Lazare Kaplan International v. Photoscribe Technologies

Deanne Maynard argued in front of the U.S. Court of Appeals for the Federal Circuit and won vacatur and remand for patent owner on two patent claims as well as vacatur of inequitable conduct findings, exceptional case finding, and attorneys' fees award.

Transcript

Unofficial transcript for users of mofo.com

Speaker 1 (00:01):

We have four cases on the calendar this morning. Afternoon, sorry. Time flies. Time flies when you’re having fun. Two patent cases, a government employee case, a veteran’s case, and the last will be submitted on the brief and not be argued. So our first argued case is Lazare Kaplan International v. Photoscribe Technologies et al, 2009-1251. Ms. Maynard.

Deanne Maynard (00:39):

Thank you, Your Honor, may it please the court. My name is Deanne Maynard, and I represent Lazare Kaplan International. The district court in this case fundamentally misunderstood the patent claims, the prior art, and this court’s case law. That misunderstanding infected all of the court’s rulings, causing it to make multiple claim construction errors, to mislead the jury, and to find an equitable conduct when there was none. In my time this morning, although I’m happy to address—

Speaker 1 (01:10):

—afternoon.

Deanne Maynard (01:11):

Thank you, Your Honor.

Speaker 1 (01:13):

Common mistake.

Deanne Maynard (01:14):

Although I’m happy to address anything in the briefs this afternoon, I’d like to spend my time focusing on one of the court’s claim construction errors that are the rigid frame limitation and both of the court’s inequitable conduct rulings. We would also request that this panel consider holding its decision in this case, pending the en banc decision in the Therasense matter, as the principles there are likely to affect the principal’s governing this appeal.

Speaker 3 (01:37):

Well, if were to do that in this case, I assume every other panel in this court that has an inequitable kind of issue should also do it.

Deanne Maynard (01:47):

I think it might depend on the case, Your Honor, but this case presents issues of materiality, of intent, and of balancing, which are all squarely at issue in the court’s request for briefing in the Therasense case. And so I think if there is a case to be held, it would be appropriate to hold this one.

Speaker 1 (02:06):

Let me ask you about inequitable conduct.

Deanne Maynard (02:08):

Yes, Your Honor.

Speaker 1 (02:09):

Intent. You argue that there was no intent here, but the trial court felt awfully strongly that withholding the Gresser machine was highly material and withheld with intent to deceive. That’s a finding of intent, isn’t it?

Deanne Maynard (02:36):

Well, Your Honor, the district court inferred its finding of intent from the fact that he believed the Gresser machine was highly material, which is an error of law under this court’s precedent. And also, his conclusion of materiality is based on his legally erroneous claim construction of the rigid frame limitation in Claim 18. The district court mistakenly believed that all the rigid frame limitation required was a rigid base with elements attached to it in some manner. But that’s not the point of the rigid frame limitation Claim 18. It’s much more sophisticated than that.

Speaker 4 (03:12):

But didn’t the district court understand the claim language with respect to the rigid frame, including all of the additional language following it about reducing very vibrations and the like and wasn’t that essentially what the claim construction interpretation was that the claim language itself was clear and in no need of any further interpretation other than to conclude that it did not require that the vibrations were completely eliminated?

Deanne Maynard (03:48):

At the Markman hearing, Your Honor, that’s correct. That’s the conclusion. This dispute was about whether it completely eliminated vibration or whether only partially, and at the Markman hearing, the judge correctly interpreted the claim. But then when it came time to instruct the jury, and when it came time to decide the inequitable conduct, the judge had reduced it to something quite different and something in fact, inconsistent with its claim construction ruling. Because as it informed the jury, it said, I have one of these Webster’s dictionaries in my office, and I’m going to read to you some definitions of rigid and frame. And the essence of what he told the jury is that he summed it up, he read the definite sum, he picked some selection of rigid, some selection of frame, and then he summed it up for the jury, and he said, what it means is not client not flexible.

