Ronald A. Katz Tech. Licensing, L.P. v. Cont'l Airlines, Inc. (In re Katz Interactive Call Processing Patent Litig.)

Teligence's motion for summary judgment argues that these numbers are not acknowledgement numbers because they do not serve to verify transactions ( e.g. leaving messages in mailboxes, purchasing or obtaining membership minutes, or talking with operators.) In response, Teligence says that the membership numbers and pass codes serve as acknowledgment numbers in one type of transaction—when a customer signs up to establish a membership with Teligence. In that transaction, the Teligence system provides the membership number and passcodes.

Teligence argues that this infringement analysis is specious because it would mean that any account number would be an acknowledgment number because it would signify that a caller has opened up an account. Although Teligence does not properly articulate why an acknowledgment number should be read more narrowly, this Court finds alternative grounds for doing so. Claims 32, 53 and 67 of the '762 patent separately require both a customer number and an acknowledgment number. The specification of the '762 patent likewise describes these concepts separately. See, e.g., Figure 5 of the '762 patent. Thus, we conclude that the two terms refer to different structures. See Applied Medical Resources Corp. v. U.S. Surgical Corp., 448 F.3d 1324, 1333 fn. 3 (Fed.Cir.2006) (“The prosecution history, specification, comparison with other claims in the patent, and other evidence may require that two terms in a claim refer to different structures ....” (citation omitted)). With that understanding of the claim terms in mind, this Court finds that Teligence's membership number is not an acknowledgment number.

This Court also finds that a reasonable juror could not conclude that a passcode is provided by the system to verify or acknowledge a transaction. A passcode is clearly provided so that the system may verify the identity of the caller in future transactions, not so that the caller can verify that the current transaction took place. Accordingly, this Court GRANTS Teligence's motion for summary judgment and finds that it does not infringe claims 32, 53 and 67 of the '762 patent because the accused systems did not generate an “acknowledgment number.”

Katz says that Teligence infringed claim 24 of the '415 patent because of various accounting features that its system included. Claim 24 of the '415 patent depends from independent claim 20. Together the claims recite:

20. A method for determining the acceptability of calls and executing certain operations of telephonic formats in association with a communication facility including remote terminal apparatus for the individual callers, wherein said remote terminal apparatus includes a telephonic instrument with voice communication means and digital input means in the form of an array of alphabetic, numeric buttons for providing data, including the steps of:

receiving associated telephone number signals automatically provided by the communication facility upon the instance of a call from one of said remote terminal apparatus;

testing said associated telephone number signals with respect to stored data to determine the acceptability of said call from said one of said remote terminal apparatus; and

selectively providing one or more cues to said one of said remote terminal apparatus and providing at least one cue depending upon the associated telephone number signals for said call from said one of said remote terminal apparatus in accordance with a select format.

24. A method according to claim 20, wherein at least one cue indicates on-going accounting data during said call.
(emphasis added).

Teligence points out that its systems did not have any brand specific prompts that depended on testing the caller's ANI. Its systems also did not prompt the customer with an indication of how many points the customer has accumulated. Teligence argues that these features take its systems outside the scope of claim 24. Katz challenges Teligence's claim construction (and various facts).

Teligence appears to interpret the term “associated telephone number signals” to be limited to ANI signals. Teligence argues that the '415 patent teaches only one type of testing to determine whether to accept or reject a call. However, Katz points out that the specification teaches that both ANI and DNIS could be utilized to determine call acceptance. '415 patent at 4:58–59. This is consistent with this Court's earlier rulings. ( SeeAugust 13, 2009 Order Ruling on the Parties' Individual Summary Judgment Motions at pp. 80–81 (DE 6718) (holding that the step of testing associated telephone number signals could be satisfied by testing ANI or DNIS signals.)) Thus, this Court rejects Teligence's claim interpretation and finds that “associated telephone number signals” can refer to either ANI or DNIS signals.

Teligence also interprets the term “providing at least one cue” to mean “providing a caller with a question or prompt being specific to a game format.” The additional language Teligence proposes is not reflected in the claim language nor does Teligence explain why a cue must be limited to a game format cue. Thus, this Court declines to revise its previous definition where it construed “cue” as “a question or prompt which is given to a caller.” (February 21, 2008 Claim Construction Order at p. 57)

Teligence also interprets the term “on-going accounting data” to indicate how many points the caller has accumulated in response to questions asked of the caller during a call. As with Teligence's “game format” contention, there is no basis for linking the “on-going accounting data” limitation with a definition that describes “points.” The specification discloses an example of on-going accounting data, it does not describe its limits. Indeed, the Eastern District of Pennsylvania rejected a similar attempt to limit the meaning of “accounting data” to “scores in a television game show format.” (Ronald A. Katz Technology Licensing L.P., et al. v. AT & T Corp., et al., 63 F.Supp.2d 583 (E.D.PA.1999) Claim Construction Order at pp. 74–75 attached as Ex. 3 to Walker Decl.)

