Inline Connection Corp. v. EarthLink, Inc. (684 F. Supp. 2d 496, 2010)

United States District Court for the District of Delaware 2010-02-05

Citations

Full opinion text

MEMORANDUM OPINION

THYNGE, United States Magistrate Judge.

I. INTRODUCTION

This is a patent infringement case. On June 4, 2002, Inline Communication Corporation (“Inline”) filed suit against Earth-Link, Inc. (“EarthLink”), alleging infringement of U.S. Patent Nos. 5,844,596 (“the '596 patent”), 6,243,446 (“the '446 patent”), and 6,236,718 (“the 718 patent”). Inline’s U.S. Patent No. 6,542,585 (“the '585 patent”) was subsequently added to the litigation after it issued in 2003.

The trial in this matter began on February 7, 2007. At trial, Inline asserted infringement of claim 61 of the '596 patent; claims 1, 2, 3, 4, and 5 of the '446 patent; and claims 1, 2, 4, 8, and 9 of the '585 patent. EarthLink denied infringement and alleged that the asserted claims were anticipated and obvious, and that the patents failed to comply with written description and enablement requirements of 35 U.S.C. § 112. After the close of all evidence on February 13, 2007, Inline moved for judgment as a matter of law under Fed.R.Civ.P. 50(a). On February 15, 2007, the jury returned a verdict of non-infringement and that the each asserted claims were invalid as anticipated and obvious and that each of the patents failed to comply with the written description and enablement requirements of section 112. Currently before the court is Inline’s renewed motion for judgment as a matter of law under Rule 50(a), or in the alternative for a new trial pursuant to Rule 59(a). Inline contends that there is no legally sufficient basis to support any of the jury’s findings and, therefore, its motion should be granted.

II. BACKGROUND

The technology in this case involves a system of transmitting high frequency data signals and lower frequency voice band signals over conventional telephone wiring. EarthLink, at the time of the initial action, was one of the leading internet service providers (“ISPs”). Inline alleged that EarthLink used its patented system, without permission, to make DSL products more attractive to consumers. According to Inline, although alternatives to the DSL products offered by Earth-Link exist, using the Inline system allows products to be offered without incurring installation charges every time a new DSL customer is added, merely by having the customer “self-install” filters and modem devices within the home.

In addition to providing DSL services, EarthLink offers subscribers internet access through “dial-up” service. Initially, ISPs provided internet access only through dial-up service. Like DSL service, dial-up service allows computer users to access the internet via telephone lines. In order to connect to the internet using dial-up service, residential users may open an account with an ISP and are then provided with one or more telephone numbers linked to the ISP’s computer. The dial-up modem is used to connect the user’s computer to the ISP’s computer, which in turn is connected to the internet.

However, dial-up internet service has limitations, which may be remedied by using DSL service. If dial-up service is being used to connect to the internet, the telephone line cannot simultaneously be used to send telephone voice signals. Thus, dial-up service users cannot make and receive telephone calls while connected to the internet. Additionally, computers have the capability to connect to the internet and communicate data at a higher rate than the rate afforded by a dial-up modem. The theoretical limit at which dial-up modems can exchange data over a conventional dial-up telephone connection is approximately 56,000 bits per second (“56 Kbps”). As a result, a 56K modem may be limited in the speed of transferring data to users.

A. Asymmetric Digital Subscriber Line (“ADSL”) Technology

One type of DSL technology is ADSL technology. ADSL is used as an alternative to dial-up internet service. At its most basic level, ADSL technology involves the high-speed transmission of packets of digital data back and forth from, among other things, the internet to a user’s computer. ADSL technology takes advantage of the existing telephone networks used for telephone services to send digital data between the internet and a computer (and vice versa) at higher rates of speed than dial-up service.

Moreover, an ADSL link has a potentially different connection path to the internet than dial up service. An ADSL modem at a customer’s residence connects to a companion modem at a central office, which, in turn, is connected to the internet through a central office computer. Unlike dial-up internet service, ADSL allows simultaneous transmission of low frequency voice signals and higher frequency digital data signals over the same telephone line to and from the public telephone network. Thus, the ADSL user may talk simultaneously on the telephone and connect to the internet via the same telephone line because the data and voice frequency ranges can be cleanly separated.

This arrangement permits higher data transmission rates than available on dial-up modems. As a result, ADSL is capable of using subscriber loops to communicate two-way voice signals, upstream data signals, and downstream data signals within different frequency bands. Data transfers can be optimized by allocating more of the frequency range to the data transfers from the central office to the customer than in the opposite direction. ADSL can download data as high as 1.5 million bits per second (“1.5 Mbps”), which is more than 25 times the speed of the maximum dial-up modem rate of 56 Kbps.

B. The Asserted Patented Invention

The three patents at issue at trial are directed toward transmitting data signals of different frequencies over conventional telephone wiring. Inline contends that the patents disclose a unique way of enhancing the plain old telephone system (“POTS”) to distribute any type of information over telephone wires that traditionally carry telephone calls to a location. These patents describe a system for sharing a telephone wire between information signals, confined to different frequency ranges. The asserted system uses filters to essentially block voice signals at a voice frequency range and pass the information signals at an information frequency range, and vice versa.

The systems disclosed in the '596 family of patents include a signal interface that transmits information from an external source of information along the shared telephone wire to individual households. Inside a household, a transreceiver connected to the shared telephone wire receives information and converts it to data. The shared telephone wire remains connected to the telephone, which continues its traditional use of making and receiving telephone calls, except that filters are installed at the telephone to prevent interference with the high frequency information signals.