Deanne Maynard (04:31):

This is on A-12-A-13. A structure, which is stiff, unyielding, firm as rigid bars, using a steel bar as an example. So, in effect, he backed off, I think, Judge Linn, his claim construction at the market hearing steel bars as an example. He went back to a firm base, which not only was inconsistent with his reading of it, only partially reducing, but also pointed the jury to only the question of whether or not the prior art had a firm base. And there’s no dispute that the prior Gresser machine had an inch and a half thick aluminum base and therefore was a thick base and that the elements were in some way attached to it.

Speaker 4 (05:10):

But there was a colloquy with the court about that issue. And the court basically asked counsel, “Well, what is it you would have me do to sort of straighten out the record to make sure the jury wasn’t misled by my comments about the dictionary?” And it seemed to me that the suggestion was, well, if you read this additional sentence, we’re good to go. And he did read that sentence.

Deanne Maynard (05:41):

He did read that sentence, Your Honor, but his cure in the process of curing, he went back and said, “And of course you’re also free to look back at the dictionary definitions I gave you early.” So he went right back in. He didn’t cure. He read the one sentence. And if I could back up more, because I think you’re going to the issue of whether this was adequately preserved by trial counsel, and I believe that it was. Before he gave the instructions, the parties had agreed to a full set of complete instructions, and one of which was the Markman construction of rigid frame. And the judge said, “Absolutely not. I’m not going to give the agreed to instructions.” And he gave his own. After he initially gave the dictionary definitions, trial counsel for LKI objected and said, “Your Honor, this is at A-664.”

Deanne Maynard (06:24):

We request that you read your Markman construction. No, because I’ve read the claim. Well, that misses the point, because obviously, there was a dispute about what the claim meant. The claim wasn’t sufficient. He refused to read his Markman instruction. He then did go on into the colloquy that you’re discussing and discuss the definitions. Is there something else I can do? Mr. Allcock told him, “Our position is, there’s nothing you need to do. It’s totally fine.” And LKI’s attorney asked him to read three different places in the patent that LKI, but—

Speaker 4 (06:51):

There was no request to, you know, either reiterate the claim construction from the Markman hearing or indicate to the jury that I have made a ruling on the meaning, or anything of that sort.

Deanne Maynard (07:03):

There was a request at A-664, which is after he read the dictionary definitions to read the Markman ruling, and he refused on the grounds that that was captured by the claim language, which I think this is the point of the Markman hearing. Obviously, there was a dispute in the Markman hearing, and there was a difference between the claim language and the Markman ruling that edified what it meant.

Speaker 4 (07:22):

But the question nonetheless remains as to whether the subsequent colloquy waived that objection.

Deanne Maynard (07:29):

I think, Your Honor, under Second Circuit case law, once you’ve made your position clear to the judge, and it’s clear that the judge is not going to do what you ask, you are permitted to fall back and try to get what you can. And that is what counsel, I think—the accurate reading of the record here. And in any event, even if you think that ultimately agreeing to the judge’s willingness to read only one sentence of the requested three portions of the specification that LKI’s counsel subsequently requested was sufficient. The judge then, in fact, in the process of curing, said on A-20, he did read the one sentence of the specification and then he said, but if the dictionary definition helps you, then you’re certainly free to use that. So he cured and then uncured, even if you think that the one sentence was a cure.

Speaker 4 (08:10):

Let me turn back to inequitable conduct for a minute. Is it your view that the judge concluded that LKI knew of the materiality of the prior Gresser machine, or should have known?

Deanne Maynard (08:28):

He, I think what he says is they—

Speaker 4 (08:32):

You had to have known.

Deanne Maynard (08:33):

They must have known because I find it so highly, highly material. So, but that, again, is all based on his erroneous construction of the claim, because he assumed that it was material because he thought the rigid frame limitation was captured by the aluminum base with the pieces attached to it. And there’s no evidence in the record that—none, in either the jury trial or the bench trial, that the pieces of the Gresser machine, the elements were attached in fixed relation to one another, which is the essence of the Claim 18 limitation, and is the improvement captured by the Claim 18 nor—and there’s plenty of evidence in the record that the Gresser machine lacked the precision of the plus or one minus accuracy unless it was floating on air, unless it was floating on the pneumatic legs. But that, too, was the improvement of Claim 18. The language of Claim 18 being that the elements are in fixed relation to resist differential movements of said laser, said optical system, and said stage and increased immunity to vibrational misalignments. And the judge just—he just didn’t get it. And because he didn’t get it, he thought it was so obvious they should have provided the examiner with this heavy table that had pieces attached to it. But even if one thinks that the heavy table with pieces attached to it would’ve been important to the examiner, the examiner had other things sufficient. The Gresser patent was revealed. The Gresser machine, the existence of the machine was revealed, and the—

Speaker 4 (09:57):

But the Gresser patent didn’t show even a platform, let alone a frame. Right?

