone)
`(617) 542-2241 (Facsimile)
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` Attorneys for Plaintiffs, Uniloc USA, Inc.
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` and Uniloc Singapore Private Ltd.
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`Petitioner Ex. 1042 Page 1
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`Case 1:03-cv-00440-WY-DLM Document 374 Filed 05/29/09 Page 2 of 63 PageID #: 5418
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`TABLE OF CONTENTS
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`INTRODUCTION .............................................................................................................1
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`LEGAL STANDARDS FOR POST-TRIAL MOTIONS .................................................3
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`ARGUMENT.....................................................................................................................4
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`A.
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`Credibility ..............................................................................................................5
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`B. Willful Infringement ..............................................................................................7
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`C.
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`Infringement.........................................................................................................14
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`1.
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`2.
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`3.
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`4.
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`5.
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`Uniloc Presented Sufficient Evidence That The
`Licensee Unique ID Is Associated With A Licensee...............................14
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`Uniloc Presented Sufficient Evidence That The
`MD5/SHA-1 Is A Summation Algorithm Or
`Equivalent. ...............................................................................................20
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`Uniloc Established That The Accused Technology
`Is A Registration System That Uses A Mode
`Switching Means......................................................................................23
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`Uniloc Established Direct Infringement ..................................................29
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`Microsoft Is Not Entitled To JMOL Or To A New
`Trial..........................................................................................................31
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`D.
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`Validity ................................................................................................................32
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`1.
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`2.
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`3.
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`The Record Evidence Supports The Jury’s Finding That
`Claim 19 Is Not Anticipated ....................................................................33
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`Obviousness .............................................................................................38
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`Claim 19 Is Not Indefinite, An Argument Microsoft
`Waived .....................................................................................................43
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`E.
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`The Damages Awarded Are Supported By The Evidence...................................44
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`1.
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`2.
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`The Law On Damages In Patent Cases....................................................45
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`Mr. Gemini’s Royalty Was Not Based Upon, And Did Not
`Violate, The Entire Market Value Rule ...................................................45
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`
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`I.
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`II.
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`III.
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`i
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`Petitioner Ex. 1042 Page 2
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`Case 1:03-cv-00440-WY-DLM Document 374 Filed 05/29/09 Page 3 of 63 PageID #: 5419
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`3.
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`Mr. Gemini’s Analysis Is Supported By The Evidence
`And The Law ...........................................................................................47
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`(a)
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`(b)
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`$10 Per Activation Is Supported..................................................47
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`25% Rule of Thumb.....................................................................49
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`4.
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`5.
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`The Damages Award Is Supported By The Evidence And
`Is Not Grossly Excessive .........................................................................51
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`Damages On Activations Initiated Outside The U.S. Were
`Properly Included.....................................................................................52
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`IV.