Since Teligence's non-infringement arguments depend on the three rejected claim constructions that it offered, this Court DENIES Teligence's motion for summary judgment as it relates to claim 24 of the '415 patent.

Katz asserts 16 claims against Teligence, alleging infringement under the doctrine of equivalents in each case. Teligence argues that Katz's technical expert, Dr. Lucantoni, fails to provide particularized evidence linking any of the asserted claims to the Teligence system under the doctrine of equivalents. Where a patentee does not provide particularized testimony specifically showing that the accused system performs the same function, in the same way, and achieves the same result as the patent-in-suit, a grant of a motion for summary judgment of non-infringement under the doctrine of equivalents is proper. Motionless Keyboard Co. v. Microsoft Corp., 486 F.3d 1376, 1383 (Fed.Cir.2007).

Teligence says that Dr. Lucantoni wholly fails to address the doctrine of equivalents with respect to nine of the asserted claims (claim 11 of the ' 150 patent, claim 163 of the '863 patent, claims 57 and 67 of the '120 patent, claims 31, 53, 63 and 66 of the '965 patent and claim 24 of the ' 415 patent) and analyzes only a handful of limitations under the doctrine with respect to the remaining claims. In support of these arguments, Teligence's brief cites to “Attachment A” while its Statement of Genuine Issues cites to “Attachment B pp. [sic]” These citations are unhelpful because Teligence includes more than one set of attachments with letters to various declarations it included with its summary judgment papers. In addition, a cursory review of the Snider and Onyeama attachments are unhelpful. Thus, this Court is unable to properly assess the merits of Teligence's arguments.

Based on the foregoing, this Court finds that Teligence has failed to satisfy its burden of proof and DENIES Teligence's motion for summary judgment as it relates to the issue of infringement under the doctrine of equivalents.

Teligence argues that claim 24 of the '415 patent is invalid as obvious under 35 U.S.C. 103 in light of the Periphonics system that was sold to First Hawaiian Bank (“First Hawaiian”) in combination with “ISDN Opportunities for Large Business–800 Service Customers” by A. Friedes published in June, 1986 in IEEE–International Conference on Communications '86 (“Friedes”).

A patent is presumed valid, and the defendants have the burden of proving invalidity by clear and convincing evidence. See 35 U.S.C. § 282; Iron Grip Barbell Co. v. USA Sports, Inc., 392 F.3d 1317, 1320 (Fed.Cir.2004). If the claimed invention is not disclosed in a single prior art reference, a patent may still be invalid as obvious under § 103. In Graham v. John Deere, 383 U.S. 1, 86 S.Ct. 684, 15 L.Ed.2d 545 (1966), the Supreme Court set forth the test for obviousness:

Under § 103, the scope and content of the prior art are to be determined; differences between the prior art and the claims at issue are to be ascertained; and the level of ordinary skill in the pertinent art resolved. Against this background the obviousness or nonobviousness of the subject matter is determined. Such secondary considerations as commercial success, long felt but unsolved needs, failure of others, etc., might be utilized to give light to the circumstances surrounding the origin of the subject matter sought to be patented.
Id. at 17–18, 86 S.Ct. 684.

This test is a question of law based on underlying factual inquiries. See, e.g., Daiichi Sankyo Co. v. Apotex, Inc., 501 F.3d 1254, 1256 (Fed.Cir.2007).

Although Katz argues that Teligence has failed to show that First Hawaiian is prior art, Katz has admitted in another brief that First Hawaiian was on sale no later than October 13, 1983 and is thus prior art to the '415 patent under 35 U.S.C. § 102(b). (January 29, 2010 Order Granting in Part and Denying in Part Defendants' Joint Motion for Summary Judgment of Invalidity Under Sections 102 and 103, p. 15 (DE 6946).) Both parties rely on the “Functional Specification for First Hawaiian Bank” to describe the features of the First Hawaiian system. (“FH '83”).

First Hawaiian is an automated voice response telephone system that contains two primary applications, “Bank–From–Home” (“BFH”) and credit authorization. The BFH application allows a caller to pay bills and check account status. (FH '83 at § 2.1.) To access the BFH application, callers must enter their account number and a secret code. (FH '83 at § 5.4.4.) After the caller has gained access, the caller can make a payment by entering the merchant number, payment amount, invoice number and date. (FH '83 at § 5. 1.) At the termination of a call and the customer payment, the system will provide the caller with the new account balance. (FH '83 at § 5.3.9.) Under certain circumstances, the application will divert the call to an operator. (FH '83 at § 5.3.)