III. STANDARD OF REVIEW

A. Judgment as a Matter ofLatv

Judgment as a matter of law (“JMOL”) is governed by Fed.R.Civ.P. 50. When evaluating a motion for JMOL, the court reviews the jury’s decision to determine if it is reasonably supported by the evidence. To prevail on a motion for JMOL, the moving party “ ‘must show that the jury’s findings, presumed or express are not supported by substantial evidence or, if they were, that the legal conclusions implied [by] the jury’s verdict cannot in law be supported by those findings.’ ” “ ‘Substantial’ evidence is such relevant evidence from the record taken as a whole as might be acceptable by a reasonable mind as adequate to support the finding under review.” Defined another way, substantial evidence is evidence that a reasonable individual might accept as supporting the jury’s decision. To determine the sufficiency of the JMOL motion, a court must consider all of the evidence in a light most favorable to the non-movant, and must draw all inferences in favor of the non-moving party:

In assessing the sufficiency of the evidence the court must give the nonmoving party, as the verdict winner, the benefit of all logical inferences that could be drawn from the evidence presented, resolve all conflicts in the evidence in his favor, and in general, view the record in the light most favorable to him.

The court may not determine the credibility of witnesses nor substitute its account of the facts for that of the jury’s account. Motions for JMOL are granted “sparingly” and only in those circumstances in which “the record is critically deficient of the minimum quantum of evidence in support of the verdict.” Moreover, “[a] district court may overturn a jury’s verdict only if upon the record before the jury, reasonable jurors could not reach that verdict.”

While the jury’s factual findings receive deference on a motion for JMOL, the “legal standards that the jury applies, expressly or implicitly, in reaching its verdict are considered by the district court and the appellate court de novo to determine whether those standards are correct as a matter of law.” The court must insure that the correct legal standard or law is applied.

B. Invalidity Defenses

“Anticipation is a factual determination that is reviewed for substantial evidence when decided by a jury.” A jury’s verdict on obviousness is reviewed without deference on the conclusion of obviousness, which is a question of law, while “the underlying findings of fact, whether explicit or implicit within the verdict, [are reviewed] for substantial evidence.” The standard of substantial evidence is applied to whether a specification complies with the written description requirement of 35 U.S.C. § 112, ¶ l, Since enablement is a matter of law, the findings by the jury are reviewed without deference; however, the factual underpinnings of enablement are determined on the basis of substantial evidence.

IV. DISCUSSION

The following are the asserted claims of the patents-at-issue. Claim 61 of the '596 patent recites:

61. A system for communicating information between an external source of information and a plurality of destinations of information over a telephone wiring network used for passing telephone signals in a telephone voice band between a plurality of telephone devices and a telephone exchange, comprising: a plurality of transceivers coupled between the telephone wiring network and corresponding destinations of information, each including

circuitry for accepting signals in a high frequency band of frequencies above the highest frequency of the telephone voice band and rejecting signals in the telephone voice band; and

a signal interface coupled between the external source of information and the telephone wiring network, including circuitry for receiving a plurality of external signals encoding a plurality of information streams from the external source of information, and

circuitry for transmitting to selected sets of one or more of the plurality of transceivers a corresponding plurality of internal signals in the high frequency band each encoding one of the plurality of information streams over the telephone wiring network;

wherein the telephone wiring network includes a branch network which couples one of the plurality of telephone devices to the telephone exchange telephone exchange, and the branch network includes circuitry for preventing transmission of signals in the high frequency band to the one of the telephone devices on the branch network.

Claims 1, 2, 3, 4, and 5 of the '446 patent recite:

1. A system for communicating information between an external source of information and destinations of information over a telephone wiring network used for passing telephone signals in a telephone voice band between a plurality of telephone devices and a telephone exchange, comprising:

a transceivers coupled between a conductive path of the telephone wiring network and a first destinations of information, including circuitry coupled to said conductive path for accepting signals in a high frequency band of frequencies above the highest frequency of the telephone voice band and rejecting signals in the telephone voice band;

a plurality of filters, each coupled between said conductive path and a corresponding one of the plurality of telephone devices, for preventing transmission of signals in the high frequency band to the telephone devices; and

a signal interface coupled between the external source of information and said conductive path, including

circuitry for receiving an external signal encoding an information stream from the external source of information,

circuitry for transmitting over the telephone wiring network to the transceiver an internal signal in the high frequency band encoding the information stream, and

circuitry for limiting transmission of the internal signal in the high frequency band from the telephone wiring network to the telephone exchange and for passing signals in the telephone frequency band between the telephone wiring network and the telephone exchange;

wherein each of the plurality of filters is coupled to said conductive path at a location separated from the transceiver and from the signal interface.

2. The system of claim 1 wherein the telephone wiring network includes a plurality of separate conductive paths that includes the first conductive path, each of the plurality of separate conductive paths being coupled to the signal interface.

3. The system of claim 2 further comprising additional transceivers, each coupled between a different one of the separate conductive paths and a different one of a plurality of destinations of information, wherein the signal interface further includes circuitry for transmitting over the telephone wiring network to each of the additional transceiver an internal signal in the high frequency band.

4. The system of claim 1 wherein the external signal includes an external data signal encoding a data stream and the internal signal includes an internal data signal encoding the data stream.

5.The system of claim 4 wherein the transceiver further includes circuitry for receiving the internal data signal and presenting the data stream to the destination of information.

Claims 1, 2, 4, 8, and 9 of the '585 patent recite:

1. A system for communicating information between an external source of information and destinations of information each at a different one of a plurality of residences over a telephone wiring network used for passing telephone signals in a telephone voice band between telephone devices at the residences and a telephone exchange, comprising:

a plurality of transceivers, each located at a different one of the residences and coupled to a destination of information at said residence;

a signal interface located on the telephone wiring network between the telephone exchange and each of the residences;

a plurality of separate conductive paths, each coupling the signal interface and a different one of the plurality of transceivers and providing at least part of a path for telephone signals in the voice band between the telephone exchange and one or more of the telephone devices at the same residence as said transceiver, wherein each of said separate conductive paths exceeds 1000 feet in length;

at each of the residences at which one of the transceivers is located, a branch conductive path coupled at a location separated from said transceiver to the separate conductive path from the signal interface to said transceiver, said branch conductive path providing at least part of the path for telephone signals in the voice band between the telephone exchange and a telephone device at said residence; and

for each branch conductive path, a filter coupled between the branch conductive path and the corresponding telephone device;

wherein each transceiver includes circuitry for communicating with the signal interface in a high frequency band of frequencies above the highest frequency of the telephone voice band over the separate conductive path coupling said transceiver with the signal interface;

each of the filters that is coupled to a branch conductive path is configured for preventing signals in the high band of frequencies from passing to the telephone device coupled to said branch conductive path; and

the signal interface includes circuitry for receiving a plurality of external signals encoding information streams from the external source of information, circuitry for transmitting over the telephone wiring network to the transceivers a plurality of internal signals in the high frequency band encoding the information streams, and circuitry for limiting transmission of signals in the high frequency band from the telephone wiring network to the telephone exchange and for passing signals in the telephone frequency band between the telephone wiring network and the telephone exchange.

