Engate, Inc. v. Esquire Deposition Services, L.L.C.

Citations: 331 F. Supp. 2d 673; 2004 U.S. Dist. LEXIS 16659; 2004 WL 1858401Docket: 01 C 6204

Court: District Court, N.D. Illinois; August 20, 2004; Federal District Court

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Engate, Inc. holds several patents related to enhancing real-time transcription services for court reporters and attorneys and has filed a lawsuit against Esquire Deposition Services, L.L.C. and Atkinson-Baker, Inc. for patent infringement. The court has previously defined "real time" in this context, emphasizing the limitations of transcription capabilities. Engate's claims of direct infringement were partially dismissed, as the defendants cannot be held vicariously liable for the actions of independent contractor court reporters. Additionally, the court ruled that Engate failed to provide evidence that its patents were infringed by the defendants' employee court reporters. Most recently, the court granted summary judgment to the defendants regarding allegations of inducing infringement. While Engate's claims have been resolved, the case remains active due to two counterclaims from the defendants: one challenging the validity of most of the claims due to prior public use or publication, and the other alleging that Engate filed the lawsuit without a legitimate basis, intending to coerce licensing agreements.

Engate's motion to dismiss Esquire's unfair competition claim is granted, while Esquire's motion for summary judgment on the same claim is denied. The defendants' motion for summary judgment regarding their counterclaim of invalidity is granted in part and denied in part. Summary judgment is deemed appropriate in patent cases when no genuine issues of material fact exist, based on evidence such as pleadings and affidavits, with the court favoring the nonmoving party's perspective. The presumption of validity for patents under 35 U.S.C. § 282 places the burden of proof for invalidity on the challenger, requiring clear and convincing evidence to overcome this presumption. The defendants contend that twenty-two claims of Engate's patents are invalid under 35 U.S.C. § 102(b) because they were publicly used, on sale, or described in publications prior to the filing date. They support this claim with references to articles on real-time transcription in courtrooms and closed captioning. In response, Engate argues that any prior use of the technology was experimental, which would not invalidate the patents.

Engate contends that even if real-time transcription services were not experimental prior to the critical date, the defendants have not demonstrated that the publicly used, sold, or published technology encompassed all features of Engate's patents. The evaluation of this argument will occur sequentially, beginning with the concept of experimental usage. Legal precedent from the Federal Circuit establishes that determining a patent's invalidity due to public use under 35 U.S.C. § 102(b) is a legal question based on factual inquiries. Public use includes any use of the claimed invention by individuals not bound by secrecy to the inventor, while experimental use refers to the inventor's use or that of others under the inventor's direction aimed at refining the invention. The experimental use doctrine applies when further evaluation is necessary to confirm the invention’s intended purpose. Once the inventor recognizes the invention performs as claimed, subsequent use may be deemed public. An invention must be commercially operable to be considered in public use, even if it has issues not stemming from fundamental flaws. Market testing aimed at assessing consumer demand does not qualify as experimental use. The burden of proof remains with the accused infringer to show public use prior to the critical date; if successful, the burden shifts to the patentee to demonstrate that such use was experimental. The court evaluates the totality of circumstances regarding public use, considering factors like the nature of the activity, public access, confidentiality, testing conduct, duration, and whether any compensation was involved. The relevance of these factors may vary based on individual case specifics.

A written promise of confidentiality is a relevant consideration in determining whether a use is public, particularly when experiments are conducted by parties other than the patent holder. However, the lack of such a promise does not legally classify a use as public if no confidential information was shared. Testing conducted at a potential customer's site similarly does not constitute a public use. In evaluating claims of public use regarding real-time transcription services, the focus will be on whether the defendants have established a prima facie case and if Engate has raised genuine factual disputes regarding the experimental nature of these uses.

In the mid-1980s, several U.S. courtrooms began implementing computer-integrated courtrooms (CICs) featuring real-time transcription services. These CICs utilized computer-aided transcription (CAT) technology to convert stenographers' keystrokes into readable transcripts displayed on screens for judges and parties. By 1990, multiple jurisdictions had funded CIC initiatives, and by 1991, ten such courtrooms were operational, with six more planned. The technology was continually updated and involved personal dictionaries for each court reporter, enabling real-time display of transcripts. The Phoenix CIC utilized a local area network to connect courtroom computers, allowing for immediate access to transcripts for judges and lawyers.