Deanne Maynard (10:03):

It didn’t, but, in the words of the judge, it must have been based on something. So, all that this reveal—the defendants point to nothing that revealing the structure of the Gresser machine would’ve added to what the examiner already had before him. Indeed, in response to a Babel rejection in a parent patent, the—it had been disclosed to the examiner that the prior art had used heavy cement tables as a vibration dampening mechanism and other external damping mechanisms. That’s at 1962–63 of the appendix. And that is exactly what the Gresser machine—all that it would’ve shown. And they point to pictures and manuals, but you can look at the picture and you can see, all it would show you is that it was on this base, which nobody disputes, but it doesn’t show you that the elements would’ve been attached in fixed relation and all of the sites in the record to which they point don’t show that. There’s no—

Speaker 3 (10:51):

There isn’t, there isn’t much in the patent itself though, the ’351patent, that shows any structure that attaches things to each other in a rigid way.

Deanne Maynard (11:04):

That’s—that’s true.

Speaker 3 (11:04):

Is there? There’s a diagram—figure 14 is a diagrammatic view that just shows sort of an outline that it seems odd to be fighting about the meaning of rigid frame, and whether a piece of prior art shows the structure that provides that kind of rigidity, when the patent itself only diagrammatically shows, in effect, a box and says it’s rigid.

Deanne Maynard (11:35):

I don’t think the patent says it’s rigid, but to the extent the patent—but the extent—there’s no dispute that it was on this one-and-a-half inch aluminum table, but the defendants can point to nothing about disclosing the structure of the machine that would’ve added to anything that the patent examiner had with respect to resisting vibration. And there was—there were declarations about the quality of inscriptions obtained on the Gresser machine that were provided to the patent examiner that showed they didn’t make the precision that the improvement does. And then Mr. Gresser testified himself at the trial that every time an 18-wheeler went by, every time an elevator went up in a building, the Gresser machine would have wavy lines caused by the vibration. And that’s the improvement in ’351. So—

Speaker 4 (12:16):

There is an interesting fact here, and that is that the prior Gresser machine was something that LKI was certainly aware of at the time this application was being prosecuted. And the same for the declaration with regard to the ’938 patent. And there was a decision not to file it.

Deanne Maynard (12:41):

Yes, Your Honor, with—and I would like to address the declaration, if I may briefly. The declaration is—there was a decision not to file it. At the same time, though, that they decided not to file it in the ’938, they filed it in the ’948 application, which was pending before the very same examiner. Under this court’s law, that points away from an intent to deceive. In fact, it’s hard to see how there could be any level of intent under FMC Corp and Akron Polymer. That’s the holding of this court, and it’s—what you’re dealing with here is a professional judgment. The LKI relied on its attorneys to make a professional judgment and whether to put thing in one and also in another is such a judgment. Nothing happened here that would warrant the unenforceability of the patent and the multimillions, the millions of dollars of attorney’s fees. The Rosario declaration doesn’t reveal anything that’s not shown in the prior art. Both the Gresser—and this is another example of the district court just failing to understand what was going on—the Gresser—but the Gresser and Winston patents revealed the ability to do the width and depth of inscriptions that are shown in the Rosario declaration, which keep in mind, also the Rosario declaration didn’t say anything about positional accuracy or positional repeatability, which was indeed the improvement captured by the claims at issue in the ’938 patent.

Speaker 1 (13:52):

You are well into your rebuttal time, but since we ask a lot of questions, we’ll give you your full three minutes.

Deanne Maynard (13:58):

I appreciate that, Your Honor. Thank you.