2. The system of claim 1 wherein each external signal includes a corresponding external data signal encoding a data stream and each internal signal includes a corresponding internal data signal encoding said data stream, and wherein the circuitry at each transceiver for communicating with the signal interface further includes circuitry for receiving the corresponding internal data signal and presenting said data stream to the destination of information.

4. The system of claim 1 wherein each of the filters that is coupled to a branch conductive path reflects substantially all of the energy in the high frequency band transmitting from said branch path, and the communication system includes circuitry for mitigating the effect of reflections so that said transceivers correctly receive internal signals from the signal interface.

8. The system of claim 1 wherein the signal interface includes circuitry for selecting a subset of zero or more transceivers for receipt of each of the information streams accepted from the external source of information.

9. The system of claim 1 further comprising an RJ-11 jack coupled between one of the branch conductive paths and filter connected to said branch.

A. Anticipation

At trial, EarthLink presented four anticipatory prior art references: (1) the VDM System; (2) the Bellcore RFI; (3) the Waring Article; and (4) the Ithell & Jones reference. Inline contends that there is no legally sufficient evidence for the jury to have found, by clear and convincing evidence, that any of those references anticipates the asserted claims.

Before discussing the individual prior art references, the court rejects an overarching argument by Inline that there is necessarily an insoluble inconsistency between the jury’s finding of both invalidity and non-infringement. EarthLink presented five scenarios whether those verdicts could be reconciled. The court particularly agrees with EarthLink’s third argument:

The jury could have accepted ... that the telephones were not part of the accused EarthLink ADSL system as a matter of fact and thus Inline did not prove that EarthLink was a direct infringer under 35 U.S.C. § 271(a) ... but also found that the prior art references disclose telephones (along with Mr. Waring’s extensive testimony about telephones) and therefore disclose all the elements necessary to anticipate the claims in a single reference.

This argument is compelling, particularly in that it is one of the bases the court discusses, below, for upholding the jury’s verdict of non-infringement.

1. The AT & T Voice Data multiplexer system (the ‘VDM System”)

Inline presents two arguments as to why the VDM System does not anticipate as a matter of law. First, each of the asserted independent claims of the patents-in-suit requires either “a high frequency band of frequencies above the highest frequency of the telephone voice band,” a “high frequency band,” or a “high band of frequencies” (collectively, “the high frequency band limitation”). The court construed these terms to mean “[fjrequencies above the telephone voice band between 0.25 MHZ [i.e., 250 kHz] and an undetermined upper limit.” Inline contends there was no evidence presented at trial that the VDM System actually used frequencies above 250 kHz. Second, Inline argues that, in the VDM System, the data from the external source of information improperly passes through the telephone exchange.

Inline contends that there was no showing that the VDM System actually used frequencies above 250 kHz. Inline states that Arthur Williams and David Waring each testified that the VDM System did not transmit at the required frequency level. Williams testified that the VDM System used frequencies between 50 and 100 kHz, and Waring testified similarly. In light of that testimony, Inline contends that the VDM System lacks at least one express limitation of the asserted claims and, therefore, no reasonable jury could have concluded that the VDM system rendered the patents invalid.

EarthLink counters that the asserted claims are apparatus claims, rather than method claims, and none require actual transmission at or above 250 kHz. Earth-Link contends that the asserted claims only require hardware capable of transmission above 250 kHz and that the evidence shows that the VDM System constitutes such hardware. EarthLink states that Williams testified that the VDM hardware presented to the jury and described in the printed publications is the same regardless of whether a user transmits above or below 250 kHz; that it is the very same “technology” for transmitting above or below 250 kHz; and that the choice of frequency merely corresponds to the value settings of some of the components. Williams also testified that the filters are exactly the same regardless of the frequency used for transmission. Earth-Link also maintains that Williams confirmed that he actually tested the VDM System above 250 kHz with the same hardware.

EarthLink also contends that the record shows that the VDM System fully enabled the claimed invention; stating that Waring explained the relationship between frequency and distance (the higher the frequency the shorter the distance, and vice versa) was fully understood at least by the 1970s, such that one of ordinary skill immediately would have appreciated that the VDM System’s hardware was fully capable of — and thus fully enabled to — transmit above 250 kHz based on well known and fully developed electrical engineering principles. EarthLink states that “[further confirming this point, Williams in fact transmitted above 250kHz by simply adjusting the settings based on the well known correlation between frequency and distance.” EarthLink concludes by stating that the “use of this existing circuitry confirmed what was well known in that art. Again, the ‘technology’ was already present in the hardware; value setting simply had to be adjusted (just like choosing a volume setting).” EarthLink concludes that it was reasonable for the jury to “conclude from all of the evidence that the actual claims are fully anticipated by the VDM System because the evidence at trial was sufficient for the jury to conclude that this system contains the actual hardware and circuitry that satisfies each element of these system claims.”