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`CONCLUSION................................................................................................................56
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`ii
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`Petitioner Ex. 1042 Page 3
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`Case 1:03-cv-00440-WY-DLM Document 374 Filed 05/29/09 Page 4 of 63 PageID #: 5420
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`
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`TABLE OF AUTHORITIES
`
`CASES
`
`
`ATD Corp. v. Lydall, Inc.,
`159 F.3d 534 (Fed. Cir. 1998)..................................................................................................38
`
`
`Amsted Indus., Inc. v. Buckeye Steel Castings Co.,
`24 F.3d 178 (Fed. Cir. 1994)..................................................................................................5, 6
`
`
`Arkie Lures, Inc. v. Gene Larew Tackle, Inc.,
`119 F.3d 953 (Fed. Cir. 1997)..................................................................................................41
`
`
`Bard Peripheral Vascular, Inc. v. W.L. Gore & Assocs., Inc.,
`586 F. Supp.2d 1083 (D. Az. 2008)...................................................................................12, 13
`
`
`Beatrice Foods Co. v. New England Printing and Lith. Co.,
`899 F.2d 1171 (Fed. Cir. 1990)................................................................................................48
`
`
`Biotec Biologische Naturverpackungen GmbH & Co. v. Biocorp, Inc.,
`249 F.3d 1341 (Fed. Cir. 2001)................................................................................................31
`
`
`Bose Corp v. JBL, Inc.,
`112 F. Supp.2d 138 (D. Mass. 2000) .......................................................................................49
`
`
`Brooktree Corp. v. Advanced Micro Devices, Inc.,
`977 F.2d 1555 (Fed. Cir. 1993)................................................................................................44
`
`
`Continental Can Co. USA, Inc. v. Monsanto Co.,
`948 F.2d 1264 (Fed. Cir. 1991)................................................................................................42
`
`
`Cross Med. Prods. , Inc. v. Medtronic Sofamor Danek, Inc.,
`424 F.3d 1293 (Fed. Cir. 2005)..........................................................................................30, 31
`
`
`DMI, Inc. v. Deere & Co.,
`802 F.2d 421 (Fed.Cir.1986)....................................................................................................51
`
`
`Decca Ltd. v. United States,
`544 F.2d 1070 (Ct. Cl. 1976) ...................................................................................................55
`
`
`Deepsouth Packing Co., Inv. v. Laitram Corp.,
`406 U.S. 518 (1972)...........................................................................................................30, 54
`
`
`Figueroa-Torres v. Toledo-Davila,
`232 F.3d at 270 (1st Cir, 2000).........................................................................13, 15, 16, 18, 31
`
`
`
`iii
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`Petitioner Ex. 1042 Page 4
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`

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`Case 1:03-cv-00440-WY-DLM Document 374 Filed 05/29/09 Page 5 of 63 PageID #: 5421
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`
`Fuji Photo Film Co. v. Jazz Photo Corp.,
`394 F.3d 1368 (Fed. Cir. 2005)........................................................................................4, 7, 52
`
`
`Gambro Lundia AB v. Baxter Healthcare Corp.,
`110 F.3d 1573 (Fed. Cir. 1997)................................................................................................42
`
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`GSI Group, Inc. v. Sukup Mfg. Co.,
`No. 05-3011, 2008 WL 4964801 (C.D. Ill. Nov. 18, 2008) ....................................................50
`
`
`Hewlett Packard Co. v. Mustek Systems, Inc.,
`2001 WL 36166855 (S.D. Cal. June 11, 2001)........................................................................21
`
`
`Intel Corp. v. Intern. Trade Com'n,
`946 F.2d 821 (Fed. Cir. 1991)..................................................................................................30
`
`
`Invitrogen Corp. v. Biocrest Mfg. L.P.,
`424 F.3d 1374 (Fed. Cir. 2005)................................................................................................44
`
`
`Keisling v. Ser-Jobs for Progress, Inc.,
`19 F.3d 755 (1st Cir. 1994)........................................................................................................3
`
`
`Marrero v. Goya, of Puerto Rico, Inc.