The LAN file server allowed separate access and security for parties and the court to manage confidential and privileged litigation materials. The use of litigation support software in Judge Strand's courtroom facilitated real-time electronic transcript capabilities, enabling parties to search, annotate, and issue-code transcripts as they occurred. The software could identify specific terms and their proximity to other words, enhancing the attorneys' ability to track key subjects during testimony. Users could take notes that could be integrated into or printed with the trial transcript. Additionally, courtroom systems had access to various legal research tools, enabling collaborative document editing and real-time communication with remote offices.

The implementation of real-time transcription was a public, everyday use rather than experimental, as the technology was actively utilized by judges and lawyers without confidentiality promises. Articles featuring user experiences with the technology were published in national magazines, indicating its commercial viability. Though Xscribe Corp. donated the software for a specific courtroom, pricing information suggested intent for commercial exploitation. The evidence clearly established that the court-integrated computing systems (CICs) in Chicago, Detroit, and Phoenix were publicly used prior to the relevant patent dates, countering claims of primarily experimental purposes. Additionally, the National Captioning Institute began offering real-time captioning for television broadcasts in 1982.

Real-time closed captioning initially displayed spoken words on television with a seven-second delay, reduced to four seconds by 1990. Utilizing a stenoptype machine, a captioner converts spoken words into phonetic strings, which are electronically sent to a computer at NCI. The computer translates these strings into text, which is then merged with the broadcast signal for transmission. Decoder boxes, costing approximately $200, receive and display the captioned text alongside the video, scrolling three lines at a time at the bottom of the screen. The technology mirrors that used in real-time court reporting.

By 1991, NCI provided closed captioning for prime-time broadcasts, cable shows, U.S. House proceedings, and home videos, including significant events like the Senate confirmation hearings of Justice Thomas and updates on the Persian Gulf War. The defendants assert that Engate has not demonstrated any genuine factual issues regarding the public use of closed captioning, which they argue invalidates Engate's patents.

The court must evaluate if the public use of closed captioning and courtroom technology anticipates Engate's patents. Engate contends that the defendants have not sufficiently proven that the public technology had all features of the claimed inventions. For a patent to be invalidated by prior art, it must be shown that a single prior art document encompasses all elements of the invention, either expressly or inherently. This means that anticipation requires a full disclosure of each limitation of the claimed invention within a single reference, though this requirement may be met through inherent characteristics understood by a person skilled in the art.

The Federal Circuit establishes that prior art can anticipate a patent claim if it functions according to the claimed limitations, allowing for some flexibility in how anticipation is determined, particularly when common technological knowledge is not documented. Whether prior art inherently includes a claim limitation is a factual question. Engate contends that the articles presented by defendants lack specificity regarding pre-critical date technology and that accompanying declarations do not meet the burden of proof required to invalidate its patents. The law generally disapproves of invalidating patents based solely on testimonial evidence without corroboration. Corroboration is essential for oral testimony of prior public use, regardless of the witness's interest in the case outcome. This requirement applies even to disinterested witnesses, as their testimony may be unreliable due to potential biases. Defendants argue that corroboration is unnecessary for disinterested non-parties, referencing a case that limited the corroboration requirement to testifying inventors with vested interests. However, the Federal Circuit’s ruling in Finnigan contradicts this, reaffirming that corroboration is necessary even for disinterested parties. The court notes a split within the circuit regarding the corroboration standard and questions its continued applicability in modern legal contexts, recognizing the unusual nature of requiring corroboration for a single witness's testimony to meet the burden of proof in invalidity cases.

Treason and federal perjury statutes require strict corroboration, but this standard is not widely applied in federal law. Patent invalidity has been linked to a similar corroboration requirement, as established in Finnigan and subsequent cases. Only one Federal Circuit case (Eisenberg v. Alimed, Inc.) did not mandate corroboration from a disinterested witness, while multiple other cases have upheld the need for corroboration regardless of witness interest. Judge Sachs emphasized that while Thomson has not been overruled, many subsequent decisions suggest the corroboration requirement remains vital. There is a call for the Federal Circuit to clarify its conflicting rulings on this matter. The court agrees with the fundamental corroboration requirement but disagrees with Engate's narrow interpretation that testimonial evidence from multiple witnesses cannot suffice for patent invalidation. While there is some support for skepticism towards testimonial evidence in patent cases, precedents indicate that under certain conditions, testimonial evidence can fulfill the corroboration requirement, as acknowledged in both Woodland Trust and TypeRight Keyboard Corp.