The court determines that substantial evidence was not presented that the actual hardware and circuitry of the prior art VDM System was, as constructed, capable of meeting the high frequency band limitation. First, trial record does not support EarthLink’s contention that Williams actually tested the VDM System above 250 kHz with the same hardware. The court agrees with Inline that the corresponding testimony cited by EarthLink “merely establishes] that Mr. Williams was aware of the inverse relationship between transmission distance and signal frequencies, and that he made measurements using wire spools to confirm this principle.” Although Williams testified, for instance, that he would not have to change the low and high-pass filters of the VDM System in connection with higher frequency transmission, he testified that in order to transmit at the higher frequencies required by the claims-at-issue, he would have to change components of the VDM System (such as the values of resisters or capacitors in the unit), not just simply adjusting settings. The failure of the VDM System, as constructed, to be capable of transmitting at frequency-levels required by the high frequency band limitation means that the VDM System does not anticipate the claims-at-issue. The fact that replacing components might have an obvious solution which would have met that limitation is also not sufficient to demonstrate anticipation. Consequently, the court grants Inline’s JMOL that the VDM System does not anticipate any of the claims-at-issue.

Inline also argues that each of the anticipatory references, including the VDM System, cannot invalidate the claims because signals from the “external source of information” flow to or through the “telephone exchange” in those references. The court construed “telephone exchange” as “a switching center for connecting and switching phone lines.” Inline states that the court construed the phrase “signal interface,” but does not quote the court’s claim construction, rather, it discusses reasoning contained in the court’s claim construction order concerning that term. With reference to that reasoning, Inline argues (for instance, with respect to the VDM reference) that a demonstrative exhibit illustrates T1 lines directly connected to the telephone exchange, the VDM system allows data signals on the T1 lines to flow back and reach the telephone exchange.

EarthLink argues strenuously that Inline is improperly making a new post-trial argument with its position that the claims do not allow any signals emanating from the “external source of information” to pass through the “telephone exchange” (i.e., the Central Office, or “CO”). Earth-Link states that:

The price for this new argument is that there never should have been a trial in the first place. Industry standard ADSL in all instances passes Internet data through an ATM switch located in the CO (the accused “telephone exchange”); in other words, industry standard ADSL (including all instances of ADSL configured with DSLAMs in RTs) always passes signals emanating from the “external source of information” through the CO [on their way to the RT DSLAM and then on to the user’s modem.]

EarthLink argues that no claim element explicitly prohibits “signals from the ‘external source of information’ from flowing to or through the ‘the telephone exchange’ ”; that Inline never asked the court to construe (and the court did not construe) any claim element as prohibiting “signals from the ‘external source of information’ from flowing to or through the ‘telephone exchange,’ ” and that Inline did not ask for (and did not receive) any jury instruction which would have captured this broad concept. EarthLink notes that, Inline’s brief neither identifies exactly which claim terms it believes are missing from the anticipatory references, nor does Inline quote a phrase from any claim element, nor any claim construction provided by the court. Consequently, EarthLink maintains that Inline does not rely on anything that was actually presented to the jury or to the court.

EarthLink insists that the proper time and place for these arguments would have been during claim construction, not during JMOL practice. EarthLink concludes that since Inline’s arguments were before the jury, and they were not part of the jury instructions, they have been waived.

EarthLink also states that Inline’s position is inconsistent with positions it has taken throughout this litigation. In its most recent infringement contention interrogatory responses — well after the January 2004 Markman Order on which Inline now relies — Inline asserted that the claims would be met where a “DSL interface” is “connected to the external source of information, e.g., world wide web, Internet, data center, ATM cloud, etc.” Earth-Link states that Inline never modified its infringement contentions to reflect a prohibition that external source signals cannot flow through or to a Central Office. EarthLink further notes that Inline’s invalidity expert, Beckmann, did not raise this argument in either of his two expert reports, on either of his two deposition days, or during either day of his trial testimony. Moreover, EarthLink contends that Inline’s expert, Dr. Charles Jackson, admitted at trial that ADSL works in the very manner that Inline now says is prohibited, ie., it sends Internet signals (data from the “external source of information”) to and through the Central Office (the “telephone exchange”):

Q. Okay. Now, with the T1 line or with the fiber, the signal that is being sent out of the remote terminal is certainly above 250 kilohertz, isn’t it?

A. Which signal?

Q. The signal that is carrying the Internet information. Stuff that came out of the DSLAM that is now heading back toward the central office, that is above 250 kilohertz; right?

A. Well, yes, it’s light. The frequency associated with light, I can’t remember what they are.

Q. Whatever it is, it’s way above 250 kilohertz?

A. Sure.

Q. So the remote terminal is intentionally sending to the telephone exchange a signal above 250 kilohertz; correct?

A. Yes.

EarthLink also cites the summary judgment declaration of Albert Whited which confirmed that all RT DSLAMs pass Internet signals to and from the ATM switch in the CO, which then pass them to and from the Internet through the ATM network. EarthLink continues by noting that:

at no time prior to or during trial did Inline ever state, offer to stipulate, or explain to the court, the jury, or Earth-Link that the claims prohibit the sending of Internet information from the RT DSLAM back through the telephone exchange (the CO) to the external source of information.

EarthLink concludes by stating that had it been aware of Inline’s current argument, EarthLink would have analyzed it and might have modified its trial strategy to include, among other things, making obviousness contentions to overcome that argument.

Inline responds by repeating its argument based on the court’s explanation in its claim construction order concerning the meaning of “signal interface.” The court notes that significantly, however, the jury was not aware of the reasoning behind the constructions of claims terms provided to them. In arguing that EarthLink should not have been surprised by Inline’s current position, it points to, inter alia, Inline’s proposed claim constructions, and arguments by EarthLink during claim construction briefing and on summary judgment. The court is not persuaded by Inline’s arguments and agrees with Earth-Link that the present position set forth by Inline — that the court’s claims construction order “necessarily precluded the external source’s data signals from reaching the telephone exchange” — was not a theory appropriately presented at trial. Accordingly, the court declines to consider this argument by Inline in its JMOL motion with regard to any of the purportedly invalidating prior art.