`304 F.3d at 7 (1st Cir. 2002).......................................................................................4, 7, 32, 38
`
`
`McGinley v. Franklin Sports,
`262 F.3d 1339 (Fed. Cir. 2001)..........................................................................................38, 39
`
`
`Monteagudo v. Asociacion de Empleados del Estado Libre Asociado de Puerto Rico,
`554 F.3d 164 (1st Cir. 2009)......................................................................................3, 4, 30, 51
`
`
`NTP, Inc. v. Research in Motion Ltd.,
`418 F.3d 1282 (Fed. Cir. 2005)....................................................................................39, 55, 56
`
`
`Schumer v. Lab. Computer Systems, Inc.,
`308 F.3d 1304 (Fed. Cir. 2002)..........................................................................................33, 34
`
`
`In re Seagate,
`497 F.3d 1360 (Fed. Cir. 2007), cert. denied, 128 S. Ct. 1445 (2008)............................7, 9, 12
`
`
`Shane v. Shane,
`891 F.2d 976 (1st Cir. 1989)................................................................................................4, 51
`
`
`State Farm Mutual Auto Ins. Co. v. New Horizont, Inc.,
`250 F.R.D. 203 (E.D. Pa. 2008)...............................................................................................21
`
`
`
`iv
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`Petitioner Ex. 1042 Page 5
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`

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`Case 1:03-cv-00440-WY-DLM Document 374 Filed 05/29/09 Page 6 of 63 PageID #: 5422
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`United States v. Lipscomb,
`539 F.3d 32 (1st Cir. 2008), cert. denied, 129 S. Ct. 963 (2009) ..............................................5
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`
`United States v. Riccio,
`529 F.3d 40 (1st Cir. 2008)......................................................................................................47
`
`
`United States v. Taylor,
`166 F.R.D. 356 (M.D.N.C. 1996) ............................................................................................21
`
`
`Voda v. Cordis Corp.,
`536 F.3d 1311 (Fed. Cir. 2008)..............................................................................19, 20, 21, 23
`
`
`Weinar v. Rollform, Inc.,
`744 F.2d 797 (Fed. Cir. 1984), cert. denied, 470 U.S. 1084 (1985)........................................44
`
`
`Young v. Lumenis, Inc.,
`492 F.3d 1336 (Fed. Cir. 2007)................................................................................................43
`
`
`
`STATUTES AND RULES
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`35 U.S.C. § 112, ¶ 2.......................................................................................................................43
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`35 U.S.C. § 282..............................................................................................................................38
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`35 U.S.C. § 284..............................................................................................................................45
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`Fed. R. Civ. P. 30(b)(6)..................................................................................................................21
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`Fed. R. Civ. P. 50.............................................................................................................................3
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`
`
`v
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`Petitioner Ex. 1042 Page 6
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`Case 1:03-cv-00440-WY-DLM Document 374 Filed 05/29/09 Page 7 of 63 PageID #: 5423
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`Plaintiffs, Uniloc USA, Inc. and Uniloc Singapore Private Limited (together “Uniloc”),
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`respectfully submit this brief in opposition to the motions of defendant, Microsoft Corporation
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`(“Microsoft”), for judgment as a matter of law, new trial, or remittitur. For the reasons set forth
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`herein, Microsoft’s motions should be denied.
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`I.
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`
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`INTRODUCTION
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`Microsoft’s motions should be denied because they consist entirely of re-hashing issues
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`that were previously rejected by the Court, attempting to raise issues that it has waived, and
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`ignoring the substantial evidence presented to the jury that supports the verdict. In effect,
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`Microsoft wants to retry the entire case - this time to the Court instead of the jury. Microsoft
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`blames the adverse jury verdict on everyone but itself. For example, it blames the purported
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`“animus against big companies generally” (Microsoft br. p. 1), notwithstanding the Court’s
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`accurate statement that certain members of the jury appeared from their questionnaire to be
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`generally favorable to Microsoft.
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`Microsoft inappropriately accuses Uniloc’s counsel of “inflammatory, unsupported, and
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`internally inconsistent ‘black hat’ rhetoric and innuendo” (Microsoft br. p. 1), yet points to no
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`objection to any statement made by Uniloc’s counsel. Throughout its brief, Microsoft
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`characterizes the jury as unreasonable despite the fact that it accepted the jury as impaneled. See
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`id. at 5 (“No Reasonable Jury” could have found copying or willfulness), 15 (“No Reasonable
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`Jury” could have found infringement), 47 (“No Reasonable Jury” could have found claim 19 not
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`invalid), 61 (“No Reasonable Jury” could have awarded $388 million in damages), 76 (“wholly
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`improper” for “jury to ignore the location of the customer”). Continuing with its criticism of the
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`jury, Microsoft erroneously complains that the verdict was rendered “after brief deliberations,”
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`despite the fact that the jury was out for over eight hours.