The credit authorization application allows callers to obtain authorization for a credit card transaction. (FH '83 at § 2.2.) The caller must enter a merchant number, account number, expiration date and amount of sale. (FH '83 at § 6.1.) The system responds in one of three ways: 1) authorizing the transaction and providing an authorization number, 2) declining to authorize the transaction, and 3) referring the call to an operator. Id.

The Friedes article discloses Advanced 800 and ISDN features that can be used by telephone customer service organizations such as telemarketing companies to more efficiently handle calls. (Friedes at § 1.) Friedes discloses forwarding the originally dialed number (DNIS) to provide flexibility in managing access to services and facilities. For example, where multiple businesses with different 800 numbers are being served by a single ACD, the identity of the business being called can be determined by the originally dialed number received along with the call. (Friedes at § 5.5.) This allows designating, on a call-by-call basis, what service to provide and customer-specific call-handling instructions to process a call. Id. Such ACDs can also be placed at different geographic locations to satisfy the needs of multi-location customers to give increased control of their network services. Id.

Friedes further discloses forwarding the calling number (ANI) to allow a record associated with the caller to be retrieved from a database and displayed to an attendant when the voice path is established for more efficient and personalized service. (Friedes at § 5.3.) Additionally, information received from the network (e.g., ANI) and obtained directly from the caller for updating customer information (e.g., via verbal communication with an attendant) can be transmitted along with a call when referring a call to eliminate the need for a caller to repeat the process of providing necessary information. (Friedes at Section 5.4.)

During the joint summary judgment motion briefings, the parties argued whether there was a motivation to combine First Hawaiian and Friedes. This Court stated that Friedes describes tools and features that were intended to be used in other systems like First Hawaiian, and found that there was a motivation to combine these two references. (January 10, 2010 Order Granting In Part and Denying In Part Defendants' Joint Motion for Invalidity Under Sections 102 and 103 at pp. 25–26, DE 6946.) Thus, the only remaining issue is whether the combination of references discloses all the limitations of claim 24 of the '415 patent. Katz argues that the combination fails to address three limitations.

First, Katz argues that the two references fail to disclose “testing ... to determine the acceptability of said call.” Friedes says that by using ANI, “a validation check could be made to determine whether or not to establish a voice path at all (screening out ‘hackers').” (Friedes at Section 3.1.) Teligence argues that this feature discloses to the testing step of claim 24. In response, Katz argues that the testing step only determines the acceptability of a call to an automated interface. Therefore, Friedes does not disclose the testing limitation.

This Court previously defined the testing step to mean “determine if criteria are satisfied to allow access to the system.” (February 21, 2008 Claim Construction Order at p. 57.) There is nothing in either the language of this phrase or this Court's definition that somehow limit this test to automated interfaces. Accordingly, this Court rejects Katz's argument and finds that Friedes discloses the testing limitation.

Second, Katz argues that the combination of First Hawaiian and Friedes does not disclose the step of “providing at least one cue depending upon the associated telephone number signals.” Teligence does not dispute this point. Instead, Teligence argues that it would have been obvious in light of Friedes for a person of ordinary skill in the art to modify First Hawaiian to use ANI information to distinguish between bill-paying and non-bill paying callers. However, Friedes does not disclose using ANI information to determine which cues to provide. Moreover, Katz's invalidity expert, Dr. Brody, argues that “[t]o do so would predictably restrict the ability of account holders to access the system from a location of their choosing ....” (Brody Decl., at ¶ 131.)

Although Teligence has certainly set forth a plausible argument, this Court finds that Teligence has failed to meet its burden of proof on summary judgment. Teligence's argument does not simply combine two references. It adds a non-trivial feature that is not disclosed in either reference. Therefore, this Court finds that a reasonable jury could conclude that it would not have been obvious to selectively provide a cue depending on the associated telephone number signaling ( e.g. ANI).

Accordingly, this Court DENIES Teligence's motion for summary judgment as it relates to the issue of the validity of claim 24 of the '415 patent.

Teligence also argues that claim 32 of the '309 patent is invalid as obvious in view of a combination of U.S. Patent No. 4,531,023 entitled “Computer Security System for a Time Shared Computer Accessed Over Telephone Lines” (“Levine”) and U.S. Patent No. 3,525,811 entitled “Remote Control Voting System” (“Trice”).

Levine describes a system and method for securely connecting remote computers to a time-shared central computer. A user connects to the time-shared central computer by means of a modem connected to the telephone system. The user's calling number (ANI) is transmitted, by a dedicated line, to an offsite security computer system. The user will then enter his password. The password will allow the system to bring up the user's profile including the user's calling number. This calling number will be compared to the calling number registered in the offsite security computer system.