2. The Bellcore RFI

Inline contends that EarthLink failed to satisfy its burden of proof that the Bell-core RFI anticipates all of the asserted claims because (1) EarthLink’s expert, Waring, only a provided generalized and conclusory opinion; and (2) the reference fails to disclose key limitations of the claims. With regard to the specific limitations, Inline maintains that the Bellcore RFI does not disclose (a) the low-pass filter connected to the telephone in a splitterless configuration; (b) the RJ-11 jack in the configuration disclosed by claim 9 of the '585 patent; and (c) the specific low-pass filter required by claim 4 of the '585 patent.

Inline’s first argument is that Waring failed to provide an element-by-element analysis of the Bellcore RFI and how each claim element was disclosed in that reference. Inline states that Waring only argued that, if the accused systems infringe, then the Bellcore RFI must anticipate the claims. In support of its argument that Waring failed to present clear and convincing evidence of anticipation, Inline cites the Federal Circuit’s statement that:

Typically, testimony concerning anticipation must be testimony from one skilled in the art and must identify each claim element, state the witnesses’ interpretation of the claim element, and explain in detail how each claim element is disclosed in the prior art reference. The testimony is insufficient if it is merely conclusory. General and conclusory testimony, such as that provided by Dr. Kazmer in this case, does not suffice as substantial evidence of invalidity. This is so even when the reference has been submitted into evidence before the jury.

Inline contends that Koito presents a factually analogous situation to this case. There, the defendant argued “that, if the jury found that Koito’s lenses infringed, then the '268 patent was invalid because of anticipation by prior art taillight that used the same method as that used by Koito.” The Koito jury returned a verdict of non-infringement and anticipation, as did the jury in this case. On appeal, the Federal Circuit “reject[ed] Koito’s evidence of anticipation with respect to the prior art automobile lenses” and stated that “[b]e-cause the jury found Koito’s lenses to not infringe the '268 patent and also that the '268 patent was invalid, the only consistent way to interpret the jury’s verdict is to determine that the jury did not find the prior art taillights to anticipate the '268 patent.” The Federal Circuit also stated that “this court has made clear that there is no ‘practicing the prior art’ defense to literal infringement.”

Inline contends that in light of the similarity of the arguments and facts between this case and Koito, that decision compels a grant of JMOL of non-anticipation as to the Bellcore RFI.

EarthLink argues that Koito does not mandate “that the accused infringer must proffer an expert who mechanically matches every word in a claim with a specific word or disclosure in a prior art reference” and differentiates the evidence presented in this case from that considered in Koito. There, the Federal Circuit stated that “[bjecause Koito merely entered the JP '082 reference into evidence and provided no specific testimony relating to it whatsoever, we hold that Koito did not present substantial evidence with respect to JP '082 to support the jury’s finding of anticipation and obviousness.” “Koito needed some explanatory testimony or other evidence to compare JP '082 with the patent at issue.

EarthLink does not argue that Waring provided testimony identifying each claim element and how each element was disclosed in the Bellcore RFI, but contends that Koito does not require such element-by-element testimony. EarthLink notes that, in Koito, there was “no specific testimony ... whatsoever” concerning the pri- or art reference, which was entered into evidence, and “not even mention[ed]” thereafter. Here, EarthLink states that there was significantly more than “some explanatory testimony or other evidence” concerning the Bellcore RFI. Specifically, that Waring’s direct testimony concerning that reference spans a dozen pages of the trial transcript. Additionally, EarthLink argues that the jury could have concluded that Beckmann admitted that the Bellcore RFI anticipated the claims at issue with the exception of its purported failure to show distributed filtering with low pass filters.

Q. Now, do you agree with Mr. Waring that the Bellcore RFI anticipates all of the 11 claims that Inline asserts that EarthLink has infringed in this case? A. No, I don’t agree with that.

Q. Why not?

A. Two major factors are, first, the focus of this RFI is on what we have been calling the splitter ADSL architecture. And then, secondly, in my opinion, there is no identification, no disclosure of low pass filters being used separate from the transceiver unit.

EarthLink then cites testimony concerning those two issues which it frames as a dispute between the parties’ experts concerning certain portions of the Bellcore RFI and that the jury evidently believed EarthLink’s expert.

Finally, EarthLink argues the Koito has no application where the evidence shows that the prior art reference is materially identical to the accused device and states that “practicing the prior art” is available as an invalidity defense when the prior art and the accused technology are, in all pertinent respects, the same. EarthLink maintains that the Federal Circuit has repeatedly ruled that when the defendant alleges that the prior art is the same as the accused technology, the defendant need only prove that the prior art reference is materially identical to the accused device to prove invalidity. In support of that contention, EarthLink cites Evans Cooling Sys., Inc. v. Gen. Motors Corp., Bennett Regulator Guards, Inc. v. Canadian Meter Co., Vanmoor v. Wal-Mart Stores, Inc., and Benedict v. Gen. Motors Corp.

Inline first responds that Koito is not limited to situations where explanatory testimony is completely absent, as suggested by EarthLink, and that other courts have not so limited that case. With respect to its argument that EarthLink is improperly presenting a “practicing the prior art” defense, Inline cites The Federal Circuit’s statement in Tate Access Floors, Inc. v. Interface Architectural Resources, Inc. that:

[A]ecused infringers are not free to flout the requirement of proving invalidity by clear and convincing evidence by asserting a “practicing prior art” defense to literal infringement under the less stringent preponderance of the evidence standard.... [I]t is the presence of the prior art and its relationship to the claim language that matters for invalidity.

Inline also correctly points out that the cases cited by EarthLink (Evans Cooling, Bennett Regulator, Vanmoor, and Benedict) represent a situation distinct from the facts of this case: when there is no dispute that the accused infringing product was identical to the prior art. Those cases do not support EarthLink’s position that they stand for the proposition that “when the defendant alleges that the prior art is the same as the accused technology, the defendant need only prove that the prior art reference is materially identical to the accused device to prove invalidity.” There was no dispute in those cases that the accused product was identical to the prior art because the prior art was the products those plaintiffs accused of infringement.