Speaker 1 (14:00):

We’ll hear from Mr. Allcock, and you are splitting your time.

John Allcock (14:04):

Yes, Your Honor

Speaker 1 (14:05):

And I’ll try to give you a little warning when you’re down to about three or four minutes, but it’s up to you to—

John Allcock (14:10):

I’ll keep an eye on that.

Speaker 1 (14:11):

Keep faith with your friend there.

John Allcock (14:12):

I will. May it please the court, I would like to address mostly the intent issue. I was going start with the ’938, but I will start with the ’351. Since there was so much discussion on the rigid frame. Judge Linn, I think you hit the nail on the head at the beginning of your questioning. The issue at the Markman wasn’t about the rigidity of the frame or whether the elements were tied together. The issue at the Markman was whether or not it had to completely stop the vibration or just increase the immunity to the vibration. The judge ruled against us and said all it needed to do was increase the immunity. That’s just what the claim language said. So, later on at the jury instruction discussion that you earlier referenced, the judge basically said, “Look, there’s nothing more to say on the Markman ruling other than what the claim says.” Because all I said is I took what LKI was arguing, plain and ordinary meaning of the claim, and that’s the way I went.

Speaker 4 (15:21):

But, without the judge instructing the jury that he had made a ruling that the claim means what it says and that’s what you are to go with, the jury would be free to refer to dictionaries or come up with whatever other definition they thought was appropriate.

John Allcock (15:42):

Yeah. But that’s not what happened. I mean, what he did is instruct them basically on the claim language and said plain and ordinary meeting, which is the only thing that LKI asked him to do at the Markman hearing. I mean, we asked for more explicit construction. They said, “Look, just take the terms plan and ordinary meaning.” So, there was nothing to add in effect. The Markman ruling was effectively, it’s the using the plan and ordinary meeting. But—

Speaker 4 (16:08):

When LKI requested that he read the Markman ruling to the jury, he refused.

John Allcock (16:16):

Right. But it wouldn’t have said any more than the terms increased immunity have their plain and ordinary meaning. That was the Markman ruling.

Speaker 4 (16:25):

Well, yeah, but the—

John Allcock (16:27):

So he—

Speaker 4 (16:27):

Isn’t the jury entitled to know that, and wouldn’t that normally be an appropriate instruction?

John Allcock (16:35):

Sure. But, when the essence of the Markman ruling is the claim term language itself, there’s nothing to add is I guess my point. But, the point—

Speaker 1 (16:47):

Mr. Allcock, I’d like you to get to an equitable conduct, which you started to get to, and obviously you’re prepared to defend the district court’s ruling. That there was intent. First, before you address where the evidence of intent really was, outside of saying we want you to affirm, what’s your response to the suggestion that we hold at pending Therasense?

John Allcock (17:18):

We don’t believe that’s appropriate, Your Honor. We think this case should be decided under existing law, and we don’t believe that under this case, any change in the law would make any impact and so, on intent, I’ll start with the ’938, then go to the brief.

Speaker 3 (17:36):

Well, if we were to hold ultimately that there’s a different standard for inequitable conduct, the equivalent of fraud, which is one of the things that was raised in our order setting the other case for en banc, that could make a difference here.

John Allcock (17:52):

I believe this case has the level of intent—

Speaker 3 (17:57):

So under any standard that we might adopt, this case will come out the same way?

John Allcock (18:04):

Your Honor, what I meant to say is, it would come out the same way under the higher level fraud of intent standard. And because on both the ’938 and on the ’351 patents, there was very strong evidence of intent in addition to materiality.

Speaker 1 (18:28):

Where is the evidence of intent? He found materiality, he found knowledge of materiality, but where did he find knowledge of intent?

John Allcock (18:35):

Okay, with respect to the ’938, Your Honor, the circumstances surrounding the prosecuting attorneys getting the information, the highly material character of that information, the fact that when he got it, they were actively working with the litigation lawyers to file litigation quickly. Their decision to disclose in the continuation application, but not to—when it didn’t matter—but to not disclose in the ’938 application when it did matter, with no principal basis for deciding to do it in one and not in the other.

Speaker 1 (19:19):

Couldn’t that be negligence?