Trice describes a system and a method for connecting remote voters to a polling place via a telephonic system. After connecting to the system, the system provides a code number to the call, and a reproducer instructs the caller with audio signals on how to proceed. The caller must input his voter registration number using Touch–Tone or other means. An information retrieval system searches for the voter's record. If no record is found, the voter is excluded from voting and may be told to call voter assistance. If the record is found and the voter has not yet voted, he is asked to enter his secret code number to match the one in the record. If a match occurs, the voter is further instructed to transmit a voice communication for voice print identification. If the voice prints match, the caller may proceed with voting.

As a threshold matter, we look at whether there is a motivation to combine these two references. Although Teligence's brief does not address the issue, its expert argues that a person of ordinary skill in the art would be motivated to combine Levine and Trice because such a combination would have yielded predictable results and because they both disclose the importance of verifying a caller's identity before allowing them to access the system. (Prieve Report at ¶¶ 678–679.) Teligence also notes that Levine identified Trice as prior art.

In contrast, Katz's expert, Dr. Brody, raises a number of reasons why a person of ordinary skill in the art would not be motivated to combine the two references: (1) the systems are entirely disparate (Brody Decl. at ¶ 147); (2) Trice teaches away from using ANI ( id. at ¶ 148); (3) using ANI in the Trice system would unduly restrict a voter to voting only in one place ( id. at ¶ 149); (4) a caller in Trice is already subject to three levels of security ( id. at ¶ 150); (5) adding the use of ANI to Trice as suggested would increase costs ( id. at ¶ 151); and (6) it would not be “predictable” to add the use of ANI to the Trice voting system. ( id. at ¶ 152).

After reviewing the arguments, this Court finds that there is a factual issue with respect whether a person of ordinary skill in the art would be motivated to combine Levine and Trice. A reasonable jury could conclude that there is no such motivation because a system for connecting remote voters to a polling place and a system for allowing computers to communicate securely are so disparate. Moreover, Teligence's argument merely parrots the conclusions it seeks to have this Court adopt. Accordingly, this Court DENIES Teligence's motion for summary judgment as it relates to the issue of the validity of claim 32 of the '309 patent.

Teligence argues that several claims are invalid as indefinite under 35 U.S.C. § 112 ¶ 1 which states:

The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same ....
(emphasis added).

The written description requirement helps to ensure that the patent applicant actually invented the claimed subject matter. See Vas–Cath Inc. v. Mahurkar, 935 F.2d 1555, 1561 (Fed.Cir.1991) (“Adequate description of the invention guards against the inventor's overreaching by insisting that he recount his invention in such detail that his future claims can be determined to be encompassed within his original creation.”)

Whether a patent complies with the written description requirement is a question of fact. Pandrol USA, LP v. Airboss Ry. Products, Inc., 424 F.3d 1161, 1164 (Fed.Cir.2005). Here, defendants have moved for summary judgment arguing that numerous claims are invalid because they fail to comply with the written description requirement. Summary judgment is appropriate only if no “reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Fed.R.Civ.P. 56(c). This Court must “view [ ] the evidence and any disputed factual issues in the light most favorable” to the plaintiff. Enzo Biochem Inc. v. Gen–Probe, Inc., 323 F.3d 956, 962 (Fed.Cir.2002) (citation omitted).

Teligence argues that the “qualification structure” in claim 32 and 46 of the '309 patent and claim 24 of the '707 patent is indefinite under WMS Gaming. The parties agree that the qualification structure is a means plus function limitation governed by § 112 ¶ 6. They also agree that the structure corresponding to the recited function is the “qualification unit 93.”

However, Teligence argues that the qualification unit is a general purpose computer or processor that would require the structure to include an algorithm. WMS Gaming, 184 F.3d at 1349. Teligence then argues that there is no such algorithm and concludes that the claims are invalid as indefinite. In response, Katz argues that the qualification unit 93 is a specialized component. Therefore, Katz concludes that WMS Gaming does not apply and the specification does not need to disclose an algorithm.

In this Court's October 13, 2009 Order Denying Defendants' Joint Motion for Invalidity Under § 112 (DE 6820), 2009 WL 8636052, this Court found that the qualification unit 93 unit is not a general purpose computer or microprocessor itself. Id. at pp. 19–20. Teligence merely repeats the same arguments regarding the “qualification unit,” albeit for different claims and patents. However, the analysis is the same. In contrast to a component like the processing unit 92, the '309 and '707 patents do not characterize the qualification unit 93 as a general purpose computer. Rather, the patents discuss the specific functions that the qualification unit performs. ( See Brody Decl. at ¶ 187.) Teligence has raised no new arguments that cause the Court to revisit its earlier decision. Thus, the Court concludes that an algorithm is not part of the claim construction of the qualification structure limitation. Accordingly, this Court DENIES defendants' motion for summary judgment of indefiniteness as it relates to whether there is a written description for the “qualification structure” in claims 32 and 46 of the ' 309 patent and claim 24 of the '707 patent.