Here, EarthLink’s own accused AJDSL system is not purported to be the anticipating reference. Rather, EarthLink presents prior art documents describing ADSL and contends that its ADSL system is “materially identical” and, thus, “if [EarthLink’s] industry standard ADSL were found to infringe, then the patent claims that are at issue would have to be invalid because the Bellcore RFI describes industry standard ADSL.” That testimony indicates that EarthLink is improperly relying on a “practicing the prior art” to establish invalidity where its ADSL system is not, itself, the prior art and Inline states that it “vigorously contends that the accused product is not the same as the prior art.” Also, the court’s review of Waring’s testimony is not sufficient to show that he “identified] each claim element, state[d][his] interpretation of the claim element, and explain [ed] in detail how each claim element is disclosed in the [Bellcore RFI].”

Consequently, the court grants Inline’s JMOL that the Bellcore RFI does not anticipate the claims-at-issue.

S. The Waring Article

Inline contends that EarthLink argued in its closing that the Waring Article anticipates the asserted claims, but that Earth-Link’s own expert never offered an invalidity opinion about his own paper. Inline also argues that merely having the claimed elements present in a prior art reference is insufficient; rather, “these elements must be arranged as in the claim under review.” Inline asserts that there was no such evidence from either side’s expert. Inline also states that EarthLink never presented any testimony to “identify each claim element, state the witnesses’ interpretation of the claim element, and explain in detail how each claim element is disclosed in the prior art reference,” as required by precedent in Koito. Lastly, Inline contends that there was no evidence that the Waring Article discloses either a filter that “reflects substantially all of the energy in the high frequency band” or an RJ-11 jack connected between a filter and a branch network as required by claims 4 and 9 of the '585 patent, respectively.

EarthLink maintains that there is no requirement that it use its own expert to put this prior art reference into evidence. EarthLink states that in light of the admissions Beckmann made at his deposition, it made the strategic decision to present this paper through Inline’s expert.

EarthLink states that the Waring Article was presented to the jury through the following Beckmann testimony:

Q. Okay. But you agree that the Waring paper disclosed an ADSL system; correct? That’s what you told Mr. Lewis yesterday; correct?

A. Yes, that’s correct.

Q. And the Waring paper specifically discusses the need for multiple low-pass filters if you have multiple phones; correct?

A. I believe that’s correct; he has a discussion of that in a section of his paper.

Q. And you agree that the Waring paper discloses the fact that if you have multiple telephones you need to put multiple low-pass filters in front of each phone; correct?

A. I believe that’s correct. If you could possibly pull up those two paragraphs in the paper, we can look at them; I can speak more confidently about what we are talking about.

Q. Okay. Do you recall telling Mr. Gaudet during your deposition that in fact you agreed with the fact that the Waring paper discloses the need to put low-pass filters in front of each telephone?

A. That seems reasonable. Again, I don’t recall precisely what I said there.

EarthLink contends that, particularly when all inferences are resolved in its favor, Beckmann conceded that every limitation was present in the Waring Article.

Q. And, Dr. Beckmann, at this page, Mr. Waring discusses multiple low-pass filters. Do you see that in the second paragraph on this page?

A. Yes. I see where he is discussing use of small easily installed filters.

Q. Filters, plural?

A. Right.

Q. And you would agree that you interpreted this discussion that if he had multiple telephones or a consumer had multiple telephones you needed multiple low-pass filters; right?

A. I recall that discussion, I believe I indicated to Mr. Gaudet that I was just a little confused about the mention of multiple walled telephones in the kitchen, that created some confusion in my mind about where the plurality actually applied because people typically don’t have multiple wall telephones in their kitchen, if you look across a lot of houses, and you can talk about multiple wall phones. So that confused me a little bit as to how to apply the S on filters, whether that’s talking about filters in a single home or filters in multiple homes.

Q. But if you didn’t have multiple wall telephones, if you just had an ordinary telephone sitting on the kitchen counter, you would put a filter in front of it; right?

A. I would certainly do that today. I was just trying to discuss this article as to what I could understand from the article.

Q. All right. Well, let’s cut to the punch line, then. You agree with respect to the '446 patent that the Waring paper discloses all of Claim 1; right?

A. Again, I would have to say the Waring article mentions most, if not all, of the elements of the claim. I hesitate to use the word discloses since that seems to impart some special meaning in patent law that includes teaching or helping someone understand how to put the system together.

Q. You would agree that the Waring paper mentions every single claim limitation of Claim 1 of the '446 patent; is that correct?

A. I believe that that’s correct. I believe that the '446 is the one that uses the conductive path term.

Q. And it has multiple telephones; right?

A. Right.

Q. And you did not offer an opinion during the course of your deposition with us that there was any claim element that was not mentioned in the Waring paper; right?

A. I believe that’s correct.

Q. Okay.

A. Yes.

Q. And the same would be true with respect to Claim 1 of the '585 patent; right?

A. With respect to the Waring paper?

Q. Yes.

A. I believe it would also be the case that he mentioned—

Q. Every claim element in the '585 patent; right?

A. Right. I believe that’s true.

Q. And he clearly mentioned every claim element of the '596; right?

A. Yes. Every claim element of the '596 is contained in the other.

Q. Fine. That’s the easy one; right?

A. It’s the one with fewer conditions; right.

Q. Right. And you have not offered any opinions that the Waring paper fails to disclose any of the additional elements that are found in the dependent claims of either the '446 or the '585 patent; right?

A. That’s correct. I did not refer to the Waring paper as not disclosing any — not mentioning anything in the dependent claims.”

EarthLink responds to Inline’s statement that “EarthLink’s own expert never offered and invalidity opinion about his own paper,” as being irrelevant (since party admissions may suffice), and incorrect. Arguing that Waring’s testimony was not necessary (in light of Beckmann’s purported admissions), EarthLink nevertheless states that Waring offered the following testimony about the Waring Article:

Q. This is the article that you wrote in December of 1991?

A. Yes, it is.

Q. And as it says in the abstract, this paper provides an over view of the newly emerging asynchronous digital subscriber line. And this is a summary you wrote for a technical audience about the thinking at Bellcore about ADSL at that point, was it not?