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`1
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`Petitioner Ex. 1042 Page 7
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`The truth, however, is that Microsoft presented a weak case to the jury. For instance,
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`Microsoft promised the jury in its opening that it would prove that the ‘216 patent was invalid in
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`view of the Grundy patent. See Ex. A, p. 75. Microsoft never introduced the Grundy patent and
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`never mentioned it again. Microsoft also promised the jury that the evidence would demonstrate
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`that the accused Product Activation technology was independently developed by Messrs. Hughes
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`and Pearce. See Ex. A, pp. 53, 54, 58. The testimony of Messrs. Hughes and Pearce, however,
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`was not credible. Mr. Hughes was impeached on more than one occasion. See Ex. D, pp. 130-
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`132, 200-204. Mr. Pearce admitted that his resume, touting himself as the sole inventor of the
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`‘468 patent, was false. See Ex. E, p. 225. Moreover, the only purported evidence of independent
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`development was a hen-scratch in one of Mr. Pearce’s notebooks, dated after Uniloc had
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`provided its technology to Microsoft and after Uniloc’s patent had been published.
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`On damages, Microsoft made the disingenuous argument that damages for 266 million
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`instances of infringement could not exceed $7 million. As Microsoft should have learned from
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`its prior cases, no jury has ever accepted Microsoft’s low-ball, lump-sum damages theory.
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`Nonetheless, Microsoft presented the same unrealistic theory in this case, and the jury rightly
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`rejected it again. Microsoft also complains about the size of the $388 million verdict. In doing
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`so, Microsoft ignores the extent of infringement, the value of Product Activation, and the billions
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`of dollars of additional revenue derived from its use. See Ex. E, pp. 76-77. Further, Microsoft
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`was well aware that Uniloc’s damages claim was in excess of $560 million. Nonetheless,
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`Microsoft elected to go to trial and risk suffering such a loss.1 Accordingly, Microsoft is
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`unworthy of post-trial sympathy.
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`1 One week before trial, Uniloc again asked to mediate this case. In response, Microsoft rejected
`Uniloc’s mediation offer and indicated that “we’re lighting the fuse on this thing.”
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`2
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`Petitioner Ex. 1042 Page 8
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`II.
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`LEGAL STANDARDS FOR POST-TRIAL MOTIONS
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`In deciding a Rule 50 motion, the Court must examine the evidence in the light most
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`favorable to Uniloc. Keisling v. Ser-Jobs for Progress, Inc., 19 F.3d 755, 760 (1st Cir. 1994). In
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`addition, Uniloc is entitled to “the benefit of all inferences which the evidence fairly supports,
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`even though contrary inferences might reasonably be drawn.” Id. (quoting Cochrane v.
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`Quattrocci, 949 F.2d 11, 12 n. 1 (1st Cir. 1991)).
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`“A court is without authority to set aside a jury verdict and direct the entry of a contrary
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`verdict unless the evidence points so strongly and overwhelmingly in favor of the moving party
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`that no reasonable jury could have returned a verdict adverse to that party. Keisling, 19 F.3d at
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`759-60. Thus, a jury verdict may not be set aside except upon a “determination that the evidence
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`could lead a reasonable person to only one conclusion.” Acevedo-Diaz v. Aponte, 1 F.3d 62, 66
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`(1st Cir. 1993). “[I]t is for jurors, not judges, to weigh the evidence and determine the credibility
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`of witnesses.” Marrero v. Goya of Puerto Rico, Inc., 304 F.3d 7, 22 (1st Cir. 2002). Thus, in
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`deciding a motion for JMOL, “the court may not take into account the credibility of witnesses,
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`resolve evidentiary conflicts, nor ponder the weight of the evidence introduced at trial . . .”
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`Figueroa-Torres v. Toledo-Davila, 232 F.3d 270, 273 (1st Cir. 2000) (citation omitted).