John Allcock (19:21):

Not under these set of circumstances, Your Honor. He admitted that they considered the thing, but then when questioned about it, he was highly evasive in his testimony in two areas, both under my questioning and under the judge’s questioning. And the judge commented on his evasiveness. The two areas were his testimony about the cumulative nature of the Rosario declaration and his testimony about why you filed it in the continuation application, but not in the ’938 application. And his testimony in both areas didn’t make any sense. And it was exposed under cross-examination and under the judge’s questioning. His cumulative testimony was, well, there were two references, Gresser and Winston that disclosed the same thing. But even under his own testimony, they didn’t. Under his own testimony, Gresser disclosed width and Winston disclosed depth. No reference disclosed both, other than the one he withheld. And when the judge quizzed him on that, he had no answer. On the why disclose in the continuation application, but not in the ’938, he said, “Well, I made a determination that it wasn’t material because the existing references covered it,” but the existing references were in the continuation application as well as in the application that he didn’t disclose. And the judge in questioning said, “Your testimony doesn’t make any sense. You’re not making—there’s no principal distinction.” So Your Honor, the—

Speaker 1 (21:02):

Sounds like it wasn’t really hidden. It was disclosed in the other application.

John Allcock (21:08):

Well, it was hidden for—because remember, Your Honor, he didn’t disclose it so that the patent would issue when they would file litigation. He didn’t disclose it and knew the issue fee would be paid by him nine days later and they would get the patent and be able to file the litigation. So it isn’t a case like FMC or any of those other cases that counsel cites where the disclosure in the related application is evidence of innocence. In fact, here, it’s evidence of intent because the intent was to get that patent issued because they needed to file the litigation really soon. And they did, they filed it within two and a half months.

Speaker 3 (21:50):

There’s nothing wrong with having the intent to get the patent issued. The question is whether they intended to fool the examiner, not tell the examiner something the examiner would’ve liked to have had.

John Allcock (22:02):

Well, and exactly. In here, the fact that they disclosed it in the application, that didn’t count. That didn’t matter.

Speaker 3 (22:09):

That was before the same examiner, wasn’t it?

John Allcock (22:12):

It was before the same examiner. Well, but at the time they disclosed it, Your Honor, it was out of the examiner’s hands with respect to the ’938 application. It had already notice—a notice of allowance had been issued, and so it was out of his hands. They would’ve had to, as the record discloses, filed it and asked for it to be considered. And they knew that if they did nothing, the patent would issue, despite disclosing it in the other.

Speaker 4 (22:38):

Clearly, they did not want to disrupt the processing of that application so that it could issue properly. Clearly, they wanted to do that, and that was deliberate, intentionally. No question about that. And it’s clear that they thought about this. So this was something that they did after giving it some consideration. But that still leaves open, does it not, the question of whether they were trying to mislead the patent office or mislead the examiner when it was their view that there were two other references that disclosed the same information. Maybe not collectively, maybe not the exact numbers, but nonetheless it was there.

John Allcock (23:25):

Well, Your Honor, that’s where the evaluation of the credibility of the witnesses on that very point is extremely important because you’re right, that’s what they said. But what they said makes no sense whatsoever. Gresser reading it does not disclose line width. It says disclose between one and a hundred—a wide range. And the patent is about precision and Winston doesn’t disclose the depth of the line. It doesn’t disclose a line at all. And what they were withholding was actual inscriptions on a diamond on one of the—done by one of the references already before the patent office that fell right within dead on the scope of the key elements of the claim. So, you’re right, that’s exactly what they said. They said that, but it doesn’t stand up under cross-examination. And that’s why the witnesses looked horribly evasive when they were questioned on this subject and why the trial judge found them to be so. Because their testimony just doesn’t add up.

John Allcock (24:39):

And it’s similar on the ’351 patent. And that kind of goes back to where I started, which is that there were two elements of the claim. One, the rigid aspect of it, the platform or frame aspect of it with all the elements tied together, and the increase immunity aspect of it. The one at issue in the office action where the Gresser machine was withheld from the patent office had to do with the tying together of it. And as you pointed out, Judge Linn, the Gresser patent doesn’t say anything about the structure of the actual machine that was used. Anyone that looked at a picture of the Gresser machine, and there’s a number of them in the record, would know that all the elements are tied together. It’s astounding that counsel said that there was no evidence in the record on this. There’s ample evidence in the record. There were pictures of the machine—Gresser and Rosario testified as to how the machine operated.