A. Yes, it was for, an IEEE sponsored conference call.

Q. And it summarized the Bellcore thinking about ADSL at that point?

A. Yes, that is correct.

Q. And in fact, you called it, you referred [to it] as the first published paper on ADSL, haven’t you?

A. I believe that to be the case, yes.

Q. Okay. And you put that in your resume, that it’s the first published paper on ADSL?

A. Yes, I’m not aware of any earlier paper.

Q. And in your report in this case, this is the paper you argued had all the elements of the asserted claims just like Bellcore and Valenti?

A. My first expert report?

Q. Yes.

A. Yes.

EarthLink states that the other arguments made by Inline in its attempt to undo Beckmann’s admissions were properly rejected by the jury.

In Nobelpharma, the case upon which EarthLink’s argument primarily rests, the patent-at-issue was found to be invalid for failure to disclose the inventor’s preferred mode of making the invention. The patent claimed “ ‘an element intended for implantation into bone tissue’ ” and recited that the element “preferably ... [had] a network of particularly-sized and particularly spaced ‘micropits.’ ” The Federal Circuit stated that, “[f]or whatever reason,” as part of the patentee’s ease-in-chief it introduced inventor testimony that: '

(1) “there were some minor details that were not included [in the patent] and which proved to be quite important,” (2) other skilled artisans would have to be “lucky” to obtain a suitable micropitted implant “by cutting a piece of titanium at a speed less than twenty meters per minute,” the cutting speed disclosed in the patent, and (3) “any of the small detailed recipes that I discussed but did not specify” in the patent “can cause you to fail to get micropitting even though you were cutting the metal at less than twenty meters per minute.”

The court noted that the record unambiguously indicated that when the inventor’s patent application was filed, he was aware that “a variety of undisclosed machining parameters were critical to the production of a functional implant ... [and that the inventor] possessed a preferred mode of making the claimed implants” by the time the patent application was filed. “Thus, the evidence at trial leads to only one reasonable conclusion: [the inventor] possessed a preferred method of making the claimed invention and failed to disclose it sufficiently to enable those skilled in the art to practice that method.”

The Nobelpharma court noted that “[normally, evidence presented by a patentee-plaintiff will not support a grant of a JMOL invalidating a patent. That is because the burden is on an accused infringer to show by clear and convincing evidence facts supporting the conclusion that the patent is invalid.” “[I]n unusual cases, an admission by a plaintiffs witness can be sufficient to support entry of a JMOL in favor of a defendant after the close of the plaintiffs case-in-chief, even where the defendant bears the burden of proof on the decided issue.” The court determined that the trial court had not drawn adverse inferences against the plaintiff to support its judgment; it relied on inventor-statements “ ‘that the jury would not be at liberty to disbelieve’ ” and “did not place the burden of proving validity on [the plaintiff as the plaintiffs] own evidence was clear and convincing that the patent is invalid.” Thus, the court concluded that Nobelpharma was “one of those ‘extreme’ cases in which it was not improper to grant JMOL in favor of a defendant on an issue regarding which it bore the burden of proof.”

Unlike Nobelpharma, this is not one of those “extreme” cases where Earth-Link’s reliance on testimony from the opposing party can sustain the jury’s verdict on an issue it bore the burden of proof. In Nobelpharma, the evidence that the inventor did not disclose the best mode of practicing his invention was indisputable. Such is not the case here. Beckmann’s testimony only recites his general agreement that certain hardware is “mentioned” in the Waring Paper. That testimony, however, does not provide clear and convincing evidence explaining how the hardware mentioned would demonstrate to one skilled in the art the connection between that article and the claims-at-issue. Moreover, Waring’s general testimony concerning his authorship of the reference, is clearly insufficient to support the jury’s verdict, even when combined with Beckmann’s testimony and resolving all reasonable inferences in EarthLink’s favor.

The court, therefore, grants Inline’s JMOL motion that the Waring Article does not invalidate the claims-at issue.

4. The Ithell & Jones reference

With this reference, Inline repeats its Koito argument that EarthLink’s expert failed to explain in detail how the Ithell & Jones article discloses each claimed limitation. Inline also argues that Waring’s testimony failed to explain how the reference discloses the following elements of claim 61 of the '596 patent:

“circuitry for receiving a plurality of external signals ... ”;

“circuitry for transmitting to selected sets of one or more of the plurality of transceivers ...”; and “a branch network which couples one of the plurality of telephone devices to the telephone exchange ...”

Inline makes the same argument with regard to the following limitations in claims 1-5 of the '446 patent:

“circuitry for receiving an external signal encoding an information stream from the external source of information”; and “circuitry for transmitting over the telephone wiring network to the transceiver an internal signal in the high frequency band encoding the information stream.”

With regard to claim 1 of the '585 patent, and its dependant claims, Inline states that Waring did not explain the disclosure of:

“a plurality of separate conductive paths, each coupling the signal interface and a different one of the plurality of transceivers ... ”;

“at each of the residences at which one of the transceivers is located, a branch conductive path coupled at a location separated from said transceiver ...”; “wherein each transceiver includes circuitry for communicating with the signal interface in a high frequency band of frequencies ...”;

“circuitry for receiving a plurality of external signals encoding information streams from the external source of information ... ”; and

“circuitry for transmitting over the telephone wiring network to the transceivers a plurality of internal signals in the high frequency band ...”