The court assesses the corroboration of testimonial evidence by evaluating several factors: the witness's relationship to the alleged prior user, the time elapsed between the event and trial, the witness's interest in the case, any contradictions or impeachments of their testimony, the specifics and thoroughness of their corroborating account, their familiarity with the patented invention and prior use, the likelihood of prior use based on the state of the art at the time, the invention's industry impact, and its commercial value. When a patentee challenges the credibility of prior use witnesses, the trier of fact must make credibility determinations, which complicates the summary judgment process aimed at invalidating a patent. A judge cannot assess credibility in summary judgment, meaning that if a patentee provides sufficient evidence questioning a witness's credibility, the court cannot grant summary judgment for invalidity, even with accompanying corroborating evidence from the other party. Moreover, the patentee's challenge must be more than a mere assertion; it must provide specific facts that create genuine issues regarding witness credibility. 

In examining Claim 5 of U.S. Patent No. 5,740,245, which pertains to a transcription network for attorneys, it is noted that the patent application was filed on November 15, 1994, but the critical date for assessing prior art is March 24, 1992. This claim requires a CAT system that translates a stenographer's strokes into readable language in real time, a technology confirmed to have existed in courtrooms prior to the critical date.

Diane Knox's description from a 1991 issue of *The American Lawyer* and Martin Block's 1990 article in *Trial* outline the operation of Computer-Aided Transcription (CAT) systems, which integrate advanced computer technology to provide real-time transcripts of court proceedings to judges, lawyers, and litigants. The Court, referencing these analyses, concludes that the CAT system was in public use before the critical date relevant to Engate's patent claims, specifically Claim 5 of the '245 patent. This claim's elements, including programming features for highlighting specific words, were also publicly utilized prior to the critical date. 

Engate did not present sufficient evidence to contest the finding of invalidity, and the Court determined, with clear and convincing evidence, that similar technology was already employed in courtrooms in Chicago, Detroit, and Phoenix. The Court clarified that invalidity is based on public use, rather than solely on printed publications, and various sources collectively demonstrate the functionalities claimed in Engate's patents.

Additionally, Claim 7 of U.S. Patent No. 6,026,395 relates to conducting natural language or Boolean searches on real-time transcripts. Evidence from Brent Sandstrom indicates that such search capabilities were available prior to March 24, 1992, through the DiscoveryZX software, which allowed court reporters to generate transcripts that were immediately indexed and searchable on judges' and attorneys' terminals.

The system in question identifies parts of real-time or earlier transcripts related to search requests, allowing users to view relevant portions as court reporters generate the transcript. Prior to March 24, 1992, the technology enabled Boolean logic searches during court proceedings, allowing users to search for specific words or phrases in real-time as transcripts were created and displayed on terminals. The court reporter, Merilyn Sanchez, confirmed in her declaration that this functionality was operational at that time, corroborating the claims made by Sandstrom, the software developer. Despite Sanchez’s detailed account of the technology's capabilities, the court notes that her testimony, given her lack of interest in the litigation outcome, serves as corroborative evidence under the Woodland Trust factors. However, Sandstrom's vested interest raises concerns under the Federal Circuit's corroboration requirements, suggesting that neither declaration alone is sufficient to invalidate Engate's patent claims. The court cannot make credibility determinations at the summary judgment stage, and the defendants' argument that additional articles corroborate Sanchez's declaration does not alter this limitation.

Defendants argue that certain articles imply users could search a real-time transcript, despite lacking explicit statements. Sanchez's 1990 article notes that litigation support software allows users to electronically search the record for recent events. Similarly, Shorak's 1989 article describes software enabling attorneys to review testimony during cross-examination without interruption. While it may be inferred that such software facilitates searching real-time transcripts, there is no indication that the searches involved Boolean logic or natural language, as the articles do not provide sufficient detail to confirm this. Consequently, the articles do not fully support the defendants' claim that they anticipate Claim 7, which is necessary for summary judgment to invalidate the patent.

The defendants also cite user manuals for DiscoveryZX and CaseView as printed publications that could invalidate Claim 7. The 1989 user manual for DiscoveryZX version 3.0 explains how to search documents but acknowledges it lacks real-time capabilities, thus failing to anticipate Claim 7. The defendants assert that version 3.1 has real-time capabilities, referencing a passage suggesting users should complete a tutorial with demonstration transcripts. However, the Court finds this insufficient to conclude that the manual comprehensively describes all limitations of Claim 7. Furthermore, while the version 3.1 manual states that transcripts can be searched, it does not specify if searches can be conducted using natural language or Boolean logic, failing to meet the requirements of Claim 7. Additionally, there is a legitimate dispute regarding whether the version 3.1 manual was published.