Speaker 3 (25:48):

When you say they should have, should—they should have done, they should have given the examiner a picture of the machine?

John Allcock (25:57):

Or told the examiner that the machine that was built with the Gresser patent had a 1.5-inch thick aluminum base that all of the elements were tied on.

Speaker 3 (26:11):

Should they have brought in the machine?

John Allcock (26:13):

They could have given them a picture. They could have told them what it was. They could have given—

Speaker 3 (26:17):

Let me tell you what I see as a problem. Unless they bring in the machine, no matter what they tell them, someone will go turn around and say you told them that, but that wasn’t enough. You should have told them something else.

John Allcock (26:31):

Well, the manual has a perfectly accurate picture of all the details of the machine, and that was available to them. So, here we’re not even talking about what they should have done. They didn’t, and they knew what the machine was.

Speaker 3 (26:47):

Well, you say they—you have to figure out what they should have done. But you said they didn’t, and the question is they didn’t what?

John Allcock (26:54):

Well, in the face of a rejection saying the only way you get around the prior art is that the prior art doesn’t have all the elements tied together on a solid platform—is what they should have done is told them that the prior art machine that my client has does have all the elements tied together on a platform. And in fact, they told them the opposite. They told them in an office action that none of the prior art had ever tied together all of the elements on a single platform. It was just not true. And it was not true demonstrably by a simple viewing of the machine. I mean, it’s not something that you needed to investigate looking at the machine, which the record discloses the prosecuting attorneys did do, just looking at the machine knows that’s a false statement.

Speaker 1 (27:54):

Mr. Allcock, credited on your time. I assume your representing same parties?

John Allcock (28:02):

Yes. Same side, different parties. Thank you, Your Honor.

Speaker 1 (28:04):

I see. All right. Mr. Schaefer, [inaudible] Gemological Institute. That’s you. Okay.

Ira Schaefer (28:17):

That’s it. So, if it please the Court, Ira Schaefer representing Photoscribe, one of the other defendants in the case. So just to add in a little bit on the rigid frame issue. The patent actually discloses in the summary of the invention that a preferred embodiment of the invention is mounting those three units on a common platform. And there was never any testimony that that was not what they meant by a rigid frame. In fact, the opposite came out during depositions or whatever. So, there was never any questions—

Speaker 4 (28:52):

That doesn’t mean that there wouldn’t be more structure than just a platform.

Ira Schaefer (28:57):

Well, what I mean usually what—since it talks about three elements having to be connected to the platform, so there has to be some—because there’s a laser, there’s the optics, and there’s the diamond mounting stage. So, they all have to be connected somehow to that. And, and so there—

Speaker 4 (29:15):

May be a difference between just connecting to a platform and having things connected to each other to prevent vibrations.

Ira Schaefer (29:22):

Correct. So, in fact, the original contract that Lazare Kaplan signed with Mr. Gresser’s company to make that actually called for this thick platform on which all these elements were mounted. And that was also on the record. So when LKI says that there was nothing in the record discussing the structure of the Gresser machine, we had Mr. Gresser himself come and describe how the machine was constructed. We had Mr. Rosario confirming that all the elements that were required for the contract were indeed in the machine, meaning the platform along which things were mounted.

Speaker 1 (30:04):

Mr. Schaefer, we didn’t reset the clock, but you have until minus 2:30.

Ira Schaefer (30:09):

Oh, thank you, Your Honor.

Speaker 1 (30:11):

If you don’t mind [inaudible].

Ira Schaefer (30:13):

I don’t mind. So, there was clear testimony as to the actual structure of the machine and both Mr. Mildy and Mr. Hoffberg, who are the patent attorneys for Lazare Kaplan for prosecuting this, both admitted that, prior to actually preparing the patent application, they went and visited the Lazare Kaplan premises where they had one of these machines in New York, and they witnessed the machine in operation. So they saw exactly how the parts were connected together, at least visibly, and what it did. And you have to keep in mind also, this machine was in use by Lazare Kaplan for over 10 years. They were basically the exclusive diamond scribers everywhere in the world based on these machines. And that these machines were perfectly suitable, that there was never any complaints about vibrations or squiggly lines or anything like that.