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`A motion for JMOL “preserves for review only those grounds specified at the time, and
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`no others.” Monteagudo v. Asociacion de Empleados del Estado Libre Asociado de Puerto Rico,
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`554 F.3d 164, 171 (1st Cir. 2009) (citations omitted). “[A] renewed motion for judgment as a
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`matter of law under Fed. R. Civ. P. 50(b) is bounded by the movant’s earlier Rule 50(a) motion.”
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`Id. (citation omitted). Thus, “[t]he movant cannot use such a motion as a vehicle to introduce a
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`legal theory not distinctly articulated in its close-of-evidence motion for a directed verdict.” Id.
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`(citation omitted). Microsoft’s motion ignores these fundamental precepts of Rule 50 practice
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`and, instead, impermissibly attempts to retry the case to the Court without a jury.
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`3
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`Petitioner Ex. 1042 Page 9
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`Case 1:03-cv-00440-WY-DLM Document 374 Filed 05/29/09 Page 10 of 63 PageID #: 5426
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`In the First Circuit, the standard for JMOL “is especially exacting where, as here [on the
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`issue of invalidity], the moving party bears the burden of proof on the issue in question.”
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`Marrero v. Goya, 304 F.3d at 22 (citation omitted). “[T]he party with the burden of proof is
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`entitled to judgment as a matter of law only if its has established its case by ‘testimony that the
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`jury is not at liberty to disbelieve.’” Id. (citation omitted). “In that situation, relief under Rule 50
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`is warranted only if the moving party’s evidence is ‘uncontradicted and unimpeached.’” Id.
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`(citation omitted).
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`A motion for a new trial will only be granted where “the verdict was ‘so clearly against
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`the weight of the evidence as to constitute a manifest miscarriage of justice.’” See Shane v.
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`Shane, 891 F.2d 976, 981 (1st Cir. 1989) (citations omitted). Although not the case herein, even
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`if “the evidence would support the opposite verdict or [] the court may have reached a contrary
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`result,” Microsoft would not be entitled to a new trial. Id. (citations omitted).
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`“’[A] party seeking a remittitur bears a heavy burden of showing that an award is grossly
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`excessive, inordinate, shocking to the conscience of the court, or so high that it would be a denial
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`of justice to permit it to stand.’” Monteagudo v. AEELA, 554 F.3d at 174. Juries are “free to
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`select the highest figures for which there is adequate evidentiary support.” See Shane v. Shane,
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`891 F.2d at 983. In a patent case such as this, “a jury’s [royalty] choice simply must be within
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`the range encompassed by the record as a whole.” See Fuji Photo Film Co. v. Jazz Photo Corp.,
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`394 F.3d 1368, 1378 (Fed. Cir. 2005) (citation omitted).
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`III. ARGUMENT
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`As indicated above, Microsoft asserts that the jury got it wrong on every single issue
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`tried, namely: (1) willful infringement; (2) infringement; (3) validity, and (4) damages.
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`Microsoft is not willing to concede that the jury was correct on any issue in this case. Microsoft
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`ignores the fact that Uniloc presented substantial evidence on all issues, including
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`4
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`Petitioner Ex. 1042 Page 10
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`Case 1:03-cv-00440-WY-DLM Document 374 Filed 05/29/09 Page 11 of 63 PageID #: 5427
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`Mr. Klausner’s claim charts (PX 1098), animation (PX 1094; PX 1094a), drawing (PX 1097),
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`and supporting testimony and documents on the issue of infringement, and that such evidence
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`was accepted by the jury which rejected Microsoft’s evidence contra. Thus, Microsoft’s
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`repeated assertion that Uniloc presented “no evidence” is blatantly incorrect.
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`A.
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`Credibility
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`Throughout its brief, Microsoft argues that it presented testimony at trial that supported a
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`verdict in its favor. Such an argument is improper as simply rearguing the merits to the bench.