Defendants claim that DiscoveryZX version 3.1 constitutes invalidating prior art, asserting it retained all functionalities of version 3.0, which permitted natural language searches. However, the court finds Sandstrom's declaration inadequate for summary judgment purposes. The defendants also presented a promotional DVD from Stenograph regarding CaseView, which claims that attorneys can search for relevant text in real-time transcripts. While the video implies natural language searching, it lacks definitive evidence that CaseView was in use or for sale before March 24, 1992, only indicating a copyright date of 1992. John Wenclawski, Stenograph's president, stated the video was used prior to this date, but his testimony is unreliable due to his vested interest in the product. Consequently, the court denies the defendants' request for summary judgment on the invalidity of Claim 7 of the '395 patent. 

Regarding Claims 4 and 8 of U.S. Patent No. 5,884,256, which involve a computer interface for annotating real-time text, the application was filed on April 9, 1998. The CIC software allowed for note insertion and keyword highlighting during testimony. Engate failed to provide evidence disputing whether CIC software anticipated these claims, leading the court to grant summary judgment for the defendants on Claims 4 and 8. 

Claim 10 of the same patent involves a user interface that permits users to skip unselected text portions. Defendants support their argument with two declarations, including one from Sandstrom, who asserts that the DiscoveryZX interface allowed users to skip unselected portions while reviewing selected text.

Prior to March 24, 1992, users of the DiscoveryZX software could review selected portions of real-time transcripts while skipping unselected portions. This capability aligns with Claim 8 of Engate's patent. Although the credibility of Sandstrom's declaration cannot be determined at the summary judgment stage, his documentary evidence may suffice to invalidate the patent under the clear and convincing standard. A "Quick Reference Card" prepared for a seminar in April 1991 indicates that the software’s F1 and F2 keys allowed navigation through real-time transcripts, suggesting its availability before the critical date. Engate contends there is no evidence that this version of DiscoveryZX was installed in any CICs before the critical date; however, the reference card demonstrates that it was sold prior, supporting invalidity under 35 U.S.C. § 102(b). The Court found the Quick Reference Card to provide clear evidence of invalidity, granting defendants' motion for summary judgment on Claim 10 of the '256 patent.

For Claim 15 of U.S. Patent No. 5,940,800, which allows users to create a list of issues identified in transcripts, Engate failed to establish a genuine issue regarding the issue-coding capabilities available in CICs during the 1980s and early 1990s. Consequently, the Court ruled that Claim 15 was anticipated by prior technology and is invalid under 35 U.S.C. § 102(b).

Claim 1 of U.S. Patent 5,369,704 pertains to transmitting a real-time transcript from a CAT system to multiple networked computers. Publicly available articles from before the critical date describe similar functionalities in CICs, including sending real-time transcripts to multiple computers. This evidence suggests that Claim 1 was also anticipated by existing technology.

The LAN network in the Phoenix CIC connects separate personal computer workstations, allowing communication and shared access to a central database on a file server. Users can send messages through electronic mail or ABA/Net. However, a critical element of Claim 1 is absent in the existing articles, as none indicate that users could send messages linked to specific transcript portions for another user to view. The only supporting evidence for this link comes from Sanchez's declaration, which, despite the Court's confidence in his credibility, is insufficient for patent invalidation based solely on uncorroborated testimony. Consequently, the Court denies the defendants' motion for summary judgment regarding Claim 1 of Patent 5,269,704.

Claim 16 of U.S. Patent No. 5,369,704 involves a network setup where the CAT system transmits real-time transcripts to multiple computers used by both plaintiff and defense attorneys, ensuring that their communication links remain isolated for private messaging. The CAT system in the Phoenix CIC transmits transcripts to various courtroom computers linked by a local area network, located at strategic positions including the judge's bench and counsel tables. To maintain confidentiality, separate secure database spaces are provided for each party and the court. The defendants argue that more than one terminal could be used per party, referencing an article by Judge Frank Andrews that describes a similar technology in a Dallas CIC. This article notes that while computers in the Dallas CIC are linked through a LAN, they can function independently and can be expanded to accommodate additional users. However, the Court finds that the evidence does not sufficiently support the transcription and communication network framework outlined in Claim 16.