Claim 46 of the '309 patent and claim 24 of the '707 patent require a “consumable participation key.” Although Teligence acknowledges that the specifications of both patents mention a “consumable key,” it argues that the disclosure is inadequate because they do not explain how the key is “specified, manipulated, or, most importantly, used to restrict the extent of access to the system.” (Teligence's Mot. for Summ. J. at p. 31.)

The written description requirement is satisfied if a person of ordinary skill in the art reading the patent application as originally filed would recognize that the patent application described the invention as finally claimed in the patent. It is unnecessary to spell out every detail of the invention in the specification; only enough must be included to convince a person of ordinary skill in the art that the inventor possessed the full scope of the invention. Union Oil Co. of Cal. v. Atl. Richfield Co., 208 F.3d 989, 997 (Fed.Cir.2000).

Citing to its expert, Dr. Forys, Teligence implies that a person of ordinary skill in the art would not understand how to construct the claimed invention. However, a review of the relevant portions of the expert report fails to show that Dr. Forys even addresses this issue. (Forys Expert Report at ¶¶ 124–127 and 129 attached as Ex. 29 to Caridis Decl.) Moreover, Katz's expert, Dr. Brody, identifies common portions of the specifications that describe the consumable participation key, including description of caller-entered data signals specifying the key and that the key is for restricting the extent of access to the system. (Brody Decl. at ¶¶ 196, 198.) Dr. Brody then goes on to identify other passages that provide further details regarding participation keys. (Brody Decl. at ¶¶ 199–204.)

This Court finds that Dr. Brody's declaration, together with the cited passages from the specification, provide sufficient evidence to create a triable issue of fact. Accordingly, this Court DENIES defendants' motion for summary judgment of indefiniteness as it relates to whether there is a written description for the “consumable participation key” limitation in claim 46 of the '309 patent and claim 24 of the '707 patent.

Teligence also moves for summary judgment asking the Court to rule that laches applies.

Laches occurs when a plaintiff unreasonably delays in bringing suit on its patent. The defense bars a patentee from recovering damages accrued prior to the filing of lawsuit. A.C. Aukerman Co. v. R.L. Chaides Constr. Co., 960 F.2d 1020, 1041 (Fed.Cir.1992) ( en banc ). The elements of laches are: “(1) the plaintiff delayed filing suit for an unreasonable and inexcusable length of time from the time the plaintiff knew or reasonably should have known of its claim against the defendant, and (2) the delay operated to the prejudice or injury of the defendant.” Aukerman, 960 F.2d at 1032. Laches must be established by a preponderance of the evidence. Id. at 1045.

Teligence argues that Katz had knowledge of Teligence's activities since 1999 and did not sue Teligence until eight years later—in June 2007. There is a rebuttable presumption that laches applies if the delay in bringing a lawsuit is over six years. Id. at 1035. The plaintiff can puncture the presumption with introduction of evidence sufficient to raise a genuine dispute as to either delay or prejudice. Hemstreet v. Computer Entry Sys. Corp., 972 F.2d 1290, 1293 (Fed.Cir.1992). Courts have recognized both litigation and negotiations with the accused as an excuse for delay. Aukerman, 960 F.2d at 1033 (citations omitted). Once the presumption is burst, the defendant must affirmatively prove both elements of laches. Hemstreet, 972 F.2d at 1293 (citing to Aukerman, 960 F.2d at 1032).

First, this Court must determine if the presumption of laches applies. Katz filed the current lawsuit on June 8, 2007. Teligence attempts to establish Katz's first knowledge in three ways. First, Teligence argues that Katz had actual knowledge of potentially infringing activities of Teligence's predecessor, Boulevard Media, Inc. (“Boulevard”) by March 1999, when Boulevard was identified as a potential sublicensee during Katz's negotiations with MicroVoice Applications, Inc. However, the evidence Teligence identifies is merely a list of MicroVoice Re–I.D. customers attached to the MicroVoice license. Although this evidence may suggest that Katz should have investigated Boulevard, it certainly does not show that Katz had knowledge of Boulevard's potentially infringing activity and it is clearly insufficient to satisfy Teligence's burden of proof on summary judgment.

Second, Teligence argues that Katz had constructive knowledge of Teligence's activities because Boulevard's activities were open and notorious. Although Teligence argues that very public activity is sufficient to place a patent holder on notice under Wanlass v. General Electric Co., 148 F.3d 1334 (Fed.Cir.1998), that decision states that a “plaintiff is chargeable with such knowledge as he might have obtained upon inquiry, provided the facts already known by him were such as to put upon a man of ordinary intelligence the duty of inquiry.” Id. at 1338 (citation omitted, emphasis added). Thus, if Katz had known of the public activity that Teligence identifies, that may be sufficient to show constructive knowledge. Here, Teligence fails to make that showing. Thus, this Court cannot find any constructive knowledge.