Additionally, Inline argues that the It-hell & Jones article fails to disclose low-pass filters separate from the transceiver’s location as required by all of the asserted independent claims. Lastly, Inline argues that Ithell & Jones cannot anticipate claim 9 of the '585 patent because of its failure to disclose either an RJ-11 jack or its “coupling] between one of the branch conductive paths and filter connected to said branch.” Inline also maintains that because the Ithell & Jones article does not disclose low-pass filters separate from the transceiver’s location, it cannot anticipate any of the asserted claims. Finally, Inline maintains that EarthLink failed to present any evidence that the Ithell & Jones article disclosed either the RJ-11 jack or its “coupling] between one of the branch conductive paths and filter connected to said branch,” as required by claim 9 of the '585 patent.

As a general matter, rather than improperly relying on a “practicing the prior art” argument, Waring’s testimony attempted to match the elements of the claims-at-issue with the disclosures of the Ithell & Jones reference. With regard to the “circuitry for receiving” claim elements, EarthLink contends that Waring explained in detail how figures 2 and 9 of the Ithell & Jones article discloses those elements by showing how multiple channels of data from an external source is multiplexed on an El line that is received by a signal interface placed in a cabinet. Concerning the “circuitry for transmitting” and “plurality of separate conductive paths ...” claim elements, EarthLink states that Waring testified that, as reflected in figures 2 and 9 of the Ithell & Jones article, the signal interface would separate out the individual external data channels from the El line and would then place the data in a high frequency band above voice band on specific telephone lines leading out to the corresponding transceivers in the individual homes. With regard to the “branch network/branch path” claim elements, EarthLink states that Waring testified that, as shown in figures 2 and 9 and as reflected on page F5.5 of DX-14, the system proposed by Ithell & Jones would operate over the ordinary telephone network, reaching from the telephone exchange to the individual homes, and that the article provided for separate low-pass filters before every telephone device on every branch extension within a home. Finally, concerning the “circuitry for communicating” element, EarthLink states that Waring testified that the transceivers in the homes shown in figures 2 and 9 of the Ithell & Jones article had high-pass filters before them that would block voice-band signals, but would allow the transceivers to communicate with the signal interface in the cabinet in the high frequency band.

Ultimately, the court agrees with Inline that the record evidence cited by EarthLink opposing Inline’s JMOL motion is insufficient to establish that all of the elements of the claims at issue are disclosed in the Ithell & Jones reference. At least with regard to the “circuitry for receiving” and “circuitry for transmitting” elements, required by all three patents, the testimony relied upon by EarthLink is either general testimony giving Waring’s overview of the system described in the reference and not related to a particular claim and/or testimony not sufficiently on point for the particular claim element. Because the court determines that Waring’s testimony was insufficient to “explain in detail how each claim element is disclosed in the [Ithell & Jones] reference,” that testimony cannot provide clear and convincing evidence of anticipation. In light of this determination, the court need not consider the parties’ additional arguments directed at other purportedly missing elements from this reference.

Consequently, the court grants Inline’s JMOL motion that the Ithell & Jones reference does not anticipate the claims-at-issue.

B. Obviousness

The jury instructions set forth only one basis for finding the asserted claims invalid for obviousness: the combination of the Bellcore RFI and the Valenti Article. Inline contends that the record does not contain substantial evidence that the combination of the Bellcore RFI and Valenti Article could invalidate the asserted claims. Moreover, Inline maintains that there was no testimony from EarthLink’s expert on this combination. Although Waring gave testimony related to the Bell-core RFI and the Valenti Article, Inline insists that Waring did not offer testimony about what their combination would teach, or how the combination would disclose to a skilled artisan every limitation of the asserted claims. Consequently, Inline argues that the jury had no factual basis on which to conclude that any asserted claim was obvious to a person of ordinary skill in the art at the time of the invention. Having purportedly failed to present evidence on this issue, where EarthLink bore the burden of proof, Inline maintains that judgment as a matter of law in Inline’s favor is compelled.

Additionally, Inline maintains that the evidence at trial establishes that the alleged combination of the Bellcore RFI and Valenti Article would not provide the necessary expectation of success for a finding of obviousness. Inline states that Beckmann’s testimony on the issue was uncontroverted and precludes the obviousness finding as a matter of law. Moreover, Inline contends that although Waring discussed the Valenti article and the Bellcore RFI in relation to the accused ADSL system, it did not compare the references to, or show how they disclose, the asserted claims.

Lastly, Inline contends that Beckmann’s testimony demonstrated that all secondary considerations (long-felt, but unmet, need; licensing of the patents; commercial success; and praise of the inventions) considered at trial compel a conclusion of nonobviousness. Inline maintains that EarthLink did not offer adequate evidence to rebut these secondary considerations and that those objective indicia, therefore, reinforce the evidence of non-obviousness.

Based on the above, Inline maintains that no reasonable jury could have found that EarthLink proved by clear and convincing evidence that any asserted claim is obvious in light of the combination of the Bellcore RFI and the Valenti Article and the court should grant JMOL on this issue.

EarthLink argues that Inline does not suggest that there are any missing or non-obvious claim elements and that, in light of the Supreme Court’s decision in KSR Int’l Co. v. Teleflex, Inc., and the Federal Circuit’s decision in Leapfrog Enters., Inc. v. Fisher-Price, Inc., the jury’s decision on obviousness must stand. In response to Inline’s argument that Waring did not testify about what the combination would teach, EarthLink cites Leapfrog and the Federal Circuit’s caution against formulaic approaches to obviousness:

An obviousness determination is not the result of a rigid formula disassociated from the consideration of the facts of a case. Indeed, the common sense of those skilled in the art demonstrates why some combinations would have been obvious where others would not.

The court agrees with EarthLink that the evidence demonstrates that the Bell-core RFI and the Valenti Article should be combined. That evidence includes the testimony of both Beckmann and Waring that both references were written by the same author and both described ADSL: Waring described Valenti as an “elaboration” of the Bellcore RFI; Beckmann referred to the Valenti paper as an “expansion” of the Bellcore RFI.

The court determines, however, the record cannot support the jury’s verdict on obviousness. Unlike its attempt to demonstrate, albeit unsuccessfully in the court’s view, the presence of each of the specific claim