Engate established that the article referenced was published after the critical date and did not demonstrate that the Dallas CIC was operational before that date, thus failing to anticipate Claim 16 of Engate's patent. The defendants' argument relied on the Sanchez declaration, which described a Phoenix CIC setup prior to March 24, 1992, involving a Novell local area network with ten DOS 286 workstations capable of sending messages, including parts of a real-time transcript. The workstations were strategically placed in various courtroom locations, enabling communication between the judge and clerk via e-mail, isolated from counsel. While it was noted that additional terminals could be provided for plaintiffs and defendants upon request, the court highlighted that this evidence alone does not substantiate a claim without corroboration. Although the court speculated that multiple computers for each party could have been connected to the network, it concluded that the technology in the Phoenix CIC did not inherently possess this capability. The court ultimately denied the defendants' motion for summary judgment regarding Claim 16 of Engate's patent. 

Additionally, Claims 26-28 and 32 of U.S. Patent No. 5,949,952 were outlined: Claim 26 involves a system that converts spoken words to text and captures video images in real-time; Claim 27 adds delivery of video portions to the terminal; Claim 28 allows simultaneous viewing of video and transcript; and Claim 32 associates real-time transcripts with video images, enabling storage and search functionalities. The patent application was filed on March 12, 1997.

Defendants claim that Claims 26 through 28 of the patent were anticipated by closed captioning technology developed by the National Captioning Institute (NCI) in the early 1990s. The NCI utilized a CAT system to convert stenographic strokes into readable text associated with a broadcast signal, allowing viewers to see captions alongside the video. Engate's counterargument emphasizes that NCI's closed captioning was displayed on television screens, not computer screens; however, this distinction is deemed irrelevant to the patent's substance. As a result, Engate has not established a genuine issue of fact regarding the validity of Claims 26 through 28, which were anticipated by closed captioning technology from the 1980s.

Regarding Claim 32, defendants assert it was anticipated by DiscoveryVideo ZX2 software, launched on April 12, 1991. This software translates court reporters’ shorthand into text while synchronizing audio and video recordings. The DiscoveryVideo ZX allows users to search and retrieve transcripts from extensive databases, linking the text to specific video segments. Playback can occur on various devices, including standard monitors and video recorders, with capabilities for controlling video functions.

Engate contends that DiscoveryVideo ZX did not meet the requirements of Claim 32 since it could not synchronize video with the transcript in real time during creation, citing deposition testimony from Stenograph employee Fred Middlebrooks. He indicated that synchronization occurred only after the transcript was complete.

Claim 32 does not explicitly require real-time searching of text and associated video images but does necessitate that video images be synchronized to the transcript in real time, as it incorporates Claim 26. While Claim 26 was found to be anticipated by closed captioning, there is insufficient evidence to determine that the initial elements of Claim 32 were also anticipated by closed captioning, nor that its searching and playback features were anticipated by DiscoveryVideoZX. The record lacks clarity on whether DiscoveryVideoZX utilized closed captioning, and all elements of a claim must be used together for prior art to anticipate that claim. Middlebrooks' deposition raises factual questions regarding the potential invalidation of Claim 32 by DiscoveryVideoZX as prior art. 

The defendants contend that a press release serves as a printed publication invalidating Claim 32, but the ambiguity regarding real-time synchronization of transcript and video prevents the press release from definitively invalidating the claim. The defendants further argue that technology described in Claim 32 was in use by 1992 in the Dallas CIC, where a court reporter's CAT system provided real-time transcription and video recording capabilities, allowing for quick retrieval of testimony from video based on transcript searches. Engate counters that an article describing this technology was published in September 1992, indicating it did not anticipate Claim 32, and the court agrees that prior availability cannot be assumed before March 24, 1992. Consequently, the court denies the defendants' motion for summary judgment regarding Claim 32 while granting it for Claims 26, 27, and 28.

Claims 12, 13, 19, and 25 of U.S. Patent No. 6,282,510 relate to real-time transcription linked to audio recordings. Claim 12 details creating a real-time transcript that can be stored, displayed, and searched, enabling playback of the associated audio. Claim 13 involves resynchronizing the transcript with the audio signals. Claim 19 describes using a Computer-Assisted Transcription (CAT) system to create and display a real-time transcript linked to audio recordings. Claim 25 allows users to search this transcript and play corresponding audio files.

The defendants assert that these claims are anticipated by DiscoveryVideoZX, referencing a press release outlining its capabilities. However, the court finds that the software and press release do not invalidate the claims because a genuine issue of fact exists regarding whether DiscoveryVideoZX could link transcripts to audio in real time. Additionally, the press release is deemed too ambiguous to serve as a prior printed publication that fully describes the claims.