Ira Schaefer (31:11):

They worked perfectly fine. And so, when having that information in front of them, they just went ahead and filed these new patent applications just basically ignoring the previous machine. I think what Judge Bruzzese was saying with regard to the ’351 of the rigid frame, when the examiner rejected the claims and said, “I’m rejecting Claim 18 over the Gresser machine,” which doesn’t teach any kind of rigid frame, and Babel, which is some monstrous piece of equipment that has elements together, Mr. Mildy came back and said, “No.” There’s no teaching of a diamond inscribing machine that has these three elements: the laser, the optics, and the diamond holding stage tied together on a common platform or on a common frame. It just said outright. And I think what the court was saying is that when that occurred, that when the examiner made that rejection, it demanded of Mr. Mildy that he come forward and say, “Well, look, I know you’re saying that, but we have this other machine. Let me give you some details about it.” And—

Speaker 1 (32:28):

Mr. Schaefer, I think the red light has no further questions. I think the red light does mean something now.

Ira Schaefer (32:34):

Okay. Thank you.

Speaker 1 (32:34):

Three minutes for Ms. Maynard.

Deanne Maynard (32:38):

Thank you, Your Honor, if I could just make three quick points. First on the Gresser machine and its materiality. Defense counsel here is making the same mistake that the district court made, which is that the only evidence in the record is that the three elements were attached in some fashion to a common base in the Gresser machine. There is no evidence they were attached in fixed relation to one another so as to reduce the vibrational effects. And Mr. Gresser testified, as I indicated, that his machine couldn’t do the precision in a normal office environment without being floated on air. And the Babel rejection proves that rather than disproves it on A-1951, The Babel rejection was quote Babel et al teaches in figure five, a rigid frame supporting the laser, the optical system, and the work piece. And LKI’s response to that was Babel et all make no mention that the elements are rigidly connected and then went on to talk about known techniques and cement platforms and that the Gresser machine would’ve been redundant of that prior art before the examiner.

Deanne Maynard (33:44):

In addition, pointing to the specification, I would point you to, as Judge Linn was saying, the specification is the summary of the invention. The relevant part starts right before, I think, the part to which Mr. Schaefer was referencing on A-113 and column two starting at line 51. The process according to the present invention typically achieves a positioning accuracy of about plus or minus one micron, and then goes on to talk about how things are rigidly connected to reduce the vibrational effects. With respect to the Rosario decoration, the prosecuting attorneys did give a reasoned explanation for why they filed it in the ’948 rather than the ’938. And they said in the ’948, because it was still in the normal flow, they sent it in. They didn’t make an analysis about whether or not they needed to do it.

Deanne Maynard (34:28):

They sent it in because you’re not limited to putting in only what you have to put in and when it’s in the process, you send it in. And in the ’938, because there had been a [inaudible], they looked at it very carefully to decide whether they needed to submit it. And they concluded that the prior art revealed what the declaration showed. And the Gresser and Winston patents do reveal the ability, and the prosecuting attorneys testified it was their belief that they did so, revealed the ability to do the depth and widths shown. And I think the fact that—both of the Winston patents revealed both depth and width and the testimony of the prosecuting attorney was that he believed it to reveal both depth and resolution, meaning width. Finally, well, one more point, it can’t be the most reasonable inference on these facts that these attorneys intended to deceive the patent office. And for that reason alone, the judges can be reversed. With respect to the Therasense case, just to be clear, LKI believes that district court can be reversed under current state of the law and that the district court is wrong here for several reasons, factual and legal. Certainly if the court were to adopt a fraud standard like that reflecting the Supreme Court decisions, there’s no way the evidence here could support a finding. Thank you, Your Honors.

Speaker 1 (35:46):

Thank you, Ms. Maynard. We could call this case [inaudible] when it’s decided. We’ll take it under advisement. Thank you.