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`Further, the jury rejected such testimony as not credible. Microsoft does not now get a second
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`bite at the apple by arguing to the Court that such testimony should be believed. As the Court’s
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`instructions properly stated, issues of credibility and the weight of testimony are the province of
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`the jury. United States v. Lipscomb, 539 F.3d 32, 40 (1st Cir. 2008), cert. denied, 129 S. Ct. 963
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`(2009). Thus, in reaching a verdict, a jury may disregard the testimony of witnesses who are not
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`credible. Amsted Indus., Inc. v. Buckeye Steel Castings Co., 24 F.3d 178, 183 (Fed. Cir. 1994).
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`Accordingly, the Court gave the jury (without objection) the following proper instruction on the
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`issue of credibility:
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`Now, as to the testimony of witnesses, your principal task is to
`determine the credibility of the witnesses and the weight that you
`will give to the testimony of each. Whether a party has sustained
`its burden of proof does not depend on the number of witnesses it
`has called or the number of exhibits that it has offered, but instead
`upon the nature and quality of the evidence that has been
`presented.
`You do not have to accept the testimony of any witness if you do
`not find that witness credible. You must decide which witnesses to
`believe and which facts are true. To do this, you must look at all
`the evidence and draw upon your common sense and your personal
`experience.
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`* * *
`Now, in assessing credibility, you may consider whether on some
`prior occasion the witness made statements that contradict the
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`5
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`Petitioner Ex. 1042 Page 11
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`testimony that he or she gave at the time of trial. If you conclude
`that a witness did at some prior time make statements that were
`materially different from what the witness said during this trial,
`you may take that into account in assessing that witness’s
`credibility or determining the weight that you will give to that
`witness’s testimony.
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`Ex. J, pp. 166, 167.
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`
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`Microsoft’s witnesses at trial were shown not to be credible. They were repeatedly
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`impeached and their testimony was repeatedly shown to be inconsistent with Microsoft’s own
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`contemporaneous documents:
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`WITNESS
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`IMPEACHED
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`DISAGREED WITH MS
`DOCUMENT
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`HELLMAN
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`1) Ex. G, pp. 42-43
`2) Id. at 49-52
`3) Id. at 60-62.
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`
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`WALLACH
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`PEIKER
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`HUGHES
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`NAPPER
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`1) Ex. F, pp. 72-73
`2) Id. at 75-76
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`1) Ex. D, pp. 130-32
`2) Id. at 200-04
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`1) Ex. H, pp. 201-03
`2) Id. at 229-30
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`
`6
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`PX 246 (Ex. H, pp. 17-19)
`PX 234 (id. at 20-22)
`PX 256 (id. at 24-25)
`PX 36 (id. at 43-44)
`PX 43 (id. at 45-46)
`PX 1104 (id. at 53-54)
`PX 270 (id. at 54-55)
`PX 26 (id. at 55-56)
`PX 73 (id. at 56-57)
`PX 608 (id. at 57-58)
`PX 244 (id. at 59-60)
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`PX 424 (Ex. F,
`pp. 118-20
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`PX 239 (Ex. D,
`pp. 141-43)
`PX 250 (id. at 146-47)
`PX 50 (id. at 170-71)
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`PX 71 (Ex. H, pp.
`237-38
`PX 238 (id. at 238-39)
`PX 424 (id. at 239-40)
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`Petitioner Ex. 1042 Page 12
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`WITNESS
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`IMPEACHED
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`RICHARDS
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`DISAGREED WITH MS
`DOCUMENT
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`PX 261 (Ex. I, pp. 55-56)
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`Thus, from the record evidence the jury was free to, and obviously did, reject the testimony of
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`Microsoft’s witnesses. A jury’s credibility determinations are not to be second-guessed.