The defendants also cite a brochure and user manual for DiscoveryVideoZX as prior printed publications that invalidate the patent claims. The brochure states that spoken information is synchronized with video during testimony, allowing keyword searches. However, it lacks a date, and the sole source for its dating is Richard Stirewalt's declaration, which the court cannot rely on without corroboration. Thus, the court rules that the brochure cannot be assumed to be prior art. The user manual, copyrighted in 1991, describes how steno translations appear almost immediately on the OZpc system.

VideoZX's Video Index File synchronizes video tape information with steno, allowing attorneys to view transcript text and perform full text searches alongside video testimony. However, the user manual does not specify that the transcript can be displayed for real-time review, which is a limitation of Claims 12, 13, 19, and 25 of the '510 patent. Consequently, the court denies the defendants' motion for summary judgment regarding these claims. 

Claims 1 of U.S. Patent No. 5,815,639 and Claim 4 of U.S. Patent No. 5,926,787 describe a Computer-Aided Transcription (CAT) system utilizing a library of keystrokes and their corresponding translations to convert stenographer keystrokes into words in real-time or phonetic syllables when exact matches are unavailable. The applications for these patents were filed on May 20, 1993, and August 31, 1998, respectively. 

Defendants presented two declarations to argue anticipation. A Stenograph employee indicated that prior to March 24, 1992, CAT systems existed that contained both phonetic and standard dictionaries, like the OmniCat system, which compared stenographic strokes to dictionary entries. Similarly, Sanchez described using a CAT system in Phoenix that also contained main and user-programmable job dictionaries with phonetic representations. Both declarations affirm that the prior technology included all elements of Claim 1 and Claim 4 of Engate's patents.

Credibility determinations regarding interested witnesses, such as Middlebrooks, cannot be relied upon during summary judgment, which impacts the corroboration of Sanchez's declaration. The defendants need to provide clear and convincing evidence beyond Middlebrooks' testimony. An article from the Los Angeles Times from 1982 discusses a CAT system used during a trial of a deaf defendant, detailing how the system operated by translating stenographic input into a real-time transcript displayed on screens. However, this article does not corroborate Sanchez's declaration as it does not specify that she used the Xscribe system mentioned. Engate contends that the article alone does not demonstrate that the Dallas CIC anticipated its patents, highlighting differences in how transcripts were delivered and uncertainties regarding the software's phoneme library. The Court finds the delivery method immaterial but agrees with Engate's concern about reliance on Middlebrooks' declaration to prove the existence of a phoneme library. Although a Flexcap User's Manual suggests the software had phonetic translation capabilities, its copyright date raises questions about prior art status before the critical date of March 24, 1992. The Court can infer that the Flexcap features were available before this date, but this inference relies on Middlebrooks' declaration, which cannot be deemed credible due to his potential bias as an employee of Stenograph. Consequently, the Court denies the defendants' motion for summary judgment regarding Claim 1 of Patent 5,815,639 and Claim 4 of Patent 5,926,787.

Claims 1 and 3 of U.S. Patent No. 6,023,675 pertain to real-time digital and audio recording of testimonial proceedings, with Claim 1 specifically addressing the translation of spoken words into text via a CAT system, which is then transmitted to a terminal in a different location for display. Claim 3 focuses on the audio recording being sent to a remote location and subsequently to a third location. The patent application was filed on November 3, 1998. Defendants argue that these claims were anticipated by closed captioning technology, which uses a CAT system to create and transmit captions to multiple locations with minimal delay. However, the Court finds that the distinction between displaying text on a television versus a computer terminal is immaterial, concluding that closed captioning embodies the elements of Claims 1 and 3, and thus declares these claims invalid.

Claims 4 and 6 of U.S. Patent No. 5,970,141 involve a transcription network using a CAT system to create and transmit a real-time transcript to an attorney's terminal and a second linked terminal. Claim 6 adds a third terminal linked to the CAT system but not directly to the attorney's terminal. The application for this patent was filed on April 9, 1998. Defendants claim these were anticipated by the Phoenix CIC's use of a local area network for communication among courtroom personnel but fail to demonstrate that the real-time transcript could be transmitted by the CAT system to a remote terminal as required by the claims. The Court denies the defendants' motion for summary judgment on Counts 4 and 6 of patent '141, as the evidence does not meet all necessary claim elements.