Third, Teligence argues that the knowledge of Mr. Miller, MicroVoice's CEO, should be attributed to Katz because MicroVoice's rights to grant sublicenses created a principal-agent relationship between Katz and MicroVoice. Agency is actual when the agent is really employed by the principal. Cal. Civil Code §§ 2298 and 2299. An agency is ostensible when the principal intentionally or by want of ordinary care causes a third person to believe another is the principal's agent, who is not really employed by the principal. § 2300.

Katz argues that MicroVoice was not an actual agent because the Katz/MicroVoice license specifically states that MicroVoice is not an agent and because Mr. Miller was not employed by Katz. Katz argues that MicroVoice was not an ostensible agent because Mr. Miller had actually acted on behalf of Teligence. He was retained as a consultant to negotiate with Katz and he asserted arguments on behalf of Teligence. In reviewing the briefs, this Court finds that although Teligence presented evidence suggesting that MicroVoice was an agent, it has failed to satisfy its burden of proof on summary judgment. Therefore, for the purposes of this summary judgment motion, this Court will not attribute Mr. Miller's knowledge to Katz.

This Court has rejected all of Teligence's arguments regarding first knowledge. Instead this Court draws the inferences against Teligence and assumes that Katz did not know of Teligence's potentially infringing activity until August 2001, when Katz first contacted Teligence. Relying on this date, the presumption of laches does not apply. Since Teligence's motion failed to identify any other evidence of unreasonable delay, this Court does not find unreasonable delay.

Moreover, Katz says that any delay was excused by its negotiations with Teligence and various third parties. In response, Teligence argues that licensing efforts with third parties do not excuse delay where the patentee failed to notify the potential infringer. Teligence's response fails to address Katz's negotiations with Teligence. Early laches decisions state that, for license negotiations to serve as an excuse, the negotiation must “ordinarily be continuous and bilaterally progressing, with a fair chance of success, so as to justify significant delays.” A.C. Aukerman Co. v. Miller Formless Co., Inc., 693 F.2d 697, 700 (7th Cir.1982);see also Continental Coatings Corp. v. Metco, Inc., 464 F.2d 1375, 1377–78 (7th Cir.1972). Here, Teligence has failed to present evidence that show that its negotiations failed to meet this standard. Accordingly, this Court finds that there is a triable issue with respect to unexcusable delay both based on the length of delay and on the excuses Katz identified.

The second element of laches is prejudice. Teligence argues that it suffered both economic and evidentiary prejudice based on Katz's delay in filing suit. With respect to economic prejudice, Teligence argues that its predecessor, Boulevard, could have changed its operations substantially had Katz approached Boulevard in 1999 to negotiate a license. In support of that argument, Teligence relies on a single declaration. (Madigan Decl. at ¶ 23.)

In response, Katz argues that Teligence has failed to show that it would have acted differently if Katz had sued earlier. In Meyers v. Brooks Shoe, Inc., 912 F.2d 1459, 1463 n. 1 (Fed.Cir.1990), the Federal Circuit stated that to prevail on laches, the defendants “must show that the prejudice they suffered resulted from the delay.” In Meyers, none of the defendants submitted evidence that they curtailed design and development of the accused products in response to suit once it was actually filed. Id. at 1463. The evidence also failed to show that the defendants were concerned that their products might infringe the patents or that they would have acted differently had they been sued earlier. Id. As a result, the Federal Circuit reversed the district court's decision to grant the defendants' summary judgment on laches. Here, the Madigan Declaration only suggests that Teligence could have acted differently. It hardly proves that Teligence would have acted differently. Accordingly, this Court finds that Teligence has failed to prove economic prejudice.

Teligence also argues that it suffered evidentiary prejudice. Teligence says that the memories of the relevant witnesses have faded and that there are missing relevant documents. Specifically, Teligence says that many of Boulevard's financial documents prior to 2003 have been lost. In response, Katz argues that the defendants have failed to identify any specific item of absent evidence or testimony that prevents it from presenting a full defense.

Although Teligence generally discusses evidence that is no longer available, it never explains why this evidence is important to its case, or discusses why the same facts cannot be otherwise proved. As a result, this Court finds that Teligence has failed to present substantial evidence of evidentiary prejudice.

In sum, this Court has found factual issues with respect to unreasonable delay, excuse, and economic and evidentiary prejudice. Accordingly, this Court DENIES Teligence's motion for summary judgment as it relates to the affirmative defense of laches.

Katz's motion for summary judgment asks this Court to rule against Teligence's affirmative defenses of equitable estoppel and prosecution laches.