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`Fuji Photo Film, 394 F.3d at 1379.2
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`B. Willful Infringement
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`
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`Microsoft first argues that no reasonable jury could have found copying or willful
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`infringement. See Microsoft br. pp. 5-15. As the jury was correctly instructed, “to prove willful
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`infringement, Uniloc must persuade you with clear and convincing evidence that it is highly
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`probable that Microsoft acted with reckless disregard of the claims of Uniloc’s patent.” Ex. J, p.
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`143. See In re Seagate, 497 F.3d 1360, 1371 (Fed. Cir. 2007), cert. denied, 128 S. Ct. 1445
`
`(2008). The Court thereafter instructed the jury on the two-part test for willfulness set forth by
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`the Federal Circuit in In re Seagate. Ex. J, pp. 143-44. Microsoft did not object to these
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`instructions. Uniloc submitted more than sufficient evidence from which a reasonable jury
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`properly instructed could, and did, find willful infringement.
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`Uniloc introduced evidence that the inventor of the ‘216 patent, Ric Richardson, visited
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`Microsoft in Australia in 1993. Ex. A, pp. 155:25-158:6. Mr. Richardson approached Microsoft
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`with his anti-piracy system that he thought might be of interest to Microsoft. Ex. A, p. 156:3-22.
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`As Mr. Gledhill testified, Mr. Richardson wanted to disclose his new anti-piracy technology to
`
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`2 The testimony of Uniloc’s witnesses must be believed when addressing Microsoft’s motion for JMOL.
`The Court cannot now make credibility findings contrary to the verdict. Marrero v. Goya, 304 F.3d at
`22. In its brief in support of its motion for JMOL, Microsoft repeatedly cites to and relies upon the
`testimony of its own witnesses to contradict the testimony of Uniloc’s witnesses. That testimony is
`irrelevant in the context of a motion for JMOL. Obviously, in rejecting all of Microsoft’s non-
`infringement and invalidity defenses, the jury did not believe Microsoft’s witnesses.
`
`7
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`Petitioner Ex. 1042 Page 13
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`

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`Case 1:03-cv-00440-WY-DLM Document 374 Filed 05/29/09 Page 14 of 63 PageID #: 5430
`
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`Microsoft. Ex. A, p. 156. Mr. Gledhill testified that Microsoft was interested in
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`Mr. Richardson’s anti-piracy system. Ex. A, p. 159.
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`At the time, Microsoft was having major problems with software piracy. Ex. A, pp.
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`159:21-160:12. Mr. Gledhill contacted Microsoft’s applications group in Redmond, Washington
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`to indicate that Mr. Richardson’s anti-piracy system may be of interest to Microsoft (see Ex. A,
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`pp. 160:13-161:11). Mr. Gledhill testified that Microsoft thought it may be able to support and
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`utilize Mr. Richardson’s technology. Ex. A, p. 161.
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`Before disclosing his anti-piracy technology to Microsoft, Mr. Richardson ensured that
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`Microsoft executed a non-disclosure agreement (“NDA”) in order to protect his now patented
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`invention (PX 366). The NDA included the following provisions:
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`A.
`
`
`B.
`
`
`
`
`8.
`
`
`
`The Supplier is the owner of the copyright in certain
`computer programs (including a computer program known
`as the “Uniloc Program”), and other documents (the
`documents and programs being referred
`to as “the
`Documents”) which embody a concept developed by the
`Supplier including both technical information and marketing
`plans (“the Concept”).
`
`Certain elements of the Concept are the subject of a patent
`application.
`
`* * *
`
`The Recipient warrants that it will not attempt to reverse
`compile or reverse engineer any software provided to it as
`part of the Confidential Information and the Recipient
`further warrants that it will not write any software which
`embodies the Concept or the Confidential Information or any
`part of it nor any document which describes the Concept or
`the Confidential Information.