The Court grants summary judgment in favor of the defendants regarding their counterclaim of invalidity for several specific claims across multiple U.S. patents, including Claims 5 of U.S. Patent No. 5,740,245, Claims 4, 8, and 10 of U.S. Patent No. 5,884,256, Claim 15 of U.S. Patent No. 5,940,800, and others. Conversely, the Court denies the defendants' motion for summary judgment concerning Claims 1 and 16 of U.S. Patent 5,369,704 and several other claims from different patents.

Esquire's second counterclaim asserts that Engate's lawsuit constitutes unfair competition under California Business and Professions Code § 17200 et seq., alleging that Engate falsely claimed Esquire infringed 131 patented claims without evidence or a good faith belief in the validity of its claims. Initially, Esquire contended that Engate knew it could not infringe the mentioned patents, specifically citing U.S. Patent No. 5,926,787. 

Engate seeks to dismiss Esquire's unfair competition counterclaim, arguing it fails to state a valid claim, while Esquire maintains it is entitled to summary judgment on this counterclaim. Engate interprets Esquire's counterclaim as only addressing the '787 patent, which the Court finds too narrow. The Court concludes that Esquire's allegations encompass multiple patents, not just the '787 patent.

Engate also contends that Esquire's claim lacks sufficient particularity, but the Court does not address this point. Instead, it determines that the unfair competition claim is barred by an absolute privilege for acts made during judicial proceedings, as outlined in California Civil Code § 47(b)(2). This privilege aims to protect litigants and witnesses from subsequent harassment, allowing for unimpeded access to the courts without fear of derivative tort actions.

California Civil Code § 47(b) grants absolute immunity from liability for tort claims arising from communications or conduct in prior litigation, extending beyond defamation to all torts except malicious prosecution. The rationale is to promote free access to courts while allowing redress for individual wrongs when specific conditions (favorable termination, lack of probable cause, and malice) are met. The privilege applies to communications made in judicial or quasi-judicial proceedings by authorized participants, aimed at achieving litigation objectives, and logically related to the action. The California Supreme Court emphasizes that the "furtherance" requirement does not evaluate participants' motives or ethics, and doubts regarding the privilege's applicability should favor its application. 

Esquire's argument that § 47(b) applies only to slander or libel in court proceedings is countered by precedent, notably in Rubin v. Green, where the court applied the privilege to a case involving solicitation allegations by attorneys, despite the absence of slanderous statements. The court determined that actions such as discussing litigation merits and filing complaints fell within the privilege's scope. Thus, malicious prosecution remains the sole actionable claim against attorneys for filing allegedly frivolous suits if the requisite conditions are established.

Rubin's solicitation claim was barred by section 47(b), which also precluded his unfair competition claim against the lawyers for instigating a baseless lawsuit for profit. The California Supreme Court determined that a party cannot bypass the stringent pleading standards for malicious prosecution by merely recasting the claim as unfair competition. In typical derivative actions following allegedly tortious litigation, the aggrieved party must have been involved in the prior proceeding to seek damages from the subsequent communications. Section 47(b) denies relief unless malicious prosecution elements are adequately pled and proven. This is essential to maintain unfettered access to courts and to use the original litigation as a means to reveal witness bias and evidence falsehoods. The court referenced Kashian v. Harriman, which upheld that the filing of meritless lawsuits constitutes communicative conduct protected under section 47(b), unless the plaintiff was not a participant in those lawsuits. Therefore, the privilege bars claims for the filing of meritless lawsuits unless the plaintiff meets malicious prosecution criteria. As a result, the Court granted Engate's motion to dismiss Esquire's unfair competition claim under Federal Rule of Civil Procedure 12(b)(6). The Court's rulings included partial summary judgment on invalidity, dismissal of Esquire's unfair competition claim, and a reconsideration of previous motions, affecting the outcome of Claim 32 of the '952 patent.

The defendants' motion to reconsider has been denied, but the opinion has been amended to address arguments raised in that motion. Notably, the author served as Judge Marshall's law clerk before real-time transcription was utilized in his courtroom. The Federal Circuit referenced Finnigan in an unpublished case, Berry Sterling Corp. v. Pescor Plastics, illustrating the ongoing application of the corroboration requirement in both trials and summary judgment. The Court critiques this rule's rationality, noting that both a single interested and a single disinterested witness's testimony are insufficient, yet the TypeRight Keyboard case suggests a more complex evaluation. The Court expresses a desire for reform of the corroboration rule rather than its gradual erosion. 

The opinion includes a paraphrase of the patented claims, specifically detailing Claim 5 of U.S. Patent No. 5,740,245, which outlines a transcription network for attorneys. Claim 7 of U.S. Patent No. 6,026,395 describes a method for real-time transcript generation and search functionality within that transcript. The document touches on Boolean logic used in searches, explaining its three logical operators: or, and, not, which facilitate more nuanced record searches based on user input.