Equitable estoppel comes into play when a patent owner represents to an infringer, expressly or implicitly, that he will not enforce his patent against the infringer's business, and the infringer relies on that representation. The Federal Circuit has stated that there are three elements to equitable estoppel: a) the patentee, through misleading conduct, leads the alleged infringer to reasonably infer that the patentee does not intend to enforce its patent against the alleged infringer; b) the alleged infringer relies on that conduct; and c) due to its reliance, the alleged infringer will be materially prejudiced if the patentee is allowed to proceed with its claim. See A.C. Aukerman, 960 F.2d at 1028. Equitable estoppel must be shown by a preponderance of the evidence. Id. at 1046.

Katz argues that Teligence has no evidence to show misleading conduct. In response, Teligence discusses what Katz knew and should have known, but it never identifies any misleading conduct apart from Katz's silence. However, silence cannot be the basis for an inequitable conduct claim. See Hemstreet v. Computer Entry Sys. Corp., 972 F.2d 1290, 1295 (Fed.Cir.1992) (“equitable estoppel may, in some instances, be based upon a misleading silence, mere silence must be accompanied by some other factor which indicates that the silence was sufficiently misleading as to amount to bad faith.” (internal citations omitted)); see also ABB Robotics, Inc. v. GMFanuc Robotics Corp., 52 F.3d 1062, 1064 (Fed.Cir.1995) (“Misleading action by the patentee may be silence, if such silence is accompanied by some other factor indicating that the silence was sufficiently misleading to amount to bad faith.”); Aukerman, 960 F.2d at 1042 (“inaction must be combined with other facts”).

Since Teligence has failed to offer any substantial evidence of misleading conduct, this Court GRANTS Katz's motion for summary judgment with respect to Teligence's equitable estoppel defense.

Katz's summary judgment motion asks this Court to dismiss Teligence's affirmative defense of prosecution laches. The equitable doctrine of prosecution laches may bar enforcement of patent claims issuing after an unreasonable and unexplained delay in prosecution, even though the applicant complied with pertinent statutes and rules. Symbol Techs., Inc. v. Lemelson Med., Educ., & Research Found., 277 F.3d 1361, 1363 (Fed.Cir.2002) (hereinafter “Symbol I ”).

In Symbol I, the Federal Circuit did not issue any “firm guidelines” for determining when laches exists. Symbol Techs., Inc. v. Lemelson Med., Educ., & Research Found., 422 F.3d 1378, 1385 (Fed.Cir.2005) (hereinafter “Symbol II ”). Both parties agree that prosecution laches requires an unreasonable and unexplained delay in the prosecution of a patent. Unlike some of the other cases in this multidistrict litigation, Teligence does not argue that intervening rights is not necessary to prove prosecution laches. Thus, the defendant must prove both: 1) unreasonable and unexplained delay, and 2) intervening adverse rights. Katz's motion for summary judgment argues that Teligence has failed to present substantial evidence to support either of these elements.

On July 2, 2009, this Court struck Teligence's intervening rights contentions as tardy. (DE 6625). The Court later DENIED Teligence's request to reconsider that order on October 13, 2009, 2009 WL 8635998 (DE 6818). In view of that order, Teligence has no evidence to support this element of its defense. Accordingly, this Court GRANTS Katz's motion for summary judgment as it relates to the prosecution laches defense.

Even though the intervening adverse rights ruling disposes of Teligence's prosecution laches defense, this Court will also address the unreasonable delay argument. This will allow the parties to include this issue in any appeal.

Katz's summary judgment motion argues that Teligence does not have evidence of unreasonable delay. However, Teligence offers the expert report of Professor Wagner that compares the pendency of Katz's patents against other patents prosecuted during the same time period. With respect to the patents Katz asserts against Teligence, the report shows thirteen of the asserted claims have priority pendencies that were longer than 99% of other similar patents. These delays are certainly significant and might provide a basis for finding prosecution laches.

The question revolves on whether Katz can provide a reasonable explanation for that delay. Katz's motion argues that it was diligent and hastened the issue of patents by having at least one patent issue between 1988 and 2004. Moreover, Katz points out that it filed terminal disclaimers in connection with nearly all of its patents. See Chiron Corp. v. Genentech, Inc., 268 F.Supp.2d 1139, 1143 (E.D.Cal.2002) (filing of a terminal disclaimer “may weigh strongly in favor of finding the delay is reasonable”). However, Teligence challenges the reasonableness of Katz's explanations. ( See Mossinghoff Report at ¶¶ 145–155.) With all of the evidence in mind, this Court finds that there is a genuine issue of material fact with respect to the issue of unreasonable and unexplained delay. Accordingly, this Court DENIES Katz's motion for summary judgment on the issue of prosecution laches to the extent it relies on unreasonable delay.

This Court DENIES Teligence's motion for summary judgment of non-infringement with respect to the “conditionally interfacing” limitation because preliminary qualification steps can satisfy the “conditionally interfacing” limitation.

This Court also rejects Teligence's narrow construction of the “fetching control data” limitation and DENIES Teligence's motion for summary judgment of non-infringement with respect to this limitation.