`
`8
`
`Petitioner Ex. 1042 Page 14
`
`

`
`Case 1:03-cv-00440-WY-DLM Document 374 Filed 05/29/09 Page 15 of 63 PageID #: 5431
`
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`This NDA was executed by Microsoft and Uniloc. Id., p. 3.3 Mr. Gledhill conceded that
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`he understood paragraph B of the NDA stating that Uniloc had a patent application pending on
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`the provided technology. Ex. A, p. 168:11-22. The NDA was dated September 28, 1993. Id., p.
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`1. The patent application for the ‘216 patent was filed a week earlier on September 21, 1993. PX
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`1. Thus, Uniloc submitted evidence from which a reasonable jury properly instructed could, and
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`did, conclude that the patent application referenced in the NDA was the application for the ‘216
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`patent. Further, Mr. Richardson testified at trial that the ‘216 patent “definitely covers [his] --
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`the product that [he] made, as well as a number of different other ways of doing that product.”
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`Ex. B, pp. 26-27. Thus, contrary to Microsoft’s argument, Uniloc submitted evidence from
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`which a reasonable jury properly instructed could, and did, conclude that the product provided to
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`Microsoft embodied Mr. Richardson’s patented invention. Mr. Gledhill sent the Uniloc product
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`to Microsoft in Redmond, Washington for evaluation. Ex. A, p. 162. An inspection was made of
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`the Uniloc product at Microsoft in Redmond, Washington. Ex. A, pp. 162:11-20; 163:24-164:23;
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`170:2-5.
`
`As noted above, Microsoft was having major problems with software piracy. Ex. A, pp.
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`159:21-160:12. As of the time it received Uniloc’s software, Microsoft did not have any anti-
`
`piracy technology of its own and was not undertaking any efforts to develop internally any anti-
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`piracy software of its own. Id. Concerned that Microsoft might attempt to reverse compile and
`
`
`3 On page 6-7 of its brief, Microsoft cites Amazon v. Barnesandnoble.com and Leapfrog v. Fisher-Price
`for the proposition that the plaintiff must show that the product copied by the infringer was covered by
`the plaintiff’s patent. Unlike in this case, neither the Amazon nor the Leapfrog case involved a
`defendant such as Microsoft who was given specific notice of the pendency of the patent application at
`issue. Thus, these two cases are inapposite. Further, copying in the Amazon case was discussed in
`connection with validity, not willfulness. In the Leapfrog case, as Microsoft states, the plaintiff offered
`“no evidence” that the copied device was covered by the patent. In contrast, there is evidence via
`Microsoft’s acknowledgement in paragraphs A and B of the NDA that the Uniloc sample was covered
`by Uniloc’s patent application.
`
`
`
`9
`
`Petitioner Ex. 1042 Page 15
`
`

`
`Case 1:03-cv-00440-WY-DLM Document 374 Filed 05/29/09 Page 16 of 63 PageID #: 5432
`
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`reverse engineer Uniloc’s code, in addition to having Microsoft agree to paragraph 8 of the
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`NDA, Uniloc had its exclusive distributor, IBM, send a letter to Microsoft again warning
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`Microsoft against such actions.
`
`Per our conversation this morning, I want to confirm that
`Microsoft will only be conducting normal end user testing of the
`Uniloc code to determine its viability for use with Microsoft’s
`products. This testing will not include any reverse engineering,
`decompiling or disassembly of the Uniloc code.
`
`Please refer to the Uniloc license which is part of the Note Pad that
`I gave you for the specific details. This license does not apply to
`your use and evaluation of the Uniloc code. IBM does not support
`any action that violates the terms of the Uniloc license agreement.
`I am sure that you agree with this position. I appreciate your
`cooperation in this matter.
`
`PX 132, p. UNILOC 14909.
`
`This letter was sent to Mr. Negrin at Microsoft’s headquarters in Redmond by Mr. Picker
`
`of IBM. Ex. B, pp. 6:13-7:18. Mr. Picker reported to Mr. Richardson that the letter had been
`
`sent and further informed Mr. Richardson that Microsoft had also been warned verbally and
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`again agreed not to