Proximity connectors and word roots enhance search capabilities in legal research, as noted in the Thurgood Marshall Law Library Research Guide. Claims 4 and 8 of U.S. Patent No. 5,884,256 (issued March 16, 1999) reference Claim 1, which describes a transcription network used in testimonial proceedings, featuring an attorney terminal, a stenograph system for real-time text conversion, and a user interface for annotating selected text portions. Claim 4 specifies that supplemental information includes notes that annotate selected text, while Claim 8 specifies that it includes messages related to selected text.

Documentary evidence related to DiscoveryZX software was deemed insufficient to support Sanchez's testimonial evidence, as she did not indicate using the software's search-and-skip function, failing to meet the Federal Circuit's corroboration requirement. A fact finder may ultimately determine, post-trial, whether the combined evidence is adequate, but a judge cannot assess credibility during a summary judgment.

Claim 15 of U.S. Patent No. 5,940,800 (issued August 17, 1999) describes a method for categorizing transcript text during transcription proceedings, involving real-time text conversion, display, and categorization by user input. Claim 1 of U.S. Patent No. 5,369,704 (issued November 29, 1994) outlines a transcription network that generates transcript signals from spoken words, with provisions for attorney and associate terminals to display and associate messages with selected transcript portions.

A transcription network includes mechanisms for real-time conversion of spoken words into transcript signals, which are displayed on various examining and defending terminals. These terminals are connected via separate communication links for message exchange. 

Claim 26 of U.S. Patent No. 5,949,952 outlines a method for utilizing information from testimonial proceedings involving a transcription system and a capture system. This method entails real-time conversion of spoken words to text, capturing video images of the speaker, associating the video with the text, and displaying the text on a terminal screen for immediate review. 

Claim 27 further specifies that portions of the captured video images are also delivered to the terminal for display alongside the text. Claim 28 states that this video display occurs concurrently with the displayed text. 

Claim 32 adds that the method includes storing both the text and associated video images, allowing users to search the stored text and display corresponding video portions based on the search results. 

Claim 12 of U.S. Patent No. 6,282,510 describes a similar method that involves capturing audio signals instead of video, associating these audio signals with the text, storing them, and enabling text searches that can reproduce corresponding audio segments.

Claim 12 of U.S. Patent No. 6,282,510 includes a method that involves reassociating audio signals with text to improve synchronization. Claim 19 of the same patent outlines a method for utilizing information from testimonial proceedings, which incorporates real-time transcription and audio capture systems. The method entails converting spoken words to text in real-time, capturing corresponding audio signals, associating these signals with the text, delivering the text to a terminal, and displaying it for immediate review.

Claim 25 elaborates further, stating that the method includes storing both the text and associated audio signals, accepting input for searches, and reproducing specific spoken word portions based on the search results from the stored audio signals.

Claim 1 of U.S. Patent No. 5,815,639 describes a reporting system that provides real-time text representation of spoken words, utilizing a cross-reference library for exact text associations and a phoneme library for pronounceable representations. This system enables delivery of both exact and substitute text to a viewing terminal.

Claim 4 of U.S. Patent No. 5,926,787 specifies that the reporting system employs a phoneme library to identify substitute text, while Claim 1 of the same patent outlines a reporting system designed for layperson use that identifies exact textual representations and substitutes for unrecognized spoken words, displaying both on a screen.

A method for real-time transcription during testimonial proceedings is detailed, involving the following steps: capturing spoken words at one location, converting them to text in real time, and sending this text to a remote system located elsewhere. The remote system is connected to at least one terminal, which is situated at a third location, allowing for real-time text delivery and display for review. Claim 1 of U.S. Patent No. 6,023,675 (issued Feb. 8, 2000) outlines this method. Claim 3 of the same patent adds steps for capturing audio signals related to the spoken words and delivering them to the terminal for reproduction. Claim 4 of U.S. Patent No. 5,970,141 (issued Oct. 19, 1999) describes a transcription network that links messages to text portions. Claim 1 of the '141 patent details components of the transcription network, including an attorney terminal and a converter that facilitates text conversion and delivery to both the attorney terminal and a remote terminal for real-time display. Claim 6 of the '141 patent includes an additional terminal connected to the converter but not to the attorney terminal. It is noted that the assumption cannot be made that the remote terminal would receive the e-mailed transcript instantly.