This Court DENIES Teligence's motion for summary judgment of non-infringement with respect to the “imposed condition” limitation because preliminary qualification steps can satisfy the “imposed condition” limitation.

This Court also rejects Teligence's attempt to interpret “or one of said live operator stations” as a format and DENIES Teligence's motion for summary judgment of non-infringement with respect to this limitation.

This Court also finds that the rule from WMS Gaming does not apply to the “selection means” and “interconnect switch means.” Therefore, the Court DENIES Teligence's motion for summary judgment of non-infringement with respect to those limitations.

This Court finds that the “designation structure” is not governed by 35 U.S.C. 112 ¶ 6. Therefore, the Court DENIES Teligence's motion for summary judgment of non-infringement with respect to this limitation.

This Court finds that “caller data signals” refers to signals containing data related to a caller. Therefore, the Court DENIES Teligence's motion for summary judgment of non-infringement with respect to this limitation.

This Court finds that there is factual issue with respect to whether a promotional membership number can be considered a “consumable participation key.” Therefore, the Court DENIES Teligence's motion for summary judgment of non-infringement with respect to this limitation.

This Court finds that Teligence has failed to substantially address Katz's infringement allegation related to the “at a predetermined time” limitation (claim 24 of the '707 patent only). Therefore, the Court DENIES Teligence's motion for summary judgment of non-infringement with respect to this limitation.

This Court rejects Teligence's attempt to interpret “key numbers” to require incrementing or decrementing. Therefore, this Court DENIES Teligence's motion for summary judgment of non-infringement with respect to this limitation.

This Court also rejects Teligence's attempt to limit “processing at least certain answer data responsive to said approval signals” to the “key numbers” to a particular manner of manipulating the answers of individual callers described by the specification. Therefore, this Court DENIES Teligence's motion for summary judgment of non-infringement with respect to this limitation.

This Court finds that there is a factual issue with respect to whether a membership number can be considered a “customer number.” Therefore, the Court DENIES Teligence's motion for summary judgment of non-infringement with respect to this limitation.

However, this Court finds that the claims require a separate “customer number” and “acknowledgment number.” Therefore, this Court GRANTS Teligence's motion for summary judgment of non-infringement with respect to claims 32, 53 and 67 of the '762 Patent.

This Court finds that “associated telephone number signals” can refer either ANI or DNIS signals. Therefore, the Court DENIES Teligence's motion for summary judgment of non-infringement with respect to this limitation.

This Court finds that the term “cues” is not limited to a game format. Therefore, the Court DENIES Teligence's motion for summary judgment of non-infringement with respect to this limitation.

This Court finds that the term “on-going accounting data” is not limited to points a caller accumulated during a call. Therefore, the Court DENIES Teligence's motion for summary judgment of non-infringement with respect to this limitation.

This Court finds that Teligence has failed to satisfy its burden of proof with respect to any arguments it raised with respect to infringement under the doctrine of equivalents. Therefore, this Court DENIES its motion for summary judgment with respect to this issue.

This Court finds that a reasonable jury could conclude that a combination of First Hawaiian and Friedes did not render all the limitations of claim 24 of the '415 patent obvious. Therefore, this Court DENIES Teligence's motion for summary judgment with respect to this defense.

This Court finds that there is a factual issue with respect to whether there is a motivation to combine the Levine and Trice references. Therefore, this Court DENIES Teligence's motion for summary judgment with respect to the issue of whether claim 32 of the '309 patent was obvious.

This Court finds that the qualification unit 93 is not a general purpose computer and that the WMS Gaming rule does not apply to the qualification structure of claims 32 and 46 of the '309 patent and claim 24 of the '707 patents. Therefore, this Court DENIES Teligence's motion for summary judgment of indefiniteness as it relates to these issues.

This Court finds that there is sufficient written description of the “consumable participation key” in the specifications of the '309 and '707 patent. Therefore, this Court DENIES Teligence's motion for summary judgment of indefiniteness as it relates to claim 46 of the '409 patent and claim 24 of the '707 patent.

This Court finds that there are factual issues with respect to unreasonable delay, excuse, and prejudice. Therefore, this Court DENIES Teligence's motion for summary judgment as it relates to its laches affirmative defense.

This Court finds that Teligence has failed to offer any substantial evidence of misleading conduct apart from silence. This Court GRANTS Katz's motion for summary judgment on Teligence's affirmative defense of inequitable conduct.

Since Teligence has failed to offer any evidence of intervening rights (that has not been stricken), this Court GRANTS Katz's motion for summary judgment on Teligence's affirmative defense of prosecution laches. The Court DENIES Katz's motion to the extent that it argues that there is no factual issue with respect to unreasonable delay.

To the extent the Court has relied on evidence to which the parties have objected, those objections are overruled.

IT IS SO ORDERED.
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